What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-26 compared with 2025-04-07 · 142 added, 134 removed, 202 unchanged (58% of the section changed)

8 unchanged sentences

We are a clinical stage biopharmaceutical company focused on developing novel therapies for the treatment of orphan pulmonary and fibrosis indications with no approved or limited effective treatments.

We currently have two product candidates in clinical development, LTI-03 and LTI-01, and multiple candidates in preclinical development focused on fibrosis indications.

We currently have one lead product candidate in clinical development, LTI-03.

As a result of our current capital limitations, we have suspended development activities for LTI-01 and our candidates in preclinical development focused on fibrosis indications for an indefinite period and are allocating our limited resources to LTI‑03, as it is further discussed below.

Our pipeline includes:

2 unchanged sentences

• preclinical programs targeting cystic fibrosis and a peptide program focused on the Cav1 protein for systemic fibrosis indications.

In June 2024, we decided to temporarily delay clinical development of LTI-01 in an effort to focus our resources on clinical development of LTI-03 and until additional funds are raised.

In June 2024, we decided to temporarily delay clinical development of LTI-01 and other pre-clinical candidates in an effort to focus our resources on clinical development of LTI-03 and until additional funds are raised.

In the fourth quarter of 2024, we determined that the temporary delay of further clinical development of LTI-01 may not be a short-term measure.

In the fourth quarter of 2025, we decided to pause development activities related to LTI-01 for an indefinite period.

In May 2025, we initiated screening and recruitment of patients in the RENEW Phase 2 clinical trial of LTI-03.

The RENEW trial is a Phase 2 multi-center, randomized, double-blind, placebo-controlled study evaluating the safety, tolerability, and efficacy of LTI-03 patients with IPF.

In addition, the trial is designed to assess the activity of inhaled dry powder LTI-03 across multiple biomarkers and to measure lung function and the potential for healthy tissue regeneration.

The trial is designed to enroll approximately 120 patients diagnosed with IPF within 5 years of screening, who may be receiving standard of care antifibrotic therapy, across up to 50 sites globally, including sites in the United States, United Kingdom, Germany, Austria and Poland.

Patients will be randomized into two blinded placebo-controlled cohorts that will run concurrently.

Patients in the low dose cohort will receive 2.5 mg of either LTI-03 or placebo administered twice daily, or BID, for a total dose of 5 mg/day, while participants in the high dose cohort will receive 5 mg BID for a total dose of 10 mg/day.

The primary endpoint is the incidence of treatment-emergent adverse events from Day 1 through Week 24.

The key secondary endpoint is the efficacy of LTI-03 measured through forced vital capacity, percent predicted FVC and high-resolution computer tomography, in collaboration with Qureight Ltd.

Patients will undergo a 28-day screening period prior to being randomized and entering the 24-week treatment period, with a four-week follow-up.

In October 2025, we received authorization from the European Medicines Agency, or the EMA, to initiate our Phase 2 RENEW trial of our lead candidate, LTI-03, at sites in Germany and Poland.

We had previously received regulatory clearance from the U.K.’s Medicines and Healthcare products Regulatory Agency, or the MHRA.

In January 2026, we received orphan drug designation from the EMA for LTI-03.

As of the date of this Annual Report, we activated sites and are enrolling patients in the U.S.

and are seeking to activate additional sites, enroll patients and initiate the RENEW trial throughout the U.S., UK, Europe and other jurisdictions.

In March 2026, we dosed our first patient in the RENEW Phase 2 clinical trial of LTI-03.

We expect to report initial interim topline data on some proportion of patients in the fourth quarter of 2026.

We have not completed the development of any of our product candidates, have not generated any revenue from product sales and have never generated an operating profit.

To date, we have financed operations primarily through $145.5 million in net proceeds from sales of common stock and warrants, $0.7 million in net proceeds from sales of common stock under our “at-the-market” offering program, $131.2 million from sales of preferred stock prior to our initial public offering, or IPO, $34.9 million from a collaboration agreement in 2010, $17.5 million in net proceeds in connection with a private placement following the Lung Acquisition (as defined below) in 2023, and $17.7 million in net proceeds in connection with the issuance and sale of shares and accompanying warrants in our public offering in May 2024.

To date, we have financed operations primarily through $145.5 million in net proceeds from sales of common stock and warrants, $2.2 million in net proceeds from sales of common stock under our “at the market” offering program, $131.2 million from sales of preferred stock prior to our initial public offering, or IPO, $34.9 million from a collaboration agreement in 2010, $17.5 million in net proceeds in connection with a private placement following the Lung Acquisition (as defined below) in 2023, $17.7 million in net proceeds in connection with the issuance and sale of shares and accompanying warrants in our public offering in May 2024, $5.1 million in net proceeds from the April 2025 Transactions (as defined below), $2.9 million in net proceeds from the Yorkville Transactions described below and $4.3 million of net proceeds from our 2026 promissory notes described below.

As of December 31, 2025, we had $3.2 million in cash and cash equivalents, without giving effect to the $4.3 million of proceeds from our 2026 promissory notes.

Since our inception, we have incurred significant losses on an aggregate basis.

1 unchanged sentence

As of December 31, 2025, we had an accumulated deficit of $401.3 million.

These losses have resulted primarily from costs incurred in connection with research and development activities, licensing and patent investment and general and administrative costs associated with our operations as well as the impairment loss on intangible assets identified in the fourth quarter of 2024.

We expect to continue to incur operating losses for the foreseeable future.

