Arcturus Therapeutics Holdings Inc. 10-Q

Item 1. Financial Statements. ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS March 31, 2026 December 31, 2025 (in thousands, except par value information) (unaudited) Assets Current assets: Cash and cash equivalents $ 211,375 $ 230,909 Accounts receivable 1,343 5,564 Prepaid expenses and other current assets 4,164 4,973 Total current assets 216,882 241,446 Property and equipment, net 6,078 6,736 Operating lease right-of-use assets, net 20,423 21,081 Non-current restricted cash 2,028 1,885 Total assets $ 245,411 $ 271,148 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 4,093 $ 4,235 Accrued liabilities 22,666 23,898 Deferred revenue 7,610 8,246 Total current liabilities 34,369 36,379 Operating lease liabilities, net of current portion 19,680 20,784 Total liabilities 54,049 57,163 Stockholders’ equity Common stock, $ 0.001 par value; 60,000 shares authorized; issued and outstanding shares were 28,423 at March 31, 2026 and 28,414 at December 31, 2025 28 28 Additional paid-in capital 732,888 728,547 Accumulated deficit ( 541,554 ) ( 514,590 ) Total stockholders’ equity 191,362 213,985 Total liabilities and stockholders’ equity $ 245,411 $ 271,148 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) Three Months Ended March 31, (in thousands, except per share data) 2026 2025 Revenue: Collaboration revenue $ 610 $ 25,477 Grant revenue 1,451 3,905 Total revenue 2,061 29,382 Operating expenses: Research and development, net 21,527 34,893 General and administrative 9,465 11,315 Total operating expenses 30,992 46,208 Loss from operations ( 28,931 ) ( 16,826 ) Finance income, net 1,932 2,771 Other income (expense) 35 ( 21 ) Net loss $ ( 26,964 ) $ ( 14,076 ) Net loss per share, basic and diluted $ ( 0.95 ) $ ( 0.52 ) Weighted-average shares outstanding, basic and diluted 28,421 27,107 Comprehensive loss: Net loss $ ( 26,964 ) $ ( 14,076 ) Comprehensive loss $ ( 26,964 ) $ ( 14,076 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 2 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATE MENTS OF STOCKHOLDERS’ EQUITY (unaudited) Additional Total Common Stock Paid-In Accumulated Stockholders’ (in thousands) Shares Amount Capital Deficit Equity Balance – December 31, 2025 28,414 $ 28 $ 728,547 $ ( 514,590 ) $ 213,985 Net loss — — — ( 26,964 ) ( 26,964 ) Share-based compensation expense — — 4,325 — 4,325 Issuance of common stock upon exercise of stock options 9 — 16 — 16 Balance – March 31, 2026 28,423 $ 28 $ 732,888 $ ( 541,554 ) $ 191,362 Additional Total Common Stock Paid-In Accumulated Stockholders’ (in thousands) Shares Amount Capital Deficit Equity Balance – December 31, 2024 27,096 $ 27 $ 689,758 $ ( 448,807 ) $ 240,978 Net loss — — — ( 14,076 ) ( 14,076 ) Share-based compensation expense — — 6,662 — 6,662 Issuance of common stock upon exercise of stock options 25 — 195 — 195 Balance – March 31, 2025 27,121 $ 27 $ 696,615 $ ( 462,883 ) $ 233,759 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEM ENTS OF CASH FLOWS (unaudited) Three Months Ended March 31, (in thousands) 2026 2025 Operating activities Net loss $ ( 26,964 ) $ ( 14,076 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 658 801 Share-based compensation expense 4,325 6,662 Gain on sale of equipment ( 34 ) — Foreign currency transaction loss 1 21 Changes in assets and liabilities: Accounts receivable 4,221 ( 10,598 ) Prepaid expense and other assets 809 1,203 Right-of-use assets 658 935 Accounts payable ( 142 ) ( 1,015 ) Accrued liabilities ( 1,233 ) ( 8,243 ) Deferred revenue ( 636 ) ( 9,817 ) Lease liabilities ( 1,104 ) ( 1,011 ) Net cash used in operating activities ( 19,441 ) ( 35,138 ) Investing activities Acquisition of property and equipment — ( 137 ) Proceeds from sale of equipment 34 — Net cash provided by (used in) investing activities 34 ( 137 ) Financing activities Proceeds from exercise of stock options 16 195 Proceeds from debt — 15,000 Net cash provided by financing activities 16 15,195 Net decrease in cash, cash equivalents and restricted cash ( 19,391 ) ( 20,080 ) Cash, cash equivalents and restricted cash at beginning of the period 232,794 293,913 Cash, cash equivalents and restricted cash at end of the period $ 213,403 $ 273,833 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Description of Business, Basis of Presentation and Summary of Significant Accounting Policies Description of Business Arcturus Therapeutics Holdings Inc. (the “Company” or "Arcturus") is a 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. Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Arcturus and its subsidiaries and are unaudited. All intercompany accounts and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. Interim financial results are not necessarily indicative of results anticipated for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. These condensed consolidated financial statements are prepared in accordance with GAAP, which requires management to make estimates and assumptions regarding the valuation of equity instruments, share-based compensation, accruals for liabilities, income taxes, revenue and deferred revenue, leases, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Although these estimates are based on management’s knowledge of current events and actions the Company may undertake in the future, actual results may ultimately differ from these estimates and assumptions. There were no significant changes to our significant accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 . Recently Issued Accounting Standards Not Yet Adopted From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the condensed consolidated financial statements and disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public entities to disclose specified information about certain costs and expenses on an interim and annual basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that adoption of ASU 2024-03 will have on the financial statement disclosures. 5 Note 2. Revenue The Company has entered into license agreements and collaborative research and development arrangements with pharmaceutical and biotechnology companies, as well as consulting, related technology transfer, product revenue and government grant agreements. Under these arrangements, the Company is entitled to receive license fees, consulting fees, product fees, technological transfer fees, upfront payments, milestone payments if and when certain research and development milestones, technology transfer milestones or success-based milestones are achieved, royalties on approved product sales and reimbursement for research and development activities. The Company’s costs of performing these services are included within research and development expenses. The Company’s milestone payments are typically defined by achievement of certain preclinical, clinical, and commercial success criteria. Preclinical milestones may include in vivo proof of concept in disease animal models, lead candidate identification, and completion of IND-enabling toxicology studies. Clinical milestones may, for example, include successful enrollment of the first patient in or completion of Phase 1, 2 and 3 clinical trials, and commercial milestones are often tiered based on net or aggregate sale amounts. The Company cannot guarantee the achievement of these milestones due to risks associated with preclinical and clinical activities required for development of nucleic acid medicine-based therapeutics and vaccines. The following table presents changes during the three months ended March 31, 2026 in the balances of contract assets and liabilities as compared to what was disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. (in thousands) December 31, 2025 Additions Deductions March 31, 2026 Contract Assets: Accounts receivable $ 5,564 $ 1,485 $ ( 5,706 ) $ 1,343 Contract Liabilities: Deferred revenue $ 8,246 $ 1,425 $ ( 2,061 ) $ 7,610 The following table summarizes the Company’s revenues for the periods indicated. Three Months Ended March 31, (in thousands) 2026 2025 Collaboration Revenue: CSL Seqirus $ 610 $ 25,473 Other collaboration revenue — 4 Total collaboration revenue $ 610 $ 25,477 Grant revenue: BARDA $ 891 $ 3,905 Gates Foundation 560 — Total grant revenue $ 1,451 $ 3,905 The following paragraphs provide information regarding the nature and purpose of the Company’s most significant collaboration and grant arrangements. 6 CSL Seqirus On November 1, 2022, the Company entered into a Collaboration and License Agreement (as amended, the “CSL Collaboration Agreement”) with Seqirus, Inc., a part of CSL Limited (“CSL Seqirus”), for the global exclusive rights to research, develop, manufacture, and commercialize vaccines. Under the terms of the CSL Collaboration Agreement, the Company provides CSL Seqirus with an exclusive global license to its mRNA technology (including STARR ® ) and LUNAR ® lipid-mediated delivery, along with mRNA drug substance and drug product manufacturing processes. CSL Seqirus will lead the development and commercialization of vaccines under the collaboration. The collaboration plans to advance vaccines against SARS-CoV-2 (COVID-19), influenza, pandemic preparedness as well as other infectious