Humacyte, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS HUMACYTE, INC. Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 115 Consolidated Balance Sheets as of December 31, 202 4 and 20 23 116 Consolidated Statements of Operations and Comprehensive Loss for the Years ended December 31, 202 4 and 20 23 117 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Years ended December 31, 202 4 and 202 3 118 Consolidated Statements of Cash Flows for the Years ended December 31, 202 4 and 20 23 119 Notes to Consolidated Financial Statements 120 114 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Humacyte, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Humacyte, Inc. 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. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. 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 Raleigh, North Carolina March 31, 2025 We have served as the Company’s auditor since 2013. 115 Table of Contents HUMACYTE, INC. CONSOLIDATED BALANCE SHEETS (in thousands except for share and per share amounts) As of December 31, 2024 2023 ASSETS Current assets Cash and cash equivalents $ 44,937 $ 80,448 Prepaid expenses and other current assets 2,922 2,830 Total current assets 47,859 83,278 Restricted cash 50,209 209 Property and equipment, net 23,063 26,791 Finance lease right-of-use assets, net 15,490 17,313 Other long-term assets 1,251 632 Total assets $ 137,872 $ 128,223 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities Accounts payable $ 4,490 $ 6,490 Accrued expenses 11,424 9,340 Finance lease obligation, current portion 2,917 2,560 Other current liabilities 1,123 53 Total current liabilities 19,954 18,443 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 13,620 16,293 Contingent derivative liability 2,415 2,636 Other long-term liabilities 983 711 Total liabilities 190,541 114,677 Commitments and contingencies (Note 13) Stockholders’ equity (deficit) Preferred stock, $ 0.0001 par value; 20,000,000 shares designated as of December 31, 2024 and 2023; 0 shares issued and outstanding as of December 31, 2024 and 2023 — — Common stock, $ 0.0001 par value; 250,000,000 shares authorized as of December 31, 2024 and 2023; 130,027,509 and 103,673,728 shares issued and outstanding as of December 31, 2024 and 2023, respectively 13 10 Additional paid-in capital 633,333 550,850 Accumulated deficit ( 686,015 ) ( 537,314 ) Total stockholders’ equity (deficit) ( 52,669 ) 13,546 Total liabilities and stockholders’ equity (deficit) $ 137,872 $ 128,223 The accompanying notes are an integral part of these financial statements. 116 Table of Contents HUMACYTE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands except for share and per share amounts) Year Ended December 31, 2024 2023 Operating expenses: Research and development $ 88,599 $ 76,550 General and administrative 25,799 23,497 Total operating expenses 114,398 100,047 Loss from operations ( 114,398 ) ( 100,047 ) Other income (expense), net Interest income 4,104 5,467 Change in fair value of Contingent Earnout Liability ( 33,045 ) ( 10,023 ) Interest expense ( 9,277 ) ( 6,599 ) 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 ) Net loss and comprehensive loss $ ( 148,701 ) $ ( 110,776 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 1.26 ) $ ( 1.07 ) Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted 118,479,097 103,420,238 The accompanying notes are an integral part of these financial statements. 117 Table of Contents HUMACYTE, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands except for share amounts) Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity (Deficit) Shares Amount Balance as of December 31, 2022 103,229,013 $ 10 $ 543,456 $ ( 426,538 ) $ 116,928 Proceeds from the exercise of stock options 444,715 — 566 — 566 Stock-based compensation — — 6,828 — 6,828 Net loss — — — ( 110,776 ) ( 110,776 ) Balance as of December 31, 2023 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 Stock-based compensation — — 6,137 — 6,137 Net loss — — — ( 148,701 ) ( 148,701 ) Balance as of December 31, 2024 130,027,509 $ 13 $ 633,333 $ ( 686,015 ) $ ( 52,669 ) The accompanying notes are an integral part of these financial statements. 118 Table of Contents HUMACYTE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2024 2023 Cash flows from operating activities Net loss $ ( 148,701 ) $ ( 110,776 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 5,104 5,659 Stock-based compensation expense 6,137 6,828 Change in fair value of Contingent Earnout Liability 33,045 10,023 Non-cash interest expense 7,754 3,099 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 Non-cash operating lease costs 53 50 Amortization of SVB debt discount — 482 Changes in operating assets and liabilities: Accounts receivable — 31 Prepaid expenses and other current assets 88 ( 388 ) Accounts payable ( 1,962 ) 4,811 Accrued expenses 2,238 2,167 Operating lease obligation ( 53 ) ( 50 ) Net cash used in operating activities ( 98,122 ) ( 73,305 ) Cash flows from investing activities Purchase of property and equipment ( 1,572 ) ( 2,280 ) 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 ) 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 Proceeds from JDRF Agreement 240 80 Payments of finance lease principal ( 2,579 ) ( 2,256 ) 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 Cash, cash equivalents and restricted cash at the end of the period $ 95,290 $ 80,801 Supplemental disclosure: Cash paid for interest on SVB loan $ — $ 1,613 Supplemental disclosure of noncash activities: Purchase of property and equipment in accounts payable and accrued expenses $ 92 $ 284 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. 119 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Description of Business Organization Humacyte, Inc. 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. (“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”). On the Closing Date, AHAC changed its name to Humacyte, Inc. and Legacy Humacyte changed its name to Humacyte Global, Inc. (“Global”). The Merger was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and under this method of accounting, AHAC was treated as the acquired company for financial reporting purposes and Legacy Humacyte was treated as the acquirer. Operations prior to the Merger are those of Legacy Humacyte. Liquidity 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. To date, the Company has financed its operations primarily through the sale of equity securities and convertible debt, proceeds from the Reverse Recapitalization, borrowings under loan facilities, proceeds from a revenue interest purchase agreement and, to a lesser extent, through governmental and other grants. At December 31, 2024 and December 31, 2023, the Company had an accumulated deficit of $ 686.0 million and $ 537.3 million, respectively. The Company’s operating losses were $ 114.4 million and $ 100.0 million for the years ended December 31, 2024 and 2023, respectively. Net cash flows used in operating activities were $ 98.1 million and $ 73.3 million during the years ended December 31, 2024 and 2023, respectively. Substantially all of the Company’s operating losses resulted from costs incurred in connection with the Company’s research and development programs and from general and administrative costs associated with the Company’s operations. 