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Item 7. Management’s Discussion and Analysis

2026-03-04 compared with 2025-03-05 · 137 added, 149 removed, 231 unchanged (55% of the section changed)

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All dollar amounts are stated in thousands.

Aquestive Therapeutics, Inc.

is a pharmaceutical company advancing medicines to bring meaningful improvement to patients' lives through innovative science and delivery technologies.

Aquestive is a pharmaceutical company advancing medicines to bring meaningful improvement to patients' lives through innovative science and delivery technologies.

We are developing pharmaceutical products to deliver complex molecules through administrations that are alternatives to invasive and inconvenient standard of care therapies.

We have a proprietary commercial product, Libervant® (diazepam) Buccal Film for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e.

, seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy between two and five years of age, which was launched in April 2024.

We are advancing a product pipeline for the treatment of severe allergic reactions, including anaphylaxis, under the trade name "Anaphylm™", and our Adrenaverse™ epinephrine prodrug pipeline platform.

We have five licensed commercialized products which are marketed by our licensees in the U.S.

We are advancing our late stage non-device based epinephrine prodrug product candidate for the treatment of severe allergic reactions, including anaphylaxis, under the Anaphylm™ trade name, and our Adrenaverse™ epinephrine prodrug pipeline platform.

We have four licensed commercialized products which are marketed by our licensees in the U.S.

and around the world.

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Our production facilities are located in Portage, Indiana, and our corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.

We manufacture licensed products at our facilities and anticipate that our current manufacturing capacity is sufficient for commercial quantities of our licensed products and product candidates currently in development.

Our facilities have been inspected by the FDA, TGA, and DEA, and are subject to inspection by all applicable health agencies, including ANVISA and EMA.

Not all collaborative or licensed products of the Company that may be commercially launched in the future will necessarily be manufactured by us.

Financial Operations Overview

Our revenues to date have been earned from our manufactured products made to order for licensees, as well as revenue from our self-developed, self-commercialized proprietary product, Libervant for ARS patients between two and five years of age which lost U.S.

market access as a result of a court case challenging FDA's approval of Libervant in April 2025.

R evenues are also earned from our product development services provided under contracts with customers, and from the licensing of our intellectual property.

We generate revenues in four primary categories:

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We manufacture based on receipt of purchase orders from our licensees, and our licensees have an obligation to accept these orders once quality assurance validates the quality of the manufactured product with agreed upon technical specifications.

In most cases.

our licensees are responsible for all other aspects of commercialization of these products, and we have no role, either direct or indirect, in our customers’ commercialization activities, including those related to marketing, pricing, sales, payor access and regulatory operations.

In most cases, our licensees are responsible for all other aspects of commercialization of these products, and we have no role, either direct or indirect, in our customers’ commercialization activities, including those related to marketing, pricing, sales, payor access and regulatory operations.

We expect future manufacture and supply revenue from licensed products to be based on volume demand for existing licensed products, and for manufacturing and supply rights under license and supply agreements for existing or new agreements for successful product development collaborations.

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Co-development and research fees are earned through performance of specific tasks, activities or completion of stages of development defined within a contractual development or feasibility study agreement with a customer.

The nature of these performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product.

Accordingly, the duration of our research and development projects may range from several months to as long as three years.

Although each contractual arrangement is unique, common milestones contained in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical

and/or scale-up batches, and stability testing of those batches.

The nature of these

performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product.

Accordingly, the duration of our R&D projects may range from several months to approximately three years.

Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product.

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At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates.

For sales of Libervant for patients between two to five years of age, returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables.

For sales of Libervant for ARS patients between two to five years of age while Libervant had U.S.

market access through April 2025, returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables.

Once receivables are collected, allowances are reclassified and treated as accrued liabilities.

Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, and other rebates, and these estimates are reflected as a component of accrued liabilities.

Once all related variable considerations are resolved and uncertainties as to collectable amounts are eliminated, estimates are adjusted to actual allowance amounts.

Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis.

Once related variable considerations are resolved and uncertainties as to incurred amounts are eliminated, estimates are adjusted to actual allowance amounts.

Provisions for these estimated amounts are reviewed and adjusted as needed on no less than a quarterly basis.

Costs and Expenses

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Research and Development Expenses

Since our inception, we have focused significant resources on our research and development activities.

Research and development expenses primarily consist of:

Since our inception, we have focused significant resources on our R&D activities.

R&D expenses primarily consist of:

• employee-related expenses, including compensation, benefits, share-based compensation and travel expense;

• external research and development expenses incurred under arrangements with third parties, such as CROs, investigational sites and consultants;

• external R&D expenses incurred under arrangements with third parties, such as CROs, investigational sites and consultants;

• the cost of acquiring, developing and manufacturing clinical study materials;

• costs associated with preclinical and clinical activities and regulatory operations.

We expect our research and development expenses to continue to be significant over the next several years as we continue to develop existing product candidates such as Anaphylm, AQST-108 and others, and as we identify and develop or acquire additional product candidates and technologies.

We expect our R&D expenses to continue to be significant over the next several years as we continue to develop existing product candidates such as Anaphylm, AQST-108, and others, and as we identify and develop or acquire additional

product candidates and technologies.

We may hire or engage additional skilled colleagues or third parties to perform these activities, conduct clinical trials and ultimately seek regulatory approvals for any product candidate that successfully completes those clinical trials.

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Selling, General and Administrative expenses consist primarily of salaries, benefits, share-based compensation, other related costs for executive, finance, and operational personnel.

Other costs include facility and related costs not otherwise included in research and development expenses such as:

professional fees for patent-related and other legal expenses, regulatory fees, consulting, tax and accounting services;

market research;

advisory board and key opinion leaders;

depreciation;

and general corporate expenses, inclusive of IT systems-related costs.

Other costs include facility and related costs not otherwise included in R&D expenses such as:

professional fees for patent-related expenses and for other legal expenses, legal expenditures, regulatory fees, consulting, tax and accounting services, insurance, market research, advisory board and key opinion leaders, depreciation, and general corporate expenses, inclusive of IT systems related costs.

