Arcturus Therapeutics Holdings Inc. 10-Q

Item 1. Financial Statements. ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2025 December 31, 2024 (in thousands, except par value information) (unaudited) Assets Current assets: Cash and cash equivalents $ 180,360 $ 237,028 Restricted cash 55,000 55,000 Accounts receivable 7,951 3,974 Prepaid expenses and other current assets 5,889 9,977 Total current assets 249,200 305,979 Property and equipment, net 7,419 9,531 Operating lease right-of-use assets, net 23,839 26,674 Non-current restricted cash 1,885 1,885 Total assets $ 282,343 $ 344,069 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 5,491 $ 7,194 Accrued liabilities 19,382 38,781 Deferred revenue 6,826 19,514 Total current liabilities 31,699 65,489 Deferred revenue, net of current portion 4,220 12,604 Operating lease liability, net of current portion 21,865 24,998 Total liabilities 57,784 103,091 Stockholders’ equity Common stock, $ 0.001 par value; 60,000 shares authorized; issued and outstanding shares were 27,235 at September 30, 2025 and 27,096 at December 31, 2024 27 27 Additional paid-in capital 710,043 689,758 Accumulated deficit ( 485,511 ) ( 448,807 ) Total stockholders’ equity 224,559 240,978 Total liabilities and stockholders’ equity $ 282,343 $ 344,069 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share data) 2025 2024 2025 2024 Revenue: Collaboration revenue $ 14,153 $ 38,815 $ 64,140 $ 117,389 Grant revenue 2,998 2,858 10,695 12,155 Total revenue 17,151 41,673 74,835 129,544 Operating expenses: Research and development, net 23,265 39,134 87,736 151,376 General and administrative 10,398 13,276 32,052 40,443 Total operating expenses 33,663 52,410 119,788 191,819 Loss from operations ( 16,512 ) ( 10,737 ) ( 44,953 ) ( 62,275 ) Loss from foreign currency ( 170 ) ( 201 ) ( 319 ) ( 642 ) Finance income, net 3,234 3,818 8,572 11,981 Net loss before income taxes ( 13,448 ) ( 7,120 ) ( 36,700 ) ( 50,936 ) Provision (benefit) for income taxes — ( 217 ) 4 — Net loss $ ( 13,448 ) $ ( 6,903 ) $ ( 36,704 ) $ ( 50,936 ) Net loss per share, basic and diluted $ ( 0.49 ) $ ( 0.26 ) $ ( 1.35 ) $ ( 1.89 ) Weighted-average shares outstanding, basic and diluted 27,188 27,062 27,142 26,970 Comprehensive loss: Net loss $ ( 13,448 ) $ ( 6,903 ) $ ( 36,704 ) $ ( 50,936 ) Comprehensive loss $ ( 13,448 ) $ ( 6,903 ) $ ( 36,704 ) $ ( 50,936 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 2 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATE MENTS OF STOCKHOLDERS’ EQUITY (unaudited) Additional Total Common Stock Paid-In Accumulated Stockholders’ (in thousands) Shares Amount Capital Deficit Equity Balance – December 31, 2024 27,096 $ 27 $ 689,758 $ ( 448,807 ) $ 240,978 Net loss — — — ( 14,076 ) ( 14,076 ) Share-based compensation expense — — 6,662 — 6,662 Issuance of common stock upon exercise of stock options 25 — 195 — 195 Balance – March 31, 2025 27,121 $ 27 $ 696,615 $ ( 462,883 ) $ 233,759 Net loss — — — ( 9,180 ) ( 9,180 ) Share-based compensation expense — — 6,200 — 6,200 Issuance of common stock upon exercise of stock options 27 — 274 — 274 Balance – June 30, 2025 27,148 $ 27 $ 703,089 $ ( 472,063 ) $ 231,053 Net loss — — — ( 13,448 ) ( 13,448 ) Share-based compensation expense — — 5,729 — 5,729 Issuance of common stock upon exercise of stock options 52 — 640 — 640 Issuance of common stock under equity plans 35 — 585 — 585 Balance – September 30, 2025 27,235 $ 27 $ 710,043 $ ( 485,511 ) $ 224,559 Additional Total Common Stock Paid-In Accumulated Stockholders’ (in thousands) Shares Amount Capital Deficit Equity Balance – December 31, 2023 26,828 $ 27 $ 646,352 $ ( 367,866 ) $ 278,513 Net loss — — — ( 26,817 ) ( 26,817 ) Share-based compensation expense — — 10,088 — 10,088 Issuance of common stock upon exercise of stock options 89 — 2,188 — 2,188 Balance – March 31, 2024 26,917 $ 27 $ 658,628 $ ( 394,683 ) $ 263,972 Net loss — — — ( 17,216 ) ( 17,216 ) Share-based compensation expense — — 9,424 — 9,424 Issuance of common stock upon exercise of stock options 125 — 2,403 — 2,403 Balance – June 30, 2024 27,042 $ 27 $ 670,455 $ ( 411,899 ) $ 258,583 Net loss — — — ( 6,903 ) ( 6,903 ) Share-based compensation expense — — 9,493 — 9,493 Issuance of common stock upon exercise of stock options 2 — 11 — 11 Issuance of common stock under equity plans 40 — 682 — 682 Balance – September 30, 2024 27,084 $ 27 $ 680,641 $ ( 418,802 ) $ 261,866 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEM ENTS OF CASH FLOWS (unaudited) Nine Months Ended September 30, (in thousands) 2025 2024 Operating activities Net loss $ ( 36,704 ) $ ( 50,936 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,343 2,725 Share-based compensation expense 18,591 29,005 Foreign currency transaction loss 319 643 Changes in assets