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 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 120 Table of Contents 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. 2. Summary of Significant Accounting Policies Basis of Presentation The Company has prepared the accompanying financial statements in conformity with U.S. GAAP. 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. Use of Estimates The preparation of financial statements in conformity with U.S. 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, 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. 121 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. None of these reclassifications had a material impact on the Company’s consolidated financial statements. Segments 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 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 PAD 143 306 Total 8,944 13,030 Unallocated Expenses External services 7,071 6,106 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, 122 Table of Contents 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 (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. Cash and Cash Equivalents The Company considers all short-term, highly liquid investments, including certificates of deposit (“CDs”) purchased with an original maturity of three months or less at the date of purchase, to be cash equivalents. Cash deposits are held with financial institutions with investment-grade ratings in the U.S. Cash deposits typically exceed federally insured limits. 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. 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, 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 . As of December 31, ($ in thousands) 2024 2023 Cash and cash equivalents $ 44,937 $ 80,448 Restricted cash included in prepaid expenses and other current assets 144 144 Restricted cash included in long-term assets 50,209 209 Total cash, cash equivalents and restricted cash $ 95,290 $ 80,801 Employee Retention Credit The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provided refundable employee retention credits, which could be used to offset payroll tax liabilities. Under the provisions of the extension of the CARES Act, the Company qualified for the employee retention credit for the first three quarters of 2021, and the Company applied for the credit in February 2023. As there is no authoritative guidance under U.S. 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 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 123 Table of Contents 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 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 the 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. 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. 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 derivatives. JDRF Award 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. 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 Company’s BVP. 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. 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 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 124 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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, 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. 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 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. As the Company has incurred losses for the years ended December 31, 2024 and 2023, basic and diluted net loss per share is the same for each period. The following potential shares of Common Stock were excluded from the computation of diluted net loss per share for each period because including them would have had an antidilutive effect: Year Ended December 31, 2024 2023 Exercise of options under stock plan 12,274,139 11,919,421 Warrants to purchase Common Stock 14,079,314 5,588,506 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 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 Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. ASC 820, Fair Value Measurement and Disclosures , establishes a hierarchy whereby inputs to valuation techniques used in measuring fair value are prioritized, or the fair value hierarchy. There are three levels to the fair value hierarchy based on reliability of inputs, as follows: • Level 1 — Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets. • 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. 125 Table of Contents 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. The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them for each reporting period, utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The determination requires significant judgments to be made by the Company. Property and Equipment, Net Property and equipment, net are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. The estimated useful lives for significant asset categories are as follows: Property and equipment Estimated Useful Lives (Years) Scientific equipment 5 – 7 Computer equipment 5 Software 3 Furniture and fixtures 5 – 7 Leasehold improvements Lesser of useful life or life of lease Construction in progress N/A Impairment of Long-Lived Assets The Company reviews the carrying value of property and equipment for indicators of possible impairment whenever events and circumstances indicate that the carrying value of an asset or asset group may not be recoverable from the estimated future net undiscounted cash flows expected to result from its use and eventual disposition. In cases where estimated future net undiscounted cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of the asset or asset group. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors. Based on this assessment, during the years ended December 31, 2024 and 2023, respectively, the Company concluded there were no such events or changes in circumstances requiring review of the carrying amount of the Company’s long-lived assets and there was no impairment during the years ended December 31, 2024 and 2023. Income Taxes 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. 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. As of December 31, 2024 and 2023, the Company has recorded a full valuation allowance against its deferred tax assets. The Company applies the accounting guidance for uncertainties in income taxes, which prescribes a recognition threshold and measurement process for recording uncertain tax positions taken, or expected to be taken, in a tax return in the financial statements. Additionally, the guidance also prescribes the treatment for derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. 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. 