Arcturus Therapeutics Holdings Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e)) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. Our Chief Executive Officer and Principal Financial Officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures, and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as of December 31, 2025. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with “U.S. GAAP” and includes those policies and procedures that: (1) pertain to the maintenance of records that accurately and fairly reflect our transactions and the dispositions of our assets; (2) provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with “GAAP” and that our receipts and expenditures are being made only in accordance with appropriate authorizations; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Management assessed our internal control over financial reporting as of December 31, 2025 based on the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment included evaluation of such elements as the 77 design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. This assessment is supported by testing and monitoring performed both by our Internal Audit function and our Finance function. Based on our assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2025. Management reviewed the results of its assessment with our Audit Committee. The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, and their opinion is stated in their report, which is included in Part II, Item 8 of the Annual Report on Form 10-K. Remediation of Previously Reported Material Weakness As previously reported in Part II, Item 9A. “Controls and Procedures” of our Annual Reports on Form 10-K for the fiscal year ended December 31, 2024, we identified a material weakness related to information technology general controls (“ITGCs”) that support the financial reporting process. Specifically, the remediated material weakness related to ineffective controls over (i) user access to ensure appropriate segregation of duties and adequate restriction of user and privileged access to financial applications, programs and data, to the appropriate personnel; (ii) program change management for financial applications to ensure that information technology (“IT”) program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; and (iii) IT operations controls to ensure that critical interface jobs are monitored. We have completed execution of our remediation plan for this material weakness and, as of December 31, 2025, successfully remediated this material weakness by implementing the following measures: • updated and enhanced the IT policies and relevant internal controls to consider and address ITGCs including access security and change management; • limited elevated access profiles in financially relevant IT systems and software to appropriate personnel; • developed and enhanced access administration controls over provisioning, deprovisioning, and authentication; • developed and enhanced user access reviews for financially relevant IT systems; • designed and refined controls over change management and IT operations controls to monitor critical interface jobs; • hired an internal audit manager with an appropriate level of knowledge and experience; • engaged an accounting advisory firm to assist with the documentation, evaluation, remediation, and testing of our internal control over financial reporting; and • provided training to control owners and relevant personnel to improve documentation that supports effective control activities, including evidence over the completeness and accuracy of information used in controls. Changes in Internal Control over Financing Reporting Other than the remediation efforts completed and described above, there were no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations on Effectiveness of Disclosure Controls and Procedures, and Internal Controls Over Financial Reporting Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. 78 Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Arcturus Therapeutics Holdings Inc. Opinion on Internal Control Over Financial Reporting We have audited the internal control over financial reporting of Arcturus Therapeutics Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated March 3, 2026, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become 79 inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP San Diego, California March 3, 2026 Item 9B. Other Information Rule 10b5-1 Trading Plans For the three months ended December 31, 2025, none of our directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" (as defined in Item 408 of Regulation S-K of the Exchange Act) intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. Item 9C. Disc losure Regarding Foreign Jurisdictions that Prevent Inspections Not Applicable. 80 PART III Item 10. Directors, Executive Off icers and Corporate Governance Information required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated herein by reference. Item 11. Executiv e Compensation Information required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Own ers and Management and Related Stockholder Matters Information required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence Information required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated herein by reference. Item 14. Principal Accoun ting Fees and Services Information required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated herein by reference. 81 PART IV Item 15. Exhibits, Financ ial Statement Schedules (a) (1) The information required by this item is included in Item 8 of Part II of this Annual Report.; (2) Financial statement schedules not listed above have been omitted because information required to be set forth therein is not applicable, not required, or the information required by such schedules is shown in the consolidated financial statements or the notes thereto. (3) See the exhibit index preceding the signature pages to this Annual Report, which is incorporated by reference herein. (b) See the exhibit index preceding the signature pages to this Annual Report, which is incorporated by reference herein. (c) Not applicable. Item 16. Form 10-K Summary None. 82 Exhibit Index Exhibit Number Description 1.1 Controlled Equity Offering℠ Sales Agreement, dated as of December 23, 2022 by and between Cantor Fitzgerald & Co, Wells Fargo Securities, LLC and Arcturus Therapeutics Holdings Inc. Incorporated by reference to Exhibit 1.2 to Registration Statement on Form S-3 filed on December 23, 2022 (File No. 333269003). 1.2 Amendment No. 1 to Controlled Equity Offering℠ Sales Agreement by and between Cantor Fitzgerald & Co, Wells Fargo Securities, LLC, William Blair & Company, L.L.C., and Arcturus Therapeutics Holdings Inc. Incorporated by reference to Exhibit 1.1 to Form 8-K filed on August 7, 2023 . 3.1 Certificate of Incorporation. Incorporated by reference to Annex B to the proxy statement/prospectus which forms part of the Registration Statement on Form S-4 filed on March 18, 2019 (File No. 333-230353). 3.2 Certificate of Amendment, dated November 25, 2020. Incorporated by reference to Exhibit 3.1 to Form 8-K filed on November 25, 2020 (File No. 001-38942). 3.3 Bylaws of Arcturus Therapeutics Holdings Inc. Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-3, filed with the SEC on May 8, 2020 (File No. 333-238139). 4.1* Description of Registrant’s Securities. 10.1† Form of Indemnification Agreement. Incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on March 16, 2020 (File No. 001-38942). 10.2† Amended and Restated 2019 Omnibus Equity Incentive Plan. Incorporated by reference Exhibit 4.3 to the Registration Statement on Form S-8 filed on August 5, 2020 (File No. 001-38942). 10.3† Arcturus Therapeutics Ltd. Amended and Restated Compensation Policy for Company Office Holders. Incorporated by reference to Exhibit 99.2 to the Company’s Report of Foreign Private Issuer on Form 6-K filed on July 27, 2018 (File No. 001-35932). 10.4** Research and Exclusive License Agreement, by and between Arcturus Therapeutics, Inc. and Synthetic Genomics, Inc., effective October 24, 2017. Incorporated by reference to Exhibit 4.8 to Form 20-F filed on May 14, 2018 (File No. 001-35932). 10.5** Letter Agreement, by and between Arcturus Therapeutics, Inc. and the Cystic Fibrosis Foundation, dated May 16, 2017. Incorporated by reference to Exhibit 4.11 to Form 20-F filed on May 14, 2018 (File No. 001-35932). 