What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-13 · 101 added, 123 removed, 109 unchanged (67% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis together with our unaudited condensed financial statements and notes thereto included in “Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended December 31, 2024 included in the Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on March 28, 2025.

You should read the following discussion and analysis together with our unaudited condensed consolidated financial statements and notes thereto included in “Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q (this “Quarterly Report”) and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025 included in the Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on March 31, 2026 (the “Annual Report”).

In addition to historical information, this Quarterly Report contains forward-looking statements that involve risks, uncertainties, and assumptions.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to those set forth under the caption “Risk Factors” in the Annual Report on form 10-K, and the caption “Risk Factors” in this Quarterly Report, as updated by our subsequent filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to those set forth under the caption “Risk Factors” in the Annual Report, and the caption “Risk Factors” in this Quarterly Report, as updated by our subsequent filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Furthermore, past operating results are not necessarily indicative of results that may occur in future periods.

We are a clinical-stage biopharmaceutical company developing our novel class of highly specific and selective antibody-based therapeutics for the treatment of solid tumor cancer.

Our CABs capitalize on our proprietary discoveries with respect to tumor biology, enabling us to target known and widely validated tumor antigens that have previously been difficult or impossible to target.

Our CABs capitalize on our proprietary discoveries with respect to tumor biology, enabling us to target known, validated tumor antigens that have previously been difficult or impossible to target.

Our novel CAB therapeutic candidates exploit characteristic pH differences between the tumor microenvironment and healthy tissue.

Unlike healthy tissue, the tumor microenvironment is acidic, and we have designed our antibodies to selectively bind to their targets on tumor cells under acidic pH conditions but not on targets in normal tissues.

Our approach is to identify the necessary targeting and potency required for cancer cell destruction, while aiming to eliminate or greatly reduce on-target, off-tumor toxicity—one of the fundamental challenges of existing cancer therapies.

Our proprietary approach is to identify the necessary targeting and potency required for cancer cell destruction, while aiming to eliminate or greatly reduce on-target, off-tumor toxicity—one of the fundamental challenges of existing cancer therapies.

We are a United States-based company with facilities in San Diego, California.

Since the commencement of our operations, we have focused substantially all of our resources on conducting research and development activities, including drug discovery, preclinical studies and clinical trials of our product candidates, including the ongoing Phase 2 clinical trials of mecbotamab vedotin (BA3011), ozuriftamab vedotin (BA3021), evalstotug (BA3071), and our Phase 1 clinical trial of BA3182 (CAB-EpCAM x CAB-CD3), establishing and maintaining our intellectual property portfolio, manufacturing clinical and research material through third parties, hiring personnel, establishing product development and commercialization collaborations with third parties, raising capital and providing general and administrative support for these operations.

Since 2014, such research and development activities have exclusively related to the research, development, manufacture and Phase 1 and Phase 2 clinical testing of our CAB antibody-based product candidates and the strengthening of our proprietary CAB technology platform and pipeline.

Since the commencement of our operations, we have focused substantially all of our resources on conducting research and development activities, including drug discovery, preclinical studies and clinical trials of our product candidates, including the completed Phase 2 clinical trials of mecbotamab vedotin (BA3011), ozuriftamab vedotin (BA3021), evalstotug (BA3071), and our ongoing Phase 1 clinical trial of BA3182 (CAB-EpCAM x CAB-CD3), establishing and maintaining our intellectual property portfolio, manufacturing clinical and research material through third parties, hiring personnel, establishing product development and commercialization collaborations with third parties, raising capital and providing general and administrative support for these operations.

On March 2, 2026, we announced that our Board of Directors initiated a formal process to explore and evaluate strategic options to maximize shareholder value, including the sale of preclinical and clinical assets, licensing transactions, strategic partnerships or other corporate transactions.

There can be no assurance that this process will result in any agreements or transactions.

We do not intend to provide updates until our Board of Directors approves a specific action or otherwise determines whether disclosure is appropriate or required.

In connection with the evaluation of strategic options, we also implemented a reduction in force and other cost-containment measures intended to better align resources with our near-term priorities.

In order to continue to preserve capital during this period, we are re-evaluating the timing and scope of our clinical development programs.

