What changed in this filing

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Item 1. Financial Statements

2025-08-11 compared with 2025-05-12 · 77 added, 52 removed, 293 unchanged (31% of the section changed)

21 unchanged sentences

Operating lease liability, net of current portion

Long-term debt

Total liabilities

2 unchanged sentences

60,000 shares authorized;

outstanding shares were 27,121 at March 31, 2025 and 27,096 at December 31, 2024

outstanding shares were 27,148 at June 30, 2025 and 27,096 at December 31, 2024

Additional paid-in capital

7 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands, except per share data)

10 unchanged sentences

Net loss before income taxes

Provision for income taxes

Provision (benefit) for income taxes

Net loss per share, basic and diluted

12 unchanged sentences

Balance – March 31, 2025

Share-based compensation expense

Issuance of common stock upon exercise of stock options

Balance at June 30, 2025

Stockholders’

4 unchanged sentences

Balance – March 31, 2024

Share-based compensation expense

Issuance of common stock upon exercise of stock options

Balance at June 30, 2024

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEM ENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

19 unchanged sentences

Proceeds from debt

Payments on debt obligations

Net cash provided by financing activities

2 unchanged sentences

Cash, cash equivalents and restricted cash at end of the period

Three Months Ended March 31,

Six Months Ended June 30,

Non-cash investing activities

8 unchanged sentences

Arcturus Therapeutics Holdings Inc.

(the “Company” or "Arcturus") is a commercial messenger RNA medicines company focused on the development of infectious disease vaccines and opportunities within liver and respiratory rare diseases.

(the “Company” or "Arcturus") is a commercial messenger RNA medicines company focused on the development of liver and respiratory rare disease therapeutics and infectious disease vaccines.

Arcturus became a clinical stage company in 2020 when it announced that its Investigational New Drug (“IND”) application for ornithine transcarbamylase (“OTC”) deficiency and its Clinical Trial Application (“CTA”) for candidate LUNAR-COV19 were approved by applicable health authorities.

26 unchanged sentences

The Company cannot guarantee the achievement of these milestones due to risks associated with preclinical and clinical activities required for development of nucleic acid medicine-based therapeutics and vaccines.

The following table presents changes during the three months ended March 31, 2025 in the balances of contract assets and liabilities as compared to what was disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The following table presents changes during the six months ended June 30, 2025 in the balances of contract assets and liabilities as compared to what was disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

(in thousands)

December 31, 2024

March 31, 2025

June 30, 2025

Contract Assets:

4 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in thousands)

6 unchanged sentences

On November 1, 2022, the Company entered into a Collaboration and License Agreement (as amended, the “CSL Collaboration Agreement”) with Seqirus, Inc., a part of CSL Limited (“CSL Seqirus”), for the global exclusive rights to research, develop, manufacture, and commercialize vaccines.

Under the terms of the CSL Collaboration Agreement, the Company provides CSL Seqirus with an exclusive global license to its mRNA technology (including STARR ® ) and LUNAR ® lipid-mediated delivery, along with mRNA drug substance and drug product manufacturing process.

CSL Seqirus will lead development and commercialization of vaccines under the collaboration.

The collaboration plans to advance vaccines against SARS-CoV-2 (COVID-19), influenza, pandemic preparedness as well as three other respiratory infectious diseases.

CSL Seqirus will lead the development and commercialization of vaccines under the collaboration.

The collaboration plans to advance vaccines against SARS-CoV-2 (COVID-19), influenza, pandemic preparedness as well as three other infectious diseases.

In September 2024, our COVID-19 vaccine KOSTAIVE ® became the world’s first approved and commercially available self-amplifying RNA (sa-mRNA) vaccine.

The Company received a $ 200.0 million upfront payment and is eligible to receive over $ 1.3 billion in development milestones if all products are registered in the licensed fields and entitled to potentially receive up to $ 3.0 billion in commercial milestones based on “net sale” of vaccines in the various fields.