10.6** Amendment No. 2 to Letter Agreement, by and between Arcturus Therapeutics, Inc. and the Cystic Fibrosis Foundation, dated August 1, 2019. Incorporated by reference to Exhibit 10.16 to Form 10-Q filed on August 14, 2019. 10.7 Lease Agreement, by and between Arcturus Therapeutics, Inc. and ARE-SD Region No. 44, LLC, dated October 4, 2017. Incorporated by reference to Exhibit 4.6 to Form 20-F filed on May 14, 2018 (File No. 001-35932). 83 Exhibit Number Description 10.8 First Amendment to Lease Agreement, by and between Arcturus Therapeutics Holdings Inc. and ARE-SD Region No. 44, LLC dated February 1, 2020. Incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on March 16, 2020 (File No. 001-38942). 10.9** Acceptance Letter, dated March 4, 2020, by and between Arcturus Therapeutics Holdings Inc. and the Economic Development Board of Singapore. Incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on March 16, 2020 (File No. 001-38942). 10.10** Manufacturing Support Agreement, dated November 7, 2020, by and between Arcturus Therapeutics Holdings Inc. and the Economic Development Board of Singapore. Incorporated by reference to Exhibit 10.33 to Quarterly Report on Form 10-Q filed on November 9, 2020 (File No. 001-38942). 10.11† 2020 Employee Stock Purchase Plan. Incorporated by reference to Exhibit 4.3 to Form S-8 filed on August 5, 2020 (File No. 001-38942). 10.12 Second Amendment to Lease, by and between Arcturus Therapeutics, Inc. and ARE-SD Region No. 44, LLC, dated November 13, 2020. Incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on March 1, 2020 (File No. 001-38942). 10.13 Third Amendment to Lease, by and between Arcturus Therapeutics, Inc. and ARE-SD Region No. 44, LLC, dated February 25, 2021. Incorporated by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on March 1, 2021 (File No. 001-38942). 10.14† Arcturus Therapeutics Holdings Inc. Severance Policy for Executives. Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 26, 2021 (File No. 001-38942). 10.15† Employment Agreement, dated as of June 13, 2019, between the Company and Joseph Payne. Incorporated by reference to Exhibit 10.1 to Form 8-K12B filed on June 14, 2019 (File No. 001-38942) 10.16† Employment Agreement, dated as of June 13, 2019, between the Company and Andy Sassine. Incorporated by reference to Exhibit 10.2 to Form 8-K12B filed on June 14, 2019 (File No. 001-38942) 10.17† Employment Agreement, dated as of June 13, 2019, between the Company and Dr. Padmanabh Chivukula. Incorporated by reference to Exhibit 10.3 to Form 8-K12B filed on June 14, 2019 (File No. 001-38942) 10.18† 2021 Inducement Equity Incentive Plan. Incorporated by reference to Exhibit 4.1 to Form S-8 filed on October 20, 2021 (File No. 333-260391). 10.19 Lease, by and between Arcturus Therapeutics, Inc. and TPSC IX, LLC, dated September 29, 2021. Incorporated by reference to Exhibit 10.35 to Form 10-Q filed on November 9, 2021 (File No. 001-38942). 10.20 Technology License and Technical Support Agreement, signed July 29, 2021 and effective July 30, 2021, by and between Arcturus Therapeutics, Inc. and Vinbiotech Research and Manufacture Joint Stock Company. Incorporated by reference to Exhibit 10.32 to Quarterly Report on Form 10-Q filed on August 10, 2021 (File No. 001-38942). 84 Exhibit Number Description 10.21 Framework Drug Substance Supply Agreement, signed July 29, 2021 and effective July 30, 2021, by and between Arcturus Therapeutics, Inc. and Vinbiotech Research and Manufacture Joint Stock Company. Incorporated by reference to Exhibit 10.33 to Quarterly Report on Form 10-Q filed on August 10, 2021 (File No. 001-38942). 10.22† Amended and Restated 2019 Omnibus Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on June 14, 2024 (File No. 001-38942). 10.23** Study Support Agreement effective October 31, 2022 by and between Arcturus Therapeutics, Inc. and Vinbiocare Biotechnology Joint Stock Company. Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on November 4, 2022 (File No. 001-38942). 10.24** Cost Reimbursement Contract dated August 31, 2022, by and between Arcturus Therapeutics Holdings Inc. and Biomedical Advanced Research and Development Authority of the U.S. Department of Health and Human Services. Incorporated by reference to Exhibit 10.36 to Quarterly Report on Form 10-Q filed on November 9, 2022 (File No. 001-38942). 10.25** Collaboration and License Agreement, dated November 1, 2022, by and between Arcturus Therapeutics Holdings Inc. and CSL Limited. Incorporated by reference to Exhibit 10.38 to Quarterly Report on Form 10-Q filed on November 9, 2022 (File No. 001-38942). 10.26** Manufacturing Support Agreement Termination Letter, dated March 23, 2023, by and between Arcturus Therapeutics, Inc. and the Economic Development of Singapore. Incorporated by reference to Exhibit 10.41 to Annual Report on Form 10-K filed on March 29, 2023 (File No. 001-38942). 10.27** Credit Agreement dated April 21, 2023, by and between Arcturus Therapeutics, Inc. and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit 10.28 to Quarterly Report on Form 10-Q filed on May 9, 2023 (File No. 001-38942) . 10.28** Security Agreement dated April 21, 2023, by and between Arcturus Therapeutics, Inc. and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit 10.29 to Quarterly Report on Form 10-Q filed on May 9, 2023 (File No. 001-38942) . 10.29** Revolving Line of Credit Note dated April 21, 2023, by and between Arcturus Therapeutics, Inc. and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit 10.30 to Quarterly Report on Form 10-Q filed on May 9, 2023 (File No. 001-38942) . 10.30** Amendment Number One to Collaboration and License Agreement, dated August 3, 2023, by and between Arcturus Therapeutics, Inc. and Seqirus Inc. Incorporated by reference to Exhibit 10.31 to Quarterly Report on Form 10-Q filed on November 14, 2023 (File No. 001-38942) . 10.31** Amendment No. 4 to Letter Agreement, dated September 25, 2023, by and between Arcturus Therapeutics, Inc. and the Cystic Fibrosis Foundation. Incorporated by reference to Exhibit 10.32 to Quarterly Report on Form 10-Q filed on November 14, 2023 (File No. 001-38942) 10.32** First Amendment to Credit Agreement and First Amendment to Revolving Line of Credit, dated June 26, 2024, by and between Arcturus Therapeutics, Inc. and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit 10.35 to Quarterly Report on Form 10-Q filed on August 5, 2024 (File No. 001-38942). 85 Exhibit Number Description 10.33 Fifth Amendment to Lease, by and between Arcturus Therapeutics, Inc. and ARE-SD Region No. 44, LLC, dated July 12, 2024. Incorporated by reference to Exhibit 10.36 to Quarterly Report on Form 10-Q filed on November 7, 2024 (File No. 001-38942). 10.34 Separation Agreement and General Release between Arcturus Therapeutics Holdings Inc. and Andy Sassine dated 11, 2025. Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on December 15, 2025 (File No. 001-38942). 10.35 Employment Agreement between Arcturus Therapeutics Holdings Inc. and Joe Roberts dated July 3, 2018. Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on December 15, 2025 (File No. 001-38942). 19.1* Arcturus Therapeutics Holdings, Inc. Insider Trading Policy 21.1* List of subsidiaries of Arcturus Therapeutics Holdings, Inc. 23.1* Consent of Independent Registered Public Accounting Firm 23.2* Consent of Independent Registered Public Accounting Firm 24.1* Power of Attorney (included on the signature page of this Annual Report). 31.1* Certification by Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended. 31.2* Certification by Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended. 32.1* Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1* Arcturus Therapeutics Holdings, Inc. Clawback Policy 101* The following financial statements and footnotes from the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 formatted in Inline Extensible Business Reporting Language (Inline XBRL): 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 101.SCH Inline XBRL Taxonomy Extension Schema 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. ** Certain confidential portions of this exhibit have been redacted from the publicly filed document because such portions are (i) not material and (ii) would be competitively harmful if publicly disclosed. † Management compensatory plan, contract or arrangement. 