diseases. In September 2024, our COVID-19 vaccine KOSTAIVE ® became the world’s first approved and commercially available self-amplifying RNA (sa-mRNA) vaccine. The Company received a $ 200.0 million upfront payment and is eligible to receive over $ 1.3 billion in development milestones if all products are registered in the licensed fields and is entitled to potentially receive up to $ 3.0 billion in commercial milestones based on “net sales” of vaccines in the various fields. In addition, the Company is eligible to receive a 40 % net profit share for COVID-19 vaccine pro ducts and up to low double-digit royalties for vaccines for pandemic preparedness and against seasonal influenza as well as 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 March 31, 2026, the transaction price consisted of upfront consideration received and milestones achieved. Additional variable consideration was not included in the transaction price as of March 31, 2026, because the Company could not conclude that it is probable that including the variable consideration will not result in a significant revenue reversal. The Company allocated the transaction price to the performance obligations in proportion to their standalone selling price. The vaccine license was recognized at the point in time it was transferred in 2022. The research and development and regulatory activities performance obligations are recognized over a period of time based on the percentage of services rendered using the input method, meaning actual costs incurred divided by total costs budgeted to satisfy the performance obligation. Any consideration related to sales-based royalties will be recognized when the amounts are probable of non-reversal, provided that the reported sales are reliably measurable and the Company has no remaining promised goods/services, as they are constrained and therefore have also been excluded from the transaction price. The revenue recognized in the first quarter of 2026 relates to the license delivered, milestones achieved and services performed through March 31, 2026. Total deferred revenue as of March 31, 2026 and December 31, 2025 for the CSL Collaboration Agreement was $ 5.8 million and $ 6.2 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. The performance obligation was fully satisfied during the 2025 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, (iii) provisions of the CSL Collaboration Agreement related to specific royalty payments, (iv) provisions of the CSL Collaboration Agreement related to distributors, and (v) proprietary payment calculations related to the foregoing. BARDA In August 2022, the Company entered into a cost reimbursement contract (the “BARDA Contract”) with the Biomedical Advanced Research and Development Authority ("BARDA"), a division of the Office of the Assistant Secretary for Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services (HHS) for an award of up to $ 63.2 million for the 7 development of a pandemic influenza vaccine using the Company's STARR ® self-amplifying mRNA vaccine platform technology. The Company earns grant revenue for performing tasks under the agreement. The Company determined that the BARDA Contract is not in the scope of ASC 808 or ASC 606. Applying International Accounting Standards No. 20 ("IAS 20"), Accounting for Government Grants and Disclosure of Government Assistance, by analogy, the Company recognizes grant revenue from the reimbursement of direct out-of-pocket expenses, overhead allocations and fringe benefits for research costs associated with the grant. The costs associated with these reimbursements are reflected as a component of research and development expense in the Company’s condensed consolidated statements of operations and comprehensive loss. As of March 31, 2026, the remaining available funding net of revenue e arned was $ 25.8 million. Gates Foundation During the three months ended March 31, 2026 , the Company recognized $ 0.6 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 March 31, 2026 , deferred grant revenue related to these agreements totaled $ 1.8 million. Note 3. Fair Value Measurements The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company established a fair value hierarchy based on the inputs used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3: Unobservable inputs in which little or no market data exists and are therefore determined using estimates and assumptions developed by the Company, which reflect those that a market participant would use. The carrying value of cash, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their respective fair