As part of this process, we paused further enrollment in our ongoing Phase 1 study of BA3182 (CAB-EpCAM x CAB-CD3), while continuing treatment, follow-up of patients, including obtaining new scans in the study.

We are also reassessing the appropriate timeline and pacing of further enrollment in the Phase 1 study as well as the appropriate timeline to commence a Phase 3 study for ozuriftamab vedotin (BA3021) (CAB-ROR2-ADC) in 2L+ oropharyngeal squamous cell carcinoma (“OPSCC”).

While our goal is to continue these studies, there can be no assurances that clinical development of our programs will not be limited or delayed pending the outcome of the strategic process.

We have incurred significant losses to date.

Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current and future product candidates.

Our net loss was $15.8 million and $49.8 million for the three and nine months ended September 30, 2025, respectively, compared to $10.6 million and $54.9 million for the three and nine months ended September 30, 2024, respectively.

As of September 30, 2025, we had an accumulated deficit of $535.9 million.

Our net loss was $6.3 million for the three months ended March 31, 2026, compared to $15.3 million for the three months ended March 31, 2025.

As of March 31, 2026, we had an accumulated deficit of $552.0 million.

These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations.

We do not expect to generate meaningful revenue from product sales for the foreseeable future, and we expect to continue to incur significant operating expenses for the foreseeable future due to the cost of research and development, including conducting clinical trials and the regulatory approval process for our product candidates, as well as identifying and designing product candidates and conducting preclinical studies.

We expect our expenses, and the potential for losses, to be variable as we focus development efforts on selected assets and indications.

We expect research and development expenses to decrease in the near term as we complete our Phase 2 trials for certain indications.

We have recently implemented certain initiatives to lower cost and extend our cash runway, including a restructuring in March 2025 that included a 30% workforce reduction, and a reduction in our lease footprint by almost half in June 2025.

Over the long-term, we expect our expenses to increase substantially in connection with the development of our clinical programs beyond our existing Phase 1 and Phase 2 clinical trials and through the commercialization of our product candidates.

During the year ended December 31, 2025, we implemented certain initiatives to lower cost and extend our cash runway, including a restructuring in March 2025 that included a 30% workforce reduction, and a reduction in our lease footprint by almost half in June 2025.

Additionally, in March 2026 we implemented a restructuring plan that included a 70% workforce reduction.

We expect our expenses to decrease in the near term as a result of the March 2026 workforce reduction, cost containment measures and capital preservation initiatives discussed above.

Over the long-term, we expect our expenses to increase substantially in connection with the development of our clinical programs beyond our existing and potential future clinical trials and potentially through the commercialization of our product candidates.

As a result, we will require substantial additional capital to develop and commercialize our product candidates and fund operations for the foreseeable future.

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We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

As of September 30, 2025, our cash and cash equivalents totaled approximately $8.3 million.

Accordingly, based on our current operating plan, and along with our history of operating losses, our current cash and cash equivalents may not to be sufficient to fund our ongoing operations for a period of at least twelve months from the date the financial statements included in this report are issued, and these circumstances raise substantial doubt about our ability to continue as a going concern.

As of March 31, 2026, our cash and cash equivalents totaled approximately $2.0 million.

On May 14, 2026, we entered into a First Amendment (the "Amendment") to that certain License Agreement, dated September 23, 2024 (the "Context License Agreement"), by and between us and Context Therapeutics, Inc., a Delaware corporation ("Context").

Under the terms of the Amendment, and in full consideration for the amended license rights in the Amendment, Context has agreed to pay us:

(i) $4,500,000, payable within five (5) business days of the effective date of the Amendment, and (ii) $2,000,000, payable by August 1, 2026.

Based on our current operating plan, and along with our history of operating losses, our current cash and cash equivalents are not sufficient to fund our ongoing operations for a period of at least twelve months from the date the condensed consolidated financial statements included in this report are issued, and these circumstances raise substantial doubt about our ability to continue as a going concern.

Financial Operations Overview

To date, we have not generated any revenue from the sale of products and do not expect to generate meaningful revenue in the near future.

The Company has entered into collaborations and licensing agreements with various third parties that, in some cases, may provide for potential future milestone and royalty payments to us (see Note 8 to our financial statements).

In September 2024, the Company licensed BA3362, a Nectin-4 x CD3 T cell engaging bispecific antibody, to Context Therapeutics (“Context”).