and liabilities: Accounts receivable ( 3,977 ) 1,865 Prepaid expense and other assets 4,088 ( 923 ) Right-of-use assets 2,835 3,638 Accounts payable ( 1,616 ) 4,852 Accrued liabilities ( 19,718 ) ( 625 ) Deferred revenue ( 21,072 ) ( 47,051 ) Lease liabilities ( 3,133 ) ( 2,656 ) Net cash used in operating activities ( 58,044 ) ( 59,463 ) Investing activities Acquisition of property and equipment ( 318 ) ( 648 ) Net cash used in investing activities ( 318 ) ( 648 ) Financing activities Proceeds from exercise of stock options 1,109 4,602 Proceeds from the issuance of common stock under equity plans 585 682 Proceeds from debt 15,000 — Payments on debt obligations ( 15,000 ) — Net cash provided by financing activities 1,694 5,284 Net decrease in cash, cash equivalents and restricted cash ( 56,668 ) ( 54,827 ) Cash, cash equivalents and restricted cash at beginning of the period 293,913 348,890 Cash, cash equivalents and restricted cash at end of the period $ 237,245 $ 294,063 Nine Months Ended September 30, 2025 2024 Non-cash investing activities Non-cash asset disposal $ 2,183 $ 473 Right-of-use assets acquired through operating leases $ — $ 2,736 Purchase of property and equipment in accounts payable $ ( 87 ) $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 4 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Description of Business, Basis of Presentation and Summary of Significant Accounting Policies Description of Business Arcturus Therapeutics Holdings Inc. (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. In 2023, our COVID-19 vaccine, ARCT-154 (also referred to as KOSTAIVE ® ), received marketing authorization approval in Japan for adults 18 years and older , and in September 2024 KOSTAIVE became the world’s first approved and commercially available self-amplifying RNA (sa-mRNA) vaccine. Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Arcturus and its subsidiaries and are unaudited. All intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. Interim financial results are not necessarily indicative of results anticipated for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. These condensed consolidated financial statements are prepared in accordance with GAAP, which requires management to make estimates and assumptions regarding the valuation of certain debt and equity instruments, share-based compensation, accruals for liabilities, income taxes, revenue and deferred revenue, leases, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Although these estimates are based on management’s knowledge of current events and actions the Company may undertake in the future, actual results may ultimately differ from these estimates and assumptions. There were no significant changes to our significant accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 . Recently Issued Accounting Standards Not Yet Adopted From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the condensed consolidated financial statements and disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public entities to disclose specified information about certain costs and expenses on an interim and annual basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that adoption of ASU 2024-03 will have on the financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The standard is effective for the Company beginning in fiscal year 2025, with early adoption permitted. The Company does not expect to early adopt the new standard. The new standard is expected to be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact of ASU 2023-09 on the financial statements and related disclosures. 5 Note 2. Revenue The Company has entered into license agreements and collaborative research and development arrangements with pharmaceutical and biotechnology companies, as well as consulting, related technology transfer, product revenue and government grant agreements. Under these arrangements, the Company is entitled to receive license fees, consulting fees, product fees, technological transfer fees, upfront payments, milestone payments if and when certain research and development milestones, technology transfer milestones or success-based milestones are achieved, royalties on approved product sales and reimbursement for research and development activities. The Company’s costs of performing these services are included within research and development expenses. The Company’s milestone payments are typically defined by achievement of certain preclinical, clinical, and commercial success criteria. Preclinical milestones may include in vivo proof of concept in disease animal models, lead candidate identification, and completion of IND-enabling toxicology studies. Clinical milestones may, for example, include successful enrollment of the first patient in or completion of Phase 1, 2 and 3 clinical trials, and commercial milestones are often tiered based on net or aggregate sale amounts. 