values due to their relatively short maturities. As of March 31, 2026 and December 31, 2025 , all assets measured at fair value on a recurring basis consisted of cash equivalents and money market funds, which were classified within Level 1 of the fair value hierarchy. The fair value of these financial instruments was measured based on quoted prices. Note 4. Other Balance Sheet Details Property and equipment, net balances consisted of the following: (in thousands) March 31, 2026 December 31, 2025 Research equipment $ 14,732 $ 14,942 Computers and software 1,069 1,069 Office equipment and furniture 604 604 Leasehold improvements 2,612 2,612 Total 19,017 19,227 Less accumulated depreciation and amortization ( 12,939 ) ( 12,491 ) Property and equipment, net $ 6,078 $ 6,736 8 Depreciation and amortization expense was $ 0.7 million for the three months ended March 31, 2026 , and $ 0.8 million for the three months ended March 31, 2025. Accrued liabilities consisted of the following: (in thousands) March 31, 2026 December 31, 2025 Accrued compensation $ 5,491 $ 6,948 Cystic Fibrosis Foundation liability 6,060 6,394 Current portion of operating lease liabilities 4,307 4,214 Accrued facilities costs 1,120 1,400 Clinical trial accruals 631 399 Legal accrual 290 771 Other accrued research and development expenses 4,767 3,772 Total $ 22,666 $ 23,898 The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same such amounts shown in the unaudited condensed consolidated statement of cash flows: (in thousands) March 31, 2026 March 31, 2025 Cash and cash equivalents $ 211,375 $ 216,948 Restricted cash — 38,500 Non-current restricted cash 2,028 18,385 Total cash, cash equivalents and restricted cash $ 213,403 $ 273,833 Restricted cash also includes cash required to be set aside as security for lease payments and to maintain a letter of credit for the benefit of the landlord of the Company’s offices. As of March 31, 2026 and 2025, the Company had restricted cas h of $ 2.0 million and $ 1.9 million, respectively, i n conjunction with property leases in San Diego, California, and such restriction is expected to be removed at the end of the lease term. Note 5. Stockholders’ Equity Net Loss per Share Potentially dilutive securities that were not included in the calculation of diluted net loss per share as they were anti-dilutive totaled 0.1 million and 0.5 million for three months ended March 31, 2026 and March 31, 2025, respectively. Sales Agreement On December 23, 2022, the Company entered into a Controlled Equity Offering℠ Sales Agreement, which was amended on August 7, 2023 (as amended, the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”),Wells Fargo Securities, LLC (“Wells Fargo Securities”), and William Blair & Company, L.L.C. (“William Blair”) relating to shares of the Company's common stock. In accordance with the terms of the Sales Agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 200 million from time to time through Cantor, Wells Fargo Securities, or William Blair, each acting as the Company's sales agent. During the three months ended December 31, 2025, the Company sold 1,179,201 shares of its common stock pursuant to the Sales Agreement at a weighted‑average 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. During the three months ended March 31, 2026 the Company did not offer or sell any shares of common stock pursuant to the Sales Agreement. 9 Note 6. Share-Based Compensation Expense In June 2024 at the Company’s 2024 Annual Meeting of Stockholders (the "2024 Annual Meeting"), the stockholders of the Company appro ved an amendment to the Company’s 2019 Omnibus Equity Incentive Plan (as amended, the “2019 Plan”) which, among other things, increased the aggregate number of shares authorized for use in making awards to eligible persons under the 2019 Plan by 2,000,000 shares, for a total of up to 10,750,000 shares available for issuance. As of March 31, 2026 , a total of 1,040,059 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 March 31, 2026 , a total of 165,926 shares remain availabl e for future issuance under the 2021 Plan, subject to the terms of the 2021 Plan. Share-Based Compensation Share-based compensation expense included in the Company’s condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025 was as follows: Three Months Ended March 31, (in thousands) 2026 2025 Research and development $ 2,448 $ 3,744 General and administrative 1,877 2,918 Total $ 4,325 $ 6,662 Note 7. Income Taxes The Company is subject to taxation in the United States and various state jurisdictions. The Company calculates its quarterly income tax