In addition, these expenses also include warehousing, distribution, selling and business development, and other costs.

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We continue to incur significant costs in seeking to protect our intellectual property rights, including significant litigation costs in connection with seeking to enforce our rights concerning third parties’ at-risk launch of generic products.

We will continue to manage business costs to prepare for a potential future decline in Suboxone revenue and other external factors affecting our business, as we continue to focus on our core business:

• Continuing the development of Anaphylm and AQST-108;

• Commercializing Libervant for after approval from the FDA on April 26, 2024 for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity that are distinct from a patient’s usual seizure pattern in pediatric patients with epilepsy between two to five years of age.

We will continue to manage business costs to prepare for a potential future decline in Suboxone revenue and other external factors affecting our business.

We continue to focus on our core business as well as regulatory and pre-commercial launch activities for Anaphylm.

Interest Expense

Interest expense consists of interest costs on the outstanding balances of our 12.5% Notes and 13.5% Notes at a fixed rate of 12.5% and 13.5%, respectively, payable quarterly, as well as amortization of loan costs and debt discounts.

The redemption of 12.5% Notes and the issuance of 13.5% Notes are discussed in Note 15, Long-Term Debt , to our financial statements.

In addition, see Liquidity and Capital Resources below for further detail on our 12.5% Notes and 13.5% Notes.

Interest expense consists of interest costs on the outstanding balances of our 13.5% Notes at a fixed rate of 13.5%, payable quarterly, and amortization of issuance costs and debt discounts.

The issuance of our 13.5% Notes is discussed Part II Item 8.

Financial Statements and Supplementary Data, Note 15, Long-Term Debt .

In addition, see Liquidity and Capital Resources below for further detail on our 13.5% Notes.

Interest Expense related to Royalty Obligations

In connection with the issuance of the 13.5% Notes, we entered into the Royalty Rights Agreements with each of the Note Holders granting the Note Holders a tiered royalty between 1.0% and 2.0% of annual worldwide net sales of Anaphylm (epinephrine) Sublingual Film for a period of eight years from the first sale of Anaphylm on a global basis.

The Note Holders are also entitled to a tiered royalty between 1.0% to 2.0% of annual worldwide net sales of Libervant (diazepam) Buccal Film until the earlier of (1) the first sale of Anaphylm and (2) eight years from the first sale of Libervant.

The Note Holders are also entitled to a tiered royalty between 1.0% to 2.0% of annual worldwide net sales of Libervant until the earlier of (1) the first sale of Anaphylm and (2) eight years from the first sale of Libervant.

These royalty agreements are classified as debt, and the value of the $45,000 13.5% Notes has been allocated between debt and the Royalty Obligations based on their relative fair market values.

The excess of future estimated royalty payments of $56,926 over the $13,856 of the allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized as interest expense using the effective interest method.

The excess of future estimated royalty payments over the allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized as interest expense using the effective interest method.

The 13.5% Notes are discussed in Part II Item 8.

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During the second quarter of 2020, under the Sunovion License Agreement, we recognized $8,000 of royalty revenue and corresponding royalty receivable, related to the $1,000 annual minimum guaranteed royalty that is due in each of the subsequent eight years.

In connection with the Monetization Agreement, we performed an assessment under ASC 860, Transfer and Servicing to determine whether the existing receivable was transferred to Marathon and concluded that the receivable was

not transferred.

See Part II Item 8.

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Interest Income and other income, net

Interest income and other income, net consists of earnings derived from an interest-bearing account, investments in money market Treasury mutual funds and other miscellaneous income and expense items.

The interest-bearing account and money market Treasury mutual funds have no minimum amounts to be maintained in the accounts nor any fixed length of period for which interest and dividends are earned.

Interest income and other income, net consists of earnings derived from an interest-bearing accounts, investments in money market Treasury mutual funds, Treasury bills and other miscellaneous income and expense items.

These interest-bearing accounts have no minimum amounts to be maintained in the accounts for which interest and dividends are earned.

Results of Operations

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$ 44,545 $ 57,561 $ (13,016) (23 %)

Revenues increased 14% or $6,978 in 2024 compared to the same period in 2023.

The increase was primarily due to certain one-time increases in license and royalty revenue and increases in co-development and research fees, partially offset by decreases in manufacture and supply revenue.

Manufacture and supply revenue decreased 9% or $3,829 for the year ended December 31, 2024 compared to the same period in 2023.

This decrease was primarily due to a $4,069 decrease in Suboxone revenues mainly due to a decrease in volume and retroactive price increases in the prior period that were not present in 2024, and a $702 decrease in Sympazan revenue.

These decreases were partially offset by a $586 increase in Emylif revenues from Zambon and a $368 increase in Ondif revenue which were attributable to an increase in volume.

As part of the Indivior Amendment 11 to the Commercial Exploitation Agreement, we received retroactive price increases related to 2022 Suboxone purchases in the amount of $1,682 which was recognized in Manufacture and supply revenue in the year ended December 31, 2023.

There were no retroactive price adjustments included in Manufacture and supply revenue for the year ended December 31, 2024.

License and royalty revenue increased 185% or $9,969 for the year ended December 31, 2024 compared to the same period in 2023.

This increase was primarily due to the one-time recognition of deferred revenues of $11,544 due to the terminations of licensing and supply agreements.

These increases were partially offset by a $1,500 decrease in milestone licensing revenue for Azstarys from Zevra Therapeutics recognized in the prior year.

Co-development and research fees increased 37% or $523 for the year ended December 31, 2024 compared to the same period in 2023.

The increase was driven by the timing of the achievement of research and development performance obligations which are expected to fluctuate from one reporting period to the next.

Proprietary product revenue, net increased by $315 for the year ended December 31, 2024 compared to the same period in 2023 due to the launch of Libervant for patients between two to five years of age.

