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Item 7. Management’s Discussion and Analysis

2026-03-10 compared with 2025-03-11 · 85 added, 77 removed, 125 unchanged (56% of the section changed)

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On May 18, 2022 the FDA approved IV TPOXX® for the treatment of smallpox.

In addition to being approved by the FDA, oral TPOXX® (tecovirimat) has received regulatory approval from the European Medicines Agency ("EMA"), Health Canada, the Medicines and Healthcare Products Regulatory Agency ("MHRA") of the United Kingdom, and most recently, in December 2024, the Japanese Pharmaceuticals and Medical Devices Agency ("PMDA").

In addition to being approved by the FDA, oral TPOXX® (tecovirimat) has received regulatory approval from the European Medicines Agency ("EMA"), Health Canada, the Medicines and Healthcare Products Regulatory Agency ("MHRA") of the United Kingdom, and the Japanese Pharmaceuticals and Medical Devices Agency ("PMDA").

The EMA, MHRA and PMDA approved oral TPOXX® for the treatment of smallpox, monkeypox ("mpox"), cowpox, and vaccinia complications following vaccination against smallpox.

Health Canada approved TPOXX® for the treatment of smallpox.

TPOXX® was authorized under “exceptional circumstances” by the EMA and the MHRA, under the brand name Tecovirimat-SIGA.

These regulators granted marketing authorizations under “exceptional circumstances” because it was not possible to obtain complete efficacy and safety information about the product due to the rarity of smallpox and other orthopoxviruses and because ethical considerations prevented conducting the necessary clinical studies.

The Tecovirimat-SIGA marketing authorizations under “exceptional circumstances” are subject to certain specific obligations to gather additional data post-approval to help confirm the product’s safety and efficacy.

All “exceptional circumstances” marketing authorizations are subject to annual reassessments that consider whether data generated pursuant to the specific obligations continue to confirm its positive benefit-risk profile.

These annual reassessments determine whether the product’s marketing authorization should be maintained, changed, suspended, or withdrawn based on its benefit-risk profile.

On July 24, 2025, the EMA’s Committee for Medicinal Products for Human Use (CHMP) closed its third annual reassessment for Tecovirimat-SIGA and initiated a referral procedure for the product following questions over its effectiveness in the treatment of mpox.

These questions were raised following receipt of results from certain non-SIGA sponsored clinical trials evaluating tecovirimat as a potential mpox treatment including the PALM007 and STOMP clinical trials.

In the referral procedure, CHMP reviewed all available data on the safety and efficacy of Tecovirimat-SIGA for all its authorized indications in order to make a recommendation to the European Commission whether the marketing authorization should be maintained, modified, suspended or withdrawn.

The CHMP is expected to meet in March to issue its recommendation.

We expect the CHMP will confirm the positive benefit-risk balance of Tecovirimat-SIGA as a treatment for smallpox, cowpox, and vaccinia complications, and maintain those indications in the product label.

Regarding mpox, based on the results of the mpox clinical trials, we expect the CHMP will recommend withdrawal of the mpox indication.

In the UK, Tecovirimat-SIGA is undergoing an annual reassessment by the MHRA.

This reassessment, which is ongoing, is substantially similar to the EMA’s annual reassessment process and could result in a similar outcome.

With respect to the regulatory approvals by the EMA, PMDA, MHRA and Health Canada, oral tecovirimat represents the same formulation approved by the FDA in July 2018 under the brand name TPOXX®.

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The timing of a potential submission of a supplemental New Drug Application to the FDA (“Supplemental NDA”) for a smallpox PEP indication for oral TPOXX® will be based on the results of ongoing sample analyses from the immunogenicity trial;

the Company is currently targeting a Supplemental NDA submission in the next twelve months.

the Company is currently targeting a Supplemental NDA submission within the next twelve months.

Macroeconomic Environment

Future macroeconomic volatility, including changes to and uncertainty regarding tariffs and trade policies, could cause cost increases resulting in an adverse effect on the Company’s operating results.