126 Table of Contents 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. Otherwise, no benefit can be recognized. Assessing an uncertain tax position begins with the initial determination of the sustainability of the position and is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed. Additionally, the Company must accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Company has analyzed its filing positions in all significant Federal and state jurisdictions where it is required to file income tax returns, as well as open tax years in these jurisdictions. As of December 31, 2024 and 2023, the Company has determined that no uncertain tax positions would have a material impact on the financials statements of the Company. The Company is no longer subject to Federal, state, and local tax examinations by tax authorities for years before 2021 although carry-forward attributes that were generated prior to 2021 may still be adjusted upon examination by the taxing authorities if they either have been or will be used in a future period. No income tax returns are currently under examination by taxing authorities. As of December 31, 2024 and 2023, the Company had no t recorded any amounts for unrecognized tax benefits. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in the provision for income taxes. As of December 31, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions, and no amounts had been recognized in the Company’s statements of operations and comprehensive loss. Intellectual Property The Company seeks to protect its intellectual property by filing patent applications in the United States and abroad related to novel technologies and product candidates that it views as important to its business. The patent positions of biotechnology companies generally, including the Company’s patent positions, is highly uncertain and involves complex legal and factual questions for which legal principles remain unresolved. Patent costs have been expensed as incurred as general and administrative expense. Research and Development The Company expenses research and development costs as operating expenses as incurred. Research and development expenses consist primarily of: • salaries and related overhead expenses for personnel in research and development functions, including stock-based compensation and benefits; • 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; • depreciation of leasehold improvements, laboratory equipment and computers; • costs related to purchasing raw materials for and producing product candidates for clinical trials; • costs related to compliance with regulatory requirements; • costs related to the manufacturing scale-out initiative; and • license fees related to in-licensed technologies. 127 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accrued Research and Development The Company has entered into various agreements with CROs, which conduct preclinical studies and clinical trials. The Company’s research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in accrued expenses on the balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly. Payments made under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered. Stock-Based Compensation The Company accounts for stock-based compensation for employees and non-employees measured at grant date, based on the fair value of the award. The Company measures the fair value of awards granted using the Black-Scholes option pricing model and recognizes the expense over the requisite service period using the straight-line method. Option valuation models, including the Black-Scholes option-pricing model, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant-date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility, the expected term of the award, and the fair value of the underlying Common Stock on the date of grant. Forfeitures are accounted for as they occur. 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. Inc. 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 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. The Private Placement Warrants are non-redeemable for cash so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Common Stock Warrants to determine the appropriate financial statement classification upon the consummation of the Merger. The Common Stock Warrants are not mandatorily redeemable and are considered to be freestanding instruments as they are separately exercisable into common shares. 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 (“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. Because the holder of an instrument is not an input into the pricing of a fixed-for-fixed option on the Company’s ordinary shares, the Private Placement Warrants are not considered to be “indexed to the Company’s own stock” and therefore are not classified in stockholders’ equity. 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. 128 Table of Contents 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 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 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. 129 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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. Contingent earnout payments involve certain assumptions requiring significant judgment and actual results can differ from assumed and estimated amounts. Leases The Company accounts for its leases under ASC 842, Leases . 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 “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 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. Operating lease right-of-use assets are adjusted for (i) payments made at or before the commencement date, (ii) initial direct costs incurred, and (iii) tenant incentives under the lease. As the implicit rate for the operating leases were not determinable, the Company used an incremental borrowing rate based on the information available at the respective lease commencement dates in determining the present value of future payments. The incremental borrowing rate represents the interest rate the Company would expect to incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company determined the incremental borrowing rate by considering various factors, such as its credit rating, interest rates of similar debt instruments of entities with comparable credit ratings, the lease term and the currency in which the lease was denominated. The Company considers a lease term to be the noncancelable period that it has the right to use the underlying asset, including any periods where it is reasonably certain the Company will exercise any option to extend the contract. Lease expenses for minimum lease payments for operating leases are recognized on a straight-line basis over the lease term. Amortization expense of the right-of-use asset for finance leases is recognized on a straight-line basis over the lease term and interest expense for finance leases is recognized based on the incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. In calculating the right-of-use assets and lease liabilities, the Company has elected to combine lease and non-lease components for all asset classes. The Company excludes short-term leases, if any, having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term. 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 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 130 Table of Contents 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 ATEV for certain specified indications outside the United States. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). The FASB issued this update to improve the disclosures about an entity’s reportable segments, including providing more detailed information about a reportable segment’s expenses, enhancing interim disclosure requirements and providing new segment disclosure requirements for entities with a single reportable segment. 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. 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. 2023-09, “Income Taxes (Topic 740), Improvements to Income Tax Disclosures” (“ASU 2023-09”). 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 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 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. 131 Table of Contents HUMACYTE, INC. NOTES TO FINANCIAL STATEMENTS 3. Fair Value Measurements The Company’s assets and liabilities that were measured at fair value on a recurring basis were as follows: Fair Value Measured as of December 31, 2024 ($ in thousands) Level 1 Level 2 Level 3 Total Assets: 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 Liabilities: Contingent Earnout Liability $ — $ — $ 70,961 $ 70,961 Contingent derivative liability — — 2,415 2,415 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 JDRF Agreement derivative liability — — 121 121 Total financial liabilities $ — $ — $ 92,815 $ 92,815 Fair Value Measured as of December 31, 2023 ($ in thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents (money market funds) $ 78,995 $ — $ — $ 78,995 Total financial assets $ 78,995 $ — $ — $ 78,995 Liabilities: 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. 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. 132 Table of Contents 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 The following table presents a summary of the changes in the fair value of the Contingent Earnout Liability: Contingent Earnout Liability Year Ended December 31, ($ in thousands) 2024 2023 Fair value as of beginning of period $ ( 37,916 ) $ ( 27,893 ) Change in fair value included in other income (expense), net ( 33,045 ) ( 10,023 ) Fair value as of end of period $ ( 70,961 ) $ ( 37,916 ) 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. 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 (see Note 9 — Stockholders’ Equity (Deficit) and Warrants ). Contingent earnout payments involve certain assumptions requiring significant judgment and actual results can differ from assumed and estimated amounts. Contingent Derivative Liability 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 issuance and each subsequent reporting period. 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 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. 133 Table of Contents 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: Contingent Derivative Liability Year Ended December 31, ($ in thousands) 2024 2023 Fair value as of beginning of period $ ( 2,636 ) $ — 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 ) 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 (Deficit) and Warrants ). 134 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Property and Equipment, Net Property and equipment, net consisted of the following: As of December 31, ($ in thousands) 2024 2023 Scientific and manufacturing equipment $ 29,059 $ 28,400 Computer equipment 100 125 Software 1,024 682 Furniture and fixtures 1,066 1,066 Leasehold improvements 27,901 27,844 59,150 58,117 Accumulated depreciation ( 36,087 ) ( 31,326 ) Property and equipment, net $ 23,063 $ 26,791 Depreciation expense totaled $ 5.1 million and $ 5.7 million for the years ended December 31, 2024 and 2023, respectively. All long-lived assets are maintained in the United States. 5. Accrued Expenses Accrued expenses consisted of the following: As of December 31, ($ in thousands) 2024 2023 Accrued external research, development and manufacturing costs $ 4,889 $ 3,845 Accrued employee compensation and benefits 6,242 5,238 Accrued professional fees 293 257 Total $ 11,424 $ 9,340 6. Revenue Interest Purchase Agreement Revenue Interest Purchase Agreement 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. 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”) to be paid in multiple tranches. 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 with SVB, as defined in Note 7 — Debt. 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. 135 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Pursuant to the Purchase Agreement, the Revenue Interests entitle the Purchasers to receive a royalty initially equal to 7.5 % (the “Rate”) of global net sales of the Company’s products (subject to a lower rate for net sales by specified licensees outside the United States), to be paid on a calendar quarterly basis (the “Revenue Interest Payments”). If the Purchasers do not receive cumulative Revenue Interest Payments equal to 100 % of the amount funded to date (the “Cumulative Purchaser Payments”) by the last business day of 2028 (the “Test Date”), the Rate will increase to a rate that, had such increased rate applied during the period from May 12, 2023 through the Test Date, would have provided the Purchasers with cumulative Revenue Interest Payments equal to the Cumulative Purchaser Payments as of the Test Date. Additionally, Global will be required to pay the Purchasers an amount equal to 100 % of the Cumulative Purchaser Payments as of the Test Date less the total Revenue Interest Payments made by Global to the Purchasers under the Purchase Agreement as of the Test Date. 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 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 (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). 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, 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 its subsidiaries’ assets. 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 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 136 Table of Contents 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. 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. 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. Revenue Interest Payments made as a result of the Company’s net product sales will reduce the revenue interest liability. 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 December 31, 2023 $ 38,600 Proceeds from revenue interest purchase agreement 20,000 Transaction costs paid ( 500 ) Debt discount from embedded contingent derivative liability ( 1,552 ) Interest expense recognized 7,691 Revenue interest liability at December 31, 2024 $ 64,239 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 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. 137 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7. Debt 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”). 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. 8. Leases 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 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. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have been included in the calculation of the lease liabilities and right of use assets as the Company is reasonably certain to exercise the options due to the specialized nature of the leased building. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. The Company does not act as a lessor in any lease arrangements. The following summarizes quantitative information about the Company’s leases: Year Ended December 31, ($ in thousands) 2024 2023 Finance lease cost Amortization of right-of-use assets $ 2,086 $ 2,060 Interest on lease liabilities 1,523 1,709 Total finance lease cost 3,609 3,769 Operating lease cost 105 105 Total lease cost $ 3,714 $ 3,874 Year Ended December 31, 2024 Year Ended December 31, 2023 ($ in thousands) Finance Leases Operating Leases Finance Leases Operating Leases Operating cash flows from leases $ ( 1,523 ) $ ( 105 ) $ ( 1,709 ) $ ( 105 ) Financing cash flows from leases $ ( 2,579 ) $ — $ ( 2,256 ) $ — Weighted-average remaining lease term 3.74 4.25 4.13 4.74 Weighted-average discount rate 8.50 % 8.50 % 8.50 % 8.50 % 138 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2024, the maturities of the Company’s lease liabilities were as follows: ($ in thousands) Finance Leases Operating Leases 2025 $ 4,212 $ 105 2026 4,282 105 2027 2,718 105 2028 2,190 105 2029 2,257 105 Thereafter 5,772 259 Total 21,431 784 Less: present value discount ( 4,894 ) ( 205 ) Lease liabilities $ 16,537 $ 579 9. 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. 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 . 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. 139 Table of Contents 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. ATM Facility 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 . Common Stock 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 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. 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. 140 Table of Contents 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: December 31, 2024 2023 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 12,274,139 11,919,421 Options available for issuance under stock plans 5,817,353 1,492,057 Shares available for grant under ESPP 1,030,033 1,030,033 Warrants to purchase Common Stock 14,079,314 5,588,506 79,940,576 36,363,351 ___________________________ (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 certificate of designations. Voting powers, designations, powers, preferences and relative, participating, optional, special and other rights shall be stated and expressed in such resolutions. There were 20,000,000 shares designated as preferred stock and none were outstanding as of December 31, 2024 and 2023. Warrants The Company had the following Common Stock warrants outstanding as of December 31, 2024 and 2023: December 31, 2024 2023 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 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 . 141 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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 $ 0.4 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: As of December 31, 2024 2023 Market price of public stock $ 5.05 $ 2.84 Exercise price $ 11.50 $ 11.50 Expected term (years) 1.65 2.65 Expected share price volatility 128.0 % 75.0 % Risk-free interest rate 4.22 % 4.09 % Estimated dividend yield 0 % 0 % Public Warrants 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 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. 142 Table of Contents 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 December 31, 2024 October 7, 2024 December 31, 2024 October 7, 2024 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 December 31, 2024 November 15, 2024 December 31, 2024 November 15, 2024 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 Following the Closing, former holders of Legacy Humacyte common and preferred shares are eligible to receive up to 15,000,000 Contingent Earnout Shares in the aggregate, in two equal tranches of 7,500,000 shares of Common Stock per tranche. The first and second tranches are issuable if the closing volume weighted average price (“VWAP”) per share of Common Stock quoted on Nasdaq (or the exchange on which the shares of Common Stock are then listed), is greater or equal to $ 15.00 and $ 20.00 , respectively, over any 20 trading days within any 30 consecutive trading day period. Upon the Closing, the contingent obligation to issue Contingent Earnout Shares was accounted for as a liability because the triggering events that determine the number of Contingent Earnout Shares required to be issued include events that are not solely indexed to the Common Stock. 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. 143 Table of Contents 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: As of December 31, 2024 2023 Current stock price $ 5.05 $ 2.84 Expected share price volatility 84.8 % 86.7 % Risk-free interest rate 4.58 % 3.88 % Estimated dividend yield 0 % 0 % Expected term (years) 10.00 10.00 10. Stock-based Compensation At Closing, the 2021 Long-Term Incentive Plan, (the “2021 Plan”), and the 2021 Employee Stock Purchase Plan, (the “ESPP”), became effective. 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 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. As of December 31, 2024, 5,817,353 and 1,030,033 shares of Common Stock were available under the 2021 Plan and ESPP, respectively. 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, after the Closing no further awards were 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 retained their original terms. 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. As of December 31, 2024, 8,578,363 , 3,694,124 and 1,652 shares of Common Stock remain reserved for outstanding options issued under the 2021 Plan, the 2015 Plan and the 2005 Plan, respectively. 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. 144 Table of Contents 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 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. The service-based vesting condition for the plans is generally satisfied over 36 to 48 months from the date of grant. The performance-based vesting conditions are satisfied upon the attainment of certain product development milestones. The Company recognizes stock-based compensation expense based on the grant date fair value of the awards measured using the Black-Scholes option pricing model. Compensation expense related to awards with service-based vesting conditions is recognized on a straight-line basis over the requisite service period. 