This increase was partially offset by an additional accrual for returns allowances related to the period prior to the outlicensing to Assertio of our proprietary product, Sympazan, which is recorded as an addition to accrued distribution expenses and sales return provision.

Revenues decreased 23% or $13,016 for the year ended December 31, 2025, compared to the same period in 2024.

The decrease was primarily due to decreases in license and royalty revenue, proprietary product revenue, net, and co-development and research fees.

Manufacture and supply revenue increased 1% or $249 for the year ended December 31, 2025 compared to the same period in 2024.

This increase was primarily due to a $3,795 increase in Ondif revenues, partially offset by a $3,482 decrease in Suboxone revenues.

License and royalty revenue decreased 77% or $11,826 for the year ended December 31, 2025 compared to the same period in 2024.

This decrease was primarily due to the one-time recognition of deferred revenues of $11,544 due to the termination of licensing and supply agreements in the prior year.

Co-development and research fees decreased 34% or $646 for the year ended December 31, 2025 compared to the same period in 2024.

The decrease was driven by the timing of the achievement of research and co-development performance obligations which are expected to fluctuate among reporting periods.

Proprietary product revenue, net decreased by $793 for the year ended December 31, 2025 compared to the same period in 2024.

This decrease was primarily due to the change in the estimated returns allowance provision due to the withdrawal of Libervant from the market as U.S.

market access ended in April 2025.

Expenses, Interest Income and Other Income:

The following table sets forth our expense data for the periods indicated:

The following table sets forth our expenses and income for the periods indicated:

Year Ended December 31, Change

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Interest expense related to royalty obligations

5,459 905 4,554 N/M

5,737 5,459 278 5 %

Interest expense related to the sale of future revenue 243 236 7 3 %

Interest income and other income, net (4,367) (3,437) (930) 27 %

Loss on extinguishment of debt — 1,382 (1,382) N/M

Manufacture and supply costs and expenses decreased 14%, or $2,959, for the year ended December 31, 2024 compared to the same period in 2023.

The decrease in manufacture and supply costs was due to lower volume of strips sold, changes in product mix, and lower production costs.

Research and development expenses increased 55%, or $7,176, for the year ended December 31, 2024 compared to the same period in 2023.

The increase in research and development expenses is primarily due to clinical trial costs and product research expenses associated with the continued advancement of the Anaphylm and AQST-108 programs, increases in personnel costs, and an increase in share-based compensation.

The tables below provide a breakdown of the major costs included in total Research and development expenses and project costs by type of expense for each of the main clinical development projects in which we are engaged for each period presented:

Manufacture and supply costs and expenses increased 4%, or $683, for the year ended December 31, 2025 compared to the same period in 2024.

The increase in manufacture and supply costs was due to changes in product mix and inventory write downs.

R&D expenses decreased 15%, or $3,088, for the year ended December 31, 2025 compared to the same period in 2024.

The decrease in R&D expenses is primarily due to decreases in clinical trial costs associated with the continued advancement of the Anaphylm program, partially offset by increases in product research expenses as well as R&D personnel costs and share-based compensation.

The tables below provide a breakdown of the major costs included in total R&D expenses and project costs by type of expense for each of the main clinical development projects in which we are engaged for each period presented:

Year Ended December 31, Change

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dec Libervant %

Clinical Trials $ 8,837 $ 3,597 146% $ 8,231 $ 4,687 76% $ 588 $ — N/M $ 18 $ (1,090) N/M

Clinical Trials $ 3,476 $ 8,837 (61%) $ 3,040 $ 8,231 (63)% $ 436 $ 588 (26)% $ — $ 18 N/M

Development and Manufacturing 834 303 175% 773 310 149% 61 10 510% — (17) N/M

Product Research Expenses 2,002 1,119 79% 2,002 930 115% — 188 N/M — 1 N/M

Total Project Costs $ 10,259 $ 4,939 108% $ 9,471 $ 5,826 63% $ 786 $ — N/M $ 2 $ (887) N/M

Total project expenses for Anaphylm increased 63%, or $3,645, for the year ended December 31, 2024 compared to the same period in 2023.

Clinical trial expenses and product research expenses for Anaphylm increased $3,544 and $467, respectively, offset by decreases in development and manufacturing of $366 for the year ended December 31, 2024 compared to the same period in 2023.

In 2024, Clinical trial expenses for Anaphylm of $8,231 were primarily due to Clinical trial costs

associated with the continued advancement of the Anaphylm program.

In 2023, Clinical trial expenses for Anaphylm of $4,687 were related to the activities leading up to the Phase 3 PK Study.

Total project expenses for AQST-108 increased $786 for the year ended December 31, 2024 compared to the same period in 2023 and were related to feasibility work for AQST-108.

In 2023, Clinical trial expenses for Libervant of $1,090 were a credit from third party contractors upon the post completion audit of a study.

In 2023, product research expenses for Libervant of $215 were primarily due to data integration and modeling work.

R&D personnel costs increased by 13%, or $734, for the year ended December 31, 2024 compared to the same period in 2023, due to additional headcount.

R&D share-based compensation increased by $759, or 166%, which was primarily related to awards granted to our Chief Medical Officer upon his commencement of employment and the effect of new grants in 2024 to R&D personnel.

All other R&D expenses include rent, utilities, maintenance and other expenses and fees.

Total Project Costs $ 6,312 $ 10,259 (38%) $ 5,815 $ 9,471 (39%) $ 497 $ 786 (37)% $ — $ 2 N/M

Total project expenses for Anaphylm decreased 39%, or $3,656, for the year ended December 31, 2025 compared to the same period in 2024.

Anaphylm clinical trial expenses decreased $5,191 over the comparable period in 2024, partially offset by increases in Anaphylm product research expenses of $1,072 due to the continued advancement of the Anaphylm program.

Total project expenses for AQST-108 decreased $289 over the comparable period in 2024 due to a credit received from a vendor and due to completion of feasibility work for AQST-108 performed in the prior year period.