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 nine months ended September 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 Additions Deductions September 30, 2025 Contract Assets: Accounts receivable $ 3,974 $ 53,189 $ ( 49,212 ) $ 7,951 Contract Liabilities: Deferred revenue $ 32,118 $ 53,763 $ ( 74,835 ) $ 11,046 The following table summarizes the Company’s revenues for the periods indicated. For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Collaboration Revenue: CSL Seqirus $ 13,553 $ 38,786 $ 63,453 $ 117,078 Other collaboration revenue 600 29 687 311 Total collaboration revenue $ 14,153 $ 38,815 $ 64,140 $ 117,389 Grant revenue: BARDA $ 1,895 $ 2,858 $ 9,591 $ 12,155 Gates Foundation 1,103 — 1,104 — Total grant revenue $ 2,998 $ 2,858 $ 10,695 $ 12,155 The following paragraphs provide information regarding the nature and purpose of the Company’s most significant collaboration and grant arrangements. 6 CSL Seqirus 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 processes. 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 is entitled to potentially receive up to $ 3.0 billion in commercial milestones based on “net sales” 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 third quarter of 2025, the Company invoiced $ 4.1 million in upfront payments related to the CSL Collaboration Agreement. All amounts were included in accounts receivable as of September 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 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 September 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 September 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. The vaccine license was recognized at the point in time it was transferred in 2022. The research and development and regulatory activities performance obligations are recognized over a period of time based on the percentage of services rendered using the input method, meaning actual costs incurred divided by total costs budgeted to satisfy the performance obligation. 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 third quarter of 2025 relates to the license delivered, milestones achieved and services performed through September 30, 2025. Total deferred revenue as of September 30, 2025 and December 31, 2024 for the CSL Collaboration Agreement was $ 8.7 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. As part of the amendment, the Company received $ 17.5 million from CSL Seqirus. The amendment also provides for up to $ 1.5 million in additional payments which are achievable upon meeting certain clinical milestones relating to the Phase 1 clinical study in the influenza field. The Company previously concluded that the expansion of research and development support services under the CSL Collaboration Agreement represented an option that was not a material right. 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 September 30, 2025 , the Company recognized $ 1.4 million related to the performance obligation, which was fully satisfied during the period. 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. During the first quarter of 2024, the Company received an additional advance payment of $ 5.1 million from CSL Seqirus for manufacturing activities related to COVID-19 vaccine product. The Company concluded that the promise to perform manufacturing activities is a customer option as part of the CSL Collaboration Agreement and is accounted for as a separate contract. 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. 7 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. BARDA In August 2022, the Company entered into a cost reimbursement contract (the “BARDA Contract”) with the Biomedical Advanced Research and Development Authority ("BARDA"), a division of the Office of the Assistant Secretary for Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services (HHS) for an award of up to $ 63.2 million for the development of a pandemic influenza vaccine using the Company's STARR ® self-amplifying mRNA vaccine platform technology. The Company earns grant revenue for performing tasks under the agreement. The Company determined that the BARDA Contract is not in the scope of ASC 808 or ASC 606. Applying International Accounting Standards No. 