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. The Company does not recognize compensation expense related to awards with performance-based vesting conditions until it is probable that the performance-based vesting condition will be achieved. Forfeitures are accounted for as they occur. Option awards under the Company’s option plans generally provide for accelerated vesting of the unvested portions of any option award in the event of an involuntary termination, as such term is defined in the relevant stock option agreement, of a grantee’s employment during the period that commences 30 days prior to the effective date of a corporate transaction and that ends 12 months following the effective date of such transaction. Additionally, the Company’s board of directors may, in its sole discretion, accelerate the vesting of any unvested stock options in the event of a corporate transaction. The Company estimated the fair value of the stock options on the date of grant using the following assumptions in the Black-Scholes option-pricing model: Year Ended December 31, 2024 2023 Estimated dividend yield 0 % 0 % Expected share price volatility (weighted average and range, if applicable) 91.8 % ( 90.8 % to 92.8 %) 88.6 % ( 88.5 % to 89.8 %) Risk-free interest rate (weighted average and range, if applicable) 4.12 % ( 3.54 % to 4.41 %) 4.22 % ( 3.58 % to 4.39 %) Expected term of options (in years) 6.25 6.25 • Fair Value of Common Stock. The fair value of the Common Stock has been determined based on the closing price of the shares on Nasdaq. • Expected Term. The expected term represents the period that stock options are expected to be outstanding. The Company calculated the expected term using the simplified method for options, which is available where there is insufficient historical data about exercise patterns and post-vesting employment termination behavior. The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting-tranche for awards with graded vesting. The mid-point between the vesting date and the maximum contractual expiration date is used as the expected term under this method. For awards with multiple vesting-tranches, the times from grant until the mid-points for each of the tranches may be averaged to provide an overall expected term. • Expected Volatility. 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. 145 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS • Risk-Free Interest Rate. The risk-free interest rate was based on the yields of U.S. Treasury zero-coupon securities with maturities similar in duration to the expected term of the options. • Expected Dividend Yield. The Company has not paid dividends on its Common Stock nor does it expect to pay dividends in the foreseeable future. Accordingly, the Company has estimated the dividend yield to be zero . 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: Year Ended December 31, ($ in thousands) 2024 2023 Research and development $ 2,851 $ 1,716 General and administrative 3,286 5,112 Total $ 6,137 $ 6,828 A summary of option activity under the Company’s stock option plans during the year ended December 31, 2024 is presented below: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Options outstanding at December 31, 2023 11,919,421 $ 4.64 8.3 $ 383 Granted 1,640,900 6.18 Exercised ( 503,672 ) 3.01 Forfeited ( 782,510 ) 3.89 Options outstanding at December 31, 2024 12,274,139 $ 4.96 7.7 $ 16,202 Vested and exercisable, December 31, 2024 5,734,589 $ 6.26 6.4 $ 5,614 Vested and expected to vest, December 31, 2024 12,274,139 $ 4.96 7.7 $ 16,202 The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2024 and 2023 was $ 4.82 and $ 2.20 , respectively. The total intrinsic value of options exercised during the years ended December 31, 2024 and 2023 was $ 2.0 million and $ 0.8 million, respectively. As of December 31, 2024, unrecognized stock-based compensation cost for options was $ 18.1 million and is expected to be recognized over a weighted-average period of 2.7 years. 146 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. Income Taxes The Company did not record any income tax expense or benefit during the years ended December 31, 2024 and 2023. 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. 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. Significant components of the Company’s deferred tax assets and deferred tax liabilities, including valuation allowances, are as follows: As of December 31, ($ in thousands) 2024 2023 Deferred tax assets: Net operating loss $ 97,880 $ 80,785 Capitalized research and development 57,498 50,968 Research credits 27,278 20,099 Stock-based compensation 1,141 1,140 Right of use lease liability 127 133 Accrued expenses 105 69 Other 1 1 Total deferred tax asset 184,030 153,195 Less: valuation allowance ( 182,867 ) ( 151,677 ) Total net deferred tax asset 1,163 1,518 Deferred tax liabilities: Basis difference in fixed assets ( 1,041 ) ( 1,385 ) Right of use lease assets ( 122 ) ( 133 ) Total deferred tax liability ( 1,163 ) ( 1,518 ) Total net deferred tax asset/(liability) $ — $ — A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets. Based on the weight of the available evidence, which includes the Company’s historical operating losses, lack of taxable income and the accumulated deficit, the Company provided a full valuation allowance against the deferred tax assets resulting from the tax loss and credits carried forward as of December 31, 2024 and December 31, 2023. On November 18, 2021, North Carolina enacted the 2021 Appropriations Act, which included a gradual corporate income tax rate decrease from the current 2.5% to 0% by 2030. The Company is in a cumulative loss position and does not have significant deferred tax liabilities that can be utilized as a source of taxable income in the future. 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. 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. 147 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The reasons for the difference between the actual income tax benefit for the years ended December 31, 2024 and 2023, and the amount computed by applying the statutory Federal income tax rate to losses before income taxes are as follows: December 31, 2024 2023 ($ in thousands) Amount Rate Amount Rate Income tax benefit at statutory rate $ ( 31,227 ) 21.0 % $ ( 23,263 ) 21.0 % State income taxes, net of federal benefit ( 2,399 ) 1.6 % ( 2,066 ) 1.9 % Tax credits ( 4,548 ) 3.1 % ( 1,917 ) 1.7 % Other nondeductible expenses 6,702 ( 4.5 ) % 1,759 ( 1.6 ) % Deferred rate changes 2,256 ( 1.5 ) % 2,100 ( 1.9 ) % Deferred tax true-up (1) ( 1,973 ) 1.3 % 2,860 ( 2.6 ) % Change in valuation allowance 31,189 ( 21.0 ) % 20,527 ( 18.5 ) % Provision for income taxes $ — 0.0 % $ — 0.0 % ___________________________ (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. Some of these state net operating losses included in these amounts follow the Federal Tax Cuts and Jobs Act and are carried over indefinitely. The Company’s state net operating losses began to expire in 2020 and will expire completely in 2044. The state operating loss carryforwards are inclusive of North Carolina net operating losses, which are recorded at a zero benefit. As of December 31, 2024 and 2023, the Company had Federal and state research tax credit carryforwards of $ 27.3 million and $ 20.1 million, respectively. These credit carryforwards will begin to expire in 2025 and will expire completely in 2044. Net operating loss carryforwards and tax credit carryforwards are subject to review and possible adjustment by the IRS, and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders or groups over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code, which could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not determined whether there have been any cumulative ownership changes or the impact on the utilization of the loss carryforwards if such changes have occurred. A section 382 study will be performed at a time when forthcoming profitability is reasonably anticipated. 