R&D personnel costs and share-based compensation increased by $266, or 4% and $660, or 54%, respectively, primarily due to severance and acceleration of compensation expense, partially offset by forfeitures.

Selling, general and administrative expenses increased 59%, or $29,669, for the year ended December 31, 2025 as compared to the same period in 2024.

The increase primarily represents higher commercial spending of approximately $3,750, higher personnel costs of approximately $3,000, severance costs of approximately $2,900, higher share-based compensation expenses of $2,300, higher regulatory and licensing fees of approximately $1,400 related to the regulatory fee for Libervant, higher legal fees of $520, and higher expenses of $4,600 due to a change in the allocation of manufacture and supply costs compared to the prior period, partially offset by lower insurance expenses of $1,150.

Interest expense increased 76%, or $4,785, for the year ended December 31, 2024 compared to the same period in 2023.

The increase was mostly driven by the increased amortization of debt issuance costs and discounts and higher interest expense on the 13.5% Notes refinanced in November 2023.

The increase primarily represents higher legal-related expenses of approximately $14,300, higher commercial spending of approximately $9,600 in preparation for the launch of Anaphylm, Anaphylm PDUFA fee of $4,310, higher personnel expenses of approximately $1,900, higher regulatory expenses related to Anaphylm of approximately $1,000, and higher share-based compensation expenses of approximately $900, partially offset by lower severance expenses of approximately $2,800 including the acceleration of share-based compensation, and lower insurance expenses of approximately $600.

Interest expense was $11,120 and $11,122 for the years ended December 31, 2025 and 2024, respectively.

These amounts represent interest incurred on the outstanding 13.5% Notes, and amortization of the debt discount and capitalized debt issuance costs.

Interest expense related to amortization of the discount on the royalty obligations was $5,737 and $5,459 for the years ended December 31, 2025 and 2024, respectively.

These amounts are due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance in November 2023.

The year ended December 31, 2024 reflects 12 months of activity while the year ended December 31, 2023 reflects 2 months of activity.

Interest expense related to the sale of future revenue was $236 and $220 for the years ended December 31, 2024 and 2023.

These amounts are due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance.

Interest expense related to the sale of future revenue was $243 and $236 for the years ended December 31, 2025 and 2024, respectively, and represents amortization of the issuance costs.

These amounts are due to the accounting associated with the sale of future revenue related to KYNMOBI royalties sold to Marathon on November 3, 2020 and do not represent or imply a monetary obligation or cash output at any time during the life of the transaction.

These amounts represent amortization of issuance costs.

In June 2023, Sunovion announced that it has voluntarily withdrawn KYNMOBI from the U.S.

and Canadian markets, therefore, we likely will not receive any of the additional contingent payments under the Monetization agreement.

and Canadian markets.

Therefore, the Company likely will not receive any of the additional contingent payments under the Monetization agreement.

As a result, we discontinued recording interest expense related to the sale of future revenue in the fourth quarter of 2022.

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Interest income and other income, net was $4,367 and $3,437 for the years ended December 31, 2025 and 2024, respectively.

The decrease by $12,884 is due to other income of $6,000 related to the Amendment 11 to the Indivior Commercial Exploitation Agreement, $8,500 related to the patent litigation settlement with BioDelivery Sciences International, Inc.

and the receipt of the ERTC, which were recognized in the year ended December 31, 2023 and did not recur in 2024.

During the year ended December 31, 2024, we recognized a gain of $1,500 on the termination of a license and supply agreement, which was partially offset by the adjustment of $1,200 to the remaining balance of the intangible asset due to the termination of the agreement.

We also recognized higher interest income of $2,713 due to higher cash balances invested in interest-bearing and dividend-earning money market accounts.

For the year ended December 31, 2023, we recognized a loss on extinguishment of debt of $1,382 for prepayment penalties resulting from 12.5% Notes principal payments made in the first quarter of 2023 and fees related to the repayment of the 12.5% Notes in the fourth quarter of 2023.

There was no loss on extinguishment of debt in 2024.

The increase primarily represents a ERTC credit received in April 2025.

In June 2024, the Company recorded a gain of $1,500 on the termination of a license and supply agreement, which was partially offset by the adjustment of $1,200 to the remaining balance of the intangible asset due to the termination of the agreement.

Liquidity and Capital Resources

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While our ability to execute our business objectives and achieve profitability over the longer term cannot be assured, our on-going business, existing cash and cash equivalents, expense management activities, potential asset sales or product outlicensing as well as access to the equity capital markets, including through our ATM facility, provide near term liquidity for us to fund our operating needs for at least the next twelve months as we continue to execute our business strategy.

On October 7, 2021, we entered into a supplemental indenture for the 12.5% Notes, pursuant to which the amortization schedule for the 12.5% Notes was amended to provide for the date of the first principal payment to be extended to March 30, 2023.

The indenture did not change the maturity date of the 12.5% Notes or the interest payment obligation due under the 12.5% Notes.

In connection with the indenture, we entered into a Consent Fee Letter with the holders of the 12.5% Notes,

pursuant to which we agreed to pay the holders of the 12.5% Notes an additional cash payment of $2,700 in the aggregate, payable in four quarterly payments beginning May 15, 2022.

These payments were made by December 31, 2023.

In 2023, we redeemed $5,647 of our outstanding 12.5% Notes.

We also made three scheduled principal payments totaling $11,463 prior to the refinancing of the 12.5% Notes on November 1, 2023.

We also paid $353 in prepayment premium as result of the early retirement of debt which was reflected as a loss on extinguishment of debt in our Statements of Operations and Comprehensive Loss for the year ended December 31, 2023.

We established our first ATM facility in September 2019, and since inception to December 31, 2025, we have sold 27,315,145 shares of Common Stock which has generated net cash proceeds of approximately $81,753, net of commissions and other transactions costs of $3,890.