In addition, the Company is eligible to receive a 40 % net profit share for COVID-19 vaccine pro ducts and up to low double-digit royalties for vaccines against flu, pandemic preparedness and three other respiratory pathogens.

During the first quarter of 2025, upon the regulatory approval of KOSTAIVE in the European Union (the “EU”), the Company achieved an initial $ 8.0 million milestone related to the CSL Collaboration Agreement which was included in accounts receivable as of March 31, 2025.

Additionally, during the first quarter of 2025, the Company achieved a $ 7.0 million development milestone related to the CSL Collaboration Agreement.

The Company received a $ 200.0 million upfront payment and is eligible to receive over $ 1.3 billion in development milestones if all products are registered in the licensed fields and is entitled to potentially receive up to $ 3.0 billion in commercial milestones based on “net sale” of vaccines in the various fields.

In addition, the Company is eligible to receive a 40 % net profit share for COVID-19 vaccine pro ducts and up to low double-digit royalties for vaccines for pandemic preparedness and against seasonal influenza as well as three other infectious disease pathogens.

During the second quarter of 2025, the Company achieved $ 20.0 million in development milestones related to the CSL Collaboration Agreement, of which $ 10.0 million was included in accounts receivable as of June 30, 2025.

In evaluating the CSL Collaboration Agreement in accordance with ASC 606, the Company concluded that CSL Seqirus is a customer.

The Company identified all promised goods/services within the CSL Collaboration Agreement, and when combining certain promised goods/services, the Company concluded that there are five distinct performance obligations.

The nature of the performance obligations consists of delivery of the vaccine license, research and development services for COVID and non-COVID vaccines and regulatory activities for COVID vaccines.

The nature of the performance obligations consists of the delivery of the vaccine license, research and development services for COVID-19 and non-COVID-19 vaccines and regulatory activities for COVID-19 vaccines.

For each performance obligation, the Company estimated the standalone selling price based on 1) in the case of the license, the fair value using costs to recreate plus margin method and 2) in the case of research and development services and regulatory activities, cost plus margin for estimated full-time equivalent (“FTE”) costs, direct costs including laboratory supplies, contractors, and other out-of-pocket expenses for research and development services and regulatory activities.

As of March 31, 2025, the transaction price consisted of upfront consideration received and milestones achieved.

Additional variable consideration was not included in the transaction price as of March 31, 2025 because the Company could not conclude that it is probable that including the variable consideration will not result in a significant revenue reversal.

As of June 30, 2025, the transaction price consisted of upfront consideration received and milestones achieved.

Additional variable consideration was not included in the transaction price as of June 30, 2025, because the Company could not conclude that it is probable that including the variable consideration will not result in a significant revenue reversal.

The Company allocated the transaction price to the performance obligations in proportion to their standalone selling price.

2 unchanged sentences

Any consideration related to sales-based royalties will be recognized when the amounts are probable of non-reversal, provided that the reported sales are reliably measurable and the Company has no remaining promised goods/services, as they are constrained and therefore have also been excluded from the transaction price.

The revenue recognized in the first quarter of 2025 relates to the license delivered, milestones achieved and services performed through March 31, 2025.

Total deferred revenue as of March 31, 2025 and December 31, 2024 for the CSL Collaboration Agreement was $ 20.8 million and $ 30.7 million, respectively.

The revenue recognized in the second quarter of 2025 relates to the license delivered, milestones achieved and services performed through June 30, 2025.

Total deferred revenue as of June 30, 2025 and December 31, 2024 for the CSL Collaboration Agreement was $ 18.1 million and $ 30.7 million, respectively.

During 2023, the Company entered into an amendment to the CSL Collaboration Agreement, pursuant to which the Company agreed to sponsor and conduct a Phase 1 clinical study in the influenza field.

3 unchanged sentences

Therefore, the Company concluded the promise to sponsor and conduct the Phase 1 clinical study is a separate contract and the sole performance obligation under the new arrangement.