provision using a forecasted annual effective tax rate and records discrete items in the period in which they arise. The primary difference between the Company’s effective tax rate and the federal statutory rate is attributable to federal and state income tax expense offset by a valuation allowance on the Company’s deferred tax assets. The Company recorded negligible income tax expense for the three months ended March 31, 2026 and 2025. No tax benefit was recorded for losses incurred in the United States, as such losses are offset by a full valuation allowance. Note 8. Commitments and Contingencies Cystic Fibrosis Foundation Agreement On September 25, 2023, the Company amended its Development Program Letter Agreement, dated May 16, 2017 and as amended July 13, 2018 and August 1, 2019, with the Cystic Fibrosis Foundation (“CFF”). Pursuant to the amendment, (i) CFF increased the amount it will award to advance LUNAR-CF to $ 24.6 million from approximately $ 15.6 million, and (ii) the Company agreed to incur at least $ 15.0 million toward activities under the research plan. During the fourth quarter of 2023, the Company received the full payment from CFF related to the amendme nt. For the three months ended March 31, 2026 and 2025, the Company recognized a contra expen se of $ 0.3 million and $ 0.4 million, respectively, related to CFF . As of March 31, 2026 and December 31, 2025 , $ 6.1 million and $ 6.4 million, respectively, remained in accrued liabilities. Leases In October 2017, the Company entered into a non-cancellable operating lease agreement for office space adjacent to its previously occupied headquarters. The commencement of the lease began in March 2018 and the lease extended for approximately 84 months from the commencement date with a remaining lease term through March 2025. In March 2024, the Company negotiated with the lessor to extend the lease through March 2027. 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 10 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 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. An impairment loss of $ 1.9 million was recorded for this lease in the year ended December 31, 2025. In September 2021, the Company entered into a 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 assets and liabilities 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 assets and liabilities. The Company uses its incremental borrowing rate to calculate the present value of the lease payments, as the implicit rate in the lease is not readily determinable. As of March 31, 2026, the remaining payments of the operating lease liabilities were as follows: (in thousands) Remaining Lease Payments 2026 (remainder of year) 3,978 2027 4,132 2028 3,822 2029 3,937 2030 4,055 Thereafter 7,758 Total remaining lease payments 27,682 Less: imputed interest ( 3,695 ) Total operating lease liabilities $ 23,987 Weighted-average remaining lease term 6.2 Weighted-average discount rate 4.6 % Operating lease costs consist of the fixed lease payments included in operating lease liabilities and are recorded on a straight-line basis over the lease terms. Operating lease costs were $ 0.9 million and $ 1.3 million for the three months ended March 31, 2026 and March 31, 2025 , respectively. Note 9. 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. 11 The following table presents information about reported segment revenues, segment loss, and significant segment expenses: Three Months Ended March 31, (in thousands) 2026 2025 Revenues $ 2,061 $ 29,382 Less: Research and development: LUNAR-COVID 602 5,809 LUNAR-OTC 2,718 1,576 BARDA 324 2,481 LUNAR-CF, net 6,531 7,148 Early-stage programs 243 — Discovery technologies 1,754 2,187 Payroll and benefits 7,619 13,043 Facilities and equipment 1,736 2,649 Total research and development 21,527 34,893 General and administrative 9,465 11,315 Other (1) ( 1,967 ) ( 2,750 ) Net loss $ ( 26,964 ) $ ( 14,076 ) (1) Primarily includes interest income. Note 10. Related Party Transactions Equity-method Investment - ARCALIS, Inc. Investments for which the Company exercises significant influence but does not have control, are accounted for under the equity method. Equity-method investment activity is related to the Company's joint venture in ARCALIS, Inc. with Axcelead, Inc. The Company’s share of the investees’ results is presented as either income or loss from equity-method investees in the accompanying consolidated statements of operations and comprehensive loss. As of March 31, 2026 , the carrying value of the equity-method investment in ARCALIS remained at zero . Note 11. Subsequent Events None. 12