86 SIGNAT URES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . ARCTURUS THERAPEUTICS HOLDINGS INC. Date: March 3, 2026 By: /s/ Joseph E. Payne Name: Joseph E. Payne Title: President, Chief Executive Officer and Director The undersigned officers and directors of Arcturus Therapeutics Holdings Inc., hereby severally constitute and appoint Joseph E. Payne and Dr. Padmanabh Chivukula, and each of them individually, with full power of substitution and resubstitution, as their true and lawful attorneys and agents, to do any and all acts and things in their name and behalf in their capacities as directors and officers and to execute any and all instruments for them and in their names in the capacities indicated below, which said attorneys and agents, may deem necessary or advisable to enable said corporation to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this Annual Report on Form 10-K, including specifically but without limitation, power and authority to sign for them or any of them in their names in the capacities indicated below, any and all amendments hereto, and they do hereby ratify and confirm all that said attorneys and agents, or either of them, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Name Title Date /s/ Joseph E. Payne President, Chief Executive Officer and Director March 3, 2026 Joseph E. Payne (principal executive officer) /s/ Dr. Moncef Slaoui Chairman of the Board March 3, 2026 Dr. Moncef Slaoui /s/ Joseph Roberts Corporate Controller March 3, 2026 Joseph Roberts (principal financial and accounting officer) /s/ Dr. Magda Marquet Director March 3, 2026 Dr. Magda Marquet /s/ James Barlow Director March 3, 2026 James Barlow /s/ Edward Holmes Director March 3, 2026 Edward Holmes /s/ Dr. Peter Farrell Director March 3, 2026 Dr. Peter Farrell /s/ Dr. John Markels Director March 3, 2026 Dr. John Markels /s/ Jing Marantz Director March 3, 2026 Jing Marantz 1 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 34 ) F- 2 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) F- 4 Consolidated Balance Sheets as of December 31, 2025 and 2024 F- 5 Consolidated Statements of Operations and Comprehensive Loss for the Years ended December 31, 2025, 2024 and 2023 F- 6 Consolidated Statements of Changes in Stockholders’ Equity for the Years ended December 31, 2025, 2024 and 2023 F- 7 Consolidated Statements of Cash Flows for the Years ended December 31, 2025, 2024 and 2023 F- 8 Notes to Consolidated Financial Statements F- 9 F- 1 Report of Independent Regist ered Public Accounting Firm To the shareholders and the Board of Directors of Arcturus Therapeutics Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Arcturus Therapeutics Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2025, and 2024, the related consolidated statements of operations, comprehensive loss, stockholder’s equity, and cash flows, for each of the two years in the period ended December 31, 2025 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United Sta tes) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 3, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Collaboration Revenue — Refer to Note 2 and Note 3 to the financial statements Critical Audit Matter Description The Company has entered into a license and collaborative research and development arrangement with Seqirus, Inc. There are five distinct performance obligations under this arrangement. The Company recognizes revenue over time for all performance obligations except for the vaccine license. The vaccine license is recognized at the point in time it is transferred. The accounting for revenue recognized over time measures the progress using an input method which is based on costs incurred toward the satisfaction of the performance obligation. As of December 31, 2025, Collaboration revenue was $67.2 million, of which $66 million relates to the agreement with Seqirus, Inc. Given the judgments necessary to estimate total costs to be incurred to satisfy the performance obligations, as well as the high volume of expense data used in the revenue calculation, auditing such estimates required extensive audit effort and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures. F- 2 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the recognition of revenue for the Seqirus, Inc. arrangement included the following, among others: • We tested the operating effectiveness of controls over collaboration revenue, including those related to the determination of the timing and amount of revenue recognized. • We evaluated the total costs incurred related to each performance obligation by inspecting, on a sample basis, underlying source documents to determine costs were recorded to the correct performance obligation. • We evaluated the assumptions used in the estimates of total costs and the estimated measure of progress for recognizing revenue by: o Analyzing period-over-period changes in the total cost assumption, identifying any significant fluctuations. o Inspecting third-party evidence of the agreed-upon total costs to be incurred and comparing that to the total cost to be incurred used by the Company in the calculation. /s/ Deloitte & Touche LLP San Diego, California March 3, 2026 We have served as the Company’s auditor since 2024. F- 3 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Arcturus Therapeutics Holdings Inc. Opinion on the Financial Statements We have audited the accompanying consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows of Arcturus Therapeutics Holdings Inc. and its subsidiaries (the Company) for the year ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Ernst & Young LLP We served as the Company's auditor from 2018 to 2024. San Diego, California March 14, 2024 except for Note 12, as to which the date is March 6, 2025 F- 4 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, (in thousands, except per share data) 2025 2024 Assets Current assets: Cash and cash equivalents $ 230,909 $ 237,028 Restricted cash — 55,000 Accounts receivable 5,564 3,974 Prepaid expenses and other current assets 4,973 9,977 Total current assets 241,446 305,979 Property and equipment, net 6,736 9,531 Operating lease right-of-use asset 21,081 26,674 Non-current restricted cash 1,885 1,885 Total assets $ 271,148 $ 344,069 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 4,235 $ 7,194 Accrued liabilities 23,898 38,781 Deferred revenue 8,246 19,514 Total current liabilities 36,379 65,489 Deferred revenue, net of current portion — 12,604 Operating lease liability, net of current portion 20,784 24,998 Total liabilities 57,163 103,091 Stockholders’ equity: Common stock: $ 0.001 par value; 60,000 shares authorized; issued and outstanding shares were 28,414 at December 31, 2025 and 27,000 at December 31, 2024 28 27 Additional paid-in capital 728,547 689,758 Accumulated deficit ( 514,590 ) ( 448,807 ) Total stockholders’ equity 213,985 240,978 Total liabilities and stockholders’ equity $ 271,148 $ 344,069 The accompanying notes are an integral part of these consolidated financial statements. F- 5 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES C ONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Year Ended December 31, (in thousands, except per share data) 2025 2024 2023 Revenue: Collaboration revenue $ 67,221 $ 138,389 $ 157,748 Grant revenue 14,810 13,921 9,051 Total revenue 82,031 152,310 166,799 Operating expenses: Research and development, net 112,212 195,156 192,133 General and administrative 46,079 52,823 52,871 Total operating expenses 158,291 247,979 245,004 Loss from operations ( 76,260 ) ( 95,669 ) ( 78,205 ) Gain (loss) from foreign currency 382 ( 471 ) ( 229 ) Finance income, net 10,095 15,195 16,591 Gain on debt extinguishment — — 33,953 Net loss before income taxes ( 65,783 ) ( 80,945 ) ( 27,890 ) (Benefit) provision for income taxes — ( 4 ) 1,835 Net loss ( 65,783 ) ( 80,941 ) ( 29,725 ) Net loss per share, basic and diluted $ ( 2.40 ) $ ( 3.00 ) $ ( 1.12 ) Weighted-average shares outstanding, basic and diluted 27,386 27,000 26,628 Comprehensive loss $ ( 65,783 ) $ ( 80,941 ) $ ( 29,725 ) F- 6 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Additional Total Common Stock Paid-In Accumulated Stockholders’ (in thousands) Shares Amount Capital Deficit Equity Balance at December 31, 2022 26,555 $ 27 $ 608,426 $ ( 338,141 ) $ 270,312 Share-based compensation — — 34,649 — 34,649 Issuance of common stock upon exercise of stock options 238 — 2,668 — 2,668 Issuance of common stock under equity plans 35 — 609 — 609 Net loss — — — ( 29,725 ) ( 29,725 ) Balance at December 31, 2023 26,828 $ 27 $ 646,352 $ ( 367,866 ) $ 278,513 Share-based compensation — — 37,988 — 37,988 