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Included as part of the 2024 Registration Statement was a $100,000 ATM facility pursuant to the Amended Equity Distribution Agreement with Piper Sandler & Co.

For the year ended December 31, 2024, we sold 4,557,220 shares which provided net proceeds of approximately $11,821 after deducting commissions and other transaction costs of $564.

For the year ended December 31, 2025, we sold 7,457,627 shares under the ATM facility which provided net proceeds of approximately $21,229 after deducting commissions and other transaction costs of $771.

In the period subsequent to December 31, 2024 through March 5, 2025, we sold 7,457,627 shares under our ATM facility, which generated net proceeds of approximately $21,400 net of commissions of $605000.

The remaining authorized balance of the ATM facility was $78,000,000 as of March 5, 2025.

On April 12, 2022, we entered into the Lincoln Park Purchase Agreement, which provides that, upon the terms and subject to the conditions and limitations under the Lincoln Park Purchase Agreement, we have the right, but not the obligation, to sell to Lincoln Park up to $40,000 worth of shares of our Common Stock from time to time over the 36-month term of the Lincoln Park Purchase Agreement.

For the years ended December 31, 2024 and 2023, we did not sell shares in connection with the Lincoln Park Purchase Agreement.

We have no current intent to use the Lincoln Park facility and the Lincoln Park Purchase agreement will expire on April 12, 2025.

For the year ended December 31, 2024, we sold 4,557,220 shares under the ATM facility which provided net proceeds of approximately $11,821 after deducting commissions and other transaction costs of $564.

The remaining authorized balance of the ATM facility was $78,000 as of December 31, 2025.

On June 6, 2022, we entered into the Securities Purchase Agreements with certain purchasers.

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The New Warrants have an exercise price of $2.60 per share.

During the year ended December 31, 2025, 550,000 shares were issued upon the exercise of warrants with the Company receiving proceeds of $1,430 as it relates to the Warrants issued under Securities Purchase Agreements.

On November 1, 2023, we issued $45,000 aggregate principal amount of its 13.5% Notes due November 1, 2028.

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Interest on the 13.5% Notes accrues at a rate of 13.5% per annum and is payable quarterly in arrears on March 30, June 30, September 30 and December 30 of each year commencing on December 30, 2023.

The 13.5% Notes are interest-only until June 30, 2026, whereupon on such date and each payment date thereafter we will also pay an installment of principal of the 13.5% Notes pursuant to a fixed amortization schedule, along with a portion of an Exit Fee determined as of the applicable date of prepayment, payment, acceleration, repurchase or redemption, as the case may be.

We accounted for this transaction as an extinguishment of debt and recognized a debt extinguishment charge of $1,029 for the year ended December 31, 2023.

The debt extinguishment charge is included in Loss on the extinguishment of debt in the Company’s Statements of Operations and Comprehensive Loss.

On March 22, 2024, we completed the underwritten public offering of 16,666,667 shares of our common stock at the public offering price of $4.50 per share.

The 13.5% Notes are interest-only until June 30, 2026, whereupon on such date and each payment date thereafter we will also pay an installment of principal of the 13.5% Notes

pursuant to a fixed amortization schedule, along with a portion of an Exit Fee determined as of the applicable date of prepayment, payment, acceleration, repurchase or redemption, as the case may be.

On March 22, 2024, we completed an underwritten public offering of 16,666,667 shares of our common stock at the public offering price of $4.50 per share.

In addition, pursuant to the partial exercise of the underwriters' option, on April 22, 2024, we sold an additional 559,801 shares of Common Stock.

Net proceeds from the 2024 Underwritten Public Offering, including the exercise of underwriters' option were $72,868, after deducting underwriting discounts of $4,651.

In addition to the underwriting discounts related to this offering, we incurred professional fees and other costs totaling $894 as of December 31, 2024.

The following table provides information regarding our cash flows for the years ended December 31, 2024 and 2023:

In addition to the underwriting discounts related to this offering, we incurred professional fees and other costs totaling $894.

On August 13, 2025, we entered into a purchase and sale agreement with funds managed by RTW Investments LP ("RTW" or "Purchaser").

Under the terms of the Purchase and Sale Agreement, in exchange for the Purchaser's payment to the Company of a purchase price of $75,000, upon approval of Anaphylm by the FDA by a specified date, the refinancing of the Company’s existing 13.5% Notes and certain other customary conditions, the Company agreed to a sale of assigned interests to the Purchaser, including a right for the Purchaser to tiered revenue share payments ranging from 7.5% to 1.0% of net sales (as defined in the Purchase and Sale Agreement) (and 9.5% if net sales do not achieve specified levels in subsequent calendar year periods beginning in 2027) in the United States.

Revenue share payments commence in the first fiscal quarter in which the first commercial sale of Anaphylm in the United States after the closing of the transaction.

Revenue share payments will cease upon the Purchaser's receipt of $187,500 by December 31, 2035 or $225,000 thereafter.

The Purchase and Sale Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company’s ability to, among other things, incur indebtedness (which restrictions are eliminated after the achievement by the Purchaser of a specified return on its investment), and other provisions customary for transactions of this nature, in each case subject to certain exceptions set forth in the Purchase Agreement.

On March 3, 2026, we entered into Amendment No.

1 to the Purchase and Sale Agreement, dated August 13, 2025, with funds managed by RTW.

The Amendment extends the Marketing Approval Deadline for Anaphylm from its original date to June 30, 2027.

Concurrently, we entered into a Warrant Issuance Agreement with funds managed by RTW, pursuant to which we agreed to issue a warrant to such funds to purchase up to 375,000 shares of our Common Stock at an exercise price of $4.00 per share, expiring on March 3, 2029.

On March 3, 2026, we also entered into a Share Purchase Commitment Agreement with certain RTW-affiliated funds, pursuant to which such funds committed to purchase, in the aggregate, not less than $5.0 million of Common Stock during the 90-day period following the effective date of the agreement, at prices determined in accordance with Rule 415(a)(4) under the Securities Act.