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 loss. As of September 30, 2025, the remaining available funding net of revenue e arned was $ 30.3 million. Gates Foundation During the three months ended September 30, 2025 , the Company recognized $ 1.1 million of grant revenue related to cost reimbursement under two grants awarded by the Gates Foundation. The grants support development of (i) a therapeutic HPV vaccine candidate and (ii) durability assessments of self-amplifying mRNA COVID-19 vaccine platforms. Grant funding is conditional upon achievement of defined milestones and submission of periodic progress and financial reports. Revenue is recognized as qualifying costs, including employee FTE labor and related expenses, are incurred in accordance with the terms of each agreement. Unspent or uncommitted amounts remain deferred until the associated performance obligations are satisfied. As of September 30, 2025 , deferred grant revenue related to these agreements totaled $ 2.3 million. Note 3. Fair Value Measurements The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company established a fair value hierarchy based on the inputs used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3: Unobservable inputs in which little or no market data exists and are therefore determined using estimates and assumptions developed by the Company, which reflect those that a market participant would use. 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 September 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. Note 4. Other Balance Sheet Details 8 Property and equipment, net balances consisted of the following: (in thousands) September 30, 2025 December 31, 2024 Research equipment $ 15,105 $ 16,864 Computers and software 1,069 1,131 Office equipment and furniture 604 703 Leasehold improvements 2,612 2,644 Total 19,390 21,342 Less accumulated depreciation and amortization ( 11,971 ) ( 11,811 ) Property and equipment, net $ 7,419 $ 9,531 Depreciation and amortization expense was $ 0.8 million and $ 2.3 million for the three and nine months ended September 30, 2025 , respectively, and $ 0.9 million and $ 2.7 million for the three and nine months ended September 30, 2024 , respectively. During the three months ended September 30, 2025, the Company disposed of certain fully depreciated assets with no cash proceeds. Accrued liabilities consisted of the following: (in thousands) September 30, 2025 December 31, 2024 Accrued compensation $ 4,956 $ 13,305 Cystic Fibrosis Foundation liability 6,577 7,443 Current portion of operating lease liability 4,122 3,552 Clinical trial accruals 349 2,828 Vinbiocare contractual liabilities 386 2,421 Legal accrual — 130 Other accrued research and development expenses 2,992 9,102 Total $ 19,382 $ 38,781 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 September 30, 2025 and 2024: (in thousands) September 30, 2025 September 30, 2024 Cash and cash equivalents $ 180,360 $ 237,178 Restricted cash 55,000 55,000 Non-current restricted cash 1,885 1,885 Total cash, cash equivalents and restricted cash $ 237,245 $ 294,063 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 September 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 September 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. Note 5. Debt Wells Fargo Credit Agreement The Company’s wholly-owned subsidiary, Arcturus Therapeutics, Inc. (“Arcturus Therapeutics”) entered into a credit agreement with Wells Fargo Bank on April 21, 2023, and amended on June 26, 2024 , whereby Wells Fargo will make a $ 50.0 million 9 revolving credit line available to the Company (the “Loan”) and each draw on the Loan evidenced by a revolving line of credit note (the “Note”). Borrowings under the agreement will bear interest at a rate of 1.00 % above either the Daily Simple SOFR or Term SOFR (as such terms are defined in the Note), with “SOFR” being the rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York. If an Event of Default (as defined in the agreement) occurs, then all Loans shall bear interest at a rate equal to 2.00 % above the interest rate applicable immediately prior to the occurrence of the Event of Default. The term of the agreement was originally two years , with an option for one-year renewals subject to Wells Fargo approval and Arcturus Therapeutics furnishing to Wells Fargo a non-refundable commitment fee equal to 0.25 % of the Loan amount for each such renewal. There is no penalty for terminating the facility prior to the maturity date of the Note. As collateral, the Company has agreed to pledge $ 55.0 million in cash to be held in the Company’s securities accounts with Wells Fargo Securities, LLC, an affiliate of Wells Fargo, pursuant to a security agreement. In June 2024, Arcturus Therapeutics and Wells Fargo entered into an amendment to the Note, whereby the term of the Note was extended by one year to April 2026. No amounts were drawn down under the Loan during the three months ended September 30, 2025. Note 6. 