Issuance of common stock upon exercise of stock options 228 — 4,736 — 4,736 Issuance of common stock under equity plans 40 — 682 — 682 Net loss — — — ( 80,941 ) ( 80,941 ) Balance at December 31, 2024 27,096 $ 27 $ 689,758 $ ( 448,807 ) $ 240,978 Share-based compensation — — 25,408 — 25,408 Issuance of common stock upon exercise of stock options 104 — 1,109 — 1,109 Issuance of common stock under equity plans 35 — 585 — 585 Proceeds from issuance of common stock, net of issuance costs 1,179 1 11,687 — 11,688 Net loss — — — ( 65,783 ) ( 65,783 ) Balance at December 31, 2025 28,414 $ 28 $ 728,547 $ ( 514,590 ) $ 213,985 The accompanying notes are an integral part of these consolidated financial statements. F- 7 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONSOLIDATED STATEM ENTS OF CASH FLOWS Year Ended December 31, (in thousands) 2025 2024 2023 Operating activities Net loss $ ( 65,783 ) $ ( 80,941 ) $ ( 29,725 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,025 3,544 2,957 Share-based compensation expense 25,408 37,988 34,649 Gain on debt extinguishment — — ( 33,953 ) Foreign currency transaction loss 382 471 90 Other non-cash expenses — — 502 Impairment of right‑of‑use assets 1,897 — — Changes in assets and liabilities: Accounts receivable ( 1,590 ) 28,090 ( 29,300 ) Prepaid expenses and other current assets 5,004 ( 2,456 ) 1,165 Right-of-use assets 3,696 4,562 4,045 Accounts payable ( 2,959 ) 1,915 ( 2,238 ) Accrued liabilities ( 15,265 ) 5,932 ( 588 ) Deferred revenue ( 23,872 ) ( 55,207 ) 38,606 Lease liabilities ( 4,214 ) ( 3,645 ) ( 4,309 ) Net cash used in operating activities ( 74,271 ) ( 59,747 ) ( 18,099 ) Investing activities Acquisition of property and equipment ( 230 ) ( 648 ) ( 2,901 ) Net cash used in investing activities ( 230 ) ( 648 ) ( 2,901 ) Financing activities Proceeds from debt 15,000 — 20,000 Proceeds from exercise of stock options 1,109 4,736 2,668 Proceeds from issuance of common stock under equity plans 585 682 609 Proceeds from issuance of common stock, net of issuance costs 11,688 — — Payments on debt obligations ( 15,000 ) — ( 47,364 ) Net cash provided by (used in) financing activities 13,382 5,418 ( 24,087 ) Net decrease in cash, cash equivalents and restricted cash ( 61,119 ) ( 54,977 ) ( 45,087 ) Cash, cash equivalents and restricted cash, beginning of year 293,913 348,890 393,977 Cash, cash equivalents and restricted cash, end of year $ 232,794 $ 293,913 $ 348,890 Year Ended December 31, 2025 2024 2023 Supplemental disclosure of cash flow information Cash paid for interest $ — $ — $ 2,127 Cash paid for income taxes $ — $ 1,407 $ — Non-cash investing activities Right-of-use assets acquired through operating leases $ — $ 2,736 $ — Non-cash asset disposal $ 2,345 $ 473 $ — Purchase of property and equipment in accounts payable and accrued expenses $ — $ — $ 68 The accompanying notes are an integral part of these consolidated financial statements. F- 8 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINAN CIAL STATEMENTS Note 1. Organization Description of Business Arcturus Therapeutics Holdings Inc. (the “Company” or "Arcturus") is a messenger RNA medicines company focused on the development of liver and respiratory rare disease therapeutics. 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. Note 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of Arcturus Therapeutics Holdings Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP” ), which requires management to make estimates and assumptions regarding the valuation of certain debt and equity instruments, the equity method investment, share-based compensation, accruals for liabilities, income taxes, revenue and deferred revenue, leases, expense accruals, 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 period. Although these estimates are based on management’s knowledge of current events and actions the Company may undertake in the future, actual results could materially differ from those estimates. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manage its business in one operating segment, which includes all activities related to the discovery, development and commercialization of messenger RNA medicines. Cash and Cash Equivalents Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date of purchase. Restricted cash Restricted cash 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 for the Company’s offices. At December 31, 2025 and 2024, the Company had restricted cash o f $ 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. Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued Fair Value Measurements Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available under the circumstances. The hierarchy consists of three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounts Receivable Accounts receivable are recorded at the net invoice value and are non-interest bearing. The Company considers receivables past due based on the contractual payment terms. The Company reserves for specific receivables if collectability is no longer reasonably assured. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations, historical payment patterns, and individual customer circumstances. The Company reevaluates such reserves on a regular basis and adjusts its reserves as needed. Once a receivable is deemed to be uncollectible, such balance is charged against the reserve. No reserves have been recorded as of December 31, 2025 or 2024 . Concentration of Credit Risk and Significant Customers The Company is exposed to concentrations of credit risk primarily related to cash, cash equivalents, and accounts receivable. Cash and Cash Equivalents The Company mitigates credit risk exposure by maintaining cash and cash equivalents only with high-credit-quality financial institutions and investing in instruments with short maturities. The Company continuously monitors counterparty risk to minimize potential financial exposure. Accounts Receivable Concentration As of December 31, 2025 and 2024, the Company had significant concentrations of credit risk related to accounts receivable from a limited number of customers. The following customers accounted for 10% or more of total accounts receivable in each respective period: As of December 31, 2025: • BARDA – 64 % of total accounts receivable • CSL – 19 % of total accounts receivable As of December 31, 2024: • BARDA – 60 % of total accounts receivable • CSL – 20 % of total accounts receivable The Company monitors its credit exposure through regular assessments of counterparty risk and maintains ongoing collection efforts to mitigate potential credit losses. Revenue Concentration The Company generates a substantial portion of its revenue from a limited number of key customers. The following customers accounted for 10% or more of total revenue for each period: F- 10 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued For the year ended December 31, 2025: • CSL – 80 % of total revenue • BARDA – 16 % of total revenue For the year ended December 31, 2024: • CSL – 91 % of total revenue For the year ended December 31, 2023: • CSL – 92 % of total revenue Given this concentration, the Company’s financial performance and cash flows may be materially impacted if there are changes in demand, contract renewals, or the financial condition of these key customers. The Company continues to evaluate opportunities to expand its customer base and mitigate concentration risk over time. Joint Ventures, Equity Method Investments and Variable Interest Entities 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 December 31, 2025, the carrying value of the equity-method investment in ARCALIS remained at zero . Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized using the straight-line method over the respective useful lives of the assets, ranging from three to five years . Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. The determinants used for this evaluation include management’s estimate of an asset’s ability to generate positive income from operations and positive cash flow in future periods, as well as the strategic significance of the assets to the Company’s business objectives. The Company did no t recognize any impairment losses for the years ended December 31, 2025, 2024 or 2023. Comprehensive Loss Comprehensive loss is defined as the change in stockholders’ equity during a period from transactions and other events and circumstances from non-owner sources. There was no other comprehensive loss or income tax effect related to unrealized losses in the years ended December 31, 2025, 2024 or 2023. Revenue Recognition At contract inception, the Company analyzes its collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808). For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration reflect a vendor-customer relationship and are therefore within the scope of ASC 606. The Company determines revenue recognition for arrangements within the scope of Topic 606 by performing the following five steps: (i) identify the contract; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the company satisfies a performance obligation. F- 11 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued The terms of the Company’s revenue agreements include license fees, upfront payments, milestone payments, reimbursement for research and development activities, option exercise fees, consulting and related technology transfer fees and royalties on sales of commercialized products. The event-based milestone payments represent variable consideration, and the Company uses the most likely amount method to estimate this variable consideration because the Company will either receive the milestone payment or will not, which makes the potential milestone payment a binary event. The most likely amount method requires the Company to determine the likelihood of earning the milestone payment. Given the high degree of uncertainty around achievement of these milestones, the Company determines the milestone amounts to be fully constrained and does not recognize revenue until the uncertainty associated with these payments is resolved. The Company will recognize revenue from sales-based royalty payments when or as the sales occur. The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved and other changes in circumstances occur. A performance obligation is a promise in a contract to transfer a distinct good or service to the collaborative partner and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation based on relative standalone selling price and recognized as revenue when, or as, the performance obligation is satisfied. For performance obligations that are recognized over time, the Company measures the progress using an input method. The input methods used are based on the effort expended or costs incurred toward the satisfaction of the performance obligation. The Company estimates the amount of effort expended, including the time estimated it will take to complete the activities, or costs incurred in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This approach requires the Company to make numerous estimates and use significant judgment. If estimates or judgments change over the course of the collaboration, a cumulative catch up of revenue is recognized in the period such changes are identified. See “Note 3, Revenue” for specific details surrounding the Company’s arrangements. Grant revenue Grant revenue consists of funding under cost reimbursement programs primarily from federal and non-profit foundation sources for qualified research and development activities performed by the Company. Such amounts are invoiced and recorded as revenue as grant-funded activities are performed, with any advance funding recorded as deferred revenue until the activities are performed. Leases The Company determines if an arrangement is a lease at inception. Lease right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. For operating leases with an initial term greater than 12 months, the Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of lease payments over the lease term at the commencement date. Operating lease right-of-use assets are comprised of the lease liability plus any lease payments made and excludes lease incentives. Lease terms include options to renew or terminate the lease when the Company is reasonably certain that the renewal option will be exercised or when it is reasonably certain that the termination option will not be exercised. For the Company's operating leases, if the interest rate used to determine the present value of future lease payments is not readily determinable, the Company estimates its incremental borrowing rate as the discount rate for the lease. The Company's incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in similar economic environments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient to not separate lease and non-lease components. See “Note 11, Commitments and Contingencies” for specific details surrounding the Company’s leases. Research and Development Costs, net All research and development costs are expensed as incurred. Research and development costs consist primarily of salaries, employee benefits, costs associated with preclinical studies and clinical trials (including amounts paid to clinical research organizations and other professional services), pre-launch inventory, in-process research and development expenses and license agreement expenses. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods are received or the services are performed. The Company recognizes grants that fall within the scope of ASC 808 as contra research and F- 12 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued development expense in the consolidated statement of operations on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate. The Company records accruals for estimated research and development costs, comprising payments for work performed by third party contractors, laboratories, participating clinical trial sites, and others. Some of these contractors bill monthly based on actual services performed, while others bill periodically based upon achieving certain contractual milestones. For the latter, the Company accrues the expenses as goods or services are used or rendered. Clinical trial activities performed by third parties are accrued and expensed based upon estimates of the proportion of work completed over the life of the individual clinical trial and patient enrollment rates in accordance with agreements established with Clinical Research Organizations (“CROs”) and clinical trial sites. Estimates are determined by reviewing contracts, vendor agreements and purchase orders, and through discussions with internal clinical personnel and external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services. General and Administrative Costs General and administrative expenses consist primarily of personnel-related costs, including share-based compensation, for executives, finance, legal, human resources, business development, and other administrative and operational functions, professional fees, accounting and legal services, information technology and facility-related costs, and expenses associated with obtaining and maintaining intellectual property (“IP”). These costs relate to the operation of the business, unrelated to the research and development function, or any individual program. Pre-Launch Inventory Prior to obtaining initial regulatory approval for an investigational product candidate, the Company expenses costs relating to production of inventory as research and development expense in its consolidated statements of operations and comprehensive loss, in the period incurred. When the Company believes regulatory approval and subsequent commercialization of an investigational product candidate is probable, and the Company also expects future economic benefit from the sales of the investigational product candidate to be realized, it will then capitalize the costs of production as inventory. F- 13 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued Share-Based Compensation The Company records share-based compensation for equity awards granted to employees, consultants, officers and directors within general and administrative and research and development expenses on the statements of operations and comprehensive loss. Share-based compensation is recognized over the requisite service period of the individual awards using the straight-line attribution method, which generally equals the vesting period. Employees and officers’ stock options have a ten-year life and generally vest 25 % on the first anniversary of the grant and in 1/36 th equal installments on each monthly anniversary thereafter, such that options are fully vested on the four-year anniversary of the date of grant. The exercisability and vesting periods of equity awards granted to consultants and directors vary. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. This method requires certain assumptions be used as inputs, such as the fair value of the underlying common stock, expected term of the option before exercise, expected volatility of the Company’s common stock, expected dividend yield, and a risk-free interest rate. The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted using the simplified method, which represents the average of the contractual term of the stock option and its weighted-average vesting period. Through the third quarter of 2024, the Company estimated expected volatility using the historical volatility of a peer group of publicly traded companies. Beginning in the fourth quarter of 2024 and continuing into fiscal year 2025, the Company used its own historical volatility to estimate expected volatility, as it had accumulated sufficient trading history and stock price data to support the use of Company‑specific volatility. The Company has not declared or paid any dividends and does not currently expect to do so in the foreseeable future. The risk-free interest rates used are based on the implied yield currently available in United States Treasury securities at maturity with a term equivalent to the expected term of the stock options. The effect of forfeited or cancelled awards is recorded when the forfeiture or cancellation occurs. Statement of Cash Flows The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of such amounts shown in the consolidated statement of cash flows: As of December 31, (in thousands) 2025 2024 2023 Cash and cash equivalents $ 230,909 $ 237,028 $ 292,005 Restricted cash - current — 55,000 55,000 Non-current Restricted cash 1,885 1,885 1,885 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 232,794 $ 293,913 $ 348,890 Income Tax Expense Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at the applicable tax rates, along with net operating loss and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. Management has considered estimated taxable income and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. Based upon the weight of available evidence, which includes the Company’s historical operating performance and limited potential to utilize tax attribute carryforwards, the Company has determined that total deferred tax assets should be fully offset by a valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The Company also files income tax returns in the foreign countries in which it operates. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement, and classification in the consolidated financial statements of tax positions taken or expected to be taken in a tax return. F- 14 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock and dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. Dilutive shares of common stock for the years ended December 31, 2025, 2024 and 2023 were comprised of stock options and restricted stock units. No dividends were declared or paid during the reporting periods. Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” ) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. The Company adopted ASU 2023-07 for annual reporting periods beginning January 1, 2024 and interim reporting periods beginning January 1, 2025. The adoption of ASU 2023-07 had no significant impact on our financial statement disclosures. See “ Note 12, Segment Information ” for further information. 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 Company adopted ASU 2023-09 prospectively beginning in fiscal year 2025. See “ Note 10, Income Taxes ” for further information. Recently Issued Accounting Standards Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the 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. NOTE 3. 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. F- 15 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued The following table presents changes in the balances of receivables and contract liabilities related to revenue generating agreements during the year ended December 31, 2025: (in thousands) December 31, 2024 Additions Deductions December 31, 2025 Contract Assets: Accounts receivable $ 3,974 $ 57,200 $ ( 55,610 ) $ 5,564 Contract Liabilities: Deferred revenue $ 32,118 $ 57,823 $ ( 81,695 ) $ 8,246 During the year ended December 31, 2025, the Company recognized $ 26.4 million in revenue from the deferred revenue balance as of December 31, 2024. The following table summarizes the Company’s revenue for the periods indicated. Approximately $ 67.1 million, $ 138.4 million and $ 154.9 million of total revenue represents revenue derived from foreign countries for the years ended December 31, 2025, 2024 and 2023, respectively. For the Year Ended December 31, (in thousands) 2025 2024 2023 Collaboration revenue: CSL Seqirus $ 65,982 $ 138,389 $ 154,264 Ultragenyx — — 1,837 Other 1,239 — 1,647 Total collaboration revenue $ 67,221 $ 138,389 $ 157,748 Grant revenue: BARDA $ 13,236 $ 13,921 $ 9,051 Gates Foundation $ 1,574 $ — $ — Total grant revenue $ 14,810 $ 13,921 $ 9,051 Accounts receivable is comprised of the following as of December 31, 2025 and 2024: December 31, (in thousands) 2025 2024 Billed accounts receivable $ 1,957 $ 1,472 Unbilled accounts receivable 3,607 2,502 Total accounts receivable $ 5,564 $ 3,974 Billed accounts receivable represent amounts invoiced under the Company’s collaboration and reimbursement arrangements that remain outstanding. Unbilled accounts receivable represent reimbursable costs incurred or revenue recognized for which invoices have not yet been issued as of the balance sheet date in accordance with contractual billing terms. Substantially all unbilled accounts receivable are expected to be billed and collected within 12 months. The following paragraphs provide information regarding the nature and purpose of the Company’s most significant revenue arrangements. 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 F- 16 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued 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 products and up to low double-digit royalties for vaccines for pandemic preparedness and against seasonal influenza as well as three other infectious disease pathogens. 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 December 31, 2025, the transaction price primarily consisted of upfront consideration received and milestones achieved. Additional variable consideration was not included in the transaction price at December 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. 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 during 2025 relates to the license delivered, milestones achieved and research and development and manufacturing services performed through December 31, 2025. Total deferred revenue as of December 31, 2025 and 2024 for the CSL Collaboration Agreement was $ 6.2 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 period ended December 31, 2025, the Company recognized $ 3.2 million related to the performance obligation, which was fully satisfied during the period. 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, and (iii) provisions of the CSL Collaboration related to distributors, and (iv) proprietary payment calculations related to the foregoing. BARDA Grant In August 2022, the Company entered into a cost reimbursement contract (the “BARDA Contract”) with the Biomedical Ad vanced 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 F- 17 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued 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. The Company recognized $ 13.2 million and $ 13.9 million of grant revenue during the years ended December 31, 2025 and 2024, respectively, which is included in revenue on the Company's consolidated statements of operations. As of December 31, 2025, the remaining available funding net of revenue earned was $ 26.7 million. Gates Foundation During the year ended December 31, 2025, the Company recognized $ 1.6 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 December 31, 2025, deferred grant revenue related to these agreements tota led $ 2.1 million. NOTE 4. 