On August 14, 2025, we completed an underwritten public offering of 21,250,000 shares of our common stock at the public offering price of $4.00 per share.

Net proceeds from the 2025 Underwritten Public Offering were $79,900, after deducting underwriting discounts of $5,100.

In addition to the underwriting discounts related to this offering, we incurred professional fees and other costs totaling $440.

Year Ended December 31,

(In thousands) 2025 2024

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Net cash provided by financing activities 102,617 83,592

Net increase (decrease) in cash and cash equivalents

$ 47,674 $ (3,401)

Net increase in cash and cash equivalents $ 49,623 $ 47,674

Net Cash Used for Operating Activities

Net cash used for operating activities for the year ended December 31, 2025 increased by $16,673 compared to the same period in 2024.

The increase in cash used for operating activities was primarily related to the change in net loss of $36,267 and deferred revenue of $13,809, which was mostly attributed to the recognition of deferred revenues due to the termination of license and supply agreements during the year ended December 31, 2024, and increases in trade and other receivables of $4,167.

Other changes were mainly due to higher amortization of debt issuance costs and discounts of $8,742 on the 13.5% Notes refinancing in November 2023 and an increase in share-based compensation of $4,410 as compared to the year ended December 31, 2023.

The increase in cash used for operating activities was primarily related to the increases in net loss by $39,647, in trade and other receivables by $11,466, and in inventories by $851, partially offset by increases in liabilities by $21,265 largely due to obligations under a confidential legal settlement, changes in deferred revenue of $12,272, which were mostly attributed to the recognition of deferred revenues due to the termination of license and supply agreements during the year ended December 31, 2024, and decreases in prepaid expenses and other assets by $921.

Net Cash Used for Investing Activities

Net cash used for investing activities for the year ended December 31, 2024 decreased by $836 compared to the same period in 2023.

Net cash used for investing activities for the year ended December 31, 2025 increased by $403 compared to the same period in 2024.

The use of cash was related to capital expenditures.

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Net cash provided by financing activities for the year ended December 31, 2025 increased by $19,025 compared to the same period in 2024.

The increase was primarily related to the underwritten public offering which provided net proceeds of $71,974, and higher ATM proceeds by $2,871 due to higher volumes and Common Stock prices as compared to the prior year.

These increases during the year ended December 31, 2024 were also due to the absence of 12.5% Notes principal payments and premium paid to retire debt and the absence of the financing costs associated with the issuance of the 13.5% Notes, partially offset by no proceeds received from the issuance of the 13.5% Notes and the issuance of the Royalty Rights Agreements as compared to the prior year, and lower proceeds by $8,142 from the exercise of warrants.

The increase was primarily related to net proceeds of $79,460 from the 2025 Underwritten Public Offering as compared to net proceeds of $71,974 from the 2024 Underwritten Public Offering, higher ATM proceeds by $9,411 due to higher volumes and Common Stock prices as compared to the prior year, higher net proceeds from exercise of warrants by $1,265, and higher net proceeds from exercise of options by $538.

Funding Requirements

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On November 1, 2023, we issued $45,000 in aggregate principal amount of the 13.5% Notes due November 1, 2028.

A portion of the net proceeds from the Offering were used to redeem all of the outstanding 12.5% Notes and to pay expenses relating to the Offering, with the balance of the proceeds to be used for general corporate purposes.

On March 22, 2024, we completed the Underwritten Public Offering of 16,666,667 shares of our common stock at the public offering price of $4.50 per share.

In addition, pursuant to the partial exercise of the underwriters' option, on April 22, 2024, we sold an additional 559,801 shares of Common Stock.

Net proceeds from the Underwritten Public Offering, including the exercise of underwriters' option were $72,868 after deducting underwriting discounts of $4,651.

In addition to the underwriting discounts related to this offering, we incurred professional fees and other costs totaling $894 as of December 31, 2024.

We have used and intend to continue to use the net proceeds received from these transactions, together with the Company’s existing cash and cash equivalents, primarily to advance the development and commercialization of our product pipeline, including Anaphylm™ (epinephrine) Sublingual Film for the treatment of severe life-threatening allergic reactions, including anaphylaxis, and the continued commercial expansion of Libervant® (diazepam) Buccal Film for the treatment of ARS patients aged between two and five years, and for working capital, capital expenditures and general corporate purposes.

We can provide no assurance that any of these sources of funding, either individually or in combination, will be available on reasonable terms, if at all, or sufficient to fund our business objectives.

Principal payments of the 13.5% Notes will commence in June 2026, unless the 13.5% Notes are refinanced or amended.

We have used and intend to continue to use our existing cash and cash equivalents, primarily to advance the development and commercialization of our product pipeline and for working capital, capital expenditures and general corporate purposes.

We can provide no assurance that any sources of funding, either individually or in combination, will be available on reasonable terms, if at all, or sufficient to fund our business objectives.

In addition, we may be required to utilize available financial resources sooner than expected.

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• continued ability of our customers to pay, in a timely manner, for presently contracted and future anticipated orders for our manufactured products, including effects of generics and other competitive pressures as currently envisioned;

• approval of Anaphylm by the FDA;

• continued ability of our customers to pay, in a timely manner, for presently contracted and future anticipated orders for provided co-development and feasibility services, as well as regulatory support services for recently licensed products;

• our obligation to commence the 13.5% Notes principal payments in June 2026, unless they are refinanced or amended;

• access to debt or equity markets if, and at the time, needed for any necessary future funding, including our ability to access funding through our ATM facility, should we choose to access this facility;

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• continued growth and market penetration of Sympazan, including anticipated patient and physician acceptance and our licensee’s ability to obtain adequate reimbursement and payment support from government agencies and other private medical insurers;

• effective commercialization within anticipated cost levels and expected ramp-up timeframes of our product Libervant for pediatric patients between two and five years of age;

• infrastructure and administrative costs at expected levels to support operations as an FDA and highly regulated public company;

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In doing so, we plan to continue to focus on the core drivers of value for our stockholders, including, more importantly, continued investments in our ongoing product development activities in support of Anaphylm and AQST-108.

