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Item 8. Financial Statements and Supplementary Data

2026-03-31 compared with 2025-03-31 · 562 added, 375 removed, 478 unchanged (66% of the section changed)

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Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statement of Shareholders ’ Equity (Deficit)

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Omeros Corporation (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income (loss), shareholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Omeros Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, shareholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2025, and 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 at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.

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

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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OMIDRIA royalty obligation

2026 Notes, net

Lease liabilities

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OMIDRIA royalty obligation, non-current

Convertible senior notes, net

Term debt, non-current

2026 and 2029 Notes, non-current, net

2029 Notes embedded derivative, non-current

Term debt, non-current, net

Term debt, embedded derivative, non-current

Lease liabilities, non-current

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OMEROS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

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Loss from operations

Interest expense

Gain on sale of zaltenibart

Gain on early extinguishment of term debt, net

Gain (loss) on early extinguishment of 2026 Notes

Interest and other income

Gain on early extinguishment of convertible senior notes

Net loss from continuing operations

Interest expense, net of remeasurement adjustments and other

Gain (loss) on change in fair value of financial instruments, net

Loss from continuing operations before income tax expense

Income tax expense

Net loss from continuing operations, net of tax

Net income from discontinued operations, net of tax

Net income (loss)

Basic and diluted net income (loss) per share:

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Net income from discontinued operations

Net income (loss)

Weighted-average shares used to compute basic and diluted net income (loss) per share

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Issuance of common stock upon vesting of restricted stock units

Repurchases of common stock

Stock-based compensation

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Issuance of common stock upon exercise of stock options

Issuance of common stock upon vesting of restricted stock units

Repurchases of common stock

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Balance at December 31, 2024

Issuance of common stock - registered direct offering, net

Issuance of common stock - at-the-market equity offering facility, net

Issuance of common stock - 2026 Notes equitization, net

Issuance of common stock upon exercise of stock options

Repurchases of common stock

Stock-based compensation

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Operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Gain on sale of zaltenibart

Remeasurement on fair value of financial instruments

Stock-based compensation expense

Depreciation and amortization

Amortization of discount and issuance costs on convertible notes

Amortization of non-cash interest and issuance costs on term debt

(Gain) loss on early extinguishment of 2026 Notes

Amortization of discount and issuance costs on 2026 Notes and 2029 Notes

Amortization of premium and issuance costs on term debt

Gain on early extinguishment on term debt, gross

Non-cash interest remeasurement on OMIDRIA royalty obligation

Non-cash interest on OMIDRIA contract royalty asset

Remeasurement on OMIDRIA contract royalty asset

Non-cash interest remeasurement on the OMIDRIA royalty obligation

Accretion on U.S.

government treasury bills, net

Gain on early extinguishment of convertible senior notes

Changes in operating assets and liabilities:

OMIDRIA contract royalty asset

Prepaid expenses and other

Accounts payable and accrued expense

Prepaid expenses and other

Net cash provided by (used in) operating activities

Investing activities:

Gross cash proceeds from sale of zaltenibart

Proceeds from the sale and maturities of investments

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Purchases of property and equipment

Net cash provided by (used in) investing activities

Net cash provided by investing activities

Financing activities:

Proceeds from sale of future royalties

Proceeds from registered direct offering, net

Proceeds from issuance of common stock from the ATM facility, net

Proceeds upon exercise of stock options

Payment on maturity of 2023 convertible senior notes

Repurchase of 2026 convertible senior notes

Repayment of term debt principal

Principal payments on OMIDRIA royalty obligation

Repurchases of common stock

Prepayment premium and transaction costs on repayment of term debt

Payment of debt issuance costs related to 2029 Notes

Payments on finance lease obligations

Proceeds from sale of future royalties

Payment on maturity of 2023 Notes

Cash paid to repurchase 2026 Notes

Repurchases of common stock

Net cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

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Supplemental cash flow information

Exchange of 2026 Notes for 2029 Notes

Exchange of 2026 Notes for common stock

Cash paid for interest

Equipment acquired under finance lease

Cash paid for income taxes, net

Equipment acquired under finance lease

See accompanying Notes to Consolidated Financial Statements

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Note 1 — Organization and Basis of Presentation

Omeros Corporation (“Omeros,” the “Company” or “we”) is a clinical-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market as well as orphan indications targeting immunologic diseases, including complement-mediated diseases and cancers related to dysfunction of the immune system, as well as addictive and compulsive disorders.

Omeros Corporation (“Omeros,” the “Company” or “we”) is an innovative, commercial-stage biotechnology company that discovers and develops first-in-class protein and small-molecule therapeutics for large-market and orphan indications, with particular emphasis on complement-mediated diseases, cancers, and addictive or compulsive disorders.

Our clinical-stage development programs include:

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OMS1029, our long-acting antibody targeting MASP-2;

zaltenibart, also known as OMS906, our antibody targeting mannan-binding lectin-associated serine protease-3 (“MASP-3”), the key activator of the alternative pathway of complement;

and OMS527, our phosphodiesterase 7 (“PDE7”) inhibitor program.

Clinical development of narsoplimab is currently focused primarily on hematopoietic stem cell transplant-associated thrombotic microangiopathy (“TA-TMA”).

We successfully completed a pivotal clinical trial for narsoplimab in TA-TMA and previously submitted to FDA a biologics license application (“BLA”) seeking marketing approval for narsoplimab in this indication.

In October 2021, FDA issued a complete response letter (“CRL”) with respect to the original BLA and indicated that additional information would be needed to support regulatory approval.

We appealed FDA’s decision to issue the CRL through a formal dispute resolution process that concluded in late 2022.

Although our appeal was denied, the decision identified potential paths for resubmission of the BLA, including paths based on comparison of survival data from the completed pivotal trial versus a historical control group.

Based on the recommendations included in the appeal decision and on subsequent interactions with FDA’s review division, we developed a statistical analysis plan to assess data from our pivotal clinical trial, existing data from a historical control population available from an external source and data from the narsoplimab expanded access program.

In March 2025, we resubmitted to FDA a BLA seeking regulatory approval for narsoplimab in TA-TMA.

FDA has 30 days to decide whether the application is sufficiently complete to permit a review of the BLA.

Assuming FDA agrees to review the BLA, we expect the resubmission to be classified as Type B, meaning that the target date for FDA action on the BLA under the Prescription Drug User Fee Act (“PDUFA”) is expected to be in September 2025.

As with any BLA or new drug application, there can be no guarantee that, even if FDA agrees to review the BLA, that FDA will complete its review within a given timeframe, or that our BLA will ultimately be approved.

During 2025, we sold to Novo Nordisk Health Care AG the exclusive global rights in all indications to develop and commercialize zaltenibart, also known as OMS906, our antibody targeting mannan-binding lectin-associated serine protease-3 (“MASP-3”), the key activator of the alternative pathway of complement.

FDA Approval of YARTEMLEA ®

On December 23, 2025, FDA approved YARTEMLEA ® (narsoplimab-wuug) for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy (“TA-TMA”).

TA-TMA is a severe and often-fatal complication of hematopoietic stem cell transplantation in adults and children, driven by systemic endothelial injury triggered by conditioning regimens, immunosuppressants, infection, graft-versus-host disease, and other transplant-related factors.

Activation of the lectin pathway of complement plays a central role in disease pathogenesis.

YARTEMLEA selectively inhibits MASP-2, blocking pathway activation while preserving classical and alternative complement functions important for host defense.

In TA-TMA, MASP-2 inhibition prevents lectin pathway-mediated cellular injury, including endothelial damage in small blood vessels, and thrombus formation.

YARTEMLEA is the first and only approved inhibitor of the lectin pathway of complement.

YARTEMLEA is approved for use in adults and in children ages two years and older.

Commercial distribution and sales of YARTEMLEA commenced in January 2026.

A marketing authorization application (“MAA”) for YARTEMLEA in TA-TMA has been submitted to the European Medicines Agency (“EMA”) and is being reviewed under EMA’s centralized review procedure, which allows review of a single marketing authorization application.

If the MAA is approved, it would authorize the product to be marketed in all EU member states and European Economic Area countries.

The European Commission (the “EC”) has granted narsoplimab designation as an orphan medicinal product for treatment in hematopoietic stem cell transplantation.

Sale of Zaltenibart

On November 25, 2025, we completed a transaction (the “Transaction”) pursuant to an Asset Purchase and License Agreement (“APLA”) between Omeros and Novo Nordisk Healthcare AG (“Novo Nordisk”), dated October 10, 2025, in which Novo Nordisk received exclusive global rights in all indications to develop and commercialize our lead investigational MASP-3 inhibitor, zaltenibart (formerly OMS906), and certain related compounds and products.

Zaltenibart is a first-in-class, late-stage clinical humanized monoclonal antibody targeting MASP-3, the most upstream and key activator of the alternative pathway of the complement system.

Zaltenibart has shown multiple potential advantages over other alternative pathway inhibitors in development and on the market.

At the closing of the Transaction, we received an upfront cash payment of $240.0 million.

In addition, we are eligible to receive (i) up to $510.0 million in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of each of the development and approval milestone events as set forth in the APLA and (ii) up to $1.3 billion in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of certain sales-based milestone events as set forth in the APLA.

We are also eligible under the APLA to receive tiered royalties on annual net sales of products at percentage rates ranging from high single digit to high teens, subject to reduction in certain circumstances, as set forth in the APLA.

In total, we are eligible to receive up to an additional $1.8 billion in potential development and commercial milestones, plus tiered royalties on net sales.

Pursuant to the APLA, we sold and transferred, and Novo Nordisk purchased zaltenibart and certain related assets, and the parties agreed to grant and receive certain intellectual property licenses to facilitate the continued development and commercialization activities of both companies.

We retain rights to our MASP-3 small-molecule program unrelated to zaltenibart, including the ability to develop and commercialize small-molecule MASP-3 inhibitors, across a range of therapeutic areas, including, but not limited to, ophthalmology, neurology, gastrointestinal disorders, dermatology, musculoskeletal diseases, and oncology.

We also retain rights to our “grandfathered” MASP-3 antibodies, with temporal and indication restrictions on commercialization and for use in advancing our small-molecule therapeutics.

In accordance with the APLA, at the closing of the Transaction, Omeros and Novo Nordisk entered into a transition services agreement (the “Transition Services Agreement”) pursuant to which we are providing certain transition services to Novo Nordisk to facilitate the transfer of the acquired assets and liabilities under the APLA and to provide for the continued operation of relevant studies and program activities during the applicable term.

Subject to certain exceptions and limitations, Novo Nordisk reimburses us for costs and expenses we incur under the Transition Services Agreement, including third-party costs and expenses, costs associated with delivery of transition services by Omeros personnel on an hourly basis at rates specified in the Transition Services Agreement, and for our inventories of zaltenibart drug substance and product.

Other Development Programs

Our lectin pathway program also includes OMS1029, our long-acting antibody targeting MASP-2.

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OMS1029 has been well tolerated to date with no safety concerns identified.

We are evaluating several potential indications for Phase 2 clinical development of OMS1029.

Our pipeline of clinical-stage complement-targeted therapeutic candidates also includes zaltenibart, a proprietary, patented monoclonal antibody targeting MASP-3, the key and most proximal activator of the alternative pathway of complement.

We have substantially completed two Phase 2 clinical trials evaluating zaltenibart in paroxysmal nocturnal hemoglobinuria (“PNH”) and have an ongoing open label extension study to assess the long-term efficacy and safety of zaltenibart in PNH patients who have completed either of the two Phase 2 clinical trials.

We have initiated our Phase 3 clinical development program for zaltenibart in this indication.

We also have an ongoing program evaluating zaltenibart in C3G, a rare and debilitating renal disease driven by complement dysregulation.

We are working to finalize selection of an indication and initiate Phase 2 clinical development of OMS1029.

Our phosphodiesterase 7 (“PDE7”) inhibitor program, which we refer to as OMS527, comprises multiple PDE7 inhibitor compounds and is based on our discoveries of previously unknown links between PDE7 and any addiction or compulsive disorder, and between PDE7 and any movement disorders.

In April 2023, we were awarded a grant from the National Institute on Drug Abuse (“NIDA”), part of the National Institutes of Health, to develop, at NIDA’s request, our lead orally administered PDE7 inhibitor compound for the treatment of cocaine use disorder (“CUD”).

NIDA awarded the grant to us for a total of $ 6.24 million over three years, of which we have claimed and received $ 1.1 million of funding to date and recognized $ 1.3 million into Other Income in our consolidated statement of operations and comprehensive income (loss).

The grant is intended to support preclinical cocaine interaction/toxicology studies to assess safety of the therapeutic candidate in the presence of concomitant cocaine administration, as well as an in-patient, placebo-controlled clinical study evaluating the safety and effectiveness of OMS527 in adults with CUD who receive concurrent intravenous cocaine.

The preclinical study has been completed successfully and provides the drug-interaction safety data necessary to support the human study of OMS527 in CUD.

We expect enrollment in the study evaluating OMS527 in adult patients with CUD to begin in 2025, also fully funded by NIDA.

In April 2023, we were awarded a grant from the National Institute on Drug Abuse (“NIDA”), to develop an orally administered PDE7 inhibitor compound for the treatment of cocaine use disorder (“CUD”).

NIDA awarded the grant to us for a total of $ 6.24 million over three years, of which we have claimed and received $ 2.2 million of funding to date and for the year ended December 31, 2025 recognized $ 0.9 million into Other Income in our consolidated statement of operations and comprehensive loss.

FDA subsequently requested additional preclinical information prior to initiating the clinical in-patient study in cocaine users.

Together with our collaborators at NIDA, we are scheduled to meet with FDA to discuss that request.

We also have various programs in preclinical research and development.

OMIDRIA Sale and Royalty Monetization Transactions

On December 23, 2021, we closed on an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Rayner Surgical Inc.

(“Rayner”) for the sale of our commercial product OMIDRIA, which we recorded as an OMIDRIA contract asset on our consolidated balance sheet.

As a result of this divesture, the results of OMIDRIA activities are classified as discontinued operations in our consolidated statements of operations and comprehensive income (loss) and excluded from continuing operations for all periods presented (See “Note 7 – Discontinued Operations – Sale of OMIDRIA”).

On September 30, 2022, we sold an interest in a portion of our future OMIDRIA royalties to DRI Healthcare Acquisitions LP (“DRI”) and received $ 125.0 million in cash consideration, which we recorded as an OMIDRIA royalty obligation on our consolidated balance sheet.

Interest expense on the royalty obligation is recorded as a component of continuing operations.

On February 1, 2024, we sold an expanded interest in OMIDRIA royalties to DRI and received $ 115.5 million in cash consideration, which we recorded as an addition to the OMIDRIA royalty obligation.

The amended and restated royalty purchase agreement with DRI (the “Amendment”) eliminates the previously existing annual caps on royalty payments after January 1, 2024, and provides that DRI receives all royalties on U.S.

net sales of OMIDRIA payable between January 1, 2024 and December 31, 2031.

All royalties earned on OMIDRIA sales within the U.S.

through December 31, 2031 are remitted by Rayner to an escrow account established by Omeros, from which payments are made to DRI.

After December 31, 2031, we will retain any U.S.

OMIDRIA royalties.

We are entitled to retain all royalties on net sales of OMIDRIA outside of the United States.

(See “Note 8 – OMIDRIA Royalty Obligation”).

Term Loan and Repurchase of 2026 Notes

On June 3, 2024, we, with certain subsidiaries, as guarantors, entered into a Credit and Guaranty Agreement (the “Credit Agreement”) with funds managed by Athyrium Capital Management (collectively “Athyrium”) and funds managed by Highbridge Capital Management (collectively “Highbridge”) as Lenders (the “Lenders”).

The Credit Agreement provides for a senior secured term loan facility of up to $ 92.1 million, consisting of an initial term loan of $ 67.1 million (the “Initial Term Loan”) and a $ 25.0 million delayed draw term loan (the “Delayed Draw Term Loan”), which may be drawn once in full upon notice delivered on or prior to June 3, 2025, conditioned on receipt of FDA approval of narsoplimab in TA-TMA within 30 days of the notice.

Also, we used the Initial Term Loan along with $ 21.7 million in cash on hand, to repurchase from the Lenders $ 118.1 million aggregate principal amount of our existing 5.25 % convertible senior notes due on February 15, 2026 (the “2026 Notes” and such repurchase, the “2026 Note Repurchase Transaction”), which resulted in a $ 51.0 million reduction in our outstanding debt.

(See “Note 6 – Debt” for a description of the Credit Agreement provision).

Basis of Presentation

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Liquidity and Capital Resources

The Transaction with Novo Nordisk, which closed on November 25, 2025, provided us with $ 240.0 million in upfront cash.

Under that certain Credit and Guarantee Agreement, dated June 3, 2024 (the “Credit Agreement”), among the Company, the Lenders (as defined below) from time to time party thereto, and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent, the Company used a portion of the proceeds from the sale of zaltenibart to repay the $ 67.1 million outstanding principal on the term debt (the “Term Loan”) under the Credit Agreement, along with $ 3.5 million in related prepayment premiums and transaction expenses.

Repayment of our obligations under the Credit Agreement resulted in the release in full of all liens and covenants thereunder including the covenant requiring us to maintain a minimum of $ 25.0 million in unrestricted cash, cash equivalents and short-term investments at all times.

As of December 31, 2025, we had cash, cash equivalents and short-term investments of $ 171.8 million.

Our cash used in operations for the year ended December 31, 2024 was $ 148.8 million and included a net loss for the year of $ 156.8 million.

Pursuant to a covenant in the Credit Agreement entered on June 3, 2024, we must maintain $ 25.0 million of unrestricted cash, cash equivalents and short-term investments at all times (see “Note 6 - Debt”).

In recent years, Omeros has incurred net losses from continuing operations and negative cash flows from operations.

The recurring losses, in combination with our cash and investment balances as of December 31, 2024, and an expected repayment of a portion of the borrowings under our secured credit facility on or prior to November 1, 2025, along with the maturity of the 2026 Notes on February 15, 2026, raises substantial doubt about our ability to continue as a going concern.

The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to our ability to continue as a going concern.

As we currently do not have an ongoing source of revenue sufficient to cover our operating costs, we will need to raise additional capital to accomplish our business plan.

We have a sales agreement to sell shares of our common stock, from time to time, in an “at the market” equity offering facility through which we may offer and sell shares of our common stock equaling an aggregate amount of up to $ 150.0 million.

In addition, our Delayed Draw Term Loan of $ 25.0 million may be drawn once in full upon notice delivered on or prior to June 3, 2025, conditioned on receipt of FDA approval of narsoplimab in TA-TMA within 30 days of the notice;

however, we do not expect that FDA approval of narsoplimab will be obtained within a timeframe that would permit the Delayed Draw Term Loan to be drawn absent an amendment to, or waiver of, this condition.

Proceeds of the Delayed Draw Term Loan, if available, may only be used towards any related transaction costs and for commercialization of narsoplimab efforts of TA-TMA.

We may pursue additional debt financings to retire the 2026 Notes that remain outstanding and to fund operations.

Should it be necessary or determined to be strategically advantageous, we also could pursue public and private offerings of our equity securities, additional debt transactions or restructurings, future royalty sales, or other strategic transactions, which may include licensing or selling a portion or all of one or more of our existing technologies.

However, pursuing debt financings, certain equity offerings or other strategic transactions may result in mandatory prepayments of the Initial Term Loan to the Credit Agreement.

(see “Note 6 — Debt” for further details).

If these capital resources, for any reason, are needed but inaccessible, it would have a significant negative impact on our financial condition.

We had $ 87.9 million in aggregate principal amount of debt at December 31, 2025, reflecting a decrease of $ 77.1 million, or 46.7 %, compared to $ 164.9 million in aggregate principal amount of debt at December 31, 2024.

On February 17, 2026, using funds received upon the closing of the Transaction, we repaid at maturity the remaining $ 17.1 million principal balance on our 5.25 % convertible senior notes due 2026 (the “2026 Notes”).

Omeros expects that it will be able to fund more than 12 months of operations from the date the financial statements are issued, utilizing our current cash, cash equivalents, and short-term investments, along with funds we expect to receive from commercial sales of YARTEMLEA.

Should it be necessary or determined to be strategically advantageous, we also could pursue public and private offerings of our equity securities, debt transactions or restructurings, future royalty sales, or other strategic transactions, which may include licensing or selling a portion or all of one or more of our existing technologies.

In addition, we have a sales agreement to sell shares of our common stock, from time to time, in an “at the market” equity offering facility through which we may offer and sell shares of our common stock in an aggregate amount of up to $ 150.0 million.

For purposes of determining available capital resources, future royalty and/or milestone receipts are excluded.

Should it be necessary, we plan to manage our operating expenses and reduce our projected cash requirements by delaying clinical trials, reducing selected research and development efforts, or implementing other restructuring activities.

The conditions described above, when evaluated in accordance with the relevant accounting literature, raise substantial doubt with respect to our ability to meet our obligations through one year from the issuance of the Company's consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Significant items subject to such estimates include the OMIDRIA contract royalty asset valuation and the OMIDRIA royalty obligation valuation.

Significant items subject to such estimates include the OMIDRIA contract royalty asset, OMIDRIA royalty obligation valuations and the embedded derivatives associated with our debt.

We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances;

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The Company's CODM is our Chief Executive Officer.

For the year ended December 31, 2024, the Company has identified one operating and reportable segment.

The CODM reviews net loss and expenses reported on the consolidated statement of operations and comprehensive income (loss).

The measurement of segment assets is reported on the balance sheet as total consolidated assets.

For the year ended December 31, 2025, the Company has identified one operating and reporting segment.

The CODM reviews net income (loss) and expenses reported on the consolidated statement of operations and comprehensive income (loss).

The measurement of segment assets is reported on the consolidated balance sheet as total consolidated assets.

All long-lived assets are held in the U.S.

Our segment net income (loss) aligns with our consolidated statement of operations and comprehensive income (loss).

Our segment net loss aligns with our consolidated statement of operations and comprehensive loss.

Research and Development

Research and development expenses are comprised primarily of contracted research, clinical trial study and manufacturing costs prior to approval;

consulting services;

contract milestones;

materials and supplies;

costs for personnel, including salaries, benefits and stock compensation;

depreciation;

an allocation of our occupancy costs;

and other expenses incurred to sustain our overall research and development programs.

Advance payments for goods or services that will be used for future research and development activities are deferred and then recognized as an expense as the related goods are delivered or the services are performed.

All other research and development costs are expensed as incurred.

Selling, General and Administrative

Selling, general and administrative expenses are comprised primarily of marketing expenses;

professional and legal services;

patent costs;

and salaries, benefits, and stock-compensation costs for marketing and other personnel not directly engaged in research and development.

Additionally, selling, general and administrative expenses include depreciation;

an allocation of our occupancy costs;

and other general corporate expenses.

Advertising costs are expensed as incurred.

We had no advertising costs during the years ended December 31, 2025, 2024 and 2023.

Stock-Based Compensation

Stock-based compensation expense is recognized for all share-based payments, including grants of stock option awards and restricted stock units based on estimated fair values.

The fair value of our stock is calculated using the Black-Scholes option-pricing model, which requires assumptions around volatility, forfeiture rates, risk-free interest rate and expected term.

Compensation expense is recognized over the requisite service periods, which is generally the vesting period, using the straight-line method.

Forfeiture expense is estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

The Company included the impact of the One Big Beautiful Bill Act (“OBBBA”) in its income tax provision for the twelve months ended December 31, 2025.

The enactment of the OBBBA reduced the Company’s taxable income for federal income tax purposes, resulting in no federal taxable income for the year.

The impact of the OBBBA on state income taxes varies by jurisdiction due to differences in state conformity with federal tax law, and the Company incurred state income tax expense in certain jurisdictions.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled.

We recognize the effect of income tax positions only if those positions are more likely than not to be sustained upon an examination by the relevant taxing authority.

A valuation allowance is established when it is more likely than not that the deferred tax assets will not be realized.

(For further details, see “Note 14 — Income Taxes”).

Asset Sale Transactions

The Company evaluates transactions involving the sale of our compounds, products or drug programs to determine whether such arrangements represent a sale of a business or a sale of a nonfinancial asset.

Transactions that do not meet the definition of a business are accounted for as the sale of a nonfinancial asset under Accounting Standards Codification (“ASC”) 610‑20, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets .

Upon transfer of control of the compound, product or drug program asset to a counterparty, the Company recognizes consideration received.

Any excess of consideration over the carrying value of the asset sold is recognized as a gain in the consolidated statements of operations.

Potential Milestone Income

The APLA with Novo Nordisk includes variable consideration in the form of milestone payments that are contingent upon the achievement of specified development, regulatory, or commercialization events.

The Company applies the variable consideration and constraint guidance in ASC 606, Revenue from Contracts with Customers , by analogy.

At contract inception and throughout the term of the arrangement, the Company assesses whether the achievement of each milestone is probable and estimates variable consideration using the most likely amount method.

Contingent milestone payments are excluded from the transaction price until the related milestone is achieved and it is probable that a significant reversal of cumulative revenue recognized will not occur.

Amounts are included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The Company re-evaluates the transaction price at each reporting period, including the estimated variable consideration and the application of the constraint, to reflect changes in circumstances.

Factors considered in these evaluations include the clinical or technical complexity of the milestone, the stage of development, and the risk of regulatory approval.

Because of the risk that products in development will not receive regulatory approval, we generally do not recognize any contingent payments that would be due to us until regulatory approval.

Discontinued Operations

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Planned or completed business dispositions are presented as discontinued operations when all the criteria described above are met.

For those divestitures that qualify as discontinued operations, all comparative periods presented are reclassified in the consolidated balance sheets.

Additionally, the results of operations of a discontinued operation are reclassified to income from discontinued operations, net of tax, for all periods presented in the consolidated statements of operations and comprehensive income (loss).

Results of discontinued operations include all revenues and expenses directly derived from such businesses.

General corporate overhead is not allocated to discontinued operations.

The OMIDRIA asset sale to Rayner qualifies as a discontinued operation and has been presented as such for all reporting periods presented.

The Company included information regarding cash flows from discontinued operations (see “Note 7 – Discontinued Operations – Sale of OMIDRIA”).

OMIDRIA Royalties, Milestones and Contract Royalty Assets

We determined that the sale of OMS906 to Novo Nordisk did not meet the above criteria.

As such, we have recorded the gain on sale of zaltenibart in Other Income in our consolidated statement of operations and comprehensive loss.

On December 23, 2021, we closed on an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Rayner Surgical Inc.

(“Rayner”) for the sale of our commercial product OMIDRIA which we record as an OMIDRIA contract asset on our consolidated balance sheet.

As a result of the divestiture, the results of OMIDRIA activities are classified as discontinued operations in our consolidated statement of operations and comprehensive loss and excluded from continuing operations for all periods presented.

We have rights to receive future royalties from Rayner on OMIDRIA net sales at royalty rates that vary based on geography and certain regulatory contingencies.

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To measure the OMIDRIA contract royalty asset, we use the expected value approach which is the sum of the discounted probability-weighted royalty payments we would receive using a range of potential outcomes, to the extent that it is probable that a significant reversal in the amount of cumulative income recognized will not occur.

As contemplated by the Asset Purchase Agreement, in December 2022, we earned a $ 200.0 million milestone payment (the “Milestone Payment”) upon the establishment of separate payment for OMIDRIA for a continuous period of at least four years when furnished in the ambulatory surgery center (“ASC”) setting (the “Milestone Event”).

We received $ 200.0 million in February 2023.

Upon achieving the Milestone Event, the royalty rate applicable to U.S.

net sales of OMIDRIA was reduced from 50 % to 30 %.

The 30 % royalty rate continues until the expiration or termination of the last issued and unexpired U.S.

patent, which we expect to occur no earlier than 2035.

Consequently, in December 2022, we revalued the OMIDRIA contract royalty asset using the 30 % royalty rate on U.S.

net sales and adjusted the probability weighted outcomes to reflect the occurrence of the Milestone Event.

Royalties earned are recorded as a reduction to the OMIDRIA contract royalty asset.

royalties received from Rayner through December 31, 2031 are remitted by Rayner to an escrow account established by Omeros, from which payments are made to DRI Healthcare Acquisition LP (“DRI”) and are entirely pass-through in nature to the Company.

These payments comprise interest expense, with the remainder treated as a reduction of the OMIDRIA royalty obligation.

The amount recorded in discontinued operations in future periods will reflect interest earned on the outstanding OMIDRIA contract royalty asset at 11.0 % and any amounts we receive that are different from the expected royalties.

The OMIDRIA contract royalty asset is re-measured periodically using the expected value approach based on actual results and future expectations.

Any required adjustment to the OMIDRIA contract royalty asset is recorded in discontinued operations.

The OMIDRIA contract royalty asset is re-measured quarterly using the expected value approach, which incorporates actual results and future expectations.

(For further details see “Note 8 — Discontinued Operations —Sale of OMIDRIA”).

OMIDRIA Royalty Obligation

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On February 1, 2024, DRI purchased our remaining U.S.

OMIDRIA royalty receipts through December 31, 2031 for $ 115.5 million in cash, which increased the OMIDRIA royalty obligation by the same amount.

The OMIDRIA royalty obligation is valued based on our estimates of future OMIDRIA royalties and is amortized through December 31, 2031 using the implied effective interest rate of 10.27 %.

Interest expense is recorded as a component within continuing operations.

OMIDRIA royalty receipts through December 31, 2031 for $ 115.5 million in cash under an Amended and Restated Royalty Purchase Agreement (the “Amendment”).

The Amendment with DRI eliminated the previously existing annual caps on royalty payments after January 1, 2024, and provides that DRI receives all royalties on U.S.

net sales of OMIDRIA payable between January 1, 2024 and December 31, 2031.

We accounted for the Amendment as a modification of our existing debt from DRI.

The OMIDRIA royalty obligation is valued based on our estimates of future OMIDRIA royalties and is amortized through December 31, 2031.

To the extent our estimates of future royalties differ materially from the previous estimates, we will adjust for future OMIDRIA royalties to the present value of the revised estimated cash flows, discounted at the implied effective interest rate of 10.27 % utilizing the cumulative catch-up method.

The offset to the adjustment would be recognized as non-cash interest expense, a component of net income (loss) from continuing operations (see “Note 8 - OMIDRIA Royalty Obligation”).

We record interest expense as a component within continuing operations.

Any such remeasurement adjustment is recognized as non-cash interest expense within continuing operations (see “Note 9 - OMIDRIA Royalty Obligation”).

Cash and Cash Equivalents, Short-Term Investments and Restricted Investments

Cash and cash equivalents include highly liquid instruments with a maturity of three months or less on the date of purchase which can be easily converted into cash without a significant impact to their value.

Cash and cash equivalents include highly liquid instruments with a maturity of three months or less on the date of purchase, which can be easily converted into cash without a significant impact on their value.

Short-term investment securities are classified as held-to-maturity, except for money market funds which are classified as available-for-sale.

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Investment income, which is included as a component of other income, consists primarily of interest earned.

We expense inventory costs related to product candidates as research and development expenses until regulatory approval is reasonably assured in the U.S.

or the European Union (“EU”).

Once approval is reasonably assured, costs, including amounts related to third-party manufacturing, transportation and internal labor and overhead, will be capitalized.

Receivables primarily consist of royalties receivable from Rayner.

Receivables primarily consist of royalties receivable from Rayner and receivables from Novo Nordisk for work performed under the Transition Services Agreement.

Considering the nature of our receivables, we concluded an allowance for doubtful accounts was not necessary as of December 31, 2025 and 2024, respectively.

Property and Equipment, Net

Property and equipment are stated at cost, and depreciation is calculated using the straight-line method over the estimated useful life of the assets, which is generally between three to 10 years.

Property and equipment are stated at cost, and depreciation is calculated using the straight-line method over the estimated useful life of the assets, which is generally between three and ten years.

Expenditures for repairs and maintenance are expensed as incurred.

We expense inventory costs related to product candidates as research and development expenses until regulatory approval is reasonably assured in the U.S.

or the European Union (“EU”).

Once approval is reasonably assured, costs, including amounts related to third-party manufacturing, labelling, transportation and internal labor and overhead, are capitalized.

Transactions involving contemporaneous exchanges of cash between the same debtor and creditor in connection with the issuance of a new debt obligation and satisfaction of an existing debt obligation are evaluated as a modification or an extinguishment depending on whether the exchange is determined to have substantially different terms.

Repayment at Maturity of 2023 Notes

On November 15, 2023, we repaid $ 95.0 million aggregate principal amount of our 6.25 % convertible senior notes (the “2023 Notes”) at maturity.

Repurchase of 2026 Notes for Cash

In December 2023, we repurchased $ 9.1 million aggregate principal amount of our 2026 Notes at a discount, realizing a $ 4.1 million non-cash gain on extinguishment.

Repurchase of 2026 Notes under the Credit Agreement

On June 3, 2024, we entered into a Credit Agreement with certain funds managed by Athyrium Capital Management, LP and certain funds managed by Highbridge Capital Management, LLC, as lenders (together with additional lenders from time to time, the “Lenders”) and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent.

The Credit Agreement provided for the Term Loan.

We used the Term Loan along with $ 21.7 million in cash on hand, to repurchase from the Lenders $ 118.1 million aggregate principal amount of our 2026 Notes.

In June 2024, we performed an assessment of the Credit Agreement and determined that it met the criteria to be accounted for as a troubled debt restructuring.

As a result, the $ 29.3 million difference between the $ 118.1 million aggregate principal amount of the 2026 Notes (as defined above) repurchased by the Company and the $ 88.8 million aggregate repurchase price (consisting of the $ 67.1 million Term Loan and $ 21.7 million cash on hand) was recorded as a premium (i.e.

an increase) to the term debt recorded on our consolidated balance sheet instead of being recognized as a gain on early extinguishment of debt.

We amortize the premium as both a reduction of term debt in the consolidated balance sheet and as interest expense in the consolidated statement of operations and comprehensive loss over the duration of the Term Loan.

Exchange of 2026 Notes for 2029 Notes and Equitization Transaction

On May 14, 2025, we completed the exchange (the “Convertible Note Exchange”) of $ 70.8 million of our existing 2026 Notes on a one-for-one basis for newly-issued convertible senior notes maturing on June 15, 2029 (the “2029 Notes”).

On May 12, 2025, we entered into note conversion agreements (each, a “Note Conversion Agreement”) with two holders of the 2026 Notes to convert $ 10.0 million aggregate principal amount of 2026 Notes into shares of our common stock (the “Equitization Transaction”) in three tranches.

Our obligation to deliver shares in three tranches was initially accounted for as a share-settled liability measured at fair value.

We completed the conversion of the final tranche in September 2025, resulting in the issuance of an aggregate of 2,819,866 shares of our common stock to the two holders in exchange for $ 10.0 million aggregate principal amount of 2026 Notes.

We did not receive new cash proceeds in these transactions.

We performed an assessment of the Convertible Note Exchange and Equitization Transaction and determined that these transactions were not a troubled debt restructuring and were a partial extinguishment of our 2026 Notes.

Together with the Equitization Transaction, these transactions resulted in a net $ 3.0 million non-cash loss on extinguishment due to (i) expensing of the unamortized debt issuance costs of the extinguished 2026 Notes, (ii) recording the 2029 Notes to fair market value (i.e., at a discount) which we recorded both in our consolidated statement of operations and comprehensive loss and as debt on our consolidated balance sheet and (iii) recording the fair market value of the share-settled liability upon settlement.

The Convertible Note Exchange and the Equitization Transaction reduced the aggregate principal balance of our 2026 Notes from $ 97.9 million to $ 17.1 million.

Repayment of 2026 Notes

In February 2026, we repaid in full the remaining $ 17.1 million principal balance on our 2026 Notes upon maturity.

Repayment of Term Loan under the Credit Agreement

On November 25, 2025, concurrent with the closing of the sale of zaltenibart (OMS906) to Novo Nordisk under the APLA, the Company repaid in full the $ 67.1 million principal outstanding under the Term Loan.

As a result, we recognized a net non-cash gain on extinguishment in the amount of $ 17.0 million which represents the de-recognition of $ 17.9 million in unamortized premium and debt issuance costs, derecognition of $ 2.6 million of embedded derivatives, offset by $ 3.5 million of prepayment premium and related transaction expenses.

(For further details, see “Note 7 – Debt”).

Embedded Derivatives

We account for convertible instruments in accordance with ASC 470-20, Debt with Conversion and Other Option s, when we determine that embedded conversion features do not require bifurcation from the host instrument.

We account for convertible instruments (when we have determined that the embedded conversion options should be bifurcated from their host instruments) in accordance with ASC 815 – Derivative and Hedge Accounting (“ASC 815”).

Under ASC 815, proceeds received upon the issuance of the hybrid contract are allocated between the fair value of the notes and the fair value of the derivative.

The derivative is subsequently marked-to-market at each reporting date based on current fair value, with the changes in fair value reported in the consolidated statements of operations and comprehensive loss.

The embedded derivative on our 2029 Notes represents the conversion feature and interest make-whole feature available to holders of the 2029 Notes allowing them to convert the notes into cash, common stock and/or a combination thereof.

The embedded derivative on our Term Loan was eliminated upon repayment on November 25, 2025.

(For further details, see “Note 5 – Fair Value Measurements” and “Note 7 – Debt”).

Right-of-Use Assets and Related Lease Liabilities

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We have not recognized any impairment losses for the years ended December 31, 2025, 2024 and 2023.

Payment on Maturity of the 2023 Notes

On November 15, 2023, we extinguished our 6.25 % convertible senior notes (the “2023 Notes”) at par upon maturity.

Repurchase of 2026 Notes

In December 2023, we repurchased $ 9.1 million par value of our 2026 Notes at a discount, realizing a $ 4.1 million non-cash gain on extinguishment.

In June 2024, we performed an assessment of the Credit Agreement which was entered into with Highbridge and Athyrium and determined that it met the criteria to be accounted for as a troubled debt restructuring.

As a result, the $ 29.3 million difference between the $ 118.1 million aggregate principal amount of the 2026 Notes exchanged and the $ 88.8 million aggregate repurchase price (consisting of the $ 67.1 million Initial Term Loan and $ 21.7 million cash on hand) was recorded as a premium (i.e.

an increase) to the term debt recorded on the Company's consolidated balance sheet instead of being recognized as a gain on early extinguishment of debt.

The premium will be amortized as both a reduction of term debt in the consolidated balance sheet and interest expense in the consolidated statement of operations and comprehensive income (loss) over the duration of the term loan.

Research and Development

Research and development expenses are comprised primarily of contracted research, clinical trial study and manufacturing costs prior to approval;

consulting services;

contract milestones;

materials and supplies;

costs for personnel, including salaries, benefits and stock compensation;

depreciation;

an allocation of our occupancy costs;

and other expenses incurred to sustain our overall research and development programs.

All other research and development costs are expensed as incurred.

Selling, General and Administrative

Selling, general and administrative expenses are comprised primarily of marketing expenses;

professional and legal services;

patent costs;

and salaries, benefits, and stock-compensation costs for marketing and other personnel not directly engaged in research and development.

Additionally, selling, general and administrative expenses include depreciation;

an allocation of our occupancy costs;

and other general corporate expenses.

Advertising costs are expensed as incurred.

We had no advertising costs during the years ended December 31, 2024, 2023 and 2022.

Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled.

We recognize the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination by the relevant taxing authority.

A valuation allowance is established when it is more likely than not that the deferred tax assets will not be realized.

Stock-Based Compensation

Stock-based compensation expense is recognized for all share-based payments, including grants of stock option awards and restricted stock units based on estimated fair values.

The fair value of our stock is calculated using the Black-Scholes option-pricing model, which requires assumptions around volatility, forfeiture rates, risk-free interest rate and expected term.

Compensation expense is recognized over the requisite service periods, which is generally the vesting period, using the straight-line method.

Forfeiture expense is estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

Common Stock Repurchases

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Under applicable Washington State law, repurchased shares are retired and not presented separately as treasury stock in the consolidated financial statements.

The terms of the Credit Agreement dated June 3, 2024 prohibit us from repurchasing our common stock, unless agreed to by the Lenders.

Consequently, the Board of Directors terminated the active share repurchase program effective upon the execution of the Credit Agreement.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) is comprised of net income (loss) and certain changes in equity that are excluded from net income (loss).

There were no differences between comprehensive income (loss) and net income (loss) for the years ended December 31, 2024, 2023 and 2022.

There were no differences between comprehensive loss and net loss for the years ended December 31, 2025, 2024 and 2023.

Financial Instruments and Concentrations of Credit Risk

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Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosure (Topic 740), to enhance the transparency of income tax disclosures.

ASU 2023-09 provides enhancements to the income tax disclosures related to the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and applied prospectively.

The Company is evaluating the impact of this pronouncement on its consolidated financial statements.

In November 2024, the FASB issued 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expense , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

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The Company is currently evaluating the impact on its financial statement disclosures.

Note 3 — Net Income (Loss) Per Share

Basic net income (loss) per share (“Basic EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period.

Diluted net income (loss) per share (“Diluted EPS”) is computed by dividing net income (loss) by the weighted average number of common shares and potentially dilutive common shares outstanding during the period.

Our potentially dilutive securities include common shares related to our stock options, RSUs and convertible senior notes calculated using the treasury stock method.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities , which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants.

Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received.

The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis.

The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements.

ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-10.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements , which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-11.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company prospectively adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements.

In November 2024, the FASB issued ASU 2024-04, Debt with Conversion and Other Options (Subtopic 470-20), Induced Conversions of Convertible Debt Instruments , which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt.

The Company early adopted ASU 2024-04 during the year ended December 31, 2025, applying the guidance prospectively as of January 1, 2025.

The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07 , Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Scope Clarification and Share-Based Consideration .

The update refines the scope of derivative accounting by expanding the scope exception for certain non-exchange-traded contracts with underlyings based on the operations or activities of one of the parties to the contract, such as regulatory approvals or development milestones, and clarifies the accounting for share-based noncash consideration received from a customer under Topic 606.

The Company early adopted ASU 2025-07 during the year ended December 31, 2025.

The adoption did not result in any reclassification within the Company’s consolidated financial statements.

Note 3 — Gain on Sale of Zaltenibart

On November 25, 2025, we closed a previously announced transaction under an APLA with Novo Nordisk, pursuant to which Novo Nordisk received exclusive global rights in all indications to develop and commercialize zaltenibart, the Compounds, and the Products.

At the closing, we received net proceeds of $ 237.6 million comprising $ 240.0 million in upfront cash less $ 2.4 million in transaction fees.

As set forth in the APLA, beyond the $ 240.0 million, we are eligible to receive (i) up to an additional $ 510.0 million in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of each of the development and approval milestone events and (ii) up to $ 1.3 billion in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of certain sales-based milestone events.

We are also eligible under the APLA to receive tiered royalties on annual net sales of Products at percentage rates ranging from high single digit to high teens, subject to reduction in certain circumstances.

In accordance with the APLA, at the closing of the Transaction, Omeros and Novo Nordisk entered into the Transition Services Agreement pursuant to which we are providing certain transition services to Novo Nordisk to facilitate the transfer of the acquired assets and liabilities under the APLA and to provide for the continued operation of relevant studies and program activities during the applicable term.

We report such expenses net of reimbursement within Other Income in our statement of operations and comprehensive loss.

Note 4— Net Loss Per Share

Basic net loss per share (“Basic EPS”) is computed by dividing net loss by the weighted average number of common shares outstanding during the period.

Diluted net loss per share (“Diluted EPS”) is computed by dividing net loss by the weighted average number of common shares and potentially dilutive common shares outstanding during the period.

Our potentially dilutive securities include common shares related to our stock options using the treasury stock method and convertible senior notes calculated using the if-converted method.

In periods where we have a net loss from continuing operations but overall net income, we do not compute Diluted EPS because the effect would be antidilutive.

Potentially dilutive securities excluded from Diluted EPS are as follows:

When there is a net loss, potentially dilutive securities, like stock options or convertible debt, are typically excluded from the diluted net loss per share calculation.

Potentially dilutive securities excluded from Diluted EPS are calculated based on a weighted average of days in the quarter from when the respective transactions occurred and are shown as follows:

Year Ended December 31,

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2026 Notes convertible to common stock (1)(2)(3)

2023 Notes convertible to common stock (4)

Outstanding options to purchase common stock

Outstanding restricted stock units (4)

Total dilutive shares excluded from net income (loss) per share

(1) The 2026 Notes are subject to a capped call arrangement that potentially reduces the dilutive effect as described in “Note 6 - Debt”.

Any potential impact of the capped call arrangement is excluded from this table.

(2) In December 2023 and on June 3, 2024, we repurchased $ 9.1 million and $ 118.1 million of our 2026 Notes, respectively, reducing an effect of dilution related to those notes.

Total dilutive shares excluded from net loss per share

On May 14, 2025, we exchanged $ 70.8 million aggregate principal amount of our 2026 Notes for 2029 Notes on a one-for-one basis in the Convertible Note Exchange and recorded a reduction of an additional $ 10.0 million aggregate principal amount of our 2026 Notes to be equitized pursuant to the Equitization Transaction.

The 2029 Notes are subject to a conversion arrangement that potentially increases the dilutive effect of conversion as described in “Note 7 — Debt.”

The 2026 Notes were subject to a capped call arrangement that potentially reduced the dilutive effect of conversion as described in “Note 7 — Debt.” Any potential impact of the capped call arrangement is excluded from this table.

The remaining outstanding 2026 Notes were fully repaid at maturity on February 15, 2026.

On June 3, 2024, we repurchased $ 118.1 million aggregate principal amount of our 2026 Notes, reducing any effect of the dilution related to these notes.

(For further details refer to “Note 7 — Debt”).

(3) The 2023 Notes were fully extinguished upon maturity on November 15, 2023.

(4) The outstanding restricted stock units were vested and converted to shares of common stock on December 1, 2023.

The 2023 Notes were fully repaid at maturity on November 15, 2023.

Note 5 — Investments and Fair-Value Measurements

All of our investments are short-term and held in our name.

Money market funds are classified as available-for-sale and treasury bills are classified as held-to-maturity on the accompanying consolidated balance sheets.

Interest income is included as a component of interest and other income on our consolidated statement of operations and comprehensive income (loss).

Interest and other income for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 consists primarily of interest earned from investments of $ 8.4 million, $ 14.7 million and $ 2.2 million, respectively.

The following tables summarize our investments:

December 31, 2024

Gross Unrealized

Amortized Cost

Gains/(Losses)

Estimated Fair Value

(In thousands)

Money-market funds classified as short-term investments

Certificate of deposit classified as non-current restricted investments

Total investments

December 31, 2023

Gross Unrealized

Amortized Cost

Gains/(Losses)

Estimated Fair Value

(In thousands)

government securities classified as short-term investments

Money-market funds classified as short-term investments

Total short-term investments

Certificate of deposit classified as non-current restricted investments

Total investments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

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Level 3—Unobservable inputs in which little or no market data exists, therefore they are developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Our fair-value hierarchy for our financial assets are as follows:

We review the fair value hierarchy classification on a quarterly basis.

Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

There have been no transfers of assets or liabilities between fair value measurement classifications during the year ended December 31, 2025.

Our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis are as follows:

December 31, 2025

(In thousands)

Money-market funds classified as short-term investments

Cash and cash equivalents:

Certificate of deposit classified as non-current restricted investments

Total investments

Short-term investment:

Money-market funds

2029 Note conversion option derivative

Total Liabilities

December 31, 2024

(In thousands)

government treasury bills classified as short-term investments

Money-market funds classified as short-term investments

Total short-term investments

Cash and cash equivalents:

Certificate of deposit classified as non-current restricted investments

Total investments

Unrealized gains and losses on our short-term investments were not material for either period presented.

Short-term investment:

Money-market funds

Call and put options derivative (1)

Total Liabilities

While the Term Loan is recorded as a liability, the embedded call and put options that have been identified as requiring bifurcation are recognized as a net embedded derivative asset reflected as a component of the Term Loan on the consolidated balance sheet.

Cash held in demand deposit accounts of $ 9.7 million and $ 3.4 million is excluded from our fair-value hierarchy disclosure as of December 31, 2025 and 2024, respectively.

The carrying amounts for receivables, accounts payable and accrued liabilities, and other current monetary assets and liabilities, including lease financing obligations, approximate fair value.

See “Note 6 - Debt” and “Note 8 – OMIDRIA Royalty Obligation” for the carrying amount and estimated fair value of our outstanding term loan, 2026 Notes and the OMIDRIA royalty obligation.

All of our investments, which are classified as Level 1 assets, are short-term and held in our name.

Money market funds are classified as available-for-sale on the accompanying consolidated balance sheets.

Interest income is included as a component of interest and other income on our consolidated statement of operations and comprehensive loss.

Interest and other income for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 consists primarily of interest earned from investments of $ 2.3 million, $ 8.4 million and $ 14.7 million, respectively.

The fair value of both of our embedded derivatives were determined using the Lattice and Discounted Cash Flow models with the following key assumptions:

2029 Note conversion option derivative

Stock price (per share)

Unsecuritized discount rate

Risk-free rate

Stock price volatility

Dividend yield

Term (in years)

Changes in valuation assumptions could have a significant impact on the 2029 Note conversion option derivative.

The Company can provide no assurance that changes in yield or in our price would not have a significant impact on the derivative in the future.

An increase in our stock price volatility could increase the valuation of the 2029 Note conversion option derivative, whereas an increase in interest rates could decrease the valuation of the 2029 Note conversion option derivative.

(For further details see “Note 7 — Debt”).

Term Loan derivative

Interest is comprised of:

SOFR benchmark rate

Securitized discount rate

Yield volatility

Probability weighted term (in years)

The repayment of our Term Loan on November 25, 2025 eliminated the related Term Loan embedded derivative as of December 31, 2025.

The following table sets forth a summary of changes in the fair value of Level 3 liabilities for the year ended December 31, 2025:

Balance as of

Change in Fair Value

Conversions & Extinguishment

(In thousands)

Share-settled liability

Call and put options derivative

Conversion option derivative

Total Liabilities

See “Note 7 - Debt” for the estimated fair market values of our 2029 Notes and 2026 Notes.

See “Note 9 – OMIDRIA Royalty Obligation” for the estimated fair value of our OMIDRIA royalty obligation.

Note 6 — Certain Balance Sheet Accounts

Receivables consists of the following:

OMIDRIA contract royalty asset

OMIDRIA contract royalty asset consists of the following:

(In thousands)

Short-term OMIDRIA contract royalty asset

Long-term OMIDRIA contract royalty asset

Total OMIDRIA contract royalty asset

See “Note 8 — Discontinued Operations – Sale of OMIDRIA” for discussion regarding the estimated fair value of our OMIDRIA contract royalty asset.

OMIDRIA royalty obligation

OMIDRIA royalty obligation consists of the following:

(In thousands)

Short-term OMIDRIA royalty obligation

Long-term OMIDRIA royalty obligation

Total OMIDRIA royalty obligation

See “Note 9 — OMIDRIA Royalty Obligation” for further details.

Receivables consist of the following:

(In thousands)

OMIDRIA royalty receivables

Novo Nordisk receivables

Other receivables

Total receivables

OMIDRIA royalty receivables represents approximately two months of royalty earnings from Rayner.

royalties received from Rayner are remitted by Rayner to an escrow account, established by Omeros, from which payments are made on our behalf to DRI.

These payments are entirely pass-through in nature to the Company with DRI as the recipient.

Property and Equipment, Net

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Contract research and development

Interest payable

Deferred income

Consulting and professional fees

Income taxes payable

Interest payable

Other accrued expenses

Total accrued expenses

Deferred income as of December 31, 2025 primarily relates to billings under the Transition Services Agreement to Novo Nordisk.

Note 7 — Debt

Secured Term Debt

On June 3, 2024, we entered into a Credit Agreement, which provides for a term loan credit facility of up to $ 92.1 million, in aggregate, consisting of an Initial Term Loan of $ 67.1 million and a Delayed Draw Term Loan of $ 25.0 million.

The Delayed Draw Term Loan may be drawn once in full upon notice delivered on or prior to June 3, 2025, conditioned on receipt of FDA approval of narsoplimab in TA-TMA within 30 days of the notice;

The Delayed Draw Term Loan would be issued with an original issue discount of 3.0 % and the proceeds may be used only for commercialization of narsoplimab in TA-TMA and transaction costs associated with the Delayed Draw Term Loan.

Until the earlier of November 1, 2025 and the date we elect to utilize the Delayed Draw Term Loan, the Company, at its sole discretion, may exchange up to $ 14.9 million aggregate principal amount of outstanding 2026 Notes for cash and/or additional term loan amounts, with the holders of such notes becoming Lenders under the Credit Agreement (any such additional term loans, together with the Initial Term Loan and the Delayed Draw Term Loan, the “Loans”).

As of December 31, 2024, no such additional exchanges have occurred.

All indebtedness under the Credit Agreement is secured by a first-priority security interest in and lien on substantially all our tangible and intangible property, subject to customary exceptions, and excluding royalty interests in OMIDRIA and certain related rights.

In connection with our entry into the Credit Agreement, we used the Initial Term Loan of $ 67.1 million along with $ 21.7 million of cash on hand to repurchase $ 118.1 million aggregate principal amount of the 2026 Notes held by the Lenders.

The total aggregate purchase price of $ 88.8 million represented a purchase price equal to approximately 75 % of the par value of the 2026 Notes retired in the transaction.

The reduction in the aggregate outstanding principal balance of our 2026 Notes and incurrence of a new Initial Term Loan resulted in a $ 51.0 million reduction of our outstanding debt.

The $ 29.3 million difference between the $ 118.1 million aggregate principal amount of the 2026 Notes and the $ 88.8 million aggregate repurchase price was recorded as a premium (i.e., an increase) to the long-term debt on the Company’s consolidated balance sheet instead of being recognized as a gain on early extinguishment of debt.

The premium is being amortized as both a non-cash reduction of long-term debt in the consolidated balance sheets and interest expense in the consolidated statement of operations and comprehensive income (loss) over the duration of the term loan.

The amount outstanding on the Initial Term Loan is as follows:

Convertible senior notes, net, and term debt balances are comprised of the following:

(In thousands)

2029 Notes, net maturing on June 15, 2029

Term Loan, net maturing on June 3, 2028, repaid November 25, 2025

2026 Notes, net maturing on February 15, 2026, repaid February 13, 2026

Term Loan embedded derivative reported at fair value

2029 Notes embedded derivative reported at fair value

Exchange of 2026 Notes for 2029 Notes and Equitization Transaction

On May 14, 2025, we completed the Convertible Note Exchange of $ 70.8 million in aggregate principal amount of our existing 2026 Notes on a one-for-one basis for newly-issued 2029 Notes.

The Convertible Note Exchange was conducted with a limited number of holders of the 2026 Notes pursuant to exchange agreements dated as of May 12, 2025.

The 2029 Notes are convertible at the option of the holders into shares of common stock, cash or a combination thereof, as elected by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.

The 2029 Notes were issued pursuant to an Indenture, dated as of August 14, 2020 (the “Base Indenture”), between the Company and Computershare Trust Company, National Association, as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by a Second Supplemental Indenture, dated as of May 14, 2025 (the “Second Supplemental Indenture”), between the Company and the Trustee (the Base Indenture, as amended and supplemented by the Second Supplemental Indenture, the “Indenture”).

The 2029 Notes will mature on June 15, 2029 unless earlier converted, redeemed or repurchased in accordance with their terms prior to such date.

Embedded Derivative

The embedded derivative on the 2029 Notes includes both a derivative for the interest make-whole feature and a derivative for the conversion feature available to holders allowing them to convert their notes to common stock, cash or a combination thereof.

At each reporting date, we remeasure the embedded derivative instruments to fair market value.

At contract inception, we recorded a net $ 23.0 million embedded derivative as a component of our 2029 Notes.

However, with the sale of OMS906 to Novo Nordisk and the announcement of FDA approval of TA-TMA, our stock price significantly increased.

At December 31, 2025, the fair market value of our embedded derivative was $ 157.2 million.

We marked-to-market the initial $ 23.0 million embedded derivative on the 2029 Notes and recorded a $ 134.2 million non-cash loss on remeasurement in our consolidated statement of operations and comprehensive loss.

Increases or decreases in our stock price may materially affect the value of the derivative.

Interest Make Whole Feature

Holders who convert their 2029 Notes after November 13, 2025 and prior to June 1, 2029 (except for any conversion in connection with a make-whole fundamental change) are entitled to an interest make-whole payment equal to the sum of the remaining scheduled payments of interest that would have been made had the 2029 Notes remained outstanding from their conversion date through the earlier of (i) the date that is 18 months following their conversion date, and (ii) June 15, 2029 , the maturity date.

Conversion Feature

The 2029 Notes are convertible at the option of the holder into shares of common stock, cash or a combination thereof at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.

The Company elects whether the conversion occurs in common stock, cash or a combination thereof.

The conversion rate is 161.81 shares of our common stock per $ 1,000 of note principal (equivalent to an initial conversion price of approximately $ 6.18 per share of common stock), which equals approximately 11.5 million shares issuable upon conversion.

The conversion rate is subject to adjustment in certain circumstances as described in the Indenture.

The 2029 Notes are comprised of the following:

(In thousands)

Principal amount

Unamortized debt premium, net of issuance costs and other

Total term debt, net

The Loans have a stated maturity date of June 3, 2028 and bear interest at an adjusted secured overnight financing rate (“adjusted SOFR”), subject to a 3.0 % floor, plus 8.75 % per annum, payable quarterly from the closing date.

As of December 31, 2024, the contractual interest rate on the Loans was 13.32 %.

We have the option to pay all of the interest in cash or to pay 50 % in cash and pay-in-kind (“PIK”), the remaining interest.

When this provision is elected, interest for the quarter, including both the cash interest and PIK interest, is calculated based on adjusted SOFR plus a 10.25 % PIK margin (instead of the customary 8.75 % margin).

The PIK interest is then added to the outstanding principal balance and interest is computed using the original adjusted SOFR plus 8.75 % margin rate.

Due to the premium amortization on the Initial Term Loan, interest expense is currently being recognized at an implied effective interest rate of 1.50 %.

The following table sets forth interest expense recognized related to the Initial Term Loan:

Unamortized debt discount, net of issuance costs

Total 2029 Notes

Fair value of outstanding 2029 Notes (1)

Fair value of 2029 Notes embedded derivative (2)

The fair value is classified as a Level 2 liability due to the limited trading activity for the 2029 Notes.

This balance reflects the fair value of the 2029 Notes based on quoted prices in an over-the counter market using the most recent trading information at the end of the reporting period.

The fair value of the 2029 Notes embedded derivative is classified as a Level 3 liability due to unobservable inputs in which little or no market data exists.

(For further details refer to “Note 5 — Investments and Fair-Value Measurements”).

Interest on the 2029 Notes is payable semi-annually in arrears at a rate of 9.50 % per annum on each June 15 and December 15, beginning on December 15, 2025.

The carrying value of the 2029 Notes includes a discount which we amortize over the duration of the term as non-cash interest expense in the consolidated statement of operations and comprehensive loss.

Due to the discount amortization on the 2029 Notes, interest expense is currently being recognized at an implied effective interest rate of 1.82 %.

The following table sets forth interest expense recognized on the 2029 Notes:

Twelve Months Ended

2 unchanged sentences

Contractual interest expense

Amortization of premium and debt issuance costs

Amortization of debt discount and issuance costs

Total interest expense

We may elect to prepay the Loans, in whole or in part, in cash, plus an applicable prepayment and/or make-whole premium.

Under certain circumstances, we are required to prepay all or a portion of the outstanding Loans, plus an applicable prepayment and/or make-whole premium, as described below.

(1) If, on November 1, 2025, (i) the aggregate outstanding principal amount of the outstanding 2026 Notes that is not held by the Lenders equals or exceeds $ 38.5 million and (ii) we have not made or delivered notice that we expect to make certain voluntary or mandatory prepayments under the Credit Agreement of at least $ 20.0 million in the aggregate, then we would be required, on or prior to November 15, 2025, to make a $ 20.0 million mandatory prepayment, together with a $ 1.0 million prepayment premium.

(2) Upon the occurrence of a change in control, we must prepay the entire outstanding amount of the Loans, plus the applicable make-whole or prepayment premium.

(3) We must prepay the Loans in an amount equal to:

(i) 25.0 % of any milestone payments received from DRI or its affiliates on the basis of net sales of OMIDRIA;

(ii) 60.0 % of the net cash proceeds (excluding transaction expenses and certain milestone payments) received by Omeros from the sale or license of our assets (or in the case of an asset sale or license involving narsoplimab that occurs while any Delayed Draw Term Loan is outstanding, an amount equal to 100 % of the net cash proceeds from such transaction);

(iii) 100.0 % of net cash proceeds of indebtedness incurred by the Company other than as permitted by the Credit Agreement;

and (iv) 100 % of the net cash proceeds of insurance recoveries on loss of property, except to the extent utilized to repair or replace the relevant assets within a specified time.

Voluntary and mandatory prepayments of the Loans are subject to payment of the following premiums:

(i) during the first year of such Loans, a make-whole premium plus 5.0 % of the applicable prepayment amount (unless the prepayment is made in contemplation of a change of control, in which case only the make-whole premium would be payable);

(ii) during the second year, a prepayment premium equal to 5.0 % of the applicable prepayment amount;

and (iii) during the third year, a prepayment premium equal to 3.0 % of the applicable prepayment amount.

The Credit Agreement contains certain customary default provisions, representations and warranties and affirmative and negative covenants.

These include a covenant requiring us to maintain at all times unrestricted cash, cash equivalents and short-term investments of at least $ 25.0 million in accounts subject to control agreements and a covenant limiting the use of cash for open market or privately negotiated repurchases of any outstanding 2026 Notes to:

(i) an initial amount not exceeding $ 25.0 million, which may be increased by up to an additional $ 10.0 million subject to the satisfaction of certain conditions;

(ii) an unlimited amount, if the amount of the Loans outstanding at the time of repurchase does not exceed $ 38.5 million;

and (iii) an additional amount not to exceed 50 % of the net cash proceeds from an equity offering, provided that the Company offers to prepay an equal amount of the Loans with the net cash proceeds of such offering.

As of December 31, 2024, the Company was in compliance with the covenants under the Credit Agreement.

After review of the customary default provisions, affirmative and negative covenants, and voluntary and mandatory prepayment options, we determined that the net derivative asset was not significant as of December 31, 2024.

A default under the Credit Agreement that results in the outstanding debt thereunder being declared due and payable prior to the stated maturity would constitute a cross-default under the indenture governing the 2026 Notes.

In such an event, the principal and all accrued and unpaid interest on the 2026 Notes may be declared immediately due and payable either by the trustee under the indenture, or by the holders of at least 25 % of the aggregate principal amount of the 2026 Notes outstanding.

The fair value of the Loans is classified as a Level 3 liability.

As of December 31, 2024, the approximate fair value of our Loan obligations was $ 69.5 million.

We determined the fair market value by discounting the future cash flows based on adjusted SOFR at each measurement date.

2023 Unsecured Convertible Senior Notes

We extinguished the $ 95.0 million outstanding on our 2023 Notes at par upon maturity on November 15, 2023.

The following table sets forth interest expense recognized related to the 2023 Notes.

The 2029 Notes are redeemable, in whole or in part, at our option at any time, and from time to time, on or after June 20, 2027 and on or before the 50 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, but only if the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice and (ii) the trading day immediately before the date we send such notice.

In addition, calling any 2029 Note for redemption will constitute a “make-whole fundamental change” (as defined in the Indenture) with respect to that 2029 Note, in which case the conversion rate applicable to the conversion of that 2029 Note will be increased in certain circumstances if it is converted after it is called for redemption.

The Indenture contains customary terms and covenants and events of default.

If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the Trustee or the holders of at least 25 % in aggregate principal amount of the 2029 Notes then outstanding may declare the principal amount of, and all accrued and unpaid interest on, all of the 2029 Notes then outstanding to become due and payable immediately.

Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, the principal amount of, and all accrued and unpaid interest, if any, on all of the 2029 Notes then outstanding will immediately become due and payable without any further action or notice by the Trustee or any holder.

Notwithstanding the foregoing, the Indenture provides that, to the extent we elect and for up to 180 days, the sole remedy for an event of default relating to certain failures by us to comply with certain reporting covenants in the Indenture may consist exclusively of the right to receive special interest on the 2029 Notes.

The 2029 Notes are structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of its subsidiaries.

Equitization Transaction

On May 12, 2025, we entered into Note Conversion Agreements with two holders of the 2026 Notes to convert $ 10.0 million aggregate principal amount of 2026 Notes into shares of our common stock in three tranches.

Our obligation to deliver shares in three tranches was initially accounted for as a share-settled liability measured at fair value.

We did not receive new cash proceeds in these transactions.

These exchanges resulted in a net $ 3.0 million non-cash loss on extinguishment due to (i) expensing of the unamortized debt issuance costs of the extinguished 2026 Notes, (ii) recording the 2029 Notes to fair market value (i.e., at a discount) which we recorded both to our consolidated statement of operations and comprehensive loss and as debt on our consolidated balance sheet and (iii) recording the difference between the principal value of converted 2026 Notes and the fair market value of the share-settled liability.

The Convertible Note Exchange and Equitization Transaction reduced the aggregate principal balance of our 2026 Notes from $ 97.9 million to $ 17.1 million.

The $ 80.8 million reduction reflects the exchange of $ 70.8 million aggregate principal amount of 2026 Notes for the same amount of principal under the 2029 Notes and the reduction of $ 10.0 million in aggregate principal amount of 2026 Notes for common stock.

On June 3, 2024, we entered into a Credit Agreement to borrow $ 67.1 million under our Term Loan.

In connection with our entry into the Credit Agreement, we used the Term Loan of $ 67.1 million, along with $ 21.7 million of cash on hand (for a total aggregate purchase price of $ 88.8 million) to repurchase $ 118.1 million aggregate principal amount of the 2026 Notes held by the Lenders.

The $ 29.3 million difference between the $ 118.1 million aggregate principal amount of the 2026 Notes and the $ 88.8 million aggregate repurchase price was recorded as a premium (i.e., an increase) to the Term Loan on the Company’s consolidated balance sheet instead of being recognized as a gain on early extinguishment of debt.

On November 25, 2025, concurrent with the closing of the sale and licensing of zaltenibart (OMS906) to Novo Nordisk under the APLA, we were required under the terms of the Credit Agreement to repay in full the $ 67.1 million principal outstanding under the Term Loan along with a 5 % prepayment premium.

We recognized a net non-cash gain on extinguishment in the amount of $ 17.0 million which represents the de-recognition of $ 17.9 million in unamortized premium and debt issuance costs, derecognition of $ 2.6 million of embedded derivatives, and partially offset by $ 3.5 million of prepayment premium and related transaction expenses.

The repayment of the Term Loan eliminated the embedded derivative associated with the Term Loan as of December 31, 2025.

Pursuant to a covenant under the Credit Agreement, we were required to maintain $ 25.0 million of unrestricted cash, cash equivalents and short-term investments at all times.

The amount outstanding on the Term Loan is as follows:

(In thousands)

Principal amount

Unamortized debt premium, net of issuance costs and other

Total term debt

Fair value of outstanding term debt (1)

Fair value of term debt embedded derivative (2)

The fair value was classified as Level 3 liability.

We determine the fair market value by discounting future flows based on adjusted SOFR on each measurement date.

While the Term Loan is recorded as a liability, the embedded call and put options that have been identified as requiring bifurcations are recognized as a net embedded derivative asset reflected as a component of the Term Loan on the consolidated balance sheet.

(For further details refer to “Note 5 — Investments and Fair-Value Measurements”)

The Term Loan had a stated maturity date of June 3, 2028 , bearing interest at an adjusted secured overnight financing rate (“adjusted SOFR”), subject to a 3.0 % floor, plus 8.75 % per annum, payable quarterly from the closing date.

As of December 31, 2025 and 2024, the contractual interest rate on the Term Loans was 13.02 % and 13.32 %, respectively.

We amortized the premium as both a non-cash reduction of long-term debt in the consolidated balance sheets and as interest expense in the consolidated statement of operations and comprehensive loss.

Due to the premium amortization on the Term Loan, interest expense was being recognized at an implied effective interest rate of 3.38 %.

The following table sets forth interest expense recognized related to the Term Loan:

Year Ended December 31,

1 unchanged sentence

Contractual interest expense

Amortization of debt issuance costs

Amortization of debt premium and issuance costs

Total interest expense

2026 Unsecured Convertible Senior Notes

We have outstanding unsecured convertible senior notes which accrue interest at an annual rate of 5.25 % per annum, payable semi-annually in arrears on February 15 and August 15 of each year.

The 2026 Notes mature on February 15, 2026, unless earlier purchased, redeemed or converted in accordance with their terms.

In 2024, we repurchased $ 118.1 million of principal amount outstanding on our 2026 Notes for a total aggregate repurchase price of $ 88.8 million (approximately 75 % of par value), using proceeds from the Initial Term Loan of $ 67.1 million and paying $ 21.7 million of cash on hand.

Amounts outstanding on our 2026 Notes are as follows:

As of December 31, 2025, we had outstanding $ 17.1 million aggregate principal amount of unsecured convertible senior notes, which accrued interest at an annual rate of 5.25 % per annum, payable semi-annually in arrears on February 15 and August 15 of each year.

The 2026 Notes matured on February 15, 2026 .

The 2026 Notes were issued in the third quarter of 2020 in an aggregate principal amount of $ 225.0 million.

In order to reduce the dilutive impact or potential cash expenditure associated with the conversion of the 2026 Notes, we entered into capped call transactions in connection with the issuances of the 2026 Notes (the “2026 Capped Call”).

The 2026 Capped Call was a separate transaction and not part of the terms of the 2026 Notes and was executed separately from the issuance of the 2026 Notes.

The amount paid for the 2026 Capped Call was recorded as a reduction to additional paid-in capital in the consolidated balance sheet.

As of December 31, 2025, approximately 12.2 million shares remained outstanding under the 2026 Capped Call.

Further, we concluded the 2026 Capped Call qualifies for a derivative scope exception for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity in its balance sheet.

Consequently, the fair value of the 2026 Capped Call of $ 23.2 million is classified as equity.

The 2026 Capped Call expired upon maturity of the 2026 Notes on February 15, 2026.

In December 2023, we repurchased $ 9.1 million aggregate par value of our 2026 Notes for cash on hand of $ 5.0 million, resulting in a $ 4.1 million non-cash gain on extinguishment (approximately 55 % of par value).

In connection with our entry into the Credit Agreement, we used the $ 67.1 million in Term Loan proceeds along with $ 21.7 million of cash on hand for a total purchase price of $ 88.8 million to repurchase $ 118.1 million aggregate principal amount of the 2026 Notes held by the Lenders (approximately 75 % of par value).

The May 2025 Convertible Note Exchange and Equitization Transaction further reduced the aggregate principal balance of our 2026 Notes by $ 80.8 million.

The Convertible Note Exchange and the Equitization Transaction resulted in a net $ 3.0 million non-cash loss on extinguishment as previously discussed.

As of December 31, 2025, we had $ 17.1 million outstanding principal under the 2026 Notes.

This balance was repaid in full at maturity in February 2026.

The 2026 Capped Call expired upon maturity of the 2026 Notes.

Unamortized debt issuance costs are amortized to interest expense at an effective interest rate of 5.9 % over the remaining term of the loan.

The 2026 Notes were comprised of the following:

(In thousands)

1 unchanged sentence

Unamortized debt issuance costs

Total convertible senior notes, net

Fair value of outstanding convertible senior notes (1)

Total 2026 Notes, net

Fair value of outstanding 2026 Notes (1)

The fair value is classified as Level 2 liability due to the limited trading activity for the unsecured convertible senior notes.

The fair value of the 2026 Notes is determined based on quoted prices in an over-the counter market using the most recent trading information available at the end of the reporting period.

The value of the conversion feature of the 2026 Notes is not deemed to be significant as the current market price of our common stock is below the initial conversion price of $ 18.49 per share of common stock.

The unamortized debt issuance costs of $ 0.7 million as of December 31, 2024 will be amortized to interest expense at an effective interest rate of 5.89 % over the remaining term.

The value of the conversion feature of the 2026 Notes is not deemed to be significant as subsequent to year-end, no holders converted their notes prior to repayment

The following table sets forth interest expense recognized related to the 2026 Notes:

4 unchanged sentences

Total interest expense

The conversion rate is 54.0906 shares of our common stock per $ 1,000 of note principal (equivalent to an initial conversion price of approximately $ 18.4875 per share of common stock), which equals approximately 5.3 million shares issuable upon conversion, subject to adjustment in certain circumstances.

The 2026 Notes are convertible at the option of the holders on or after November 15, 2025 at any time prior to the close of business on February 12, 2026, the second scheduled trading day immediately before the stated maturity date of February 15, 2026.

Additionally, holders may convert their 2026 Notes at their option at specified times prior to the maturity date only if:

(1) during any calendar quarter, the last reported sale price per share of our common stock exceeds 130 % of the conversion price of the 2026 Notes for each of at least 20 trading days in the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(2) during the five consecutive business days immediately after any five -consecutive-trading-day period (such five -consecutive-trading-day period, the “measurement period”) in which the trading price per $ 1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day;

(3) there is an occurrence of one or more certain corporate events or distributions of our common stock;

(4) we call the 2026 Notes for redemption.

We will settle any conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on the applicable conversion rate(s).

Subject to the satisfaction of certain conditions, we may redeem in whole or in part the 2026 Notes at our option beginning August 15, 2023 through the 50th scheduled trading day immediately before the maturity date at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed plus any accrued and unpaid interest.

The 2026 Notes are subject to redemption only if certain requirements are satisfied, including that the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice and (ii) the trading day immediately before the date we send such notice.

The 2026 Capped Call will cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2026 Notes, the number of shares of common stock underlying the 2026 Notes when our common stock is trading within the range of $ 18.49 and $ 26.10 .

However, should the market price of our common stock exceed the $ 26.10 cap, then the conversion of the 2026 Notes would have an additional dilutive impact or may require a cash expenditure to the extent the market price exceeds the cap price.

The 2026 Capped Call will expire on various dates over the 50 -trading-day period ranging from December 2, 2025 to February 12, 2026, if not exercised earlier.

The 2026 Capped Call is a separate transaction and not part of the terms of the 2026 Notes and was executed separately from the issuance of the 2026 Notes.

The amount paid for the 2026 Capped Call was recorded as a reduction to additional paid-in capital in the consolidated balance sheet.

As of December 31, 2024, approximately 12.2 million shares remained outstanding under the 2026 Capped Call.

We also retain all potential future value of the capped call purchased in connection with the issuance of the 2026 Notes covering all shares underlying the original 2026 Notes.

Consequently, the fair value of the 2026 Capped Call of $ 23.2 million is classified as equity, not accounted for as derivatives, and will not be subsequently remeasured.

We repaid the $ 95.0 million aggregate principal amount of our 6.25 % convertible senior notes (the “2023 Notes”) that remained outstanding at maturity on November 15, 2023 .

The following table sets forth interest expense recognized related to the 2023 Notes:

Year Ended December 31,

(In thousands)

Contractual interest expense

Amortization of debt issuance costs

Total interest expense

Minimum Commitments

As of December 31, 2024, the most probable principal payments on our 2026 Notes and Term Loan are as follows:

As of December 31, 2025, the most probable principal payments on our 2026 Notes and 2029 Notes are as follows:

(In thousands)

1 unchanged sentence

Total principal payments

Unamortized premiums, discounts and issuance costs and other (1)

Net unamortized discounts and issuance costs

Carrying value of debt

(1) Under the Term Loan, we expect to pay a $ 1.0 million prepayment penalty in November 2025 which is included in the current portion of term debt in the consolidated balance sheet.

As this is not a principal payment it is included as a component of other costs herein.

Note 8 — Discontinued Operations - Sale of OMIDRIA

On December 23, 2021, we sold the rights to OMIDRIA and related assets to Rayner, which is reported as discontinued operations in our consolidated statements of operations and comprehensive income (loss) and excluded from continuing operations for all periods presented.

In December 2022, we earned a $ 200.0 million Milestone Payment upon the occurrence of an event specified in the Asset Purchase Agreement with Rayner.

The Milestone Payment was received in February 2023.

The Milestone Event also resulted in a reduction in the U.S.

royalty rate from 50 % to 30 % on OMIDRIA net sales.

The results of operations for OMIDRIA are recorded as income from discontinued operations for all periods presented in the consolidated statements of operations and comprehensive income (loss) are as follows:

On December 23, 2021, we sold the rights to OMIDRIA and related assets to Rayner, which is reported as discontinued operations in our consolidated statements of operations and comprehensive loss and excluded from continuing operations for all periods presented.

As contemplated by the Asset Purchase Agreement between Omeros and Rayner, in December 2022, we earned a $ 200.0 million milestone payment upon the establishment of separate payment for OMIDRIA for a continuous period of at least four years when furnished in the ambulatory surgery center setting (the “Milestone Event”).

We received the $ 200.0 million in February 2023.

Upon achieving the Milestone Event, the royalty rate applicable to U.S.

net sales of OMIDRIA was reduced from 50 % to 30 %.

The 30 % royalty rate continues until the expiration or termination of the last issued and unexpired U.S.

patent, which we expect to occur no later than early 2035.

We currently earn a royalty rate of 15 % on net ex-U.S.

To date, ex-U.S.

royalties have not been significant.

The results of operations for OMIDRIA are recorded as income from discontinued operations in the consolidated statements of operations and comprehensive loss are as follows:

Year Ended December 31,

2 unchanged sentences

Remeasurement adjustments

Milestone income

Other income (expense), net

Ex-US royalties

Income before income tax

12 unchanged sentences

Balance at December 31, 2025

We remeasure the OMIDRIA contract royalty asset on a quarterly basis using the expected value approach, which incorporates actual results and future expectations.

Cash flow from discontinued operations is as follows:

2 unchanged sentences

Net cash provided by discontinued operations from operating activities

Net cash provided by discontinued operations primarily represents royalties received and the $ 200.0 million milestone payment that we collected from Rayner in February 2023.

All royalties earned on OMIDRIA sales within the U.S.

Net cash provided by discontinued operations primarily represents royalties received and a $ 200.0 million milestone payment that we collected from Rayner in February 2023.

All royalties earned on OMIDRIA net sales within the U.S.

through December 31, 2031 are remitted by Rayner to an escrow account established by Omeros, from which payments are made to DRI.

Note 9 — OMIDRIA Royalty Obligation

In September 2022, we sold to DRI an interest in our future OMIDRIA royalty receipts and received $ 125.0 million in cash consideration which was recorded as an OMIDRIA royalty obligation on our consolidated balance sheet.

DRI was entitled to receive royalties on OMIDRIA net sales between September 1, 2022 and December 31, 2030 up to certain annual cap limits.

In February 2024, Omeros and DRI expanded their royalty purchase agreement under the Amendment, resulting in the elimination of previously existing annual caps on royalty payments and Omeros receiving an additional $ 115.5 million in cash consideration which we accounted for as a modification of our existing debt from DRI.

On September 30, 2022, we sold to DRI a portion of our future OMIDRIA royalty receipts for a purchase price of $ 125.0 million and recorded an OMIDRIA royalty obligation for the same amount.

On February 1, 2024, DRI purchased our remaining U.S.

OMIDRIA royalty receipts through December 31, 2031 for $ 115.5 million in cash under the Amendment.

The Amendment with DRI eliminated the previously existing annual caps on royalty payments after January 1, 2024, and provides that DRI receives all royalties on U.S.

net sales of OMIDRIA payable between January 1, 2024 and December 31, 2031.

We accounted for the Amendment as a modification of our existing debt from DRI.

The OMIDRIA royalty obligation is valued based on our estimates of future OMIDRIA royalties and is amortized through December 31, 2031.

All royalties earned on OMIDRIA sales within the U.S.

through December 31, 2031 are remitted by Rayner to an escrow account established by Omeros, from which payments are made to DRI.

We retain the right to receive all royalties payable by Rayner on any U.S.

net sales of OMIDRIA after December 31, 2031 and all royalties on global net sales of OMIDRIA from and after December 31, 2031.

To date, international royalties have not been significant.

DRI has no recourse to our assets other than in its interest in OMIDRIA royalties.

We are also entitled to receive a milestone payment ranging between $ 10.0 million and $ 27.5 million if U.S.

net sales of OMIDRIA reach applicable thresholds ranging between a total of $ 156.0 million and $ 160.0 million for any period of four consecutive quarters prior to January 1, 2026.

In addition, we are entitled to receive a separate milestone payment ranging between $ 8.0 million and $ 27.5 million if U.S.

net sales of OMIDRIA reach applicable thresholds ranging between a total of $ 181.0 million and $ 185.0 million for any period of four consecutive quarters prior to January 1, 2028.

The changes in the OMIDRIA royalty obligation during the year ended December 31, 2024 are as follows (in thousands):

Balance at December 31, 2022

Principal payments

We currently retain the right to receive all royalties payable by Rayner on any ex-U.S.

After December 31, 2031, we retain the right to receive all global royalties payable by Rayner on net sales of OMIDRIA.

Changes in the OMIDRIA royalty obligation are as follows (in thousands):

Balance at December 31, 2023

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Balance at December 31, 2024

Non-cash interest

Principal payments

Balance at December 31, 2025

The OMIDRIA royalty obligation is classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market.

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As of December 31, 2025, the approximate fair value of our obligation was $ 166.7 million.

For the years ended December 31, 2024, 2023 and 2022, we incurred interest expense of $ 15.0 million, $ 11.8 million and $ 2.9 million, respectively, on the OMIDRIA royalty obligation.

Interest expense is comprised of cash interest which is paid by escrow directly from Rayner and non-cash interest is comprised of remeasurement adjustments taken on the OMIDRIA royalty obligation based on changes in Rayner's forecasted OMIDRIA cash flows:

Year Ended December 31,

(In thousands)

OMIDRIA royalty obligation

Pass through interest remitted to administrative agent

Non-cash remeasurement adjustment

Interest expense, net of remeasurement on OMIDRIA royalty obligation

As of December 31, 2025, the expected scheduled principal and interest payments (based on an implied effective interest rate of 10.27 %) are as follows:

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We have various agreements with third parties that collectively require payment of termination fees totaling $ 2.6 million as of December 31, 2025 if we cancel the work within specific time frames, either prior to commencing or during performance of the contracted services.

Development Milestones and Product Royalties

Payment of Development Milestones and Product Royalties

We have entered a variety of development, collaboration, licensing or similar agreements with third parties under which we have accessed technology or services in connection with our development assets and programs.

Some of these agreements require milestone payments based on achievements of development, regulatory or sales milestones, and/or low-single to low-double digit royalties on net income or net sales of the relevant product.

For the year ended December 31, 2024, we did not pay any development milestones.

For the years ended December 31, 2023 and 2022, we paid $ 5.0 million and $ 0.3 million, respectively in development milestones.

For the years ended December 31, 2025 and 2024, development milestones were not significant.

For the year ended December 31, 2023, we paid $ 5.0 million in development milestones.

Note 12 — Shareholders ’ Equity (Deficit)

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Total shares reserved

At the Market Sales Agreement – We have a sales agreement to sell shares of our common stock having an aggregate offering price of up to $ 150.0 million, from time to time, through an “at the market” equity offering program.

At the Market Sales Agreement - 2021 – We have a sales agreement to sell shares of our common stock, from time to time, through an “at the market” (“ATM”) equity offering program.

During the year ended December 31, 2025, we sold 4.4 million shares of common stock pursuant to our ATM program, generating $ 19.0 million in net proceeds at an average price per share of $ 4.51 .

On November 14, 2025, the Company filed a shelf registration statement and prospectus supplement renewing the ATM for an aggregate offering price up to $ 150.0 million, and as of the date of this annual report, we have $ 150.0 million in shares of our common stock available to sell under our ATM program.

Amendment of 2017 Omnibus Incentive Compensation Plan - At our June 23, 2023 annual meeting, our shareholders approved a 5,000,000 share increase in the number of shares of common stock available for grant under the 2017 Omnibus Incentive Compensation Plan, as amended and restated.

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During the first quarter of 2024, we repurchased and retired 3.2 million shares of common stock at an average of $ 3.71 per share for an aggregate purchase price of $ 11.9 million.

The terms of the Credit Agreement prohibit us from repurchasing our common stock unless expressly agreed to by the Lenders.

Consequently, the Board of Directors terminated the share repurchase program effective upon execution the Credit Agreement in June 2024.

The terms of the Credit Agreement prohibited us from repurchasing our common stock unless expressly agreed to by the Lenders.

Consequently, the Board of Directors terminated the share repurchase program effective upon the execution of the Credit Agreement.

Share Repurchase Program - 2025 - On November 29, 2025, the Board of Directors approved a new share repurchase program under which we are permitted to repurchase from time to time up to $ 100.0 million of our common stock in the open market or through privately negotiated transactions.

Equitization Transaction - On May 12, 2025, we entered into Note Conversion Agreements with two holders of the 2026 Notes which resulted in the conversion of $ 10.0 million aggregate principal amount of 2026 Notes into 2,819,866 shares of our common stock.

(For further details, see “Note 7 – Debt”).

Registered Direct Offering - On July 28, 2025, we issued and sold 5,365,853 shares of our common stock in a registered direct offering to entities managed by Polar Asset Management Partners at a price of $ 4.10 per share, representing a 14 % premium to the closing price of our common stock on the date of the definitive agreement for the purchase of the shares.

We received $ 20.3 million in cash proceeds net of offering expenses.

Note 13 — Stock-Based Compensation

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1/12 or 1/48 monthly

Employee RSUs

50 % after one year, 50 % after two years

Stock-based compensation expense is as follows:

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Forfeiture expense is estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

Stock option activity for all stock option plans is as follows:

Stock option activity for all stock plans is as follows:

Options Outstanding

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Exercisable at December 31, 2025

Of the 16.7 million common stock options outstanding as of December 31, 2024, 8.2 million have an exercise price above the $ 9.88 closing price of our stock on the Nasdaq exchange on December 31, 2024.

Of the 18.3 million common stock options outstanding as of December 31, 2025, 0.4 million have an exercise price above the $ 17.18 closing price of our stock on the Nasdaq Global Market on December 31, 2025.

The total intrinsic value of stock options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 6.2 million, $ 0.5 million and $ 0.1 million, respectively.

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Income tax expense as a component of discontinued operations

For the year ended December 31, 2024, for federal and state income tax purposes, we have net income from continuing operations and from discontinued operations.

For the years ended December 31, 2023 and 2022, we had net losses from continuing operations and net income from discontinued operations.

At December 31, 2024, 2023 and 2022, we had federal net operating loss (“NOL”) carryforwards of approximately $ 331.7 million, $ 398.6 million and $ 361.4 million, respectively.

At December 31, 2024, 2023 and 2022, we had state NOL carryforwards of approximately $ 233.2 million, $ 245.8 million and $ 226.3 million, respectively.

In 2024 and 2022, we had net income for federal income tax purposes.

Therefore, we utilized existing NOLs of $ 62.5 million and $ 268.6 million, respectively, to fully offset our federal tax liability for both periods.

In 2023, we had a net loss for federal income tax purposes and no federal tax liability.

We recorded state income tax expense of $ 0.3 million, $ 0.5 million and $ 4.0 million in discontinued operations in 2024, 2023 and 2022, respectively, as we did not have adequate NOLs and tax credits to fully offset our state tax liability.

Our income is wholly derived from domestic U.S.

operations, and we have no income from foreign subsidiaries for all years presented.

For the years ended December 31, 2025, 2024 and 2023, we have net losses from continuing operations before income tax expense of $ 2.8 million, $ 180.3 million and $ 174.9 million, respectively.

For the years ended December 31, 2025, 2024 and 2023, we have net pre-tax income from discontinued operations of $ 2.0 million, $ 26.1 million and $ 57.6 million, respectively.

In 2025 and 2023, we had net losses for federal income tax purposes and no federal tax liability.

In 2024, we had net income for federal income tax purposes;

therefore, we utilized existing net operating losses (“NOLs”) of $ 62.5 million, to fully offset our federal tax liability for the period.

We recorded state income tax expense in continuing operations of $ 2.0 million and $ 2.3 million in 2025 and 2024, and $ 0.6 million, $ 0.3 million and $ 0.5 million in discontinued operations in 2025, 2024 and 2023, respectively, as we did not have adequate NOLs and tax credits to fully offset our state tax liability.

The Tax Cuts and Jobs Act was enacted on December 22, 2017 and includes the requirement to capitalize and amortize research and development expenditures beginning in 2022.

government enacted the OBBBA on July 4, 2025, which includes new Section IRC 174A.

This section allows for immediate expensing of domestic research and development expenditures for tax years beginning after December 31, 2024, reversing the prior requirement under the 2017 Tax Cuts and Jobs Act which capitalized domestic research and development costs over five years.

As a result of the most recent OBBBA legislation, we have chosen to accelerate the previously capitalized and unamortized U.S.

research and development expenditures as a current year deduction which allows us to reduce our federal tax liability in the current year to zero.

We plan to expense our U.S.

research and development expenditures moving forward.

Foreign research and development expenditures continue to be subject to capitalization and amortization requirements.

State income tax treatment of research and development expenditures continues to vary, as not all states conform to federal provisions, which may result in differences between federal and state taxable income.

At December 31, 2025, 2024, and 2023, we had federal NOL carryforwards of $ 386.5 million, $ 331.7 million and $ 398.6 million, respectively.

Pre-2018 federal NOL carryforwards of $ 45.4 million expire between 2036 and 2037.

Post-2018 federal NOL carryforwards of $ 340.9 million do not expire.

Research and development tax credit carryforwards of $ 111.8 million expire between 2026 and 2044.

At December 31, 2025, 2024 and 2023, we had state NOL carryforwards of $ 229.8 million, $ 233.2 million and $ 245.8 million, respectively.

We file federal and certain state income tax returns, which provides varying statutes of limitations on assessments.

However, because of NOL carryforwards, substantially all of our tax years remain open to federal and state tax examination.

Deferred income tax assets and liabilities reflect the tax effect of NOL and tax credit carryforwards and the net temporary difference between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Deferred tax assets:

Net operating loss carryforwards

Research and development tax credits

Capitalized research and development

Net operating loss carryforwards

OMIDRIA royalty obligation

Debt derivative

Capitalized research and development

Stock-based compensation

Lease liability

Total deferred tax assets

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OMIDRIA contract royalty asset

Right of use assets

Property and equipment

Total deferred tax liabilities

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Net deferred tax liabilities

As of December 31, 2024, we had federal NOL carryforwards of approximately $ 331.7 million and state NOL carryforwards of approximately $ 233.2 million.

Pre-2018 federal NOLs of $ 45.2 million expire between 2035 and 2037.

Post-2018 federal NOLs of $ 286.5 million do not expire.

Research and development tax credit carryforwards of $ 104.9 million expire between 2025 and 2044.

The Tax Cuts and Jobs Act was enacted on December 22, 2017 and includes the requirement to capitalize and amortize research and experimental expenditures beginning in 2022.

Prior to 2022, we expensed these costs as incurred for tax purposes.

Reconciliation of income tax computed at federal statutory rates to the reported provisions for income taxes from continuing operations are as follows:

The valuation allowance relates primarily to net U.S.

deferred tax assets from research tax credit carryforwards, operating losses, the OMIDRIA royalty obligation, the 2029 Notes derivative, capitalized research and development, and amounts paid and accrued for which the tax treatment requires capitalization and amortization.

The Company maintains a full valuation allowance on its net U.S.

deferred tax assets.

The assessment regarding whether a valuation allowance is required considers both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable.

In making this assessment, significant weight is given to evidence that can be objectively verified.

In its evaluation, the Company considered its cumulative losses and its forecasted losses in the near term as significant negative evidence.

Based upon a review of the four sources of income identified within ASC 740, Accounting for Income Taxes , the Company determined that the negative evidence outweighed the positive evidence, and a full valuation allowance on its net deferred tax assets should be maintained.

The Company will continue to assess the realizability of its deferred tax assets going forward and will adjust the valuation allowance as needed.

The following table summarizes the activities related to the Company's gross unrecognized tax benefits (in thousands):

Balance at December 31, 2023

Increase in balance related to tax positions taken during prior years

Decrease in balance as a result of a lapse of the applicable statute of limitations

Balance at December 31, 2024

Decrease in balance related to tax positions taken during current year

Decrease in balance as a result of a lapse of the applicable statute of limitations

Balance at December 31, 2025

As of December 31, 2025, 2024 and 2023, the total amount of gross unrecognized tax benefits was $ 4.4 million, $ 4.5 million and $ 2.0 million, respectively.

Accrued interest and penalties of $ 1.5 million, $ 0.5 million and $ 0.3 million, respectively, were included within our unrecognized tax benefits as of December 31, 2025, December 2024 and December 2023, which are excluded from the table above.

As of December 31, 2025, $ 4.4 million of the total unrecognized tax benefits, if recognized, would have an impact on the Company's effective tax rate.

The Company's policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

Rate Reconciliation

The Company adopted ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosure s on a prospective basis beginning with the year ended December 31, 2025.

The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the Company's U.S.

federal statutory tax amount and rate to its actual effective amount and rate:

December 31, 2025

(In thousands)

federal tax at statutory rate

State tax, net of federal benefit (1)

Change in valuation allowance

Changes in unrecognized tax benefits

Research and development credit

Orphan drug credit

Non-deductible items

Stock based compensation awards

Section 162(m) limitations

Effective tax rate

The states and local jurisdiction that contribute to the majority (greater than 50%) of the tax effect in this category include California, Michigan and Minnesota

The following table presents the required disclosures prior to the Company's adoption of ASU 2023-09 and reconciles the U.S.

federal statutory income tax rate to the actual global effective income tax rate for the years ended December 31, 2024 and December 31, 2023:

Year ended December 31,

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Effective tax rate

We file federal and certain state income tax returns, which provides varying statutes of limitations on assessments.

However, because of NOL carryforwards, substantially all our tax years remain open to federal and state tax examination.

As of December 31, 2024, 2023 and 2022, the total amount of gross unrecognized tax benefits was $ 4.5 million, $ 2.0 million and $ 0.2 million, respectively.

Interest and penalties of $ 0.5 million and $ 0.3 million, respectively, were included within our unrecognized tax benefits as of December 31, 2024 and December 31, 2023.

As of December 31, 2024, $ 4.2 million of the total unrecognized tax benefits, if recognized, would have an impact on our effective tax rate.

We estimate that there will be no material changes in uncertain tax positions for the next 12 months.

The Company's policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

The following table summarizes the activities related to our gross unrecognized tax benefits (in thousands):

Balance at December 31, 2022

Increase in balance related to tax positions taken during prior years

Decrease in balance related to tax positions during prior years

Decrease in balance as a result of a lapse of the applicable statute of limitations

Balance at December 31, 2023

Increase in balance related to tax positions taken during current year

Decrease in balance as a result of a lapse of the applicable statute of limitations

Balance at December 31, 2024

Income taxes paid, net of refunds received for the year ended December 31, 2025 are shown as follows (in thousands):

December 31, 2025

Massachusetts

All other states

Income tax, net of amounts refunded

We did not pay any federal or foreign income taxes during 2025.

The amount of cash income taxes paid by the Company during the years ended December 31, 2025, December 31, 2024 and December 31, 2023 was $ 0.2 million, $ 0.2 million and $ 3.3 million, respectively.

Note 15 — 401(k) Retirement Plan

Our 401(k) retirement plan provides for an annual company discretionary match on employee contributions.

For all three years ended December 31, 2024, 2023 and 2022, Omeros' 401(k) match expense was $ 0.6 million.

Our 401(k) retirement plan provides for an annual company discretionary match on employee contributions.For each of the three years ended December 31, 2025, 2024 and 2023, Omeros' 401(k) match expense was $ 0.6 million.

We match up to 4.0 % of each participant's eligible earnings, with a maximum annual company match of $ 4,000 per employee.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data