12. Retirement Plan The Company currently maintains a defined contribution employee retirement plan, or 401(k) plan, for all employees upon their date of hire. The 401(k) plan is intended to qualify as tax-qualified plans under Section 401(k) of the Internal Revenue Code of 1986, as amended. The plan permits employees to contribute, on a pre-tax basis, a portion of their salary up to the Federally mandated limits. The Company matches an employee’s contribution up to 4 % of the employee’s compensation. Contributions to the 401(k) plan by the Company totaled $ 1.1 million and $ 1.0 million for the years ended December 31, 2024 and 2023, respectively. 148 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Commitments and Contingencies Patent License Agreements Duke University In March 2006, the Company entered into a license agreement with Duke University (“Duke”), which was subsequently amended in 2011, 2014, 2015, 2018, 2019 and 2022. Under this license agreement, Duke granted the Company a worldwide, exclusive, sublicensable license to certain patents related to decellularized tissue engineering, referred to as the patent rights, as well as a non-exclusive license to use and practice certain know-how related to the patent rights. The relevant licensed patent on decellularization of tissue expired in 2021. The Company has agreed to use commercially reasonable efforts to develop, register, market and sell products utilizing the patent rights, referred to as the licensed products. Any services provided to a third party utilizing licensed products are referred to as licensed services. The Company has also agreed to meet certain benchmarks in its development efforts, including as to development events, clinical trials, regulatory submissions and marketing approval, within specified timeframes. Under the license agreement, Duke retains the right to use the patent rights for its own educational and research purposes, and to provide the patent rights to other non-profit, governmental or higher-learning institutions for non-commercial purposes without paying royalties or other fees. In connection with the Company’s entry into the license agreement, the Company granted equity consideration to Duke in the form of 52,693 shares of Common Stock. Under the license agreement, the Company also agreed to pay Duke: • a low single-digit percentage royalty on eligible sales of licensed products and licensed services, plus a low double-digit percentage of any sublicensing revenue; • an annual minimum royalty beginning in 2012, which increases in the calendar year immediately following the first commercial sale of licensed products or licensed services (whichever occurs first); and • an additional amount in license fees, as certain milestones are met. The license agreement remains effective until the later of (i) the last of the patent rights expires or (ii) four years after the Company’s first commercial sale, unless terminated earlier. Either party may terminate the agreement for fraud, willful misconduct or illegal conduct, or uncured material breach. Duke may terminate the agreement if the Company becomes insolvent. Duke may also terminate the license, convert the license into a non-exclusive license or seek assignment of any sublicense if the Company fails to reach diligence milestones within the applicable time period. If the Company abandons any claim, patent or patent application, its rights under the license with respect to such patent rights will be terminated in the territory in which the Company abandons such rights. The Company may terminate the license agreement unilaterally upon three months ’ prior notice to Duke. The Company agrees to indemnify Duke against certain third-party claims. 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. 149 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. The Company has agreed to pay to Yale an annual maintenance fee, increasing between the first and fourth anniversaries of the BVP License Agreement up to a maximum of less than $ 0.1 million per year for this license. In August 2019, the Company entered into a license agreement with Yale that granted the Company a worldwide license to the patents related to tubular prostheses (the “Tubular Prosthesis License Agreement”). The license granted under the Tubular Prosthesis License Agreement is exclusive in the field of engineered urinary conduits, engineered tracheas/airways, and engineered esophagi, 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. The Company has agreed to pay to Yale an annual maintenance fee, increasing between the first and fourth anniversaries of the Tubular Prosthesis License Agreement up to a maximum of less than $ 0.1 million per year for this license. The Company has agreed to use reasonable commercial efforts to develop and commercialize the licensed patents and any licensed products and methods, and to use reasonable efforts to make the licensed products available to patients in low and low-middle income countries. The Company is also obligated to provide Yale periodically an updated and revised copy of its plan for each license, which must indicate progress of its development and commercialization. The Company may also sublicense the Company’s rights without Yale’s prior written consent, but such sublicense is subject to certain conditions. In connection with its entry into the Tubular Prosthesis License Agreement, the Company paid Yale upfront cash fees. The Company has also agreed to pay Yale: • 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 ; • a low single-digit percentage royalty on worldwide net sales, subject to reductions for third-party license fees; and • a low double-digit percentage of sublicensing income. If the Company or any of its future sublicensees bring a patent challenge against Yale or assists another party in bringing a patent challenge against Yale, the license fees described above will be subject to certain increases and penalties. The BVP License Agreement and Tubular Prosthesis License Agreement expire on a country-by-country basis on the date on which the last of the patents in such country expires, lapses or is declared invalid. Yale may terminate the BVP License Agreement and Tubular Prosthesis License Agreement if the Company fails to (i) provide written diligence reports, (ii) provide commercially reasonable diligence plans, (iii) implement the plans in accordance with the obligations under the agreements, or (iv) reach certain research and development milestones within the scheduled timeframe set forth in the agreements; however, any such termination right would be limited in scope to the country to which such failure relates. Yale may also terminate for the Company’s non-payment, uncured material breach, failure to obtain adequate insurance, bringing or assisting in bringing of a patent challenge against Yale, abandonment of the research and development of the Company’s products or insolvency. 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 150 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 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 related to the Company’s BVP. The Company received the first milestone payment of $ 80 thousand in April 2023 upon execution of the agreement. 