Until profitability is achieved, if at all, additional capital and/or other financing or funding will be required, which could be material, to further advance the commercialization of Libervant for pediatric patients between two and five years of age and development and commercialization of Anaphylm and AQST-108, if approved by the FDA, and to meet our other cash requirements, including debt service, specifically our 13.5% Notes.

We plan to conservatively manage our launch spending as to both timing and level relating to Libervant in light of the approval of Libervant by the FDA for patients between two and five years of age.

Until profitability is achieved, if at all, additional capital and/or other financing or funding will be required, which could be material, to develop and commercialize our product pipeline, including AQST-108, and to fund additional development and commercial activities that are required by the FDA for Anaphylm under the CRL issued to the Company on January 30, 2026, and to meet our other cash requirements, including debt

service, specifically our 13.5% Notes.

Even as such, we expect to incur losses and negative cash flows for the foreseeable future and, therefore, we expect to be dependent upon external financing and funding to achieve our operating plan.

The sufficiency of our short-term and longer-term liquidity is directly impacted by our level of operating revenues and our ability to achieve our operating plan for revenues, regulatory approval in the time period planned for our product candidates and our ability to monetize other royalty streams or other licensed rights within planned timeframes, and there can be no assurance that we will be successful in any monetization transaction.

The sufficiency of our short-term and longer-term liquidity is directly impacted by our level of operating revenues and our ability to achieve our operating plan for revenues, regulatory approval in the time period planned for our product candidates and licensed rights within planned timeframes, and there can be no assurance that we will be successful in any transaction.

Our operating revenues have fluctuated in the past and can be expected to fluctuate in the future.

We expect to incur significant operating losses and negative operating cash flows for the foreseeable future, and we have a significant level of debt on which we have substantial ongoing interest payments have principal repayments related to our 13.5% Notes starting in June 2026 through the debt maturity date and royalty obligation payments projected to be made from the fourth quarter of 2024 to 2034, which are further discussed in Part II Item 8.

We expect to incur significant operating losses and negative operating cash flows for the foreseeable future, and we have a significant level of debt with principal payments starting in June 2026 through the debt maturity date, substantial ongoing interest payments, and royalty obligation payments projected to be made through 2035, which are further discussed in Part II Item 8.

Financial Statements and Supplementary Data, Note 15, Long-Term Debt .

A substantial portion of our current and past revenues has been dependent upon our licensing, manufacturing and sales with one customer, Indivior, which is expected to continue, and it could take significantly longer than planned to achieve anticipated levels of cash flows to help fund our operations and cash needs.

To the extent that we raise additional funds by issuance of equity securities, our stockholders would experience further dilution and the terms of these securities could include liquidation or other preferences (if and to the extent permitted under the Indenture) that would adversely affect our stockholders’ rights.

Our ability to secure additional equity financing could be significantly impacted by numerous factors including our operating performance and prospects, positive or negative developments in the regulatory approval process for our product candidates, our existing level of debt which is secured by substantially all of our assets under the Indenture, and general financial market conditions, and there can be no assurance that we will continue to be successful in raising capital or that any such needed financing will be available, available on favorable or acceptable terms, if at all.

If adequate funds are not available for our short-term or longer-term liquidity needs and cash requirements as and when needed, we would be required to engage in expense management activities such as reducing staff, delaying, significantly scaling back, or even discontinuing some or all of our current or planned launch activities and research and development programs and clinical and other product development activities, and otherwise significantly reducing our other spending and adjusting our operating plan, and we would need to seek to take other steps intended to improve our liquidity.

We also may seek outlicensing opportunities for our proprietary products and product candidate programs that we currently plan to self-commercialize, including for Libervant and Anaphylm, or explore other potential liquidity options or strategic opportunities.

We are currently engaging in plans to commercialize Anaphylm through our own sales force in the United States, should Anaphylm be approved by the FDA.

We will need to raise significant funding to support the continued commercialization of Anaphylm over the long-term, in addition to the funds we may receive under the Purchase Agreement and the funds we received in the 2025 Underwritten Public Offering.

To the extent such additional financing through debt or debt-like instruments is required, we may have increased repayment obligations and potential limits on our flexibility to raise additional debt.

To the extent that we raise additional funds by issuance of equity securities, our stockholders would experience further dilution, and the terms of these securities could include liquidation or other preferences (if and to the extent permitted under the Indenture Agreement) that would adversely affect our stockholders’ rights.

Our ability to secure additional equity financing could be significantly impacted by numerous factors including our operating performance and prospects, positive or negative developments in the regulatory approval process for our product candidates, our existing level of debt which is secured by substantially all of our assets under the Indenture Agreement, and general financial market conditions, and there can be no assurance that we will continue to be successful in raising capital or that any such needed financing will be available on favorable or acceptable terms, if at all.

If adequate funds are not available for our short-term or longer-term liquidity needs and cash requirements as and when needed, we would be required to engage in expense management activities such as reducing staff, delaying, significantly scaling back, or even discontinuing some or all of our current or planned launch activities, R&D programs and clinical and other product development activities, and otherwise significantly reducing our other spending and adjusting our operating plan, and we would need to seek to take other steps intended to improve our liquidity.

We also may seek outlicensing opportunities for our proprietary products and product candidate programs that we may self-commercialize, including for Libervant and Anaphylm, or explore other potential liquidity options or strategic opportunities.

Such strategic opportunities could include asset sales, outlicensing or other monetization opportunities of our proprietary products and product candidates, including Libervant and Anaphylm, although we cannot assure that any of these actions or opportunities would be available or available on acceptable terms.

While an outlicensing of our proprietary products and product candidates, if approved by the FDA, could limit our exposure to the costs of commercialization of the product and provide a potential source of royalty and milestone revenues, the benefit from the potential of additional future value that could result from our independent commercialization of these products and product candidates, assuming a successful launch of our proprietary products and product candidates, if approved by the FDA, would likely be limited.

