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Item 1A. Risk Factors

2025-11-13 compared with 2025-08-14 · 208 added, 366 removed, 1233 unchanged (32% of the section changed)

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• We are highly dependent on the successful planned or future development of our current product candidates, EQ504 and EQ302, and we may not be able to obtain regulatory or marketing approval of, or successfully commercialize, these product candidates in any of the indications for which we plan to develop them;

• We have licensed the rights to itolizumab in the United States, Canada, Australia, and New Zealand.

Any adverse developments that occur during any research, clinical, or commercial use of itolizumab by Biocon or third parties in other jurisdictions may affect our ability to advance the further clinical development of itolizumab (EQ001), obtain regulatory approval of or successfully commercialize itolizumab (EQ001) or otherwise adversely impact our business;

• We have licensed itolizumab from Biocon pursuant to an exclusive license agreement, which license is conditioned upon us meeting certain diligence obligations with respect to the development, regulatory approval and commercialization of itolizumab, and making significant milestone payments in connection with regulatory approval and commercial milestones as well as royalty payments.

We do not intend to advance itolizumab in any further clinical development and may consider terminating our exclusive license agreement with Biocon or seeking alternative means to monetize our rights under the license agreement;

• Any delays in the commencement and completion, or any termination or suspension, of our planned or future clinical studies could result in increased costs to us, and delay or limit our ability to raise capital or generate revenue and adversely affect our commercial prospects;

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• We currently have no marketing and sales organization and have no experience as a company in commercializing products and we may have to invest significant resources to develop these capabilities.

If we are unable to establish marketing and sales capabilities or enter into agreements with contracted third parties to market and sell any of our products, we may not be able to generate product revenue;

• The manufacture of pharmaceutical products, especially biologics, is complex and we may encounter difficulties in production, distribution and delivery of our product candidates.

If CMOs, including Biocon, our exclusive CMO for itolizumab (EQ001), encounter such difficulties, our ability to provide supply of our product candidates for our planned or future clinical studies, our ability to obtain marketing approval, or our ability to obtain commercial supply of our products, if approved, could be delayed or stopped;

If we are unable to establish marketing and sales capabilities or enter into agreements with contracted third parties to market and sell any of our products if and when approved, we may not be able to generate product revenue;

• The manufacture of pharmaceutical products is complex and we may encounter difficulties in production, distribution and delivery of our product candidates.

If CMOs encounter such difficulties, our ability to provide supply of our product candidates for our planned or future clinical studies, our ability to obtain marketing approval, or our ability to obtain commercial supply of our products, if approved, could be delayed or stopped;

• International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects;

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• Even if our product candidates receive marketing approval in any indication, they may fail to achieve the degree of market acceptance by physicians, patients, hospitals, healthcare payors and others in the medical community necessary for commercial success;

• If we are unable to regain compliance with the listing requirements of the Nasdaq Capital Market, with an initial deadline of June 11, 2025, followed by a 180-day extension until December 8, 2025, our common stock may be delisted from the Nasdaq Capital Market which could have a material adverse effect on our financial condition and could make it difficult for you to sell your shares.

• We have in the past and may in the future fail to maintain compliance with the listing requirements of the Nasdaq Capital Market, and as a result, our common stock may be delisted from the Nasdaq Capital Market which could have a material adverse effect on our financial condition and could make it difficult for you to sell your shares.

You should carefully consider the following risk factors, as well as the other information in this report, before deciding whether to purchase, hold or sell shares of our common stock.

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We have incurred significant losses since our inception, expect to incur significant losses for the foreseeable future and may never achieve or maintain profitability.*

We are a clinical-stage biotechnology company incorporated in March 2017 and our operations, to date, have consisted primarily of organizing and staffing our company, business planning, raising capital, in-licensing product rights, conducting clinical and preclinical development, filing three INDs, conducting chemistry, manufacturing and controls, or CMC, and formulation development activities, conducting business development activities including the acquisitions of Bioniz, Inc.

and Ariagen, Inc., effecting a stock repurchase program, and the general and administrative activities associated with being a public company.

We are a clinical-stage biotechnology company incorporated in March 2017 and our operations, to date, have consisted primarily of organizing and staffing our company, business planning, raising capital, in-licensing product rights, conducting clinical and preclinical development, filing INDs, conducting chemistry, manufacturing and controls, or CMC, and formulation development activities, conducting business development activities and the general and administrative activities associated with being a public company.

We have never completed the development of any product candidate through to marketing approval, and we have never generated any revenue from sales of an approved product.

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We have never generated any revenues from sales of an approved product, and we cannot estimate with precision the extent of our future losses.

For the six months ended June 30, 2025 and the year ended December 31, 2024, our net losses were $14.4 million and $8.1 million, respectively.

As of June 30, 2025, we had an accumulated deficit of $208.2 million.

We expect to incur operating losses for the foreseeable future as we execute our plan to perform research and development activities, conduct preclinical studies on EQ504 and potentially other product candidates, potentially perform discovery research, conduct formulation development of our product candidates, potentially expand the indications for which we conduct clinical development of our product candidates, potentially acquire or develop new products and/or product candidates, seek regulatory approvals of and potentially commercialize any approved products, hire and retain additional personnel, maintain compliance with regulatory requirements, protect our intellectual property, and manage the administrative aspects of our business.

Furthermore, strategic transactions have and may in the future accelerate the rate at

which our operating losses increase, including as a result of preclinical, clinical and regulatory expenses incurred to advance our potential product candidates.

For the nine months ended September 30, 2025 and the year ended December 31, 2024, our net losses were $18.6 million and $8.1 million, respectively.

As of September 30, 2025, we had an accumulated deficit of $212.4 million.

We expect to incur operating losses for the foreseeable future as we execute our plan to perform research and development activities, conduct preclinical and clinical studies on EQ504 and potentially other product candidates, potentially perform discovery research, conduct formulation development of our product candidates, potentially expand the indications for which we conduct clinical development of our product candidates, potentially acquire or develop new products and/or product candidates, seek regulatory approvals of and potentially commercialize any approved products, hire and retain additional personnel, maintain compliance with regulatory requirements, protect our intellectual property, and manage the administrative aspects of our business.

Furthermore, strategic transactions have and may in the future accelerate the rate at which our operating losses increase, including as a result of preclinical, clinical and regulatory expenses incurred to advance our potential product candidates.

In addition, if we obtain regulatory approval of any of our product candidates, we expect to incur increased sales and marketing expenses, with certain of such investments potentially being made in advance of an approval.

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Furthermore, because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability.

If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis and we may continue to incur substantial research and development and other expenditures to develop and market additional product candidates.

If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis and we may continue to incur substantial research and development and other

expenditures to develop and market additional product candidates.

Our failure to become and remain profitable would decrease the value of the company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations.

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If we are unable to raise this capital when needed, we may be forced to delay, reduce or eliminate our research and development programs or other operations.*

We expect our expenses to potentially increase substantially over the next few years if EQ504 or other product candidates successfully advance through additional stages of development and larger, more expensive clinical studies.

The development of biotechnology product candidates is capital intensive.

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The initial closing of the Private Placement occurred on August 12, 2025, the Initial Closing.

At the Initial Closing, we issued and sold 21,814,874 shares at a purchase price of $0.57 per share and pre-funded warrants to purchase up to 30,816,705 warrant shares at a purchase price of $0.5699 per warrant share, the Warrant Price, to the Investors for gross proceeds to us of approximately $30.0 million.

At the Initial Closing, we issued and sold 21,814,874 shares at a purchase price of $0.57 per share and pre-funded warrants to purchase up to 30,816,705 shares at a purchase price of $0.5699 per warrant share, the Warrant Price, to the Investors for gross proceeds to us of approximately $30.0 million.

The Purchase Agreement also provides for a potential second closing for up to approximately $20.0 million in gross proceeds in exchange for up to approximately 35,087,717 shares of common stock, subject to achieving certain specified milestones related to clinical study initiation and stock price conditions or waiver thereof.

We expect to use the net proceeds from the private placement transaction to accelerate the clinical development of EQ504, a novel aryl hydrocarbon receptor, or AhR, modulator into a Phase 1 proof-of-mechanism study into mid-2026, with data expected to follow approximately six months thereafter.

As of June 30, 2025, we had $11.5 million in cash and cash equivalents.

We expect that the net proceeds from the Private Placement with the cash and cash equivalents as of June 30, 2025, will enable us to fund our operations through 2027, based on certain assumptions and estimates that may prove to be inaccurate.

We expect to use the net proceeds from the private placement transaction to accelerate the clinical development of EQ504, a novel aryl hydrocarbon receptor, or AhR, modulator into a Phase 1 proof-of-mechanism study in mid-2026, with data expected to follow approximately six months thereafter.

However, we cannot provide any assurances that we will be able to obtain data within those time frames or that the data which may be obtained will be favorable to the further clinical development of EQ504.

We also cannot provide any assurances that the milestones related to the clinical study initiation and stock price conditions will be met or that the second closing will occur.

As of September 30, 2025, we had $33.1 million in cash and cash equivalents.

We expect that our cash and cash equivalents as of September 30, 2025 will enable us to fund our operations through 2027, based on certain assumptions and estimates that may prove to be inaccurate.

We have and will continue to pursue sources of additional capital, including pursuant to the Open Market Sales Agreement SM , dated October 8, 2023, as amended August 3, 2025, with LifeSci Capital LLC, the 2023 ATM Facility, as well as other financing sources that may be available to us.

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We do not have sufficient funds to complete the clinical development of EQ504 or any of our product candidates.

We will need to raise substantial additional capital to complete the development and commercialization of EQ504 and any other product candidates,

which additional capital, if capable of being raised, may be raised through the sale of our common stock or other securities or through the entering into of alternative strategic transactions, the terms of which may require us to divest one or more of our product candidates, or cause our stockholders to incur substantial dilution.

We will need to raise substantial additional capital to complete the development and commercialization of EQ504 and any other product candidates, which additional capital, if capable of being raised, may be raised through the sale of our common stock or other securities or through the entering into of alternative strategic transactions, the terms of which may require us to divest one or more of our product candidates, or cause our stockholders to incur substantial dilution.

Future capital requirements will depend on many factors, including:

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Adequate additional financing may not be available to us on acceptable terms, or at all.

Our ability to raise additional capital was adversely impacted by the FDA's negative feedback on the EQUATOR trial results, and may be adversely impacted by the potential worsening global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from public health epidemics or outbreaks, bank failures, potential tariffs, the conflict between Russia and Ukraine, the conflicts in the Middle East, and monetary policy changes of federal agencies that have increased interest rates to address inflationary pressures on the economy.

Our ability to raise additional capital may be adversely impacted by the potential worsening global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from public health epidemics or outbreaks, potential tariffs, the conflict between Russia and Ukraine, the conflicts in the Middle East, potential government shutdowns and monetary policy changes of federal agencies that have increased interest rates to address inflationary pressures on the economy.

If such disruptions persist and deepen, we could experience an inability to access additional capital.

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We are highly dependent on the successful planned or future development of our current product candidates, EQ504 and EQ302, and we may not be able to obtain regulatory or marketing approval of, or successfully commercialize, these product candidates in any of the indications for which we plan to develop them.*

Our future success will depend almost entirely on our ability to successfully develop, obtain regulatory approval of and then successfully commercialize EQ504 and EQ302 in any of the indications for which we are currently planning to develop them, including treatment of inflammatory bowel disease, particularly ulcerative colitis, with EQ504, or treatment of celiac disease or other gastrointestinal conditions with EQ302, which may never occur.

Our future success will depend almost entirely on our ability to successfully develop, obtain regulatory approval of and then successfully commercialize EQ504 or other product candidates, which may never occur.

We currently generate no revenues from sales of any biopharmaceutical products, and we may never be able to develop or commercialize a marketable biopharmaceutical product.

Before we can market and sell any of our product candidates in the United States, we would need to manage research and development activities, commence and complete our planned or future clinical studies, obtain necessary regulatory approvals from the FDA and build a commercial organization or enter into a marketing collaboration with a third party, among other things.

Before we would be able to market and sell any of our product candidates in the United States, we would need to manage research and development activities, commence and complete our planned or future clinical studies, obtain necessary regulatory approvals from the FDA and build a commercial organization or enter into a marketing collaboration with a third party, among other things.

We cannot assure you that we will be able to successfully complete the necessary planned or future clinical studies and/or obtain regulatory approval and develop sufficient commercial capabilities for any of our product candidates.

Further, we may decide to modify the design of our planned or future clinical studies, which could adversely impact the likelihood of obtaining regulatory approval.

Further, we may decide to modify the

design of our planned or future clinical studies, which could adversely impact the likelihood of obtaining regulatory approval.

We have not submitted a BLA or an NDA to the FDA or filed for approval with any other regulatory authority outside the United States for any product candidate.

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For example, in October 2024, we entered into the Stock Purchase Agreement with all the stockholders of Ariagen to acquire control of that company and its preclinical stage therapeutic drug product, now referred to as EQ504.

In December 2022 we entered into the Asset Purchase Agreement with Ono pursuant to which we granted Ono the exclusive option to acquire our rights to itolizumab (EQ001), which Ono subsequently decided not to exercise.

Despite our efforts, we may be unable to enter into future partnerships or otherwise monetize our pipeline through strategic transactions with third parties on favorable terms or at all.

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We may enter into a strategic transaction for one or more of our product candidates that prove to be more successful than the product candidates we decide to continue to develop and commercialize.

As a result, our financial position and the return we realize on our research and development activities could be negatively affected, and we could be required to seek additional funding to support our operations through equity offerings, debt financings or other capital sources, which could result in substantial dilution to our existing stockholders and could cause the price of our common stock to decline.

As a result, our financial position and the return we realize on our research and development activities could be negatively affected.

Any of the foregoing could have a material adverse effect on our competitive position, business prospects, financial condition and results of operations.

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We may not be successful in our efforts to establish other strategic partnerships or alternative arrangements for any product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and potential parties may not view such product candidates as having the requisite potential to demonstrate safety and efficacy.

If and when we collaborate on the development

and commercialization of product candidates, we can expect to relinquish some or all of the control over the future success of that product candidate to the partner.

Our ability to reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.

Those factors may include the following

• the design or results of planned or future clinical studies;

• the likelihood of approval by the FDA or comparable foreign regulatory authorities;

• the potential market for the product candidate;

• the costs and complexities of manufacturing and delivering such product candidate to patients;

• the potential of competing products;

• the existence of uncertainty with respect to our ownership of technology or other rights, which can exist if there is a challenge to such ownership without regard to the merits of the challenge;

• industry and market conditions generally.

If and when we collaborate on the development and commercialization of product candidates, we can expect to relinquish some or all of the control over the future success of that product candidate to the partner.

Any collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidate.

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If we do not have sufficient funds, we may not be able to further develop our future product candidates or bring them to market and generate product revenue.

Even if we are successful in our efforts to establish such collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such collaborations if, for example, development approval of a product candidate is delayed, the safety of a product candidate is questioned or sales of an approved product candidate are unsatisfactory.

development approval of a product candidate is delayed, the safety of a product candidate is questioned or sales of an approved product candidate are unsatisfactory.

We have limited experience in clinical development and have not successfully completed late-stage clinical studies or obtained regulatory approval for any product candidate.*

We initiated our first clinical study in the first quarter of 2019, which was a Phase 1 clinical study of itolizumab (EQ001) for the treatment of aGVHD.

Since then, we have initiated three additional clinical studies of itolizumab (EQ001), two of which were Phase 1 clinical studies in uncontrolled asthma and lupus/LN and one was a Phase 3 clinical study in aGVHD.

The Phase 1 studies of itolizumab (EQ001) have been completed.

The Phase 3 study in aGVHD stopped enrollment in October 2024 and based on FDA feedback received in April 2025 we accelerated closure of the trial.

We completed a Phase 1 first-in-human clinical study of EQ102 in healthy volunteers in Australia and a Phase 2 clinical study of EQ101 in subjects with AA in Australia and New Zealand.

We previously conducted four Phase 1 studies, one Phase 2 study and one Phase 3 study of discontinued product candidates and indications.

To date we have not successfully completed late-stage clinical studies or obtained regulatory approval for any product candidate.

Prior to initiating a clinical study of EQ504, data from animal toxicology studies will be required as well as formulation development.

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In addition, success in early clinical studies does not mean that later clinical studies will be successful, because later-stage clinical studies may be conducted in broader patient populations and involve different study designs.

For example, results seen in clinical studies of itolizumab conducted by Biocon may not be predictive of the results of our planned or future clinical studies of itolizumab (EQ001).

Furthermore, our planned or future clinical studies will need to demonstrate sufficient safety and efficacy in larger patient populations for approval by the FDA.

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• receipt of marketing approvals from the FDA;

• maintaining arrangements with Biocon, our manufacturer of itolizumab (EQ001), for cell lines and drug product clinical supply and, if and when approved, for commercial supply of itolizumab (EQ001) and with our other CMOs for clinical supply and, if and when approved, commercial supply of EQ504 and EQ302, if we resume development;

• maintaining arrangements with our CMOs for clinical supply and, if and when approved, commercial supply of EQ504 and EQ302, if we resume development;

• establishing sales, marketing and distribution capabilities and launching commercial sale of our product candidates, if and when approved in one or more indications;

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• obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates;

• maintaining a continued acceptable safety profile of our products, following approval.

• maintaining a continued acceptable safety profile of our products, if and when approved.

If we do not achieve one or more of these factors in a timely manner, we could experience significant delays or an inability to successfully obtain marketing approval and commercialize our product candidates, which would materially harm our business.

We have licensed the rights to itolizumab in the United States, Canada, Australia, and New Zealand.

Biocon, its Cuban partner, CIMAB, S.A., and their licensees and partners, over which we have no control, have the rights to develop itolizumab worldwide and commercialize itolizumab in geographies outside of the Equillium Territory (as defined below).

Itolizumab is approved in India for the treatment of moderate to severe plaque psoriasis and was marketed by Biocon as ALZUMAb.

Biocon was also granted restricted emergency use approval of itolizumab by the Drugs Controller General of India, or DCGI, for the treatment of cytokine release syndrome, or CRS, in COVID-19 patients with moderate to severe acute respiratory distress syndrome, or ARDS, in India.

In September 2020, the DCGI granted approval of itolizumab produced in a Chinese hamster ovary, or CHO, cell line, marketed in India under the brand name ALZUMAb-L, or ALZUMAb Lyophilized, for the treatment of chronic plaque psoriasis, as well as restricted emergency use authorization for the treatment of CRS in COVID-19 patients with moderate to severe ARDS.

We are also aware that ALZUMAb and ALZUMAb-L have been used and ALZUMAb-L may continue to be used in India on a compassionate use basis, off label, and/or in investigator-initiated studies.

Centro de Immunologia Molecular was granted emergency use authorization of itolizumab for patients with severe COVID-19 in Cuba, and there are other clinical settings of autoimmune disease where itolizumab has been, and in the future may be, studied in Cuba.

Uses of itolizumab in Cuba we believe are limited to itolizumab manufactured in an NS0 cell line, whereas itolizumab (EQ001) is manufactured in a CHO cell line.

There may be other entities that conduct research and development of antibodies that target CD6, including itolizumab, in geographies outside of the Equillium Territory, which are outside of our control.

The results of clinical studies with itolizumab conducted by Biocon or third parties as well as the ongoing adverse event reporting related to the clinical or commercial use of itolizumab supported by Biocon or third parties could impact our development plans and the potential commercial prospects for itolizumab (EQ001).

Further, we do not control and are unable to validate study results reported by Biocon or third parties.

Any errors or omissions in the data and public disclosures reported by Biocon or third parties could have a material adverse effect on our stock price and business plans.

If serious adverse events occur with patients using itolizumab as an approved therapy or during any clinical studies, exploratory studies, or other clinical uses of itolizumab conducted or supported by Biocon or third parties, regulatory authorities, including the FDA, may delay, limit or deny approval of itolizumab (EQ001), suspend our planned or future clinical development of itolizumab (EQ001), or require us to conduct additional clinical studies as a condition of marketing approval, which would increase our costs and adversely impact our business.

If we receive regulatory approval of itolizumab (EQ001) and a new and serious safety issue is identified in connection with the commercial use of ALZUMAb-L or in clinical studies, exploratory studies, or other clinical uses of itolizumab conducted or supported by Biocon or third parties, regulatory authorities may withdraw their approval of the product or otherwise restrict our ability to market and sell itolizumab.

In addition, treating physicians may be less willing to administer our product due to concerns over such adverse events, which would limit our ability to commercialize itolizumab (EQ001) and could potentially adversely impact our ability to conduct clinical development of itolizumab (EQ001).

If we fail to develop or acquire other product candidates or products, our business and prospects would be limited.*

One element of our strategy is to expand our pipeline by acquiring a portfolio of other product candidates through business or product candidate acquisitions such as our acquisitions of Bioniz and Ariagen, if we are able to raise additional capital.

The success of this strategy depends in large part upon raising additional capital and the combination of our regulatory, development and commercial capabilities and expertise and our ability to identify, select and acquire product candidates for therapeutic indications that complement or augment our current pipeline, or that otherwise fit into our development or strategic plans on terms that are acceptable to us.

The success of this strategy depends in large part upon raising additional capital and the combination of our regulatory, development and commercial

capabilities and expertise and our ability to identify, select and acquire product candidates for therapeutic indications that complement or augment our current pipeline, or that otherwise fit into our development or strategic plans on terms that are acceptable to us.

Identifying, selecting and acquiring promising product candidates requires substantial technical, financial and human resources expertise.

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Such extreme weather events, or other natural disasters such as earthquakes, can cause power outages and network disruptions that may result in disruption to operations and may impact our ability to continue or complete our planned or future clinical studies, which will negatively impact our operations and delay our plans to commercialize our product candidates.

They could also cause significant damage to or destruction of our clinical study sites resulting in temporary or long-term closures of these facilities.

Such disasters could also result in loss or damage to office buildings, laboratories, employee and/or patient homes, employees and/or patients relocating to other parts of the country or being unwilling to travel to the clinical study site locations, and the inability to recruit key employees and/or enroll patients.

This could result in adverse impacts to the available workforce and/or patient samples, damage to or destruction of materials and/or data, or the inability to conduct planned or future clinical studies and deliver new data.

We have licensed itolizumab from Biocon pursuant to an exclusive license agreement, which license is conditioned upon us meeting certain diligence obligations with respect to the development, regulatory approval and commercialization of itolizumab, and making significant milestone payments in connection with regulatory approval and commercial milestones as well as royalty payments.

We are party to an exclusive license agreement with Biocon, pursuant to which we initially acquired an exclusive license to develop, make, have made, use, sell, have sold, offer for sale, import and otherwise exploit itolizumab and any pharmaceutical composition or preparation containing or comprising itolizumab in the United States and Canada and which was later amended to grant us the same exclusive license in Australia and New Zealand as well, or, collectively, the Equillium Territory.

We are obligated, under this agreement, to achieve certain development milestones within specified timeframes in order to retain all of the licensed rights.

Certain of such milestones are largely outside of our control.

We are also obligated to use commercially reasonable efforts to develop and seek regulatory approval of, and if regulatory approval is obtained, to commercialize, itolizumab in the Equillium Territory and to secure funding for the development of itolizumab in two or more indications.

Further, we are obligated to make certain cash milestone payments to Biocon upon completion of certain regulatory approval and commercial milestones and are required to pay royalties to Biocon on net sales of itolizumab, if approved.

Though we believe that the royalty rates and milestone payments are reasonable in light of our business plan, we will require large amounts of capital to satisfy these obligations.

We may become obligated to make a milestone payment when we do not have the cash on hand to make such payment, which could require us to delay our planned or future clinical studies, curtail our operations, scale back our commercialization and marketing efforts or seek funds to meet these obligations on terms unfavorable to us.

In addition, if we are unable to make any payment when due or, if we fail to achieve the development milestones within the timeframes required by the license agreement, or to satisfy our general diligence obligation to use commercially reasonable efforts to develop, register and commercialize itolizumab and to secure funding for the development of itolizumab in two or more indications, Biocon may have the right to limit the scope of our license or terminate the agreement and all of our rights to develop and commercialize itolizumab.

As we no longer intend to develop itolizumab, we may consider terminating our exclusive license agreement with Biocon or seeking alternative means to monetize our rights under the license agreement.

The development and commercialization of biopharmaceutical products are subject to extensive regulation and we may not obtain regulatory approvals of our product candidates in any of the indications for which we plan to develop them, or any future product candidates, on a timely basis or at all.*

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Before we can initiate our planned or future clinical studies of our product candidates in any distinct indication in the United States, we must submit the results of non-clinical studies to the FDA along with other information, including information about their chemistry, manufacturing and controls and our proposed clinical study protocol, as part of an IND or similar regulatory filing.

To date, we have only submitted INDs for clinical studies of itolizumab (EQ001) for the treatment of aGVHD, LN, and COVID-19.

Before obtaining marketing approval from the FDA or from any other applicable regulatory authority outside of the United States for the sale of any of our product candidates in any indication, we must conduct extensive clinical studies to demonstrate the safety and efficacy of those product candidates.

Clinical testing is expensive, time consuming and uncertain as to outcome.

In addition, we expect to rely in part on non-clinical, clinical and quality data generated by our partner, Biocon, as well as CROs and other contracted parties for regulatory submissions for our product candidates.

In addition, we expect to rely in part on non-clinical, clinical and quality data generated by CROs and other contracted parties for regulatory submissions for our product candidates.

While we have or will have agreements governing these contracted parties’ services, we have limited influence over their actual performance.

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Any such delays in the commencement or completion of planned or future clinical studies could significantly affect our product development costs.

We do not know whether our planned or future studies will be completed on schedule, if at all, or whether our planned or future studies will begin on time, if at all.

We do not know whether our planned or future studies will be completed on

schedule, if at all, or whether our planned or future studies will begin on time, if at all.

The commencement and completion of our planned or future clinical studies can be delayed for a number of reasons, including delays related to:

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Such authorities may impose such a suspension or termination, or a modification to our study protocol, due to a number of factors, including failure to conduct the clinical study in accordance with regulatory requirements or our clinical protocols, inspection of the clinical study operations or study site by the FDA or other regulatory agencies resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a pharmaceutical, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical study.

In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical study protocols to comply with these changes.

In addition, changes in regulatory requirements and policies may occur, and we may

need to amend clinical study protocols to comply with these changes.

Amendments may require us to resubmit our clinical study protocols to IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical study.

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Moreover, any delays in completing our planned or future clinical studies will increase our costs, slow down our development and approval process and jeopardize our ability to commence product sales and generate revenues from product sales which may harm our business, financial condition, results of operations and prospects significantly.

If we experience delays or difficulties in enrolling patients in planned or future clinical studies, our receipt of necessary regulatory approval could be delayed or prevented.*

We may not be able to initiate planned or future clinical studies of our product candidates if we are unable to identify and enroll a sufficient number of eligible patients to participate in these studies as required by the FDA or other applicable regulatory authorities.

Multiple factors could contribute to such challenges of enrolling our planned or future clinical studies, including changing business conditions that impart financial constraints that impede our ability to fund further enrollment, as we experienced with our Phase 3 EQUATOR study, as well as impacts related to public health epidemics or outbreaks, which have previously adversely impacted enrollment in our clinical studies.

In addition, some of our competitors may have ongoing clinical studies for product candidates that would treat the same indications as our product candidates, and patients who would otherwise be eligible for our planned or future clinical studies may instead enroll in clinical studies of our competitors’ product candidates.

Patient enrollment is also affected by other factors, including:

If we experience delays or difficulties in enrolling patients in any future clinical studies, our receipt of necessary regulatory approval could be delayed or prevented.*

We may not be able to initiate any future clinical studies of our product candidates if we are unable to identify and enroll a sufficient number of eligible patients to participate in these studies as required by the FDA or other applicable regulatory authorities.

Multiple factors could contribute to such challenges of enrolling any future clinical studies, including changing business conditions that impart financial constraints that impede our ability to fund further enrollment, as we experienced with our Phase 3 EQUATOR study, as well as impacts related to public health epidemics or outbreaks, which have previously adversely impacted enrollment in our clinical studies.

In addition, some of our competitors may have ongoing clinical studies for product candidates that would treat the same indications as our product candidates, and patients who would otherwise be eligible for our future clinical studies may instead enroll in clinical studies of our competitors’ product candidates.

Any future patient enrollment may also be affected by other factors, including:

• severity of the disease under investigation;

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• impacts and risks associated with global health epidemics or outbreaks.

Our inability to enroll and retain a sufficient number of patients for our planned or future clinical studies would result in significant delays or may require us to abandon one or more of our planned or future clinical studies altogether.

Enrollment delays in our planned or future clinical studies may result in increased development costs, which would cause the value of our company to decline and limit our ability to obtain additional financing.

Our inability to enroll and retain a sufficient number of patients for clinical studies we may conduct would result in significant delays or may require us to abandon clinical studies altogether.

Enrollment delays in clinical studies would likely result in increased development costs, which would cause the value of our company to decline and limit our ability to obtain additional financing.

Adverse side effects or other safety risks associated with our product candidates could delay or preclude approval, cause us to suspend or discontinue planned or future clinical studies, abandon further development, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.*

As is the case with pharmaceuticals generally, it is likely that there may be side effects and adverse events associated with our product candidates in our planned or future clinical studies as well as in clinical studies, investigator-initiated studies, and commercial usage in jurisdictions where itolizumab is available commercially.

Based on our current limited clinical experience with itolizumab (EQ001), expected adverse events include lymphopenia, injection site reactions, infusion-/injection-related reactions (including fever and headache), and other systemic hypersensitivity reactions including rash, urticaria, erythema, and pruritus.

The most common adverse drug reactions that have been identified from the itolizumab (EQ001) clinical programs were injection site reactions (designated an identified risk) with SC administration and lymphopenia (designated an important identified risk).

Additionally, infection has been designated as an important potential risk.

Lymphopenia events were common treatment emergent adverse events reported across itolizumab (EQ001) studies.

A decrease in lymphocyte count is a known pharmacodynamic marker of itolizumab (EQ001).

These events were generally transient following the first dose, did not decline with continued dosing, and resolved when itolizumab (EQ001) treatment was withdrawn.

Further, the declines in lymphocyte count were not associated with infection or other clinical sequelae.

Biocon may also continue to support the use of ALZUMAb-L in their own sponsored clinical studies, off-label use, investigator-initiated studies, or third party-sponsored studies over which we have no control.

Given such ongoing usage of itolizumab by Biocon or third parties, there is a risk that adverse events may impact our ability to conduct clinical development and successfully commercialize itolizumab (EQ001).

Further, there is a risk that any such adverse events are not properly reported, which may also adversely impact our business.

Although itolizumab (EQ001) and ALZUMAb share the same primary monoclonal antibody sequence, they are manufactured in different cell lines and thus could be considered different biopharmaceutical products.

Therefore, clinical results seen with ALZUMAb may have no bearing on results, including adverse events, that may be seen with itolizumab (EQ001).

Through the date of the filing of this Quarterly Report on Form 10-Q, we are not aware of any meaningful adverse change in the benefit-to-risk profile of itolizumab.

Results of our planned or future clinical studies could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

Undesirable side effects caused by our product candidates could result in the delay, suspension or termination of our planned or future clinical studies by us, the FDA or other applicable regulatory authorities for a number of reasons.

Additionally, a material percentage of patients in our aGVHD clinical studies may die from this disease, possibly as a result of itolizumab (EQ001), which could impact development of itolizumab (EQ001).

If we elect or are required to delay, suspend or terminate any clinical study, the commercial prospects of our product candidates will be harmed and our ability to generate product revenues from this product candidate will be delayed or eliminated.

Serious adverse events observed in our planned or future clinical studies could hinder or prevent market acceptance of our product candidates.

Any of these occurrences may harm our business, prospects, financial condition and results of operations significantly.

Moreover, if any of our product candidates are associated with undesirable side effects in our planned or future clinical studies or have characteristics that are unexpected, we may elect to abandon or limit their development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit the commercial expectations for our product candidates, if approved.

If any of our product candidates are associated with undesirable side effects in our planned or future clinical studies or have characteristics that are unexpected, we may elect to abandon or limit their development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit the commercial expectations for our product candidates, if approved.

We may also be required to modify our study plans based on findings in our planned or future clinical studies.

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Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses, or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.

In addition, the information we choose to publicly disclose regarding a particular study or clinical study is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular biopharmaceutical product, biopharmaceutical product candidate or our business.

In addition, the

information we choose to publicly disclose regarding a particular study or clinical study is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular biopharmaceutical product, biopharmaceutical product candidate or our business.

If the topline data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval of, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.

We have conducted studies of itolizumab (EQ001) at sites located outside of the United States, including our Phase 3 clinical study of itolizumab (EQ001) in aGVHD, and we may in the future use sites outside of the United States for our planned or future clinical studies of EQ504 and possibly EQ302 or any other future product candidates.

We have previously and may in the future use sites outside of the United States for any future clinical studies, including for EQ504 and possibly EQ302 or any other future product candidates.

The FDA may not accept data from any such studies, in which case our development plans will be delayed, which could materially harm our business.*

We have utilized sites in Australia and New Zealand for a Phase 1b clinical study of itolizumab (EQ001) in uncontrolled moderate to severe asthma, and we have utilized sites in India for a Phase 1b clinical study of itolizumab (EQ001) in lupus and LN.

Our Phase 2 clinical study of EQ101 in subjects with AA was conducted in Australia and New Zealand.

We expect to be ready to initiate a first-in-human Phase 1 clinical study of EQ504 in Australia in mid-2026.

In addition, if we advance EQ302 into clinical studies, we may decide to utilize sites in countries outside of the United States.

Although the FDA may accept data from clinical studies conducted entirely outside the United States and not under an IND, acceptance of such clinical study data is generally subject to certain conditions.

We expect to be ready to initiate a first-in-human Phase 1 clinical study of EQ504 in mid-2026, and we may conduct this study at clinical sites outside of the United States.

In addition, if we advance EQ302 or our other future product candidates into clinical studies, we may decide to utilize clinical sites in countries outside of the United States.

Although the FDA may accept data from clinical studies conducted entirely outside of the United States and not under an IND, acceptance of such clinical study data is generally subject to certain conditions.

For example, the FDA requires the clinical study to have been conducted in accordance with GCPs, and the FDA must be able to validate the data from the clinical studies through an onsite inspection if it deems such inspection necessary.

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Additionally, any of our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.

Any regulatory approvals of our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical studies, and surveillance to monitor the safety and efficacy of the product candidate.

Phase 4 clinical studies, and surveillance to monitor the safety and efficacy of the product candidate.

In addition, if the FDA approves any product candidate, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and record keeping for the product will be subject to extensive and ongoing regulatory requirements, which can be costly and time consuming.

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If any of our product candidates receive marketing approval in any one or more indication, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.

If they do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable.

If they do not achieve an adequate

level of acceptance, we may not generate significant product revenues and we may not become profitable.

The degree of market acceptance, if approved for commercial sale in any indication, will depend on a number of factors, including:

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We may not be able to enter into collaborations or hire consultants or external service providers to assist us in sales, marketing and distribution functions on acceptable financial terms, or at all.

In addition, our product revenues and our profitability, if any, may be lower if we rely on contracted parties for these functions than if we were to market, sell and distribute our products ourselves.

We likely will have limited control over such contracted parties, and any of them may fail to devote the necessary resources

and attention to sell and market our products effectively.

In addition, our product revenues and our profitability, if any, may be lower if we rely on contracted parties for these functions than if we were to market, sell and distribute any of our products, if and when approved, ourselves.

We likely will have limited control over such contracted parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively.

Even if we determine to perform sales, marketing and distribution functions ourselves, we could face a number of additional related risks, including:

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Our competitors also may obtain marketing approval of their products more rapidly than we may obtain approval of ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

We are aware that other products addressing the same indications as EQ504, EQ302 and itolizumab (EQ001) are in development, and some have been approved.

There are no FDA-approved therapies indicated as a first-line treatment of aGVHD.

Other than our EQUATOR study, the only late-stage clinical study for the treatment of first line aGVHD that we are aware of is CSL Behring’s Phase 3 study of alpha-1 antitrypsin.

Incyte Corporation’s ruxolitinib and Mesoblast’s remestemcel-L-rknd have been approved for treatment of steroid refractory aGVHD.

Other second-line, or steroid refractory therapy consists of off-label immunosuppressives for which the therapeutic benefit has not been established.

Private and public companies with Phase 3 development programs in second-line, or steroid refractory aGVHD, include Maat Pharma SA, Medac GmbH and Mediolanum Farmaceutici.

There are currently no approved products for celiac disease.

Private and public companies with development programs targeting celiac disease include Amgen Inc.

(former asset of Provention Bio), Anokion SA, Barinthus Biotherapeutics Ltd., Calypso Biotech BV (acquired by Novartis AG), Chugai Pharmaceutical Co., Ltd., Immunic, Inc., ImmunogenX, Inc.

(acquired by Entero Therapeutics, Inc.), Mozart Therapeuitcs, Pfizer Inc., Protagonist Therapeutics, Inc., Sanofi SA, Takeda Pharmaceuticals, Teva Pharmaceuticals, Topas Therapeutics GmbH, and Zedira GmbH.

We are aware that other products addressing the same indications as EQ504 and EQ302 are in development, and some have been approved.

There are multiple private and public companies with over 25 active clinical development programs for the treatment of ulcerative colitis.

There are also 13 currently approved products for the treatment of ulcerative colitis being marketed by AbbVie Inc., Bristol-Myers Squibb Company, Eli Lilly and Company, Galapagos N.V., Johnson & Johnson, Pfizer Inc.

There are multiple private and public companies with over 25 active clinical development programs for the

treatment of ulcerative colitis.

There are 13 currently approved products for the treatment of ulcerative colitis being marketed by AbbVie Inc., Bristol-Myers Squibb Company, Eli Lilly and Company, Galapagos N.V., Janssen Pharmaceuticals, Johnson & Johnson, Pfizer Inc.

and Takeda Pharmaceuticals.

There are currently no approved products for celiac disease.

Private and public companies with development programs targeting celiac disease include Ahead Therapeutics, Amgen Inc.

(former asset of Provention Bio), Anokion SA, Barinthus Biotherapeutics Ltd., Calypso Biotech BV (acquired by Novartis AG), Chugai Pharmaceutical Co., Ltd., Immunic, Inc., ImmunogenX, Inc.

(acquired by Entero Therapeutics, Inc.), Mozart Therapeutics, Pfizer Inc., Protagonist Therapeutics, Inc., Sanofi SA, Takeda Pharmaceuticals, Teva Pharmaceuticals, Topas Therapeutics GmbH, and Zedira GmbH.

Many of our competitors, such as large pharmaceutical and biotechnology companies like Amgen Inc., Sanofi SA, and Takeda Pharmaceuticals, have significantly greater financial resources and expertise in research and development, manufacturing, non-clinical studies, conducting clinical studies, obtaining regulatory approvals and marketing approved products than we have.

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Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical study sites and subject enrollment for clinical studies, as well as acquiring technologies complementary to, or necessary for, EQ504, EQ302 and itolizumab (EQ001) or any future programs.

The key competitive factors affecting the success of any of our product candidates are likely to be their efficacy, safety, convenience and availability of reimbursement.

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If market opportunities for our product candidates are smaller than we believe they are, our potential revenue may be adversely affected and our business may suffer.*

We have global rights to EQ504 and are initially looking to develop it as a potential treatment for ulcerative colitis, with potential indication expansion opportunities in pouchitis and lung diseases.

We only have the rights to itolizumab (EQ001) for the Equillium Territory, and we were focused on the development of itolizumab (EQ001) for autoimmune and inflammatory diseases.

Based on data from our completed EQUATOR and EQUALISE studies and subsequent regulatory interactions, we do not have plans to advance the development of itolizumab (EQ001) further in any indication currently.

We have global rights to EQ504 and are initially planning to develop it as a potential treatment for ulcerative colitis, with potential indication expansion opportunities in pouchitis and lung diseases.

We have global rights to EQ302, and although we have paused development activities of EQ302, we believe it may be a promising candidate for future development as a potential treatment of gastrointestinal indications such as celiac disease.

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If any of our estimates are inaccurate, the market opportunities for our product candidates could be significantly diminished and have an adverse material impact on our business.

Fast-track designation by the FDA may not actually lead to a faster development or regulatory review or approval process.

We have received fast-track designation for itolizumab (EQ001) for the treatment of aGVHD and LN.

If a product is intended for the treatment of a serious or life-threatening condition and the product demonstrates the potential to address unmet medical needs for this condition, the product sponsor may apply for FDA fast-track designation.

Even with fast-track designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

The FDA may withdraw fast-track designation if it believes that the designation is no longer supported by data from our clinical development program.

Even if we receive marketing approval, we may not be able to successfully commercialize any of our approved products due to unfavorable pricing regulations or third-party coverage and reimbursement policies, which could make it difficult for us to sell any of our approved products profitably.

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Moreover, eligibility for coverage and reimbursement does not imply that a product will be paid for in all cases or at a rate that covers our costs, including research, development, intellectual property, manufacture, sale and distribution expenses.

Interim reimbursement levels for

new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent.

Interim reimbursement levels for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent.

Reimbursement rates may vary according to the use of the product and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost products and may be incorporated into existing payments for other services.

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Assuming we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.

Each third-party payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy and on what tier of its list of covered drugs, or formulary, it will be placed.

Each third-party payor determines whether or not it will provide coverage

for a therapy, what amount it will pay the manufacturer for the therapy and on what tier of its list of covered drugs, or formulary, it will be placed.

The position on a third-party payor’s formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians.

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Risks Related to Manufacturing and Our Reliance on Third Parties

The manufacture of pharmaceutical products, especially biologics, is complex and we may encounter difficulties in production, distribution and delivery of our product candidates.

The manufacture of pharmaceutical products is complex and we may encounter difficulties in production, distribution and delivery of our product candidates.

We have no experience in pharmaceutical product manufacturing and do not own or operate, and we do not expect to own or operate, facilities for product manufacturing, storage and distribution, or testing.

We are completely dependent on third-party CMOs to fulfill our clinical and commercial supply of our product candidates.

However, the process of manufacturing pharmaceutical products, especially biologics, is complex, highly-regulated and subject to multiple risks.

However, the process of manufacturing pharmaceutical products is complex, highly-regulated and subject to multiple risks.

Such manufacturing is highly susceptible to product loss due to contamination, equipment failure, improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics and difficulties in scaling the production process.

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If microbial, viral or other contaminations are discovered at the facilities of our manufacturer, such facilities may need to be closed for an extended period of time to investigate and remedy the contamination, which could delay clinical studies, result in higher costs of drug product and adversely harm our business.

In addition, if the facilities of our manufacturer are located outside of the United States, as is the case currently for EQ504 and itolizumab (EQ001), the production, distribution and delivery of pharmaceutical products are also subject to the laws and regulations of the country.

In addition, if the facilities of our manufacturer are located outside of the United States, the production, distribution and delivery of pharmaceutical products are also subject to the laws and regulations of the country.

Any changes in the laws and regulations of another country, or disruptions in production or the supply chain related to geopolitical issues or health pandemics, could delay clinical studies, result in higher costs of drug product and adversely harm our business.

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If our manufacturers are unable to produce sufficient quantities for clinical studies or for commercialization, commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.

Scaling up pharmaceutical manufacturing processes, especially biological processes and peptide synthesis, is a difficult and uncertain task, and our CMOs may not have the necessary capabilities to complete the implementation and development process of further scaling up production, transferring production to other sites, or managing its production capacity to timely deliver our supplies of EQ504 and EQ302 or other future product candidates or meet product demand.

In May 2017, we entered into an exclusive clinical supply agreement with Biocon and have agreed to enter into an exclusive commercial supply agreement with Biocon in the future.

Biocon manufactures itolizumab (EQ001) at its FDA regulated facility in Bangalore, India.

Our dependence on Biocon subjects us to further risks and uncertainties related to our ability to fulfill our clinical and commercial supply of itolizumab (EQ001).

If Biocon is unable to meet our manufacturing requirements (due to export restrictions or otherwise), it has the discretion to outsource manufacturing to a third party and the joint steering committee may determine to shift manufacturing to a third party.

However, transfer of the manufacturing of biologic products to a new contract manufacturer, whether related to itolizumab (EQ001) or any of our current or future product candidates, can be lengthy and involve significant additional costs.

Even if we are able to adequately validate and scale-up the manufacturing process with a contract manufacturer, we will still need to negotiate with such contract manufacturer an agreement for commercial supply and it is not certain we will be able to come to agreement on terms acceptable to us, if at all.

In addition, Biocon has certain rights to reacquire exclusive manufacturing rights for itolizumab (EQ001), even after a third party has been engaged following shortfalls by Biocon, which may make it difficult and expensive to engage any third-party manufacturer for itolizumab (EQ001) other than Biocon.

Scaling up pharmaceutical manufacturing processes is a difficult and uncertain task, and our CMOs may not have the necessary capabilities to complete the implementation and development process of further scaling up production, transferring production to other sites, or managing its production capacity to timely deliver our supplies of EQ504 and EQ302 or other future product candidates or meet product demand.

International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.*

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There is inherent risk, based on the complex relationships among the U.S.

and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that

may adversely affect our business and operations.

The current international trade and regulatory environment is subject to significant ongoing uncertainty.

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We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for clinical testing, as well as for manufacture of any products that we may commercialize, if approved.

Currently, several of our suppliers are located outside of the United States, and our principal suppliers of critical raw materials and active pharmaceutical ingredients, or APIs, are located in India and China, consistent with broader industry practices.

Currently, many of our suppliers are located outside of the United States, and our principal suppliers of critical raw materials and active pharmaceutical ingredients, or APIs, are located in Europe and China, consistent with broader industry practices.

We also rely on specialized laboratory equipment, supplies, materials, and precursor compounds, all or part of which we believe may be ultimately sourced from multiple countries outside the United States, to advance our research and development efforts.

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In addition, as we advance toward commercialization in the future, tariffs and trade restrictions could hinder our ability to establish cost-effective production capabilities, negatively impacting our growth prospects.

The complexity of announced or future tariffs may also increase the risk that we or our customers or suppliers may be subject to civil or criminal enforcement actions in the United States or foreign jurisdictions related to compliance with trade regulations.

Foreign governments may also adopt non-tariff measures, such as procurement preferences or informal disincentives to engage with, purchase from or invest in U.S.

entities, which may limit our ability to compete internationally and attract non-U.S.

investment, employees, customers and suppliers.

Foreign governments may also take other retaliatory actions against U.S.

entities, such as decreased intellectual property protection, increased enforcement actions, or delays in regulatory approvals, which may result in heightened international legal and operational risks.

In addition, the United States and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity to our business.

Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns.

The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition, and prospects.

While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial condition and prospects.

In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this report and in our Annual Report for the fiscal year ended June 30, 2025.

We rely, and intend to continue to rely, on CROs to conduct our planned or future clinical studies and perform some of our planned or future research and non-clinical studies.

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Specifically, we expect CROs, clinical investigators and consultants to play a significant role in the conduct of these studies and the subsequent collection and analysis of data.

However, we will not be able to control all aspects of their activities.

However, we will not be able to control all aspects of their activities, and the effectiveness and capabilities of many of these CROs, clinical investigators and consultants will be unknown to us as we move the focus of our development activities to EQ504 and potentially EQ302.

Nevertheless, we are responsible for ensuring that each clinical study is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on the CROs and other third parties does not relieve us of our regulatory responsibilities.

Should our CROs engage in unethical, illegal, or non-compliant activities, such behavior could adversely impact our business.

Further, should

we terminate our contractual relationship with a CRO for such improprieties, transitioning to a different CRO may delay, disrupt or otherwise adversely impact the progress of the clinical study.

Further, should we terminate our contractual relationship with a CRO for such improprieties, transitioning to a different CRO may delay, disrupt or otherwise adversely impact the progress of the clinical study.

We and our CROs are required to comply with GCP requirements, which are regulations and guidelines enforced by the FDA, for product candidates in clinical development.

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There is no guarantee that any such CROs, clinical study investigators or other third parties on which we rely on will devote adequate time and resources to our development activities or perform as contractually required.

If any of these third parties fail to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, otherwise performs in a substandard manner, or terminates its engagement with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated.

If any of these third parties fail to meet expected

deadlines, adhere to our clinical protocols or meet regulatory requirements, otherwise performs in a substandard manner, or terminates its engagement with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated.

If our clinical study site terminates for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical study unless we are able to transfer those subjects to another qualified clinical study site, which may be difficult or impossible.

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If these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA concludes that the financial relationship may have affected the interpretation of the study, the integrity of the data generated at the applicable clinical study site may be questioned and the utility of the clinical study itself may be jeopardized, which could result in the delay or rejection of any marketing application we submit by the FDA.

Any such delay or rejection could prevent us from commercializing EQ504 and EQ302.

Any such delay or rejection could prevent us from commercializing EQ504, EQ302 or any future products.

Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors for whom they may also be conducting clinical studies or other biopharmaceutical product development activities that could harm our competitive position.

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If we are unable to obtain or protect intellectual property rights covering our product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to our product candidates, and we may not be able to compete effectively in our market.*

Our success depends in significant part on our, and with respect to itolizumab (EQ001), Biocon’s, ability to establish, maintain and protect patents and other intellectual property rights with respect to our proprietary technologies, research programs, and product candidates including EQ504, EQ302 and itolizumab (EQ001), and operate without infringing the intellectual property rights of others.

The patent prosecution process is expensive and time-consuming, and we and our current or future licensors, licensees or partners may not be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

It is also possible that we or our current and future licensors, licensees or partners will fail to identify patentable aspects of our research or inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them.

Our success depends in significant part on our ability to establish, maintain and protect patents and other intellectual property rights with respect to our proprietary technologies, research programs, and product candidates including EQ504 and EQ302, and operate without infringing the intellectual property rights of others.

The patent prosecution process is expensive and time-consuming, and we and any future licensors, licensees or partners may not be able to prepare, file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

It is also possible that we or any future licensors, licensees or partners will fail to identify patentable aspects of our research or inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them.

Although we enter into confidentiality agreements with parties who have access to patentable aspects of our research and development programs, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, independent contractors, advisors and other third parties, any of these parties may breach these agreements and disclose such results before a patent application is filed, thereby jeopardizing our ability to seek patent protection on technology relating to our research programs.

Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from or license to third parties and are reliant on our licensors, licensees or partners.

Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

If our current or future licensors, licensees or partners fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated.

If our licensors, licensees or partners are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised.

If any future licensors, licensees or partners fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated.

If any future licensors, licensees or partners are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised.

There may be significant pressure on the U.S.

government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns.

The patent position of biotechnology companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation, resulting in court decisions, including Supreme Court decisions, which have increased uncertainties as to the ability to enforce patent rights in the future.

uncertainties as to the ability to enforce patent rights in the future.

In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, allowing foreign competitors a better opportunity to create, develop and market competing product candidates, or vice versa.

We cannot be certain that the claims in our pending patent applications directed to our product candidates such as EQ504, EQ302 and itolizumab (EQ001) as well as technologies relating to our research programs, will be considered patentable by the United States Patent and Trademark Office, or USPTO, or by patent offices in foreign countries.

We cannot be certain that the claims in our pending patent applications directed to our product candidates such as EQ504 and EQ302 as well as technologies relating to our research programs, will be considered patentable by the United States Patent and Trademark Office, or USPTO, or by patent offices in foreign countries.

Furthermore, even if they are unchallenged, patents in our portfolio may not adequately exclude third parties from practicing relevant technology or prevent others from designing around our claims.

As a result, the issuance, scope, validity, enforceability and commercial value of our and our current or future licensors’, licensees’ or partners’ patent rights are highly uncertain.

Our and our licensors’, licensees’ or partners’ pending and future patent applications may not result in patents being issued, which protect our technology or products, in whole or in part, or their intended uses, methods of manufacture or formulations, or which effectively prevent others from commercializing competitive technologies and products.

The patent examination process may require us or our licensors, licensees or partners to narrow the scope of the claims of our or our licensors’, licensees’ or partners’ pending and future patent applications, which may limit the scope of patent protection that may be obtained.

As a result, the issuance, scope, validity, enforceability and commercial value of our and any future licensors’, licensees’ or partners’ patent rights are highly uncertain.

Our and any future licensors’, licensees’ or partners’ pending and future patent applications may not result in patents being issued, which protect our technology or products, in whole or in part, or their intended uses, methods of manufacture or formulations, or which effectively prevent others from commercializing competitive technologies and products.

The patent examination process may require us, or any future licensors, licensees or partners, to narrow the scope of the claims of our or any future licensors’, licensees’ or partners’ pending and future patent applications, which may limit the scope of patent protection that may be obtained.

In the past, we have not always been able to obtain the full scope of patent protection we have initially sought in our patent applications, and as described above and as is typical for most biotechnology patent prosecution, we have been required to narrow or eliminate patent claims as part of the patent prosecution process.

In addition, some patent applications that we or our licensors have filed have not resulted in issued patents because we or our licensors have abandoned those patent applications as changes in business and/or legal strategies dictated.

In addition, some patent applications that we have filed have not resulted in issued patents because we have abandoned those patent applications as changes in business and/or legal strategies dictated.

We cannot assure you that all of the potentially relevant prior art—information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention—relating to our patents and patent applications has been found.

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In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

Our and our licensors’, licensees’ or partners’ patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications, and then only to the extent the issued claims cover the technology.

Because patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we or our licensors were the first to file any patent application related to our research programs and product candidates such as EQ504, EQ302 and itolizumab (EQ001).

Our patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications, and then only to the extent the issued claims cover the technology.

Because patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we were the first to file any patent application related to our research programs and product candidates such as EQ504 and EQ302.

Even where we have a valid and enforceable patent, we may not be able to exclude others from practicing our invention where the other party can show that they used the invention in commerce before our filing date or the other party benefits from a compulsory license.

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Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from competitive medications, including biosimilar or generic medications.

If we are not able to obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of our marketing exclusivity for EQ504, EQ302, itolizumab (EQ001) or any other product candidates that we may identify, our business may be materially harmed.*

If we are not able to obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of our marketing exclusivity for EQ504 and EQ302 or any other product candidates that we may identify, our business may be materially harmed.*

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.

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Patent term extension may also be available in certain foreign countries upon regulatory approval of our product candidates.

However, the applicable authorities, including the FDA and USPTO, in the United States, and any equivalent foreign regulatory authority, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request.

grant more limited extensions than we request.

If this occurs, our competitors may take advantage of our investment in development and clinical studies by referencing our clinical and non-clinical data and launch their product earlier than might otherwise be the case.

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• whether the patent applications that we own or in-license will result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries.

We depend on intellectual property licensed from Biocon and termination of our license could result in the loss of significant rights, which would harm our business.

We currently in-license certain intellectual property that is important to our business from Biocon and, in the future, we may enter into additional agreements that provide us with licenses to valuable intellectual property or technology.

We rely to some extent on Biocon to file patent applications and to otherwise protect the intellectual property we license from them.

We have limited control over these activities or any other intellectual property that may be related to our in-licensed intellectual property.

For example, we cannot be certain that such activities by Biocon have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights.

We have limited control over the manner in which Biocon initiates an infringement proceeding against a third-party infringer of the intellectual property rights or defends certain of the intellectual property that is licensed to us.

It is possible that our licensor’s infringement proceeding or defense activities may be less vigorous than had we conducted them ourselves.

Furthermore, in-licensed patents may be subject to a reservation of rights by one or more third parties.

Further, our existing license with Biocon imposes, and future agreements may also impose, various diligence, milestone payment, royalty, insurance and other obligations on us.

If we fail to comply with these obligations, we may be required to pay damages and our licensor may have the right to terminate the license, in which event we would not be able to develop or market the products covered by such licensed intellectual property and our competitors or other third parties might be able to gain access to technologies and products that are identical to ours.

Our business would suffer if any current or future licenses terminate, if the licensors fail to abide by the terms of the license, if the licensors fail to enforce licensed patents against infringing third parties, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms.

Furthermore, if any current or future licenses

terminate, or if the underlying patents fail to provide the intended exclusivity, competitors or other third parties may gain the freedom to seek regulatory approval of, and to market, products identical to ours.

Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights.

Disputes may also arise between us and our licensor regarding intellectual property subject to a license agreement, including those relating to:

• the scope of rights granted under the license agreement and other interpretation-related issues;

• whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement;

• our right to sublicense patent and other rights to third parties under collaborative development relationships;

• whether we are complying with our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates;

• the allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and by us and our partners.

In addition, intellectual property or technology license agreements, including our existing agreements, are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.

The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we license as we are for intellectual property that we own, which are described below.

If we or our licensor fail to adequately protect this intellectual property, our ability to commercialize products could suffer.

Because our programs may require the use of proprietary rights held by third parties, the growth of our business may depend in part on our ability to acquire, in-license or use these proprietary rights.

We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary for our product candidates.

The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive.

These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.

We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment.

In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products, if any, the amounts may be significant.

The amount of our future royalty obligations will depend on the technology and intellectual property we use in products that we successfully develop and commercialize, if any.

Therefore, even if we successfully develop and commercialize products, we may be unable to achieve or maintain profitability.

In the future, we may need to obtain additional licenses of third-party technology that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.*

From time to time we may be required to license technologies relating to our therapeutic research programs from additional third parties to further develop or commercialize our product candidates such as EQ504, EQ302 and itolizumab (EQ001) and/or others.

In the future, we may need to obtain licenses of third-party technology that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.*

Should we be required to obtain licenses to any third-party technology, including any such patents required to manufacture, use or sell our product candidates, such licenses may not be available to us on commercially reasonable terms, or at all.

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We cannot assure you that our operations do not, or will not in the future, infringe existing or future patents.

We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third party patent and pending application in the United States and abroad that is relevant to our therapeutic research programs or necessary for the commercialization of our product candidates such as EQ504, EQ302, itolizumab (EQ001) and/or others in any jurisdiction.

Numerous U.S.

and foreign patents and pending patent applications exist in our market that are owned by third parties, and there may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our products and/or product candidates that we may identify.

Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our products.

We do not always conduct independent reviews of pending patent applications of and patents issued to third parties.

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Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our products or the use of our products.

As such, there may be applications of others now pending or recently revived patents of which we are unaware, potentially relating to our research programs and product candidates such as EQ504, EQ302, itolizumab (EQ001) and others, or their intended uses.

These applications may later result in issued patents, or the revival of previously abandoned patents, that will prevent, limit or otherwise interfere with our ability to make, use or sell our products.

The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history.

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We may incorrectly determine that our products are not covered by a third party patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope.

Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which

may negatively impact our ability to develop and market our product candidates.

Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our product candidates.

Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products.

We cannot provide any assurances that third party patents do not exist which might be enforced against our current technology, including our research programs, product candidates, which include EQ504, EQ302, itolizumab (EQ001) and others, their respective methods of use, manufacture and formulations thereof, and could result in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.

We cannot provide any assurances that third party patents do not exist which might be enforced against our current technology, including our research programs, product candidates, which include EQ504, EQ302 and others, their respective methods of use, manufacture and formulations thereof, and could result in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.

If we are sued for infringing intellectual property rights of third parties, such litigation could be costly and time consuming and could prevent or delay us from developing or commercializing our product candidates.*

Our commercial success depends, in part, on our ability to develop, manufacture, market and sell EQ504, EQ302, itolizumab (EQ001) and other potential future product candidates without infringing the intellectual property and other proprietary rights of third parties.

Our commercial success depends, in part, on our ability to develop, manufacture, market and sell EQ504, EQ302 and other potential future product candidates without infringing the intellectual property and other proprietary rights of third parties.

Third parties may allege that we have infringed or misappropriated their intellectual property.

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In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the market price of our common stock.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.

Such litigation or proceedings could substantially increase our

operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.

We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.

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We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.*

Competitors may infringe our patents, trademarks, copyrights or other intellectual property that relate to our planned and future product candidates, including EQ504, EQ302, itolizumab (EQ001) and others, their respective methods of use, manufacture and formulations thereof.

To counter infringement or unauthorized use, we or our licensor may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.

Any claims we or our licensor assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both.

Competitors may infringe our patents, trademarks, copyrights or other intellectual property that relate to our planned or future product candidates, including EQ504, EQ302, and others, their respective methods of use, manufacture and formulations thereof.

To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel.

Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both.

In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and the outcome following legal assertions of invalidity and unenforceability is unpredictable.

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For example, an unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party.

Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms or at all, or if a non-exclusive license is offered and our competitors gain access to the same technology.

Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms or at all, or if a non-exclusive license is

offered and our competitors gain access to the same technology.

Our defense of litigation or interference or derivation proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees.

In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our planned or future clinical studies, continue our planned or future research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring EQ504, EQ302, itolizumab (EQ001) or other product candidates that we may identify to market.

In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our planned or future clinical studies, continue our planned or future research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring EQ504, EQ302 or other product candidates that we may identify to market.

Any of these occurrences could adversely affect our competitive business position, results of operations, business prospects and financial condition.

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While we may litigate to defend ourselves against these claims, even if we are successful, litigation could result in substantial costs and could be a distraction to management and other employees.

If our defenses to these claims fail, in addition to requiring us to pay monetary damages, a court could prohibit us from using technologies or features that are essential to our product candidates, if we resume development activities, including EQ504, EQ302 or itolizumab (EQ001), if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the current or former employers.

If our defenses to these claims fail, in addition to requiring us to pay monetary damages, a court could prohibit us from using technologies or features that are essential to our product candidates, if we resume development activities, including EQ504 or EQ302, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the current or former employers.

Moreover, any such litigation or the threat thereof may adversely affect our reputation, our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations and financial condition.

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The legal systems of many foreign countries do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights.

For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties.

In addition, some countries limit the enforceability of patents against third parties, including government agencies or government contractors.

In these countries, patents may provide limited or no benefit.

Further, the complexity and uncertainty of European patent laws have increased in recent years.

In Europe, the new unitary patent system that came into effect in June 2023 would significantly impact European patents, including those granted before the introduction of such a system.

Under the unitary patent system, European applications will have the option, upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the Unitary Patent Court, or UPC.

As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation.

Patents granted before the implementation of the UPC will have the option of opting out of the jurisdiction of the UPC and remaining as national patents in the UPC countries.

Patents that remain under the jurisdiction of the UPC will be potentially vulnerable to a single UPC-based revocation challenge that, if successful, could invalidate the patent in all countries who are signatories to the UPC.

We cannot predict with certainty the long-term effects of any potential changes.

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.

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Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.

If we fail to maintain the patents and patent applications covering our research programs and planned or future product candidates such as EQ504, EQ302, itolizumab (EQ001) and others as well as their respective methods of use, manufacture and formulations thereof, our competitive position would be adversely affected, as, for example, competitors might be able to enter the market earlier than would otherwise have been the case.

As a means of conserving our cash, we recently decided to pause efforts related to the prosecution and maintenance of the itolizumab patents, and we intend to let lapse all itolizumab-related patent families in the Equillium Territory.

However, should we receive positive feedback from the FDA and raise additional capital or enter into a new strategic partnership related to itolizumab, we would revisit the decision to let such patents lapse and seek to bring

into good standing all patents and patent applications related to itolizumab, to the extent such patents and applications have not irrevocably lapsed by that time.

Further, should itolizumab be approved in the United States, we expect to obtain regulatory exclusivity that the FDA currently affords to novel biologic therapies of 12 years following first approval which is expected to extend beyond the life of patents issued and in prosecution.

If we fail to maintain the patents and patent applications covering our research programs and planned or future product candidates such as EQ504, EQ302, and others as well as their respective methods of use, manufacture and formulations thereof, our competitive position would be adversely affected, as, for example, competitors might be able to enter the market earlier than would otherwise have been the case.

We may rely on trade secret and proprietary know-how which can be difficult to trace and enforce and, if we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

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Trade secrets may be independently developed by others in a manner that could prevent legal recourse by us.

Trade secrets will over time be disseminated within the industry through independent development, the publication of journal articles and the movement of personnel skilled in the art from company to company or academic to industry scientific positions.

Trade secrets will over time be disseminated within the industry through independent development, the publication of journal articles and the movement of

personnel skilled in the art from company to company or academic to industry scientific positions.

Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets, our agreements may contain certain limited publication rights.

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We may become subject to claims challenging the inventorship or ownership of our patents and other intellectual property.*

We or our licensor may be subject to claims that former employees, consultants, independent contractors, collaborators or other third parties have an interest in our patents or other intellectual property as an owner, co-owner, inventor or co-inventor.

We may be subject to claims that former employees, consultants, independent contractors or other third parties have an interest in our patents or other intellectual property as an owner, co-owner, inventor or co-inventor.

The failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable.

Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing our product candidates or as a result of questions regarding co-ownership of potential joint inventions.

In addition, while it is our policy to require our employees, consultants, advisors, contractors and other third parties who may be involved in the conception or development of intellectual property rights to execute agreements assigning such intellectual property rights to us, we or our licensors may be unsuccessful in executing such agreements with each party who, in fact, conceives or develops intellectual

property rights that we regard as our own.

In addition, while it is our policy to require our employees, consultants, advisors, contractors and other third parties who may be involved in the conception or development of intellectual property rights to execute agreements assigning such intellectual property rights to us, we or any of our future licensors may be unsuccessful in executing such agreements with each party who, in fact, conceives or develops intellectual property rights that we regard as our own.

The assignment of intellectual property rights may not be self-executing or sufficient in scope, or the assignment agreements may be breached.

Furthermore, individuals executing agreements with us may have preexisting or competing obligations to a third party, such as an academic institution, and thus an agreement with us or our licensors may be ineffective in perfecting ownership of inventions developed by that individual.

Furthermore, individuals executing agreements with us may have preexisting or competing obligations to a third party, such as an academic institution, and thus an agreement with us or any of our future licensors may be ineffective in perfecting ownership of inventions developed by that individual.

Litigation may be necessary to resolve these and other claims challenging inventorship and/or ownership.

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Our current or future trademarks or trade names may be challenged, infringed, circumvented or declared generic or descriptive determined to be infringing on other marks.

We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest.

We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or potential customers in our markets of interest.

During trademark registration proceedings, we may receive rejections.

Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections.

Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such

In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks.

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We may license our trademarks and trade names to third parties, such as distributors.

Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names.

Intellectual property rights may address all potential threats to our competitive advantage.

Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by any future licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names.

Intellectual property rights may not address all potential threats to our competitive advantage.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage.

• others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own or have exclusively licensed;

• we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;

• we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions;

• we or our future licensors or collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;

• we or our future licensors or collaborators might not have been the first to file patent applications covering certain of our inventions;

• others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

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We are highly dependent on the services of our key personnel, Bruce D.

Steel, who serves as our President and Chief Executive Officer and Stephen Connelly, Ph.D., who serves as our Chief Scientific Officer.

Steel, who serves as our Chief Executive Officer and Stephen Connelly, Ph.D., who serves as our President and Chief Scientific Officer.

Although we have entered into agreements with them regarding their employment, they are not for a specific term and each of them may terminate their employment with us at any time, though we are not aware of any present intention of any of these individuals to leave us.

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Our competitors may provide higher compensation, more diverse opportunities and/or better opportunities for career advancement.

Any or all of these competing factors may limit our ability to continue to attract and retain high quality personnel, which could negatively affect our ability to successfully develop and commercialize our product candidates and to grow our business and operations as currently contemplated.

Any or all of these competing factors may limit our ability to

continue to attract and retain high quality personnel, which could negatively affect our ability to successfully develop and commercialize our product candidates and to grow our business and operations as currently contemplated.

Third-party expectations relating to environmental, social and governance factors may impose additional costs and expose us to new risks.

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reputational harm;

loss of revenue or profits;

loss of potential revenue or profits;

and other adverse consequences.*

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We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods, and other similar threats.

In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive information and income, reputational harm, and diversion of funds.

In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive information, reputational harm, and diversion of funds.

Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

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Any of the previously identified or similar threats could cause a security incident or other interruption, that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties upon whom we rely.

A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our products and services.

A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide any products and services.

We may expend significant resources or modify our business activities (including our clinical study activities) to try to protect against security incidents.

Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures, or industry-standard or reasonable security measures designed to protect our information technology systems and sensitive information.

Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors of security incidents.

Additionally, certain data privacy and security obligations may require us to implement and maintain specific

security measures, or industry-standard or reasonable security measures designed to protect our information technology systems and sensitive information.

Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, potential customers, regulators, and investors of security incidents.

Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.

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and other similar harms.

Security incidents and attendant consequences that we or our third-party providers could experience may prevent or cause customers to stop using our products and services, deter new customers from using our products and services, and negatively impact our ability to grow and operate our business.

Security incidents and attendant consequences that we or our third-party providers could experience may negatively impact our ability to grow and operate our business.

Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.

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loss of revenue or profits;

loss of customers or sales;

loss of potential customers or sales;

and other adverse business consequences.

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As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.

The exercise of these rights may impact our business and ability to provide our products and services.

The exercise of these rights may impact our business and operations.

Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments.

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Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security.

For example, the European Union’s General Data Protection Regulation, or EU GDPR, the United Kingdom’s GDPR, or UK GDPR,

India’s Information Technology Act and supplementary rules, and Australia’s Privacy Act, impose strict requirements for processing personal data.

For example, the European Union’s General Data Protection Regulation, or EU GDPR, the United Kingdom’s GDPR, or UK GDPR, India’s Information Technology Act and supplementary rules, and Australia’s Privacy Act, impose strict requirements for processing personal data.

For example, under GDPR, companies may face temporary or definitive bans on data processing, and other corrective actions;

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Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons (the “Rule”), which places additional restrictions on certain data transactions involving countries of concern (e.g., China, Russia, Iran) and covered individuals (i.e., individuals and entities located in or controlled by individuals or entities located in those jurisdictions) that may impact certain business activities such as vendor engagements, employment of certain individuals, and investor agreements.

If there is no lawful manner under the Final Rule for us to transfer sensitive personal data or if the requirements for a legally-compliant transfer under the Final Rule are too onerous, we could face significant adverse consequences, including the degradation of our operations or the need to relocate part or all of our business, personnel and/or data processing activities to other jurisdictions (such as the United States).

If there is no lawful

manner under the Final Rule for us to transfer sensitive personal data or if the requirements for a legally-compliant transfer under the Final Rule are too onerous, we could face significant adverse consequences, including the degradation of our operations or the need to relocate part or all of our business, personnel and/or data processing activities to other jurisdictions (such as the United States).

Our failure to implement or have in place controls for identifying covered transactions, conduct appropriate diligence on our business partners, or implement compliance strategies could result in violations of the Rule.

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Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.

Preparing for and complying with these obligations

requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.

Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.

We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.

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Any of these events could have an adverse effect on our reputation, business, or financial condition, including but not limited to:

loss of customers;

loss of potential customers;

interruptions or stoppages in our business operations (including, as relevant, clinical studies);

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As a result, our ability to use our pre-ownership change NOL carryforwards to offset U.S.

federal taxable income in the future (if we earned net taxable income) and any other pre-ownership change tax attributes may be subject to limitations, which could potentially result in increased future tax liability to us.

federal taxable income in the future (if we earned net taxable income) and any other pre-ownership change tax attributes may be subject to limitations, which could potentially result in

increased future tax liability to us.

In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

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If we lose our ability to operate in Australia, or if our subsidiary is unable to receive the research and development tax credit allowed by Australian regulations, our business and results of operations will suffer.*

In January 2019, we formed a wholly-owned Australian subsidiary, Equillium Australia Pty Ltd, to initially conduct the clinical development of itolizumab (EQ001) for the treatment of uncontrolled asthma in Australia and New Zealand.

That subsidiary also conducted our Phase 1 study of EQ102 in healthy volunteers and Phase 2 study of EQ101 in subjects with AA, both of which have completed subject enrollment, treatment and follow-up.

That subsidiary may conduct further clinical studies in the future.

In January 2019, we formed a wholly-owned Australian subsidiary, Equillium Australia Pty Ltd., to conduct clinical studies.

Due to the geographical distance and lack of employees currently in Australia, as well as our lack of experience operating in Australia, we may not be able to efficiently or successfully monitor, develop or commercialize our product candidates in Australia and New Zealand, including conducting clinical studies.

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If we lose our ability to operate Equillium Australia Pty Ltd in Australia, are ineligible or unable to receive the research and development tax credit, receive a refund that is materially less than our expectations, or if the Australian government significantly reduces or eliminates the tax credit, or if upon the results of an audit the Australian Taxation Office rules that prior claims were invalid and requires repayment of previous refund amounts, our financial forecasts could be incorrect and our business and results of operations would be adversely affected.

If we fail to comply with U.S.

export control and economic sanctions, our business, financial condition and prospects may be materially and adversely affected.

Our business and our products are subject to U.S.

export control laws and regulations, including the U.S.

Export Administration Regulations and economic and trade sanctions regulations administered by the U.S.

Treasury Department’s Office of Foreign Assets Control, or OFAC.

Our company must comply with these laws and regulations.

The antibody sequence for itolizumab (EQ001) is derived from Cuban-origin intellectual property and thus we believe this to be a pharmaceutical of Cuban origin, which would make the import, development and commercialization of itolizumab (EQ001) subject to these laws, sanctions and regulations.

We currently rely on a general license issued by OFAC under the Cuban Assets Control Regulations, or CACR, relating to Cuban-origin pharmaceuticals to import and conduct clinical studies relating to itolizumab (EQ001).

In the absence of the OFAC general license, all of our development and potential commercialization activities for itolizumab (EQ001) would be prohibited under the CACR, and we would be required to request a specific license from OFAC authorizing such activities, which OFAC could deny.

We submitted to OFAC, and subsequently amended and supplemented, a request for interpretive guidance confirming the applicability of the general license to itolizumab (EQ001), or in its absence, a specific license authorization from OFAC authorizing activities relating to the commercialization of itolizumab (EQ001), or the Submission.

We simultaneously requested that OFAC treat the Submission as a voluntary disclosure if OFAC concluded that our determination that the general license applies to itolizumab (EQ001) was in error.

In November 2019, OFAC notified us that after careful consideration, which included consultation with the FDA, OFAC determined that itolizumab (EQ001) falls within the definition of “Cuban-origin pharmaceutical” and, as such, the general licenses at section 515.547(b) and (c) of the CACR authorize the conduct of clinical studies for itolizumab (EQ001) for the purpose of seeking approval of the drug from the FDA.

Thus, no further authorization is required from OFAC at this time for our planned and future clinical studies of itolizumab (EQ001).

Even though OFAC has concluded that the general license for Cuban-origin pharmaceuticals applies to itolizumab (EQ001), there can be no assurance that the general license will not be revoked or modified by OFAC in the future, or that we will remain in compliance with the general license or other export laws and regulations.

If OFAC revokes or modifies the general license, or otherwise determines that the general license does not apply to itolizumab (EQ001), and OFAC then denies our request for a specific license or delays issuance of a specific license, we will be unable to deal in, or otherwise commercialize, itolizumab (EQ001).

In that case, we would be required to cease operations related to itolizumab (EQ001), which would materially and adversely affect our financial condition and business prospects.

In addition, in the absence of the general or specific license, the transfer, sale and/or purchase of our securities could be prohibited, and the ownership or possession of our securities could be subject to an affirmative OFAC reporting requirement relating to blocked property.

Any violations of the CACR or other applicable export control and sanctions laws could subject us and certain of our employees to substantial civil or criminal penalties.

Changes in healthcare law and implementing regulations, as well as changes in healthcare policy, may impact our business in ways that we cannot currently predict and may have a significant adverse effect on our business and results of operations.*

There have been, and continue to be, numerous legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

Among policy makers and payors in the United States there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access and the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

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Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year pursuant to the Budget Control Act of 2011 and

subsequent laws, which began in 2013 and will remain in effect until 2032 unless additional Congressional action is taken.

These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year pursuant to the Budget Control Act of 2011 and subsequent laws, which began in 2013 and will remain in effect until 2032 unless additional Congressional action is taken.

Additionally, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.

On July 4, 2025, the annual reconciliation bill, the One Big Beautiful Bill Act, or OBBBA, was signed into law, which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program.

OBBBA also narrows access to ACA marketplace exchange enrollment and declines to extend the ACA enhanced advanced premium tax credits, set to expire in 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.

New laws may result in additional reductions in Medicare and other healthcare funding, which may materially adversely affect customer demand and affordability for our products and, accordingly, the results of our financial operations.

Also, there has been heightened governmental scrutiny recently over the manner in which pharmaceutical companies set prices for their marketed products, which have resulted in several Congressional inquiries and proposed and enacted federal legislation, as well as state efforts, designed to, among other things, bring more transparency to product pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

OBBBA also narrows access to ACA marketplace exchange enrollment and declines to extend the ACA enhanced advanced premium tax credits, set to expire at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.

New laws may result in additional reductions in Medicare and other healthcare funding, which may materially adversely affect customer demand and affordability for our products when and if approved and, accordingly, the results of our financial operations.

as state efforts, designed to, among other things, bring more transparency to product pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

For example, the IRA, among other things, (1) directs HHS to negotiate the price of certain high-expenditure, single-source drugs that have been on the market for at least seven years and biologics that have been on the market for at least eleven years covered under Medicare, or the Medicare Drug Price Negotiation Program, and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

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These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.

These actions may, for example, include directives to reduce agency workforce, program cuts, rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation, or CMMI to consider new payment and healthcare models to limit drug spending and eliminating the Biden administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan, directing HHS and other agencies to lower prescription drug costs for Medicare through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program, and directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans.

These actions may, for example, include:

(1) directives to reduce agency workforce and program cuts, (2) rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation, or CMMI to consider new payment and healthcare models to limit drug spending, (3) eliminating the Biden administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan, (4) directing HHS and other agencies to lower prescription drug costs for Medicare through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products, (5) imposing tariffs of imported pharmaceutical products, (6) directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans, and (7) as part of the Make America Healthy Again (“MAHA”) Commission’s recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.

These actions and policies may significantly reduce U.S.

drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks.

Additionally, in its June 2024 decision in Loper Bright Enterprises v.

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Tax or other regulatory authorities may challenge our characterization of services providers as independent contractors both under existing laws and regulations and under laws and regulations adopted in the future.

We are aware of a number of judicial decisions and legislative proposals that could bring about major changes in the way workers are classified, including the California legislature’s passage of California Assembly Bill 5, which California Governor Gavin Newsom signed into law in September 2019, or AB 5, and Assembly Bill 2257, or AB 2257, which went into effect in September 2020 and amended certain portions of AB 5.

We are aware of a number of judicial decisions and legislative proposals that could bring about major changes in the way

workers are classified, including the California legislature’s passage of California Assembly Bill 5, which California Governor Gavin Newsom signed into law in September 2019, or AB 5, and Assembly Bill 2257, or AB 2257, which went into effect in September 2020 and amended certain portions of AB 5.

AB 5 and AB 2257 are often referred to collectively simply as AB 5.

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Healthcare providers and third-party payors will play a primary role in the recommendation and prescription of any future product candidates for which we obtain marketing approval.

Our arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may affect the business or financial arrangements and relationships through which we conduct research and would market, sell and distribute our products.

Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business.

Our arrangements with third-party payors and potential customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may affect the business or financial arrangements and relationships through which we conduct research and would market, sell and distribute our products.

Even though we do not yet have any products approved for marketing and sale, and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business.

The laws that may affect our ability to operate include, but are not limited to:

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• federal civil and criminal false claims laws, such as the FCA which can be enforced by private citizens, on behalf of the government, through civil qui tam actions, and civil monetary penalty laws prohibits individuals or entities from, among other things, knowingly presenting, or causing to be presented, false, fictitious or fraudulent claims for payment or approval by the federal government, including federal health care programs, such as Medicare and Medicaid, and knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim, or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government.

In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback

Statute constitutes a false or fraudulent claim for purposes of the FCA.

In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA.

As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or property presented to the U.S.

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We have entered into consulting and scientific advisory board arrangements with physicians and other healthcare providers, including some who could influence the use of our product candidates such as EQ504 and EQ302 and any future product candidates, if approved.

Because of the complex and far-reaching nature of these laws, regulatory agencies may view these transactions as

prohibited arrangements that must be restructured, or discontinued, or for which we could be subject to other significant penalties.

Because of the complex and far-reaching nature of these laws, regulatory agencies may view these transactions as prohibited arrangements that must be restructured, or discontinued, or for which we could be subject to other significant penalties.

We could be adversely affected, if regulatory agencies interpret our financial relationships with providers who may influence the ordering of and use of EQ504 and EQ302 or any future product candidates, if approved, to be in violation of applicable laws.

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Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies, healthcare providers and other third parties, including charitable foundations, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.

It is possible that governmental authorities may conclude that our business practices, including our consulting arrangements with physicians, some of whom received stock options as compensation for services provided, do not comply with current or future statutes, regulations, agency guidance or case law involving applicable healthcare laws.

healthcare laws.

Responding to investigations can be time and resource-consuming and can divert management’s attention from the business.

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• our ability to enroll and retain subjects in our planned or future clinical studies if we are able to raise additional capital to continue the development of our product candidates;

• results from our planned or future clinical studies with our current and future product candidates, and the results of the clinical studies of our competitors or of Biocon;

• adverse events observed in our planned or future clinical studies or in the clinical studies, exploratory studies, or other clinical uses of itolizumab supported by Biocon or third parties or during post-approval use of itolizumab;

• results from our planned or future clinical studies with our current and future product candidates, and the results of the clinical studies of our competitors;

• the timing of data from our planned or future clinical studies of EQ504 and EQ302 and potentially other product candidates;

• changes in our projected operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock;

• regulatory or legal developments of ours, our competitors’ or Biocon’s;

• regulatory or legal developments of ours, our competitors’;

• the level of expenses related to future product candidates or clinical development programs;

• changes in the structure of healthcare payment systems;

• our ability to achieve product development goals in the timeframe we announce;

• announcements of clinical study results, regulatory developments, acquisitions or mergers, strategic alliances or significant agreements by us, by our competitors, or by Biocon;

• our ability to achieve product candidate development goals in the timeframe we announce;

• announcements of clinical study results, regulatory developments, acquisitions or mergers, strategic alliances or significant agreements by us, by our competitors;

• the success or failure of our efforts to acquire, license or develop additional product candidates;

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If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and adversely affect our business.

If we are unable to regain compliance with the listing requirements of the Nasdaq Capital Market, with an initial deadline of June 11, 2025, followed by a 180-day extension until December 8 , 2025, our common stock may be delisted from the Nasdaq Capital Market which could have a material adverse effect on our financial condition and could make it difficult for you to sell your shares.*

We have in the past and may in the future fail to maintain compliance with the listing requirements of the Nasdaq Capital Market, and as a result, our common stock may be delisted from the Nasdaq Capital Market which could have a material adverse effect on our financial condition and could make it difficult for you to sell your shares.*

Our common stock is listed on the Nasdaq Capital Market, and we are therefore subject to its continued listing requirements, including requirements with respect to the market value of publicly held shares, market value of listed shares, minimum bid price per share, and minimum stockholders’ equity, among others, and requirements relating to board and committee independence.

If we fail to satisfy one or more of the requirements, we may be delisted from the Nasdaq Capital Market.

On December 13, 2024, we received a notice, or Notice, from the Nasdaq Stock Market, or Nasdaq, that we were not in compliance with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Price Requirement.

The Notice indicated that, consistent with Nasdaq Listing Rule 5810(c)(3)(A), we have 180 days, or until June 11, 2025, to regain compliance with the Minimum Bid Price Requirement by having the bid price of our common stock meet or exceed $1.00 per share for at least ten consecutive business days.

The Notice had no immediate effect on the listing of our common stock, and our common stock continues to trade on the Nasdaq Capital Market under the symbol “EQ” at this time.

On June 12, 2025, the Company received another notice from Nasdaq that the Company was granted an additional 180 calendar days, until December 8, 2025, to regain compliance with the Minimum Bid Price Requirement.

This notice from Nasdaq states that if compliance with the Minimum Bid Price Requirement cannot be demonstrated by December 8, 2025, Nasdaq staff will provide written notification that the Company’s common stock will be delisted.

At that time, the Company may appeal Nasdaq staff’s determination to a Nasdaq hearings panel.

We intend to actively monitor the bid price of our common stock and will consider available options to regain compliance with the listing requirements, including such actions as effecting a reverse stock split, for which our board of directors has received stockholder approval.

There can be no assurance, however, that we will be able to regain compliance with the Minimum Bid Price Requirement, and even if we do, there can be no assurance that we will be able to maintain compliance with the continued listing requirements for the Nasdaq Capital Market or that our common stock will not be delisted in the future.

In addition, we may be unable to meet other applicable listing requirements of the Nasdaq Capital Market, including corporate governance requirements and/or maintaining minimum levels of stockholders’ equity or market values of our common stock in which case, our common stock could be subject to delisting.

On December 13, 2024, we received a notice, or Notice, from the Nasdaq Stock Market, or Nasdaq, that we were not then in compliance with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Price Requirement.

The Notice indicated that, consistent with Nasdaq Listing Rule 5810(c)(3)(A), we had 180 days, or until June 11, 2025, to regain compliance with the Minimum Bid Price Requirement by having the bid price of our common stock meet or exceed $1.00 per share for at least ten consecutive business days.

The Notice had no immediate effect on the listing of our common stock, and our common stock continued to trade on the Nasdaq Capital Market under the symbol “EQ”.

On June 12, 2025, we received a notice from Nasdaq that we had been granted an additional 180 days, or until December 8, 2025, to regain compliance with the Minimum Bid Price Requirement.

On August 29, 2025, we received a letter from Nasdaq notifying us that the closing bid price of our common stock had met or exceeded $1.00 per share for at least ten consecutive business days, from August 15, 2025 through August 28, 2025, and accordingly, we had regained compliance with Nasdaq Listing Rule 5550(a)(2).

There can be no assurance, however, that we will maintain compliance with the continued listing requirements for the Nasdaq Capital Market or that our common stock will not be delisted in the future.

In addition, we may be unable to meet other applicable listing requirements of the Nasdaq Capital Market, including maintaining minimum levels of stockholders’ equity or market values of our common stock in which case, our common stock could be subject to delisting.

Delisting from the Nasdaq Capital Market would adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock.

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Raising additional equity capital would cause dilution to our stockholders, and raising additional equity or debt capital may restrict our operations or require us to relinquish rights to our technologies or product candidates.*

As disclosed above, on August 12, 2025, we issued and sold 21,814,874 shares at a purchase price of $0.57 per share and pre-funded warrants to purchase up to 30,816,705 warrant shares at a purchase price of $0.5699 per warrant share, to the investors for gross proceeds to us of approximately $30.0 million in connection with the Private Placement.

On August 12, 2025, we issued and sold 21,814,874 shares at a purchase price of $0.57 per share and pre-funded warrants to purchase up to 30,816,705 shares at a purchase price of $0.5699 per warrant share, to the investors for gross proceeds to us of approximately $30.0 million in connection with the Private Placement.

Additionally, the Purchase Agreement provides for a potential second closing for up to approximately $20.0 million in gross proceeds in exchange for up to approximately 35,087,717 shares of common stock, subject to achieving certain specified milestones related to clinical study initiation and stock price conditions or waiver thereof.

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1 to the 2023 ATM Facility pursuant to which Jefferies LLC was replaced by LifeSci Capital LLC as the sales agent under the 2023 ATM Facility.

Since June 30, 2025 and through the date of the filing of this Quarterly Report on Form 10-Q, we have sold 1,610,075 shares under the 2023 ATM Facility, as amended, for gross proceeds of approximately $0.9 million.

As of August 12, 2025, we had 59,503,223 shares of common stock outstanding, which excludes the pre-funded warrant shares totaling 30,816,705 until they are exercised.

On September 19, 2025, we filed a prospectus supplemental with the SEC under which we may offer and sell shares of our common stock having an aggregate offering price of up to $75.0 million, pursuant to the 2023 ATM Facility, as amended.

For the nine months ended September 30, 2025, we sold 1,719,485 shares under the 2023 ATM Facility, as amended, for gross proceeds of approximately $1.0 million.

As of September 30, 2025 and through the date of the filing of this Quarterly Report on Form 10-Q, we have not sold any additional shares under the 2023 ATM Facility, as amended.

As of November 10, 2025, we had 60,893,283 shares of common stock outstanding, which excludes the pre-funded warrant shares totaling 30,816,705 until they are exercised.

The sale of our shares of common stock and pre-funded warrants has significantly diluted the ownership interest of our stockholders from their ownership interest before such sales, and the potential sale of additional shares of common stock and pre-funded warrants if the second closing occurs will continue to significantly dilute their ownership interest.

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We have also registered shares of common stock that we have issued, and may issue under our employee equity incentive plans, which shares may be sold freely in the public market upon issuance.

Even though shares held by directors, executive officers and other affiliates are subject to volume limitations under Rule 144 under the Securities Act, the sale of shares by directors, executive officers and other affiliates may cause the price of our common stock to decline.

Even though shares held by directors, executive officers and other affiliates are

subject to volume limitations under Rule 144 under the Securities Act, the sale of shares by directors, executive officers and other affiliates may cause the price of our common stock to decline.

Sales of our common stock by current stockholders may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, and make it more difficult for other stockholders to sell shares of our common stock.

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• provide that special meetings of our stockholders may be called only by the chairman of the board, our Chief Executive Officer or by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors.

• provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law;

(i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws, or (iv) any action asserting a claim against us governed by the internal affairs doctrine.

These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act.

Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions.

Accordingly, both state and federal courts have jurisdiction to entertain such claims.

The amendment of any of these provisions, with the exception of the ability of our board of directors to issue shares of preferred stock and designate any rights, preferences and privileges thereto, would require approval by the holders of at least 66-2/3% of our then-outstanding common stock.

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If these earthquakes, fires, other natural disasters, terrorism and similar unforeseen events beyond our control prevented us from using all or a significant portion of our headquarters or research facility, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.

We do not have a disaster recovery or business continuity plan in place and may incur substantial expenses as a result of the absence or limited nature of our internal or third-party service

provider disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.

We do not have a disaster recovery or business continuity plan in place and may incur substantial expenses as a result of the absence or limited nature of our internal or third-party service provider disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.

Furthermore, integral parties in our supply chain are operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen and severe adverse events, including public health epidemics or outbreaks, that could impact our business.

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After March 2013, under the Leahy-Smith Act, the United States transitioned to a first inventor to file system in which, assuming that the other statutory requirements are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention.

However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications, our ability to obtain future patents, and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications, our ability to obtain

future patents, and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations.

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Product liability lawsuits against us could cause us to incur substantial liabilities and could limit our commercialization of any product candidates that we may develop.*

We face an inherent risk of product liability exposure related to the testing of EQ504 and EQ302 and any future product candidates in human clinical studies and will face an even greater risk if we commercially sell any products that we may develop.

We face an inherent risk of product liability exposure related to the testing of EQ504 and EQ302 and any future product candidates which may go into human clinical studies and will face an even greater risk if we commercially sell any products that we may develop.

If we cannot successfully defend ourselves against claims that EQ504 and EQ302 or any future product candidates or products caused injuries, we could incur substantial liabilities.

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We anticipate that we will need to increase our insurance coverage as EQ504, EQ302 and any future product candidates advance through potential future clinical studies and if we successfully commercialize any products.

Insurance coverage is

increasingly expensive.

Insurance coverage is increasingly expensive.

We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.*

Changes in tax laws or regulations that are applied adversely to us or our potential customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.*

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of our domestic and foreign earnings.

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Our income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the

application of complex tax regulations.

While we believe we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes.

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Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.

Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not

In addition, we do not have a risk management program or processes or procedures for identifying and addressing risks to our business in other areas.

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(iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates;

and (iv) the actual or perceived environmental impact of cryptocurrency and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the cryptocurrency mining process;

and (iv) the actual or perceived

environmental impact of cryptocurrency and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the cryptocurrency mining process;

• changes in consumer preferences and the perceived value or prospects of cryptocurrency;

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Cryptocurrency and other digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price.

The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects and evolving, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of digital assets or results in increased compliance costs, limitations on our business model, or the forced liquidation of our digital asset holdings, if any.

business model, or the forced liquidation of our digital asset holdings, if any.

We may also be subject to enforcement actions or penalties if our activities are deemed to violate applicable laws or regulations.

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Recent actions by U.S.

requirements negatively impact the ability of exchanges and trading venues to provide services for cryptocurrency and other digital assets.

banking regulators have reduced the ability of cryptocurrency-related services providers to gain access to banking services and liquidity of digital assets may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for cryptocurrency and other digital assets.

In addition, while the current administration has expressed support regarding the development and use of digital assets and the US recently enacted the GENIUS Act, the specific regulatory frameworks, including the potential adoption of the CLARITY Act, are still to be developed.

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Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered cryptocurrencies or otherwise generate funds using cryptocurrency holdings, including in particular, during times of market instability or when the price of cryptocurrencies has declined significantly.

If we are unable to sell digital assets, enter into additional capital raising transactions using cryptocurrency as collateral, or otherwise generate funds using cryptocurrency holdings, or if we are forced to sell cryptocurrency at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

cryptocurrency at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

We may face risks relating to the custody of our cryptocurrency, if any, including the loss or destruction of private keys required to access our cryptocurrency and cyberattacks or other data loss relating to our cryptocurrency.*

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To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, neither we nor our custodians will be able to access the cryptocurrency held in the related digital wallet.

Furthermore, we cannot provide assurance that our digital wallets, nor the digital

wallets of our custodians held on our behalf, will not be compromised as a result of a cyberattack or other source of compromise.

Furthermore, we cannot provide assurance that our digital wallets, nor the digital wallets of our custodians held on our behalf, will not be compromised as a result of a cyberattack or other source of compromise.

The cryptocurrency and blockchain ledger, as well as other digital assets and blockchain technologies, have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities.

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federal income tax treatment of digital assets and related transactions and there continues to be uncertainty with respect to the timing and amount of income inclusions for various digital asset transactions.

There can be no assurances that the IRS will not issue future guidance with respect to digital assets or that a court will not interpret existing (or new) guidance in a manner that has negative tax

consequences including the imposition of a greater tax burden on investors in digital assets or imposing a greater cost on the acquisition and disposition of digital assets.

There can be no assurances that the IRS will not issue future guidance with respect to digital assets or that a court will not interpret existing (or new) guidance in a manner that has negative tax consequences including the imposition of a greater tax burden on investors in digital assets or imposing a greater cost on the acquisition and disposition of digital assets.

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 1A. Risk Factors