As of December 31, 2025, we had cash and cash equivalents of $3.2 million.

Based on our current operating plan, we believe that our existing cash and cash equivalents will enable us to fund our planned operating expense and capital expenditure requirements into August 2025.

These funds are not sufficient to enable us to complete our planned Phase 2 clinical trial of LTI-03 and we will need to obtain additional funding prior to initiating the trial.

viability is dependent on our ability to raise additional capital to finance our operations.

Based on our current operating plan, we believe that our existing cash and cash equivalents as of December 31, 2025, together with the $4.3 million of proceeds received by us pursuant to the securities purchase agreements we entered into in January and February 2026, will be sufficient to enable us to fund our planned operating expense and capital expenditure requirements into the second quarter of 2026.

These funds are not sufficient to enable us to complete the Phase 2 RENEW clinical trial of LTI-03 and we will need to obtain additional funding prior to completing the trial.

Our future viability is dependent on our ability to raise additional capital to finance our operations.

Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

2 unchanged sentences

There is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, or at all.

Exclusive Option Agreement with Advancium

On October 31, 2024, we entered into an exclusive option agreement, or the Option Agreement, with Advancium Health Network, or Advancium, for the sale of ALRN-6924, a clinical stage oncology agent that we were development prior to the Lung Acquisition (as defined below).

During the option period, Advancium intends to evaluate ALRN-6924 as a potential therapy for retinoblastoma.

Under the terms of the option agreement Advancium paid us a non-refundable fee of $0.1 million for the exclusive option to acquire ALRN-6924 and related assets.

If Advancium exercises its option, we will receive an exercise payment with potential for additional development, regulatory and commercial milestone payments and sales royalties.

Equity Distribution Agreement

On July 26, 2024, we entered into an Equity Distribution Agreement with Citizens JMP Securities, LLC, or Citizens JMP, as agent and/or principal, under which we may offer and sell up to $50.0 million of shares of our common stock from time to time through or to Citizens JMP.

Sales of common stock through or to Citizens JMP may be made by any method that is deemed an “at the market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Capital Market.

There have been no sales on the "at the market" offering through December 31, 2024, however, in January 2025, we issued and sold 317,772 shares of common stock for total net proceeds of $0.7 million.

If we are unable to obtain sufficient funding on terms acceptable to us, on a timely basis or at all, we may be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.

2026 Bridge Loans

In January 2026 and February 2026, we entered into separate securities purchase agreements, or the Purchase Agreements, with three institutional investors pursuant to which we issued and sold to the investors, in a private placement, unsecured promissory notes in the aggregate original principal amount of $5.4 million, or the Notes.

Pursuant to the Purchase Agreements, we issued and sold the Notes to the investors for the aggregate purchase price of $4.3 million, inclusive of an original issue discount of 20%.

The Notes have a stated maturity date of the earlier of (i) the date of the closing of the next issuance and sale of our securities, in a single transaction or series of related transactions, to investors resulting in gross proceeds to us of at least $10.0 million (exclusive of the Notes proceeds) or (ii) June 30, 2026.

Our obligations under the Notes are unsecured.

There is no interest payable under the Notes other than the 20% original issue discount.

The Purchase Agreements contained representations, warranties, covenants and other terms customary for agreements of such nature.

Pre-Paid Advance Agreement and Standby Equity Purchase Agreement with Yorkville

On July 29, 2025, we entered into a Pre-Paid Advance Agreement, or the PPA, and a Standby Equity Purchase Agreement, or the SEPA, with YA II PN, Ltd., a Cayman Islands exempt limited partnership, or Yorkville.

The PPA and the SEPA are collectively referred to as the Yorkville Transactions.

Under the PPA, we may request up to $6.0 million in pre-paid advances from Yorkville over a 12-month period, subject to certain limitations and conditions set forth in the PPA.

Each pre-paid advance will be purchased by Yorkville at 95% of the face amount of the pre-paid advance.

An initial pre-paid advance of $1.0 million was purchased on July 29, 2025 by Yorkville, for net proceeds of $0.95 million.

Each additional pre-paid advance shall be subject to the consent of Yorkville.

Interest shall accrue on the outstanding balance of any pre-paid advance at an annual rate of 8%, subject to an increase to 18% upon events of default described in the PPA.

At any time that there is an outstanding balance under any pre-paid advances, Yorkville may provide a written notice to require us to issue and sell shares of common stock to offset against and reduce the balance under the pre-paid advances at a price per share equal to the lower of (i) 115% of the daily volume weighted average price, or the VWAP, of our common stock on the Nasdaq Capital Market on the last full trading day immediately prior to the date of such pre-paid advance and (ii) 95% of the lowest daily VWAP on the Nasdaq Capital Market during the seven consecutive trading days immediately preceding the date on which Yorkville provides such a purchase notice, subject to a floor price of $0.28 per share.

Cash amortization payments will be triggered if the daily VWAP falls below the floor price for five of seven consecutive trading days, or in the event of any shares issued pursuant to the PPA are not eligible to be sold pursuant to an effective registration statement for a period of 10 consecutive trading days, or if we have issued substantially all of the shares available under certain exchange cap limitations.

On September 8, 2025, Yorkville purchased a second Pre-Paid Advance, or the Second Advance, of $1.0 million, for which we received net proceeds of $0.95 million.

On October 23, 2025, Yorkville purchased a third Pre-Paid Advance, or the Third Advance, of $1.0 million, for which we received net proceeds of $0.95 million.

As of the date of this report, we have issued 953,765 shares of our common stock, at a weighted average price per share of approximately $1.056, to Yorkville, which were offset against $1.0 million of the outstanding principal and accrued interest under the initial Pre-Paid Advance, and issued 927,107 shares of our common stock, at a weighted average price per share of approximately $1.082, to Yorkville, which were offset against $1.0 million of the outstanding principal and accrued interest under the Second Pre-Paid Advance, and issued 846,290 shares of our common stock, at a weighted average price per share of approximately $1.183, to Yorkville, which were offset against $1.0 million of the outstanding principal and accrued interest under the Third Pre-Paid Advance.

All three Pre-Paid Advances were fully settled as of December 31, 2025, with no remaining outstanding balance.

Accordingly, the fair value of the liabilities at December 31, 2025, was $0, and no adjustment for changes in fair value was required during the year ended December 31, 2025.

Separately, under the SEPA, we may sell up to $15.0 million of our common stock to Yorkville over a 36-month period at our discretion.

Sales under the SEPA are based on our advance notices and may be for a number of shares up to 100% of the average daily trading volume of our common stock during the five trading days immediately prior to the date of each such notice, priced at 96% of the lowest daily VWAP of our common stock on the Nasdaq Capital Market during the three consecutive trading days commencing on the date of delivery each notice, subject to a minimum price floor set by us.

As consideration for Yorkville’s commitment to purchase our common stock under the SEPA, we agreed to pay to Yorkville a commitment fee of $0.3 million, which was satisfied by the issuance to Yorkville of an aggregate of 213,099 shares of our common stock.

We did not issue shares of our common stock to Yorkville under the SEPA.

The issuance of shares under both the PPA and SEPA was subject to a cap equal to 19.9% of our outstanding common stock as of July 29, 2025, unless stockholder approval is obtained or other specified conditions are met.

On December 11, 2025, we terminated the PPA and SEPA.

Advisory Agreements

We have entered into various arrangements with certain business advisors, consultants, and investment institutions to assist us with fundraising and to provide certain advisory services.

In connection with these arrangements, we may be required to pay such business advisors, consultants, and investment institutions certain contingent fees related to their services to the extent that certain conditions are met, such as a successful fundraising.

There are no contingent fees payable under these arrangements as of December 31, 2025.

Sales Agreement with H.C.

On May 15, 2025, we entered into an “at the market offering” agreement, or the Wainwright Sales Agreement, with H.C.

Wainwright & Co., LLC, or H.C.

Wainwright, as agent and/or principal, pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $13.7 million from time to time through or to H.C.

Wainwright by any method permitted that is deemed to be an “at the market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended.

As of December 31, 2025, we had issued and sold 999,967 shares of common stock pursuant to the Wainwright Sales Agreement for a net proceeds of $1.5 million..

In July 2025, in connection with the Yorkville Transactions, we reduced the aggregate offering price of the shares of common stock that could be offered and sold under the Wainwright Sales Agreement to $8.1 million.

Prior to entering into the Wainwright Sales Agreement, in May 2025, we terminated the equity distribution agreement, dated July 26, 2024, or the Equity Distribution Agreement, with Citizens JMP Securities, LLC, or Citizens JMP, as agent and/or principal, under which we could offer and sell up to $50.0 million of shares of our common stock from time to time through or to Citizens JMP by any method that was deemed to be an “at the market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended.

Through May 2025, we issued and sold 317,772 shares of common stock pursuant to the Equity Distribution Agreement for total net proceeds of $0.7 million.

We did not issue or sell any other shares of common stock pursuant to the Equity Distribution Agreement in 2025.

April 2025 Warrant Transactions and Private Placement

On April 21, 2025, we entered into privately negotiated letter agreements with certain holders of the PIPE Warrants (as defined below) and certain holders of the Offering Warrants (as defined below).

Pursuant to these letter agreements, these holders agreed to exercise for cash the PIPE Warrants for the purchase of an aggregate of 159,500 shares of common stock and the Offering Warrants for the purchase of an aggregate of 890,138 shares of common stock at a reduced exercise price of $1.60 per share, or the Warrant Exercises.

The total net proceeds for the Warrant Exercises were $1.6 million.

On April 21, 2025, we entered into privately negotiated letter agreements with additional holders of the PIPE Warrants pursuant to which such holders surrendered PIPE Warrants exercisable for an aggregate of 1,939,000 shares of common stock for cancellation in exchange for pre‑funded warrants (the “Exchange Pre-Funded Warrants”) to purchase the same number of shares at an exercise price of $0.001 per share (the “Warrant Exchanges”).

In connection with these exchanges, the holders also made an aggregate cash payment of $1.599 per underlying share.

The total net proceeds for the Warrant Exchanges were $3.0 million.

In the Warrant Exchanges, entities affiliated with Bios Equity Partners, LP, or Bios Partners, surrendered the PIPE Warrants to purchase an aggregate of 1,300,500 shares common stock plus provided the associated cash consideration of $2.1 million for Exchange Pre-Funded Warrants.

In addition, on April 21, 2025, an entity affiliated with Bios Partners, or the Bios Purchaser, purchased additional pre-funded warrants to purchase 312,695 shares of the common stock in a private placement, or the Placement Pre-Funded Warrants, pursuant to a subscription agreement at a price of $1.599 per share underlying the Placement Pre-Funded Warrants, or the Private Placement.

The Private Placement closed on April 24, 2025.

The total net proceeds for the Private Placement were $0.5 million.

We refer to the Warrant Exercises, the Warrant Exchanges and the Private Placement as the April 2025 Transactions.

Master Services Agreement

In April 2025, we entered into a master services agreement with a third party Contract Research Organization, or CRO, under which the CRO has agreed to perform certain services in accordance with written work orders.

The work orders set forth the obligations of the parties with regard to conducting the clinical research study entitled “A Randomized, Double-Blind, Placebo-Controlled, Phase 2, Safety, Tolerability and Efficacy Study of Caveolin1-Scaffolding-Protein-Derived Peptide (LTI-03) in Patients with IPF”, under our Protocol LTI-03-2001.

Pursuant to the agreement, we had contracted for up to $17.0 million of master services.

In August 2025, this master services agreement was terminated with no future commitment for the Company.

In December 2025, we entered into a project addendum with a third party CRO for the purposes of setting forth the responsibilities and obligations of the parties in regards to conducting a certain clinical research program entitled “A Phase 2, Randomized, Double-Blind, Placebo-Controlled Study of the Safety, Tolerability and Efficacy of

Caveolin-1-Scaffolding-Protein-Derived Peptide in Patients with IPF” under our Protocol LTI-03-2001.

Pursuant to the project addendum, we had contracted for up to $19.8 million of master services.

Follow-on public offering

1 unchanged sentence

We sold all of the Offering Shares and Offering Warrants.

Each Offering Share was offered and sold together with an accompanying Offering Warrant at a combined offering price of $4.68, and the underwriter purchased each Offering Share with an accompanying Offering Warrant at a combined price of $4.35.

Each Offering Share was offered and sold together with an accompanying Offering Warrant at a combined public offering price of $4.68, and the underwriter purchased each Offering Share with an accompanying Offering Warrant at a combined price, after underwriting discounts, of $4.35.

Net proceeds from the Offering were $17.7 million, after deducting underwriting discounts and commissions and offering expenses, and excluding any proceeds that may be received from exercise of the Offering Warrants.

The Lung Acquisition

On October 31, 2023, we acquired Lung Therapeutics, Inc., or Lung, pursuant to an Agreement and Plan of Merger, or the Lung Acquisition Agreement.

Following our acquisition of Lung, Lung became our wholly owned subsidiary, or the Lung Acquisition.

Following the Lung Acquisition, the business conducted by Lung became the business primarily conducted by us and we shifted our operating disease focus to advancing a pipeline of first-in-class medicines to address significant unmet medical needs in orphan pulmonary and fibrosis indications.

Under the terms of the Lung Acquisition Agreement, at the closing of the Lung Acquisition, we issued to the stockholders of Lung 344,345 shares of our common stock and 19,903 shares of our newly designated Series X Preferred Stock.

Each share of Series X Preferred Stock is convertible into 1,000 shares of common stock.

In addition, we assumed (i) all Lung stock options and all warrants exercisable for Lung common stock immediately outstanding prior to the closing of the Lung Acquisition, each subject to adjustment pursuant to the terms of the Lung Acquisition Agreement.

Immediately following the closing of the Lung Acquisition, we entered into the Purchase Agreement, with the Investors, led by Bio Partners, the majority stockholder of Lung prior to the closing of the Lung Acquisition, and including Nantahala Capital, as well as additional undisclosed investors, pursuant to which we issued and sold (i) an aggregate of 4,707 shares of Series X Preferred Stock, and (ii) warrants to purchase up to an aggregate of 2,353,500 shares of common stock, or the PIPE Warrant Shares, for an aggregate purchase price of approximately $18.4 million, which included the conversion of certain convertible promissory notes in the aggregate principal amount of approximately $1.6 million issued by Lung to Bios Partners prior to the closing of the Lung Acquisition at a 10% discount to the per share price of the Series X Preferred Stock, or the PIPE Financing, and collectively with the Lung Acquisition, the Transactions.

The PIPE Financing closed on November 2, 2023.

On February 28, 2024, we held our 2023 annual meeting of stockholders in which our stockholders approved the issuance, in accordance with Nasdaq Listing Rule 5635(a), of shares of common stock, upon conversion of our outstanding Series X Preferred Stock.

Following approval of the conversion of outstanding Series X Preferred Stock, the Company had approximately 29,495,512 shares of common stock issued and outstanding on a pro forma basis, which gives effect to the full conversion of the Series X Preferred Stock as of the date of our 2023 annual meeting of stockholders, without regard to beneficial ownership limitations that may limit the ability of certain holders of Series X Preferred Stock to convert such shares to common stock as such time.

On March 5, 2024, subject to then existing beneficial ownership limitations, 11,957 shares of Series X Preferred Stock were automatically converted into 11,957,000 shares of common stock.

As of December 31, 2025, Offering Warrants to purchase 3,388,707 shares of common stock remained outstanding.

Components of Rein’s Results of Operations

5 unchanged sentences

• salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;

• expenses incurred in connection with the clinical development of our product candidates, including under agreements with third parties, such as consultants and contract research organizations, or CROs;

• expenses incurred in connection with the clinical development of our product candidates, including under agreements with third parties, such as consultants and CROs;

• the cost of manufacturing product candidates for use in our clinical trials and preclinical studies, including under agreements with third parties, such as consultants and contract manufacturing organizations, or CMOs;

17 unchanged sentences

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate.

For example, if the U.S.

Food and Drug Administration, or the FDA, or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipated would be required for the completion of clinical development of a product candidate, or if we experience significant trial delays due to patient enrollment or other reasons, we could be required to expend significant additional financial resources and time on the completion of clinical development.

For example, if the FDA, or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipated would be required for the completion of clinical development of a product candidate, or if we experience significant trial delays due to patient enrollment or other reasons, we could be required to expend significant additional financial resources and time on the completion of clinical development.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance and corporate and administrative functions.

General and administrative expenses are comprised of professional fees associated with being a public company including costs of accounting, auditing, legal, regulatory, tax and consulting services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs;

General and administrative expenses are comprised of professional fees associated with being a public company including costs of accounting, auditing, legal, regulatory, tax and consulting services associated with maintaining compliance with exchange listing and the SEC requirements, director and officer insurance costs;

and both public and investor relations costs.

5 unchanged sentences

Impairment Loss on Intangible Assets

Impairment loss on intangible assets was identified in the fourth quarter of 2024 when the carrying value of LTI-01 exceeded its fair value as of December 31, 2024.

Restructuring Costs

Restructuring-related charges are comprised of one-time termination costs in connection with our reduction-in-workforce in 2023, including severance, benefits, and related costs.

Impairment loss on intangible assets was identified in the fourth quarter of 2025 and 2024 when the carrying value of LTI-01 and other intangible assets which are early-stage programs exceeded their fair value as of December 31, 2025 and 2024, respectively.

Other Income, net

3 unchanged sentences

We anticipate that our interest income will fluctuate in the future in response to our cash and cash equivalents and the interest rate environment.

Other income, net consists of the income recognized under the Option Agreement with Advancium, gains or losses recognized from non-routine items such as accretion on short-term investments, and gains or losses recognized from foreign currency transactions, and the disposal of fixed assets.

from foreign currency transactions, original issue discount, or OID, related to the PPA, the promissory notes, and the disposal of fixed assets.

We anticipate that our interest income and investment accretion will fluctuate in the future in response to our then-current cash and cash equivalents, and then-current interest rates.

3 unchanged sentences

Year Ended December 31,

(in thousands)

Operating expenses:

2 unchanged sentences

Impairment loss on intangible assets

Restructuring and Other Costs

Total operating expenses

10 unchanged sentences

Research and development expenses for the year ended December 31, 2025 were $11.0 million, compared to $14.2 million for the year ended December 31, 2024.

The increase of $10.3 million of research and development expenses was primarily a result of the termination of ALRN-6924 in 2023 and new clinical programs acquired as part of the Lung Acquisition in October 2023.

During the year ended December 31, 2024, we incurred expenses of $5.9 million on clinical trials and preclinical studies, $5.5 million on manufacturing including $3.2 million write-offs due

to the expiration of clinical materials and the temporary delay of clinical development of LTI-01, and $0.6 million on regulatory and development consulting as well as $2.2 million on employee and related expenses associated with clinical programs acquired in the Lung Acquisition.

The decrease of $3.2 million of research and development expenses was primarily a result of the clinical hold imposed on LTI-03.

During the year ended December 31, 2025, we spent $5.5 million on clinical trials, $2.4 million on manufacturing, $2.1 million on employee and related expenses, $0.1 million on professional fees and facilities and other expenses, and $0.9 million on regulatory and development consulting.

During the year ended December 31, 2024, we incurred expenses of $5.9 million on clinical trials and preclinical studies, $5.5 million on manufacturing including $3.2 million write-offs due to the expiration of clinical materials and the temporary delay of clinical development of LTI-01, and $0.6 million on regulatory and development consulting as well as $2.2 million on employee and related expenses associated with clinical programs acquired in the Lung Acquisition.

These programs and related activities were not included in our financial results for periods prior to the Lung Acquisition.

There were $2.1 million on research and development expenses related to ALRN-6924 and $1.9 million on research and development expenses related to LTI-03, LTI-01 and other preclinical programs including $1.2 million on clinical trials and preclinical studies, $0.2 million on manufacturing, $0.1 million on regulatory and development consulting as well as $0.5 million on employee and related expenses during the year ended December 31, 2023.

General and Administrative Expenses

5 unchanged sentences

General and administrative expenses were $10.9 million for the year ended December 31, 2025, compared to $13.9 million for the year ended December 31, 2024.

The increase of $2.5 million in general and administrative expenses was primarily due to increased employee and related expenses of $2.7 million as a result of increased headcount associated with the Lung Acquisition and severance expense recognized due to departure of former employees, and increased facilities and other expenses of $0.6 million as a result of the Lung Acquisition, offset by a decrease of $0.8 million in professional fees as a result of no acquisition related events during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The decrease of $3.0 million in general and administrative expenses was primarily due to decreased professional fees of $1.1 million as a result of decrease of $0.8 million in legal expense, and decrease of $1.0 million in other professional fees including accounting fee and audit and tax fees, offset by increased stock compensation expense of $0.7 million due to vesting of restricted stock units granted in exchange for consulting services and the commitment fee related to the Yorkville Transactions recognized during the year ended December 31, 2025, and decreased employee and related expenses of $1.7 million as a result of employee turnover in 2024 as well as decreased facilities and other expenses of $0.2 million.

Impairment Loss on Intangible Assets

We incurred impairment loss on intangible assets of $28.7 million and $37.0 million for the years ended December 31, 2025 and 2024, respectively, in connection with the delay of further clinical development of LTI-01 and other intangible assets which are early-stage programs until additional funds are raised and after LTI-03 is completed.

In the fourth quarter of 2025, we decided to pause development activities related to LTI-01 for an indefinite period.

The timing and likelihood of resuming development are uncertain and contingent on our ability to obtain additional financing and the future success of LTI-03.

Therefore, the carrying value of the LTI-01 asset and other preclinical programs was fully written off as of December 31, 2025, which resulted in an impairment loss of $28.7 million for the year ended December 31, 2025.

We incurred impairment loss on intangible assets of $37.0 million for the year ended December 31, 2024 in connection with the temporary delay of further clinical development of LTI-01 until additional funds are raised.

In the fourth quarter of 2024, we determined that the temporary delay of further clinical development of LTI-01 may not be a short-term measure.

There was no impairment loss on goodwill during the year ended December 31, 2024.

There was no impairment loss on goodwill or intangible assets incurred during the year ended December 31, 2023.

Restructuring and Other Costs

There were no restructuring-related expenses incurred during the year ended December 31, 2024.

We incurred restructuring-related charges of $0.9 million for the year ended December 31, 2023 in connection with our February 2023 restructuring.

Restructuring-related charges were comprised of one-time termination costs in connection with the reduction-in-workforce, including severance, benefits, and related costs.

All restructuring-related expenses were incurred and paid in 2023.

There were no impairment losses recognized for the LTI-03 asset or goodwill during the years ended December 31, 2025 and 2024.

Other Income, net

Other income, net of less than $0.1 million for the year ended December 31, 2025 primarily consisted of interest income and accretion in our then-current cash and cash equivalents, offset by OID related to the PPA.

Other income, net of $0.7 million for the year ended December 31, 2024 consisted of interest income of $0.4 million, investment accretion of $0.3 million, and other income of $0.1 million recognized from the Option Agreement with Advancium.

Other income, net of $0.5 million for the year ended December 31, 2023 consisted of interest income of $0.4 million and investment accretion of $0.2 million.

We anticipate that our interest income and investment accretion will fluctuate in the future in response to our then-current cash and cash equivalents, and then-current interest rates.

As of December 31, 2025, we had federal and state net operating loss carryforwards of $122.7 million and $46.1 million, respectively, which begin to expire in 2036 and 2043, respectively.

As of December 31, 2024, we also had

federal research and development tax credit carryforwards of $2.4 million, which begin to expire in 2035.

As of December 31, 2025, we also had federal research and development tax credit carryforwards of $2.5 million, which begin to expire in 2035.

We also have federal orphan drug tax credit carryforwards of $5.8 million which begin to expire in 2039.

5 unchanged sentences

On October 31, 2023, we acquired, in accordance with the terms of the Lung Acquisition Agreement, the stock of Lung.

In accordance with Accounting Standards Codification, or ASC, 805-740-25-3, recognition of deferred tax assets and liabilities is required for substantially all temporary differences and acquired tax carryforwards and credits.

In accordance with Accounting Standards Codification, or ASC, 805, Business Combinations , recognition of deferred tax assets and liabilities is required for substantially all temporary differences and acquired tax carryforwards and credits.

We have computed estimated temporary differences and acquired tax carryforwards and credits as of the transaction date.

1 unchanged sentence

For accounting purposes, the intangible assets will not be amortized and subject to impairment review and testing.

Though the tax effects may be delayed indefinitely, ASC 740-10-55-63 states that “deferred tax liabilities may not be eliminated or reduced because a reporting entity may be able to delay the settlement of those liabilities by delaying the events that would cause taxable temporary differences to reverse.” As such, we have recorded a deferred tax liability for the portion of the liability that cannot be offset with indefinite lived deferred tax assets.

Though the tax effects may be delayed indefinitely, ASC 740, Accounting for Income Taxes, states that “deferred tax liabilities may not be eliminated or reduced because a reporting entity may be able to delay the settlement of those liabilities by

delaying the events that would cause taxable temporary differences to reverse.” As such, we have recorded a deferred tax liability for the portion of the liability that cannot be offset with indefinite lived deferred tax assets.

Liquidity and Capital Resources

Since inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations.

We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our lead product candidates, LTI-03 and LTI-01, or any future product candidates.

We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials and manufacturing for our lead product candidates or any future product candidates to support potential future commercialization and providing general and administrative support for our operations, including the costs associated with operating as a public company.

If we obtain funding for our continued operations, we expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our lead product candidate, LTI-03, or any future product candidates.

We expect that our research and development and general and administrative costs would continue to increase significantly, including in connection with conducting clinical trials and manufacturing for our lead product candidates or any future product candidates to support potential future commercialization and providing general and administrative support for our operations, including the costs associated with operating as a public company.

As of December 31, 2025, we had cash and cash equivalents of $3.2 million.

Based on our current operating plan, we believe that our existing cash and cash equivalents as of December 31, 2024 will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into August 2025.

Based on our current operating plan, we believe that our existing cash and cash equivalents as of December 31, 2025, together with the $4.3 million of proceeds received by us pursuant to the securities purchase agreements we entered into in January 2026 and February 2026, will be sufficient to enable us to fund our planned operating expense and capital expenditure requirements into the second quarter of 2026.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

1 unchanged sentence

See the section titled “Risk Factors” found elsewhere in this Annual Report on Form 10-K for risks associated with our substantial capital requirements.

To date, we have funded our operations through sales of common stock in our initial public offering, sales of common stock and warrants in follow-on public offerings, sales of common stock and warrants in a private placement, sales of common stock in “at-the-market” offerings, sales of preferred stock prior to our initial public offering, payments received under a collaboration agreement, sales of common stock, preferred stock and warrants in connection with the Lung Acquisition and the PIPE Financing and sales of common stock upon option exercises.

In July 2024, we entered into an Equity Distribution Agreement with Citizens JMP, as agent and/or principal, under which we may offer and sell up to $50.0 million of our common stock from time to time through or to Citizens JMP.

Under General Instruction I.B.6 to Form S-3, or the Baby Shelf Rule, the amount of funds we can raise through primary public offerings of securities in any 12-month period using our registration statement on Form S-3 is limited to one-third of the aggregate market value of our common stock held

by non-affiliates.

As of March 27, 2025, the aggregate market value of our outstanding shares of common stock held by non-affiliates was approximately $35.2 million, which was calculated based on 19,889,930 shares held by non-affiliates on such date and a price per share of $1.77, which was the closing price of our common stock on the Nasdaq Capital Market on March 27, 2025.

We therefore are limited by the Baby Shelf Rule as of the filing of this Annual Report on Form 10-K, until such time as our public float exceeds $75.0 million.

We did not sell any shares of common stock pursuant to the Equity Distribution Agreement during the year ended December 31, 2024.

In January 2025, we issued and sold 317,772 shares of common stock for total net proceeds of $0.7 million.

Upon entry into the Equity Distribution Agreement, we terminated our prior “at the market offering” pursuant to a Capital on Demand Sales Agreement with JonesTrading Institutional Services LLC and William Blair & Company, L.L.C.

At the time of termination, we had not sold any shares under the sales agreement prospectus related to the prior sales agreement.

In May 2024, we completed the Offering as described above.

We received net proceeds of $17.7 million from the Offering, after deducting underwriting discounts and commissions and offering expenses, and excluding any proceeds that may be received from exercise of the Offering Warrants.

Each Offering Warrant has an exercise price per share of common stock equal to $4.68.

Each Offering Warrant may be exercised until May 1, 2027.

Each Offering Warrant is exercisable solely by means of a cash exercise, except that an Offering Warrant is exercisable via cashless exercise if at the time of exercise, a registration statement registering the issuance of Offering Warrant Shares is not then effective or the prospectus contained therein is not available for the issuance of such shares.

The report of our independent registered accounting firm states that our significant losses, expectation to continue to incur operating losses and need to raise additional funds to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern.

The following table summarizes our sources and uses of cash for each of the periods presented:

5 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash and cash equivalents

Operating Activities

During the year ended December 31, 2025, operating activities used $19.4 million of cash, primarily resulting from our net loss of $49.9 million and a change in operating assets and liabilities of $0.9 million, partially offset by non-cash charges of $31.4 million.

Non-cash charges resulted primarily from impairment loss on intangible assets of $28.7 million and stock-based compensation expense of $2.2 million, commitment fee related to the PPA of $0.3 million and OID related to the PPA of $0.2 million.

Changes in our operating assets and liabilities during the year ended December 31, 2025 consisted primarily of an increase of $0.3 million in prepaid expenses and other current assets, a decrease of $2.6 million in accrued expenses and other current liabilities, a decrease of $0.3 million in other long-term liabilities, and a decrease of $0.7 million in deferred tax liabilities, offset by an increase of $3.0 million in accounts payable.

During the year ended December 31, 2024, operating activities used $22.3 million of cash, primarily resulting from our net loss of $62.9 million partially offset by a change in operating assets and liabilities of $2.4 million and non-cash charges of $38.2 million.

1 unchanged sentence

Changes in our operating assets and liabilities during the year ended December 31, 2024 consisted primarily of a decrease of $2.2 million in other assets, and an increase of $1.7 million in accrued expenses and other current liabilities, offset by a decrease of $1.6 million in deferred tax liabilities due to the reduction in the carrying value of our intangible assets.

During the year ended December 31, 2023, operating activities used $19.8 million of cash, primarily resulting from our net loss of $15.7 million and cash provided by the change in operating assets and liabilities of $5.4 million offset by non-cash charges of $1.3 million.

Non-cash charges resulted primarily from stock-based compensation expense of $1.2 million.

Changes in our operating assets and liabilities during the year ended December 31, 2023 consisted primarily of an increase of $5.0 million in accounts payable, and $0.4 million in accrued expenses and other current liabilities.

Investing Activities

During the year ended December 31, 2024, no cash was provided by investing activities.

During the year ended December 31, 2023, investing activities provided $16.2 million of cash.

We received $16.3 million of proceeds from the maturities of investments, offset by $0.1 million of cash and cash equivalents from the Lung Acquisition.

Financing Activities

During the year ended December 31, 2025, net cash provided by financing activities was $9.8 million primarily due to the April 2025 Transactions, Yorkville Transactions and “at the market” offering programs described above.

During the year ended December 31, 2024, net cash provided by financing activities was $17.8 million primarily due to the Offering in May 2024.

During the year ended December 31, 2023, net cash provided by financing activities was $15.8 million due to the proceeds of $15.8 million from the PIPE Financing in October 2023.

Funding Requirements

Our plan of operation is to continue implementing our business strategy, continue research and development of LTI-03 and LTI-01 and any other product candidates we may acquire or develop and continue to expand our research pipeline and our internal research and development capabilities.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our current and future product candidates.

In addition, we expect to incur additional costs associated with operating as a public company.

Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or terminate our research and development programs or future commercialization efforts.

Our future capital requirements will depend on many factors, including:

• the scope, timing, progress, costs, and results of discovery, preclinical development, and clinical trials for our current and future product candidates;

• the number of clinical trials required for regulatory approval of our current and future product candidates;

• the costs, timing, and outcome of regulatory review of any of our current and future product candidates;

• the cost of manufacturing clinical and commercial supplies of our current and future product candidates;

• the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval;

• the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights;

• our ability to maintain existing, and establish new, strategic collaborations, licensing, or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement;

• the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

• expenses to attract, hire and retain, skilled personnel;

• the costs of operating as a public company;

• if our product candidates are approved, our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors;

• the effect of competing technological and market developments;

• the extent to which we acquire or invest in businesses, products, and technologies;

• unfavorable global economic conditions, which may exacerbate the magnitude of the factors discussed above.

As of December 31, 2024, we had cash and cash equivalents of $12.9 million.

Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into August 2025.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Our future viability is dependent on our ability to raise additional capital to finance our operations.

In addition, our existing cash and cash equivalents will not be sufficient to fund all of the efforts that we plan to undertake or to fund the completion of development of our product candidates.

Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources.

Although management plans to pursue additional funding, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, or at all.

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations from the sale of additional equity or debt financings, strategic collaborations, licensing, arrangements or other sources.

In the event that additional financing is required, we may not be able to raise it on terms acceptable to us, or at all.

If we raise additional funds through the issuance of equity or convertible preferred stock, it may result in dilution to our existing stockholders.

Debt financing or preferred equity financing, if available, may result in increased fixed payment obligations, and the existence of securities with rights that may be senior to those of our common stock.

If we incur indebtedness, we could become subject to covenants that would restrict our operations.

If we raise funds through strategic collaborations, licensing or other arrangements, we may relinquish significant rights or grant licenses on terms that are not favorable to us.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Off-Balance Sheet Arrangements

As of December 31, 2024 and 2023 and in the periods presented, we did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Contractual and other obligations

We enter into contracts in the normal course of business with CROs for clinical and preclinical research studies, external manufacturers for product for use in our clinical trials, and other research supplies and other services as part of our operations.

These contracts generally provide for termination on notice, and therefore are cancelable contracts.

In April 2025, we entered into a master services agreement with a third party CRO, under which the CRO has agreed to perform certain services in accordance with written work orders.

Pursuant to the agreement, we had contracted for up to $17.0 million of master services.

This master services agreement was terminated in August 2025 with no future commitment for the Company.

Pursuant to the project addendum, we had contracted for up to $19.8 million of master services.

Critical Accounting Estimates

9 unchanged sentences

however, some require advanced payments.

We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time.

We make estimates of our accrued

expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time.

Examples of estimated accrued research and development expenses include fees paid to:

30 unchanged sentences

• Projected cash flows:

Based on historical trends, market analysis, and business forecasts.

Based on market analysis and business forecasts.

• Discount rate:

5 unchanged sentences

Changes in these assumptions, particularly in discount rates or expected future cash flows, could result in significant adjustments to the impairment calculation and may lead to impairment losses recognized in the financial statements.

During the year ended December 31, 2024, we conducted an impairment assessment and determined that an impairment loss of $37.0 million was recognized for our LTI-01 intangible asset in connection with the temporary delay of further clinical development of LTI-01 until additional funds are raised.

During the years ended December 31, 2025 and 2024, we conducted an impairment assessment and determined that an impairment loss of $28.7 million and $37.0 million, respectively, was recognized for our LTI-01 intangible asset and other preclinical programs.

In the fourth quarter of 2024, we determined that the temporary delay of further clinical development of LTI-01 may not be a short-term measure.

In the fourth quarter of 2025, we decided to pause development activities related to LTI-01 and other preclinical programs for an indefinite period.

The timing and likelihood of resuming development are uncertain and contingent on our ability to obtain additional financing and the future success of LTI-03.

Therefore, the carrying value of the LTI-01 asset and other preclinical programs was fully written off as of December 31, 2025.

There were no impairment losses recognized for our LTI-03 asset or goodwill during the years ended December 31, 2025 and 2024.

Management continues to monitor these estimates and will adjust them as necessary to reflect changing economic conditions and business performance.

11 unchanged sentences

Judgments concerning the recognition and measurement of our tax benefits, as well as limitations surrounding their realizability, might change as new information becomes available.

Contractual Obligations

Our wholly owned subsidiary, Lung, leased a facility containing 6,455 square feet of office space located at 3801 S.

Capital of Texas Hwy, Suite 330, Austin, Texas, which expired on March 31, 2024.

We did not renew the lease.

Following expiration of the lease, we are operating virtually, and expect to do so for the foreseeable future.

Our remaining contractual rent commitment under this lease was $0 million and less than $0.1 million as of December 31, 2024 and December 31, 2023, respectively.

For a description of our lease obligations, refer to Note 14 to our consolidated financial statements appearing in this Annual Report on Form 10-K.

Global and Macroeconomic Developments

We are subject to continuing risks and uncertainties in connection with legislative, regulatory, political, geopolitical and macroeconomic developments beyond our control, including inflationary pressures, general economic slowdown or a recession, high interest rates, changes in monetary policy or foreign currency exchange rates, changes in trade policies, including tariffs and other trade restrictions or the threat of such actions, instability in financial institutions, the ongoing conflicts in Ukraine and in the Middle East.

Most of these developments and factors are outside of our control and could exist for an extended period of time.

We will continue to evaluate the nature and extent of the potential impacts to our business, results of operations, liquidity and capital resources.

For additional information, see the section titled “Risk Factors” found elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2025.

Smaller Reporting Company Status

5 unchanged sentences

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