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 totaled 0.5 million and 0.4 million for three and nine months ended September 30, 2025, respectively, and 0.7 million and 1.1 million for the three and nine months ended September 30, 2024, respectively. Sales Agreement On December 23, 2022, the Company entered into a Controlled Equity Offering℠ Sales Agreement, which was amended on August 7, 2023 (as amended, the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”),Wells Fargo Securities, LLC (“Wells Fargo Securities”), and William Blair & Company, L.L.C. (“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 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 nine months ended September 30, 2025 the Company did no t offer or sell any shares of common stock pursuant to the Sales Agreement. Note 7. 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 September 30, 2025 , a total of 1,586,213 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. Approval of the Company’s stockholders is not required as a condition to the effectiveness of the 2021 Plan for so long as the plan is in compliance with applicable Nasdaq inducement plan rules. 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 . Pursuant to the terms of the plan, shares underlying awards that are forfeited, cancelled, or terminated without issuance are returned to the share reserve. As of September 30, 2025 , a total of 151,215 shares remain availabl e 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 and nine months ended September 30, 2025 and 2024 was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Research and development $ 3,342 $ 4,395 $ 10,414 $ 13,575 General and administrative 2,387 5,098 8,177 15,430 Total $ 5,729 $ 9,493 $ 18,591 $ 29,005 10 Note 8. Income Taxes The Company is subject to taxation in the United States and various states. The Company computes its quarterly income tax provision by using a forecasted annual effective tax rate and adjusts for any discrete items arising during the quarter. 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. The Company recorded negligible income tax expense for the three and nine months ended September 30, 2025 . For the three months ended September 30, 2024, the Company recorded $ 0.2 million of income tax benefit and for the nine months ended September 30, 2024, the Company recorded no income tax benefit. 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 impact of the tax law changes from the OBBBA was included in the Company’s financial statements beginning in the three-months ending September 30, 2025. Note 9. Commitments and Contingencies Cystic Fibrosis Foundation Agreement On September 25, 2023, the Company amended its Development Program Letter Agreement, dated May 16, 2017 and as amended July 13, 2018 and August 1, 2019, with the Cystic Fibrosis Foundation (“CFF”). Pursuant to the amendment, (i) CFF increased the amount it will award to advance LUNAR-CF to $ 24.6 million from approximately $ 15.6 million, and (ii) the Company agreed to incur at least $ 15.0 million toward activities under the research plan. During the fourth quarter of 2023, the Company received the full payment from CFF related to the amendme nt. Total contra expense recognized was $ 0.2 million and $ 0.9 million for the three and nine months ended September 30, 2025 , respectively. A total expense of $ 0.3 million and a total contra expense of $ 0.5 million were recognized during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025 and December 31, 2024 , $ 6.6 million and $ 7.4 million, respectively, remained in accrued liabilities. Leases In October 2017, the Company entered into a non-cancellable operating lease agreement for office space adjacent to its previously occupied headquarters. The commencement of the lease began in March 2018 and the lease extends for approximately 84 months from the commencement date with a remaining lease term through March 2025. Monthly rental payments are due under the lease and there are escalating rent payments during the term of the lease. The Company is also responsible for its proportional share of operating expenses of the building and common areas. In conjunction with the new lease, the Company received free rent for four months and received a tenant improvement allowance of $ 0.1 million. In March 2024, the Company negotiated with the lessor to extend the lease through March 2027. The Company entered into an irrevocable standby letter of credit with the landlord for a security deposit of $ 0.1 million upon executing the lease which is included (along with additional funds required to secure the letter of credit) in the balance of non-current restricted cash. In February 2020, the Company entered into a second non-cancellable operating lease agreement for office space near its current headquarters. The lease extended for 13 months from the commencement date and included a right to extend the lease for one