We did not recognize any revenue during the three and nine months ended September 30, 2025, related to the licensing agreement with Context.

We recognized revenue of $11.0 million during the three and nine months ended September 30, 2024, related to the licensing agreement with Context.

In November 2025, the Company received the first $2 million milestone payment under the License Agreement (the “Context License Agreement”) with Context.

In addition, Context is funding supplementary preclinical research by BioAtla to support their pre-IND process, where Context has publicly indicated that the IND filing will be completed in Q2 of 2026.

We have entered into collaborations and licensing agreements with various third parties that, in some cases, may provide for potential future milestone and royalty payments to us (see Note 9 to our condensed consolidated financial statements).

In September 2024, we licensed BA3362, a Nectin-4 x CD3 T cell engaging bispecific antibody, to Context.

In November 2025, we received the first $2.0 million milestone payment under the Context License Agreement.

In addition, Context has funded supplementary preclinical research performed by us to support their pre-IND process, where Context has publicly indicated that it expects to initiate a Phase 1 clinical trial in the third quarter of 2026.

We did not recognize any revenue during the three months ended March 31, 2026 and 2025, related to the Context License Agreement.

Operating Expenses

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The capitalized amounts are then expensed as the related goods are delivered and services are performed.

We expect our research and development expenses to decrease in the near term as we complete certain of our Phase 2 clinical trials and focus development on selected high potential indications.

We expect our research and development expenses to decrease in the near term due to completion of our Phase 2 clinical trials and as a result of the March 2026 workforce reduction, cost containment measures and capital preservation initiatives discussed above.

However, research and development could increase upon initiation of new clinical trials, including registrational trials for our lead product candidates.

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Interest income consists primarily of interest earned on our cash and cash equivalent balances.

Loss on warrant liability

Loss on warrant liability relates to the changes in the fair value of our liability-classified warrants to purchase common stock.

Gain on Warrant Liability

Gain on warrant liability relates to the changes in the fair value of our liability-classified warrants to purchase common stock.

Gain on PPAs Liability

Gain on PPAs liability relates to the changes in the fair value of our liability-classified PPAs (as defined below).

Other Expense

Other expense consists of miscellaneous income and expense unrelated to our core operations.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

Comparison of the three months ended March 31, 2026 and 2025

Three Months Ended

September 30,

(in thousands)

Collaboration and other revenue

Operating expenses:

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Loss from operations

Other income (loss):

Other income (expense):

Interest income

Loss on warrant liability

Gain on warrant liability

Gain on PPAs liability

Other expense

Total other income (loss)

Net loss and comprehensive loss

Collaboration and Other Revenue

There was no revenue recognized during the three months ended September 30, 2025.

Collaboration and other revenue for the three months ended September 30, 2024 was $11.0 million and consisted of revenue recognized under the Context License Agreement.

See Note 8 to our financial statements for further details regarding collaboration and licensing agreements.

Total other income

Consolidated net loss and comprehensive loss

Research and development expense

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Three Months Ended

September 30,

(in thousands)

External expenses:

Mecbotamab vedotin, BA3011 (CAB AXL-ADC)

Ozuriftamab vedotin, BA3021 (CAB ROR2-ADC)

Evalstotug, BA3071 (CAB CTLA-4)

BA3182 (CAB EpCAM x CAB CD3)

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Total research and development expenses

Research and development expenses were $9.5 million and $16.4 million for the three months ended September 30, 2025 and 2024, respectively.

The decrease of approximately $6.9 million was primarily driven by a $4.7 million decrease in program development costs for our clinical programs due to lower enrollment and lower overall expense as we complete Phase 2 trials for mecbotamab vedotin, ozuriftamab vedotin, and evalstotug, a $1.8 million decrease in related party expense incurred in connection with our licensing agreement with Context Therapeutics in September 2024, a $0.9 million decrease in headcount related expenses due to the reduction in force announced in March 2025, and a $0.6 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan.

This was partially offset by a $1.1 million increase in development costs for our ongoing Phase 1 trial for our EpCAM program.

General and Administrative Expense

General and administrative expenses were $4.3 million and $5.9 million for the three months ended September 30, 2025 and 2024, respectively.