During the quarter ended March 31, 2025 , the Company recognized $ 0.7 million related to the performance obligation and the remaining amount of $ 2.4 million is included in deferred revenue.

During the quarter ended June 30, 2025 , the Company recognized $ 1.1 million related to the performance obligation and the remaining amount of $ 1.3 million is included in deferred revenue.

During the fourth quarter of 2023, the Company received an advance payment of $ 5.3 million from CSL Seqirus for manufacturing activities related to COVID-19 vaccine product.

2 unchanged sentences

The Company recognized $ 5.3 million in revenue related to this customer option during the third quarter of 2024 upon the transfer of vaccine product to CSL Seqirus.

The remaining $ 5.1 million, along with an estimated

adjustment for costs in excess of previously invoiced amounts, was recognized as revenue during the quarter ended March 31, 2025 when the remaining vaccine product was transferred to CSL Seqirus.

The remaining $ 5.1 million, along with an estimated adjustment for costs in excess of previously invoiced amounts, was recognized as revenue during the quarter ended March 31, 2025 when the remaining vaccine product was transferred to CSL Seqirus.

In March 2024, the Company entered into an amendment to the CSL Collaboration Agreement, pursuant to which the parties agreed to, among other things, adjust (i) the development plans for certain product candidates, (ii) various development milestones related to such product candidates, (iii) provisions of the CSL Collaboration Agreement related to specific royalty payments, (iii) provisions of the CSL Collaboration Agreement related to distributors, and (iv) proprietary payment calculations related to the foregoing.

5 unchanged sentences

20 ("IAS 20"), Accounting for Government Grants and Disclosure of Government Assistance, by analogy, the Company recognizes grant revenue from the reimbursement of direct out-of-pocket expenses, overhead allocations and fringe benefits for research costs associated with the grant.

The costs associated with these reimbursements are reflected as a component of research and development expense in the Company’s condensed consolidated statements of operations and comprehensive income (loss).

As of March 31, 2025, the remaining available funding net of revenue e arned was $ 36.1 million.

As of June 30, 2025, the remaining available funding net of revenue e arned was $ 32.2 million.

Fair Value Measurements

6 unchanged sentences

The carrying value of cash, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their respective fair values due to their relatively short maturities.

As of March 31, 2025 and December 31, 2024 , all assets measured at fair value on a recurring basis consisted of cash equivalents and money market funds, which were classified within Level 1 of the fair value hierarchy.

As of June 30, 2025 and December 31, 2024 , all assets measured at fair value on a recurring basis consisted of cash equivalents and money market funds, which were classified within Level 1 of the fair value hierarchy.

The fair value of these financial instruments was measured based on quoted prices.

2 unchanged sentences

(in thousands)

March 31, 2025

June 30, 2025

December 31, 2024

5 unchanged sentences

Property and equipment, net

Depreciation and amortization expense w as $ 0.8 million for th e three months ended March 31, 2025 and $ 0.9 million for the three months ended March 31, 2024.

Depreciation and amortization expense was $ 0.8 million and $ 1.6 million for the three and six months ended June 30, 2025 , respectively, and $ 0.9 million and $ 1.8 million for the three and six months ended June 30, 2024, respectively.

Accrued liabilities consisted of the following:

(in thousands)

March 31, 2025

June 30, 2025

December 31, 2024

6 unchanged sentences

Other accrued research and development expenses

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same such amounts shown in the unaudited condensed consolidated statement of cash flows as of March 31, 2025 and 2024:

(in thousands)

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Cash and cash equivalents

3 unchanged sentences

Restricted cash includes collateral pledged and held in the Company’s securities accounts pursuant to a security agreement with Wells Fargo Bank, National Association (“Wells Fargo”) (Note 5).

As of March 31, 2025 , such collateral amounted to $ 55.0 million.

As of June 30, 2025 , such collateral amounted to $ 55.0 million.

Restricted cash also includes cash required to be set aside as security for lease payments and to maintain a letter of credit for the benefit of the landlord of the Company’s offices.

As of March 31, 2025 and 2024 , the Company had restricted cash of $ 1.9 million in conjunction with property leases in San Diego, California, and such restriction is expected to be removed at the end of the lease term.

As of March 31, 2025 , non-current restricted cash also includes $ 16.5 million related to the Wells Fargo Loan (Note 5).

As of June 30, 2025 and 2024 , the Company had restricted cash of $ 1.9 million in conjunction with property leases in San Diego, California, and such restriction is expected to be removed at the end of the lease term.

Wells Fargo Credit Agreement

8 unchanged sentences

whereby the term of the Note was extended by one year to April 2026.

In March 2025, the Company drew down $ 15.0 million from the Loan, which was subsequently repaid in April 2025.

No amounts were drawn down under the Loan during the three months period ended June 30, 2025.

Stockholders’ Equity

Net Loss per Share

Potentially dilutive securities that were not included in the calculation of diluted net loss per share as they were anti-dilutive for the three months ended March 31, 2025 and 2024 totaled 0.5 million and 1.4 million, respectively.

Potentially dilutive securities that were not included in the calculation of diluted net loss per share as they were anti-dilutive totaled 0.3 million and 0.4 million for three and six months ended June 30, 2025, respectively, and 1.1 million and 1.3 million for the three and six months ended June 30, 2024, respectively.

Sales Agreement

2 unchanged sentences

(“William Blair”) relating to shares of the Company's common stock.

In accordance with the terms of the Sales Agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 200,000,000 from time to time through Cantor, Wells Fargo Securities, or William Blair, each acting as the Company's sales agent.

During the period ended March 31, 2025 the Company did no t offer or sell any shares of common stock pursuant to the Sales Agreement.

In accordance with the terms of the Sales Agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 200 million from time to time through Cantor, Wells Fargo Securities, or William Blair, each acting as the Company's sales agent.

During the three and six months ended June 30, 2025 the Company did no t offer or sell any shares of common stock pursuant to the Sales Agreement.

Share-Based Compensation Expense

In June 2024 at the Company’s 2024 Annual Meeting of Stockholders (the "2024 Annual Meeting"), the stockholders of the Company appro ved an amendment to the Company’s 2019 Omnibus Equity Incentive Plan (as amended, the “2019 Plan”) which, among other things, increased the aggregate number of shares authorized for use in making awards to eligible persons under the 2019 Plan by 2,000,000 shares, for a total of up to 10,750,000 shares available for issuance.

As of March 31, 2025 , a total of 1,177,945 shares remain available for future issuance under the 2019 Plan, subject to the terms of the 2019 Plan.

As of June 30, 2025 , a total of 1,397,536 shares remain available for future issuance under the 2019 Plan, subject to the terms of the 2019 Plan.

In October 2021, the Company adopted the 2021 Inducement Equity Incentive Plan which covers the award of up to 1,000,000 shares of common stock (the “2021 Plan”) effective as of October 15, 2021.

1 unchanged sentence

In April 2022, the compensation committee of the Company’s board of directors approved a proposal to reduce the total number of shares available for future issuance under the 2021 Plan to 130,000 .

As of March 31, 2025, a tota l of 127,419 s hares remain available for future issuance under the 2021 Plan, subject to the terms of the 2021 Plan.

As of June 30, 2025, a tota l of 135,898 s hares remain available for future issuance under the 2021 Plan, subject to the terms of the 2021 Plan.

Share-Based Compensation

Share-based compensation expense included in the Company’s condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024 was as follows:

Share-based compensation expense included in the Company’s condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2025 and 2024 was as follows:

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

(in thousands)

4 unchanged sentences

The primary difference between the effective tax rate and the federal statutory rate is due to federal and state income tax expense offset by valuation allowance on the Company's deferred tax assets.

For the three months ended March 31, 2025 and 2024 , the Company recorded no income tax expense and $ 0.4 million of income tax expense, respectively.

The Company recorded negligible income tax expense for the three and six months ended June 30, 2025 .

For the same periods in 2024, the Company recognized an income tax benefit of $ 0.2 million and income tax expense of $ 0.2 million, respectively.

No tax benefit was provided for losses incurred in the United States because those losses are offset by a full valuation allowance.

Recent Tax Legislation

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which enacts significant changes to U.S.

tax and related laws.

Some of the provisions of the new tax law affecting corporations include but are not limited to current deduction of domestic research expenses, increasing the limit of the deduction of interest expense deduction to thirty percent of EBITDA, and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025.

The Company is currently evaluating the impact the new tax law will have on its financial condition and results of operations.

Preliminarily, the Company does anticipate a change to its effective income tax rate, its net deferred federal income tax Liability and a decrease in current taxes payable;

however a reasonable estimate is not available at this time.

The impact of the tax law changes from the OBBBA will be included in the Company’s financial statements beginning in the three-months ending September 30, 2025.

Commitments and Contingencies

3 unchanged sentences

During the fourth quarter of 2023, the Company received the full payment from CFF related to the amendment.

For the three months ended March 31, 2025 and 2024, the Company recognized a contra expense of $ 0.4 million and no contra expense, respectively, related to CFF.

As of March 31, 2025 and December 31, 2024, $ 7.1 million and $ 7.4 million, respectively, remained in accrued liabilities.

Total contra expense recognized was $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2025, respectively, and $ 0.8 million for both the three and six months ended June 30, 2024.

As of June 30, 2025 and December 31, 2024, $ 6.8 million and $ 7.4 million, respectively, remained in accrued liabilities.

In October 2017, the Company entered into a non-cancellable operating lease agreement for office space adjacent to its previously occupied headquarters.

21 unchanged sentences

The Company uses its incremental borrowing rate to calculate the present value of the lease payments, as the implicit rate in the lease is not readily determinable.

As of March 31, 2025, the remaining payments of the operating lease liability were as follows:

As of June 30, 2025, the remaining payments of the operating lease liability were as follows:

(in thousands)

7 unchanged sentences

Operating lease costs consist of the fixed lease payments included in operating lease liability and are recorded on a straight-line basis over the lease terms.

Operating lease costs were $ 1.3 million for the three months ended March 31, 2025 and $ 1.4 million for the three months ended March 31, 2024, respectively.

Operating lease costs were $ 1.3 million and $ 2.5 million for the three and six months ended June 30, 2025 , respectively, and $ 1.5 million and $ 2.9 million for the three and six months ended June 30, 2024 , respectively.

Segment Information

1 unchanged sentence

The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”).

The Company’s CODM is its Chief Executive Officer, who reviews and evaluates consolidated net (loss) income for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

The Company’s CODM is its Chief Executive Officer, who reviews and evaluates consolidated net loss for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

The CODM does not evaluate the operating segment using asset or liability information.

The following table presents information about reported segment revenues, segment loss and income, and significant segment expenses:

Three Months Ended March 31,

For the Three Months

Ended June 30,

For the Six Months Ended June 30,

(in thousands)

9 unchanged sentences

Related Party Transactions

See “Note 1, Joint Ventures, Equity Method Investments and Variable Interest Entities” for specific details surrounding the Company’s agreement with Axcelead to form the joint venture entity, ARCALIS, Inc.

Equity-method Investment - ARCALIS, Inc.

Investments for which the Company exercises significant influence, but does not have control are accounted for under the equity method.

Equity-method investment activity is related to the Company's joint venture in ARCALIS, Inc.

with Axcelead, Inc.

The Company’s share of the investees’ results is presented as either income or loss from equity-method investees in the accompanying

consolidated statements of operations and comprehensive loss.

As of June 30, 2025, the carrying value of the equity-method investment in ARCALIS remained at zero .

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-Q

Item 1. Financial Statements