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 Company's assets measured at fair value on a recurring basis consisted of money market funds. As of December 31, 2025, the Company's had money market funds with a fair valu e of $ 229.1 million, w hich were classified within Level 1 of the fair value hierarchy. The fair value of these financial instruments was measured based on quoted prices. F- 18 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued NOTE 5. Accrued Liabilities Detail Accrued liabilities consisted of the following: December 31, (in thousands) 2025 2024 Accrued compensation $ 6,948 $ 13,305 Cystic Fibrosis Foundation liability 6,394 7,443 Current portion of operating lease liability 4,214 3,552 Accrued facilities costs 1,400 — Clinical trial accruals 399 2,828 Vinbiocare contractual liabilities — 2,421 Legal accrual 771 130 Other accrued research and development expenses 3,772 9,102 Total $ 23,898 $ 38,781 NOTE 6. Property and Equipment, Net Property and equipment, net consisted of the following: December 31, (in thousands) 2025 2024 Research equipment $ 14,942 $ 16,864 Computers and software 1,069 1,131 Office equipment and furniture 604 703 Leasehold improvements 2,612 2,644 Total $ 19,227 $ 21,342 Less accumulated depreciation and amortization ( 12,491 ) ( 11,811 ) Property and equipment, net $ 6,736 $ 9,531 Depreciation and amortization expense was $ 3.0 million, $ 3.5 million and $ 3.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. Construction in progress is primarily comprised of research equipment not yet placed in service. NOTE 7. 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 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”). On June 26, 2024, the parties entered into Amendment No. 1 to the Wells Fargo Loan, whereby the term was extended by one year to April 2026. 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 December 2025, the Company terminated the credit agreement and related security agreement. No amounts were ou tstanding under the Loan at the time of termination. As a result, $ 55.0 million of cash previously pledged as collateral was released and is no longer classified as restricted cash as of December 31, 2025. F- 19 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued NOTE 8. Stockholders’ Equity Net Loss Per Share Potentially dilutive securities that were not included in the calculation of diluted net loss per share for the year ended December 31, 2025 and 2024 as they were anti-dilutive totaled 0.6 million and 1.4 million, respectively. Potentially dilutive securities that were not included in the calculation of diluted earnings per share for the year ended December 31, 2023 as they were anti-dilutive totaled 0.8 million. Sales Agreement On December 23, 2022, the Company entered into a Controlled Equity Offering℠ Sales Agreement, which was amended on Augu st 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 months ended December 31, 2025, the Company sold 1,179,201 shares of its common stock pursuant to the Sales Agreement at a weighted‑averag e price of $ 10.38 per share, resulting in gross proceeds of approximately $ 12.2 million. After deducting offering costs of $ 0.5 million, the Company received net proceeds of approximately $ 11.7 million from these sales. In December 2025, the Company filed, and subsequently had declared effective, a replacement shelf registration statement on Form S‑3, which replaced the prior registration statement and continues to support the Sales Agreement. NOTE 9. Share-Based Compensation In June 2024 at the Company’s 2024 Annual Meeting of Stockholders (the "2024 Annual Meeting"), the stockholders of the Company approved 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 December 31, 2025, a total of 903,396 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 December 31, 2025, a total of 162,164 shares remain available for future issuance under the 2021 Plan, subject to the terms of the 2021 Plan. Share Options The following table presents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fair value of stock options granted: For the Year Ended December 31, 2025 2024 2023 Expected life (in years) 6.01 5.88 6.04 Expected volatility 104.7 % 91.4 % 76.1 % Expected dividend yield — % — % — % Risk-free interest rate 4.23 % 4.24 % 3.91 % Grant date weighted average fair value $ 11.81 $ 22.62 $ 18.87 F- 20 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued The following table summarizes the Company’s stock option activity for the year ended December 31, 2025: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding – December 31, 2024 8,078,752 $ 32.38 7.2 $ 9,247 Granted 2,029,190 $ 11.37 Exercised ( 103,440 ) $ 10.72 Forfeited/cancelled ( 1,135,895 ) $ 33.90 Outstanding – December 31, 2025 8,868,607 $ 29.20 6.26 $ 13,333 Exercisable – December 31, 2025 6,046,218 $ 33.12 5.45 $ 8,652 At December 31, 2025 , the total unrecognized compensation cost of $ 30.1 million will be recognized over the weighted-average remaining service period of approximately 2.5 years. The fair value of the options vested during the years ended December 31, 2025 , 2024 and 2023 was $ 29.3 million, $ 40.5 million and $ 35.3 million, respectively. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 0.5 million, $ 3.3 million and $ 4.3 million, respectively. Restricted Stock Units In August 2023, the Company granted 18,786 restricted stock units ( “RSUs” ) to its board of directors, when the market value of the Company's common stock was $ 34.92 per share. These RSUs fully vested at the Company's 2024 annual stockholders' meeting. However, the release of the units remains subject to specific conditions and will occur only in the event of a board separation or a change in control. The following table summarizes the Company’s RSU activity for the year ended December 31, 2025: Number of Shares Weighted- Average Grant Date Fair Value Outstanding – December 31, 2024 18,786 $ 34.92 Awarded - Released - Forfeited - Outstanding – December 31, 2025 18,786 $ 34.92 Share-based compensation expenses included in the Company’s statements of operations and comprehensive income loss for the years ended December 31, 2025, 2024 and 2023 were: For the Year Ended December 31, (in thousands) 2025 2024 2023 Research and development $ 13,248 $ 18,456 $ 14,950 General and administrative 12,160 19,532 19,699 Total $ 25,408 $ 37,988 $ 34,649 NOTE 10. Income Taxes A reconciliation of (loss) income before income taxes for domestic and foreign locations is as follows: For the Year Ended December 31, (In thousands) 2025 2024 2023 United States $ ( 65,783 ) $ ( 80,945 ) $ ( 27,890 ) Foreign — — — Total (loss) income before income taxes $ ( 65,783 ) $ ( 80,945 ) $ ( 27,890 ) F- 21 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued A reconciliation of in come tax (benefit) expense for the years ended December 31, 2025, 2024 and 2023 is as follows: For the Year Ended December 31, 2025 2024 2023 Current: Federal $ — $ ( 11 ) $ 1,246 State — 7 589 Foreign — — — Total current income tax (benefit) expense $ — $ ( 4 ) $ 1,835 Deferred: Federal $ — $ — $ — State — — — Foreign — — — Total deferred income tax expense — — — Total income tax (benefit) expense $ — $ ( 4 ) $ 1,835 The table below provides the updated requirements of ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”) for 2025. The effective income tax rate for the years ended December 31, 2025 differs from the statutory federal income tax rate as follows (in thousands, except percentages): For the Year Ended December 31, 2025 $ % U.S. federal statutory rate $ ( 13,814 ) 21.0 % State and local income taxes, net of federal income tax effect (1) ( 69 ) 0.1 % Effects of cross-border tax laws - Global intangible low-tax income 4,501 ( 6.8 %) Tax credits - research and development credits ( 1,587 ) 2.4 % Changes in valuation allowance 6,189 ( 9.4 %) Nontaxable or nondeductible items: Stock-based compensation 2,946 ( 4.5 %) Limitations on the deductibility of officer compensation 1,533 ( 2.3 %) Other 137 ( 0.2 %) Changes in unrecognized tax benefits 143 ( 0.4 %) Other 21 0.1 % Provision for income taxes $ — 0.0 % (1) State tax expense in the State of California comprises the majority (greater than 50 percent) of the tax effect in this category. As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023‑09, the Company’s effective income tax rate differed from the statutory federal income tax rate as follows: For the Year Ended December 31, 2024 2023 Federal statutory income tax rate 21.0 % 21.0 % State income taxes, net of federal benefit 1.9 % 1.9 % Share-based compensation ( 1.9 %) ( 2.5 %) Officers compensation ( 3.4 %) ( 7.4 %) Research and development credits 24.0 % 20.0 % Uncertain tax positions ( 3.7 %) ( 2.4 %) Change in tax rate ( 1.4 %) 0.2 % Change in valuation allowance ( 36.1 %) ( 36.5 %) Other ( 0.2 %) ( 0.3 %) Permanent differences ( 0.2 %) ( 0.7 %) Provision for income taxes 0.0 % ( 6.7 %) F- 22 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued A summary