What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-18 compared with 2025-03-11 · 107 added, 61 removed, 165 unchanged (50% of the section changed)

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This discussion and analysis and other parts of this Annual Report on Form 10-K contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections.

Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

this Annual Report on Form 10-K.

You should carefully read the “Risk Factors” section of this Annual Report on Form 10-K to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”

We are a biopharmaceutical company dedicated to developing small molecule medicines for brain conditions with significant unmet need.

We are a biopharmaceutical company dedicated to developing small molecule medicines for brain disorders with significant unmet need.

Our approach to achieve this goal is scientifically driven, patient-focused, and coupled with an integrated and disciplined approach to research, clinical development and business development.

Our team has significant experience with and understanding of epilepsies and other neurological conditions, and we continue to gain insight into the ways the different molecular mechanisms and pathways underlying these disorders impact the symptoms patients experience.

We have developed a differentiated pipeline of drug candidates containing three novel MoAs to target seizures and believe we are the only company that holds a portfolio of direct activators of KCC2.

Two of our programs are in clinical trials in humans, and a third will begin a clinical trial in the second quarter of 2026.

We are initially pursuing therapeutic drug candidates for epilepsy and psychosis in Parkinson’s disease and Lewy body dementia.

We have developed a differentiated pipeline of drug candidates containing novel mechanisms of action (“MoAs”) to target seizures and believe we are the only company that holds a portfolio of direct activators of potassium-chloride cotransporter 2 (“KCC2”).

One of our programs are in clinical trials in humans, and a second is expected to begin a clinical trial in the first half of 2026.

We are initially pursuing therapeutic drug candidates for the potential treatment of drug-resistant focal onset seizures (“FOS”), developmental and epileptic encephalopathies (“DEEs”), including tuberous sclerosis complex (“TSC”) seizures and infantile spasms (“IS”), psychosis associated with Parkinson’s disease and Lewy body dementia (“LBD”), and schizophrenia.

If successfully developed and marketed to treat these conditions, we intend to explore these drug candidates for broader neurologic indications.

Our cohesive focus in brain conditions with significant unmet need reinforces our belief that we can develop and produce multiple novel medicines, scale our infrastructure, positively impact patients’ lives and create long-term stockholder value.

Our cohesive focus in brain disorders with significant unmet need reinforces our belief that we can develop and produce multiple novel medicines, scale our infrastructure, positively impact patients’ lives and create long-term stockholder value.

Since our inception in April 2014, we have devoted substantially all of our efforts to organizing and planning our business, building our management and technical team, acquiring assets and raising capital.

During the years ended December 31, 2025 and 2024, we generated $7.3 million and $0.6 million of royalty and licensing revenue, respectively.

We have otherwise primarily funded our business through the sale of our capital stock and through the entry into the RLT Agreement with Takeda, which resulted in a one-time up-front payment of $196.0 million in 2021 and the entry into a Royalty Monetization Agreement (the “Ligand Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”), which resulted in a one-time up-front payment of $30.0 million in 2023.

Through December 31, 2024, we have raised net proceeds of $275.4 million from the sale of our preferred and common stock.

We have otherwise primarily funded our business through the sale of our capital stock and through the entry into the royalty, license and termination agreement (“RLT Agreement”) with Takeda Company Limited (“Takeda”), which resulted in a one-time up-front payment of $196.0 million in 2021 and the entry into a Royalty Monetization Agreement (the “Ligand Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”), which resulted in a one-time up-front payment of $30.0 million in 2023.

Through December 31, 2025, we have raised net proceeds of $350.5 million from the sale of our capital stock.

As of December 31, 2025, we had $90.4 million in cash, cash equivalents and marketable securities.

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As of December 31, 2025, we had an accumulated deficit of $321.7 million.

We expect to continue to incur significant expenses and increasing operating losses for at least the next several years.

Our net losses may fluctuate significantly from period to period, depending on the timing of our planned clinical trials and expenditures on our other research and development and commercial development activities.

We expect to incur significant expenses and operating losses for at least the next several years.

Our net losses may fluctuate significantly from period to period, depending on the timing of our clinical trials and expenditures on our other research and development and commercial development activities.

We expect our expenses will increase substantially over time as we:

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• attract, hire and retain additional administrative, clinical, regulatory, manufacturing, commercial and scientific personnel.