In addition, in the event of any such asset sales or outlicensing transactions, the future growth of the Company would be dependent on continued successful development or our early stage product candidates and/or asset acquisitions or other strategic transactions for the Company.

While an outlicensing of our proprietary products and product candidates, if approved by the FDA, could limit our exposure to the costs of commercialization of the product and provide a potential source of royalty and milestone revenues, the benefit from the potential future value that could result from our independent commercialization of these products and product candidates, assuming a successful launch of our proprietary products and product candidates, if approved by the FDA, would likely be limited.

In addition, in the event of any such asset sales or outlicensing transactions, the future growth of the Company would be dependent on continued successful development of our early stage product candidates and/or asset acquisitions or other strategic transactions for the Company.

There is no assurance that any such outlicensing or other strategic opportunities will be available or available on reasonable terms.

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Financial Statements and Supplementary Data, Note 11, Right-of-Use Assets and Lease Obligations for our minimum lease payments schedule.

The expected timing of our leases may be different in future years, depending on our decision to extend lease terms and/or enter into leases in preceding years.

For more information on our payments related to the 13.5% Notes, see Part II, Item 8.

The expected timing of our leases may be different in future years, depending on our decision to extend terms of leases entered in proceeding years and/or enter into new leases.

For more information on our obligations related to the 13.5% Notes, see Part II, Item 8.

Financial Statements and Supplementary Data, Note 15, Long-Term Debt .

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While significant accounting policies are more fully described in Part II Item 8.

Financial Statements and Supplementary Data, Note 3, Summary of Significant Accounting Policies , included in this filing, we believe that the following accounting policies are those that are most critical to the significant judgements and estimates used in the preparation of our Financial Statements.

Financial Statements and Supplementary Data, Note 3, Summary of Significant Accounting Policies , included in this filing, we believe that the following accounting policies are those that are most critical to the significant judgments and estimates used in the preparation of our Financial Statements.

Revenue Recognition

Proprietary product revenue, net - this net revenue is recognized when product is shipped and title passes to the customer, typically at time of delivery.

At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates .

Once all related variable considerations are resolved and uncertainties as to collectable amounts are eliminated, estimates are adjusted to actual allowance amounts.

Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis.

License and Royalty Revenue – license revenues are determined based on an assessment of whether the license is distinct from any other performance obligations that may be included in the underlying licensing arrangement.

If the customer is able to benefit from the license without provision of any other performance obligations by Aquestive and the license is

thereby viewed as a distinct or functional license, Aquestive then determines whether the customer has acquired a right to use the license or a right to access the license.

For functional licenses that do not require further development or other ongoing activities by Aquestive, the customer is viewed as acquiring the right to use the license as, and when, transferred and revenues are generally recorded at a point in time, subject to contingencies or constraints.

For symbolic licenses providing substantial value only in conjunction with other performance obligations to be provided by Aquestive, revenues are generally recorded over the term of the license agreement.

Such other obligations provided by Aquestive generally include manufactured products, additional development services or other deliverables that are contracted to be provided during the license term.

If the customer is able to benefit from the license without provision of any other performance obligations by the Company and the license is thereby viewed as a distinct or functional license, the Company then determines whether the customer has acquired a right to use the license or a right to access the license.

For functional licenses that do not require further development or other ongoing activities by the Company, the customer is viewed as acquiring the right to use the license as, and when, transferred and revenues are generally recorded at a point in time, subject to contingencies or constraints.

For symbolic licenses providing substantial value only in conjunction with other performance obligations to be provided by the Company, revenues are generally recorded over the term of the license agreement.

Such other obligations provided by the Company generally include manufactured products, additional development services or other deliverables that are contracted to be provided during the license term.

Payments received in excess of amounts ratably or otherwise earned are deferred and recognized over the term of the license or as contingencies or other performance obligations are met.

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Revenue recognition arising from milestone payments is dependent upon the facts and circumstances surrounding the milestone payments.

Milestone payments based on a non-sales metric such as a development-based milestone ( e.g.

, an NDA filing or obtaining regulatory approval) represent variable consideration and are included in the transaction price subject to any constraints.

Milestone payments based on a non-sales metric such as a development-based milestone (i .e ., an NDA filing or obtaining regulatory approval) represent variable consideration and are included in the transaction price subject to any constraints.

If the milestone payments relate to future development, the timing of recognition depends upon historical experience and the significance a third party has on the outcome.

For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales are incurred or the performance obligation to which the sales relate to has been satisfied.

For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales occur or the performance obligation to which the sales relate to has been satisfied.

Co-development and Research Fees – co-development and research fees are earned through performance of specific tasks, activities or completion of stages of development defined within a contractual development or feasibility study agreement with a customer.

Accordingly, the duration of the Company’s R&D projects may range from several months to approximately three years.

Although each contractual arrangement is unique, common milestones included in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical and/or scale-up batches, and stability testing of those batches.

Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product.

Proprietary product revenue, net - this net revenue is recognized when product is shipped and title passes to the customer, typically at time of delivery.

At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates.

For sales of Libervant for patients between two to five years of age while Libervant had U.S.

Once receivables are collected, allowances are reclassified and treated as accrued liabilities.

Once related variable considerations are resolved and uncertainties as to incurred amounts are eliminated,

estimates are adjusted to actual allowance amounts.

Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis.

Royalty Obligations and Interest Expense

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The Royalty Rights Agreements are classified as debt, and the value of the $45,000 13.5% Notes has been allocated between debt and the royalty obligations based on their relative fair market values.

The excess of future estimated royalty payments of $56,926 over the $13,856 of allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized over the life of the Royalty Rights Agreements.

The excess of future estimated royalty payments over the allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized over the life of the Royalty Rights Agreements.

Such amortization is reflected as interest expense related to royalty obligations in the Statements of Operations and Comprehensive Loss.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis