What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-31 compared with 2024-03-28 · 506 added, 290 removed, 773 unchanged (51% of the section changed)

5 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss for the Years ended December 31, 202 4 and 20 23

Consolidated Statements of Changes in Stockholders’ Equity for the Years ended December 31, 2023 and 2022

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Years ended December 31, 202 4 and 202 3

Consolidated Statements of Cash Flows for the Years ended December 31, 202 4 and 20 23

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We have audited the accompanying consolidated balance sheets of Humacyte, Inc.

and its subsidiary (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, of changes in stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of changes in stockholders’ equity (deficit) and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

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We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company has incurred operating losses and negative cash flows from operations since inception.

Management’s evaluation of the events and conditions and management’s plans to mitigate these matters are also described in Note 1.

/s/ PricewaterhouseCoopers LLP

10 unchanged sentences

Prepaid expenses and other current assets

Short-term investments — 2,107

Accounts receivable

Total current assets

47,859 83,278

Restricted cash 50,209 209

Property and equipment, net

4 unchanged sentences

$ 137,872 $ 128,223

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities

3 unchanged sentences

Finance lease obligation, current portion

Operating lease obligation, current portion

SVB loan payable, current portion — 8,571

Other current liabilities 1,123 53

Total current liabilities

19,954 18,443

Revenue interest liability 38,600 —

Contingent Earnout Liability 70,961 37,916

Revenue interest liability 63,354 38,600

Common stock warrant liabilities 19,254 78

Finance lease obligation, net of current portion

2 unchanged sentences

Other long-term liabilities

SVB loan payable, net of current portion — 20,336

Total liabilities

1 unchanged sentence

Commitments and contingencies (Note 13)

Stockholders’ equity

Stockholders’ equity (deficit)

Preferred stock, $ 0.0001 par value;

8 unchanged sentences

( 686,015 ) ( 537,314 )

Total stockholders’ equity

Total stockholders’ equity (deficit)

( 52,669 ) 13,546

Total liabilities and stockholders’ equity

Total liabilities and stockholders’ equity (deficit)

$ 137,872 $ 128,223

4 unchanged sentences

Year Ended December 31,

Grant revenue

Operating expenses:

9 unchanged sentences

Change in fair value of Contingent Earnout Liability ( 33,045 ) ( 10,023 )

Employee retention credit 3,107 —

Loss on extinguishment of debt ( 2,421 ) —

Interest expense

( 9,277 ) ( 6,599 )

Change in fair value of derivative liabilities ( 260 ) 417

Total other income (expense), net

Change in fair value of derivatives 3,915 ( 260 )

Employee retention credit — 3,107

Loss on extinguishment of debt — ( 2,421 )

Total other expense, net

( 34,303 ) ( 10,729 )

7 unchanged sentences

HUMACYTE, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands except for share amounts)

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Stockholders’

Equity (Deficit)

Shares Amount

6 unchanged sentences

103,673,728 $ 10 $ 550,850 $ ( 537,314 ) $ 13,546

Issuance of stock in public offering, net of issuance costs 15,410,000 2 43,044 — 43,046

Issuance of stock in registered direct offerings, net of issuance costs 8,490,808 1 21,744 — 21,745

Issuance of stock under ATM Facility, net of issuance costs 1,333,596 — 6,809 — 6,809

Issuance of commitment shares pursuant to Common Stock Purchase Agreement 115,705 — 708 — 708

Proceeds from sale of stock under Common Stock Purchase Agreement 500,000 — 2,530 — 2,530

Proceeds from the exercise of stock options 503,672 — 1,511 — 1,511

14 unchanged sentences

Change in fair value of Contingent Earnout Liability 33,045 10,023

Loss on extinguishment of debt 2,421 —

Non-cash interest expense 7,754 3,099

Change in fair value of derivative liabilities 260 ( 417 )

Change in fair value of derivatives ( 3,915 ) 260

Loss on disposal of property and equipment 4 18

Loss on extinguishment of debt — 2,421

Amortization expense 2,086 2,060

7 unchanged sentences

Operating lease obligation ( 53 ) ( 50 )

Deferred payroll taxes — ( 173 )

Net cash used in operating activities ( 98,122 ) ( 73,305 )

Cash flows from investing activities

Proceeds from maturity of short-term investments (certificates of deposit) 2,107 16,000

Purchase of property and equipment ( 1,572 ) ( 2,280 )

Purchase of short-term investments (certificates of deposit) — ( 10,107 )

Net cash provided by (used in) investing activities ( 173 ) 4,845

Proceeds from maturity of short-term investments (certificates of deposit) — 2,107

Net cash used in investing activities ( 1,572 ) ( 173 )

Cash flows from financing activities

Proceeds from issuance of stock in public offering, net of underwriting fees 43,396 —

Payments of costs related to public offering ( 350 ) —

Proceeds from issuance of stock and warrants in registered direct offerings, net of placement agent fees 43,126 —

Proceeds from Revenue Interest Purchase Agreement, net of issuance costs 20,000 39,377

Payments of transaction costs related to Revenue Interest Purchase Agreement ( 500 ) ( 1,450 )

Principal payments on SVB loan ( 31,500 ) —

Payments for debt prepayment and extinguishment costs ( 310 ) —

Proceeds from issuance of stock under ATM Facility, net of issuance costs 6,809 —

Proceeds from sale of stock under Common Stock Purchase Agreement 2,530 —

Proceeds from the exercise of stock options 1,511 566

1 unchanged sentence

Payments of finance lease principal ( 2,579 ) ( 2,256 )

Net cash provided by (used in) financing activities 4,507 ( 1,446 )

Net decrease in cash, cash equivalents and restricted cash ( 68,971 ) ( 67,730 )

Principal payments on SVB loan — ( 31,500 )

Payments for debt prepayment and extinguishment costs — ( 310 )

Net cash provided by financing activities 114,183 4,507

Net increase (decrease) in cash, cash equivalents and restricted cash 14,489 ( 68,971 )

Cash, cash equivalents and restricted cash at the beginning of the period 80,801 149,772

4 unchanged sentences

Purchase of property and equipment in accounts payable and accrued expenses $ 92 $ 284

Initial fair value of contingent derivative liability related to revenue interest liability $ 2,354 $ —

Debt discount from embedded contingent derivative liability $ 1,552 $ 2,354

Issuance of commitment shares pursuant to Common Stock Purchase Agreement $ 708 $ —

The accompanying notes are an integral part of these financial statements.

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Humacyte, Inc.

and subsidiary (unless the context indicates otherwise, collectively, the “Company”) is pioneering the development and manufacture of off-the-shelf, universally implantable, bioengineered human tissues, advanced tissue constructs and organ systems designed to improve the lives of patients and transform the practice of medicine.

and subsidiaries (unless the context indicates otherwise, collectively, the “Company”) is pioneering the development and manufacture of off-the-shelf, universally implantable, bioengineered human tissues, advanced tissue constructs and organ systems with the goal of improving the lives of patients and transforming the practice of medicine.

The Company is leveraging its regenerative medicine technology platform to develop proprietary product candidates for use in the treatment of diseases and conditions across a range of anatomic locations in multiple therapeutic areas.

On August 26, 2021 (the “Closing Date”), Alpha Healthcare Acquisition Corp.

(“AHAC”) consummated a merger pursuant to a Business Combination Agreement, dated as of February 17, 2021 (the “Merger Agreement”), by and among Humacyte, Inc., a Delaware Corporation (“Legacy Humacyte”), AHAC and Hunter Merger Sub, Inc.

(“Merger Sub”), a Delaware corporation and wholly owned subsidiary of AHAC.

(“AHAC”) consummated a merger pursuant to a Business Combination Agreement, dated as of February 17, 2021 (the “Merger Agreement”), by and among Humacyte, Inc.

(“Legacy Humacyte”), AHAC and Hunter Merger Sub, Inc.

(“Merger Sub”), a wholly owned subsidiary of AHAC.

As contemplated by the Merger Agreement, Merger Sub merged with and into Legacy Humacyte, with Legacy Humacyte continuing as the surviving corporation and as a wholly-owned subsidiary of AHAC (such transactions, the “Merger,” and, collectively with the other transactions described in the Merger Agreement, the “Reverse Recapitalization”).

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Operations prior to the Merger are those of Legacy Humacyte.

Concurrently with the execution of the Merger Agreement, certain investors (the “PIPE Investors”) purchased an aggregate of 17,500,000 shares of the Company’s common stock, par value $ 0.0001 per share (“Common Stock” and such shares purchased by the PIPE Investors, the “PIPE Shares”), in a private placement for an aggregate purchase price of $ 175 million (the “PIPE Financing”).

The Company received $ 242.4 million in proceeds from the Merger and related PIPE Financing, and incurred $ 3.9 million of transaction costs, consisting of banking, legal, and other professional fees.

Liquidity and Going Concern

Since its inception in 2004, the Company has generated no product revenue and has incurred operating losses and negative cash flows from operations in each year.

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The Company expects to incur substantial operating losses and negative cash flows from operations for the foreseeable future as the Company advances its product candidates.

As of December 31, 2023, the Company had cash and cash equivalents of $ 80.4 million.

On March 5, 2024, the Company closed the Offering (defined below), raising net proceeds of approximately $ 43.1 million .

On March 11, 2024, the Company received an additional $ 20.0 million under the Purchase Agreement.

See Note 15 — Subsequent Events for further information.

The Company believes its cash and cash equivalents on hand will be sufficient to fund operations, including clinical trial expenses and capital expenditure requirements, for at least 12 months from the issuance date of these financial statements.

Adequate capital may not be available to the Company when needed or on acceptable terms.

If the Company is unable to raise capital, it could be forced to delay, reduce, suspend or cease its research and development programs or any future commercialization efforts, which would have a negative impact on its business, prospects, operating results and financial condition.

As further disclosed in Note 6, on May 12, 2023, Humacyte, Inc.

and Global entered into a Revenue Interest Purchase Agreement (the “Purchase Agreement”) with two purchasers, both affiliates of Oberland Capital Management LLC (the “Purchasers”), and another affiliate of Oberland Capital Management LLC (“Oberland”), as agent for the Purchasers (the “Agent”), to obtain financing with respect to the further development and commercialization of the Company’s ATEV, to repay the Company’s then-existing credit facility with Silicon Valley Bank (“SVB”), and for other general corporate purposes.

As of December 31, 2024 , $ 64.2 million was recorded as a revenue interest liability on the consolidated balance sheets.

The Purchase Agreement contains customary representations and warranties and affirmative covenants for transactions of this type, including, among others, the provision of financial and other information to the Purchaser, notice to the Purchaser upon the occurrence of certain material events, and compliance with applicable laws.

The Purchase Agreement also contains customary negative covenants, including certain restrictions on the ability to incur indebtedness and grant liens or security interests on assets.

On February 18, 2024, the Company reached an agreement with the Purchasers and the Agent to waive certain breaches related to, and extend the deadline for certain post-closing obligations under, the Purchase Agreement, including the requirement for the Company to deliver a leasehold mortgage in favor of the Agent over the Company’s headquarters.

On May 8, 2024, the Company agreed with the Purchasers to amend the Purchase Agreement to remove requirements related to the leasehold mortgage.

In exchange for removing this requirement, the Company agreed to fund an account in the amount of $ 54.0 million over which the Agent has certain consent and other rights to $ 50.0 million

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of the funds.

The Company funded an account with the required $ 54.0 million on August 14, 2024.

As of December 31, 2024, the $ 50.0 million was classified as restricted cash on the accompanying consolidated balance sheets.

As further disclosed in Note 9, on September 24, 2024, the Company entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Common Stock Purchase Agreement”).

The Common Stock Purchase Agreement provides that, subject to the terms and conditions set forth therein, the Company has the sole right, but not the obligation, to sell to Lincoln Park shares of the Company’s common stock, par value $ 0.0001 per share (“Common Stock”), having an aggregate value of up to $ 50.0 million (the “Purchase Shares”) over a 24 -month period.

The Company controls the timing and amount of any sales of Purchase Shares to Lincoln Park pursuant to the Common Stock Purchase Agreement in its sole discretion.

As of December 31, 2024 , the Company had $ 47.5 million in remaining availability for sales of Common Stock under the Common Stock Purchase Agreement.

As of December 31, 2024 , the Company had completed sales of shares under the Common Stock Purchase Agreement that provided $ 2.5 million in gross proceeds.

As further disclosed in Note 9, o n September 1, 2022, the Company entered into an agreement with Jefferies LLC for the sale from time to time of up to $ 80.0 million of shares of Common Stock pursuant to a sales agreement (the “ATM Facility”).

In December 2024, the Company completed sales of shares under the ATM Facility that provided net proceeds $ 6.8 million, and from December 31, 2024 through March 31, 2025 , the Company completed sales of shares to under the ATM Facility that provided net proceeds of approximately $ 0.4 million .

As of December 31, 2024, $ 73.0 million remained available under the ATM Facility.

As of December 31, 2024, the Company had available cash and cash equivalents of $ 44.9 million.

Subsequent to December 31, 2024, in March 2025, the Company completed a public offering of Common Stock, which provided approximately $ 46.6 million in net proceeds.

See Note 15 — Subsequent Events for further information.

Before consideration of management’s plans described below, the Company believes its cash and cash equivalents on hand and existing capacity under its Common Stock Purchase Agreement will be sufficient to fund operations at least into March 2026.

The future viability of the Company beyond that point is dependent on its ability to generate cash flows from the sale of Symvess and raise additional capital to finance its operations.

The Company plans to seek additional funding through private or public equity financings, debt financings, debt refinancing or restructuring, collaborations, strategic alliances, and marketing, distribution or licensing arrangements.

Adequate capital may not be available to the Company when needed or on acceptable terms.

If the Company is unable to raise capital, the Company plans to implement a program that delays, reduces, suspends or ceases certain of its planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on its business, prospects, operating results and financial condition.

Based on the Company’s current cash and cash equivalents on hand and existing capacity under its Common Stock Purchase Agreement, and after considering management’s plans, the Company believes it has the ability to fund operations at least into the middle of 2026.

Summary of Significant Accounting Policies

1 unchanged sentence

The Company has prepared the accompanying financial statements in conformity with U.S.

The Company’s consolidated financial statements reflect the operations of the Company and its wholly owned subsidiary.

The Company’s consolidated financial statements reflect the operations of the Company and its wholly owned subsidiaries.

All intercompany accounts and transactions have been eliminated in consolidation.

2 unchanged sentences

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates in the financial statements include stock-based compensation costs, right-of-use assets, accruals for research and development activities, contingent earnout liability, revenue interest liability, derivative liabilities, fair value of common stock warrants and income taxes.

Significant estimates in the financial statements include stock-based compensation costs, right-of-use assets, accruals for research and development activities, contingent earnout liability, revenue interest liability, derivatives, fair value of common stock warrants and income taxes.

The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate.

Actual results could differ from those estimates.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reclassifications

1 unchanged sentence

None of these reclassifications had a material impact on the Company’s consolidated financial statements.

The Company operates and manages its business as one reportable and operating segment.

The Company is developing proprietary, bioengineered, acellular human tissues, advanced tissue constructs and organ systems that are designed to be used in the treatment of diseases and conditions across a range of anatomic locations in multiple therapeutic areas.

The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of evaluating financial performance and allocating resources.

The Company’s operations are managed and reported to its Chief Executive Officer, the Company’s chief operating decision maker (“CODM”), on a consolidated basis.

The CODM evaluates financial performance, allocates resources and monitors budget versus actual results based on the Company’s consolidated statements of operations.

The measure of segment assets provided to and reviewed by the CODM is reported on the consolidated balance sheets as total assets.

Segment asset information is not used by the CODM to evaluate performance, allocate resources or make strategic decisions.

Under the current organizational and reporting structure, the Company operates and manages its business on a consolidated basis as one reportable and operating segment.

As a single reportable segment entity, the Company’s segment performance measure is consolidated net (loss) income.

Consolidated net (loss) income is used to monitor the budget versus actual results and to help make key operating decisions such as the allocation of budget between research and development and general and administrative expenses.

Significant segment expenses within net loss include research and development and general and administrative expenses, which are each separately presented on the Company’s consolidated statements of operations.

Other segment items within net loss include interest income, interest expense, the change in fair value of the Company’s Contingent Earnout Liability and the change in fair value of derivatives.

Additional disaggregated significant segment expenses that are not separately presented on the Company’s consolidated statements of operations are presented below.

Research and Development Expenses

Year Ended December 31,

($ in thousands) 2024 2023

Direct Expenses

Vascular Trauma $ 2,181 $ 3,976

AV Access 6,620 8,748

Total 8,944 13,030

Unallocated Expenses

External services

Materials and supplies

21,765 13,705

Payroll and personnel expenses

36,537 30,118

Other research and development expenses

14,282 13,591

Total 79,655 63,520

Total research and development expenses $ 88,599 $ 76,550

Direct expenses for the Company’s vascular trauma, AV access for hemodialysis and PAD indications include costs related to the Company’s clinical trials, including fees paid to CROs, consultants, clinical sites and investigators.

Costs related to development activities which broadly support multiple programs using the Company’s technology platform, including personnel, materials and supplies, external services costs, and other internal expenses, such as facilities and overhead costs, are not allocated to individual research and development programs.

Other research and development expenses reported in the table above include direct costs not identifiable with a specific product candidate, including costs associated with the Company’s research and development platform used across programs, process development,

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

manufacturing analytics and preclinical research and development for prospective product candidates and new technologies.

Non-cash Operating Expenses

Year Ended December 31,

($ in thousands) 2024 2023

Depreciation expense $ 5,104 $ 5,659

Stock-based compensation expense 6,137 6,828

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders.

There was no difference between net loss and comprehensive loss for the years ended December 31, 2024 and 2023.

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Cash deposits typically exceed federally insured limits.

As of December 31, 2023, cash and cash equivalents consisted of cash on deposit with banks denominated in U.S.

As of December 31, 2024 and 2023, cash and cash equivalents consisted of cash on deposit with banks denominated in U.S.

dollars and investments in money market funds.

As of December 31, 2022, cash and cash equivalents consisted of cash on deposit with banks denominated in U.S.

dollars, investments in money market funds, and CDs maturing within three months of their purchase date.

Restricted Cash

The Company classifies as restricted cash all cash pledged as collateral to secure long-term obligations and all cash whose use is otherwise limited by contractual provisions.

As of December 31, 2023 , restricted cash consisted of $ 0.2 million in funds maintained in a separate deposit account to secure a letter of credit for the benefit of the lessor of the Company’s headquarters lease, and $ 0.1 million in cash balances held as collateral for the Company’s employee credit card program.

There was no restricted cash as of December 31, 2022 .

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024 , restricted cash includes $ 50.0 million maintained in an account that is not subject to the Company’s unilateral control, in accordance with the amended Purchase Agreement, as further disclosed in Note 6.

As of December 31, 2024 and 2023, the Company classified $ 0.2 million in funds maintained in a separate deposit account to secure a letter of credit for the benefit of the lessor of the Company’s headquarters lease, and $ 0.1 million in cash balances held as collateral for the Company’s employee credit card program as restricted cash.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the amounts shown in the consolidated statements of cash flows as of December 31, 2024 and 2023 .

3 unchanged sentences

Restricted cash included in prepaid expenses and other current assets 144 144

Restricted cash included in other long-term assets 209 —

Restricted cash included in long-term assets 50,209 209

Total cash, cash equivalents and restricted cash $ 95,290 $ 80,801

Short-term Investments

The Company classifies its certificates of deposit as cash and cash equivalents or short-term investments and reassesses the appropriateness of the classification of its investments at the end of each reporting period.

Certificates of deposit held for investment with an original maturity greater than three months are carried at amortized cost and reported as short-term investments on the consolidated balance sheets.

The type of certificates of deposit that the Company invests in are not considered debt securities under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 320, Investments - Debt Securities.

As of December 31, 2022, the Company had approximately $ 10.1 million in CDs.

These cash deposits were deposited at a bank that is a member of the Certificate of Deposit Account Registry Service (“CDARS”), in which large deposits are divided into smaller amounts and placed with other Federal Deposit Insurance Corporation (“FDIC”) insured banks which are also members of the CDARS network.

Those members issue CDs in amounts under $250,000, so that the entire deposit balance is eligible for FDIC insurance.

As of December 31, 2022, the Company classified $ 8.0 million of its CDs as cash and cash equivalents and $ 2.1 million of its CDs as short-term investments on its consolidated balance sheets.

The Company did not have any CDs as of December 31, 2023.

Employee Retention Credit

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GAAP for accounting for grants to for-profit business entities, the Company accounted for the grant by applying Accounting Standards Codification (“ASC”) 450, Contingencies .

The Company received an employee retention credit of $ 3.1 million in July 2023, and recognized the credit as income during the second quarter of 2023 after the Company received notices from the Internal Revenue Service, (the “IRS”), specifying the amount of the credit receivable, and all uncertainties were resolved regarding receipt of the credit.

The Company recognized the credit as a component of other income (expense), net on the consolidated statement of operations and comprehensive loss during the year ended December 31, 2023 .

The Company received an employee retention credit of $ 3.1 million in July 2023, and recognized the credit as a component of other income (expense), net on the consolidated statement of operations and comprehensive loss during the second quarter of 2023.

The Company considered the collection of the receivable probable and recognized the credit

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

after the Company received notices from the Internal Revenue Service, (the “IRS”), specifying the amount of the credit receivable and all uncertainties were resolved regarding receipt of the credit.

Revenue Interest Liability

On May 12, 2023, Humacyte, Inc.

and Global entered into a Revenue Interest Purchase Agreement (the “Purchase Agreement”) with the Purchasers and another affiliate of Oberland, as agent for the Purchasers.

The revenue interest liability associated with the Purchase Agreement is presented net of a debt discount comprised of issuance costs, transaction costs, the fair value of a freestanding option agreement related to the Purchase Agreement, and the fair value of embedded derivatives requiring bifurcation on the consolidated balance sheets.

The Company imputes interest expense associated with this liability using the effective interest rate method.

The Company imputes interest expense associated with this liability using the interest method.

The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement.

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If the level and timing of any forecasted net sales and related payments change, the Company will prospectively adjust the effective interest and the related amortization of the liability and related issuance costs on a quarterly basis.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contingent Derivative Liability

The Purchase Agreement contains certain features that meet the definition of embedded derivatives requiring bifurcation as a separate compound financial instrument apart from the Revenue Interest Liability.

The contingent derivative liability related to the Put Option, as defined in Note 6 — Revenue Interest Purchase Agreement, was initially measured at fair value upon issuance and is subject to remeasurement at each reporting period with changes in fair value recognized as other income (expense) in the consolidated statements of operations and comprehensive loss, classified in change in fair value of derivative liabilities.

On April 1, 2023, the Company entered into an Industry Discovery and Development Partnership Agreement with JDRF International (“JDRF,” and such agreement, the “JDRF Agreement”) to further develop and perform preclinical testing of the Company’s Biovascular Pancreas (“BVP”), a product candidate designed to deliver insulin-producing islets using the HAV as a means of treating patients with type 1 diabetes.

According to the terms of the JDRF Agreement, JDRF will provide funding up to $ 0.8 million (“JDRF Award”) based on the achievement of certain research and development milestones related to the BVP.

On April 1, 2023, the Company entered into an Industry Discovery and Development Partnership Agreement with Breakthrough T1D (f/k/a JDRF International) (“JDRF,” and such agreement, the “JDRF Agreement”) to further develop and perform preclinical testing of the Company’s BioVascular Pancreas (“BVP”), a product candidate designed to deliver insulin-producing islets using the ATEV as a means of treating patients with type 1 diabetes.

The JDRF Agreement refers to the total cumulative payments the Company has received from JDRF as of any point in time as the “Actual Award.”

The Company received the first milestone payment of $ 80 thousand in April 2023 upon execution of the JDRF Agreement.

The Company determined that the JDRF Actual Award payments are to be classified as long-term debt under ASC 470, Debt in the consolidated balance sheets.

The JDRF liability related to the Actual Award payments is reported at amortized cost, and as of December 31, 2023 the carrying value is $ 69 thousand and is included in other long-term liabilities in the consolidated balance sheet.

In May 2024, the Company received the second milestone payment of $ 90 thousand and the third milestone payment of $ 150 thousand, based on the achievement of certain research and development milestones specified in the JDRF Agreement.

As of December 31, 2024, the Actual Award totaled $ 320 thousand .

As further disclosed in Note 13, in accordance with the JDRF Agreement the Company has agreed to pay JDRF a one-time royalty, to be paid in three equal installments following the first commercial sale of any product containing the Company’s technology identified in the JDRF Agreement, and an additional royalty equal to the Actual Award after net sales exceed $ 250 million.

In the event of a license, sale or transfer of the Company’s rights to the product’s technology identified in the JDRF Agreement or a change of control transaction, the Company is obligated to pay JDRF a payment equal to 10 % of any license or purchase price payments received by the Company up to an amount equal to four times the Actual Award (the “Royalty Cap”), less any previous royalty payments paid towards the Royalty Cap (the “Disposition Payment”).

The derivative liability related to the Disposition Payment, was initially measured at fair value upon issuance and is subject to remeasurement at each reporting period with changes in fair value recognized as other income (expense) in the consolidated statements of operations and comprehensive loss, classified in change in fair value of derivative liabilities.

Revenue Recognition

The Company’s revenues generally consist of grant revenues, including revenues generated under government and other awarded grants.

Grant Revenue

The Company generates revenue primarily from government and other awarded grants that reimburse the Company for certain allowable costs related to research and development efforts.

In August 2017, the Department of Defense (“DoD”) granted the Company a cash award for work to support human tissue engineered blood vessels for vascular reconstruction in the injured warfighter.

The final amount awarded to the Company totaled $ 6.8 million and the program ended in November 2022.

Based on the terms of the research project award agreement associated with the DoD grant, allowable costs were reimbursed to the Company based on the percentage of completion of project milestones in accordance with milestone payment schedules set forth in the agreement.

During the year ended December 31, 2022, the Company recognized revenue of $ 1.6 million, for reimbursement of certain allowable costs related to this grant.

Revenue related to the DoD grant is included in grant revenue in the Company’s consolidated statements of operations and comprehensive loss.

The Company has determined that the grant was not within the scope of ASC 606 as it did not meet the definition of a contract with a customer.

The Company concluded that the grant met the definition of a contribution and was a nonexchange transaction and applied the contribution accounting model in Subtopic 958-605, Not-for-Profit-Entities-Revenue Recognition by analogy.

The JDRF Agreement expires on the date on which the Company has paid JDRF all of the above mentioned royalty payments.

If the JDRF Agreement is terminated earlier in accordance with its terms, royalties based on previously received milestone payments would remain due after a termination by JDRF without cause.

As the royalties are contractually required to be paid upon achieving these milestones even after the termination of the JDRF Agreement, the Company determined that the JDRF Actual Award payments are to be classified as a liability on the consolidated balance sheets.

The JDRF liability related to the Actual Award payments is reported at amortized cost and is included in other long-term liabilities in the consolidated balance sheets.

The Disposition Payment was determined to meet the definition of an embedded derivative requiring bifurcation and is measured at fair value each reporting period with changes in fair value

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company recognizes funding received from grants as revenue, rather than as a reduction of research and development expenses, because the Company is the principal in conducting the research and development activities and these grants are central to the Company’s ongoing operations.

The Company recognizes revenue only after the qualifying expenses related to the grants have been incurred and it is reasonably assured that the expenses will be reimbursed and the revenue will be collectible.

The related costs incurred are included in research and development expense in the Company’s consolidated statements of operations and comprehensive loss.

Revenue from Customers

Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

ASC 606 also impacts certain other areas, such as the accounting for costs to obtain or fulfill a contract.

In addition, ASC 606 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

For contracts where the period between when the Company transfers a promised good or service to the customer and when the customer pays is one year or less, the Company has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component.

recognized as other income (expense) in the consolidated statements of operations and comprehensive loss, classified in change in fair value of derivatives.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and short-term investments consisting of CDs.

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, including amounts classified as restricted cash.

Total cash balances exceeded insured balances by the FDIC as of December 31, 2024 and 2023.

The Company believes it mitigates this risk by monitoring the financial stability of the institutions holding material cash and cash equivalents balances.

The Company maintains the majority of these balances at a Global Systemically Important Bank, as designated by the Financial Stability Board.

The Company has cash equivalents that are invested in highly rated money market funds that are invested only in obligations of the U.S.

government and its agencies.

During the year ended December 31, 2022 , 100 % of the Company’s total revenue related to the award it received from the DoD in August 2017.

As of December 31, 2022 , 100 % of the Company’s accounts receivable related to the DoD grant.

The Company has not experienced any credit loss relating to its cash and cash equivalents.

Net Loss per Share Attributable to Common Stockholders

Basic net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of potentially dilutive Common Stock.

Basic net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding during the period without consideration of potentially dilutive shares of Common Stock.

Diluted net loss per share attributable to common stockholders reflects the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in the earnings of the Company unless inclusion of such shares would be anti-dilutive.

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Warrants to purchase Common Stock 14,079,314 5,588,506

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The 15,000,000 Contingent Earnout Shares (defined below) are excluded from the anti-dilutive table for all periods presented, as such shares are contingently issuable until the share price of the Company exceeds specified thresholds that have not yet been achieved, or upon the occurrence of a change in control.

The Option Agreement, as defined in Note 6 — Revenue Interest Purchase Agreement, is excluded from the anti-dilutive table for the year ended December 31, 2023 , based on the Company’s assumption that the Option Agreement will not be exercised unless the Company’s stock price exceeds $ 7.50 per share, the minimum purchase price under the Option Agreement.

The Option Agreement, as defined in Note 6 — Revenue Interest Purchase Agreement, is excluded from the anti-dilutive table for the years ended December 31, 2024 and 2023 , based on the Company’s assumption that the Option Agreement will not be exercised unless the Company’s stock price exceeds $ 7.50 per share, the minimum purchase price under the Option Agreement.

Fair Value of Financial Instruments

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• Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• Level 3 — Unobservable inputs in which little or no market data exists, therefore requiring the Company to develop its own assumptions.

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Construction in progress N/A

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impairment of Long-Lived Assets

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Income taxes are computed using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements.

In estimating future tax consequences, the Company considers all expected future events other than enactment of changes in tax laws or rates.

A valuation allowance is recorded, if necessary, to reduce net deferred tax assets to their realizable values if management does not believe it is more likely than not that the net deferred tax assets will be realized.

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The Company accrues for the estimated amount of taxes for uncertain tax positions if it is more likely than not that the Company would be required to pay such additional taxes.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company recognizes the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position.

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Patent costs have been expensed as incurred as general and administrative expense.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Research and Development

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• salaries and related overhead expenses for personnel in research and development functions, including stock-based compensation and benefits;

• fees paid to consultants and CROs, including in connection with clinical trials, and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work and statistical compilation and analysis;

• fees paid to CROs and consultants, including in connection with clinical trials, and other related clinical trial fees, such as for clinical site fees and investigator grants related to patient screening and treatment, conduct of clinical trials, laboratory work and statistical compilation and analysis;

• allocation of facility lease and maintenance costs;

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• license fees related to in-licensed technologies.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accrued Research and Development

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Forfeitures are accounted for as they occur.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common Stock Warrants

Public and Private Placement Warrants

In connection with the Merger, the Company assumed 5,000,000 publicly-traded warrants (“Public Warrants”) and 177,500 private placement warrants issued to AHAC Sponsor LLC (the “Sponsor”), Oppenheimer & Co.

and Northland Securities, Inc, in connection with AHAC’s initial public offering (“Private Placement Warrants” and, together with the Public Warrants, the “Common Stock Warrants”).

The Common Stock Warrants entitle the holder to purchase one share of the Company’s Common Stock, at an exercise price of $ 11.50 per share.

The Common Stock Warrants entitle the holder to purchase one share of Common Stock, at an exercise price of $ 11.50 per share.

The Public Warrants are publicly traded and are exercisable for cash unless certain conditions occur, such as the failure to have an effective registration statement related to the shares issuable upon exercise or redemption by the Company under certain conditions, at which time the warrants may be eligible for a cashless exercise.

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As such, the Common Stock Warrants were not classified as liabilities under FASB ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”).

The Company then evaluated the Common Stock Warrants under FASB ASC Topic 815, Derivatives and Hedging .

The Company then evaluated the Common Stock Warrants under FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”).

The agreement governing the Common Stock Warrants includes a provision (“Replacement of Securities Upon Reorganization”), the application of which could result in a different settlement value for the Private Placement Warrants depending on their holder.

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As the Private Placement Warrants meet the definition of a derivative, the Company recorded these warrants as liabilities on the consolidated balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Public Warrants are considered to be “indexed to the Company’s own stock”.

The agreement provides that in the event of a tender or exchange offer made to and accepted by holders of more than 50 % of the outstanding shares of the Company’s common shares, all holders of the Common Stock Warrants (both the Public Warrants and the Private Placement Warrants) would be entitled to receive cash for all of their Common Stock Warrants.

As the Company has a single class of common stock, a qualifying cash tender offer of more than 50 % of the Company’s common stock will always result in a change-in-control and would not preclude permanent equity classification of the Public Warrants.

The agreement provides that in the event of a tender or exchange offer made to and accepted by holders of more than 50 % of the outstanding shares of Common Stock, all holders of the Common Stock Warrants (both the Public Warrants and the Private Placement Warrants) would be entitled to receive cash for all of their Common Stock Warrants.

As the Company has a single class of common stock, a qualifying cash tender offer of more than 50 % of the shares of Common Stock will always result in a change-in-control and would not preclude permanent equity classification of the Public Warrants.

Based on this evaluation, the Company concluded that the Public Warrants meet the criteria to be classified within stockholders’ equity.

Registered Direct Offering Warrants

As further disclosed in Note 9, in October 2024, the Company completed a registered direct offering whereby Common Stock warrants were issued to purchase up to 5,681,820 shares of Common Stock (the “October 2024 RDO Warrants”).

In November 2024, the Company completed a registered direct offering whereby Common Stock warrants were issued to purchase up to 2,808,988 shares of Common Stock of the Company, (the “November 2024 RDO Warrants”).

Together the October 2024 RDO Warrants and the November 2024 RDO Warrants are referred to as the “Registered Direct Offering Warrants”).

The Company evaluated the Registered Direct Offering Warrants to determine the appropriate financial statement classification upon issuance.

The Registered Direct Offering Warrants are not mandatorily redeemable and are considered to be freestanding instruments as they are separately exercisable into common shares.

The Company is not required to transfer assets to settle the warrants, except potentially as a result of a fundamental transaction (defined in the agreement to include various merger and change in control transactions).

As such, the Registered Direct Offering Warrants were not classified as liabilities under ASC 480.

The Company then evaluated the Registered Direct Offering Warrants under ASC 815.

The agreements governing the Registered Direct Offering Warrants include a provision, the application of which could result in a different settlement value for the warrants.

T he Warrants cannot be exercised if after the exercise the warrant holder would own more than 4.99 % of the Company’s outstanding Common Stock (“Beneficial Ownership Limitation”).

The holder may elect to increase the Beneficial Ownership Limitation to 9.99 %.

The Beneficial Ownership Limitation constitutes an exercise contingency in that it limits or defers the exercise of some of the Registered Direct Offering Warrants if the limitation would otherwise be reached, depending on the number of shares of Common Stock that are outstanding.

The exercise contingency is not based on either an observable market or an observable index, so it does not preclude the Warrants from being considered indexed to the Company’s own stock.

In the event of a fundamental transaction, if the warrant holder elects to have the Company repurchase the warrant, the Black-Scholes value of the warrant is calculated with adjustments to the stock price and volatility of the shares on the market.

These are not standard adjustments in determining the fair value of an option.

As the volatility adjustment provision violates the fixed-for-fixed rule, the Registered Direct Offering Warrants are not considered to be “indexed to the Company’s own stock” and therefore are not classified in stockholders’ equity.

As the Registered Direct Offering Warrants meet the definition of a derivative, the Company recorded these warrants as liabilities on the consolidated balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date.

Contingent Earnout Liability

Pursuant to the Merger Agreement, following the closing of the Merger (the “Closing”), Legacy Humacyte equity holders are entitled to receive additional merger consideration of up to 15,000,000 shares of the Company’s Common Stock (the “Contingent Earnout Shares”), comprised of two separate tranches of 7,500,000 shares per tranche, for no consideration upon the occurrence of certain triggering events, including a change of control event that is not solely indexed to the Common Stock.

Pursuant to the Merger Agreement, following the closing of the Merger (the “Closing”), Legacy Humacyte equity holders are entitled to receive additional merger consideration of up to 15,000,000 additional shares of Common Stock (the “Contingent Earnout Shares”), comprised of two separate tranches of 7,500,000 shares per tranche, for no consideration upon the occurrence of certain triggering events, including a change of control event that is not solely indexed to the Common Stock.

In accordance with ASC 815-40, as the earnout shares were not indexed to the common stock, they were accounted for as a liability (“Contingent Earnout Liability”) at the Reverse Recapitalization date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of other income (expense), net in the consolidated statements of operations and comprehensive loss.

The estimated fair value of the Contingent Earnout Liability was determined using a Monte Carlo simulation using a distribution of potential outcomes on a monthly basis over a 10 -year period prioritizing the most reliable information available.

The assumptions utilized in the calculation were based on the achievement of certain stock price milestones, including the current Common Stock price, expected volatility, risk-free rate, expected term and expected dividend yield.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Contingent Earnout Shares are categorized as a Level 3 fair value measurement (see “Fair Value of Financial Instruments” accounting policy described above) because the Company estimated projections over a 10 -year period utilizing unobservable inputs.

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The Company determines if an arrangement is or contains a lease and the classification of that lease at inception of a contract.

The Company’s operating lease assets are included in “other long-term assets”, and the current and non-current portions of the operating lease liabilities are included in “operating lease obligation, current portion”, and “other long-term liabilities”, respectively, on the balance sheets.

The Company’s operating lease assets are included in “other long-term assets”, and the current and non-current portions of the operating lease liabilities are included in “other current liabilities”, and “other long-term liabilities”, respectively, on the consolidated balance sheets.

The Company’s finance lease assets are included in “finance lease right-of-use assets, net”, and the current and non-current portions of the finance lease liabilities are included in “finance lease obligation, current portion”, and “finance lease obligation, net of current portion”, respectively, on the consolidated balance sheets.

Under this guidance, arrangements meeting the definition of a lease are classified as operating or finance leases, and are recorded on the balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate.

Under this guidance, arrangements meeting the definition of a lease are classified as operating or finance leases, and are recorded on the consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate.

Lease right-of-use assets and lease obligations are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

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Other Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, successful discovery and development of its product candidates, the success of clinical trials and other studies for its product candidates, including its V005 Phase 2/3 clinical trial and ongoing V007 Phase 3 clinical trial, the regulatory approval and commercialization of its HAVs and other product candidates, the expected size of the target populations for the Company’s product candidates, the degree of market acceptance of the HAVs, if approved, the availability of third-party coverage and reimbursement, development by competitors of new technological innovations, the ability to manufacture HAVs and other product candidates in sufficient quantities, expectations regarding the Company’s strategic partnerships, dependence on third parties, key personnel and the ability to attract and retain qualified employees, protection of proprietary technology and confidentiality of trade secrets, compliance with governmental regulations, the Company’s implementation and maintenance of effective internal controls, and the ability to secure additional capital to fund operations and the commercial success of its product candidates.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, successful discovery and development of its product candidates, the success of clinical trials and other studies for its product candidates, including its ongoing V007 and V012 Phase 3 clinical trials, successful commercialization of Symvess and regulatory approval and commercialization of its product candidates, if approved, the expected size of the target populations for the Company’s product candidates, the degree of market acceptance of Symvess, and if approved by regulatory authorities, our product candidates, the availability of third-party coverage and reimbursement, development by competitors of new technological innovations, the ability to manufacture Symvess and its product candidates in sufficient quantities, expectations regarding the Company’s strategic partnerships, dependence on third parties, key personnel and the ability to attract and retain qualified employees, protection of proprietary technology and confidentiality of trade secrets, compliance with governmental regulations, the Company’s implementation and

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

maintenance of effective internal controls, and the ability to secure additional capital to fund operations and the commercial success of its product candidates.

Product candidates currently under development will require extensive preclinical and clinical testing and regulatory approval prior to commercialization.

These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities.

Even if the Company’s commercialization efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales, and the Company may depend on certain strategic relationships to distribute its products, including the Company’s strategic partnership with Fresenius Medical Care to sell, market and distribute its 6 millimeter HAV for certain specified indications outside the United States.

Even if the Company’s commercialization efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales, and the Company may depend on certain strategic relationships to distribute its products, including the Company’s strategic partnership with Fresenius Medical Care to sell, market and distribute its 6 millimeter ATEV for certain specified indications outside the United States.

Recently Adopted Accounting Pronouncements

The Company did not adopt any new standards or updates issued by the FASB during the year ended December 31, 2023 that had a material impact on the Company’s consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No.

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This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

Entities should apply the amendments retrospectively to all prior periods presented in the financial statements.

This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and subsequent interim periods.

The Company is currently evaluating the impact of adopting ASU 2023-07 on its disclosures included in the notes to the consolidated financial statements.

The Company adopted ASU 2023-07 effective December 31, 2024 on a retrospective basis.

The adoption of ASU 2023-07 did not change the way the Company identifies its reportable segments.

The adoption had no impact on the consolidated financial statements, but it resulted in incremental disclosures within the Company’s notes to the consolidated financial statements.

See the “Segments” section above for further information.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No.

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The FASB issued this update to improve the transparency and comparability of income tax disclosures, including requiring consistent categories and greater disaggregation of information in the rate reconciliation and further disaggregation of income taxes paid by jurisdiction.

This standard is effective for fiscal years beginning after December 15, 2024, with early adoption is permitted.

This standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

Entities should apply the amendments prospectively, with retrospective application permitted.

This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

This ASU is applicable to the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2025.

The Company is currently evaluating the impact of adopting ASU 2023-09 on its disclosures included in the notes to the consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses (“ASU 2024-03”).

In January 2025, the FASB issued ASU No.

2025-01, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40), Clarifying the Effective Date (“ASU 2025-01”).

ASU 2024-03 requires additional disclosure about the nature and amounts of expenses included in certain expense captions presented on the income statement to enhance the transparency of the relevant expense captions.

ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

Entities may elect to apply the amendments either prospectively or retrospectively.

The Company is currently evaluating the impact of adopting ASU 2024-03 on its disclosures included in the notes to the consolidated financial statements.

HUMACYTE, INC.

NOTES TO FINANCIAL STATEMENTS

Fair Value Measurements

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Cash equivalents (money market funds) $ 32,044 $ — $ — $ 32,044

Common Stock Purchase Agreement derivative asset — 672 — 672

Total financial assets $ 32,044 $ 672 $ — $ 32,716

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Private Placement Warrants liability — — 385 385

October 2024 RDO Warrants liability — — 12,437 12,437

November 2024 RDO Warrants liability — — 6,432 6,432

Option Agreement liability — — 64 64

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Total financial liabilities $ — $ — $ 92,815 $ 92,815

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measured as of December 31, 2023

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Cash equivalents (money market funds) $ 78,995 $ — $ — $ 78,995

Cash equivalents (certificates of deposit) — 8,000 — 8,000

Short-term investments (certificates of deposit) — 2,107 — 2,107

Total financial assets $ 78,995 $ — $ — $ 78,995

Contingent Earnout Liability $ — $ — $ 37,916 $ 37,916

Contingent derivative liability — — 2,636 2,636

Private Placement Warrants liability — — 78 78

Option Agreement liability — — 35 35

JDRF Agreement derivative liability — — 28 28

Total financial liabilities $ — $ — $ 40,693 $ 40,693

The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

Certificates of deposit were carried at amortized cost in the Company’s consolidated balance sheets, which approximated their fair value based on Level 2 inputs.

The carrying values of other receivables, accounts payable and accrued expenses as of December 31, 2023 and 2022 approximated their fair values due to the short-term nature of these items.

The fair value of the Contingent Earnout Liability, Private Placement Warrants liability, Contingent derivative liability related to the Put Option (as defined in Note 6 — Revenue Interest Purchase Agreement and discussed below), Option Agreement liability (as defined in Note 6 — Revenue Interest Purchase Agreement), and the derivative liability associated with the JDRF Agreement Disposition Payment are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

The fair values of the Private Placement Warrants liability, the Option Agreement liability and the derivative liability associated with the JDRF Agreement Disposition Payment, are included in other long-term liabilities on the consolidated balance sheets.

The carrying values of cash, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities as of December 31, 2024 and 2023 approximated their fair values due to the short-term nature of these items.

The fair value of the Contingent Earnout Liability, contingent derivative liability related to the Put Option (as defined in Note 6 — Revenue Interest Purchase Agreement and discussed below), Private Placement Warrants liability, liabilities associated with the Registered Direct Offering Warrants (as defined in Note 9 — Stockholders’ Equity (Deficit) and Warrants), Option Agreement liability (as defined in Note 6 — Revenue Interest Purchase Agreement), and the derivative liability associated with the JDRF Agreement Disposition Payment are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

The fair values of the Private Placement Warrants liability and the liabilities associated with the Registered Direct Offering Warrants are included in common stock warrant liabilities on the consolidated balance sheets.

The fair values of the Option Agreement liability and the derivative liability associated with the JDRF Agreement Disposition Payment are included in other long-term liabilities on the consolidated balance sheets.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common Stock Purchase Agreement

The Company evaluated the Common Stock Purchase Agreement and determined that the agreement should be accounted for in accordance with ASC 815-40, “ Derivatives and Hedging — Contracts on an Entity’s Own Equity”.

Accordingly, the Company recorded a derivative asset with an initial fair value based on the 115,705 shares of Common Stock issued to Lincoln Park as consideration for its irrevocable commitment to purchase up to $ 50.0 million in shares of Common Stock.

The initial fair value of $ 0.7 million was based on the closing price of the Common Stock on September 24, 2024, which was $ 6.12 per share, and the derivative asset is reported as a component of long-term assets on the consolidated balance sheets.

Subsequent changes in the fair value of the derivative asset are dependent upon, among other things, changes in the closing share price of Common Stock, the quantity and purchase price of the shares purchased by Lincoln Park during the reporting period and the unused capacity under the Common Stock Purchase Agreement.

The Common Stock Purchase Agreement is subsequently remeasured at each reporting date with changes in fair value recorded within Change in fair value of derivatives in the consolidated statements of operations and comprehensive loss.

The change in fair value of the derivative asset between the September 24, 2024 issuance date and December 31, 2024 was insignificant.

Contingent Earnout Liability

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In determining the fair value of the Contingent Earnout Liability, the Company used the Monte Carlo simulation value model using a distribution of potential outcomes on a monthly basis over a 10 -year period prioritizing the most reliable information available.

Contingent earnout payments involve certain assumptions requiring significant judgment and actual results can differ from assumed and estimated amounts.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Private Placement Warrants Liability

The following table presents a summary of the changes in the fair value of the Private Placement Warrants liability:

Private Placement Warrants

Year Ended December 31,

($ in thousands) 2023 2022

Fair value as of beginning of period $ ( 80 ) $ ( 497 )

Change in fair value included in other income (expense), net 2 417

Fair value as of end of period $ ( 78 ) $ ( 80 )

In determining the fair value of the Private Placement Warrants liability, the Company used the Monte Carlo simulation valuation model to estimate the fair value utilizing assumptions including the current Company stock price, expected volatility, risk-free rate, expected term and expected dividend yield (see Note 9 — Stockholders’ Equity).

Derivative liabilities

Contingent Derivative Liability

The debt pursuant to the Purchase Agreement contains an embedded derivative related to the Put Option, as defined in Note 6, requiring bifurcation as a single compound derivative instrument.

The debt pursuant to the Purchase Agreement, as defined in Note 6, contains an embedded derivative related to the Put Option, as defined in Note 6, requiring bifurcation as a single compound derivative instrument.

The Company estimated the fair value of the derivative liability using a “with-and-without” methodology.

The “with-and-without” methodology involves valuing the whole instrument on an as-is basis and then valuing the instrument without the individual embedded derivative.

The difference between the entire instrument with the embedded derivative compared to the instrument without the embedded derivative was the fair value of the derivative liability at May 12, 2023 and December 31, 2023 .

In determining the fair value of the contingent derivative liability, the Company used the Monte Carlo simulation value model using a distribution of potential outcomes on a monthly basis over a 10 -year period.

The estimated probability and timing of underlying events triggering the exercisability of the Put Option contained within the Purchase Agreement, forecasted cash flows and the discount rates are significant unobservable inputs used to determine the estimated fair value of the entire instrument with the embedded derivative.

As of May 12, 2023, the discount rates used to calculate the value of the contingent derivative liability were 12.7 % to calculate the present-value of the revenue forecast and 12.1 % to calculate the present-value of the payoff of the Put Option.

As of December 31, 2024 , the discount rates used to calculate the value of the contingent derivative liability were 14.2 % to calculate the present-value of the revenue forecast and 11.8 % to calculate the present-value of the payoff of the Put Option.

As of December 31, 2023 , the discount rates used to calculate the value of the contingent derivative liability were 14.5 % to calculate the present-value of the revenue forecast and 17.1 % to calculate the present-value of the payoff of the Put Option.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents a summary of the changes in the fair value of the contingent derivative liability, which is classified as a Level 3 financial instrument:

($ in thousands) Year Ended

December 31, 2023

Contingent Derivative Liability

Year Ended December 31,

($ in thousands) 2024 2023

Fair value as of beginning of period $ ( 2,636 ) $ —

Initial fair value of contingent derivative liability ( 2,354 )

Fair value of embedded derivative upon issuance of debt ( 1,552 ) ( 2,354 )

Change in fair value included in other income (expense), net 1,773 ( 282 )

Fair value as of end of period $ ( 2,415 ) $ ( 2,636 )

Registered Direct Offering Warrants Liabilities

The following table presents a summary of the changes in the fair value of the Registered Direct Offering Warrants liabilities during the year ended December 31, 2024:

($ in thousands) October 2024 RDO Warrants November 2024 RDO Warrants

Fair value as of beginning of period $ — $ —

Issuances ( 15,249 ) ( 6,132 )

Change in fair value included in other income (expense), net 2,812 ( 300 )

Fair value as of end of period $ ( 12,437 ) $ ( 6,432 )

In determining the fair value of the Registered Direct Offering Warrants liabilities, the Company used the Black-Scholes valuation model to estimate the fair value utilizing assumptions including the current Company stock price, expected volatility, risk-free rate, expected term and expected dividend yield (see Note 9 — Stockholders’ Equity (Deficit) and Warrants ).

Private Placement Warrants Liability

The following table presents a summary of the changes in the fair value of the Private Placement Warrants liability:

Private Placement Warrants

Year Ended December 31,

($ in thousands) 2024 2023

Fair value as of beginning of period $ ( 78 ) $ ( 80 )

Change in fair value included in other income (expense), net ( 307 ) 2

Fair value as of end of period $ ( 385 ) $ ( 78 )

HUMACYTE, INC.

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Property and Equipment, Net

Property and equipment, net consist of the following:

Property and equipment, net consisted of the following:

As of December 31,

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27,901 27,844

Construction in progress — 680

59,150 58,117

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Revenue Interest Purchase Agreement

On May 12, 2023, Humacyte, Inc.

and Global entered into the Purchase Agreement with the Purchasers and another affiliate of Oberland, as agent for the Purchasers, to obtain financing with respect to the further development and commercialization of the Company’s HAV, to repay the Company’s credit facility with SVB, and for other general corporate purposes.

Pursuant to the Purchase Agreement, on May 12, 2023, the Purchasers purchased certain revenue interests (the “Revenue Interests”) from Global in exchange for an aggregate investment amount of up to $ 150.0 million (the “Investment Amount”).

On May 12, 2023, the Company received an initial payment of $ 40.0 million , less certain transaction expenses, which was used to repay in full the Company’s then-existing obligations under the Loan Agreement, as defined in Note 7 — Debt.

The Company will also be entitled to receive up to approximately $ 110.0 million in subsequent installments subject to the terms and conditions set forth in the Purchase Agreement, as follows:

(i) $ 20.0 million upon the Company’s BLA for an indication in vascular trauma being accepted on or prior to March 31, 2024, (ii) $ 40.0 million , at the Company’s option, upon the Company receiving FDA approval of the HAV for the vascular trauma indication on or prior to December 31, 2024 and (iii) $ 50.0 million , at the Company’s option, upon reaching $ 35.0 million trailing worldwide three-month net sales any time prior to December 31, 2025.

Each tranche is dependent on the satisfaction of the conditions and receipt of funds from the previous tranche.

On May 12, 2023, the Company and Global entered into the Purchase Agreement with the Purchasers and another affiliate of Oberland, as agent for the Purchasers, to obtain financing with respect to the further development and commercialization of the Company’s ATEV , to repay the Company’s then-existing credit facility with SVB, and for other general corporate purposes.

In February 2024, the FDA accepted the Company’s BLA for an indication in vascular trauma, and in accordance with the Purchase Agreement, on March 11, 2024, the Company received a subsequent installment of $ 20.0 million.

In accordance with the amended Purchase Agreement, the Company was entitled to receive up to $ 90.0 million in subsequent installments subject to the terms and conditions set forth in the Purchase Agreement, as follows:

(i) $ 40.0 million, at the Company’s option, upon the Company receiving FDA approval of the ATEV for the vascular trauma indication on or prior to December 31, 2024 and (ii) $ 50.0 million, at the Company’s option, upon reaching $ 35.0 million trailing worldwide three-month net sales any time prior to December 31, 2025.

Each tranche was dependent on the satisfaction of the conditions and receipt of funds from the previous tranche.

The FDA granted full approval for the Company’s BLA on December 19, 2024, and as of December 31, 2024, the Company did not elect to draw the additional $ 40.0 million that became available under the Purchase Agreement.

As of December 31, 2024, the Company is not entitled to draw on any further installments under the Purchase Agreement.

HUMACYTE, INC.

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Global’s obligation to make Revenue Interest Payments terminates on the date on which the Purchasers have received Revenue Interest Payments of 150 % of the Cumulative Purchaser Payments unless the Purchase Agreement is terminated earlier due to the Purchaser’s exercise of a Put Option, the Company’s exercise of a call option, or by mutual consent.

However, if the Purchasers have not received such Revenue Interest Payments as of such date, the Purchase Agreement will instead terminate on the date on which the Purchasers receive Revenue Interest Payments of 195 % of the Cumulative Purchaser Payments.

However, if the Purchasers have not received such Revenue Interest Payments as of the Test Date, the Purchase Agreement will instead terminate on the date on which the Purchasers receive Revenue Interest Payments of 195 % of the Cumulative Purchaser Payments.

Under the Purchase Agreement, Global has an option (the “Call Option”) to repurchase the Revenue Interests and terminate the Purchase Agreement at any time upon advance written notice.

Additionally, the Purchasers have an option (the “Put Option”) to terminate the Purchase Agreement and to require Global to repurchase the Revenue Interests upon enumerated events such as a bankruptcy event, an uncured material breach, a material adverse effect or a change of control.

If the Put Option is exercised prior to August 12, 2024 by the Purchasers (except pursuant to a change of control), the required repurchase price will be 125 % of the Cumulative Purchaser Payments (minus the aggregate Revenue Interest payments Global has made to the Purchasers as of such date).

If (i) the Put Option is exercised on or prior to August 12, 2024 by the Purchasers after the occurrence of a change of control, (ii) the Put Option is exercised after August 12, 2024 until May 12, 2026, or (iii) the Call Option is exercised on or prior to May 12, 2026, then in each case, the required repurchase price will be 175 % of the Cumulative Purchaser Payments (minus the aggregate Revenue Interest Payments Global has made to the Purchasers as of such date).

If (i) the Put Option is exercised by May 12, 2026, or (ii) the Call Option is exercised on or prior to May 12, 2026, then in each case, the required repurchase price will be 175 % of the Cumulative Purchaser Payments (minus the aggregate Revenue Interest Payments Global has made to the Purchasers as of such date).

If a Put Option or Call Option is exercised after May 12, 2026, the required repurchase price will be 195 % of the Cumulative Purchaser Payments (minus the aggregate Revenue Interest Payments Global has made to the Purchasers as of such date).

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The Purchase Agreement also contains customary negative covenants, including certain restrictions on the ability to incur indebtedness and grant liens or security interests on assets.

On February 18, 2024, the Company agreed with the Purchasers and the Agent, to waive certain breaches related to, and extend the deadline for certain post-closing obligations under, the Purchase Agreement, including the requirement for a leasehold mortgage over the Company’s headquarters.

Giving effect to the extension and waiver, the Company is obligated to deliver by no later than April 30, 2024 (or such later date as the Agent may agree in its sole discretion), an executed leasehold mortgage (or alternative documentation satisfactory to the Agent in its sole discretion) over the Company’s headquarters.

Concurrently with such agreement, the Company delivered a request that the Purchasers fund the second payment under the Purchase Agreement in an aggregate amount equal to $ 20.0 million, which was funded on March 11, 2024.

On May 8, 2024, the Company agreed with the Purchasers to amend the Purchase Agreement, the effect of which was to remove requirements related to the leasehold mortgage.

In exchange for the removal of these requirements, the Company funded an account in an amount of $ 54.0 million on August 14, 2024, over which the Agent has certain consent and other rights to $ 50.0 million of the funds.

As of December 31, 2024, the $ 50.0 million was classified as restricted cash on the accompanying consolidated balance sheets.

The Company has provided a parent company guaranty to guarantee the payment in full of the obligations under the Purchase Agreement.

The Company’s obligations under the parent company guaranty and Global’s obligations under the Purchase Agreement and the Revenue Interests are secured by a perfected security interest on substantially all of the Company’s and Global’s assets.

The Purchase Agreement is considered a sale of future revenues and accounted for as long-term debt recorded at amortized cost using the effective interest rate method.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2023 , $ 38.6 million was recorded as a revenue interest liability on the accompanying consolidated balance sheets (net of transaction costs, the fair value allocated to the Option Agreement and the fair value of the bifurcated contingent derivative liability).

The Purchase Agreement is considered a sale of future revenues and accounted for as long-term debt recorded at amortized cost using the interest method.

The Company recorded a revenue interest liability related to the Purchase Agreement on the accompanying consolidated balance sheet on the date the Company entered into the Purchase Agreement, net of a debt discount comprised of $ 2.1 million issuance costs and of transaction costs, the $ 0.1 million fair value allocated to the Option Agreement, defined below, and the $ 2.4 million initial fair value of the bifurcated contingent derivative liability related to the Put Option.

The revenue interest liability is based on the Company’s contractual repayment obligation to the Purchasers, based on the current estimates of future revenues, over the life of the Purchase Agreement.

The Company imputes interest expense associated with this liability using the effective interest rate method.

The Company imputes interest expense associated with this liability using the interest method.

The effective interest rate is calculated based on the rate that would enable the debt to be repaid in full over the anticipated life of the arrangement.

The interest rate on this liability may vary during the term of the agreement depending on a number of factors, including the level and expected timing of forecasted net sales.

The estimated effective annual interest rate as of December 31, 2023 was 14.1 %.

The interest rate on this liability

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

may vary during the term of the agreement depending on a number of factors, including the level and expected timing of forecasted net sales.

The Company evaluates the interest rate quarterly based on its current net sales forecasts.

The Company recorded $ 3.1 million in interest expense related to the Purchase Agreement for the year ended December 31, 2023 .

If the level and timing of any forecasted net sales and related payments change, the Company prospectively adjusts the effective interest and the related amortization of the liability and related issuance costs on a quarterly basis.

As of December 31, 2024 and 2023, $ 64.2 million and $ 38.6 million, respectively, was recorded as a revenue interest liability.

As of December 31, 2024, $ 0.9 million of the revenue interest liability was included in other current liabilities on the consolidated balance sheet.

The estimated effective annual interest rate as of December 31, 2024 and 2023 was 13.7 % and 14.1 %, respectively.

The Company recorded $ 7.7 million and $ 3.1 million in interest expense related to the Purchase Agreement for the years ended December 31, 2024 and 2023, respectively .

The Company incurred and paid $ 0.5 million of transaction costs during the year ended December 31, 2024 in connection with the Purchase Agreement.

The transaction costs were capitalized to debt discount and are being amortized to interest expense over the estimated term of the debt, consistent with the issuance and transaction costs incurred in 2023 discussed above.

The Put Option under the Purchase Agreement that is exercisable by the Purchasers upon certain contingent events was determined to be an embedded derivative requiring bifurcation and separately accounted for as a single compound derivative instrument.

The Company recorded the initial fair value of the derivative liability of $ 2.4 million as a debt discount, which is being amortized to interest expense over the expected term of the debt using the effective interest method.

At May 12, 2023, the Company recorded the initial fair value of the derivative liability of $ 2.4 million as a debt discount.

On March 11, 2024, upon the issuance of the second installment of the Purchase Agreement of $ 20.0 million , the Company estimated the fair value of the embedded derivative and recorded a $ 1.6 million increase in fair value as a debt discount.

The debt discount is being amortized to interest expense over the expected term of the debt using the interest method.

See Note 3 — Fair Value Measurements for a further discussion of the fair value of the contingent derivative liability associated with the Put Option.

For the year ended December 31, 2023 , the Company incurred and paid $ 2.1 million of issuance and transaction costs in connection with the Purchase Agreement.

The issuance and transaction costs were capitalized to debt discount and are being amortized to interest expense over the estimated term of the debt.

Revenue Interest Payments made as a result of the Company’s net product sales will reduce the revenue interest liability.

During the year ended December 31, 2023 , the Company did not record any product sales revenue.

During the years ended December 31, 2024 and 2023 , the Company did not record any product sales revenue.

The following table summarizes the revenue interest liability activity during the year ended December 31, 2024 :

($ in thousands)

Revenue interest liability at inception $ —

Proceeds from revenue interest purchase agreement, gross 40,000

Less issuance costs ( 623 )

Proceeds from revenue interest purchase agreement, net 39,377

Revenue interest liability at December 31, 2023

Proceeds from revenue interest purchase agreement 20,000

Transaction costs paid ( 500 )

Debt discount from embedded contingent derivative liability ( 1,552 )

Debt discount from fair value of Option Agreement ( 55 )

Interest expense recognized 7,691

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Option Agreement

In connection with the Purchase Agreement, the Company also entered into an option agreement with TPC Investments III LP and TPC Investment Solutions LP (the “Option Agreement”), which gives TPC Investments III LP and TPC Investment Solutions LP (the “Holders”) the right to purchase, in the aggregate, up to $ 10.0 million worth of shares of common stock of the Company (the “Option”) at a purchase price per share equal to the greater of $ 7.50 , or the 15 day volume-weighted average price as of the exercise date, exercisable in cash only at any time prior to the earlier of (i) December 31, 2026 and (ii) the closing date of a corporate reorganization.

In connection with the Purchase Agreement, the Company also entered into an option agreement with TPC Investments III LP and TPC Investment Solutions LP (the “Option Agreement”), which gave TPC Investments III LP and TPC Investment Solutions LP (the “Holders”) the right to purchase, in the aggregate, up to $ 10.0 million worth of shares of Common Stock (the “Option”) at a purchase price per share equal to the greater of $ 7.50 , or the 15 day volume-weighted average price as of the exercise date, exercisable in cash only at any time prior to the earlier of (i) December 31, 2026 and (ii) the closing date of a corporate reorganization.

The Holders also received certain registration rights relating to the shares underlying the Option pursuant to the Option Agreement.

The Holders purchased $ 1,950,000 shares of Common Stock in the Offering, as defined in Note 9, and as of December 31, 2024, the Holders have the right to purchase up to $ 8,050,000 of shares of Common Stock under the Option Agreement.

The Option granted to the Holders represents a freestanding instrument separate from the purchaser commitments outlined in the Purchase Agreement.

The Option Agreement does not qualify for the equity contract scope exception under ASC 815-40 and the Company recorded the Option as a liability (“Option Agreement liability”) on the consolidated balance sheet at an initial fair value of $ 55 thousand, and subsequent changes in the fair value are recognized in the consolidated statements of operations and comprehensive loss at each reporting date.

The fair value of the Option Agreement liability as of December 31, 2024 and 2023 was $ 64 thousand and $ 35 thousand, respectively.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Option granted to the Holders represents a freestanding instrument separate from the purchaser commitments outlined in the Purchase Agreement.

The Option Agreement does not qualify for the equity contract scope exception under ASC 815-40 and the Company recorded the Option as a liability (“Option Agreement liability”) on the consolidated balance sheet at an initial fair value of $ 55 thousand, with subsequent changes in fair value recognized in the consolidated statements of operations and comprehensive loss at each reporting date.

The fair value of the Option Agreement liability as of December 31, 2023 was $ 35 thousand.

Pursuant to the Purchase Agreement, on May 12, 2023, $ 40.0 million , less certain transaction expenses, was funded to the Company, which was used to repay in full the Company’s existing obligations under its term loan agreement with SVB and SVB Innovation Credit Fund VIII, L.P., entered into on March 30, 2021, as amended in June 2021 and September 2021 (the “Loan Agreement”).

The Loan Agreement provided a term loan facility in tranches of up to $ 50.0 million with a maturity date of March 1, 2025.

The initial term loan tranche of $ 20.0 million was drawn on March 31, 2021, and on October 13, 2021, the Company borrowed an additional $ 10.0 million under the Loan Agreement.

In connection with the Loan Agreement, the Company granted warrants to the lenders to purchase shares of Common Stock at an exercise price of $ 10.28 per share, of which 287,704 warrants were immediately exercisable.

The warrants were classified within stockholders’ equity, as the settlement of the warrants is indexed to the Common Stock.

The Company recognized the fair value of the warrants immediately exercisable within stockholders’ equity using a Black-Scholes valuation model at issuance.

At issuance, the Company initially determined that the funding of an additional tranche was not probable, and therefore no value was ascribed to the remaining 123,302 warrants that were only exercisable upon the funding of the first additional tranche.

As a result of the Company’s additional $ 10.0 million borrowings under the Loan Agreement on October 13, 2021, the warrants to purchase the additional 123,302 shares of Common Stock became exercisable at an exercise price of $ 10.28 per share and the value of the warrants was recorded as of that date.

The additional warrants were classified within stockholders’ equity using a Black-Scholes valuation model, as the settlement of the warrants is indexed to the Common Stock.

The fair value of warrants ($ 3.3 million), a 5 % final payment fee ($ 1.5 million) and debt issuance costs ($ 0.3 million) were being accreted to interest expense over the term of the loan using the effective interest method.

In connection with the termination of the Loan Agreement, the Company paid a prepayment premium of $ 0.3 million and recorded a loss on extinguishment of debt of $ 2.4 million during the year ended December 31, 2023 in other income (expense), net in the consolidated statements of operations and comprehensive loss.

The loss on extinguishment of debt consists of the prepayment premium, the unamortized debt discount and issuance costs and the unaccreted final payment fee.

The Company’s finance lease relates to its headquarters, which was substantially completed in June 2018 and is being leased through May 2033, and its operating lease relates to the land lease associated with its headquarters.

At December 31, 2023 and 2022, the Company had finance lease liabilities of $ 18.9 million and $ 21.1 million, respectively, and right-of-use assets of $ 17.3 million and $ 19.4 million, respectively, and operating lease liabilities of $ 0.6 million and $ 0.7 million, respectively, and right-of-use assets of $ 0.6 million and $ 0.7 million, respectively, all of which were included in the consolidated balance sheets.

The Company’s finance leases relate to its headquarters, which was substantially completed in June 2018 and is being leased through May 2033, and its operating lease relates to the land lease associated with its headquarters.

As of December 31, 2024 and 2023, the Company had finance lease liabilities of $ 16.5 million and $ 18.9 million, respectively, and right-of-use assets of $ 15.5 million and $ 17.3 million, respectively.

As of both December 31, 2024 and 2023, the Company had operating lease liabilities of $ 0.6 million and right-of-use assets of $ 0.6 million.

As of December 31, 2024 and 2023, operating lease right-of-use assets are included in other long-term assets on the consolidated balance sheets.

As of both December 31, 2023 and 2022, approximately $ 0.6 million of the operating lease liabilities is included in other long-term liabilities on the consolidated balance sheets, and the remaining balance is classified in operating lease obligation, current portion on the consolidated balance sheets.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024 and 2023, approximately $ 0.5 million and $ 0.6 million , respectively, of the operating lease liabilities is included in other long-term liabilities on the consolidated balance sheets, and the remaining balance is classified in other current liabilities on the consolidated balance sheets.

The Company’s leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.

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Weighted-average discount rate 8.50 % 8.50 % 8.50 % 8.50 %

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024, the maturities of the Company’s lease liabilities were as follows:

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$ 16,537 $ 579

Stockholders’ Equity

On August 26, 2021, the Merger and related PIPE Financing was consummated and the Company issued 27,346,449 shares of Common Stock for proceeds of $ 242.4 million.

The Company incurred $ 3.9 million of transaction costs, consisting of banking, legal, and other professional fees.

Legacy Humacyte assumed $ 15.2 million of liabilities, including PIPE Financing fees and legal fees, and $ 0.1 million of assets from AHAC.

Immediately following the Merger, there were 103,003,384 shares of Common Stock outstanding with a par value of $ 0.0001 per share.

As of December 31, 2023, the Company’s Second Amended and Restated Certificate of Incorporation authorized the Company to issue 250,000,000 shares of Common Stock.

The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares then outstanding or reserved for issuance) by the affirmative vote of the holders of a majority in interest of the Common Stock.

Stockholders’ Equity (Deficit) and Warrants

Public Offering

On February 29, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Cowen and Company, LLC and Cantor Fitzgerald & Co., as representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to the issuance and sale in an underwritten offering (the “Offering”) of 15,410,000 shares of Common Stock, which included a full exercise of the Underwriters’ option to purchase additional shares, at a price to the public of $ 3.00 per share.

The net proceeds to the Company from the Offering were approximately $ 43.0 million after deducting underwriting discounts and commissions and Offering expenses.

The Offering closed on March 5, 2024.

In March 2025, the Company completed a public offering of Common Stock that provided approximately $ 46.6 million in net proceeds.

See Note 15 — Subsequent Events for further information.

Equity Line Financing

On September 24, 2024, the Company entered into the Common Stock Purchase Agreement with Lincoln Park for an equity line financing, which provides that, subject to the terms and conditions set forth therein, the Company has the sole right, but not the obligation, to sell to Lincoln Park shares of Common Stock having an aggregate value of up to $ 50.0 million over a 24 -month period.

The Company controls the timing and amount of any sales of Purchase Shares to Lincoln Park pursuant to the Common Stock Purchase Agreement in its sole discretion.

In consideration for entering into the Common Stock Purchase Agreement, the Company issued 115,705 shares of Common Stock (the “Commitment Shares”) to Lincoln Park.

The Company did not receive any cash proceeds from the issuance of the Commitment Shares.

The fair value of the Common Stock Purchase Agreement was measured on the issuance date based on the fair value of the Commitment Shares, which was the consideration given to Lincoln Park in exchange for entering into the agreement.

The fair value of the Commitment Shares on the issuance date was determined to be $ 0.7 million based on the closing price of the Common Stock on September 24, 2024, which was $ 6.12 per share.

The Company recognized the fair value of the Commitment Shares as a non-current asset as a component of other long-term assets on the consolidated balance sheets.

As of December 31, 2024 , the Company has sold 500,000 shares to Lincoln Park for aggregate gross proceeds of $ 2.5 million, and the Company had $ 47.5 million in remaining availability for sales of Common Stock under the Common Stock Purchase Agreement.

During the year ended December 31, 2024, the Company incurred $ 0.2 million of transaction costs related to the Common Stock Purchase Agreement, consisting of legal and professional fees, which were expensed in the consolidated statements of operations and comprehensive loss.

As of December 31, 2024, t here were $ 0.1 million of unpaid transaction costs related to the Common Stock Purchase Agreement included in accounts payable on the consolidated balance sheets.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Registered Direct Offerings

On October 4, 2024, the Company entered into a securities purchase agreement with an institutional investor pursuant to which the investor purchased 5,681,820 shares of Common Stock and warrants to purchase up to 5,681,820 shares of Common Stock in a registered direct offering (the “October 2024 Registered Direct Offering”).

See below for additional information regarding the October 2024 RDO Warrants.

The purchase price for one share of Common Stock and one warrant issued in the October 2024 Registered Direct Offering was $ 5.28 .

The net proceeds to the Company from the October 2024 Registered Direct Offering were approximately $ 28.0 million after deducting placement agent’s fees and offering expenses of approximately $ 2.0 million.

The October 2024 Registered Direct Offering closed on October 7, 2024.

During the year ended December 31, 2024 , the Company expensed $ 0.1 million of transaction costs related to the October 2024 Registered Direct Offering in the consolidated statements of operations and comprehensive loss.

As of December 31, 2024, t here were $ 0.1 million of unpaid transaction costs related to the October 2024 Registered Direct Offering included in accounts payable on the consolidated balance sheets.

On November 13, 2024, the Company entered into a securities purchase agreement with an institutional investor pursuant to which the investor purchased 2,808,988 shares of Common Stock and warrants to purchase up to 2,808,988 shares of Common Stock in a registered direct offering (the “November 2024 Registered Direct Offering”).

See below for additional information regarding the November 2024 RDO Warrants.

The purchase price for one share of Common Stock and one warrant issued in the November 2024 Registered Direct Offering was $ 5.34 .

The net proceeds to the Company from the November 2024 Registered Direct Offering were approximately $ 14.9 million after deducting offering expenses of approximately $ 0.1 million.

The November 2024 Registered Direct Offering closed on November 15, 2024.

All offering costs were expensed in the consolidated statements of operations and comprehensive loss.

As of December 31, 2024, t here were $ 0.1 million of unpaid transaction costs related to the November 2024 Registered Direct Offering included in accounts payable on the consolidated balance sheets.

On September 1, 2022, the Company entered into the ATM Facility for the sale from time to time of up to $ 80.0 million of shares of Common Stock.

In December 2024, the Company sold an aggregate of 1,333,596 shares of Common Stock under the ATM Facility at an average price of $ 5.26 per share for net proceeds of approximately $ 6.8 million after deducting sales commissions of approximately $ 0.2 million .

From December 31, 2024 through March 31, 2025, the Company sold an aggregate of 75,793 shares of Common Stock under the ATM Facility at an average price of $ 5.04 per share for net proceeds of approximately $ 0.4 million .

As of December 31, 2024, the Company’s Second Amended and Restated Certificate of Incorporation authorized the Company to issue 250,000,000 shares of Common Stock.

The holders of Common Stock are entitled to receive dividends from time to time as may be declared by the Company’s board of directors.

Through December 31, 2024, no dividends have been declared.

The Purchase Agreement limits the Company’s ability to pay cash dividends to the holders of Common Stock.

The holders of Common Stock are entitled to one vote for each share held with respect to all matters voted on by the common stockholders of the Company.

In the event of a reorganization of the Company, after payment to any preferred stockholders of their liquidation preferences, holders of Common Stock are entitled to share ratably in all remaining assets of the Company.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024 and 2023, the Company had reserved Common Stock for future issuances as follows:

Common Stock reserved for Contingent Earnout Shares 15,000,000 15,000,000

Common Stock reserved for Common Stock Purchase Agreement 12,000,000 —

Common Stock reserved for ATM Facility 18,666,404 —

Common Stock reserved for Option Agreement (1)

1,073,333 1,333,334

Exercise of options outstanding under stock plans

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___________________________

(1) Assumes the exercise of the entire Option as provided for in the Option Agreement at the minimum purchase price of $ 7.50 per share.

(1) As of December 31, 2024, assumes the exercise of the $ 8,050,000 of shares of Common Stock remaining under the Option, and as of December 31, 2023, assumes the exercise of the entire Option, as provided for in the Option Agreement, both at the minimum purchase price of $ 7.50 per share.

Preferred Stock

The Company’s Second Amended and Restated Certificate of Incorporation provides the Company’s board of directors with the authority to issue preferred stock, par value $ 0.0001 per share, in one more series and to establish from time to time the number of shares to be included in each such series, by adopting a resolution and filing a certification of designations.

Voting powers, designations, powers, preferences and relative, participating, optional, special and other rights shall be stated and expressed in such resolutions.

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The Company had the following Common Stock warrants outstanding as of December 31, 2024 and 2023:

Common Stock Warrants Outstanding

Legacy Humacyte Common Stock Warrants

411,006 411,006

Private Placement Warrants

177,500 177,500

Public Warrants 5,000,000 5,000,000

October 2024 RDO Warrants 5,681,820 —

November 2024 RDO Warrants 2,808,988 —

Total Common Stock Warrants

See Note 7 — Debt for a discussion of Common Stock warrants issued in conjunction with the Loan Agreement in 2021 (such warrants, “Legacy Humacyte Common Stock Warrants”).

There were no issuances, exercises or expirations of warrants during the years ended December 31, 2023 and 2022 .

14,079,314 5,588,506

Legacy Humacyte Common Stock Warrants

In connection with the Company’s Loan Agreement, in 2021 the Company granted warrants to the lenders to purchase 411,006 shares of common stock at an exercise price of $ 10.28 per share (such warrants, “Legacy Humacyte Common Stock Warrants”).

The Company recognized the fair value of the warrants within stockholders’ equity using a Black-Scholes valuation model, as the settlement of the warrants is indexed to the Common Stock.

There were no exercises or expirations of warrants during the year ended December 31, 2024, and t here were no issuances, exercises or expirations of warrants during the year ended and December 31, 2023 .

HUMACYTE, INC.

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Private Placement Warrants

The Private Placement Warrants were initially recognized as a liability on the Closing Date at a fair value of $ 0.6 million, and the liability was remeasured to an estimated fair value of $ 0.1 million as of December 31, 2022.

The Private Placement Warrants were initially recognized as a liability on the Closing Date at a fair value of $ 0.6 million.

See Note 3 — Fair Value Measurements for a summary of the change in the fair value of the Private Placement Warrants during the years ended December 31, 2024 and 2023.

The remeasurement of the Private Placement Warrant liability to a fair value of $ 0.1 million as of December 31, 2023 resulted in an insignificant non-cash gain for the year ended December 31, 2023, and a non-cash gain of $ 0.4 million for the year ended December 31, 2022.

The remeasurement of the Private Placement Warrant liability is classified within Change in fair value of derivative liabilities in the consolidated statements of operations and comprehensive loss.

The remeasurement of the Private Placement Warrant liability to a fair value of $ 0.4 million as of December 31, 2024 from $ 0.1 million as of December 31, 2023 resulted in a non-cash loss of $ 0.3 million for the year ended December 31, 2024, compared to an insignificant non-cash gain for the year ended December 31, 2023.

The remeasurement of the Private Placement Warrant liability is classified within Change in fair value of derivatives in the consolidated statements of operations and comprehensive loss.

The Private Placement Warrants were valued using the following assumptions under the Monte Carlo simulation value model:

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The Public Warrants may only be exercised for a whole number of shares and will expire five years after the completion of the Merger.

The Public Warrants became exercisable 30 days after the completion of the Merger.

The Public Warrants were initially recognized as equity on the Closing Date at a fair value of $ 2.80 per share.

Registered Direct Offering Warrants

The October 2024 RDO Warrants were immediately exercisable.

October 2024 RDO Warrants to purchase 2,840,910 shares of Common Stock have an exercise price of $ 5.28 per share, and will expire 180 days from the date of issuance.

The remaining October 2024 RDO Warrants to purchase 2,840,910 shares of Common Stock have an exercise price of $ 5.28 per share, and will expire 1,640 days from the date of issuance.

The October 2024 RDO Warrants were initially recognized as a liability on the issuance date at a fair value of $ 15.2 million.

The remeasurement of the October RDO Warrants liability to a fair value of $ 12.4 million as of December 31, 2024 resulted in a non-cash gain of $ 2.8 million for the year ended December 31, 2024, classified within Change in fair value of derivatives in the consolidated statements of operations and comprehensive loss.

See Note 3 — Fair Value Measurements for a summary of the change in the fair value of the October 2024 RDO Warrants during the year ended December 31, 2024.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The October 2024 RDO Warrants were valued using the following assumptions under the Black-Scholes valuation model:

180 Day Warrants 1,640 Day Warrants

2024 October 7,

2024 December 31,

2024 October 7,

Market price of public stock

$ 5.05 $ 5.50 $ 5.05 $ 5.50

Exercise price

$ 5.28 $ 5.28 $ 5.28 $ 5.28

Expected term (years)

0.27 0.50 4.27 4.50

Expected share price volatility

106.7 % 99.0 % 88.4 % 86.7 %

Risk-free interest rate

4.27 % 4.36 % 4.25 % 3.79 %

Estimated dividend yield

0 % 0 % 0 % 0 %

The November 2024 RDO Warrants were immediately exercisable.

November 2024 RDO Warrants to purchase 1,404,494 shares of Common Stock have an exercise price of $ 5.34 per share, and will expire 180 days from the date of issuance.

The remaining November 2024 RDO Warrants to purchase 1,404,494 shares of Common Stock have an exercise price of $ 5.34 per share, and will expire 1,640 days from the date of issuance.

The November 2024 RDO Warrants were initially recognized as a liability on the issuance date at a fair value of $ 6.1 million.

The remeasurement of the November 2024 RDO Warrants liability to a fair value of $ 6.4 million as of December 31, 2024 resulted in a non-cash loss of $ 0.3 million for the year ended December 31, 2024, classified within Change in fair value of derivatives in the consolidated statements of operations and comprehensive loss.

See Note 3 — Fair Value Measurements for a summary of the change in the fair value of the November 2024 RDO Warrants during the year ended December 31, 2024.

The November 2024 RDO Warrants were valued using the following assumptions under the Black-Scholes valuation model:

180 Day Warrants 1,640 Day Warrants

2024 November 15,

2024 December 31,

2024 November 15,

Market price of public stock

$ 5.05 $ 4.84 $ 5.05 $ 4.84

Exercise price

$ 5.34 $ 5.34 $ 5.34 $ 5.34

Expected term (years)

0.37 0.50 4.37 4.50

Expected share price volatility

106.7 % 99.2 % 88.4 % 86.6 %

Risk-free interest rate

4.22 % 4.35 % 4.25 % 4.20 %

Estimated dividend yield

0 % 0 % 0 % 0 %

Contingent Earnout Liability

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The estimated fair value of the total Contingent Earnout Shares at the Closing on August 26, 2021 was $ 159.4 million based on a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over a 10 -year period using the most reliable information available.

See Note 3 — Fair Value Measurements for a summary of the change in the fair value of the Contingent Earnout Liability during the years ended December 31, 2023 and 2022.

The remeasurement of the Contingent Earnout Liability to a fair value of $ 37.9 million at December 31, 2023 from a fair value of $ 27.9 million at December 31, 2022, resulted in a non-cash loss of $ 10.0 million for the year ended December 31, 2023, compared to a non-cash gain of $ 75.8 million for the year ended December 31, 2022 related to the remeasurement of the Contingent Earnout Liability.

The remeasurement of the Contingent Earnout Liability is classified within Change in fair value of Contingent Earnout Liability in the consolidated statements of operations and comprehensive loss.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

See Note 3 — Fair Value Measurements for a summary of the change in the fair value of the Contingent Earnout Liability during the years ended December 31, 2024 and 2023.

The remeasurement of the Contingent Earnout Liability to a fair value of $ 71.0 million at December 31, 2024 from a fair value of $ 37.9 million at December 31, 2023, resulted in a non-cash loss of $ 33.0 million for the year ended December 31, 2024, compared to a non-cash loss of $ 10.0 million for the year ended December 31, 2023 related to the remeasurement of the Contingent Earnout Liability.

The remeasurement of the Contingent Earnout Liability is classified within Change in fair value of Contingent Earnout Liability in the consolidated statements of operations and comprehensive loss.

Assumptions used in the valuations are described below:

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Under the 2021 Plan, the Company can grant non-statutory stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance awards and other forms of awards.

Under the ESPP, when and if implemented, eligible employees will be permitted to purchase shares of the Company’s Common Stock at the lower of 85 % of the closing trading price per share of the Company’s Common Stock on the first day of the offering or 85 % of the closing trading price per share on the exercise date, which will occur on the last day of each offering.

The 2021 Plan and ESPP provide that on January 1 of each year commencing January 1, 2022, the 2021 Plan and the ESPP reserve will automatically increase in an amount equal to the lesser of (a) 5 % and 1 %, respectively, of the number of shares of the Company’s Common Stock outstanding on December 31 of the preceding year and (b) a number of shares of Common Stock determined by the Company’s board of directors.

The Company’s board of directors determined there would be no automatic increase in the number of shares reserved under the 2021 Plan on either January 1, 2022 or January 1, 2023.

The 2021 Plan share reserve automatically increased on January 1, 2024 by 5 % of the number of shares of the Company’s Common Stock outstanding on December 31, 2023 .

Under the ESPP, when and if implemented, eligible employees will be permitted to purchase shares of Common Stock at the lower of 85 % of the closing trading price per share of Common Stock on the first day of the offering or 85 % of the closing trading price per share on the exercise date, which will occur on the last day of each offering.

The 2021 Plan and ESPP provide that on January 1 of each year, the 2021 Plan and the ESPP reserve will automatically increase in an amount equal to the lesser of (a) 5 % and 1 %, respectively, of the number of shares of Common Stock outstanding on December 31 of the preceding year and (b) a number of shares of Common Stock determined by the Company’s board of directors.

The Company’s board of directors determined that there would be no automatic increase in the number of shares reserved under the 2021 Plan on January 1, 2023.

The 2021 Plan share reserve automatically increased on January 1, 2024 by 5,183,686 shares, which was equivalent to 5 % of the number of shares of Common Stock outstanding on December 31, 2023 .

The 2021 Plan share reserve automatically increased on January 1, 2025 by 6,501,375 shares, which was equivalent to 5 % of the number of shares of Common Stock outstanding on December 31, 2024.

Since the inception of the ESPP, the Company’s board of directors has determined that there would be no automatic increase in the number of shares reserved under the ESPP.

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Prior to the Closing, Legacy Humacyte had two equity incentive plans, the 2015 Omnibus Incentive Plan, as amended, (the “2015 Plan”), and the 2005 Stock Option Plan (the “2005 Plan”).

As a result of the Merger, no further awards may be granted under either the 2015 Plan or the 2005 Plan.

All awards previously granted and outstanding as of the effective date of the Merger were adjusted to reflect the impact of the Merger as set forth in the Merger Agreement, but otherwise remain in effect pursuant to their original terms.

As a result of the Merger, after the Closing no further awards were granted under either the 2015 Plan or the 2005 Plan.

The shares underlying any award granted under the 2021 Plan or the 2015 Plan that are forfeited, cancelled or reacquired by the Company prior to vesting, that expire or that are paid out in cash rather than shares will become available for grant and issuance under the 2021 Plan.

1 unchanged sentence

The Company has sufficient authorized and unissued shares to issue Common Stock in satisfaction of any outstanding awards and any awards available for grant under the 2021 Plan.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s stock option plans allow for the grant of awards that the Company believes aid in aligning the interests of award recipients with those of its stockholders.

The Company’s board of directors or compensation committee determines the specific terms of equity incentive grants, including the exercise price per share and vesting period for option awards.

Option awards are granted with an exercise price equal to the fair market value of the Company’s Common Stock at the date of grant.

Option awards are granted with an exercise price equal to the fair market value of the Common Stock at the date of grant.

The Company has granted options that include either a service-based or performance-based vesting condition, or both, and a 10-year contractual term.

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Compensation expense related to awards with service-based vesting conditions is recognized on a straight-line basis over the requisite service period.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Compensation expense related to awards with performance-based vesting conditions is recognized over the requisite service period using the accelerated attribution method to the extent achievement of the performance-based condition is probable.

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• Expected Volatility.

The expected volatility was determined based on a blended approach using the historical share volatility of the Company’s Common Stock and that of several publicly traded peer companies over a period of time equal to the expected term of the options, as the Company has a limited trading history.

The expected volatility was determined based on a blended approach using the historical share volatility of the Common Stock and that of several publicly traded peer companies over a period of time equal to the expected term of the options, as the Company has a limited trading history.

For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• Risk-Free Interest Rate.

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Accordingly, the Company has estimated the dividend yield to be zero .

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table shows a summary of stock-based compensation expense included in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023:

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The Company has a net operating loss and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets.

All losses before income taxes arose in the U.S.

The majority of losses before income taxes arose in the U.S.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

23 unchanged sentences

Therefore, the Company has reduced its North Carolina deferred tax assets, including the net operating losses, to zero , as no benefit is expected to be realized from these deferred tax assets prior to 2030 when there would be no income tax in North Carolina.

The reduction in the value of the deferred tax assets are fully offset by a corresponding reduction in the valuation allowance.

If the Company becomes profitable prior to 2030, the Company will recognize an income tax benefit related to the portion of its North Carolina deferred tax assets utilized.

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___________________________

(1) The deferred tax true-up for 2023 and 2022 primarily relates to executive compensation subject to IRC Section 162(m) limitations and t he 2021 research and development and net operating loss carryforwards were adjusted due to application of the employee retention credit determined in 2022.

As of December 31, 2023 the Company had approximately $ 384.0 million and $ 383.0 million of Federal and state net operating losses, respectively.

(1) The deferred tax true-up for 2024 and 2023 primarily relates to executive compensation subject to IRC Section 162(m) limitations .

As of December 31, 2024 the Company had approximately $ 465.0 million and $ 471.7 million of gross Federal and state net operating losses, respectively.

Of this amount, $ 303.8 million of Federal net operating losses are subject to an 80 % limitation on taxable income, do not expire and will carry forward indefinitely, while the remaining amount begins to expire in 2025.

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The Company agrees to indemnify Duke against certain third-party claims.

In December 2023, the Company filed a BLA with the FDA for an indication in extremity vascular trauma.

As of December 31, 2023 there was $ 0.5 million of license expense payable to Duke included in accounts payable in the Company’s consolidated balance sheets.

Payments to Duke under the license agreement were immaterial during the year ended December 31, 2022.

Yale University

In February 2014, the Company entered into a license agreement with Yale University (“Yale”) that granted the Company a worldwide license to the patents related to coatings for small-diameter vessels to inhibit clotting (the “Small Diameter Vessel License Agreement”).

The license granted under the Small Diameter Vessel License Agreement is exclusive in the field of engineered vascular tissues and extracellular matrix-based implants used for vascular repair, reconstruction and replacement (provided that all uses are vascular tissues within the range of 1 – 12mm in diameter), except that it was subject to Yale’s non-exclusive right, on behalf of itself and all other non-profit academic institutions, to use the licensed products for research, teaching, and other non-commercial purposes.

The Company agreed to pay to Yale an annual maintenance fee, increasing between the first and fourth anniversaries of the Small Diameter Vessel License Agreement up to a maximum of less than $ 0.1 million per year for this license.

In December 2022, in accordance with the

In December 2023, the Company filed a BLA with the FDA for urgent arterial repair following extremity vascular trauma when synthetic graft is not indicated, and autologous vein use is not feasible.

Based on the achievement of this milestone under the Duke license agreement, the Company recorded license fee expense of $ 0.5 million during the fourth quarter of 2023 in research and development expense in its consolidated statements of operations and comprehensive loss and recorded $ 0.5 million of license expense payable in accounts payable in the Company’s consolidated balance sheets as of December 31, 2023.

The Company paid the license fee to Duke during the first quarter of 2024.

In December 2024, the FDA approved the Company’s BLA with the FDA for urgent arterial repair following extremity vascular trauma when autologous vein use is not feasible.

Based on the achievement of this milestone under the Duke license agreement, the Company recorded license fee expense of $ 0.5 million during the fourth quarter of 2024 in research and development expense in its consolidated statements of operations and comprehensive loss and recorded $ 0.5 million of license expense payable in accrued expenses in the Company’s consolidated balance sheets as of December 31, 2024.

Other payments to Duke under the license agreement were immaterial during the years ended December 31, 2024 and 2023.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

terms of the Small Diameter Vessel License Agreement, the Company provided Yale with 90 days written notice of termination, effective March 21, 2023.

In August 2019, the Company entered into a license agreement with Yale that granted the Company a worldwide license to the patents related to the BVP (the “BVP License Agreement”).

Yale University

In August 2019, the Company entered into a license agreement with Yale University (“Yale”) that granted the Company a worldwide license to the patents related to the BVP (the “BVP License Agreement”).

The license granted under the BVP License Agreement is exclusive in the field of engineered vascular tissues that deliver pancreatic islet cells to patients, except that it is subject to Yale’s non-exclusive right, on behalf of itself and all other non-profit academic institutions, to use the licensed products for research, teaching, and other non-commercial purposes.

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The Company has also agreed to pay Yale:

• annual maintenance fees, increasing between the first anniversary of the Tubular Prosthesis License Agreement until the fifth anniversary for the Small Diameter Vessel License Agreement (through the termination of the agreement on March 21, 2023) and the BVP License Agreement and until the fourth anniversary for the Tubular Prostheses License Agreement up to a maximum of less than $ 0.1 million per year;

• annual maintenance fees, increasing annually until the fifth anniversary for the BVP License Agreement and until the fourth anniversary for the Tubular Prostheses License Agreement up to a maximum of less than $ 0.1 million per year;

• milestone payments upon achievement of certain regulatory and commercial milestones of $ 0.2 million and $ 0.6 million, respectively ;

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The Company may terminate the BVP License Agreement and Tubular Prosthesis License Agreement (i) on 90 days’ prior written notice to Yale, provided the Company is not in breach of the license agreements and has made all required payments to Yale thereunder and (ii) on written notice to Yale following an uncured material breach.

With respect to the BVP License Agreement, the Company’s rights under the agreement will also terminate automatically with respect to a patent application or patent within the licensed patents in a specified country if, upon receipt of written notice from Yale, the Company does not agree to pay the patent filing, prosecution and maintenance fees incurred by Yale for such patent applications or patents in the specified country.

Under certain circumstances, Yale

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

upon receipt of written notice from Yale, the Company does not agree to pay the patent filing, prosecution and maintenance fees incurred by Yale for such patent applications or patents in the specified country.

Under certain circumstances, Yale may, at its option, convert the exclusive licenses to non-exclusive licenses if the Company declines to initiate certain infringement or interference proceedings with respect to the licensed patents.

may, at its option, convert the exclusive licenses to non-exclusive licenses if the Company declines to initiate certain infringement or interference proceedings with respect to the licensed patents.

The Company has agreed to indemnify Yale against certain third-party claims.

Payments to Yale under the Small Diameter Vessel License Agreement, BVP License Agreement and Tubular Prosthesis License Agreement were immaterial during the periods presented.

Payments to Yale under the BVP License Agreement and Tubular Prosthesis License Agreement were immaterial during the periods presented.

JDRF Agreement

On April 1, 2023, the Company entered into the JDRF Agreement to further develop and perform preclinical testing of the BVP, as discussed in Note 2 — Summary of Significant Accounting Policies.

According to the terms of the JDRF Agreement, JDRF will provide funding up to $ 0.8 million based on the achievement of certain research and development milestones.

According to the terms of the JDRF Agreement, JDRF will provide funding up to $ 0.8 million based on the achievement of certain research and development milestones related to the Company’s BVP.

The Company received the first milestone payment of $ 80 thousand in April 2023 upon execution of the agreement.

As of December 31, 2024, the Actual Award totaled $ 320 thousand .

As of December 31, 2024 and 2023 , the carrying value of the JDRF liability is $ 0.3 million and $ 0.1 million, respectively.

There was $ 0.1 million and an insignificant amount of interest expense related to the JDRF liability recorded during the years ended December 31, 2024 and 2023, respectively .

In accordance with the JDRF Agreement, the Company has agreed to pay JDRF:

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Legal Matters

The Company currently is not aware of any legal proceedings or claims that management believes will have, individually or in the aggregate, a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows.

From time to time, the Company may be involved in various lawsuits, claims, assessments and proceedings, including securities, commercial, intellectual property, product liability, contractual, governmental, employment or other matters that arise in the normal course of business.

The Company accrues a liability for a contingency when management believes information available prior to the issuance of the consolidated financial statements indicates it is probable a loss has been incurred as of the date of the consolidated financial statements and the amount of loss can be reasonably estimated.

The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case.

Legal costs are expensed as incurred.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On November 18, 2024, James A.

Cutshall filed a putative class action lawsuit, captioned Cutshall v.

Humacyte, Inc., et al ., No.

1:24-cv-00954 (the “Securities Litigation”), against the Company and certain of the Company’s officers in the United States District Court for the Middle District of North Carolina.

The complaint in the Securities Litigation asserts claims under Sections 10(b) and 20(a) of the Exchange Act on behalf of a putative class of persons and entities that purchased or otherwise acquired securities of the Company between May 10, 2024 and October 17, 2024, based on allegations that the defendants made or were responsible for false or misleading statements and omissions related to the BLA for the vascular trauma indication and to alleged deficiencies at the Company’s Durham, North Carolina manufacturing facility.

The Complaint seeks a variety of relief, including unspecified compensatory damages, attorneys fees and costs.

On January 31, 2025, the court appointed co-lead plaintiffs.

On February 19, 2025, the court entered a scheduling order directing the co-lead plaintiffs to file a consolidated amended complaint by April 24, 2025 and the defendants to answer or otherwise respond to the amended complaint by June 27, 2025.

On January 7 and 10, 2025, putative stockholders of the Company filed two verified stockholder derivative actions in the United States District Court for the Middle District of North Carolina, captioned Silva v.

Sebelius, et al ., No.

1:25-cv-00005 (the “ Silva Action”) and Misko v.

Niklason, et al ., No.

1:25-cv-00028 (the “ Misko Action”).

Each of these derivative actions was brought on behalf of the Company against certain of its current or former directors and officers, as well as Ayabudge LLC.

The complaints in each action assert claims for violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets, based on a variety of allegations including claims that the defendants are responsible for any damages sustained by the Company as a result of the Securities Litigation.

The Misko Action also includes a claim for contribution against certain defendants under Sections 10(b) and 21(d) of the Exchange Act for any liability the Company may sustain as a result of the Securities Litigation.

On February 18, 2025, the court issued an order consolidating the Silva Action and the Misko Action (collectively, the “Consolidated Derivative Action”) and staying the defendants’ obligation to respond to any complaint in the Consolidated Derivative Action pending the submission of a proposed scheduling order.

On March 11, 2025, the parties entered a joint motion to stay the Consolidated Derivative Action pending final resolution of the Securities Litigation.

On March 24, 2025, the court granted the parties’ joint motion to stay the Consolidated Derivative Action.

On December 19, 2024, the Company received a demand letter (the “Demand Letter”) from a purported stockholder of the Company, demanding that the Board assert claims against certain of the Company’s current or former officers and directors for breach of fiduciary duty, gross mismanagement, corporate waste, unjust enrichment, aiding and abetting, violations of Section 14(a) of the Exchange Act, and insider trading, based on a variety of allegations including claims that the Company’s current and former officers and directors are responsible for any damages sustained by the Company as a result of the Securities Litigation.

On January 24, 2025, the Board appointed a demand evaluation committee to evaluate the claims made in the Demand Letter and report back to the full Board.

On February 19, 2025, the purported stockholder who sent the Demand Letter filed a stockholder derivative action in the United States District Court for the Middle District of North Carolina, captioned Olson v.

Niklason , et al., No.

1:25-cv-00123 (the “ Olson Action”), alleging that the Company had refused his demand.

The complaint in the Olson Action asserts substantive claims and allegations that are substantially similar to those asserted in the Consolidated Derivative Action.

The Company disputes all claims asserted against it in the Securities Litigation and disputes that the plaintiffs in the Consolidated Derivative Action and Olson Action have standing to assert claims derivatively on its behalf.

The Company is currently unable to estimate the potential loss or range of loss, if any, associated with these lawsuits, which could be material.

Although there can be no assurance of the outcome of these lawsuits, based on information known by management, the Company has not accrued any material liabilities related to these lawsuits in the consolidated financial statements, as a negative outcome is deemed not probable, nor is any range of loss estimable as of December 31, 2024.

Since the outcome of these matters cannot be predicted with certainty, any associated costs could have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows.

Indemnification

2 unchanged sentences

The maximum potential amount of future payments the Company could be required to make under these indemnification arrangements is not specified in such arrangements;

however, the Company has director and officer insurance coverage that is intended to reduce its exposure and enable the Company to recover a portion of any potential future amounts the Company could be required to make.

To date, the Company has not incurred any costs as a result of such obligations and has not accrued any liabilities related to such obligations in the consolidated financial statements.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

required to make.

To date, the Company has not incurred any costs as a result of such obligations and has not accrued any liabilities related to such obligations in the consolidated financial statements.

Related Party Transactions

Fresenius Medical Care investments and distribution agreement

In June 2018, the Company completed a $ 150 million financing transaction pursuant to which Fresenius Medical Care purchased shares of series D redeemable convertible preferred stock that at the Closing converted into 15,812,735 shares of Common Stock.

In August 2021, Fresenius Medical Care invested $ 25 million as part of the PIPE Financing and received an additional 2.5 million shares of Common Stock.

In addition, the Company entered into a distribution agreement with Fresenius Medical Care in June 2018 which, as amended as of February 16, 2021, granted Fresenius Medical Care and its affiliates exclusive rights to develop outside the United States and EU and commercialize outside of the United States the Company’s 6 millimeter x 42 centimeter HAV and all improvements thereto, and modifications and derivatives thereof (including any changes to the length, diameter or configuration of the foregoing), for use in vascular creation, repair, replacement or construction, including renal replacement therapy for dialysis access, the treatment of PAD, and the treatment of vascular trauma, but excluding coronary artery bypass graft, pediatric heart surgery, or adhering pancreatic islet cells onto the outer surface of the distribution product for use in diabetic patients.

In August 2021, Fresenius Medical Care invested $ 25 million as part of a private placement offering related to the Merger (the “PIPE Financing”) and received an additional 2.5 million shares of Common Stock.

In addition, the Company entered into a distribution agreement with Fresenius Medical Care in June 2018 which, as amended as of February 16, 2021, granted Fresenius Medical Care and its affiliates exclusive rights to develop outside the United States and EU and commercialize outside of the United States the Company’s 6 millimeter x 42 centimeter ATEV and all improvements thereto, and modifications and derivatives thereof (including any changes to the length, diameter or configuration of the foregoing), for use in vascular creation, repair, replacement or construction, including renal replacement therapy for dialysis access, the treatment of PAD, and the treatment of vascular trauma, but excluding coronary artery bypass graft, pediatric heart surgery, or adhering pancreatic islet cells onto the outer surface of the distribution product for use in diabetic patients.

Within the United States, Fresenius Medical Care will collaborate with the Company in its commercialization of the product in the field, including adoption of the distribution product as a standard of care in patients for which such use is supported by clinical results and health economic analyses.

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patent laws for determining inventorship.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is obligated to make payments to Fresenius Medical Care based on a share of aggregate net sales by or on behalf of the Company of the distribution product in the United States in the field.

1 unchanged sentence

The amounts that Fresenius Medical Care will be obligated to pay the Company under the distribution agreement for sales of the distribution product in the field outside of the United States will vary.

Fresenius Medical Care agreed to pay the Company initially, on a country-by-

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

country basis for sales outside of the United States, the amount equal to the average cost of manufacturing the Company’s distribution product plus a fixed dollar amount per unit.

Fresenius Medical Care agreed to pay the Company initially, on a country-by-country basis for sales outside of the United States, the amount equal to the average cost of manufacturing the Company’s distribution product plus a fixed dollar amount per unit.

Following a specified period, on a country-by-country basis outside of the United States, Fresenius Medical Care will pay the Company a fixed percentage of net sales for each unit sold in such country, such that the Company will receive more than half of such net sales.

4 unchanged sentences

Each party is required to indemnify one another for certain third-party claims.

The Company expensed approximately $ 0.2 million during each of the years ended December 31, 2023 and 2022 for clinical research services performed by Frenova Renal Research (“Frenova”), a subsidiary of Fresenius Medical Care.

There was $ 0.1 million payable to Frenova included in accounts payable on the Company’s consolidated balance sheets as of December 31, 2022, and there were no amounts payable to Frenova as of December 31, 2023.

Agreements with Frenova Renal Research

In May 2022 and June 2023, the Company entered into three services agreements with Frenova Renal Research (“Frenova”), a subsidiary of Fresenius Medical Care, to conduct a study to review the outcomes of 178,575 adult patients who received in-center dialysis at Fresenius Kidney Care dialysis centers.

The Company expensed approximately $ 0.2 million for clinical research services performed by Frenova during the year ended December 31, 2023 related to these agreements.

As of December 31, 2023 , the clinical research services contracted for under these agreements with Frenova were fully complete and no further expenses have been incurred related to these agreements.

In June 2024, the Company entered into a master services agreement with Frenova that sets forth the terms by which the Company may engage Frenova to provide certain services for projects, with the services for each project being described in a separate statement of work.

As of December 31, 2024 , Frenova was engaged to perform clinical research services related to the Company’s V012 Phase 3 clinical trial.

During the year ended December 31, 2024 , amounts expensed in relation to this agreement with Frenova were insignificant and there was an insignificant amount payable to Frenova as of December 31, 2024 .

In July 2024, the Company entered into a service agreement with Fresenius Medical Care Deutschland GmbH (“Fresenius GmbH”), which provides medical scientific research services through Frenova.

Frenova agreed to conduct a study to review patient data of adult hemodialysis patients who received treatment in certain European countries at dialysis centers that are part of Fresenius Medical Care AG.

Fresenius Medical Care AG is the German parent company of Fresenius GmbH and ultimately of Fresenius Medical Care.

During the year ended December 31, 2024 , amounts expensed in relation to this agreement with Fresenius GmbH were approximately $ 0.1 million.

As of December 31, 2024 , there was less than $ 0.1 million payable to Fresenius GmbH included in accounts payable and less than $ 0.1 million payable to Fresenius GmbH included in accrued expenses on the Company’s consolidated balance sheets.

During the year ended December 31, 2023 , there was $ 0.1 million of expense recognized for services performed by Fresenius GmbH.

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Arrangements with Yale University

1 unchanged sentence

As of December 31, 2024 and 2023, the Company was a party to license agreements with Yale University, as described in Note 13 — Commitments and Contingencies above.

The following table shows a summary of related party expenses pertaining to Yale University included in the statements of operations and comprehensive loss for the years ended December 31, 2023 and 2022:

($ in thousands) 2023 2022

License expenses 55 100

Total $ 80 $ 119

T here was $ 50 thousand of license expenses payable to Yale University included in accounts payable on the Company’s consolidated balance sheets as of December 31, 2022, and there was an insignificant amount payable to Yale as of December 31, 2023 .

HUMACYTE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amounts expensed in relation to the license agreements with Yale University were $ 0.1 million during each of the years ended December 31, 2024 and 2023.

There was an insignificant amount payable to Yale as of December 31, 2024 and 2023.

Subsequent Events

On February 29, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Cowen and Company, LLC and Cantor Fitzgerald & Co.

as representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to the issuance and sale in the Offering of 15,410,000 shares of the Company’s Common Stock, which included a full exercise of the Underwriters’ option to purchase additional shares, at a price to the public of $ 3.00 per share (the “Shares”).

The net proceeds to the Company from the Offering were approximately $ 43.1 million after deducting underwriting discounts and commissions and estimated Offering expenses.

The Offering closed on March 5, 2024.

In a separate transaction on March 11, 2024, the Company received an additional $ 20.0 million under the Purchase Agreement.

Public Offering

On March 25, 2025, the Company entered into an underwriting agreement with TD Securities (USA) LLC, Barclays Capital Inc.

and BTIG, LLC, as representatives of the several underwriters named therein, relating to the issuance and sale in an underwritten offering (the “Public Offering”) of 25,000,000 shares of Common Stock, at a price to the public of $ 2.00 per share (the “Firm Shares”).

The Company also granted the underwriters a 30-day option to purchase up to an additional 3,750,000 shares of Common Stock at the same price as the Firm Shares.

The net proceeds to the Company from the Public Offering were approximately $ 46.6 million after deducting underwriting discounts and commissions and estimated Public Offering expenses.

The Public Offering closed on March 27, 2025.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data