The decrease of $1.6 million was primarily driven by a $0.8 million decrease in consulting and professional fees related to the closing of our Context License agreement in September 2024, a $0.4 million decrease in headcount related costs due to the reduction in force announced in March 2025, a $0.3 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, and a $0.1 million decrease in depreciation expense.

Interest Income

Interest income was $0.1 million and $0.7 million for the three months ended September 30, 2025 and 2024, respectively.

The decrease of $0.6 million was due to lower cash and cash equivalents and lower interest rates during same period in 2024.

Loss on warrant liability

Loss on warrant liability was $2.1 million and $0 for the three months ended September 30, 2025 and 2024, respectively.

The $2.1 million loss was due to the change in fair value of the warrants we issued in December 2024.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Nine Months Ended

September 30,

(in thousands)

Collaboration and other revenue

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (loss):

Interest income

Loss on warrant liability

Other expense

Total other income (loss)

Net loss and comprehensive loss

Collaboration and Other Revenue

There was no revenue recognized during the nine months ended September 30, 2025.

Collaboration and other revenue for the nine months ended September 30, 2024 was $11.0 million and consisted of revenue recognized under the Context License Agreement.

See Note 8 to our financial statements for further details regarding collaboration and licensing agreements.

Research and Development Expense

The following table summarizes our research and development expenses allocated by CAB program for the periods indicated:

Nine Months Ended

September 30,

(in thousands)

External expenses:

Mecbotamab vedotin, BA3011 (CAB AXL-ADC)

Ozuriftamab vedotin, BA3021 (CAB ROR2-ADC)

Evalstotug, BA3071 (CAB CTLA-4)

BA3182 (CAB EpCAM x CAB CD3)

Other CAB Programs

Total external expenses

Personnel and related

Equity-based compensation

Facilities and other

Total research and development expenses

Research and development expenses were $35.6 million and $51.4 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease of approximately $15.9 million was primarily driven by a $11.9 million decrease in program development costs primarily due to a $10.5 million decrease for our clinical programs due to lower enrollment and lower overall expense as we complete Phase 2 trials for mecbotamab vedotin, ozuriftamab vedotin, and evalstotug, a $3.1 million decrease in costs for our Other CAB Programs due to a $2.0 million decrease in related party expense incurred in connection with our licensing agreement with Context Therapeutics in September 2024, and a $1.1 million decrease in development costs for our pre-clinical programs, partially offset by a $1.7 million increase in development costs for our ongoing Phase 1 trial for our EpCAM program.

The remaining decrease in research and development expenses was due to a $2.0 million decrease in personnel-related expense due to lower headcount including the impact of the reduction in force announced in March 2025, a $1.5 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, and a $0.4 million decrease in facility related costs.

Research and development expenses were $4.6 million and $12.4 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of approximately $7.8 million was primarily driven by a $6.3 million decrease in program development costs due to completion of our Phase 2 trials for mecbotamab vedotin, ozuriftamab vedotin, and evalstotug, a $2.1 million decrease in personnel related expense, including stock-based compensation, primarily due to our reduction in force in March 2026, and a $0.3 million decrease in facilities and other allocated expense.

This was offset by a $0.9 million increase in development costs for our ongoing Phase 1 trial for our EpCAM program.

General and administrative expense

General and administrative expenses were $14.5 million and $17.3 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease of approximately $2.8 million was primarily driven by a $1.2 million decrease in stock-based compensation related to awards issued under our 2020 Equity Incentive Plan, a $0.7 million decrease in consulting and professional fees related to closing of our Context License agreement in September 2024, a $0.6 million decrease in headcount related to the reduction in force announced in March 2025, and a $0.2 million decrease in insurance primarily due to lower D&O insurance premiums.

General and administrative expenses were $4.7 million and $5.3 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of approximately $0.5 million was primarily driven by a $1.2 million decrease in personnel related expense, including stock-based compensation, primarily due to our reduction in force in March 2026, offset by a $0.6 million increase in consulting and professional fees which was primarily related to the Company's efforts to maintain compliance with Nasdaq listing requirements.

Interest income

Interest income was $0.8 million and $2.8 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease of $2.0 million was due to lower cash and cash equivalents and lower interest rates during same period in 2024.