2025 Private Placement

In October 2025, we entered into a Securities Purchase Agreement with the purchasers named therein (the “Investors”), pursuant to which we issued and sold an aggregate of (i) 57,722 shares of our Series B convertible preferred stock, par value $0.001 per share (the “Series B Preferred Stock”), (ii) Series A warrants (the “Series A Warrants”) to purchase up to 38,481,325 shares of our common stock and/or pre-funded warrants to purchase common stock (the “Pre-Funded Warrants”) and (iii) Series B warrants to purchase up to 28,861,000 shares of common stock and/or Pre-Funded Warrants (the “Series B Warrants” and, together with the Series A Warrants, the “Warrants”) to the Investors in a private placement (the “2025 Private Placement”).

Each share of Series B Preferred Stock was sold together with a Series A Warrant to purchase up to 666.66 shares of common stock and/or Pre-Funded Warrants (rounded down to next whole share based on each investor’s aggregate purchase) and a Series B Warrant to purchase 500 shares of common stock and/or Pre-Funded Warrants (together, a “Security”).

The Securities were sold at a purchase price of $1,400.00 per Security to the Investors, which included the purchase of 71 shares of Series B Preferred Stock, 47,333 Series A Warrants, and 35,500 Series B Warrants by our Executive Chairman.

We received initial net proceeds of $75.1 million from the 2025 Private Placement, after deducting placement agent fees and offering expenses.

We may further receive up to $94.0 million in additional gross proceeds, assuming exercise in full of the Warrants.

In December 2025, following the approval by our stockholders at a special meeting held on December 11, 2025 of specified proposals, all of the shares of the Series B Preferred Stock automatically converted into an aggregate of 57,722,000 shares of our common stock.

The Warrants each have an exercise price of $1.40 per share (the “Exercise Price”).

The Series A Warrants are exercisable and expire on the earlier of (i) October 6, 2030 or (ii) the 30th calendar day following the date on which we publicly announce the clearance of the first of any investigational new drug application, clinical trial application or other foreign equivalent with respect to the clinical development of our OV4071 product candidate.

On March 18, 2026, we publicly announced that we received Human Research Ethics Committee (HREC) approval of the Phase 1 clinical trial protocol for OV4071 and acknowledgement of our Clinical Trial Notification (CTN) from the Therapeutic Goods Administration (TGA).

Accordingly, pursuant to the terms of the Series A Warrants, the Series A Warrants will expire on April 17, 2026, if not exercised in full.

If all Series A Warrants are exercised in full, we would anticipate receiving an additional $53.9 million in gross proceeds, prior to deducting placement agent fees.

In the event that beneficial ownership limitations prevent the exercise by an Investor of all or a portion of the Series A Warrants held thereby, such Investor may purchase shares of common stock up to the specified limit and, for the remainder, purchase Pre-Funded Warrants in lieu of shares of common stock.

The Series B Warrants are exercisable and expire on October 6, 2030.

In the event that the closing price of our common stock equals or exceeds 300% of the Exercise Price (subject to customary adjustments) for 20 of any 30 consecutive trading days, the Company may elect to require exercise of the Series B Warrants for cash.

In the event that beneficial ownership limitations prevent the exercise by an Investor of all or a portion of the Series B Warrants held thereby upon any such mandatory exercise demand, such Investor will purchase shares of common stock up to the specified limit, and for the remainder, purchase Pre-Funded Warrants in lieu of shares of common stock.

Recent Developments

2026 Private Placement

On March 17, 2026, we entered into a Securities Purchase Agreement with the purchasers named therein (the “Investors”), pursuant to which we agreed to issue and sell an aggregate of 19,154,321 shares of our common stock at a purchase price of $2.01 per share and, in lieu of common stock, pre-funded warrants to purchase up to 10,701,710 shares of common stock, at a purchase price $2.009 for each pre-funded warrant, to the Investors in a private placement (the “2026 Private Placement”).

The pre-funded warrants will have an exercise price of $0.001 per share and will be immediately exercisable.

We intend to use the net proceeds from the 2026 Private Placement, together with our existing cash, cash equivalents and marketable securities, to provide financing to support the expansion of the development of OV329 into additional indications, including TSC and IS, as well as for general research and development expenses.

We will receive gross proceeds from the 2026 Private Placement of $60.0 million, before placement agent fees and offering expenses.

The closing of the 2026 Private Placement is expected to occur on March 19, 2026, subject to customary closing conditions.

Significant Risks and Uncertainties

The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with public health crises and global geopolitical tensions, like tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, may have a material adverse effect on our business, financial condition, results of operations and growth prospects.

The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with public health crises and global geopolitical tensions may have a material adverse effect on our business, financial condition, results of operations and growth prospects.

The resulting fluctuations in inflation rates may materially affect our business and corresponding financial position and cash flows.

Inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results.

Relatively high interest rates also present a recent challenge impacting the U.S.

Relatively high interest rates also present a challenge impacting the U.S.

economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future.

Furthermore, economic conditions have produced downward pressure on share prices.

Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain relatively high or begin to rise again) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, global geopolitical tensions as a result of tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, worsening global macroeconomic conditions, as well as potential future conditions, which may be impacted by the implementation of tariffs by the United States and other countries, and employee availability and wage increases, which may result in additional stress on our working capital resources.

Moreover, there is great uncertainty with respect to potential changes in trade regulations, tariffs, sanctions and export controls which also increase volatility in the global economy.

Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the future on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, global geopolitical tensions, worsening global macroeconomic conditions, and employee availability and wage increases, which may result in additional stress on our working capital resources.

Moreover, there is great uncertainty with respect to potential changes in trade regulations, ongoing changes to U.S.

and international tariffs and other trade restrictions and trade barriers, renegotiation of international trade agreements or further escalation of trade tension, sanctions and export controls which also increase volatility in the global economy.

In addition, we are subject to other challenges and risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with:

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Financial Operations Overview

We have generated revenue primarily under the RLT Agreement and the Ligand Agreement, as well as nominal amounts from other licensing and royalty agreements.

We have not generated any revenue from commercial drug sales and we do not expect to generate any revenue from commercial drug sales unless or until we obtain regulatory approval and commercialize one or more of our current or future drug candidates, or if we become entitled to revenue from our licensing agreements.

We have generated revenue under various licensing and collaboration agreements.

We have not generated any revenue from commercial drug sales, and we do not expect to generate any further revenue unless or until we obtain regulatory approval and commercialize one or more of our current or future drug candidates.

In the future, we may also seek to generate revenue from a combination of research and development payments, license fees and other upfront or milestone payments.

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• milestone payments and other costs and payments under licensing agreements, research agreements and collaboration agreements;

• depreciation expense for assets used in research and development activities.

Costs incurred in connection with research and development activities are expensed as incurred.

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• number of sites included in the clinical trials;

• countries in which the clinical trial is conducted;

• countries in which the clinical trials are conducted;

• length of time required to enroll eligible patients;

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General and administrative expenses consist primarily of employee-related expenses, including salaries, benefits and stock-based compensation expense, related to our executive, finance, business development and support functions.

Other general and administrative expenses include costs associated with operating as a public company, generation and maintenance of intellectual property, travel expenses, conferences, professional fees for auditing, tax and legal services and facility-related costs.

Other general and administrative expenses include costs associated with operating as a public company, travel expenses, conferences, professional fees for auditing, tax and legal services, and facility-related costs.

Other Income (Expense), net

Other income (expense), net, consists primarily of interest income, accretion of discount on short-term investments, and unrealized gains/losses on long-term equity investments, changes in the values of long-term investments and the royalty monetization liability under the Ligand Agreement, and loss related to a fraudulent funds transfer.

Other income (expense), net, primarily consists of interest income and accretion of discount on investments in marketable securities, unrealized gains (losses) on long-term equity investments, changes in the fair value of the royalty monetization liability under the Ligand Agreement, and the impact of a fraudulent funds transfer.

Results of Operations

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The following table summarizes the results of our operations for the periods indicated:

(in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Change $

(in thousands) Year Ended December 31, 2025

Year Ended December 31, 2024

License and other revenue $ 7,252 $ 566 $ 6,686

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Net loss $ (17,414) $ (26,433) $ 9,019

Revenue of $0.6 million and $0.4 million was recognized for the years ended December 31, 2024 and 2023, respectively, related to a royalty agreement.

Revenue of $7.3 million and $0.6 million was recognized for the years ended December 31, 2025 and 2024, respectively, related to royalty agreements.

Research and Development Expenses

(in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Change $

(in thousands) Year Ended December 31, 2025

Year Ended December 31, 2024

Preclinical and clinical development expenses $ 15,726 $ 23,965 $ (8,239)

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Research and development expenses were $25.6 million for the year ended December 31, 2025 compared to $36.8 million for the year ended December 31, 2024.

The increase of $9.4 million in preclinical and development expenses was due to additional activities related to our ongoing development programs, primarily relating to OV350, OV888 (GV101) and OV329.

The decrease in payroll and payroll-related expenses was primarily due to the impact of an organizational restructuring in 2024, which resulted in approximately $1.7 million in severance costs during the period ended December 31, 2024 compared to approximately $0.2 million for the same period in 2023.

The decrease of $8.2 million in preclinical and development expenses was primarily due to activities related to the pause of the OV888 (GV101) program in late 2024.

General and Administrative Expenses

(in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Change $

(in thousands) Year Ended December 31, 2025

Year Ended December 31, 2024

Payroll and payroll-related expenses $ 10,043 $ 13,835 $ (3,792)

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General and administrative expenses were $24.1 million for the year ended December 31, 2025 compared to $25.7 million for the year ended December 31, 2024.

The decrease of $5.4 million was primarily due to the impact of the organizational restructuring in 2024, which resulted in approximately $1.8 million in severance costs during the period compared to approximately $1.5 million for the same period in 2023.

Additionally, resulting from the restructuring, non-severance payroll and related expenses were reduced by approximately $3.7 million between the years ended December 31, 2024 and 2023.

Legal and professional fees and general office expenses were primarily reduced by cost-cutting efforts.

The decrease in payroll and related expenses was primarily due to prior year organizational restructuring that reduced non-severance payroll and related expenses by $2.0 million and by $1.8 million of severance costs recorded in 2024.

Legal and professional fees increased between the periods in relation to the 2025 Private Placement as well as other non-routine business development related professional services fees.

Other Income (Expense), net

Other income (expense), net was $35.5 million for the year ended December 31, 2024, comprised of a $30.0 million decrease in fair value of the royalty monetization liability resulting from Takeda’s reported negative soticlestat Phase 3 study results and announcement of program discontinuation, $3.9 million in interest and accretion income on investments in U.S.

treasuries, $1.8 million loss on a fraudulent funds transfer and a net $3.3 million unrealized gain on long-term equity investments.

For the year ended December 31, 2023, other income (expense), net of $6.9 million was comprised of $4.9 million in interest and accretion income on investments in U.S.

treasuries and $2.0 million of unrealized loss on long-term equity investments.

Other income (expense), net was $25.0 million for the year ended December 31, 2025, comprised primarily of $21.0 million unrealized gain on a long-term equity investment, interest and accretion income on investments in U.S.

treasuries and gain from the full recovery of funds on a fraudulent funds transfer.

For the year ended December 31, 2024, other income (expense), net of $35.5 million was comprised of a $30.0 million decrease in fair value of the royalty monetization liability resulting from Takeda’s reported negative soticlestat Phase 3 study results and announcement of program discontinuation, $3.9 million in interest and accretion income on investments in U.S.

treasuries, $1.8 million loss on a fraudulent funds transfer and net $3.3 million unrealized gain on long-term equity investments.

Liquidity and Capital Resources

As of December 31, 2025 and 2024, we had total cash, cash equivalents and marketable securities of $90.4 million and $53.1 million, respectively.

We believe that our cash, cash equivalents and marketable securities as of December 31, 2024 are sufficient to fund our existing and planned operating expenses and capital expenditure requirements into the second half of 2026.

We believe that our cash, cash equivalents and marketable securities as of December 31, 2025 are sufficient to fund our current operating plans through at least 12 months from the issuance of the financial statements contained in our Annual Report on Form 10-K.

Similar to other development-stage biotechnology companies, we have generated limited revenue.

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As of December 31, 2025, we had an accumulated deficit of $321.7 million and working capital of $66.1 million.

2025 Private Placement

In October 2025, we sold an aggregate of (i) 57,722 shares of Series B Preferred Stock, (ii) Series A Warrants to purchase up to 38,481,325 shares of our common stock and/or Pre-Funded Warrants and (iii) Series B Warrants to purchase up to 28,861,000 shares of common stock and/or Pre-Funded Warrants to the Investors in the 2025 Private Placement.

We received initial net proceeds of $75.1 million from the 2025 Private Placement, after deducting placement agent fees and offering expenses.

We may further receive up to $94.0 million in additional gross proceeds, assuming exercise in full of the Warrants.

The Warrants each have an exercise price of $1.40 per share.

On March 18, 2026, we publicly announced that we received HREC approval of the Phase 1 clinical trial protocol for OV4071 and acknowledgement of our CTN from the TGA.

Accordingly, pursuant to the terms of the Series A Warrants, the Series A Warrants will expire on April 17, 2026, if not exercised in full.

If all Series A Warrants are exercised in full, we would anticipate receiving an additional $53.9 million in gross proceeds, prior to deducting placement agent fees.

The Series B Warrants are exercisable and expire on October 6, 2030.

In the event that the closing price of the Company’s common stock equals or exceeds 300% of the Exercise Price (subject to customary adjustments) for 20 of any 30 consecutive trading days, the Company may elect to require exercise of the Series B Warrants for cash.

If all Series B Warrants are exercised in full, we would expect to receive an additional $40.1 million in gross proceeds, prior to deducting placement agent fees.

2026 Private Placement

On March 17, 2026, we entered into a Securities Purchase Agreement related to the 2026 Private Placement.

We expect to receive gross proceeds from the 2026 Private Placement of $60.0 million, before placement agent fees and offering expenses.

The closing of the 2026 Private Placement is expected to occur on March 19, 2026, subject to customary

closing conditions.

At-the-Market Offering Program

In November 2023, we filed a new shelf registration statement on Form S-3 (Registration No.

333-275307) that allows us to sell up to an aggregate of $250.0 million of our common stock, preferred stock, convertible debt securities and/or warrants (the “S-3 Registration Statement”), which includes a prospectus covering the issuance and sale of up to $75.0 million of common stock pursuant to our at-the-market (“ATM”) program.

In November 2023, we filed a shelf registration statement on Form S-3 (Registration No.

333-275307) that allows us to sell up to an aggregate of $250.0 million of our common stock, preferred stock, convertible debt securities and/or warrants, which includes a prospectus covering the issuance and sale of up to $75.0 million of common stock pursuant to our at-the-market (“ATM”) program.

During the years ended December 31, 2025 and 2024, we did not sell any shares under our ATM program.

As of December 31, 2024, we had up to $250.0 million available under our S-3 Registration Statement, including up to $75.0 million available pursuant to our ATM program.

As of the date of this Form 10-K, our public float was less than $75.0 million.

As a result, we are subject to the limitations of General Instruction I.B.6 to Form S-3 until such time as our public float exceeds $75 million, which means we only have the capacity to sell shares up to one-third of our public float under the S-3 Registration Statement, including the ATM program, in any twelve-month period.

We will remain constrained by the limitations of General Instruction I.B.6 to Form S-3 until such time as our public float exceeds $75 million, at which time the number of securities we may sell under a Form S-3 registration statement will no longer be limited by limitations of General Instruction I.B.6 to Form S-3.

Since December 31, 2025, we have sold 1,500,000 shares through our ATM program for gross proceeds of approximately $2.4 million before deducting sales agent fees and other offering expenses.

Future Funding Requirements

We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek marketing approval for, our product candidates and advance our other programs.

Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, clinical costs, legal and other regulatory expenses and general overhead costs.

We have based our estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we currently expect.

Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, clinical trial costs, legal and other regulatory expenses and general overhead costs.

We have based our estimates on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we expect.

Additionally, the process of testing drug candidates in clinical trials is costly, and the timing of progress in these trials is uncertain.

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We have no products approved for commercial sale and have not generated any revenues from product sales to date.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through

a combination of equity offerings, debt financings and additional funding from license and collaboration arrangements.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings and additional funding from license and collaboration arrangements.

Except for any obligations of our collaborators to reimburse us for research and development expenses or to make milestone or royalty payments under our agreements with them, we will not have any committed external source of liquidity.

To the extent that we raise additional capital through future equity offerings or debt financings, ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.

Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

There can be no assurance that such financings will be obtained on terms acceptable to us, if at all.

Additionally, while the long-term economic impact of geopolitical tensions, including tensions between China and Taiwan, the ongoing war between Russia and Ukraine and the war involving Israel, is difficult to assess or predict, each of these events has caused significant disruptions to the global financial markets and contributed to a general global economic slowdown.

Additionally, while the long-term economic impact of geopolitical tensions is difficult to assess or predict, such events have caused significant disruptions to the global financial markets and contributed to a general global economic slowdown.

Furthermore, inflation rates have increased recently to levels not seen in decades, which may also be impacted by the implementation of tariffs by the United States and other countries.

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In addition, the U.S.

Federal Reserve has raised interest rates in response to concerns about inflation.

Relatively high interest rates and fluctuations in inflation, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks.

If the disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could negatively affect our future ability to pursue our business strategy.

Federal Reserve has raised interest rates in the past in response to concerns about inflation.

Relatively high interest rates and fluctuations in inflation, especially if coupled with a significant change in government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks.

If the disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our ability to pursue our business strategy.

If we raise additional funds through collaborations, strategic alliances or licensing agreements with third parties for one or more of our current or future drug candidates, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates, or to grant licenses on terms that may not be favorable to us.

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The following table summarizes our cash flows for the periods indicated:

(in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023

(in thousands) Year Ended December 31, 2025

Year Ended December 31, 2024

Net cash (used in) provided by:

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Financing activities 75,207 622

Effect of exchange rates on cash, cash equivalents and restricted cash $ (167) $ —

Net decrease in cash, cash equivalents, and restricted cash $ (13,148) $ (740)

Net Cash Used in Operating Activities

Net cash used in operating activities was $56.0 million for the year ended December 31, 2024, which consisted of net loss of $26.4 million offset by $29.4 million, net, of various noncash charges, most significantly a $30.0 million in change in fair value of the royalty monetization liability with Ligand.

Net cash used in operating activities was $45.8 million for the year ended December 31, 2023, which consisted of net loss of $52.3 million offset by a net of $4.2 million of various noncash charges, most significantly $7.3 million in stock-based compensation expense.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities was $54.6 million for the year ended December 31, 2024, which was primarily related to our purchases and sales/maturities of investments in U.S.

treasuries and the purchase of a long-term equity investment.

For the year ended December 31, 2023, $2.6 million was used in investing activities, primarily comprised of purchases and sales/maturities of investments in U.S.

Net cash used in operating activities was $38.3 million for the year ended December 31, 2025, which consisted of net loss of $17.4 million offset by various noncash charges, most significantly an adjustment to fair value of one of our long-term equity investments of $21.0 million which was reflected in other income (expense), net.

Net cash used in operating activities was $56.0 million for the year ended December 31, 2024, which consisted of net loss of $26.4 million offset by $29.5 million, net, of various noncash charges, most significantly a $30.0 million change in fair value of the royalty monetization liability with pursuant to the Ligand Agreement.

Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities was $49.9 million for the year ended December 31, 2025, which was primarily related to our purchases of investments in U.S.

For the year ended December 31, 2024, $54.6 million was provided by investing activities, primarily comprised of net sales/maturities of investments in U.S.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $0.6 million for the year ended December 31, 2024, which was comprised of proceeds from the exercise of options and purchases made under our employee stock purchase plan.

For the same period in 2023, cash provided by financing activities was $30.5 million, primarily due to the $30.0 million received in connection with the Ligand Agreement in addition to proceeds from the exercise of options and purchases made under the employee stock purchase plan.

Net cash provided by financing activities was $75.2 million for the year ended December 31, 2025, which was comprised of net proceeds from the 2025 Private Placement as well as proceeds from the exercise of options and purchases made under our employee stock purchase plan.

For the same period in 2024, cash provided by financing activities was

$0.6 million, comprised of proceeds from the exercise of options and purchases made under the employee stock purchase plan.

Critical Accounting Policies and Estimates

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ASC 606 requires that we evaluate these agreements to determine the distinct performance obligations.

Non-refundable, upfront fees that are not contingent on any future performance and require no consequential continuing involvement by us, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered.

We defer recognition of non-refundable upfront fees if the performance obligations are not satisfied.

Nonrefundable, upfront fees that are not contingent on any future performance and require no consequential continuing involvement by us, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered.

We defer recognition of nonrefundable upfront fees if the performance obligations are not satisfied.

During the year ended December 31, 2025, we recognized revenue of approximately $7.3 million related to royalty agreements.

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When preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.

This process involves reviewing open contracts and communicating with our personnel and consultants to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.

This process involves reviewing open contracts and communicating with our personnel, consultants and vendors to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.

Payments under certain contracts we have with third parties depend on factors, such as the successful enrollment of certain numbers of patients, site initiation and the completion of clinical trial milestones.

6 unchanged sentences

We are a smaller reporting company as defined in the Exchange Act.

We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) the value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our most recently completed second fiscal quarter or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our the value of voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our most recently completed second fiscal quarter.

stock held by non-affiliates is less than $700.0 million measured on the last business day of our most recently completed second fiscal quarter.

As a smaller reporting company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

1 unchanged sentence

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 7. Management’s Discussion and Analysis