The Company’s supply chain was designed to lessen the impact of macroeconomic volatility such as through development of a U.S.

domestic supply chain including U.S.

production of API and finished product, and minimal reliance on ex-U.S.

components for API and oral TPOXX®.

With respect to IV TPOXX®, tariff activity or other trading restrictions involving the U.S.

and Europe may materially increase raw material costs for IV TPOXX® and, in turn, may materially increase IV TPOXX® overall manufacturing costs.

Procurement Contracts with the U.S.

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In addition to the delivery of TPOXX® courses, the contract includes funding from BARDA for a range of activities, including:

advanced development of IV TPOXX®, post-marketing activities for oral and IV TPOXX®, development for a pediatric formulation, and procurement activities.

advanced development of IV TPOXX®, post-marketing activities for oral and IV TPOXX®, development of a pediatric formulation, support for manufacturing activities, and procurement activities.

On April 8, 2025, total payments contemplated under the contract with BARDA were increased by $14.3 million to add funding for activities supporting manufacturing.

On June 3, 2025, total payments contemplated under the contract with BARDA were increased by $13.2 million in connection with the development of the pediatric formulation of TPOXX®.

As of December 31, 2025, the contract with BARDA (as amended, modified, or supplemented from time to time, the "19C BARDA Contract") contemplates up to approximately $630 million of payments, of which approximately $79.2 million of payments are included within the base period of performance, approximately $545.2 million of payments are related to exercised options and up to approximately $5.6 million of payments are currently specified as unexercised options.

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payments up to $450.2 million for the manufacture and delivery of up to 1.5 million courses of oral TPOXX®;

payments up to $51.2 million for the manufacture of courses of IV FDP, of which $20.5 million of payments relate to the manufacture of IV BDS to be used in the manufacture of IV FDP;

payments up to $76.8 million for the manufacture of courses of IV FDP;

payments of up to approximately $3.6 million to fund post-marketing activities for IV TPOXX®;

and payments of up to $14.6 million for funding of post-marketing activities for oral TPOXX®.

As of December 31, 2024, a cumulative total of $396.9 million of oral TPOXX® has been delivered to the Strategic Stockpile and accepted, of which approximately $15 million was delivered in the first quarter of 2024, approximately $8 million was delivered in the third quarter of 2024, and approximately $51 million was delivered in the fourth quarter of 2024;

a cumulative total of $25.4 million of IV FDP has been delivered to the Strategic Stockpile and accepted, of which approximately $17 million of revenue (including recognition of deferred revenue) was recorded in the second quarter of 2024 and approximately $8 million of revenue (including recognition of deferred revenue) was recorded in the fourth quarter of 2024;

$10.3 million has been received for the manufacture of IV BDS (such amount is recorded as deferred revenue);

As of December 31, 2025, a cumulative total of $450.2 million of oral TPOXX® has been delivered to the Strategic Stockpile and accepted;

a cumulative total of $61.4 million of IV BDS or IV FDP has been either set aside in inventory or delivered to the Strategic Stockpile and accepted (IV BDS that has been set aside has been recorded as deferred revenue and will be recognized as revenue when the IV BDS is manufactured as IV FDP and delivered);

and the Company has been cumulatively reimbursed $10.9 million in connection with post-marketing activities for oral and IV TPOXX®.

Unexercised options specify potential payments up to approximately $31.2 million in total (if all such options are exercised), of which approximately $5.6 million relates to supportive activities that we currently do not expect to be required.

The remaining unexercised options specify payments of up to $25.6 million for the manufacture of courses of IV FDP, of which up to $10.2 million of payments would be paid upon the manufacture of IV BDS to be used in the manufacture of IV FDP.

The options related to IV TPOXX® are divided into two primary manufacturing steps.

There are options related to the manufacture of bulk drug substance (“IV BDS Options”), and there are corresponding options (for the same number of IV courses) for the manufacture of final drug product (“IV FDP Options”).

BARDA may choose to exercise any, all, or none of these options in its sole discretion.

The 19C BARDA Contract includes:

Unexercised options specify potential payments up to approximately $5.6 million in total (if all such options are exercised), all of which relates to supportive activities that we currently do not expect to be required.

The options related to IV TPOXX® were divided into two primary manufacturing steps.

There were options related to the manufacture of bulk drug substance (“IV BDS Options”), and there were corresponding options (for the same number of IV courses) for the manufacture of final drug product (“IV FDP Options”).

BARDA had the sole discretion to choose to exercise any, all, or none of these options.

The 19C BARDA Contract included:

three separate IV BDS Options, each providing for the bulk drug substance equivalent of 32,000 courses (as currently defined within the contract) of IV TPOXX®;

and three separate IV FDP Options, each providing for 32,000 courses of final drug product of IV TPOXX®.

BARDA has the sole discretion as to whether to simultaneously exercise IV BDS Options and IV FDP Options, or whether to exercise options at different points in time (or alternatively, to only exercise the IV BDS Option but not the IV FDP Option).

To date, BARDA has exercised two of the three IV BDS options and two of the three IV FDP options.

If BARDA decides only to exercise the remaining IV BDS Option, then the Company would receive payments up to $10.2 million;

alternatively, if BARDA decides to exercise the remaining IV BDS Option and IV FDP Option, then the Company would receive payments up to $25.6 million.

BARDA may also decide not to exercise either remaining option.

For each set of options relating to a specific group of courses (for instance, the IV BDS and IV FDP options that reference the same 32,000 courses), BARDA has the option to independently purchase IV BDS or IV FDP.

The Company estimates that sales of the IV formulation under this contract (under current terms), assuming the remaining IV FDP Option was exercised, would have a gross margin (sales less cost of sales, as a percentage of sales) that is less than 40%.

BARDA had the sole discretion as to whether to simultaneously exercise IV BDS Options and IV FDP Options, or whether to exercise options at different points in time (or alternatively, to only exercise the IV BDS Option but not the IV FDP Option).

To date, BARDA has exercised all three IV BDS options and all three IV FDP options.

The Company estimates that sales of the IV formulation under this contract (under current terms), would have a gross margin (sales less cost of sales, as a percentage of sales) that is less than 40%.

Department of Defense Procurement Contracts

In 2024, the Company had sales of approximately $10 million with the U.S.

Department of Defense ("DoD").

Sales consist mostly of delivery of oral TPOXX®, with a minor amount of IV TPOXX® delivered.

In 2023, the Company had sales of approximately $11 million with the DoD.

Sales consist of delivery of oral TPOXX®.

Over the past three years, the Company has received three procurement contracts from the DoD, including a $9 million contract in August 2024, which has been fulfilled.

Department of Defense ("DoD") (also known as the Department of War).

Sales consisted mostly of delivery of oral TPOXX®, with a minor amount of IV TPOXX® delivered.

Over the past four years, the Company has received three procurement contracts from the DoD, totaling $28 million in value, mostly in connection with the manufacture and delivery of oral TPOXX®.

All deliveries specified under these contracts have been fulfilled.

International Sales Activity

In the year ended December 31, 2025, the Company had international sales of $5.8 million consisting of a delivery of oral TPOXX® to one country.

The Company was the counterparty to the contract under which these international sales were made.

In the year ended December 31, 2024, the Company had international sales of $23.0 million consisting of deliveries of oral TPOXX® to 13 countries.

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For international sales in the third and fourth quarters, the Company was the counterparty to the contracts under which the sales were made.

In the year ended December 31, 2023, the Company had international sales of $21.3 million consisting of deliveries of oral TPOXX® to seven countries.

Since the initiation of international sales in 2020, the Company has cumulatively recorded $137 million of oral TPOXX® international revenues.

International Promotion Agreement

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In connection with the 2022 response to a global mpox outbreak, a series of observational and randomized, placebo-controlled clinical trials were initiated to assess the safety and efficacy of TPOXX® in participants with mpox.

The purpose of these randomized clinical trials is to seek to collect data on the potential benefits of using TPOXX® as an antiviral treatment for active mpox disease.

As of December 31, 2024, two of the randomized, placebo-controlled clinical trials reported preliminary topline results:

a randomized, placebo-controlled clinical trial in the Democratic Republic of the Congo ("DRC") known as PALM 007 (Tecovirimat for Treatment of Monkeypox Virus - NCT05559099), which is funded and sponsored by the National Institutes of Health's (NIH) National Institute of Allergy and Infectious Diseases (NIAID);

and the Study of Tecovirimat for Human Mpox Virus (STOMP) clinical trial (NCT05534984), which is a randomized, placebo-controlled, double-blind study sponsored and funded by NIAID to evaluate the safety and efficacy of tecovirimat for the treatment of people with laboratory-confirmed or presumptive mpox disease that included enrollees from Argentina, Brazil, Japan, Mexico, Peru, Thailand, and the United States.

The purpose of these randomized clinical trials was to seek to collect data on the potential benefits of using TPOXX® as an antiviral treatment for active mpox disease.

As of December 31, 2025, three of the randomized, placebo-controlled clinical trials reported topline results:

a randomized, placebo-controlled clinical trial in the Democratic Republic of the Congo ("DRC") known as PALM 007 (Tecovirimat for Treatment of Monkeypox Virus - NCT05559099), which was funded and sponsored by the National Institutes of Health's (NIH) National Institute of Allergy and Infectious Diseases (NIAID);

the Study of Tecovirimat for Human Mpox Virus (STOMP) clinical trial (NCT05534984), which was a randomized, placebo-controlled, double-blind study also sponsored and funded by NIAID to evaluate the safety and efficacy of tecovirimat for the treatment of people with laboratory-confirmed or presumptive mpox disease that included enrollees from Argentina, Brazil, Japan, Mexico, Peru, Thailand, and the United States;

and the UNITY clinical trial (Assessment of the Efficacy and Safety of Tecovirimat in Patients With Monkeypox Virus Disease - NCT NCT05597735), which was funded and sponsored by ANRS-Emerging Infectious Diseases, which included enrollees from Switzerland, Brazil, and Argentina.

The PALM 007 study did not meet its primary endpoint of a statistically significant improvement in time to lesion resolution within 28 days post-randomization for patients in the DRC with mpox who received TPOXX® compared to patients who received placebo.

Some improvement versus placebo was observed in patients receiving TPOXX® whose symptoms began seven days or fewer before randomization and patients with severe or grave disease, defined by the World Health Organization (WHO) as having 100 or more skin lesions, however the significance of these data have not been established.

An interim analysis of data from the STOMP study showed that TPOXX® did not demonstrate efficacy in time to skin and mucosal lesion resolution compared to placebo in patients with mild to moderate clade II mpox.

Based on this result and additional analyses, the study Data Safety and Monitoring Board (DSMB) recommended to stop enrolling patients in the randomized arms of the study.

NIAID accepted this recommendation and subsequently decided to take a similar action in the open label arm of this study, which included severe and at-risk of developing severe disease patients.

Data analysis is not yet complete for primary endpoint subgroups and detailed secondary and exploratory endpoints.

In both studies, TPOXX® exhibited a safety profile comparable to placebo.

Some improvement versus placebo was observed in patients receiving TPOXX® whose symptoms began five days or fewer before randomization and patients with severe or grave disease, defined by the World Health Organization (WHO) as having 100 or more skin lesions, however the significance of these data has not been established.

Similarly, in the STOMP study, tecovirimat did not meet its primary endpoint of a statistically significant improvement in time to lesion resolution for adults with mild to moderate mpox and a low risk of developing severe disease.

Additional analyses of subgroups, secondary and exploratory endpoints is ongoing in each of these studies.

Topline data from the UNITY study, which was presented at a medical conference, also showed that the study did not meet its primary endpoint of a statistically significant improvement in time to lesion resolution for patients with mpox who received TPOXX® compared to patients who received placebo.

In all three studies, TPOXX® exhibited a safety profile comparable to placebo.

These safety results are consistent with prior studies and further support the strong safety profile that has been observed with tecovirimat over the past 15 years.

Three randomized clinical trials, UNITY (Switzerland, Brazil, Argentina), Platinum-CAN (Canada), and EPOXI (EU), are enrolling mpox patients.

Given the STOMP and PALM007 results and the design similarities across these mpox trials, the Company believes these ongoing trials are likely to yield similar results.

Research Agreements and Grants

In July 2019, the Company was awarded a multi-year research contract ultimately valued at approximately $27 million from the DoD to support work in pursuit of a potential label expansion for oral TPOXX® that would include post-exposure prophylaxis ("PEP") of smallpox (such work known as the "PEP Label Expansion Program" and the contract referred to as the "PEP Label Expansion R&D Contract").

As of December 31, 2023, the Company invoiced the full amount of available funding, and as a result, there is no remaining revenue to be recognized in the future under the PEP Label Expansion R&D Contract.

Revenue from the performance obligation under the PEP Label Expansion R&D Contract was recognized over time using an input method using costs incurred to date relative to total estimated costs at completion.

Contracts and grants include, among other things, options that may or may not be exercised at the U.S.

Government’s discretion.

Moreover, contracts and grants contain customary terms and conditions including the U.S.

Government’s right to terminate or restructure a contract or grant for convenience at any time.

As such, the Company may not be eligible to receive all available funds.

Two other randomized clinical trials, Platinum-CAN (Canada) and EPOXI (EU), which were started in response to the global mpox outbreak, are closed to enrollment and expected to yield similar results, given the design similarities across these trials.

Critical Accounting Estimate

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Revenue connected with performance obligations related to product delivery and supportive services are recognized at a point in time.

Revenue connected with performance obligations related to research and development are recognized over time.

Revenue connected with performance obligations related to research and development and certain product supportive services are recognized over time.

Due to the nature of the work required to be performed on many of our performance obligations for which revenue is recognized over time, the estimation of total revenue and costs to satisfy the obligations may be complex, subject to many variables and requires significant judgment.

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Government under the 19C BARDA Contract;

$23.0 million related to international sales of oral TPOXX®;

and approximately $10.1 million of oral TPOXX® sales to the DoD.

Such revenues for the year ended December 31, 2023 include $97.9 million of oral TPOXX® sales to the U.S.

$5.8 million of oral TPOXX® sales to one international country and $3.1 million of supportive services.

Such revenues for the year ended December 31, 2024 include $73.9 million of oral TPOXX® sales and $26.2 million of IV TPOXX® sales to the U.S.

Government under the 19C BARDA Contract;

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Revenues from research and development activities for the years ended December 31, 2025 and 2024, were $6.5 million and $5.4 million, respectively.

The revenues for the year ended December 31, 2024, were mostly earned in connection with performance of research and development activities under the 19C BARDA Contract.

The revenue for the year ended December 31, 2023, were mostly earned in connection with performance of research and development activities under the PEP Label Expansion R&D Contract and the 19C BARDA Contract.

The decrease of $3.8 million of revenue is related to the completion of billable activities under the PEP Label Expansion R&D Contract in 2023.

The revenues for the years ended December 31, 2025 and 2024, were mostly earned in connection with performance of research and development activities under the 19C BARDA Contract.

The increase of $1.1 million of revenue is primarily related to an increase in reimbursable activities under the 19C BARDA Contract.

Cost of sales and supportive services for the years ended December 31, 2025 and 2024 were $29.7 million and $31.3 million, respectively.

Such costs in 2025 were primarily associated with the manufacture and delivery of courses of oral and IV TPOXX® to the U.S.

Government under the 19C BARDA Contract.

Such costs in 2024 were primarily associated with the manufacture and delivery of oral TPOXX® courses to the U.S.

Government, DoD and various international customers as well as the manufacture and delivery of IV TPOXX® courses to the U.S.

Such costs in 2023 were associated with the manufacturing and delivery of oral TPOXX® to the U.S.

Government as well as various international countries.

The difference in costs between years is primarily due to the inclusion of IV TPOXX® in 2024 sales;

manufacturing costs for IV TPOXX® are significantly higher than manufacturing costs for oral TPOXX®.

Selling, general and administrative expenses for the years ended December 31, 2025 and 2024 were $21.2 million and $25.1 million, respectively.

The increase of $3.1 million reflects higher compensation expense, including stock-based compensation, associated with the hiring of multiple executive officers in 2024.

Research and development expenses were $12.3 million for the year ended December 31, 2024, a decrease of approximately $4.1 million from the $16.4 million incurred during the year ended December 31, 2023.

The decrease is primarily attributable to lower direct vendor-related expenses incurred in connection with a decrease in activities under the PEP Label Expansion R&D Contract, partially offset by an increase in compensation expense in connection with new hires.

The net decrease of approximately $3.9 million primarily reflects a decrease in international promotion fees related to a combination of the amendment to the International Promotion Agreement with Meridian and lower international activity in 2025, as well as lower professional service and consulting costs, in addition to lower compensation expense associated with the nonrecurrence in 2025 of certain one-time payments and equity grants that occurred in 2024 in connection with new hires.

Such decreases are partially offset by an increase in business development costs.

Research and development expenses were $20.0 million for the year ended December 31, 2025, an increase of approximately $7.7 million from the $12.3 million incurred during the year ended December 31, 2024.

The expense increase is primarily attributable to an increase in self-funded research and development activity, as well as higher expenses for the implementation of information technology enhancements, higher compensation expense in connection with an increase in headcount, and an increase in the usage of regulatory and related consultants.

Other income, net for the years ended December 31, 2025 and 2024 was $6.7 million and $6.1 million, respectively.

The increase relates to interest income earned on cash and cash equivalents as the average cash balance during the year ended December 31, 2024 was higher than in 2023.

Additionally, the average investment return rates in the year ended December 31, 2024 were higher than those in 2023.

These amounts reflect interest income earned on cash and cash equivalents.

For the year ended December 31, 2025, we recognized a tax provision of $7.1 million on pre-tax income of $30.4 million.

Our effective tax rate for the year ended December 31, 2024 was 22.2% and differs from the statutory rate of 21% primarily as a result of non-deductible executive compensation under IRC Section 162(m), shortfalls on stock-based compensation, and state and local taxes.

Our effective tax rate for the year ended December 31, 2025 was 23.4% and differs from the statutory rate of 21% primarily as a result of non-deductible executive compensation under IRC Section 162(m), and state and local taxes.

On July 4, 2025, President Trump signed H.R.

1, the “One Big Beautiful Bill Act” (“OBBBA”) into law.

The OBBBA makes permanent many of the provisions previously enacted as part of the 2017 Tax Cut and Jobs Act that were set to expire at the end of 2025 and includes other changes to certain U.S.

corporate tax provisions including (i) the restoration of immediate expensing for domestic research and development expenditures, (ii) the reinstatement of 100% bonus depreciation for qualified property and (iii) favorably modifying the section 163(j) interest limitation (similar to EBITDA).

FASB Topic 740, “Income Taxes”, requires the tax effects of changes in tax laws or rates be recognized in the period in which the law is enacted.

The enactment of the OBBBA did not have a material impact on the Company’s effective tax rate.

We continue to evaluate the OBBBA and its requirements, but we do not expect a material impact on our financial consolidate statements.

For the year ended December 31, 2024, we recognized a tax provision of $16.9 million on pre-tax income of $76.1 million.

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Under this method, we reconcile net income to cash flows from operating activities by adjusting net income for those items that impact net income but may not result in actual cash receipts or payments during the period.

These reconciling items include but are not limited to stock-based compensation, deferred income taxes and changes in the fair value of our warrant liability;

gains and losses from various transactions and changes in the consolidated balance sheet for working capital from the beginning to the end of the period.

These reconciling items include but are not limited to stock-based compensation, deferred income taxes and gains and losses from various transactions and changes in the consolidated balance sheet for working capital from the beginning to the end of the period.

Net cash provided by operations for the years ended December 31, 2025 and 2024 was $43.5 million and $48.8 million, respectively.

For the year ended December 31, 2025, net cash increase from operations is due to the receipt of approximately $105 million from sales of oral and IV TPOXX® to the U.S.

Government and international customers, of which approximately $102 million relates to 2024 sales and the remainder to collection of accounts receivable on the December 31, 2023 balance sheet, partially offset by the payment of approximately $30 million of income taxes as well as the use of cash for customary operating activities.

For the year ended December 31, 2023, the receipt of substantially all of the $45 million of accounts receivable as of December 31, 2022, the receipt of approximately $111 million of 2023 product sales of oral TPOXX®, as well as approximately $10 million received in connection with IV BDS deferred revenue was partially offset by the use of cash to proactively build inventory, and for operating activities.

On December 31, 2024 and 2023, our accounts receivable balance was approximately $21.2 million (which includes approximately $0.5 million of unbilled receivables) and $21.1 million, respectively.

Our accounts receivable balance as of December 31, 2024 primarily reflects sales of oral TPOXX® to various international countries and the DoD, of which approximately $20.1 million was received by the Company through the end of February 2025.

The remaining amounts of the receivable balance are expected to be collected during the first or second quarter of 2025.

Our accounts receivable balance as of December 31, 2023 primarily reflected sales of oral TPOXX® to the U.S.

Government under the 19C BARDA Contract as well as various international countries, of which approximately $11.2 million was received by the Company through the end of February 2024.

The remaining amounts of the receivable balance were collected during the second quarter of 2024.

Government and international customers, of which approximately $85 million relates to 2025 sales and the remainder to collection of accounts receivable on the December 31, 2024 balance sheet, as well as the receipt of investment income on cash and cash equivalents, was partially offset by the payment of approximately $8 million of income taxes as well as for the use of cash (net of research development revenues) for inventory and customary operating activities.

For the year ended December 31, 2024, net cash increase from operations was due to the receipt of approximately $122.5 million from sales of oral and IV TPOXX® to the U.S.

Government and international customers, of which approximately $102 million related to 2024 sales and the remainder to collection of accounts receivable on the December 31, 2023 balance sheet, partially offset by the payment of approximately $30 million of income taxes as well as the use of cash for customary operating activities.

On December 31, 2025 and 2024, our accounts receivable balance was approximately $3.3 million and $21.2 million, respectively.

Our accounts receivable balance as of December 31, 2025, which was fully received by the Company through the end of February 2026, is primarily related to revenues in connection with the 19C BARDA Contract.

Our accounts receivable balance as of December 31, 2024 primarily reflected sales of oral TPOXX® to various international countries and the DoD.

Investing Activities

We used $355,009 and $42,450 for capital expenditures for the years ended December 31, 2025 and 2024, respectively.

Capital expenditures in 2025 were made in connection with the purchase of equipment related to future IV TPOXX® manufacturing.

Financing Activities

Cash used in financing activities for the years ended December 31, 2025 and 2024 was $43.6 million and $43.5 million, respectively.

For the year ended December 31, 2024, we paid a special dividend of approximately $42.7 million as well as approximately $0.8 million associated with the payment of tax obligations for employee common stock tendered.

For the year ended December 31, 2023, we paid a special dividend of approximately $32.1 million.

In addition, we purchased approximately 1.7 million shares of common stock for approximately $11.0 million.

For the year ended December 31, 2025, we paid a special dividend of approximately $43.1 million and spent approximately $0.4 million associated with the payment of tax obligations for employee common stock tendered.

For the year ended December 31, 2024, we paid a special dividend of approximately $42.7 million and spent approximately $0.8 million associated with the payment of tax obligations for employee common stock tendered.

Future Cash Requirements

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

What changed 10-K

Item 7. Management’s Discussion and Analysis