Loss on warrant liability

Loss on warrant liability was $0.5 million and $0 million for the nine months ended September 30, 2025 and 2024, respectively.

The $0.5 million loss was due to the change in fair value of the warrants we issued in December 2024.

Interest income was $0.04 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of $0.4 million was primarily due to lower cash and cash equivalents compared to the same period in 2025.

Gain on warrant liability

Gain on warrant liability was $2.7 million and $1.9 million for the three months ended March 31, 2026 and 2025, respectively.

The increase of $0.8 million was due to the change in fair value of the warrants which were issued in December 2024 and are adjusted to fair value at each period.

Gain on PPAs liability

Gain on PPAs liability was $0.3 million for the three months ended March 31, 2026 compared to zero for the three months ended March 31, 2025.

The gain of $0.3 million was due to the change in fair value for our pre-paid agreement liability which was initiated in November 2025 and has been fully converted into common stock as of March 2026.

Liquidity and Capital Resources

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Since July 2020, we have funded our operations primarily through the issuance of equity.

As of September 30, 2025, we had cash and cash equivalents of $8.3 million.

In December 2024, the Company closed on an offering (the “December 2024 Offering”) of 9,679,158 shares of common stock at a price of $0.9520 per share with accompanying warrants to purchase up to 9,679,158 shares of common stock, which have an exercise price of $1.19 per share (the “Warrants”).

The gross proceeds from the December 2024 Offering were approximately $9.2 million, before deducting $0.7 million of placement agent fees and other offering expenses payable by the Company.

The accompanying Warrants became exercisable on June 20, 2025 and will expire five years from the date of initial exercisability.

There were 9,679,158 Warrants outstanding and exercisable at September 30, 2025.

As of March 31, 2026, we had cash and cash equivalents of $2.0 million.

In November 2025, we entered into Pre-Paid Advance Agreements (the “PPAs”) with each of YA II PN, Ltd., a Cayman Islands exempt limited partnership (“Yorkville”), Anson Investments Master Fund LP and Anson East Master Fund LP (collectively, the “Investors”).

Pursuant to the PPAs, the Investors agreed to advance to us $7.5 million (the “Pre-Paid Advance”).

The Pre-Paid Advance was purchased by the Investors at 95% of the face amount of the Pre-Paid Advance for gross proceeds of approximately

$7.13 million.

The Pre-Paid Advance accrued interest at an annual rate of 4%.

As of March 2026, the entire balance of the Pre-Paid Advance has been converted into PPA Shares and no amounts remain outstanding under the PPAs.

In November 2025, we also entered into the Standby Equity Purchase Agreement (the “SEPA”) with Yorkville pursuant to which we have the right to sell to Yorkville up to $15.0 million of shares of common stock (the “Commitment Amount”), subject to certain limitations and conditions set forth in the SEPA, during the 36 months beginning November 20, 2025 (such shares, the “SEPA Shares”).

Sales of the SEPA Shares to Yorkville and the timing of any such sales, if elected to be utilized by us at a future date, are at our option, and we are under no obligation to sell any SEPA Shares to Yorkville.

As consideration for Yorkville’s commitment to purchase the SEPA Shares, we agreed to pay to Yorkville a commitment fee equal to 2.00% of the Commitment Amount, or $300,000, which was satisfied by the issuance to Yorkville of an aggregate of 4,868 shares of common stock (the “Commitment Shares”).

As of March 31, 2026, 48,092 SEPA Shares had been sold under the SEPA, with gross proceeds to the Company totaling approximately $0.4 million.

In December 2024, we closed on an offering (the “December 2024 Offering”) that included warrants to purchase up to 193,581 shares of common stock, which initially had an exercise price of $59.50 per share (the “Warrants”) subject to certain adjustments including for reverse stock splits and share consolidations.

As a result of the April 6, 2026 Share Consolidation and pursuant to the re-pricing mechanism contained in the Warrants, the exercise price of the Warrants was adjusted to $4.35 to match the lowest VWAP of our common stock during the eleven (11) trading days commencing five (5) trading days immediately preceding the Share Consolidation and ending five (5) trading days immediately following the Share Consolidation.

The Warrants became exercisable on June 20, 2025 and will expire five years from the date of initial exercisability.

There were 193,581 Warrants outstanding and exercisable at March 31, 2026.