twelve-month period. In February 2021, the Company opted to extend the lease through March 2025 to coincide with the lease term of the Company’s headquarters. In January 2024, the Company vacated this office space with no intention of operating out of the location in the future. The Company was still engaged in the lease for the property and obligated to make the remaining lease payments through March 31, 2025, and therefore recorded an impairment loss in the amount of $ 1.3 million during the three months ended March 31, 2024, as there was no future economic benefit from the lease. In July 2024, the Company terminated the existing lease agreement, in accordance with its terms, thereby ending their contractual obligation to pay for the premises. In September 2021, the Company entered into a third non-cancellable lease agreement for office, research and development, engineering and laboratory space near its current headquarters, and such lease term commenced during the second quarter of 2022. The initial term of this lease extends ten years and eight months from the date of possession, and the Company has the right to extend the term of the lease for an additional five-year period. When the lease term was determined for the operating lease right-of-use assets and lease liabilities, the extension option for the lease was not included. The lease has a monthly base rent ranging from $ 0.3 million 11 to $ 0.4 million which escalates over the lease term. The Company received a free rent period of four months and also pays for various operating costs, including utilities and real property taxes. The Company entered into an irrevocable standby letter of credit with the landlord for a security deposit of $ 2.0 million upon executing the lease which is included (along with additional funds required to secure the letter of credit) in the balance of non-current restricted cash. Operating lease right-of-use asset and liability on the consolidated balance sheets represent the present value of remaining lease payments over the remaining lease terms. The Company does not allocate lease payments to non-lease components; therefore, payments for common-area-maintenance and administrative services are not included in the operating lease right-of-use asset and liability. 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 September 30, 2025, the remaining payments of the operating lease liability were as follows: (in thousands) Remaining Lease Payments 2025 (remainder of year) $ 1,287 2026 5,274 2027 4,132 2028 3,822 2029 3,937 Thereafter 11,813 Total remaining lease payments 30,265 Less: imputed interest ( 4,278 ) Total operating lease liabilities $ 25,987 Weighted-average remaining lease term 6.6 Weighted-average discount rate 4.6 % 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 and $ 3.8 million for the three and nine months ended September 30, 2025 , respectively, and $ 1.3 million and $ 4.1 million for the three and nine months ended September 30, 2024 , respectively. Note 10. Segment Information The Company operates in one business segment, which includes all activities related to the discovery, development and commercialization of messenger RNA medicines. 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 for purposes of assessing performance, making operating 12 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: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Revenues $ 17,151 $ 41,673 $ 74,835 $ 129,544 Less: Research and development: LUNAR-COVID 3,890 12,035 13,530 55,092 LUNAR-OTC 780 890 5,257 7,200 BARDA 1,043 1,347 5,983 6,949 LUNAR-CF, net 3,210 5,502 14,987 12,307 Early-stage programs 370 2,100 536 14,566 Discovery technologies 1,720 2,071 6,346 4,123 Payroll and benefits 9,693 13,718 33,347 43,234 Facilities and equipment 2,559 1,471 7,750 7,905 Total research and development 23,265 39,134 87,736 151,376 General and administrative 10,398 13,276 32,052 40,443 Other (1) ( 3,064 ) ( 3,834 ) ( 8,249 ) ( 11,339 ) Net loss $ ( 13,448 ) $ ( 6,903 ) $ ( 36,704 ) $ ( 50,936 ) (1) Primarily includes interest income. Note 11. Related Party Transactions 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 September 30, 2025, the carrying value of the equity-method investment in ARCALIS remained at zero . Note 12. Subsequent Events Change of Corporate Headquarters On November 6, 2025, the Company changed its corporate headquarters from 10628 Science Center Drive, Suite 250 San Diego, California 92121, to 10285 Science Center Drive, San Diego, California 92121 (the “Address Change”) in order to order to consolidate administrative operations into a single facility. There was no material impact on the Company’s operations, financial position, or results of operations as a result of the Address Change. 13