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 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: • a one-time royalty in an amount equal to four times the Actual Award, 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; • an additional royalty equal to the Actual Award at a specified payment date after net sales exceed $ 250 million; and • 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, a payment equal to 10 % of any license or purchase price payments received by the Company up to the Royalty Cap, less any previous royalty payments paid towards the Royalty Cap. The JDRF Agreement expires on the date on which the Company has paid all of the royalty payments described above. Either party may terminate the JDRF Agreement for cause by providing the other party with written notice and allowing the other party 30 days to cure such breach. JDRF may terminate the JDRF Agreement without cause by providing 90 days’ notice to the Company at any time after April 1, 2024. Royalties on previously received milestone payments would remain due after a termination by JDRF without cause. Legal Matters 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. 151 Table of Contents 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 To the extent permitted under Delaware law, the Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or was serving, at the Company’s request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s service. 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 152 Table of Contents 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. 14. 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 Date converted into 15,812,735 shares of Common Stock. 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. The Company is responsible for developing and seeking regulatory approval for the distribution product in the field in the United States. For countries outside the United States, the parties agreed to use commercially reasonable efforts to satisfy certain agreed minimum market entry criteria for the distribution product in the field in such country. For the EU, once such criteria have been satisfied for the applicable country, or if the parties otherwise mutually agree to obtain regulatory approval for the distribution product in the field in the applicable country, the Company agreed to use commercially reasonable efforts to obtain such regulatory approval (other than pricing approval), and Fresenius Medical Care agreed to use commercially reasonable efforts to obtain the corresponding pricing approval. For the rest of the world (i.e., outside the United States and the EU), once such criteria have been satisfied for the applicable country, or if the parties otherwise mutually agree to obtain regulatory and pricing approval for the distribution product in the field in the applicable country, Fresenius Medical Care agreed to use commercially reasonable efforts to obtain such approvals, and the Company agreed to use commercially reasonable efforts to support Fresenius Medical Care in its efforts. Under the distribution agreement, the Company grants an exclusive, sublicensable license to Fresenius Medical Care under the patents, know-how and regulatory materials controlled by the Company during the term to commercialize the distribution product in the field outside the United States, subject to the Company’s retained rights to carry out its obligations under the distribution agreement. The Company also grants a non-exclusive, sublicensable license to Fresenius Medical Care under the patents, know-how and regulatory materials controlled by the Company during the term to develop the distribution product in accordance with the terms of the distribution agreement. In addition, the Company grants to Fresenius Medical Care, among other things, a perpetual, irrevocable, non-exclusive sublicensable license under the patents and know-how that primarily relate to the distribution product or its manufacture and that were created, conceived or developed solely or jointly by or on behalf of Fresenius Medical Care in the performance of its activities under the distribution agreement. The distribution agreement provides that the Company will own all know-how and patents that primarily relate to the distribution product or its manufacture that are created, conceived or developed by or on behalf of either party in the performance of activities under the distribution agreement. Ownership of all other know-how, patents, materials and other intellectual property created, conceived or developed during the performance of activities under the distribution agreement will be determined in accordance with U.S. patent laws for determining inventorship. 153 Table of Contents 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. Such revenue-share payments will be a percentage of net sales in the low double digits, without regard to the calendar year in which such net sales are attributable, until such time that the Company has paid to Fresenius Medical Care a certain total amount, at which time the revenue-share will decrease to a percentage of net sales in the mid-single digits. 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-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. The distribution agreement will generally continue on a country-by-country basis until the later of (a) the tenth anniversary of the launch date of the distribution product in the relevant country or (b) the expiration of the last-to-expire valid claim of specified patents in such country. Each party is permitted to terminate the distribution agreement for insolvency of, or, under certain circumstances, including various cure periods, material breach by the other party. Subject to a cure period, Fresenius Medical Care may also terminate the distribution agreement in its entirety or on a country-by-country basis (i) for certain withdrawals of regulatory approval or (ii) for termination or expiration of any of our in-licenses that is necessary for the exercise of Fresenius Medical Care’s rights, or the satisfaction of its obligations, under the distribution agreement. In addition, Fresenius Medical Care may terminate the distribution agreement for convenience on a country-by-country basis upon not less than 12 months’ written notice to the Company, although Fresenius Medical Care is not permitted to give such notice prior to the end of the second year following launch of the distribution product in such country. Each party is required to indemnify one another for certain third-party claims. 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. 154 Table of Contents HUMACYTE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Arrangements with Yale University Dr. Niklason serves as an Adjunct Professor in Anesthesia at Yale University. 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. 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. 15. Subsequent Events 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. 155 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.