On May 14, 2026, we entered into the Amendment to the Context License Agreement with Context.

Under the terms of the Amendment, and in full consideration for the amended license rights described below, Context has agreed to pay us:

(i) $4,500,000, payable within five (5) business days of the effective date of the Amendment, and (ii) $2,000,000, payable by August 1, 2026 (together, the "Amendment Pay-Off Amounts").

The Amendment Pay-Off Amounts satisfy in full any and all milestone and royalty payment obligations contemplated by the Context License Agreement.

Among other modifications to the Context License Agreement, under the terms of the Amendment, the license granted to Context under the Context License Agreement is amended to be irrevocable, exclusive, royalty-free, fully paid-up and non-terminable, and any and all diligence obligations with respect to Context are removed.

Future Funding Requirements

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The timing and amount of future funding requirements depends on many factors, including the following:

• the timing and outcome of our recently initiated evaluation of strategic options;

• the initiation and advancement, scope, rate of progress, completion of enrollment, results and costs of our preclinical studies, clinical trials and other related activities for our product candidates;

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• the extent to which we acquire or invest in businesses, products or technologies, although we have no commitments or agreements relating to any of these types of transactions.

Based on our current operating plan, our current cash and cash equivalents may not be sufficient to fund our ongoing operations for a period of at least twelve months from the date the financial statements included in this report are issued.

Based on our current operating plan, our current cash and cash equivalents are not sufficient to fund our ongoing operations for a period of at least twelve months from the date the condensed consolidated financial statements included in this Quarterly Report are issued.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

These circumstances raise substantial doubt about our ability to continue as a going concern.

While management believes additional funds can be raised through equity or debt financings, strategic collaborations transactions, or a combination of these approaches, which will alleviate the conditions that raise substantial doubt, these plans are not entirely within our control and cannot be assessed as being probable of occurring.

On March 2, 2026, we announced a formal process to explore and evaluate strategic options to maximize shareholder value, including the sale of preclinical and clinical assets, licensing transactions, strategic partnerships or other corporate transactions.

The Company plans to continue to fund its losses from operations and capital funding needs through proceeds received through the SEPA, this strategic process, other public or private equity or debt financings, or other sources.

In connection with the evaluation of strategic options, the Company also implemented a reduction in force and other cost-containment measures intended to better align resources with its near-term priorities.

In order to continue to preserve capital during this period, the Company is re-evaluating the timing and scope of its clinical development programs.

While management believes additional funds can be raised through a combination of these approaches, which may alleviate the conditions that raise substantial doubt, these plans are not entirely within our control and cannot be assessed as being probable of occurring.

We may not be able to secure additional financing in a timely manner or on favorable terms, if at all.

Failure to generate sufficient cash flows from operations, raise additional capital, and reduce discretionary spending should additional capital not become available could have a material adverse effect on our ability to achieve our intended business objectives.

Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated preclinical studies and clinical trials.

If the Company is not able to secure adequate additional funding, the Company may be forced to make further reductions in spending, extend payment terms with suppliers, liquidate assets where possible, suspend or curtail planned programs or wind down the Company.

Any of these actions could materially harm the Company’s business, results of operations and future prospects.

To the extent that we raise additional capital through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates.

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Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control.

For example, market volatility resulting from a variety of causes, including the government shutdown that began October 1, 2025, tariffs and trade disputes with other countries, inflation, high interest rates, growing recession risks, supply chain disruptions, and geopolitical tensions and disruptions, including US and EU sanctions on Russian oil and gas, the ongoing conflict between Russia and Ukraine, the wars between Israel and the terrorist groups Hamas and Hezbollah and escalating conflict and tensions with Iran, could adversely impact our ability to access capital as and when needed.

For example, market volatility resulting from a variety of causes, including recent and future government shutdowns, tariffs and trade disputes with other countries, inflation, high interest rates, growing recession risks, supply chain disruptions, and geopolitical tensions and disruptions, including the US and EU sanctions on Russian oil and gas, the ongoing conflict between Russia and Ukraine, the wars between Israel and the terrorist groups Hamas and Hezbollah, the current political situation in Venezuela and escalating conflict and tensions with Iran, could adversely impact our ability to access capital as and when needed.