of income taxes paid, net of (refunds) received, for the year ended December 31, 2025 is as follows: December 31, (In thousands) 2025 Federal income taxes paid, net of (refunds) received $ — State income taxes paid, net of (refunds) received — Foreign income taxes paid, net of (refunds) received — Total income taxes paid, net of (refunds) received $ — The significant components of deferred i ncome taxes are as follows: December 31, (in thousands) 2025 2024 Deferred tax assets: Net operating loss $ 38,566 $ 25,413 Tax credits 30,219 27,472 Accrued liabilities 689 2,966 Deferred revenue 2,808 5,515 Basis difference in equity investments 2,053 2,127 Capitalized R&D 53,549 60,104 Right-of-use lease liability 5,578 6,601 Share-based compensation 15,232 14,872 Total gross deferred tax assets 148,694 145,070 Deferred tax liabilities: Depreciation and amortization ( 462 ) ( 858 ) Right-of-use asset ( 4,704 ) ( 6,168 ) Total gross deferred tax liabilities ( 5,166 ) ( 7,026 ) Valuation allowance ( 143,528 ) ( 138,044 ) Net deferred tax asset $ — $ — In assessing the realization of the deferred tax assets, the Company considers whether it is more likely than not that some portion of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Due to lack of available sources of taxable income, the Company recorded a full valuation allowance against its net deferred tax assets as sufficient uncertainty exists regarding the future realization of these assets. As of December 31, 2025 and 2024, the Company recorded a valuation allowance of $ 143.5 million and $ 138.0 million, respectively. The valuation allowance changed by $ 5.5 million and $ 29.2 million for the years ended December 31, 2025 and 2024, respectively. Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, annual use of the Company’s federal and state net operating loss, research and development credit carryforwards, and other tax attributes may be limited in the event a cumulative change in ownership of more than 50 % occurs within a three-year period. The Company has experienced changes in prior years and there is a risk that additional ownership changes may occur in the future. If a change in ownership occurs, the NOL carryforwards and other tax attributes could be limited or restricted. At December 31, 2025, the Company has federal and state net operating losses, or NOL, carryforwards of approximately $ 115.5 million and $ 203.1 million, respectively. The federal net operating loss carryforward includes losses generated in 2018 and after, which can be carried forward indefinitely. The state net operating loss carryforward includes $ 0.7 million of losses that can be carried forward indefinitely. The remaining state net operating losses begin to expire in 2039 . F- 23 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued At December 31, 2025, the Company has federal and state research and development credit carryforwards of approximately $ 18.1 million and $ 12.5 million, respectively. If not utilized, the federal credit carryforwards begin to expire in 2037 . $ 1.0 million of the state credit begins to expire in 2037 and the remainder carries forward indefinitely. Additionally, the Company has an Orphan Drug Credit of $ 8.9 million as of December 31, 2025, which will begin to expire in 2042 unless previously utilized. The company accounts for income taxes in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes . The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain tax position will not be recognized if it has less than 50 % likelihood of being sustained. A reconciliation of unrecognized tax benefits is as follows (in thousands): December 31, (in thousands) 2025 2024 Beginning balance of unrecognized tax benefits $ 6,780 $ 3,587 (Decrease) Increase for prior period tax positions ( 763 ) 1,243 Increase for current period tax positions 925 1,950 Ending balance of unrecognized tax benefits $ 6,942 ` $ 6,780 Amounts in the summary rollforward would not impact our effective tax rate if recognized as the Company maintains a full valuation on its net deferred tax assets. The Company is subject to taxation and files income tax returns in the United States, various U.S. states and foreign jurisdictions. The Company’s tax years from 2014 to date are subject to examination by the U.S., and state taxing authorities due to the carryforward of unutilized net operating losses and research and development credits. The general statute of limitations in the foreign jurisdictions where the Company files tax returns is 4 to 5 years. The Company’s policy is to recognize interest expense and penalties related to income tax matters as income tax expense. There was no tax related interest or penalties recognized for the years ended December 31, 2025 and 2024 and 2023. Deferred income taxes are not required for undistributed earnings of the Company’s foreign subsidiary as they can be distributed tax free and without withholding taxes. On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was signed into law. The Act reinstates and makes permanent 100% first-year bonus depreciation under Section 168(k) for qualified property acquired and placed in service after January 19, 2025. Additionally, the Act permanently allows immediate expensing of domestic research and experimentation expenditures under Section 174 for tax years beginning after December 31, 2024. The Company has reflected the effects of the Act in its income tax provision in accordance with ASC 740. NOTE 11. Commitments and Contingencies Cystic Fibrosis Foundation Therapeutics Funding agreement O n 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 amendment. For the years ended December 31, 2025, 2024 and 2023, the Company recognized contra expense of $ 1.0 million, $ 0.2 million and $ 1.4 million, respectively. As of December 31, 2025, $ 6.4 million remained in accrued liabilities. F- 24 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued 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. 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 March 2024, the Company negotiated with the lessor to extend the lease through March 2027. In December 2025, the Company vacated this office space with no intention of operating out of the location in the future. The Company remains obligated to make the remaining lease payments through March 2027, and therefore recorded an impairment loss in the amo unt of $ 1.9 million dur ing the three months ended December 31, 2025, as there was no future economic benefit from the lease. 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 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 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 December 31, 2025, the remaining payments of the operating lease liability were as follows: F- 25 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued (in thousands) Remaining Lease Payments 2026 $ 5,274 2027 4,132 2028 3,822 2029 3,937 2030 4,055 Thereafter 7,758 Total remaining lease payments 28,978 Less: imputed interest ( 3,980 ) Total operating lease liabilities $ 24,998 Weighted-average remaining lease term (in years) 6.4 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 $ 5.0 million, $ 4.5 million and $ 5.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. NOTE 12. 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 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 significant segment expenses: For the Year Ended December 31, (in thousands) 2025 2024 2023 Revenues $ 82,031 $ 152,310 $ 166,799 Less: Research and development: LUNAR-COVID 16,115 70,464 81,262 LUNAR-OTC 5,748 9,509 9,315 BARDA 8,366 7,807 5,465 LUNAR-CF, net 17,489 17,227 14,666 Early-stage programs 594 16,096 12,460 Discovery technologies 8,016 6,278 6,405 Payroll and benefits 43,987 57,474 50,924 Facilities and equipment 11,897 10,301 11,636 Total research and development 112,212 195,156 192,133 General and administrative 46,079 52,823 52,871 Other (1) ( 10,477 ) ( 14,728 ) ( 48,480 ) Net loss $ ( 65,783 ) $ ( 80,941 ) $ ( 29,725 ) (1) Primarily includes interest income and expense, foreign currency gains and losses, and income taxes. The year ended December 31, 2023 includes a $ 34.0 million gain on debt extinguishment related to forgiveness of the Singapore Loan. NOTE 13. Related Party Transactions See “ Note 2, 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. F- 26 Arcturus Therapeutics Holdings Inc. and its Subsidiaries Notes to Consolidated Financial Statements — Continued NOTE 14. Subsequent Events None. F- 27