We may choose to raise additional capital through the issuance of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

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If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, acquiring other businesses, products or technology, or declaring dividends.

If we are unable to obtain additional funding from these or other sources, it may be necessary to

significantly reduce our rate of spending through additional reductions in staff and delay, scale back or stop certain research and development programs.

If we are unable to obtain additional funding from these or other sources, it may be necessary to significantly reduce our rate of spending through additional reductions in staff and delay, scale back or stop certain research and development programs.

The following summarizes our cash flows for the periods indicated:

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

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Cash used in operating activities

Net cash used in operating activities for the nine months ended September 30, 2025 was $40.3 million, which consisted of a net loss of $49.8 million, a net change of $4.3 million in our operating assets and liabilities and $5.2 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $3.6 million, a decrease in prepaid expenses and other assets of $0.7 million, and a net decrease in operating lease right-of-use assets and lease liabilities of $0.1 million.

The non-cash transactions primarily consisted of $4.3 million of stock-based compensation, $0.5 million related to the change in fair value of the warrant liability, and $0.4 million related to depreciation and amortization.

Net cash used in operating activities for the nine months ended September 30, 2024 was $55.2 million, which consisted of a net loss of $54.9 million, a net change of $7.9 million in our operating assets and liabilities and $7.7 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $8.5 million and a net decrease in operating lease right-of-use assets and lease liabilities of $0.5 million, partially offset by a decrease in prepaid expenses and other assets of $1.0 million.

The non-cash transactions primarily consisted of $7.0 million of stock-based compensation and non-cash charges of $0.7 million related to depreciation and amortization.

Net cash used in operating activities for the three months ended March 31, 2026 was $5.3 million, which consisted of a net loss of $6.3 million, a net change of $2.9 million in our operating assets and liabilities and $1.9 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $3.1

million and an increase in operating lease ROU asset and lease liability of $0.1 million, offset by an increase in prepaid expenses and other assets of $0.2 million.

The non-cash transactions primarily consisted of $2.7 million related to the change in fair value of the warrant liability and $0.3 million related to the change in fair value of the PPAs liability, offset by $1.0 million of stock-based compensation and non-cash charges of $0.1 million related to depreciation and amortization.

Net cash used in operating activities for the three months ended March 31, 2025 was $16.3 million, which consisted of a net loss of $15.3 million, a net change of $0.9 million in our operating assets and liabilities and $0.1 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $2.1 million, offset by an increase in prepaid expenses and other assets of $3.0 million.

The non-cash transactions primarily consisted of $1.6 million of stock-based compensation and non-cash charges of $0.2 million related to depreciation and amortization, offset by $1.9 million related to the change in fair value of the warrant liability.

Cash provided by (used in) financing activities

Net cash used in financing activities was $0.4 million for the nine months ended September 30, 2025, consisting primarily of the payment of financing costs in connection with the December 2024 offering and the payment of taxes related to the net settlement of restricted stock units, partially offset by the proceeds from the issuance of common stock under the ESPP and the 2020 Plan.

Net cash provided by financing activities was $0.2 million for the nine months ended September 30, 2024, consisting primarily of the proceeds from the issuance of common stock under the ESPP and the 2020 Plan, partially offset by the payment of taxes related to the net settlement of restricted stock units.

Net cash provided by financing activities was $0.1 million for the three months ended March 31, 2026, consisting primarily of proceeds from issuance of common stock under the SEPA of $0.4 million, offset by the payment of financing costs in connection with the PPAs and SEPA of $0.3 million and the payment of taxes related to the net settlement of restricted stock units of $14 thousand.

Net cash used in financing activities was $0.4 million for the three months ended March 31, 2025, consisting primarily of the payment of financing costs in connection with the December 2024 offering and the payment of taxes related to the net settlement of restricted stock units.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S.

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated, and reported expenses incurred during the reporting periods.

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Our critical accounting policies are those accounting principles generally accepted in the United States that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles.

For a description of our critical accounting policies, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” contained in our Annual Report on Form 10-K for the year ended December 31, 2024.

There have not been any material changes to the critical accounting policies discussed therein during the nine months ended September 30, 2025.

There have not been any material changes to the critical accounting policies discussed therein during the three months ended March 31, 2026.

Off-Balance Sheet Arrangements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis