ARS Pharmaceuticals, Inc. 10-Q

10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39756 ARS Pharmaceuticals, Inc. (Exact name of Registrant as specified in its Charter) Delaware 81-1489190 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 11682 El Camino Real , Suite 300 San Diego , California 92130 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: ( 858 ) 771-9307 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock , par value $0.0001 per share SPRY The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act: Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of November 6 , 2025, there were 98,848,611 share s of registrant’s common stock, $0.0001 par value per share, outstanding. Table of Contents Page PART I FINANCIAL INFORMATION Item 1. Financial Statements 7 Condensed Consolidated Balance Sheets 7 Condensed Consolidated Statements of Operations and Comprehensive Loss 8 Condensed Consolidated Statements of Stockholders’ Equity 9 Condensed Consolidated Statements of Cash Flows 11 Notes to Unaudited Condensed Consolidated Financial Statements 12 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 Item 3. Quantitative and Qualitative Disclosures About Market Risk 52 Item 4. Controls and Procedures 53 PART II OTHER INFORMATION Item 1. Legal Proceedings 54 Item 1A. Risk Factors 54 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 110 Item 5. Other Information 110 Item 6. Exhibits 111 2 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about: • future economic conditions or performance, including neffy net product revenues and net product sales; • research and development plans, including planned clinical trials, for our current or future intranasal epinephrine technology product candidates; • the expected timing for reporting data; • our expectations regarding the European Medicines Agency’s (“EMA”) review of our post-approval variation for neffy 1 mg; • our plans to submit regulatory filings for neffy in additional geographies in collaboration with our partners and the timing thereof; • the expected timing for regulatory review decisions for neffy and our intranasal epinephrine technology product candidates; • the commercial potential of and commercialization strategy for neffy and our intranasal epinephrine technology product candidates; • the size of the markets (including annual sales opportunities) for our current and future product candidates, as well as for neffy , for its currently approved indications in the United States and the European Union (“EU”), the projected growth thereof, and our, and our collaboration and marketing partners’, ability to capture and grow those markets; • the rate and degree of market acceptance of neffy and any future product candidates; • our expected competitive position; • our potential to become the standard in treatment and transform the treatment of allergic reactions; • the likelihood of neffy attaining and maintaining favorable coverage; • the expected intellectual property protection for neffy ; • legislative and regulatory developments in the United States and foreign countries; • estimates regarding anticipated operating losses, capital requirements and needs for additional funds; • our ability to satisfy our obligations, comply with the covenants, and access, if needed, additional credit under our credit agreement; • our ability to obtain, maintain and successfully enforce adequate patent and other intellectual property protection for neffy or any future product candidate; and • statements of belief and any statement of assumptions underlying any of the foregoing. Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A, “Risk Factors” of this Quarterly Report. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. 3 Unless the context otherwise indicates, references in this Quarterly Report to the terms “ARS”, “the Company”, “we”, “our” and “us” refer to ARS Pharmaceuticals, Inc. and its consolidated subsidiaries, and references to our “common stock” refers to our voting common stock. neffy is a trademark of ours that we use in this Quarterly Report. This Quarterly Report also includes trademarks, trade names, and service marks that are the property of other organizations. Solely for convenience, our trademarks and trade names referred to in this Quarterly Report appear without the ® or ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor, to our trademark and trade names. The use or display of other companies’ trade names or trademarks do not suggest or imply a relationship or affiliation with, or endorsement or sponsorship of us by, any other companies. 4 SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS An investment in shares of our common stock involves a high degree of risk. Below is a list of the more significant risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part II, Item 1A, “Risk Factors” in this Quarterly Report. Some of the material risks associated with our business include the following: • We are highly dependent on the successful commercialization of neffy in the United States and in the EU for its currently approved indications in those jurisdictions. To the extent neffy is not commercially successful, our business, financial condition and results of operations would be materially adversely affected, and the price of our common stock would likely decline. • neffy and our current and future intranasal epinephrine technology product candidates may fail to achieve the degree of market acceptance by allergists, pediatricians and other physicians, patients, caregivers, third-party payors and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or profits. • If we are unable to achieve and maintain adequate levels of third-party payor coverage and reimbursement for neffy on reasonable pricing terms, its commercial success may be severely hindered. • Competitive products may reduce or eliminate the commercial opportunity for neffy or our current and future intranasal epinephrine technology product candidates. If our competitors develop technologies or product candidates more rapidly than us, or their technologies or product candidates are more effective or safer than ours, our ability to develop and successfully commercialize neffy and our current and future intranasal epinephrine technology product candidates may be adversely affected. • If we are unable to successfully develop our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, or experience significant delays in doing so, the commercial potential of our current or future intranasal epinephrine technology product candidates or neffy will be more limited. • If the U.S. Food and Drug Administration (“FDA”) does not conclude that our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates or additional indications under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates or additional indications will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful. • Product liability lawsuits against us or any of our current and future licensing and collaboration partners could divert our resources and attention, cause us to incur substantial liabilities and limit commercialization of neffy or our current or future intranasal epinephrine technology product candidates. • If our information technology systems or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences. • We rely completely on third parties to manufacture and warehouse both our domestic and international supply of neffy and our current and future intranasal epinephrine technology product candidates. • We are dependent on international third-party licensees and assignees for the development and commercialization of neffy and our current and future intranasal epinephrine technology product candidates outside the United States. If these third parties are not successful in their development and commercialization efforts or if these third parties fail to meet their contractual, regulatory or other obligations, our business and results of operations could be adversely affected. • International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects. • We expect that our timing of sales and results of operations will fluctuate for the foreseeable future, which may make it difficult to predict our future performance from period to period. • We have incurred significant losses since our inception. • We may need additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development activities or commercialization efforts. 5 • Our commercial success depends on our ability to obtain and maintain sufficient intellectual property protection for neffy , our current and future intranasal epinephrine technology product candidates and other proprietary technologies. • Our Credit Agreement contains conditions and restrictions that limit our flexibility in drawing on the additional funds thereunder and in operating our business. We may be required to repay our outstanding indebtedness under the Credit Agreement earlier than we expect and possibly at a time when we do not have sufficient capital to meet such obligations if an event of default occurs (including a material adverse change affecting our business), which could have a material adverse effect on our financial condition and results of operations. • Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees. 6 PART I – FINANCIAL INFORMATION Item 1. Financial Statements ARS Pharmaceuticals, Inc. Condensed Consolidated Balance Sheets (in thousands, except par value and share amounts) September 30, 2025 December 31, 2024 (unaudited) Assets Current assets: Cash and cash equivalents $ 59,557 $ 50,817 Short-term investments 228,652 263,205 Accounts receivable, net 36,451 8,175 Inventories 7,782 5,212 Prepaid expenses and other current assets 6,421 6,886 Total current assets 338,863 334,295 Long-term inventories 13,645 5,307 Right-of-use asset 1,439 37 Fixed assets, net 1,209 1,029 Intangible assets, net 14,729 7,371 Other assets 2,918 3,114 Total assets $ 372,803 $ 351,153 Liabilities and stockholders’ equity Current liabilities: Accounts payable and accrued liabilities (including related party amounts of $ 4,269 and $ 656 , respectively) $ 49,768 $ 22,841 Contract liability, current 526 557 Lease liability, current 583 42 Total current liabilities 50,877 23,440 Term loans, net (including related party amounts of $ 4,811 and $ 0 , respectively) 96,229 — Financing liability 72,044 69,383 Contract liability, net of current portion 1,268 1,532 Lease liability, net of current portion 949 — Other accrued liabilities 3,781 — Total liabilities 225,148 94,355 Commitments and contingencies (Note 10) Stockholders’ equity Preferred stock, $ 0.0001 par value per share; 10,000,000 shares authorized at September 30, 2025 and December 31, 2024; no shares issued and outstanding at September 30, 2025 and December 31, 2024 — — Common stock, $ 0.0001 par value per share; 200,000,000 shares authorized at September 30, 2025 and December 31, 2024; 98,844,178 and 97,954,172 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 10 10 Additional paid-in capital 400,931 379,873 Accumulated other comprehensive (loss) gain, net ( 7 ) 220 Accumulated deficit ( 253,279 ) ( 123,305 ) Total stockholders’ equity 147,655 256,798 Total liabilities and stockholders’ equity $ 372,803 $ 351,153 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 ARS Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share data) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue: Product revenue, net $ 31,300 $ 568 $ 51,863 $ 568 Revenue under collaboration agreements 55 1,500 2,859 2,000 Revenue under supply agreements 1,146 — 1,469 — Total revenue 32,501 2,068 56,191 2,568 Operating expenses: Cost of goods sold (including related party amounts of $ 2,046 , $ 0 , $ 3,400 , and $ 0 , respectively) 8,191 112 14,269 112 Research and development (including related party amounts of $ 559 , $ 406 , $ 1,804 , and $ 1,651 , respectively) 2,751 4,423 9,738 16,553 Selling, general and administrative (including related party amounts of $ 123 , $ 129 , $ 354 , and $ 337 , respectively) 74,751 19,281 170,167 36,183 Total operating expenses 85,693 23,816 194,174 52,848 Loss from operations ( 53,192 ) ( 21,748 ) ( 137,983 ) ( 50,280 ) Other income (expense), net (including related party amounts of $( 3 ), $ 0 , $( 3 ), and $ 0 , respectively) 2,041 2,620 8,009 8,344 Net loss $ ( 51,151 ) $ ( 19,128 ) $ ( 129,974 ) $ ( 41,936 ) Change in unrealized gains and losses on available-for-sale securities 39 484 ( 227 ) 290 Comprehensive loss $ ( 51,112 ) $ ( 18,644 ) $ ( 130,201 ) $ ( 41,646 ) Net loss per share, basic and diluted $ ( 0.52 ) $ ( 0.20 ) $ ( 1.32 ) $ ( 0.43 ) Weighted-average shares outstanding used in computing net loss per share, basic and diluted 98,807,600 97,032,331 98,412,739 96,782,818 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 ARS Pharmaceuticals, Inc. Condensed Consolidated Statements of Stockholders’ Equity (in thousands, except share data) (unaudited) Accumulated Common Other Total Stock Additional Comprehensive Accumulated Stockholders’ Shares Amount Paid-in Capital Gain (Loss), Net Deficit Equity Balance at December 31, 2024 97,954,172 $ 10 $ 379,873 $ 220 $ ( 123,305 ) $ 256,798 Exercise of common stock options and release of restricted stock units 175,632 — 725 — — 725 Stock-based compensation — — 5,539 — — 5,539 Net loss and comprehensive loss — — — ( 148 ) ( 33,940 ) ( 34,088 ) Balance at March 31, 2025 98,129,804 10 386,137 72 ( 157,245 ) 228,974 Exercise of common stock options and issuance of common stock under the employee stock purchase plan 567,854 — 2,697 — — 2,697 Stock-based compensation — — 5,651 — — 5,651 Net loss and comprehensive loss — — — ( 118 ) ( 44,883 ) ( 45,001 ) Balance at June 30, 2025 98,697,658 10 394,485 ( 46 ) ( 202,128 ) 192,321 Exercise of common stock options 146,520 — 479 — — 479 Stock-based compensation — — 5,967 — — 5,967 Net loss and comprehensive loss — — — 39 ( 51,151 ) ( 51,112 ) Balance at September 30, 2025 98,844,178 $ 10 $ 400,931 $ ( 7 ) $ ( 253,279 ) $ 147,655 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 9 ARS Pharmaceuticals, Inc. Condensed Consolidated Statements of Stockholders’ Equity (in thousands, except share data) (unaudited) Accumulated Common Other Total Stock Additional Comprehensive Accumulated Stockholders’ Shares Amount Paid-in Capital Gain (Loss), Net Deficit Equity Balance at December 31, 2023 96,414,963 $ 10 $ 362,004 $ 49 $ ( 131,303 ) $ 230,760 Exercise of common stock options and release of restricted stock units 159,086 — 258 — — 258 Stock-based compensation — — 3,315 — — 3,315 Net loss and comprehensive loss — — — ( 173 ) ( 10,292 ) ( 10,465 ) Balance at March 31, 2024 96,574,049 10 365,577 ( 124 ) ( 141,595 ) 223,868 Exercise of common stock options, shares issued under the employee stock purchase plan, and release of restricted stock units 365,748 — 545 — — 545 Stock-based compensation — — 3,365 — — 3,365 Net loss and comprehensive loss — — — ( 21 ) ( 12,516 ) ( 12,537 ) Balance at June 30, 2024 96,939,797 10 369,487 ( 145 ) ( 154,111 ) 215,241 Exercise of common stock options and release of restricted stock units 207,645 — 680 — — 680 Stock-based compensation — — 3,701 — — 3,701 Net loss and comprehensive loss — — — 484 ( 19,128 ) ( 18,644 ) Balance at September 30, 2024 97,147,442 $ 10 $ 373,868 $ 339 $ ( 173,239 ) $ 200,978 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 10 ARS Pharmaceuticals, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net loss $ ( 129,974 ) $ ( 41,936 ) Non-cash adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 16,358 10,271 Depreciation and amortization expense 950 50 Accretion on investments, net of amortization ( 4,520 ) ( 5,710 ) Provision for inventory reserve 2,160 — Other non-cash items 186 — Changes in operating assets and liabilities: Accounts receivable ( 28,382 ) ( 773 ) Inventories ( 12,269 ) ( 183 ) Prepaid expenses and other assets 372 1,060 Donation of equipment — 30 Accounts payable and accrued liabilities 27,945 8,749 Operating lease right-of-use asset and lease liability, net 88 ( 14 ) Contract liability ( 295 ) — Net cash and cash equivalents used in operating activities ( 127,381 ) ( 28,456 ) Cash flows from investing activities: Purchases of short-term investments, available-for-sale ( 193,147 ) ( 192,580 ) Maturities of short-term investments, available-for-sale 232,000 191,000 Payments of milestone obligations under license agreements ( 5,860 ) ( 2,500 ) Purchases of property and equipment ( 339 ) ( 261 ) Net cash and cash equivalents provided by (used in) investing activities 32,654 ( 4,341 ) Cash flows from financing activities: Proceeds from term loan, net of issuance costs 97,750 — Payment of term loan issuance costs to third parties ( 761 ) — Proceeds from milestone obligations met under license agreements recognized as an increase to the financing liability 2,577 — Proceeds from exercise of common stock options and issuance of common stock under the employee stock purchase plan 3,901 1,483 Net cash and cash equivalents provided by financing activities 103,467 1,483 Net increase (decrease) in cash and cash equivalents 8,740 ( 31,314 ) Cash and cash equivalents at beginning of period 50,817 70,971 Cash and cash equivalents at end of period $ 59,557 $ 39,657 Supplemental cash flow information: Intangible assets included in accounts payable and accrued liabilities $ 2,000 $ 5,000 Right-of-use asset obtained in exchange for operating lease obligations $ 1,630 $ — Debt issuance costs included in accounts payable and accrued liabilities $ 763 $ — Purchases of property and equipment in accounts payable $ — $ 87 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 11 ARS Pharmaceuticals, Inc. Notes to Unaudited Condensed Consolidated Financial Statements 1. Nature of Business Description of Business ARS Pharmaceuticals, Inc. (“ARS”, “ARS Pharma” or the “Company”) is a biopharmaceutical company focused on the commercialization and development of neffy (currently identified in the EU by the trade name EURneffy ) for the needle-free intranasal delivery of epinephrine for the emergency treatment of Type I allergic reactions, including anaphylaxis. neffy is the first and only FDA and European Commission-approved needle-free epinephrine product, and the first new delivery method for epinephrine in more than 35 years. The Company incorporated in Delaware in January 2016 and is located in San Diego, California. The Company has a wholly owned subsidiary, ARS Pharmaceuticals Operations, Inc., incorporated in Delaware in August 2015, through which it conducts substantially all its operations. ARS Pharmaceuticals Operations, Inc. has a wholly owned subsidiary in Ireland, ARS Pharmaceuticals IRL, Limited, to facilitate the filing of regulatory approval for neffy in European countries. Liquidity and Capital Resources The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred net operating losses in most years since its inception and had an accumulated deficit of $ 253.3 million as of September 30, 2025. The Company had cash, cash equivalents, and short-term investments of $ 288.2 million as of September 30, 2025 and has not generated positive cash flows from operations in most years. To date, the Company has funded its operations primarily with proceeds from the merger with Silverback in November 2022 (the “Merger”), the private placement of convertible preferred stock, the issuance of common stock, licensing, supply and distribution agreements, debt, and net product sales. The Company’s currently available cash, cash equivalents, and short-term investments as of September 30, 2025 are sufficient to meet its anticipated cash requirements for at least the 12 months following the date these financial statements are issued. From August 5, 2015 (inception) through September 30, 2025 , the Company has devoted substantially all of its efforts to developing intellectual property, conducting product development and clinical trials, organizing and staffing the Company, business planning, raising capital, building infrastructure, pre-commercial and commercial activities, and providing general and administrative support for these operations. The Company has a limited operating history, and the sales and income potential of the Company’s business and market are unproven. Management expects operating expenses to increase for the foreseeable future, and there can be no assurance that the Company will achieve profitability in the future, or if achieved, that it will be sustained on a continuing basis. 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”), and Accounting Standards Update (“ASU”), of the Financial Accounting Standards Board (“FASB”). The Company’s financial statements are presented on a condensed consolidated basis, which include the accounts of ARS Pharmaceuticals, Inc., ARS Pharmaceuticals Operations, Inc. and ARS Pharmaceuticals IRL, Limited. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s functional and reporting currency is the U.S. dollar. Assets and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the balance sheet date except for nonmonetary assets, which are remeasured at historical foreign currency exchange rates in effect at the date of transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in other income in the condensed consolidated statements of operations and comprehensive loss. All adjustments considered necessary for a fair presentation have been included. 12 Unaudited Interim Condensed Consolidated Financial Statements The accompanying condensed consolidated balance sheet as of September 30, 2025, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2025 and 2024, the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2025 and 2024, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024, are unaudited. The balance sheet as of December 31, 2024 was derived from the audited financial statements as of and for the year ended December 31, 2024. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with the audited annual financial statements as of and for the year ended December 31, 2024, and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2025, the condensed consolidated results of its operations for the three and nine months ended September 30, 2025 and 2024, and its cash flows for the nine months ended September 30, 2025 and 2024. The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2025 and 2024 are also unaudited. The condensed consolidated results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full year ending December 31, 2025 or any other period. Use of Estimates The preparation of the Company’s condensed consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed consolidated financial statements and accompanying notes. The most significant estimates in the Company’s condensed consolidated financial statements are revenue recognized under collaboration agreements, accruals for variable components of product revenue, accruals for research and development expenses, and valuation of equity awards. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue and expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Cash and Cash Equivalents Cash and cash equivalents include cash readily available in checking, money market mutual funds, and short-term investments with remaining maturities when purchased of 90 days or less. The Company considers all highly liquid investments with remaining maturities when purchased of 90 days or less to be cash equivalents. Accounts Receivable and Allowance for Credit Losses Accounts receivable includes trade accounts receivable from product sales to customers, partner receivables for reimbursable research and development costs, royalties, license fees, and milestone payments under the Company’s collaboration agreements, and partner receivables for supply of neffy under the Company’s supply agreements. Trade accounts receivables are recorded at wholesale acquisition cost (“WAC”), less purchase price discounts, prompt pay discounts, chargebacks, and an allowance for credit losses, if any. The allowance for credit losses is the Company’s estimate of losses over the life of the receivables. The Company determines the allowance for credit losses for accounts receivable based on each customer’s or partner’s accounts receivable balance and age, their financial condition, and the general economic environment. When the collectability of an invoice is no longer probable, the Company will create a reserve for that specific receivable. If a receivable is determined to be uncollectible, it is charged against the general credit loss reserve or the reserve for the specific receivable, if one exists. The allowance for credit losses was no t material at September 30, 2025 , and no allowance for credit losses was deemed necessary at December 31, 2024 . 13 Investments The Company invests excess cash in investment grade fixed income securities. These investments are included in short-term investments on the condensed consolidated balance sheets, classified as available-for-sale, and reported at fair value with unrealized gains and losses included in accumulated other comprehensive (loss) gain, net. Realized gains and losses on the sale of securities are recognized in net loss. Fair Value of Financial Instruments Cash, cash equivalents, and short-term investments are carried at fair value. The carrying amounts of all accounts receivable, prepaid expenses and other current assets, and accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits and limits its exposure to cash risk by placing its cash with high credit quality financial institutions. The Company reviews its financial instruments portfolio on a quarterly basis to determine if any unrealized losses have resulted from a credit loss or other factors. As part of the review, management considers factors such as historical experience, market data, issuer-specific factors, and current economic conditions. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may be related to credit issues. The Company is also subject to credit risk related to its accounts receivable from product sales and revenue under collaboration and supply agreements. neffy is distributed primarily through wholesale distributors and pharmacies. These entities are not obligated to purchase any set number of units, and they distribute neffy on demand as orders are received. The Company enters into collaboration and supply agreements with pharmaceutical companies that have operations outside the U.S. under which the Company is entitled to receive payments for royalties, license fees, milestone achievements, reimbursable costs for research and development services, and supply of neffy . The Company extends credit to its customers and partners in the normal course of business after evaluating their overall financial condition. Prior to August 2025, the Company operated under the Title Agreement (as defined in Note 3 – Revenue ) with its Title Agent (as defined in Note 3 – Revenue ), and the Title Agent retained all credit and collection risk on sales to the Company’s wholesale distributors and pharmacy customers. As of August 2025, the Company ceased operations under the Title Agreement and retains all credit and collection risk on sales. The Company’s Title Agent accounted for 20 % and 93 % of the Company’s accounts receivable balance as of September 30, 2025 and December 31, 2024 , respectively. Three additional customers accounted for 66 % of accounts receivable as of September 30, 2025 , with each individual customer ranging from 20 % to 25 %. For the three and nine months ended September 30, 2025 , four customers accounted for 83 % and 80 % of the Company’s gross product sales, with each individual customer ranging from 14 % to 25 % and 13 % to 24 % of the Company’s gross product sales, respectively. For each of the three and nine months ended September 30, 2024 , four customers accounted for 94 % of the Company’s gross product sales, with each individual customer ranging from 11 % to 29 % of the Company’s gross product sales. For each of the three and nine months ended September 30, 2025 and 2024 , one customer accounted for 100 % of revenue under collaboration agreements. For the three and nine months ended September 30, 2025 , two customers accounted for 100 % and 98 % of revenue under supply agreements, respectively, and there was no revenue under supply agreements for the three and nine months ended September 30, 2024 . To date, the Company has not experienced any credit losses from its trade and partner accounts receivable. Inventories Inventories consist of finished goods held for sale and distribution, raw materials and work in process, and include labor and overhead. Inventories are stated at the lower of cost or net realizable value, and are determined on a first-in, first-out basis. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company periodically reviews its inventory to identify obsolete, slow-moving, or otherwise unsalable inventories, and establishes allowances for situations in which the cost of the inventory is not expected to be recovered. Such impairment charges, if any, are recorded in cost of goods sold on the condensed consolidated statements of operations. 14 The Company capitalizes inventory costs after regulatory approval, when future commercialization is considered probable, and a future economic benefit is expected to be realized. Prior to regulatory approval, the Company records inventory costs as research and development expenses. As such, when regulatory approval is received, this may result in zero-cost inventory which does not have a carrying value. This inventory is available to the Company to utilize for commercial operations as well as ongoing research and development activities. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Repair and maintenance costs are charged to expense as incurred. Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment and intangible assets. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future undiscounted net cash flows which the asset or asset group are expected to generate, including its eventual residual value. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds its fair value. The Company has not recognized any impairment losses from inception through September 30, 2025 . Leases The Company determines the initial classification and measurement of its right-of-use (“ROU”) asset and lease liabilities at the lease commencement date and thereafter, if modified. The Company recognizes a ROU asset for its operating leases with lease terms greater than 12 months. The lease term includes any renewal options and termination options that the Company is reasonably assured to exercise. The lease liability is calculated by using the present value of all lease payments, with the present value determined by using the incremental borrowing rate for operating leases determined by using the incremental borrowing rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment as well as a review of peer companies. Variable charges for common area maintenance and other variable costs are recognized as expense as incurred. Rent expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in research and development and general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss. Intangible Assets Intangible assets are measured at fair value as of the acquisition date or, in the case of commercial milestone payments, the date they become due. The evaluation of intangible assets includes assessing the amortization period for which the asset is expected to contribute to the future cash flows of the Company. Intangible assets with finite useful lives are amortized over their estimated useful lives, primarily on a straight-line basis when the Company is unable to reliably estimate the pattern of cash flow. Revenue Recognition The Company’s revenues consist of product sales of neffy and revenue derived from its collaboration, out-licensing, and supply agreements. See Note 3 – Revenue for more detail on product revenue, and Note 9 – Collaboration, Out-Licensing and Related Agreements for more detail on revenue from collaboration agreements, out-licensing agreements, and supply agreements. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The provisions of ASC 606 require the following steps to determine revenue recognition: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. At contract inception, the Company assesses the goods or services promised within each contract, determines whether each promised good or service is distinct and identifies those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. 15 Cost of Goods Sold Cost of goods sold primarily consists of direct and indirect costs related to the manufacture of neffy for commercial sale, including salaries and related expenses for personnel, stock-based compensation, third-party manufacturing costs, raw material and component costs, packaging services, freight, storage costs, distribution fees, amortization of capitalized in-licensed costs, supply agreement fees, and royalties on product sales. Prior to the FDA approval of neffy in August 2024, costs incurred for the manufacture of neffy were recorded as research and development expenses, which resulted in zero-cost inventory. As a result, the cost of goods sold related to neffy initially reflects a lower average per unit cost of materials, as previously expensed zero-cost inventory is utilized for commercial production and sold to customers. Research and Development Costs Research and development costs are expensed in the period incurred. Research and development costs primarily consist of salaries and related expenses for personnel, stock-based compensation expense, external research and development costs incurred under agreements with contract research organizations, investigative sites and consultants to conduct clinical studies, costs related to compliance with regulatory requirements, costs related to manufacturing the Company’s product candidates (including neffy prior to FDA approval in August 2024) for clinical trials, and other allocated expenses. Payments for research and development activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of performance are reflected in the accompanying condensed consolidated balance sheets as prepaid expenses. The Company records accruals for estimated costs incurred for ongoing research and development activities. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. The Company uses judgments and estimates to determine the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. Selling, General and Administrative Costs Selling, general and administrative costs are expensed in the period incurred. Selling, general and administrative costs primarily consist of marketing-related expenses, salaries and related expenses for personnel, including meals and travel-related expenses incurred by the sales team, stock-based compensation, legal fees incurred relating to corporate and patent matters, professional fees incurred for accounting, auditing, tax, and other consulting services, and insurance costs. Advertising Costs for producing advertising are expensed when incurred. Costs for communicating advertising, such as search engine marketing, banner advertisements, social media advertisements, and print advertisements, are recorded as prepaid expenses and then expensed when the advertisement occurs. For the three and nine months ended September 30, 2025, advertising costs were $ 40.9 million and $ 72.8 million, respectively. For the three and nine months ended September 30, 2024, advertising costs were $ 3.9 million and $ 4.5 million, respectively. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expenses in the statements of operations and expensed as incurred since recoverability of such expenditures is uncertain. License Fees Costs incurred to acquire technology licenses and milestone payments made on existing agreements are expensed or capitalized based upon the asset achieving technological feasibility in accordance with management’s assessment regarding the ultimate recoverability of the amounts paid and the potential for alternative future use. 16 Stock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of stock option grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company recognizes expense for awards subject to performance-based milestones over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and recognizes forfeitures as they occur. In the event that stock-based awards are granted in contemplation of or shortly before a planned release of material non-public information, and such information is expected to result in a material increase in the share price of the Company’s common stock, the Company may consider whether an adjustment to the observable market price is required when estimating the grant date fair value. Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss typically consists of the change in unrealized gains and losses on available-for-sale securities. Segment Reporting Operating segments are components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker for purposes of making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as one operating segment. Net Loss Per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since the effect of potentially dilutive securities is anti-dilutive given the net loss of the Company. For purposes of this calculation, stock options, warrants, and unvested restricted stock units, are considered to be common stock equivalents but are not included in the calculations of diluted net loss per share for the periods presented as their effect would be antidilutive. The following securities are excluded from the calculation of weighted-average dilutive common shares because their inclusion would have been anti-dilutive: As of September 30, 2025 2024 Warrants to purchase common stock 45,456 45,456 Common stock options granted and outstanding 17,106,592 15,178,403 Unvested restricted stock units 1,382 2,763 Estimated shares to be purchased under the employee stock purchase plan 43,255 9,222 Total 17,196,685 15,235,844 Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280)–Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires issuers to make additional disclosures with respect to segment expenses, including required disclosure on an annual and interim basis for significant segment expenses and other segment items. ASU 2023-07 also permits the disclosure of more than one measure of a segment’s profit or loss. ASU 2023-07 was effective for the Company on January 1, 2024 for annual periods and on January 1, 2025 for interim periods. The adoption of ASU 2023-07 resulted in enhanced disclosures as included in Note 16 – Segment Information and did not impact the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements — Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted as of the specified effective date. The Company believes the impact of recently issued standards, other than those noted below, and any issued but not yet effective standards will not have a material impact on our financial statements upon adoption. 17 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)–Improvements to Income Tax Disclosures (“ASU 2023-09”) . The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The amendments in this update are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company does not expect to early adopt the new standard. The new standard is expected to be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact of ASU 2023-09 on the financial statements and related disclosures. In November 2024, the FASB issued ASU No. 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). The amendments in this update require disclosure, in the notes to the financial statements, of specific expense categories present within expense captions presented on the face of the income statement within continuing operations of public business entities. The amendments in this update are effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any and all prior periods presented in the financial statements. The impact of adoption of this ASU on the Company’s disclosures is currently being evaluated. In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments in this update introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets applicable to revenue contracts under ASC 606. This ASU is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted. T he amendments should be applied prospectively to financial statements issued for reporting periods after the effective date of this ASU. The impact of adoption of this ASU on the Company’s disclosures is currently being evaluated. 3. Revenue The Company’s revenues consist primarily of product sales of neffy , revenue derived from its collaboration and out-licensing agreements, and revenue from its supply agreements. See Note 9 – Collaboration, Out-Licensing and Related Agreements for further discussion related to revenue from collaboration, out-licensing, and supply agreements. Product Revenue neffy was approved by the FDA in August 2024, and the Company began generating product revenue from sales of neffy in September 2024. The Company uses a third-party logistics provider (“3PL Agent”) to fulfill orders of neffy to the Company’s customers. The 3PL Agent provides services to the Company that include warehousing, distribution, order and accounts receivable management, and data management. From September 2024 to July 2025, the Company operated under a title model agreement (“Title Agreement”) with an affiliate of the 3PL Agent (the “Title Agent”) so that the Title Agent could purchase and take title to neffy and then sell it to the Company’s wholesale distributors and pharmacy customers that had contracted to make a purchase. Under the Title Agreement, the economic substance of the transaction was such that the Company did not recognize revenue until neffy was sold and title had transferred from the Title Agent to the wholesale distributor or pharmacy. As of August 2025, the Company ceased operations under the Title Agreement, and the Company now sells and transfers title of neffy directly to its wholesale distributor and pharmacy customers. Revenue is recognized at a point-in-time upon delivery and the transfer of title. The Company also enters into sales agreements with pharmacies to hold neffy under consignment. Under the consignment model, the Company recognizes revenue when neffy is sold to a patient, at which point title transfers from the Company directly to the patient. These agreements were not subject to the Title Agreement. Product revenue is recorded with each sale at the transaction price, net of reserves for variable components, including but not limited to distribution service fees, prompt pay discounts, product returns, chargebacks, rebates, and co-payment assistance, which are collectively referred to as “Gross-to-Net Adjustments.” Estimates for Gross-to-Net Adjustments are reassessed each reporting period, and adjustments are recorded on a cumulative catch-up basis, which would affect product revenue and net loss in the period of adjustment. Trade accounts receivable due to the Company from contracts with its customers are stated in the condensed consolidated balance sheets net of various allowances as described in the Accounts Receivable and Allowance for Credit Losses policy in Note 2 – Summary of Significant Accounting Policies . 18 The Company utilizes the expected value method when estimating the amount of variable consideration to include in the transaction price with respect to each of the foregoing variable components. Variable consideration is included in the transaction price only to the extent it is probable that a significant revenue reversal will not occur when the uncertainty associated with the variable consideration is resolved. In accordance with ASC 606, the Company must make significant judgments to determine the estimate for certain Gross-to-Net Adjustments. The specific considerations that the Company uses in estimating the amounts related to Gross-to-Net Adjustments are as follows: Distribution Service Fees. The Company pays distribution service fees to its wholesale distributors. These fees are a contractually fixed percentage of WAC and are calculated at the time of sale based on the purchased amount. These fees are recorded as other current liabilities on the condensed consolidated balance sheets. Commercial Pharmacy Discounts. The Company provides discounts to its pharmacy customers. These discounts are a contractually fixed percentage of WAC and are a direct reduction from the WAC price they are charged. They are calculated at the time of sale based on the purchased amount. These discounts are recorded as contra trade accounts receivable on the condensed consolidated balance sheets. Prompt Pay Discounts. The Company incentivizes on time invoice payments through prompt pay discounts. Prompt pay discounts are typically taken by customers, so an estimate of the discount is recorded at the time of sale based on the purchased amount. Prompt pay discount estimates are recorded as contra trade accounts receivable on the condensed consolidated balance sheets. Chargebacks. Certain government entities and covered entities (e.g. Veterans Administration, 340B covered entities) can purchase the product at a price discounted below WAC. The difference between the government or covered entity purchase price and WAC will be charged back to the Company. The Company estimates the amount of chargebacks based on the expected number of claims and the related costs associated with the revenue recognized for product that remains in the distribution channel and any chargeback amounts not invoiced to the Company at the end of each reporting period. Estimated chargebacks are recorded as contra trade accounts receivable on the condensed consolidated balance sheets. Rebates. The Company provides commercial rebates to pharmacy benefit managers and managed care organizations and is subject to mandatory discount obligations under the Medicare, Medicaid, and Tricare programs. The rebate amounts for these programs are determined by contractual arrangements or statutory requirements. Rebates are owed after the product has been dispensed to a patient and the Company has been invoiced. The Company estimates the amount in rebates based on the expected number of claims and the related costs associated with the revenue recognized for product that remains in the distribution channel and any rebate amounts not invoiced to the Company at the end of each reporting period. Rebate estimates are recorded as other current liabilities on the condensed consolidated balance sheets. Co-payment Program. The Company offers co-payment assistance programs to commercially insured patients whose insurance requires a co-payment to be made when filling their prescription. The Company estimates the amount of co-payment assistance based on the expected volume and the average buy down rate associated with the revenue recognized for products that remain in the distribution channel and any co-payment assistance amounts not invoiced to the Company at the end of each reporting period. Co-payment programs estimates are recorded as other current liabilities on the condensed consolidated balance sheets. Product Returns. Customers have the right to return damaged product, product that is within six months or less of the labeled expiration date, or product that is past the expiration date by no more than twelve months. neffy was commercially launched in September 2024 and due to the limited returns data, the Company uses professional judgment and industry data to estimate returns. As time passes and additional historical sales and returns data becomes available, the Company will update the estimated returns as needed. A reserve for potential product returns is recorded as other current liabilities on the condensed consolidated balance sheets. 4. Inventories The Company began to capitalize the inventory costs associated with neffy upon FDA approval in August 2024 when future commercialization was considered probable, and it was determined that the inventory had a probable future economic benefit. These inventory costs consist primarily of purchased materials, third-party manufacturing costs, and packaging and serialization services. Noncurrent inventory consists of inventory anticipated to remain on hand for more than one year from the balance sheet date. 19 Capitalized inventories consisted of the following (in thousands): September 30, 2025 December 31, 2024 Raw materials $ 17,943 $ 4,674 Work in process 89 19 Finished goods 5,555 5,826 Inventory reserve ( 2,160 ) — Total inventories, net $ 21,427 $ 10,519 Reported as: Inventories $ 7,782 $ 5,212 Long-term inventories 13,645 5,307 Total inventories, net $ 21,427 $ 10,519 Prior to FDA approval in August 2024, costs incurred for the manufacturing of neffy were recorded as research and development expenses , which upon approval resulted in zero-cost inventory. The Company held $ 8.4 million and $ 11.7 million in zero-cost inventory as of September 30, 2025 and December 31, 2024 , respectively, none of which was determined to be obsolete as of each period end. The Company expects to fully utilize its zero-cost inventory in future periods. 5. Fair Value Measurements The Company categorizes its assets and liabilities measured at fair value in accordance with the authoritative accounting guidance that establishes a consistent framework for measuring fair value and expands disclosures for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 – Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. The following table identifies the Company’s assets that were measured at fair value on a recurring basis (in thousands): Gross Gross Estimated Amortized Unrealized Unrealized Fair Level Cost Gains Losses Value September 30, 2025 Cash and cash equivalents - Money market mutual funds 1 $ 59,288 $ — $ — $ 59,288 Cash and cash equivalents - U.S. Treasury securities 2 19,871 — ( 2 ) 19,869 Short-term investments - U.S. Treasury securities 2 228,657 62 ( 67 ) 228,652 Total $ 307,816 $ 62 $ ( 69 ) $ 307,809 December 31, 2024 Cash and cash equivalents - Money market mutual funds 1 $ 6,506 $ — $ — $ 6,506 Cash and cash equivalents - U.S. Treasury securities 2 42,382 5 — 42,387 Short-term investments - U.S. Treasury securities 2 262,990 223 ( 8 ) 263,205 Total $ 311,878 $ 228 $ ( 8 ) $ 312,098 There were no transfers between the Level 1 and Level 2 categories or into or out of the Level 3 category during the periods present ed. During the three and nine months ended September 30, 2025, the Company purchased $ 127.4 million and $ 193.1 million in short-term investments, respectively, and there were $ 88.5 million and $ 232.0 million in maturities of short-term investments, respectively. During the three and nine months ended September 30, 2024, the Company purchased $ 41.5 million and $ 192.6 million in short-term investments, respectively, and there were $ 61.0 million and $ 191.0 million in maturities of short-term investments, respectively. 20 The Company’s short-term investments portfolio contains investments in U.S. Treasury securities that have an effective maturity date that is less than one year from the respective balance sheet date. The Company's money market mutual fund holdings are highly liquid and invest primarily in cash and U.S. Treasury securities. There was less than $ 0.1 million net unrealized gains and $ 0.2 million net unrealized losses on available-for-sale securities for the three and nine months ended September 30, 2025, respectively, and a $ 0.5 million and $ 0.3 million unrealized gain on available-for-sale securities for the three and nine months ended September 30, 2024, respectively. Management determined that the gross unrealized losses on the Company’s available-for-sale securities as of September 30, 2025 were primarily attributable to current economic and market conditions and not credit risk. As of September 30, 2025 and December 31, 2024 , no allowance for credit losses was recorded for available-for-sale securities. It is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell any investments prior to recovery of its amortized cost basis, which is expected to be at maturity. Accrued interest receivable on the Company's available-for-sale securities was $ 1.2 million and $ 1.0 million at September 30, 2025 and December 31, 2024, respectively, and is included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. The Company’s Term Loans (as defined in Note 8 – Term Loans ) are carried at historical cost, adjusted for the debt discount and debt issuance costs, and are not required to be carried at fair value. As of September 30, 2025, the Term Loans’ carrying value of $ 96.2 million approximates its estimated fair value. As of September 30, 2025 and December 31, 2024 , the Company did no t have any liabilities that were measured at fair value on a recurring basis. 6. Balance Sheet Details Prepaid expenses and other current assets consisted of the following (in thousands): September 30, 2025 December 31, 2024 Prepaid marketing $ 1,867 $ 3,169 Prepaid expense 1,278 237 Interest receivable 1,243 987 Prepaid insurance 685 1,261 Other 1,348 1,232 Total $ 6,421 $ 6,886 Other long-term assets consisted of the following (in thousands): September 30, 2025 December 31, 2024 Prepaid supply agreement fee $ 2,793 $ 2,800 Capitalized software implementation costs 125 314 Total $ 2,918 $ 3,114 Accounts payable and accrued liabilities consisted of the following (in thousands): September 30, 2025 December 31, 2024 Accounts payable $ 8,382 $ 9,870 Accrued gross-to-net adjustments 15,560 2,179 Accrued marketing related expenses 11,271 1,855 Accrued compensation 5,448 2,293 Accrued cost of goods sold 4,343 617 Accrued general and administrative expenses 3,083 570 Accrued inventory — 4,255 Other 1,681 1,202 Total $ 49,768 $ 22,841 21 7. Intangible Assets As described in Note 11 – In-Licensing and Supply , under the Aegis Agreement the Company capitalized milestone payments of $ 2.5 million, $ 5.0 million, and $ 2.0 million in August 2024, September 2024, and September 2025, respectively. As described in Note 9 – Collaboration, Out-Licensing and Related Agreements , under the Recordati Termination Agreement the Company capitalized the achievement of a € 5.0 million ($ 5.9 million in U.S. dollars) milestone in June 2025. Each capitalized milestone payment is amortized on a straight-line basis over the estimated life of the intellectual property. Intangible assets, net, all of which are finite-lived, consisted of the following (in thousands): September 30, 2025 December 31, 2024 Capitalized milestone payments $ 15,360 $ 7,500 Less accumulated depreciation ( 631 ) ( 129 ) Total $ 14,729 $ 7,371 The amortization expense for the three and nine months ended September 30, 2025 was $ 0.2 million and $ 0.5 million, respectively. No int angible assets were held as of September 30, 2024 , and there was no amortization expense recognized for the three and nine months ended September 30, 2024. The weighted-average amortization period of intangible assets is 13.9 years. As of September 30, 2025, estimated future amortization expense for capitalized intangible assets for the next five years is as follows (in thousands): Year Ended December 31, Amount 2025 (remaining three months) $ 239 2026 1,105 2027 1,105 2028 1,105 2029 1,105 Total $ 4,659 8. Term Loans On September 29, 2025 (the “Closing Date”), the Company and certain direct and indirect subsidiaries of the Company who may become a party thereto from time to time, as guarantors (the “Guarantors”), and ARS Pharmaceuticals Operations, Inc., as the borrower (the “Borrower” and, collectively with the Guarantors, the “Credit Parties”), entered into a credit agreement (the “Credit Agreement”) with RA Capital Agency Services, LLC (as the “Administrative Agent” and as the “Collateral Agent”), and affiliates of OMERS Administration Corporation and RA Capital Management, L.P., as lenders, and such other lenders who may become a party thereto from time to time (the “Lenders”), providing for an aggregate principal amount of up to $ 250.0 million of term loans from the Lenders to the Borrower (the “Term Loans”). The Term Loans will mature on September 29, 2030 . Pursuant to the terms of the Credit Agreement, the Term Loans may be advanced in four tranches. The first tranche (the “Term A Loan”) was advanced in the principal amount of $ 100.0 million on the Closing Date. The second tranche (the “Term B Loan”) in a principal amount of $ 25.0 million may be advanced at the Borrower’s election during the period commencing on the six-month anniversary of the Closing Date and ending no later than the one-year anniversary of the Closing Date, subject to customary conditions. The third tranche (the “Term C Loan” and collectively with the Term B Loan, the “Delayed Draw Term Loans”) in a principal amount of $ 25.0 million may be advanced at the Borrower’s election during the period commencing on and including the Closing Date and ending no later than the two-year anniversary of the Closing Date, subject to the Company achieving trailing 12-month (“TTM”) net revenues for neffy of at least $ 100.0 million and customary conditions. The fourth tranche (the “Term D Loan”) of up to $ 100.0 million is uncommitted and may be advanced at the Borrower’s election, subject to the consent of all of the Term D Lenders and customary conditions. The Company received $ 100.0 million in gross cash proceeds from Term A Loan on the Closing Date, less the upfront fees taken in the form of an original issue discount and third-party fees totaling $ 3.8 million. The debt discount and the debt issuance costs are recorded net of the Term A Loan balance and are amortized to interest expense over the term of the debt using the effective interest rate method. 22 The Term Loans will initially bear interest at a per annum rate of 5.50 % plus the greater of (i) the three-month forward-looking term SOFR or (ii) 3.00 %, which interest rate may be reduced by 25 to 50 basis points based on achieving certain TTM net revenue milestones. The Credit Agreement provides for interest-only payments on a quarterly basis until maturity. At Borrower’s election and subject to certain conditions, 100 % of accrued interest in the first two years, and 50 % of accrued interest in the last three years, may be paid-in-kind, in which case the applicable interest rate for the Term Loans shall increase by 1.00 % per annum for the portion of such Term Loans that is paid-in-kind. At the Closing Date and September 30, 2025, the contractual interest rate was 9.49 % per annum. The Borrower may prepay the Term Loans, in whole or in part, subject to a prepayment premium and an exit fee. The obligations of the Borrower under the Credit Agreement are guaranteed on a full and unconditional basis by the Company and the Guarantors and are secured by substantially all of the respective Credit Parties’ tangible and intangible assets and property, including intellectual property, subject to certain exceptions. The Credit Agreement contains customary representations and warranties, covenants and events of default, including a requirement for the Borrower to maintain at all times, a minimum specified amount of unrestricted cash in deposit accounts. The Credit Agreement also includes customary events of default, including, among others, payment defaults, material misrepresentations, breaches of covenants following any applicable cure period, cross defaults with certain other indebtedness or material agreements, bankruptcy and insolvency events, judgment defaults, the occurrence of certain events that could reasonably be expected to have a “material adverse effect,” and the occurrence of a change in control (as defined in the Credit Agreement). The occurrence of an event of default could result in the acceleration of the Company’s obligations under the Credit Agreement and the exercise by the Administrative Agent of other rights and remedies provided for under the Credit Agreement. As of September 30, 2025, the Company was in compliance with all covenants under the Credit Agreement. The Administrative Agent and Collateral Agent, as well as a Lender, are affiliates of RA Capital Management, L.P. (“RA Capital”). Affiliates of RA Capital collectively hold in excess of 10 % of the Company’s outstanding common stock and are currently the Company’s largest stockholder. One of the Company’s board members is a controlling person of RA Capital’s general partner. The Lender affiliated with RA Capital holds a portion of Term Loans in the principal amount of $ 5.0 million. The following table summarizes the composition of the Term Loans as reflected on the condensed consolidated balance sheet (in thousands): September 30, 2025 Gross proceeds $ 100,000 Unamortized debt discount and debt issuance costs ( 3,771 ) Total $ 96,229 23 9 . Collaboration, Out-Licensing and Related Agreements The Company has entered into collaboration and licensing agreements, including supply and distribution, to license certain rights to neffy to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; clinical, regulatory, and/or commercial milestone payments; payment for clinical and commercial supply; and royalties or a transfer price on the net sales of licensed products. Licenses of Intellectual Property . If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, revenue is recognized from non-refundable, upfront payments allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. If the license is subject to repurchase by the Company, at its option, control of the license is not considered transferred to the customer, and in such case, the Company would account for the proceeds allocated to such license as either a financing obligation or a lease in accordance with ASC 606. Future amounts received related to the license which is subject to the Company’s repurchase, such as royalties or milestone payments, would be accounted for as additional financing proceeds and would increase the financing obligation on the Company’s condensed consolidated balance sheet. The Company would record such financing obligation as revenue when the right to repurchase has lapsed or was exercised. If the license is not a distinct performance obligation, the Company evaluates the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments . At the inception of each arrangement that includes clinical, regulatory or commercial milestone payments, the Company evaluates whether achieving the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price. Milestone payments that are not within the Company’s control, such as approvals from regulators or where attainment of the specified event is dependent on the development activities of a third party, are not considered probable of being achieved until those approvals are received or the specified event occurs. Revenue is recognized when the underlying performance obligation has been met. Transaction Price Allocation. At the inception of each arrangement, the Company identifies its distinct performance obligations and allocates the transaction price to the performance obligations based upon their relative standalone selling prices. Standalone selling price is the price at which an entity would sell a promised good or service separately to a customer. The best evidence of standalone selling price is an observable price of a good or service when sold separately by an entity in similar circumstances to similar customers. Since the Company typically does not have such evidence, the Company estimates standalone selling price so that the amount that is allocated to each performance obligation equals the amount that the Company expects to receive for transferring the promised goods or services. The methods that the Company uses to make such estimates include (1) the adjusted market assessment approach, under which the Company forecasts product sales in the appropriate market, considers probability of commercialization success, and estimates discount rates; and (2) the expected cost of satisfying the performance obligations inclusive of a reasonable margin, also known as the expected cost plus margin approach. Research and Development Revenues . For arrangements that contain research and development commitments, any arrangement consideration allocated to the research and development work is recognized as the underlying services are performed over the research and development term, if the criteria for over time recognition are met. If the over time recognition criteria are not met, research and development performance obligations are recognized at a point-in-time, when the research and development work is completed. Clinical and Commercial Supply . Arrangements that include a promise for the future supply of drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered customer options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. Revenue from product sales to the Company’s collaboration partners is recognized at the point-in-time that the collaboration partner obtains control, which is typically based upon the terms of delivery of the product. Royalty/Transfer Price Revenues . For arrangements that include sales-based royalties or transfer price, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). 24 Alfresa Agreement In March 2020, the Company signed a Letter of Intent (“LOI”) with Alfresa Pharma Corporation (“Alfresa”) for the right to negotiate a definitive agreement for the exclusive license and sublicensable right to develop, register, import, manufacture and commercialize neffy in Japan and received an upfront payment of $ 2.0 million. In April 2020, the Company entered into a Collaboration and License Agreement (the “Alfresa Agreement”) for the rights pursuant to the LOI. Under the Alfresa Agreement, the Company delivered a license to neffy technology, completed a required clinical study, and remains obligated to use commercially reasonable efforts to develop and commercialize neffy in Japan. The parties agreed to share the cost of any additional clinical studies required for approval of neffy in Japan. Alfresa is solely responsible for regulatory and commercialization activities and may elect to assume responsibility for manufacturing and supplying drug product for commercial use in Japan. Either party may terminate the agreement for certain breaches of the agreement. Unless terminated earlier by either or both parties, the term of the agreement will continue until the later of (i) expiration of the last-to-expire patent in Japan; or (ii) 10 years after the first commercial sale of neffy in Japan. In addition to the $ 2.0 million received under the LOI, the Company was initially eligible to receive up to $ 13.0 million in milestone payments upon achievement of certain clinical and regulatory milestones. Further, the Company is eligible to receive a negotiable transfer price expected to be in the low double-digit percentage on net sales subject to the regulatory approval to commercialize neffy in Japan. At the commencement of the Alfresa Agreement, the Company identified the following performance obligations: the license for neffy and research and development services, both of which have been completed. The Company determined the initial transaction price to be $ 7.0 million, which includes a clinical milestone as it was deemed not probable of significant reversal at the inception of the agreement. Due to the uncertainty in the achievement of the regulatory and commercial milestones, the variable consideration associated with these future milestone payments has been fully constrained and is excluded from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be reassessed at each reporting period. T he transaction price was allocated to the performance obligations based on the estimated stand-alone selling price of each performance obligation. In July 2020 and November 2024, the Company earned milestone payments of $ 5.0 million and $ 6.0 million for the completion of clinical and regulatory milestones in Japan, respectively, which were recognized as revenue under collaboration agreements. Recordati Agreement In September 2020, the Company entered into a License and Supply Agreement (the “Recordati Agreement”) with Recordati Ireland, Ltd. (“Recordati”) for the exclusive license and sublicensable right to develop, import, manufacture or have manufactured commercial product, file and hold regulatory approvals and commercialize neffy in Europe and certain European Free Trade Association, Russia/the Commonwealth of Independent States, Middle East and African countries (the “Recordati Territory”). Under the Recordati Agreement, the Company received an upfront payment of $ 11.8 million and a regulatory milestone payment of $ 6.0 million in 2020. In February 2023, the Company and Recordati entered into a termination agreement (the “Recordati Termination Agreement”), pursuant to which, among other things, the Company and Recordati agreed to terminate the Recordati Agreement. Pursuant to the Recordati Termination Agreement, the Company reacquired all of the Recordati Rights, paid Recordati a one-time upfront payment of € 3.0 million ($ 3.3 million in U.S. dollars), and agreed to pay additional payments upon achievement of certain milestones including: (i) an EMA regulatory milestone payment of € 2.0 million, (ii) a milestone payment of € 5.0 million upon first commercial sale of neffy in the Recordati Territory, and (iii) royalty payments of up to € 5.0 million in the aggregate from sales of neffy in the Recordati Territory (collectively, the “Recordati Rights”). The Company determined that the Recordati Rights at the time of entering into the Recordati Termination Agreement had no alternative future use and therefore recorded the € 3.0 million upfront payment to Recordati as an in-process research and development (“IPR&D”) expense presented within research and development expense. The Recordati Termination Agreement ended the Company’s performance obligations pursuant to the Recordati Agreement and consequently the existing contract liability of $ 3.1 million previously received from Recordati was recorded against IPR&D expense presented within research and development expense in the condensed consolidated statements of operations and comprehensive loss. Accordingly, no revenue has been recognized subsequent to the Recordati Termination Agreement. 25 In June 2024, the EMA regulatory milestone was met and a € 2.0 million ($ 2.1 million in U.S. dollars) expense was recorded in research and development expense in the accompanying condensed consolidated statements of operations and comprehensive loss. In June 2025, the first commercial sale milestone was met for the first commercial sale of neffy in the Recordati Territory. As a result, the Company capitalized the € 5.0 mil lion ($ 5.9 million in U.S. dollars) milestone for the first commercial sale of neffy in the Recordati Territory to intangible assets in the accompanying condensed consolidated balance sheets. The intangible assets will be amortized through cost of goods sold in the condensed consolidated statements of operations and comprehensive loss on a straight-line basis over the estimated life of the intellectual property of 13.5 years. For the three and nine months ended September 30, 2025, the Company recognized $ 0.1 million and $ 0.2 million in royalty expense from the sale of neffy in the Recordati Territory, respectively, as cost of goods sold in the accompanying condensed consolidated statements of operations and comprehensive loss. Pediatrix Agreement In March 2021, the Company entered into a Collaboration and Distribution Agreement (the “Pediatrix Agreement”) with Pediatrix Therapeutics, Inc. (“Pediatrix”) for the exclusive license and sublicensable right to develop, import, manufacture or have manufactured commercial product, file and hold regulatory approvals and commercialize neffy in the People’s Republic of China, Taiwan, Macau, and Hong Kong (the “Pediatrix Territory”). Under the Pediatrix Agreement, Pediatrix is responsible, at its sole cost and expense, for all ongoing development work that is necessary for or otherwise supports regulatory approval in the Pediatrix Territory, including all clinical trials, and activities related to post-approval commitments and commercialization tests. In addition, Pediatrix is responsible for commercialization activities and may elect to assume responsibility for manufacturing and supplying drug product for commercial use. The Company is responsible for the manufacturing of product for clinical studies as well as commercial supply, all at a negotiated transfer price. Either party may terminate the Pediatrix Agreement for certain breaches of the agreement. Unless terminated earlier by either or both parties, the term of the agreement will continue until the later of (i) expiration of the last-to-expire patent in the Pediatrix Territory, (ii) the expiration of all regulatory exclusivities that cover neffy in the Pediatrix Territory, or (iii) 10 years after the first commercial sale of neffy in the Pediatrix Territory. Under the terms of the Pediatrix Agreement, the Company received an upfront payment of $ 3.0 million. In addition, the Company is eligible to receive up to $ 84.0 million in milestone payments upon achievement of certain regulatory and commercial sales milestones. The next eligible milestone is a $ 4.0 million regulatory milestone. Subject to regulatory approval, the Company will earn tiered royalties in the low double-digits on annual net sales in the region and will receive a per unit supply price for the sale of commercial supply to Pediatrix. At the commencement of this collaboration, the Company identified performance obligations related to the delivery of the license for neffy in the Pediatrix Territory and manufacturing of product for clinical studies and commercial supply. The Company concluded that the license was distinct from potential supply obligation. The supply provisions are effectively options granted to Pediatrix to purchase future goods and did not contain a material right. The Company determined the initial transaction price to be the $ 3.0 million upfront payment. Due to the uncertainty in the achievement of all the developmental and commercial milestones, the variable consideration associated with these future milestone payments has been fully constrained and is excluded from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. These estimates will be reassessed at each reporting period. The Company recognized revenue of the full $ 3.0 million during the year ended December 31, 2021. Seqirus Agreement In March 2024, the Company entered into a License and Distribution Agreement (the “Seqirus Agreement”) with Seqirus Pty, Ltd. (“Seqirus”) for the exclusive license to commercialize neffy in Australia and New Zealand (the “Seqirus Territory”). Under the Seqirus Agreement, the Company is responsible for the transfer of know-how, which includes regulatory materials, regulatory data, and commercialization data, and also for the manufacturing of product for commercial supply which is available to Seqirus at a negotiated price. Seqirus is solely responsible for all regulatory and commercialization activities in the Seqirus Territory. Either party may terminate the Seqirus Agreement for certain breaches. Unless terminated earlier by either or both parties, the initial term of the Seqirus Agreement is 15 years from the first commercial sale of neffy in the Seqirus Territory. The Seqirus Agreement will automatically renew for two-year periods unless either party gives a notice to terminate at least 12 months prior to the end of the initial or any renewal term. Under the terms of the Seqirus Agreement, the Company received an upfront payment of $ 0.5 million in May 2024. In addition, the Company was eligible to receive up to $ 4.5 million in milestone payments upon achievement of certain event milestones. Subject to regulatory approval in Australia and New Zealand, the Company will also receive a per unit supply price for the sale of commercial supply to Seqirus. 26 At the commencement of this collaboration, the Company identified one performance obligation which is the delivery of the license for neffy in the Seqirus Territory in combination with the transfer of know-how. The Company determined that the option to purchase the commercial supply does not represent a material right. The Company determined the initial transaction price to be the $ 0.5 million upfront payment. Due to the uncertainty in the achievement of all the regulatory milestones, the variable consideration associated with these future milestone payments has been fully constrained and is excluded from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur. The variable consideration will be reassessed at each reporting period. In May and August 2024, the Company delivered the license for neffy in the Seqirus Territory in combination with the transfer of know-how and achieved the first milestone event, respectively, and the Company received payments of $ 0.5 million and $ 1.5 million, respectively, which were recognized as revenue under collaboration agreements. ALK Collaboration Agreement In November 2024, the Company entered into a Collaboration, License and Distribution Agreement (the “ALK Collaboration Agreement”) with ALK-Abelló A/S (“ALK”). Pursuant to the ALK Collaboration Agreement, the Company granted to ALK a worldwide (other than the United States, Japan, mainland China, Hong Kong, Taiwan, Macau, Australia and New Zealand) (“ALK Territory”), exclusive license under certain of the Company’s patents and know-how to develop, manufacture and commercialize products containing epinephrine administered intranasally, including EURneffy (the trade name for neffy in the European Union) (epinephrine nasal spray) (“Products”), for all human uses, including the immediate or emergency treatment of allergic reactions (including Type I) and anaphylaxis and urticaria, and other future indications as agreed by the parties. If the Company develops any new intranasally administered product that contains epinephrine and files a new drug application in the United States for such product (“New Product”), upon ALK’s request such New Product will be included as a Product under the ALK Collaboration Agreement, subject to ALK bearing the costs of development of such New Product for its licensed territory. Under the ALK Collaboration Agreement, the Company is obligated to transfer to ALK the existing marketing authorizations for the Products in the ALK Territory. The Company is also required to conduct certain development and regulatory activities for Products in support of obtaining further regulatory approval of Products in the ALK Territory and will transfer such regulatory approvals to ALK. ALK is obligated to use commercially reasonable efforts to obtain and maintain regulatory approval for Products through the European Commission and within specified countries within the ALK Territory. Following such approval for a Product in each indication within specified countries within the ALK Territory, ALK is obligated to use commercially reasonable efforts to commercialize such Product in such indication in such countries and to achieve first commercial sale of a Product in certain countries in accordance with a timeline specified in the ALK Collaboration Agreement. Under the ALK Collaboration Agreement, ALK made a $ 145.0 million upfront payment to the Company in November 2024, and the Company earned $ 5.0 million for the first commercial sale of EURneffy in the ALK Territory in June 2025. The Company is eligible to receive additional outstanding regulatory milestone payments of up to $ 15.0 million and sales-based milestone payments of up to $ 300.0 million, provided that $ 55.0 million of such sales-based milestones are contingent upon the Company obtaining regulatory approval for the Product in Canada by a specified time. The Company is entitled to receive tiered royalty payments on net sales in the mid- to high-teens, subject to certain standard reductions and offsets. Royalties will be payable, on a Product-by-Product and country-by-country basis, until the latest of the expiration of the licensed patents covering such Product in such country, 15 years from the first commercial sale of such Product in such country, or expiration of regulatory exclusivity for such Product in such country. The contract will expire upon the expiration of the last-to-expire royalty term for all Products in the ALK Territory, unless terminated earlier. Either the Company or ALK may terminate the ALK Collaboration Agreement in the case of the other party’s insolvency or in the event of an uncured material breach of the other party, except that the Company may not terminate the ALK Collaboration Agreement for ALK’s material breach of its commercial diligence obligations. ALK may terminate the ALK Collaboration Agreement for convenience upon 12 months’ prior written notice or for a safety or regulatory concern. The Company may terminate the ALK Collaboration Agreement in the event ALK makes certain challenges to certain of the Company’s patents. Prior to a change of control and outside of a set period of time after which the Company commences change of control negotiations, the Company may terminate the ALK Collaboration Agreement with respect to all countries in the European Economic Area (“EEA”) upon prior written notice to ALK and payment of a termination fee that is the higher of an agreed mid-nine digit amount and the fair market value of the Products business in the EEA at the time of such termination (the “Repurchase Option”). The Company may also terminate the ALK Collaboration Agreement if ALK commercializes a non-injectable epinephrine product or manufactures such a product in the United States. 27 In connection with the ALK Collaboration Agreement, the Company and ALK also entered into a commercial supply agreement (the “ALK Supply Agreement”) in November 2024, under which the Company will supply ALK’s requirements (and ALK will purchase from the Company its requirements) of Products for five years for a specified supply price, after which ALK may elect to transition to itself or its contract manufacturer the manufacture and supply of Products. The contract term for the ALK Supply Agreement is coterminous with the ALK Collaboration Agreement. Either the Company or ALK may terminate the ALK Supply Agreement in the event of an uncured material breach of the other party. Accounting Assessment The Company concluded that the ALK Collaboration Agreement and the ALK Supply Agreement qualify as a contract with a customer under ASC 606 as one combined arrangement. The Company identified the following performance obligations: (i) exclusive commercialization license in the European Economic Area (the “EEA License”); (ii) exclusive commercialization license in the rest of the ALK Territory (the “ROW License”) and; (iii) five separate development and regulatory services performance obligations. The Company also evaluated the (i) promise to add a New Product and new indications to the ALK Collaboration Agreement, and (ii) the promises under the ALK Supply Agreement, and concluded that these promises did not meet the definition of a performance obligation nor did these promises convey a material right to ALK. The Company determined that the non-refundable upfront payment of $ 145.0 million is the estimated transaction price at contract inception. The outstanding regulatory milestone payments (totaling $ 15.0 million) were fully constrained at contract inception and as of September 30, 2025 as a result of the uncertainty of whether any of the milestones will be achieved. In making the assessment of the constraint utilizing the most likely amount method, the Company considered the stage of development, and the risks associated with the remaining development required to achieve the milestones, as well as whether the achievement of the milestone is outside the control of the Company or ALK. The Company determined that the commercial milestone ($ 5.0 million) and the sales-based milestones and royalties will be recognized on the later of when the related sales occur or when control of the associated license has been transferred, as the Company determined that such sales-based consideration relates predominantly to the licenses granted to ALK. The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and will include regulatory milestones in the transaction price if it is probable that a significant revenue reversal will not occur in future periods. At contract inception, the Company determined the estimated standalone selling prices for each performance obligation in order to allocate the transaction price among the performance obligations. The standalone selling price for the licenses was estimated using the adjusted market assessment approach. Under this method, the Company forecasted future cash flows expected in the ALK Territory, the probability of commercialization success, and a market discount rate. To estimate the standalone selling prices of the development and regulatory services, the Company forecasted its expected costs of satisfying each performance obligation inclusive of an appropriate margin for that service. The Company allocated the total transaction price to each performance obligation on a relative standalone selling price basis and determined whether revenue should be recognized at a point in time or over time. The Company allocated $ 69.4 million to the EEA License performance obligation; $ 73.1 million to the ROW License performance obligation; and $ 2.6 million to the development and regulatory services performance obligations. Revenue should be recognized when, or as, an entity satisfies a performance obligation by transferring a promised good or service to a customer, i.e., when the customer obtains control of the good or service. The licenses granted to ALK are being accounted for as distinct performance obligations. The licenses relate to functional intellectual property for which revenue is recognized at a point in time. In the case of the EEA License, the Company evaluated the impact of the Company’s Repurchase Option, and determined that, as a result of the Company’s ability to repurchase the license, control of the EEA License has not been transferred to ALK under ASC 606. The Company determined that the transaction price allocated to the EEA License should be accounted for as a financing liability, due to the repurchase price being greater than the original selling price of this performance obligation. Control of the EEA License will not be considered transferred to ALK until such time that the Repurchase Option lapses, which under the terms of the ALK Collaboration Agreement, will occur upon the expiration of the contract, or exercise by the Company of the Repurchase Option. In November 2024, the Company recognized the transaction price allocated to the EEA License of $ 69.4 million as a financing liability. In the case of the ROW License, the point in time for recognition of revenue was shortly after the inception of the contract because the customer obtained control of the license and was able to use and benefit from its right to use the intellectual property at that po int. In November 2024, the Company recognized $ 73.1 million in revenue for the transaction price allocated to the ROW License. 28 The development and regulatory services performance obligations under the ALK Collaboration Agreement each represent a separate performance obligation. The development and regulatory services, which are transferred to the customer over time, were provided to ALK from inception of the agreement and are expected to continue through 2028. Revenue related to the development and regulatory services performance obligations was initially recorded as contract liability and is being recognized as services are performed based on the costs incurred through the end of each reporting period, as a percentage of the estimated total costs to be incurred for these performance obligations. In November 2024, the Company recognized $ 0.5 million of revenue related to the development and regulatory services performance obligations. For the three and nine months ended September 30, 2025, the Company reco gnized less than $ 0.1 million and $ 0.3 million of revenue related to the development and regulatory services performance obligations, respectively, which is recorded as revenue under collaboration agreements in the accompanying condensed consolidated statement of operations and comprehensive loss. As of September 30, 2025, the accompanying condensed consolidated balance sheet includes a contract liability of $ 0.5 million classified as current and $ 1.3 million classified as noncurrent associated with these performance obligations and based on the expected period of performance for the development and regulatory services. In June 2025, ALK completed the first commercial sale of EURneffy in the ALK Territory and earned the $ 5.0 million commercial milestone, of which $ 2.6 million was allocated to the ROW License and recognized as revenue under collaboration agreements for the three and six months ended June 30, 2025 in the condensed consolidated statements of operations and comprehensive loss. The remaining $ 2.4 million was allocated to the EEA license and recognized as an increase to the financing liability. Pursuant to the first commercial sale of EURneffy , the Company earned sales-based royalties for product sales in the EEA totaling $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2025, respectively, which was allocated to the EEA license and recognized as an increase to the financing liability. ALK Contract Liability A reconciliation of the contract liability from the ALK Collaboration Agreement is as follows (in thousands): Balance at December 31, 2024 $ 2,089 Revenue recognized under the ALK Collaboration Agreement ( 295 ) Balance at September 30, 2025 $ 1,794 ALK Financing Liability A reconciliation of the financing liability from the ALK Collaboration Agreement is as follows (in thousands): Balance at December 31, 2024 $ 69,383 Commercial milestone allocated to the EEA License 2,435 Sales-based royalties earned in the EEA 226 Balance at September 30, 2025 $ 72,044 ALK Co-Promotion Agreement In May 2025, the Company and ALK-Abelló, Inc. (“ALK U.S.”, an affiliate of ALK) entered into a co-promotion agreement, which was subsequently amended in October 2025 (the “ALK Co-Promotion Agreement”), to co-promote neffy to up to 9,000 specified pediatricians and other prescribers in the U.S. Accordingly, the Company granted ALK U.S. a non-exclusive, royalty-free license to use the neffy trademarks and copyrights and the ARS house marks in the U.S. solely in connection with promoting neffy pursuant to the terms of the ALK Co-Promotion Agreement. Under the ALK Co-Promotion Agreement, ALK U.S. commenced its promotion activities in May 2025 and is obligated to meet specified ramp-up milestones and minimum detail requirements using sales representatives that meet specific qualifications. In addition, during the term of the ALK Co-Promotion Agreement and for 180 days thereafter, ALK U.S. will not market, sell or manufacture any injection product containing epinephrine in the U.S. The Company is the principal of all sales transactions of neffy in the U.S. and, subject to the terms of the ALK Co-Promotion Agreement, continues to have sole responsibility for all U.S. commercialization activities, including marketing, medical affairs, market access, production, distribution, pharmacovigilance, quality and safety. 29 The Company will pay ALK U.S. a base fee to compensate ALK U.S. for its promotion activities. Payments to ALK U.S. for the services performed during the first year of the arrangement will be deferred and paid in the second year of the arrangement. In addition to the base fee, ALK U.S. will be eligible to receive performance-based bonus payments from the Company starting in the second year of the arrangement equal to 30 % of the portion of neffy net sales generated from the ALK U.S.-targeted prescribers in excess of a specified initial market share threshold in year two or a 50 % market share threshold during years three and four of the arrangement. The ALK Co-Promotion Agreement expires on the fourth anniversary of the commencement of promotion activities thereunder. Either party may terminate the ALK Co-Promotion Agreement in the event of an uncured material breach of the other party or for either party’s change of control. The Company may terminate the ALK Co-Promotion Agreement in the case of ALK U.S.’s insolvency, if ALK U.S. fails to meet specified ramp-up timelines, or if ALK U.S. markets, sells or commercializes any non-injection product containing epinephrine in the U.S. After the first six months, the Company may terminate the ALK Co-Promotion Agreement if minimum detail requirements are not met for a consecutive three-month period. After the first year, the Company may terminate the ALK Co-Promotion agreement for any reason or no reason for a fee (as described below). After the first year, ALK U.S. may terminate the ALK Co-Promotion Agreement for any reason or no reason, and the Company may terminate the agreement in the event ALK U.S. restructures its sales force. Upon termination of the ALK Co-Promotion Agreement by the Company for convenience, so long as ALK U.S. has met specified performance thresholds during the term, the Company is obligated to pay ALK U.S. a specified mid-to-low double-digit percentage of the portion of neffy net sales generated from the ALK U.S.-targeted prescribers in excess of a specified mid-quartile market share threshold that increases over time up to 50 % for a specified period after termination, which period decreases in duration the later that the termination occurs. Upon termination of the ALK Co-Promotion Agreement by the Company in connection with a change of control of the Company, the Company is obligated to pay ALK U.S. a one-time mid-seven digit to low eight-digit termination fee in an amount that increases the later that the termination occurs. The Company evaluated the terms of the ALK Co-Promotion Agreement and determined that it is a vendor arrangement with ALK U.S. During the three and nine months ended September 30, 2025, the Company recognized $ 2.4 million and $ 3.8 million, respectively, in ALK-related selling, general, and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive loss, and the corresponding liability was recorded in other accrued liabilities in the accompanying condensed consolidated balance sheet as of September 30, 2025 . 10 . Commitments and Contingencies Leases In October 2021, the Company entered into a 38-month noncancelable office space lease for its previous headquarters location in San Diego, California. Under the terms of the agreement, there is no option to extend the lease , and the Company was subject to additional charges for common area maintenance and other costs. Monthly rental payments due under the lease commenced on December 6, 2021 and escalated through the lease term. The Company prepaid the first month’s rent upon execution of the lease, and the lease agreement provided full rent abatement for the second and third months of the rental term. As there was not an implicit rate within the lease, the discount rate was determined by using a set of peer companies incremental borrowing rates. In January 2025, the Company entered into a lease amendment to its headquarters location lease (the “Headquarters Amendment”), pursuant to which the Company relocated to a new office space located in the same building. In May 2025, the Company took possession of the new office space upon substantial completion of the landlord’s work. As of September 30, 2025 , the remaining lease term of the new office space is 33 months. Monthly lease payments increased when the Company took possession of the new office space and will escalate through the lease term, resulting in an annualized payment of $ 0.6 million. The Company remains subject to additional charges for common area maintenance and other costs. The Company has one option to extend the lease for an additional term of three years , and the monthly payment amounts would be determined by the landlord at the then-prevailing rate. Upon entering into the Headquarters Amendment, the Company remeasured the right-of-use asset and lease liability pertaining to its current headquarters, and as a result recorded an additional $ 0.1 million to both its right-of-use asset and lease liability on its condensed consolidated balance sheet. Upon possession of the new office space, the Company recognized a right-of-use asset and lease liability of $ 1.6 million on its condensed consolidated balance sheet. As there was not an implicit rate within the lease amendment, a discount rate of 8 % was determined using a set of peer companies’ incremental borrowing rates. 30 The following table summarizes supplemental lease information (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Lease expense (1) $ 153 $ 56 $ 372 $ 169 Cash paid for leases $ 141 $ 62 $ 267 $ 184 ______________ (1) Variable lease costs in each of the three and nine months ended September 30, 2025 and 2024 were immaterial. As of September 30, 2025, future minimum non-cancelable operating lease payments are as follows (in thousands): Year Ended December 31, Amount 2025 (remaining three months) $ 300 2026 609 2027 627 2028 318 Total lease payments 1,854 Less imputed interest ( 322 ) Lease liability 1,532 Less lease liability, current portion 583 Lease liability, net of current portion $ 949 Contingencies From time to time, the Company may be involved in various legal proceedings and subject to claims that arise in the ordinary course of business. On July 24, 2023, Aera A/S, an IP consultancy firm in Denmark representing an unidentified opponent, filed a notice of opposition with the European Patent Office (the “EPO”) in respect of EP 3678649 (the “EP ‘649 Patent”), which is a patent directed to a nasal spray formulation of epinephrine, and uses thereof. Oral proceedings took place on October 7, 2025, and the Opposition Division (the “OD”) of the EPO upheld the validity of all claims in the EP ‘649 Patent. The OD is expected to issue a written decision within one to two months, which may be appealed by filing a notice of appeal and grounds of appeal with the EPO’s Boards of Appeal, due within a non-extendable period of two months and four months respectively from the date of the written decision. On March 25, 2025, AptarGroup, Inc. (“AptarGroup”) and Aptar France SAS (collectively, “Aptar”) filed a suit against ARS Pharmaceuticals, Inc. and ARS Pharmaceuticals Operations, Inc. in the United States District Court for the Southern District of New York. Aptar alleges the Company violated the Defend Trade Secrets Act (18 USC § 1836), misappropriated trade secrets under New York state law, and committed various breaches of contract. The complaint was served to the Company, and the Company filed a motion to dismiss on June 12, 2025. Aptar subsequently filed opposition to the motion to dismiss on July 28, 2025. The Company intends to vigorously defend itself in this matter. On September 29, 2025, the Company filed a lawsuit against AptarGroup in the U.S. District Court for the Southern District of California, alleging that AptarGroup violated federal antitrust law in connection with its sale of certain constituent parts of neffy . On August 29, 2025, the Company filed a lawsuit against Lupin, Inc., Lupin Ltd., and Lupin Pharmaceuticals, Inc. (collectively, “Lupin”) in the United States District Court for the District of New Jersey, alleging infringement of U.S. Patent Nos.: 10,576,156, 10,682,414, 11,173,209, 11,191,838, 11,717,571, 11,744,895, 11,918,655, and 12,324,838 and seeking a permanent injunction preventing market entry of a generic product from Lupin prior to the expiry of such patents. The lawsuit follows a Paragraph IV certification notice letter received from Lupin on August 13, 2025, advising the Company that Lupin submitted an Abbreviated New Drug Application to the FDA seeking approval to manufacture and sell a generic version of the Company’s product neffy © 2 mg (epinephrine nasal spray) prior to the expiration of the patents referenced above. Regardless of the outcome, involvement in legal proceedings may have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. The Company cannot predict the outcome of these suits, and failure by the Company to obtain favorable resolutions could have a material adverse effect on its business, results of operations, and financial condition. The Company’s chances of success on the merits of these suits are still uncertain and any possible loss or range of loss cannot be reasonably estimated and as such the Company has not recorded a liability as of September 30, 2025. 31 Except as described above, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or other body pending or, to the knowledge of the Company’s executive officers, threatened against or affecting the Company, the Company’s common stock, any of its subsidiaries or its subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. Unconditional Purchase Obligations and Commitments Unconditional purchase obligations and commitments are defined as agreements to purchase goods or services that are enforceable and legally binding (non-cancelable, or cancelable only in certain circumstances). In the normal course of business, the Company enters into arrangements with suppliers, manufacturers, and various other companies that supply goods or services. These arrangements can include unconditional purchase obligations and commitments. The total amount of unconditional purchase obligations related to the supply of raw materials is $ 56.9 million as of September 30, 2025. Payment obligations by year are as follows: 2025 ( $ 0.2 million), 2026 ( $ 10.4 million), 2027 ( $ 11.8 million), 2028 ( $ 13.8 million), and $ 2.9 million per year thereafter through 2035. During the three and nine months ended September 30, 2025, the Company made $ 0.7 million and $ 8.0 million in payments under these agreements, respectively. During each of the three and nine months ended September 30, 2024 , the Company made $ 0.2 million in payments under these agreements. The total amount of commitments related to the ALK Co-Promotion Agreement is $ 26.8 million as of September 30, 2025. Payment obligations by year are as follows: 2025 ($ 0 ), 2026 ( $ 4.4 million), 2027 ( $ 14.2 million), 2028 ( $ 4.6 million), and 2029 ( $ 3.6 million). No payments were made under this agreement during the three and nine months ended September 30, 2025 and 2024. The total commitment related to a corporate sponsorship agreement with Food Allergy Research and Education, Inc. is $ 7.0 million as of September 30, 2025. Payments by year are as follows: 2025 ( $ 1.0 million), 2026 ( $ 5.0 million) and 2027 ( $ 1.0 million). During the three and nine months ended September 30, 2025, the Company made $ 3.0 million and $ 5.0 million in payments under this agreement, respectively. During each of the three and nine months ended September 30, 2024, the Company made $ 1.0 million in payments under these agreements. The total amount of unconditional purchase obligations related to hosted software license subscription fees is $ 2.2 million as of September 30, 2025. Payments by year are as follows: 2025 ( $ 0.3 million), 2026 ( $ 1.5 million), and 2027 ( $ 0.4 million). During the three and nine months ended September 30, 2025, the Company made $ 0.3 million and $ 1.1 million in payments under this agreement, respectively. During each of the three and nine months ended September 30, 2024, the Company made immaterial payments under these agreements. The amounts above do not represent the entire anticipated spend in the future but represent only those items for which the Company is contractually obligated. For this reason, these amounts do not provide an indication of the Company’s expected future cash outflows related to purchases and commitments. 11 . In-Licensing and Supply License Agreement with Aegis In June 2018, the Company entered into a License Agreement (the “Aegis Agreement”) with Aegis Therapeutics, LLC (“Aegis”), a wholly owned subsidiary of Neurelis, Inc. Under the Aegis Agreement, the Company licensed the exclusive, worldwide, royalty-bearing, sublicensable, rights to certain proprietary Aegis technology, patent rights and know-how to develop and commercialize epinephrine products. The Company utilizes this technology in its sole commercial product, neffy . As consideration for the license, the Company paid an upfront license fee of $ 50,000 , which was recorded in research and development expenses in the condensed consolidated statement of operations. The Company is required to make aggregate milestone payments of up to $ 20.0 million upon achievement of certain regulatory and commercial milestones. Milestone payments under the Aegis Agreement are recorded upon completion of the required events as the triggering events are not considered to be probable until they are achieved. Prior to the FDA approval of neffy in August 2024, regulatory milestone payments were recorded as research and development expenses in the condensed consolidated statement of operations. In 2019 and 2022, milestone payments of $ 0.5 million and $ 1.0 million were recognized upon the achievement of a regulatory milestone and the FDA’s acceptance of the Company’s new drug application submission for neffy , respectively. 32 Since the FDA approval of neffy in August 2024 , regulatory and commercial milestone payments have been capitalized as intangible assets in the accompanying condensed consolidated balance sheets upon achievement. Amortization expense for capitalized milestone payments has been recognized as cost of goods sold in the accompanying condensed consolidated statements of operations and comprehensive loss on a straight-line basis over the estimated life of the intellectual property. In August and September 2024, milestone payments of $ 2.5 million and $ 5.0 million were recognized for achieving FDA approval of neffy and the first commercial sale of neffy, respectively, and were paid in September 2024 and October 2024, respectively. In September 2025, a milestone payment of $ 2.0 million milestone was recognized for achieving certain annual net product sales of neffy , and the corresponding liability was recorded in accounts payable and accrued liabilities. The next milestone payment of $ 9.0 million is due upon the achievement of certain annual net product sales. The Company also pays royalties based on a mid-single-digit percentage of net product sales on its or its sublicensees’ net sales of the Licensed Products (as defined in the Aegis Agreement) on a product-by-product basis. Royalties are recorded to cost of goods sold in the period the related product revenue is recognized. In November 2024, OrbiMed Advisors LLC (“OrbiMed”) entered into an agreement with Aegis, to purchase the rights, royalty interests, and related sales milestone payments on net product sales of neffy . The Company will make all future payments under the Aegis Agreement to an affiliate of OrbiMed. As described in Note 15 – Related Party Transactions , a member of the Company’s Board of Directors is a General Partner at OrbiMed. The Company is responsible for reimbursing Aegis for patent costs incurred in connection with prosecuting and maintaining patent rights that are specific to epinephrine or epinephrine products. No expenses were recognized in connection with legal patent fees for each of the three and nine months ended September 30, 2025 and 2024. The Company may terminate the Aegis Agreement with 30 days writt en notice or either party may terminate the Aegis Agreement for certain breaches of the Aegis Agreement. Unless terminated earlier by either or both parties, the term of the Aegis Agreement will continue until the final expiration of all royalty obligations under the Aegis Agreement. In conjunction with the Aegis Agreement, the Company also entered into a supply agreement (the “Aegis Supply Agreement”) with Aegis that allows the Company to purchase materials for preclinical, development and commercial use at predetermined prices. The Company may elect to have Aegis supply minimum quantities but there are no minimum or maximum purchase obligations under the Aegis Supply Agreement unless this election is made. The parties may terminate the Aegis Supply Agreement at any time by mutual agreement. In addition, the parties may terminate the Aegis Supply Agreement in the event of certain breaches of the Aegis Supply Agreement or upon the earlier of the expiration or termination of the Aegis Agreement or June 2028. The Aegis Supply Agreement term may be extended by mutual written agreement. Under the Aegis Supply Agreement, the Company made $ 0.3 million in payments in each of the three and nine months ended September 30, 2025 , and the Company made no payments and $ 0.2 million in payments during the three and nine months ended September 30, 2024, respectively. Manufacturing Agreement with Renaissance In September 2020, the Company entered into a manufacturing agreement with Renaissance Lakewood, LLC (“Renaissance”), which was subsequently amended in July 2023, September 2024, and July 2025 (the “Renaissance Agreement”). Pursuant to the Renaissance Agreement, Renaissance agreed to manufacture for, and provide to the Company, neffy nasal unit dose sprays (“Renaissance Products”). The Company is obligated to provide Renaissance with certain supplies to manufacture the Renaissance Products and to purchase from Renaissance a mid-double-digit percentage of the Company’s annual aggregate Renaissance Product requirements in the EU, and a high double-digit percentage of the Company’s annual aggregate Renaissance Product requirements in the U.S. The Renaissance Agreement contains conventional commercial pharmaceutical manufacturing provisions including certain minimum purchase amounts to be determined in the future based on forecast needs and minimum batch size projections. The Company may also request Renaissance to perform certain services related to the Renaissance Product, for which the Company will pay reasonable compensation to Renaissance. 33 Pursuant to the amendment in September 2024, the amended initial term of the Renaissance Agreement commenced on September 17, 2024, and will terminate (a) for Renaissance Product designated for commercial sale in the U.S., on December 31 immediately following the fifth anniversary of the initial U.S. launch date (“U.S. Initial Term”), and (b) for Renaissance Product designated for commercial sale in the EU, on December 31 immediately following the fifth anniversary of the initial EU launch date (“EU Initial Term”), in each case unless earlier terminated by one of the parties. The U.S. Initial Term and EU Initial Term automatically renew for successive two-year terms (“Renewal Term”). Either party may elect not to renew the U.S. Renewal Term and/or the EU Renewal Term by providing the requisite prior notice to the other party, with the initial terms automatically renewing for successive two-year terms, unless either party gives notice pursuant to the Renaissance Agreement. Either party may terminate the Renaissance Agreement (1) for uncured material breach of the other party, (2) upon notice for insolvency-related events of the other party that are not discharged within a defined time period, (3) on a product-by-product basis if the manufacture, distribution or sale would materially contravene any applicable law, (4) by providing the requisite notice if (a) the authorization and approval to distribute or sell Renaissance Product in the U.S. is not granted on or before a specified date, (b) the authorization and approval representing more than a certain number of units of Renaissance Product sold in the U.S. during the last calendar year is withdrawn by the FDA, or (c) the Company decided in its sole discretion to cease commercializing the Renaissance Product in the U.S., (5) in the case of a force majeure event that continues for six months or more, or (6) a violation by the other party of trade control or anti-corruption laws. Supply Agreement with Ompi In October 2024, the Company entered into a supply agreement (the “Ompi Supply Agreement”) with Nuova Ompi S.r.l. (“Ompi”), pursuant to which Ompi has agreed to supply glass microvials to support the Company’s manufacture and commercialization of neffy . Under the Ompi Supply Agreement, the Company has committed to purchase, and Ompi has committed to supply, specified annual minimum quantities of glass microvials, which may be increased with prior notice by the Company or through the rolling forecast process, subject to a specified annual cap. Ompi is obligated to establish the relevant manufacturing force, assets and capabilities needed to comply with its supply obligations. In December 2024, as partial consideration for the supply arrangement, the Company made an upfront payment of € 3.0 million (approximately $ 3.2 million in U.S. dollars) to Ompi. The upfront payment was capitalized as an other asset on the condensed consolidated balance sheets and will be amortized through cost of goods sold in the condensed consolidated statement of operations and comprehensive loss on a straight-line basis over the term of the Ompi Supply Agreement. The supply price for the glass microvials is specified in the Ompi Supply Agreement, subject to an annual adjustment that is capped at a specified percentage except in the case of material and extraordinary increase in Ompi’s cost of manufacturing the glass microvials. The Ompi Supply Agreement will expire on December 31, 2035 , and may be terminated (i) upon the parties’ mutual written consent, (ii) by the Company for any reasonable business reasons (in which case the termination will become effective at the end of the following calendar year), or (iii) by the non-breaching party if the other party is in material breach of the Ompi Supply Agreement and fails to cure such breach within 90 days after receipt of notice thereof from the non-breaching party. 12 . Common Stock and Stockholders’ Equity Authorized Shares The Company’s current Amended and Restated Certificate of Incorporation authorizes 200,000,000 shares of common stock, par value $ 0.0001 per share, and 10,000,000 shares of preferred stock, par value $ 0.0001 per share. Common Stock Reserved for Future Issuance Common stock reserved for future issuance consisted of the following: September 30, 2025 December 31, 2024 Common stock options granted and outstanding 17,106,592 15,161,180 Restricted stock units granted and outstanding 1,382 2,763 Common stock reserved for future awards or option grants 8,081,362 5,905,773 Common stock reserved for future employee stock purchase plan issuances 2,811,182 2,223,100 Warrants to purchase common stock 45,456 45,456 Total 28,045,974 23,338,272 34 Equity Offerings In January 2025, the Company filed an automatic shelf registration statement on Form S-3ASR with the Securities and Exchange Commission which became effective upon filing (the “Shelf Registration Statement”). The Shelf Registration Statement allows the Company, from time to time, to offer and sell any combination of shares of the Company’s common stock and preferred stock, various series of debt securities, and/or warrants to purchase any of such securities, either individually or in combination with other securities, in one or more offerings. The Company simultaneously entered into a Controlled Equity Offering SM sales agreement (the “Equity Sales Agreement”) wit h Cantor Fitzgerald & Co. (“Cantor”) to allow the Company to offer, sell and issue shares of the Company’s common stock from time to time through Cantor acting as sales agent and up to a maximum aggregate offering price of $ 200.0 million. As of September 30, 2025 , no securities have been sold pursuant to the Shelf Registration Statement or Equity Sales Agreement. 13 . Stock-Based Compensation Stock-based compensation expense recognized for all equity awards has been reported in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Research and development expense $ 664 $ 734 $ 1,991 $ 2,558 Selling, general and administrative expense 5,025 2,857 14,367 7,713 Total $ 5,689 $ 3,591 $ 16,358 $ 10,271 During the three and nine months ended September 30, 2025, $ 0.3 million and $ 0.8 million of stock compensation expense was capitalized into inventory, respectively. During each of the three and nine months ended September 30, 2024, $ 0.1 million of stock compensation expense was capitalized into inventory. As of September 30, 2025, the total unrecognized stock-based compensation expense related to outstanding employee options was $ 48.3 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.4 years. As of September 30, 2025 and December 31, 2024 , there were 1,382 and 2,763 restricted stock units outstanding, respectively. Equity Incentive Plans In September 2018, ARS Pharma adopted the 2018 Equity Incentive Plan. As a result of the Merger, on November 8, 2022 ARS Pharma assumed Silverback’s 2016 and 2020 Equity Incentive Plans, and Employee Stock Purchase Plan (“ESPP”). There were 111,918 shares and 43,679 shares of common stock purchased under the ESPP during the nine months ended September 30, 2025 and 2024 , respectively. As of September 30, 2025, 25,737,116 shares were authorized under the 2016 and 2020 Equity Incentive Plans, of which 7,784,017 shares were available for future grant, and 12,967,489 shares were outstanding. As of September 30, 2025 , 6,634,333 shares were authorized under the 2018 Equity Incentive Plan, of which 297,345 shares were available for future grant, and 4,140,485 shares were outstanding. The Company does not intend to grant future stock options or other equity awards under the 2016 or 2018 Equity Incentive Plans. Stock Options Stock options granted under the Company’s equity incentive plans expire no later than 10 years from the date of grant and generally vest over a four-year period, with vesting either occurring at a rate of 25 % at the end of the first year and thereafter in 36 equal monthly installments or on a monthly basis. In the case of awards granted to the Company’s non-employee board members, vesting generally occurs on a monthly basis over three years or in full on an annual basis. The Company issues new shares of common stock upon the exercise of stock options. 35 A summary of the Company’s stock option activity for the nine months ended September 30, 2025 is as follows: Weighted- Shares Weighted- Average Aggregate Subject to Average Remaining Intrinsic Options Exercise Contractual Value Outstanding Price Life (Years) (in thousands) Outstanding at December 31, 2024 15,161,180 $ 6.63 Granted 3,295,750 $ 11.67 Exercised ( 776,707 ) $ 3.92 Forfeited ( 573,631 ) $ 11.13 Outstanding at September 30, 2025 17,106,592 $ 7.58 7.4 $ 59,824 Exercisable at September 30, 2025 10,310,111 $ 6.12 6.6 $ 50,019 The exercisable shares subject to options outstanding at September 30, 2025 in the table above include vested and early exercisable awards. The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the Company’s common stock for all options that were in-the-money at September 30, 2025. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2025 and 2024 was $ 8.0 million and $ 5.5 million, respectively. The weighted-average grant date fair value per share of option grants for the nine months ended September 30, 2025 and 2024 was $ 8.69 and $ 5.57 , respectively. The total fair value of shares vested during the nine months ended September 30, 2025 and 2024 was $ 19.4 million and $ 12.0 million, respectively. The fair value of stock options granted was estimated using a Black-Scholes option-pricing model (“Black-Scholes”) with the following weighted-average assumptions: Nine Months Ended September 30, 2025 2024 Expected term (in years) 6.0 6.0 Expected volatility 86.6 % 93.9 % Risk-free interest rate 4.3 % 3.9 % Expected dividend yield — — The fair value of stock options was determined using the Black-Scholes assumptions below. Each of these inputs is subjective and generally requires significant judgment. Fair Value of Common Stock . The fair market value of the Company’s common stock is based on its closing price as reported on the date of grant on the primary stock exchange on which the Company’s common stock is traded. Expected Term. The expected term represents the period that the options granted are expected to be outstanding. The expected term of stock options issued is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company has concluded that its stock option exercise history does not provide a reasonable basis upon which to estimate expected term. Expected Volatility. Given the Company’s limited historical stock price volatility data, the Company derived the expected volatility from the average historical volatilities over a period approximately equal to the expected term of comparable publicly traded companies within its peer group that were deemed to be representative of future stock price trends as the Company has limited trading history for its common stock. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Risk-free Interest Rate. The risk-free interest rate is based on the U.S. Treasury rate, with maturities similar to the expected term of the stock options. Expected Dividend Yield. The Company has never paid dividends on its common stock and does not anticipate paying any dividends in the foreseeable future. Therefore, the Company uses an expected dividend yield of zero. 36 14 . Employee Benefit Plans In June 2022, the Company adopted a retirement plan, which is qualified under section 401(k) of the Internal Revenue Code of 1986, as amended, for the Company’s U.S. employees. The plan allows eligible employees to defer, at the employee’s discretion, pretax compensation up t o the Internal Revenue Service (the “IRS”) annual limits. The Company matches up to 5 % of an employee’s pay that they contribute to the plan, subject to IRS limitations. Expenses associated with the Company’s matching contribution totaled $ 0.4 million and $ 1.2 million for the three and nine months ended September 30, 2025, respectively, and $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2024 , respectively. 15 . Related-Party Transactions In September 2015, the Company entered into a consulting agreement, superseded in July 2022, for regulatory and development services with Pacific-Link Regulatory Consulting, Inc., an entity owned by the President/Chief Executive Officer/director and his spouse, the Chief Medical Officer of the Company. The Company incurred consulting expenses related to this agreement totaling $ 0.6 million and $ 1.9 million for the three and nine months ended September 30, 2025, respectively, and $ 0.4 million and $ 1.7 million for the three and nine months ended September 30, 2024, respectively. In September 2018, the Company entered into a consulting agreement with Marlinspike Group, LLC (“Marlinspike Group”) to provide management, business consulting services and business development support. The managing member of Marlinspike Group is the Chair of the Board of Directors of the Company and one of its stockholders. The Company incurred expenses related to this agreement of $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2025 and 2024, respectively. In April 2021, the Company entered into a consulting agreement, as amended in April 2022, with a member of the Board of Directors of the Company for general advice and assistance with the development of neffy and any future product candidates. As compensation for the consulting services the Company granted the member of the Board of Directors 590,950 stock options that vest over a four-ye ar period. The Company incurred zero and less than $ 0.1 million in stock-based compensation expense related to this agreement for the three and nine months ended September 30, 2025 , respectively, and less than $ 0.1 million and $ 0.1 million in stock-based compensation expense related to this agreement for the three and nine months ended September 30, 2024, respectively. As described in Note 8 – Term Loans , in September 2025, the Company entered into the Credit Agreement with the Administrative Agent and a Lender, whom are affiliates of RA Capital. The general partner of RA Capital is RA Capital Management GP, LLC, of which a member of the Board of Directors of the Company is a controlling person. RA Capital Healthcare Fund, L.P. and RA Capital Nexus Fund II, L.P. collectively hold in excess of 10 % of the Company’s outstanding common stock and are currently the Company’s largest stockholder. RA Capital serves as the investment adviser for each of RA Capital Healthcare Fund, L.P. and RA Capital Nexus Fund II, L.P. As described in Note 11 – In-Licensing and Supply , the Company is required to make milestone payments to Aegis upon achievement of certain regulatory and commercial milestones, and royalty payments to Aegis based on net product sales of neffy . In November 2024, OrbiMed entered into an agreement with Aegis to purchase the rights, royalty interests, and related sales milestone payments on net product sales of neffy . A member of the Company’s Board of Directors is a General Partner at OrbiMed. The Company incurred $ 2.0 million and $ 3.4 million in royalty expense payable to an affiliate of OrbiMed during the three and nine months ended September 30, 2025 , respectively, and $ 2.0 million in sales-based milestone payments to an affiliate of OrbiMed in each of the three and nine months ended September 30, 2025 . 16 . Segment Information The Company reports segment information using the management approach and views its operations and manages its business as a single operating segment. The Company’s Chief Operating Decision Maker (“CODM”), who is the Chief Executive Officer , allocates resources and evaluates the performance of the operating segment based on historical and projected product sales, segment operating expenses, and condensed consolidated net loss, as reflected in the accompanying condensed consolidated statements of operations and comprehensive loss, which is the segment measure of loss. The segment reports that are provided to the CODM are tracked against the Company’s internally budgeted expenses. The segment operating expense categories consist primarily of the Company’s functional departments: Clinical, Development, Medical Affairs, Sales and Marketing, and General and Administrative. The CODM does not review assets when evaluating the operating segment’s performance; therefore, this information is not presented. 37 Segment reporting for the three and nine months ended September 30, 2025 and 2024 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue: Product revenue, net $ 31,300 $ 568 $ 51,863 $ 568 Revenue under collaboration agreements 55 1,500 2,859 2,000 Revenue under supply agreements 1,146 — 1,469 — Total revenue 32,501 2,068 56,191 2,568 Segment operating expenses: Cost of goods sold 8,191 112 14,269 112 Clinical 1,457 969 3,911 5,011 Development 690 2,755 3,942 6,854 Medical affairs 1,086 629 3,104 1,383 Sales and marketing 62,063 9,647 129,745 13,792 General and administrative 6,150 6,161 21,987 15,356 Stock-based compensation 5,689 3,591 16,358 10,271 Other 367 ( 48 ) 858 69 Total segment operating expenses 85,693 23,816 194,174 52,848 Loss from operations ( 53,192 ) ( 21,748 ) ( 137,983 ) ( 50,280 ) Other income, net 2,041 2,620 8,009 8,344 Net loss $ ( 51,151 ) $ ( 19,128 ) $ ( 129,974 ) $ ( 41,936 ) 38 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis together with our unaudited condensed consolidated financial statements and related notes thereto included in “Item 1. Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q and the audited financial statements and related notes thereto as of and for the year ended December 31, 2024 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), on March 20, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. For a complete discussion of forward-looking statements, see the section above entitled “Forward Looking Statements.” As a result of many factors, including those factors set forth in the under the caption “Item 1A. Risk Factors” of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the “Risk Factors” section of this Quarterly Report to gain an understanding of the various factors that could cause actual results to differ materially from our forward-looking statements. Overview We are a biopharmaceutical company focused on the commercialization and development of neffy (currently identified in the European Union (“EU”) by the tradename EURneffy ) for the needle-free intranasal delivery of epinephrine for the emergency treatment of Type I allergic reactions, including anaphylaxis. neffy is the first and only U.S. Food and Drug Administration (“FDA”) and European Commission-approved needle-free epinephrine product, and the first new delivery method for epinephrine in more than 35 years. neffy is a proprietary composition of epinephrine with an innovative absorption enhancer called Intravail, which allows neffy to safely provide intranasal delivery of epinephrine at a low dose within the exposures of approved injectable products across a range of dosing conditions (including repeat dosing and allergen challenge). We believe the market opportunity for neffy in the United States alone is significant. At the current list price for a two-pack of neffy and our target total gross-to-net yield, the estimated 6.5 million patients currently prescribed an epinephrine autoinjector in the United States represents an initial addressable market opportunity of approximately $3.5 billion in annual net sales, while the remaining 13.5 million diagnosed patients that have not been prescribed an epinephrine product represent an additional addressable market opportunity of approximately $7.0 billion in annual net sales. We believe neffy ’s “no needle, no injection” approach addresses a significant unmet need in the use of epinephrine, which, except for neffy , is currently approved only in injectable formulations for the emergency treatment of Type I allergic reactions. There are approximately 40 million people in the United States who experience Type I allergic reactions. Of this group, approximately 20 million people have been diagnosed and experienced severe Type I allergic reactions that may lead to anaphylaxis, and approximately 6.5 million patients were prescribed an epinephrine autoinjector. However (in 2023, for example), only 3.2 million patients filled their active epinephrine autoinjector prescription, and of those, only half consistently carry their prescribed autoinjector with them due to the many drawbacks of these devices. Those estimated 3.2 million patients who currently fill their active epinephrine autoinjector prescription represent approximately $2.0 billion in annual U.S. net sales at neffy ’s target total gross-to-net yield based on trailing 12-month epinephrine device unit volume as of September 2025. The use of needles in epinephrine autoinjectors can result in patient and caregiver injury as well as hesitation and delays in administration due principally to apprehension and pain of needles, allowing the allergic reaction to progress in severity leading to symptoms that seriously impact patient quality of life, to potential need for emergency services and/or hospitalizations, and to life-threatening symptoms or events. Moreover, intra-muscular injections are subject to dosing errors and risk of accidental blood vessel injections, which can cause a significant spike in the intravascular delivery of epinephrine potentially leading to serious cardiovascular complications or events. In aggregate, we estimate that up to 90% of patients prescribed an epinephrine device are not achieving an optimal treatment outcome today. We believe neffy’s and our intranasal epinephrine technology product candidates’ design, particularly the compact size and “no needle, no injection” delivery, eliminates needle-related apprehension and pain, improves portability and ease of use, is highly reliable, and will increase prescriptions for epinephrine, making it more likely that patients and caregivers will administer epinephrine sooner, achieve more rapid symptom relief, and prevent the allergic reaction from progressing to a level of severity that could lead to hospitalization or even death. Data from our studies of neffy and our intranasal epinephrine technology product candidates demonstrated nasally delivered epinephrine reached blood levels comparable to those of already approved epinephrine injectable products across single dosing, repeat dosing, self-administration or allergen challenge conditions, and produced statistically significant responses compared to injection on pharmacodynamic surrogates for efficacy even one minute after dosing with neffy and our intranasal epinephrine technology product candidates. 39 On August 9, 2024, the FDA approved neffy 2 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in adults and children who weigh 30 kg or greater. As a result, we initiated commercial launch of neffy 2 mg in the United States, with product becoming available for shipment on September 23, 2024. This commercialization effort currently includes a direct sales force of approximately 107 individuals targeting high-volume epinephrine prescribers that is supported by branded direct-to-consumer marketing, disease awareness campaigns with advocacy groups and non-personal promotion including medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences. On March 5, 2025, the FDA approved neffy 1 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in patients who are four years of age and older and weigh 15 kg to less than 30 kg. As a result, we initiated commercial launch of neffy 1 mg in the United States, with product becoming available on May 7, 2025. neffy U.S. Commercial Launch Initiated in September 2024 Our launch strategy for neffy in the United States involves direct outreach to high-volume prescribers of epinephrine accounting for approximately 55% of prescriptions in the last year through an efficient sales force. As of September 30, 2025, our sales force is comprised of approximately 107 ARS Pharma employees, who serve as sales reps, area sales managers, and national sales directors that began field operations as early as October 2024, as well as 10 virtual sales reps, and approximately 70 sales reps via our co-promotion partner, ALK-Abelló, Inc. (“ALK U.S.”, an affiliate of ALK-Abelló A/S (“ALK”)), who began field operations in early June 2025 and will target up to 9,000 specified pediatricians and other prescribers in the U.S. Our launch strategy is also supported by: active participation since November 2024 of approximately 2,800 healthcare professionals in our neffy experience program that allows healthcare professionals to use neffy firsthand as rescue therapy for anaphylaxis during in-clinic allergen challenge as well as for the ongoing collection of real-world evidence that supports neffy’s clinical equivalence to injection; extensive non-personal promotion including medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences; engagement and contracting with payors to obtain timely coverage with favorable gross-to-net discounting; our neffyconnect program that provides support to physicians and patients including our $25 co-pay savings card, $199 cash price and patient assistance programs; our neffy inSchools programs, where more than 6,500 schools to date have opted into receiving two cartons of neffy at no cost with accompanying school nurse education about neffy ; partnerships with patient advocacy organizations including disease awareness campaigns; and multi-channel branded direct to consumer advertising including connected television, point of care, endemic and programmatic display, social media, and paid search that initiated on mid-May 2025, as well as linear television advertising that started in late June 2025. To reduce the time burden of an in-person healthcare provider visit, we also launched a new commercial initiative in November 2025 called “Get neffy on Us” that offers patients a free visit with a virtual prescriber, along with a $0 co-pay for eligible patients with commercial insurance. We also initiated a U.S. post-marketing registry-based study for neffy for the treatment of anaphylaxis in oral food challenge or allergen immunotherapy clinics in the second quarter of 2025, which is ongoing. 40 On August 22, 2024, the European Commission granted marketing authorization in the EU for EURneffy (the trade name for neffy 2 mg in the EU), for the emergency treatment of allergic reactions (anaphylaxis), in adults and children who weigh 30 kg or greater. The 1 mg dose of EURneffy for children who weigh 15 to 30 kg is currently under review by the European Medicines Agency (“EMA”), and a regulatory decision is expected in the first half of 2026. Through our collaboration with ALK (discussed below), EURneffy was launched in Germany in June 2025 and in the United Kingdom (“U.K.”) in October 2025. We received approval of neffy 2 mg and 1 mg doses in Japan in September 2025, with commercial launch by Alfresa, our partner in Japan, expected to start in the fourth quarter of 2025. Regulatory review of neffy is ongoing in Canada and China with filings submitted by our partners, or by ARS Pharma on behalf of our partners, during the fourth quarter of 2024. neffy has been approved or is under regulatory review in countries representing approximately 98% of the current global epinephrine autoinjector sales. Regulatory decisions are anticipated in the first quarter of 2026 in Canada, with launch expected to start in the first half of 2026, and in the first half of 2026 in China. In September 2025, we reported survey results of anaphylaxis treatment outcomes in the neffy experience program, which provides 1 mg and 2 mg doses of neffy to allergists for in-office use during an anaphylaxis event during oral food challenges or allergen immunotherapy. These results showed that approximately 90% of patients experiencing anaphylaxis symptoms were effectively treated with a single dose of neffy , which is indistinguishable from that historically reported for epinephrine injection. The results were presented as an oral presentation at the American College of Allergy and Asthma Immunology in early November 2025. We reported positive topline results demonstrating statistically significant and clinically meaningful improvements in treatment-refractory chronic urticaria patients at the American Academy of Allergy and Immunology medical conference in February 2024. In the second quarter of 2025, we initiated a Phase 2b randomized, placebo-controlled outpatient clinical trial involving chronic spontaneous urticaria patients, on chronic treatment regimens, who still experience flares or exacerbations. Topline data from this clinical trial is anticipated in mid-2026, followed by the potential initiation of a single pivotal efficacy study. Since our inception in 2015 as ARS Pharmaceuticals, Inc., we have devoted substantially all of our efforts to developing intellectual property, conducting product development and clinical trials, organizing and staffing, business planning, raising capital, building infrastructure, pre-commercial and commercial activities, and providing general and administrative support for these operations. We have funded our operations primarily with proceeds from the Merger (see Note 1 – Nature of Business to the notes to the condensed consolidated financial statements included in this report), private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, debt, and net product sales. As of September 30, 2025, we had cash, cash equivalents, and short-term investments of $288.2 million. We have incurred net losses in most years since our inception. Net losses for the nine months ended September 30, 2025 and 2024 were $130.0 million and $41.9 million, respectively. As of September 30, 2025, we had an accumulated deficit of $253.3 million. Until we consistently generate positive net income, if ever, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other development activities, the cost for regulatory filings, expenses for commercial activities to establish, maintain and enhance sales, marketing and distribution capabilities for neffy , the timing and volume of our product sales, and our ability to earn potential regulatory and commercial milestones under our license and collaboration arrangements. Until such time, if ever, that we can generate substantial product revenue, we may finance our operations through our existing cash, cash equivalents, short-term investments, equity offerings, debt financings and other capital sources which may include collaborations, strategic alliances, marketing, distribution or licensing arrangements or other arrangements with third parties. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. In addition, any future debt agreements may limit our ability to enter into certain debt financings without the consent of the lenders thereunder. On September 29, 2025 we entered into a Credit Agreement (the “Credit Agreement”) with RA Capital Agency Services, LLC (as the “Administrative Agent”) and affiliates of OMERS Administration Corporation and RA Capital Management, L.P. as lenders (the “Lenders”), which provides for an aggregate principal amount of up to $250.0 million of term loans from the Lenders to us (the “Credit Facility”). Subject to limited exceptions, we are prohibited from incurring additional indebtedness and entering into certain strategic and licensing transactions without the prior written consent of the Lenders pursuant to the Credit Agreement. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and may require us to delay or reduce our marketing and sales efforts, or delay, reduce or terminate our research and development programs or other operations, or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves. We do not own or operate manufacturing facilities. We currently rely on third-party manufacturers and suppliers for neffy and our intranasal epinephrine technology product candidates, and we expect to continue to do so to meet our nonclinical, clinical and commercial activities. Our third-party manufacturers are required to manufacture our product under cGMP requirements and other applicable laws and regulations. 41 ALK Collaboration Agreement In November 2024, the Company entered into a collaboration, license and distribution agreement (the “ALK Collaboration Agreement”) with ALK. Pursuant to the ALK Collaboration Agreement, the Company granted to ALK a worldwide (other than the United States, Japan, mainland China, Hong Kong, Taiwan, Macau, Australia and New Zealand) (“ALK Territory”), exclusive license under certain of the Company’s patents and know-how to develop, manufacture and commercialize products containing epinephrine administered intranasally, including EURneffy (the tradename for neffy 2 mg in the European Union) (“Products”), for all human uses, including the immediate or emergency treatment of allergic reactions (including Type I) and anaphylaxis and urticaria, and other future indications as agreed by the parties. If the Company develops any new intranasally administered product that contains epinephrine and files a new drug application in the United States for such product (“New Product”), upon ALK’s request such New Product will be included as a Product under the ALK Collaboration Agreement, subject to ALK bearing the costs of development of such New Product for its licensed territory. Under the ALK Collaboration Agreement, we are obligated to transfer to ALK the existing marketing authorizations for the Products in the ALK Territory. We are also required to conduct certain development and regulatory activities for Products in support of obtaining further regulatory approval of Products in the ALK Territory and will transfer such regulatory approvals to ALK. ALK is obligated to use commercially reasonable efforts to obtain and maintain regulatory approval for Products through the European Commission and within specified countries within the ALK Territory. Following such approval for a Product in each indication within specified countries within the ALK Territory, ALK is obligated to use commercially reasonable efforts to commercialize such Product in such indication in such countries and to achieve first commercial sale of a Product in certain countries in accordance with a timeline specified in the ALK Collaboration Agreement. Under the ALK Collaboration Agreement, ALK made an upfront payment to us of $145.0 million in November 2024, and we earned $5.0 million for the first commercial sale of EURneffy in the ALK Territory in June 2025. We are eligible to receive additional outstanding regulatory and commercialization milestone payments of up to $15.0 million and sales-based milestone payments of up to $300.0 million, provided that $55.0 million of such sales-based milestones are contingent upon us obtaining regulatory approval for the Product in Canada by a specified time. We are entitled to receive tiered royalty payments on net sales in the mid- to high-teens, subject to certain standard reductions and offsets. Royalties will be payable, on a Product-by-Product and country-by-country basis, until the latest of the expiration of the licensed patents covering such Product in such country, 15 years from the first commercial sale of such Product in such country, or expiration of regulatory exclusivity for such Product in such country. The contract will expire upon the expiration of the last-to-expire royalty term for all Products in the ALK Territory, unless terminated earlier. Either we or ALK may terminate the ALK Collaboration Agreement in the case of the other party’s insolvency or in the event of an uncured material breach of the other party, except that we may not terminate the ALK Collaboration Agreement for ALK’s material breach of its commercial diligence obligations. ALK may terminate the ALK Collaboration Agreement for convenience upon 12 months’ prior written notice or for a safety or regulatory concern. We may terminate the ALK Collaboration Agreement in the event ALK makes certain challenges to certain of our patents. Prior to a change of control and outside of a set period of time after which we commence change of control negotiations, we may terminate the ALK Collaboration Agreement with respect to all countries in the European Economic Area (“EEA”) upon prior written notice to ALK and payment of a termination fee that is the higher of an agreed mid-nine digit amount and the fair market value of the Products business in the EEA at the time of such termination. Except with respect to ALK’s activities pursuant to and in accordance with the ALK Co-Promotion Agreement (as defined below), we may also terminate the ALK Collaboration Agreement if ALK commercializes a non-injectable epinephrine product or manufactures such a product in the United States. ALK Supply Agreement In November 2024, in connection with the ALK Collaboration Agreement, ARS and ALK also entered into a commercial supply agreement (the “ALK Supply Agreement”), under which ARS will supply ALK’s requirements (and ALK will purchase from ARS its requirements) of Products for five years for a specified supply price, after which ALK may elect to transition to itself or its contract manufacturer the manufacture and supply of Products. Either the Company or ALK may terminate the ALK Supply Agreement in the event of an uncured material breach of the other party. ALK Co-Promotion Agreement In May 2025, the Company and ALK U.S. entered into a co-promotion agreement, which was subsequently amended in October 2025 (the “ALK Co-Promotion Agreement”), to co-promote neffy to up to 9,000 specified pediatricians and other prescribers in the U.S. Accordingly, we granted ALK U.S. a non-exclusive, royalty-free license to use the neffy trademarks and copyrights and the ARS house marks in the U.S. solely in connection with promoting neffy pursuant to the terms of the ALK Co-Promotion Agreement. 42 Under the ALK Co-Promotion Agreement, ALK U.S. commenced its promotion activities in May 2025 and is obligated to meet specified ramp-up milestones and minimum detail requirements using sales representatives that meet specific qualifications. In addition, during the term of the ALK Co-Promotion Agreement and for 180 days thereafter, ALK U.S. will not market, sell or manufacture any injection product containing epinephrine in the U.S. We record all sales of neffy in the U.S. and, subject to the terms of the ALK Co-Promotion Agreement, continue to have sole responsibility for all U.S. commercialization activities, including marketing, medical affairs, market access, production, distribution, pharmacovigilance, quality and safety. We will pay ALK U.S. a base fee to compensate ALK U.S. for its promotion activities. Payments for the first year of the partnership will be deferred and paid in the second year of the partnership. In addition to the base fee, ALK U.S. will be eligible to receive performance-based bonus payments from us starting in the second year of the partnership equal to 30% of the portion of neffy net sales generated from the ALK U.S.-targeted prescribers in excess of a specified initial market share threshold in year two or a 50% market share threshold during years three and four of the partnership. The ALK Co-Promotion Agreement expires on the fourth anniversary of the commencement of promotion activities thereunder. Either party may terminate the ALK Co-Promotion Agreement in the event of an uncured material breach of the other party or for either party’s change of control. We may terminate the ALK Co-Promotion Agreement in the case of ALK U.S.’s insolvency, if ALK U.S. fails to meet specified ramp-up timelines, or if ALK U.S. markets, sells or commercializes any non-injection product containing epinephrine in the U.S. After the first six months, we may terminate the ALK Co-Promotion Agreement if minimum detail requirements are not met for a consecutive three-month period. After the first year, we may terminate the ALK Co-Promotion agreement for any reason or no reason for a fee (as described below). After the first year, ALK U.S. may terminate the ALK Co-Promotion Agreement for any reason or no reason, and we may terminate the agreement in the event ALK U.S. restructures its sales force. Upon termination of the ALK Co-Promotion Agreement by us for convenience, so long as ALK U.S. has met specified performance thresholds during the term, we are obligated to pay ALK U.S. a specified mid-to-low double-digit percentage of the portion of neffy net sales generated from the ALK U.S.-targeted prescribers in excess of a specified mid-quartile market share threshold that increases over time up to 50% for a specified period after termination, which period decreases in duration the later that the termination occurs. Upon termination of the ALK Co-Promotion Agreement by us in connection with a change of control of the Company, we are obligated to pay ALK U.S. a one-time mid-seven digit to low eight-digit termination fee in an amount that increases the later that the termination occurs. Financial Overview Revenues We have recognized net product sales in the United States since the commercial launch of neffy in September 2024. We have signed collaboration and license agreements for neffy for all geographies outside of the United States. The terms of these agreements may include payment to us of one or more of the following: non-refundable, upfront license fees; clinical, regulatory, and/or commercial milestone payments; clinical development fees; and royalties or a transfer price on net sales of licensed products if neffy receives marketing approval in these regions. We expect product revenues to fluctuate in future periods as we continue with the commercial launch of neffy . We expect revenues under collaboration agreements to fluctuate in future periods based on our ability to meet various regulatory milestones, and contingent on successfully obtaining regulatory approval for neffy in the licensed regions, commercial milestones, royalties or transfer price earned from our partner’s net sales and the supply of commercial product as set forth in the agreements described earlier. Cost of Goods Sold Cost of goods sold consists primarily of direct and indirect costs to manufacture neffy for commercial sale, including salaries and related expenses for personnel, stock-based compensation, third-party manufacturing costs, raw material and component costs, excess or obsolete inventory adjustment charges, inventory write offs, packaging services, freight, storage costs, distribution fees, amortization of capitalized in-licensed costs, and royalties on product sales. Prior to the FDA approval of neffy in August 2024, certain inventory components were purchased to manufacture neffy and recorded as research and development expenses, resulting in zero-cost inventory components. As a result, the cost of goods sold related to neffy will initially reflect a lower average per unit cost of materials, as previously expensed inventory components are consumed in commercial production and sold to customers. 43 As of September 30, 2025, we had $8.4 million in zero-cost inventory components remaining, and no zero-cost inventory components were determined to be obsolete. Based on our current forecast, we expect zero-cost inventory components to be substantially consumed in commercial production by mid-2026. The time over which the zero-cost inventory components are included in cost of goods sold will depend on several factors, but primarily the timing of future neffy sales. Research and Development Expenses To date, our research and development expenses have been related primarily to clinical development, process development, and manufacturing costs of neffy and our intranasal epinephrine technology product candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. Research and development expenses include: • salaries, payroll taxes, benefits and stock-based compensation charges for personnel engaged in research and development efforts; • external research and development expenses incurred under agreements with contract research organizations (“CROs”), investigative sites and consultants and other third-party organizations to conduct our clinical studies and development activities; • costs related to manufacturing neffy and our intranasal epinephrine technology product candidates for clinical trials and process validation studies, including fees paid to contract manufacturing organizations (“CMOs”) and other third-party manufacturers; • costs related to compliance with regulatory requirements and regulatory filings; and • indirect expenses including insurance and facility-related expenses. Our external research and development expenses for neffy and our intranasal epinephrine technology product candidates consist primarily of fees, materials and other costs paid to CROs, CMOs, consultant and contractors. Our clinical, regulatory, manufacturing, and non-clinical development costs for the periods presented below reflect an allocation of expenses associated with personnel costs, stock-based compensation expense, and indirect costs incurred in support of overall research and development, such as facilities-related costs. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical trials and the manufacturing costs of neffy and our intranasal epinephrine technology product candidates due to the inherently unpredictable nature of clinical development and manufacturing activities. Clinical development and manufacturing timelines, the probability of success and development costs can differ materially from expectations. In addition, we cannot forecast to what degree our licensing, supply and distribution arrangements would affect our development plans and capital requirements. 44 The duration, costs and timing of clinical trials and development of neffy and our intranasal epinephrine technology product candidates for the treatment of additional indications will depend on a variety of factors that include: • per patient trial costs; • the number of patients that participate in the trials; • the number of sites included in the trials; • the countries in which the trials are conducted; • tariffs and international trade relations; • the length of time required to enroll eligible patients; • the number of doses that patients receive; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring or other studies requested by regulatory agencies; • the efficacy and safety profile of neffy and our current and future intranasal epinephrine technology product candidates; • the cost to seek regulatory approvals for our intranasal epinephrine technology product candidates in additional indications and any product candidates that successfully complete clinical trials; • the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and non-U.S. regulators; • maintaining a continued acceptable safety profile of neffy and our intranasal epinephrine technology product candidates; • establishing or maintaining commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully; • significant and changing government regulation and regulatory guidance; • the impact of any business interruptions to our operations or to those of the third parties with whom we work; and • the extent to which we establish additional strategic collaborations or other arrangements. A change in the outcome of any of these variables with respect to the development of neffy and our intranasal epinephrine technology product candidates could significantly change the costs and timing associated with the development of that future product candidate. The process of conducting the necessary clinical research and manufacturing to obtain regulatory approval is costly and time-consuming. The actual probability of success for any future candidates may be affected by a variety of factors. Further, a number of factors, including those outside of our control, could adversely impact the timing and duration of our product’s or any future candidates’ development, which could increase our research and development expenses. Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries, benefits, stock-based compensation for personnel in executive, finance, business development, sales and marketing and other corporate administrative functions. Selling, general and administrative expenses also include pre-commercial launch activities prior to product launch, the initiation of commercialization activities in September 2024, legal fees incurred relating to corporate and patent matters, professional fees incurred for accounting, auditing, tax and administrative consulting services, and insurance costs. Selling, general and administrative expenses have increased since the third quarter of 2024 due to the establishment of our sales force, the development and commencement of our marketing campaigns and initiatives, the ALK Co-Promotion Agreement, the hiring of additional sales and marketing personnel to support full commercialization activities, and the addition of infrastructure and programs to support commercialization activities. We expect to continue to incur audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, board of director fees, investor relations costs associated with operating as a public company, patent costs and defense, and general and administrative personnel. 45 Other Income, net Other income, net consists primarily of interest income from our cash, cash equivalents, and short-term investments, interest expense on our outstanding debt, and net amortization and accretion associated with our short-term investments. Results of Operations Comparison of the Three Months Ended September 30, 2025 and 2024 The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024 (in thousands, except percentages): Three Months Ended September 30, Dollar % 2025 2024 Change Change Revenue: Product revenue, net $ 31,300 $ 568 $ 30,732 * Revenue under collaboration agreements 55 1,500 (1,445 ) (96 %) Revenue under supply agreements 1,146 — 1,146 * Total revenue 32,501 2,068 30,433 * Operating expenses: Cost of goods sold 8,191 112 8,079 * Research and development (1) 2,751 4,423 (1,672 ) (38 %) Selling, general and administrative (1) 74,751 19,281 55,470 * Total operating expenses 85,693 23,816 61,877 * Loss from operations (53,192 ) (21,748 ) (31,444 ) * Other income, net 2,041 2,620 (579 ) (22 %) Net loss $ (51,151 ) $ (19,128 ) (32,023 ) * Change in unrealized gains and losses on available-for-sale securities 39 484 (445 ) (92 %) Comprehensive loss $ (51,112 ) $ (18,644 ) $ (32,468 ) * ______________ * Not meaningful (1) Includes stock-based compensation expense as follows (in thousands): Three Months Ended September 30, 2025 2024 Research and development $ 664 $ 734 Selling, general and administrative 5,025 2,857 Total $ 5,689 $ 3,591 Revenues . Revenue for the three months ended September 30, 2025 was $32.5 million, as compared to $2.1 million for the three months ended September 30, 2024. Revenue for the three months ended September 30, 2025 includes $31.3 million in net product revenues for sales of neffy in the United States, $1.1 million in revenue under supply agreements with partners, and less than $0.1 million in revenue for the performance of development and regulatory services performance obligations under the ALK Collaboration Agreement. Revenue for the three months ended September 30, 2024 includes $0.6 million in net product revenues for sales of neffy and $1.5 million in revenue for the first milestone event under the Seqirus Agreement. Cost of Goods Sold . Cost of goods sold for the three months ended September 30, 2025 was $8.2 million, as compared to $0.1 million for the three months ended September 30, 2024. Prior to August 2024, costs incurred to manufacture neffy were recorded as research and development expenses, and product sales subsequent to August 2024 partially utilized zero-cost inventory components. Cost of goods sold consisted primarily of product costs and royalties in both periods. Research and Development Expenses . Research and development expenses for the three months ended September 30, 2025 was $2.8 million, as compared to $4.4 million for the three months ended September 30, 2024. The decrease of $1.7 million was primarily due to decreases in product development-related expense of $1.5 million, outside services of $0.4 million, and other research and development expenses of $0.2 million, partially offset by an increase in clinical trial costs of $0.4 million. 46 The following table summarizes our research and development expenses for the three months ended September 30, 2025 and 2024 (in thousands): Three Months Ended September 30, 2025 2024 Clinical and regulatory $ 1,840 $ 1,422 Manufacturing and non-clinical development 911 3,001 Total $ 2,751 $ 4,423 Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended September 30, 2025 was $74.8 million, as compared to $19.3 million for the three months ended September 30, 2024. The increase of $55.5 million was primarily due to increases in marketing-related expenses of $41.6 million, personnel-related expenses of $7.9 million, stock-based compensation expense of $2.2 million, outside services of $1.5 million, travel and meals expense of $1.1 million incurred by our sales personnel, and other general operating costs of $1.2 million. Other Income, Net. Other income, net for the three months ended September 30, 2025 was $2.0 million, as compared to $2.6 million for the three months ended September 30, 2024. The decrease of $0.6 million was primarily due to a decrease in net accretion of discounts on short-term investments of $0.9 million, partially offset by an increase in interest income of $0.3 million from our cash, cash equivalents, and short-term investments. Results of Operations Comparison of the Nine Months Ended September 30, 2025 and 2024 The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024 (in thousands, except percentages): Nine Months Ended September 30, Dollar % 2025 2024 Change Change Revenue: Product revenue, net $ 51,863 $ 568 $ 51,295 * Revenue under collaboration agreements 2,859 2,000 859 43 % Revenue under supply agreements 1,469 — 1,469 * Total revenue 56,191 2,568 53,623 * Operating expenses: Cost of goods sold 14,269 112 14,157 * Research and development (1) 9,738 16,553 (6,815 ) (41 %) Selling, general and administrative (1) 170,167 36,183 133,984 * Total operating expenses 194,174 52,848 141,326 * Loss from operations (137,983 ) (50,280 ) (87,703 ) * Other income, net 8,009 8,344 (335 ) (4 %) Net loss (129,974 ) (41,936 ) (88,038 ) * Change in unrealized gains and losses on available-for-sale securities (227 ) 290 (517 ) * Comprehensive loss $ (130,201 ) $ (41,646 ) $ (88,555 ) * _____________ * Not meaningful (1) Includes stock-based compensation expense as follows (in thousands): Nine Months Ended September 30, 2025 2024 Research and development $ 1,991 $ 2,558 Selling, general and administrative 14,367 7,713 Total $ 16,358 $ 10,271 47 Revenues . Revenue for the nine months ended September 30, 2025 was $56.2 million, as compared to $2.6 million for the nine months ended September 30, 2024. Revenue for the nine months ended September 30, 2025 includes $51.9 million in net product revenues for sales of neffy in the United States, $2.9 million in revenue for the achievement of the milestone for the first commercial sale of EURneffy and for the performance of development and regulatory services performance obligations under the ALK Collaboration Agreement, and $1.5 million in revenue under supply agreements with partners. Revenue for the nine months ended September 30, 2024 includes $0.6 million in net product revenue for sales of neffy and $2.0 million in revenues under the Seqirus Agreement. The revenues under the Seqirus Agreement consists of $1.5 million for the first event milestone and $0.5 million for the delivery of the license for neffy in the Seqirus Territory in combination with the transfer of know-how. Cost of Goods Sold . Cost of goods sold for the nine months ended September 30, 2025 was $14.3 million, as compared to $0.1 million for the nine months ended September 30, 2024. Prior to August 2024, costs incurred to manufacture neffy were recorded as research and development expenses, and product sales subsequent to August 2024 partially utilized zero-cost inventory components. Cost of goods sold consisted primarily of product costs and royalties, and during the nine months ended September 30, 2025, the establishment of an inventory reserve. Research and Development Expenses . Research and development expenses for the nine months ended September 30, 2025 was $9.7 million, as compared to $16.6 million for the nine months ended September 30, 2024. The decrease of $6.8 million was primarily due to decreases in IPR&D expense of $2.1 million from the achievement of the EMA regulatory milestone under the Recordati Termination Agreement during the nine months ended September 30, 2024, product-development related expense of $1.6 million, clinical trial costs of $1.3 million, personnel-related expenses of $0.9 million, stock-based compensation expense of $0.6 million, and other research and development expenses of $0.3 million. The following table summarizes our research and development expenses for the nine months ended September 30, 2025 and 2024 (in thousands): Nine Months Ended September 30, 2025 2024 Clinical and regulatory $ 5,073 $ 6,686 Manufacturing and non-clinical development 4,665 9,867 Total $ 9,738 $ 16,553 Selling, General and Administrative Expenses. Selling, general and administrative expenses for the nine months ended September 30, 2025 was $170.2 million, as compared to $36.2 million for the nine months ended September 30, 2024. The increase of $134.0 million was primarily due to increases in marketing-related expenses of $87.3 million, personnel-related expenses of $25.9 million, stock-based compensation expense of $6.7 million, outside services of $4.0 million, travel and meals expense of $3.8 million incurred by our sales personnel, conference and seminar expense of $2.2 million, audit, tax and valuation fees of $1.5 million, legal fees of $1.3 million, and other general operating costs of $1.3 million. Other Income, Net. Other income, net for the nine months ended September 30, 2025 was $8.0 million, as compared to $8.3 million for the nine months ended September 30, 2024. The decrease of $0.3 million was primarily due to a decrease in net accretion of discounts on short-term investments of $1.3 million, partially offset by an increase in interest income from our cash, cash equivalents, and short-term investments of $1.0 million. Liquidity and Capital Resources Sources of Liquidity and Capital Since our inception, we have incurred significant operating losses and negative cash flows from our operations. We have recognized limited net product sales since the commercial launch of neffy in September 2024. We have funded our operations to date primarily with proceeds from the Merger, private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, debt, and net product sales. As of September 30, 2025, we had cash, cash equivalents, and short-term investments of $288.2 million. 48 Cash flows The following table summarizes our cash flows for the nine months ended September 30, 2025 and 2024 (in thousands): Nine Months Ended September 30, 2025 2024 Net cash and cash equivalents used in operating activities $ (127,381 ) $ (28,456 ) Net cash and cash equivalents provided by (used in) investing activities 32,654 (4,341 ) Net cash and cash equivalents provided by financing activities 103,467 1,483 Net increase (decrease) in cash and cash equivalents $ 8,740 $ (31,314 ) Operating Activities During the nine months ended September 30, 2025, net cash used in operating activities was $127.4 million. This consisted primarily of a net loss of $130.0 million, an increase in our operating assets and operating liabilities of $40.3 million and $27.7 million, respectively, and non-cash charges of $15.1 million. The increase in our operating assets was due to increases in accounts receivable of $28.4 million and inventories of $12.3 million, partially offset by a decrease in prepaid expenses and other assets of $0.4 million. The increase in our operating liabilities was primarily attributable to an increase in accounts payable and accrued expenses of $27.9 million, partially offset by a decrease in contract liability of $0.3 million. The non-cash charges consisted primarily of non-cash stock-based compensation of $16.4 million, establishment of an inventory reserve of $2.2 million, and depreciation and amortization expense of $1.0 million, partially offset by $4.5 million in net accretion of discounts on short-term investments. During the nine months ended September 30, 2024, net cash used in operating activities was $28.5 million. This consisted primarily of a net loss of $41.9 million, an increase in our operating liabilities of $8.7 million, a decrease in our operating assets of $0.1 million, and non-cash charges of $4.6 million. The increase in our operating liabilities was primarily due to an increase in accounts payable and accrued liabilities of $8.7 million. The decrease in our operating assets was primarily due to a decrease in prepaid and other assets of $1.1 million, partially offset by an increase in accounts receivable of $0.8 million and an increase in inventories of $0.2 million. The non-cash charges consisted of non-cash stock-based compensation of $10.3 million, partially offset by $5.7 million in net accretion of discounts on short-term investments. Investing Activities During the nine months ended September 30, 2025, the cash and cash equivalents provided by investing activities was $32.7 million. This consisted of maturities of short-term investments of $232.0 million, partially offset by purchases of short-term investments of $193.1 million, payments of milestone obligations under license agreements of $5.9 million, and purchases of property and equipment of $0.3 million. During the nine months ended September 30, 2024, the cash and cash equivalents used in investing activities was $4.3 million. This consisted primarily of purchases of short-term investments of $192.6 million, maturities of short-term investments of $191.0 million, payments of milestone obligations under license agreements of $2.5 million, and purchases of property and equipment of $0.3 million. Financing Activities During the nine months ended September 30, 2025, the $103.5 million of cash and cash equivalents provided by financing activities was attributable to net proceeds from the term loan under the Credit Agreement of $97.8 million, proceeds from stock option exercises and issuance of common stock under the employee stock purchase plan of $3.9 million, and proceeds from milestone obligations met under license agreements of $2.6 million, partially offset by payments of term loan issuance costs of $0.8 million. During the nine months ended September 30, 2024, the cash and cash equivalents provided by financing activities was $1.5 million, which consisted of proceeds from stock option exercises and issuance of common stock under the employee stock purchase plan. Term Loans On September 29, 2025 (the “Closing Date”), we entered into the Credit Agreement with the Administrative Agent and the Lenders, which provides for an aggregate principal amount up to $250.0 million of term loans from the Lenders to us, including an initial tranche of $100.0 million under Term A Loan funded on the Closing Date, $25.0 million under Term B Loan that will be made available during the period commencing on the six-month anniversary of the Closing Date and ending no later than the one-year anniversary of the Closing Date, up to $25.0 million under Term C Loan will be made available at our election during the period commencing on and including the Closing Date and ending no later than the two-year anniversary of the Closing Date, subject to the satisfaction of a certain revenue requirement, and up to $100.0 million under Term D Loan, subject to the consent of the Lenders. The Term Loans will mature on the five-year anniversary of the Closing Date. The Credit Facility enhances our liquidity position and provides additional financial flexibility, subject to the satisfaction of certain customary conditions for future tranches and revenue-based requirements for the third tranche. 49 Future Funding Requirements Based on our current operating plan, we believe that our existing cash, cash equivalents, short-term investments, and revenues from product sales and cash proceeds from collaboration and out-licensing agreements will be sufficient to meet our anticipated cash requirements through at least the next three years. In particular, we expect our existing cash, cash equivalents, short-term investments, and revenues from net product sales and cash proceeds from collaboration and out-licensing agreements will allow us to fund commercial manufacturing and sales and marketing activities, general operating activities and working capital requirements, and proof of concept clinical trials of neffy for additional indications. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain. Our future funding requirements will depend on many factors, including: • the scope, progress, results and costs of researching and developing our intranasal epinephrine technology for additional indications; • the scope and costs of clinical and commercial manufacturing of neffy and our intranasal epinephrine technology product candidates; • the timing of, and the costs involved in, obtaining marketing approvals for our intranasal epinephrine technology for additional indications; • the number of additional indications for our intranasal epinephrine technology that we may pursue and their development requirements; • the costs of commercialization activities for neffy and our intranasal epinephrine technology product candidates, to the extent such costs are not the responsibility of any collaborators, including the costs and timing of building and maintaining product sales, marketing, distribution and manufacturing capabilities; • revenue received from commercial sales of neffy ; • the timing and amount of any milestone and royalty payments under the ALK Collaboration Agreement, ALK Co-Promotion Agreement, Pediatrix Agreement, Aegis Agreement, Alfresa Agreement, Recordati Termination Agreement, and the Seqirus Agreement; • the extent to which we in-license or acquire rights to other products, product candidates, or technologies; • our headcount growth and associated costs as we expand our employee headcount and building and maintaining a commercial infrastructure; • our ability to service our current credit facility under the Credit Agreement and access, if and when needed, additional amounts of principal provided for under the Credit Agreement; • the costs of preparing, filing, and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and • the costs of operating as a public company. Until such time, if ever, as we can generate substantial product revenues to support our cost structure, we expect to finance our cash needs through a combination of our existing cash, cash equivalents, short-term investments, equity offerings, debt financings and other capital sources which may include collaborations, strategic alliances, marketing, distribution or licensing arrangements or other arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, our current or future debt agreements may limit our ability to incur additional debt. Subject to limited exceptions, we are prohibited from incurring additional indebtedness and entering into certain strategic and licensing transactions without the prior written consent of the Lenders pursuant to the Credit Agreement. If we raise funds through additional collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, development programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. 50 Our ability to raise additional funds may be adversely impacted by macroeconomic factors that may result in worsening global economic conditions and disruptions to and volatility in the global credit and financial markets, including due to tariffs, trade wars, inflation, high interest rates, recessionary concerns, recessions, bank failures, geopolitical conflicts, and general economic uncertainty. Because of the numerous risks and uncertainties associated with product development and commercialization, we cannot predict the timing or amount of increased expenses and cannot assure you that we will generate profits or positive cash flows from operating activities in the future. Material Cash Requirements The total amount of unconditional purchase obligations related to the supply of raw materials is $56.9 million as of September 30, 2025. Our estimated remaining payment obligations by year are as follows: 2025 ($0.2 million), 2026 ($10.4 million), 2027 ($11.8 million), 2028 ($13.8 million), and $2.9 million per year thereafter through 2035. The total amount of unconditional purchase obligations related to hosted software license subscription fees is $2.2 million as of September 30, 2025. Our estimated remaining payment obligations by year are as follows: 2025 ($0.3 million), 2026 ($1.5 million), and 2027 ($0.4 million). In August 2024, we entered into a corporate sponsorship agreement with Food Allergy Research and Education, Inc., which was subsequently amended in May 2025, pursuant to which we have payment obligations of $14.0 million over a 43-month period. Our remaining payment obligations as of September 30, 2025 are $7.0 million. Our estimated remaining payment obligations by year are as follows: 2025 ($1.0 million), 2026 ($5.0 million), and 2027 ($1.0 million). In June 2018, we entered into a License Agreement (the “Aegis Agreement”) with Aegis Therapeutics, LLC (“Aegis”), a wholly owned subsidiary of Neurelis, Inc. In November 2024, OrbiMed Advisors LLC (“OrbiMed”) entered into an agreement with Aegis, to purchase the rights, royalty interests, and related sales milestone payments on net product sales of neffy . Our remaining payment obligations to OrbiMed under the Aegis Agreement are contingent upon our achievement of certain commercial milestones and have been reduced to $11.0 million as of September 30, 2025. Under the Aegis Agreement, we are also required to make royalty payments to OrbiMed based on a mid-single-digit percentage of net product sales. Future royalty payment amounts are indeterminate since they depend on future revenues, which are uncertain. In February 2023, we entered into a termination agreement (the “Recordati Termination Agreement”) with Recordati Ireland, Ltd. (“Recordati”) to reacquire the rights to neffy in Europe and certain European Free Trade Association, Russia/the Commonwealth of Independent States, Middle East and African countries (the “Recordati Territory”). Under the Recordati Termination Agreement, we are required to make royalty payments to Recordati of up to €5.0 million in the aggregate from sales of Recordati Licensed Product(s) in the Recordati Territory, of which up to €4.8 million (approximately $5.7 million in U.S. dollars) remain. Future royalty payment amounts are indeterminate since they depend on future revenues, which are uncertain. In May 2025, we entered into the ALK Co-Promotion Agreement with ALK U.S. to co-promote neffy to up to 9,000 specified pediatricians and other prescribers in the U.S. Pursuant to the ALK Co-Promotion Agreement, we will pay ALK U.S. a base fee to compensation ALK U.S. for its promotion activities. Payments for the first year of the partnership will be deferred and paid in the second year of the partnership. The total remaining payment obligations under this agreement are $26.8 million as of September 30, 2025. Our remaining payment obligations by year are as follows: 2025 ($0.0 million), 2026 ($4.4 million), 2027 ($14.2 million), 2028 ($4.6 million), and 2029 ($3.6 million). In addition to the base fee, ALK U.S will be eligible to receive performance-based payments from us. Future performance-based payment amounts are indeterminate since they depend on future revenues, which are uncertain. In September 2025, we entered into the Credit Agreement with the Administrative Agent and Lenders. The outstanding principal of $100.0 million at September 30, 2025 is due upon maturity on September 29, 2030. Estimated interest payments are calculated based on the outstanding principal, the applicable interest rate and expected timing of scheduled payments as of September 30, 2025. As of September 30, 2025, based on the interest rate in effect at such date, total estimated interest payments are $48.1 million, and our estimated interest payments by year are as follows: 2025 ($2.5 million), 2026 ($9.6 million), 2027 ($9.6 million), 2028 ($9.6 million), 2029 ($9.6 million), and 2030 ($7.2 million). We enter into contracts in the normal course of business with third-party contract organizations and vendors for clinical studies, manufacturing and other services and products. These contracts generally provide for termination after a notice period. As of September 30, 2025, we have not recognized any reserves related to uncertain tax positions and had no accrued interest or penalties related to uncertain tax positions. 51 Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue, accrued expenses, stock-based compensation, and valuation allowances for deferred tax assets. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies or estimates. Our critical accounting policies and estimates are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report on Form 10-K filed with the SEC on March 20, 2025 and Note 2 – Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q. Recent Accounting Pronouncements See Note 2 – Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Emerging Growth Company and Smaller Reporting Company Status We are an emerging growth company, as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. We will remain an emerging growth company until the earlier of: (i) the date on which we have issued more than $1.0 billion in nonconvertible debt securities during the prior three-year period; and (ii) December 31, 2025. We are also a “smaller reporting company” as defined in the Exchange Act. On June 30, 2025, the aggregate market value of our common stock held by non-affiliates exceeded $700 million, based on the closing price of our common stock on The Nasdaq Stock Global Select Market on such date. Due to recent SEC guidance, we will continue to be a non-accelerated filer through at least our fiscal year ending December 31, 2026. We will also be permitted to continue to comply with the scaled disclosures rules applicable to smaller reporting companies until the filing of our quarterly report on Form 10-Q for the quarter ending March 31, 2026. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not required for a “smaller reporting company” as defined under Item 10(f)(1) of Regulation S-K of the Securities Act. 52 Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2025, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 53 PART II – OTHER INFORMATION Item 1. Legal Proceedings From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. See Note 10 – Commitments and Contingencies to the unaudited condensed consolidated financial statements in this Form 10-Q, which is incorporated by reference in this Part II, Item 1, for any required disclosure. Item 1A. Risk Factors We operate in a dynamic and rapidly changing environment that involves numerous risks and uncertainties. Certain factors may have a material adverse effect on our business, financial condition and results of operations, and you should carefully consider them. Accordingly, in evaluating our business, we encourage you to consider the following discussion of risk factors, in its entirety, in addition to other information contained in this Quarterly Report on Form 10-Q and our other public filings with the SEC. Other events that we do not currently anticipate or that we currently deem immaterial may also affect our results of operations and financial condition. The risk factors set forth below that are marked with an asterisk (*) did not appear as separate risk factors in, or contain changes to the similarly titled risk factor included in Item 1A. of our Annual Report on Form 10-K, filed with the SEC on March 20, 2025. Risks Related to Our Business We are highly dependent on the successful commercialization of neffy in the United States and in the EU for its currently approved indications in those jurisdictions. To the extent neffy is not commercially successful, our business, financial condition and results of operations would be materially adversely affected, and the price of our common stock would likely decline. neffy is our only product that has been approved for sale and it has only been approved in the United States for the emergency treatment of Type I allergic reactions, including anaphylaxis, in patients who are four years of age and older and weigh 15 kg to less than 30 kg (in the case of neffy 1 mg), and in adults and children who weigh 30 kg or greater (in the case of neffy 2 mg), and in the EU (under the trade name EURneffy , and only in the 2 mg form) for the emergency treatment of allergic reactions (anaphylaxis) due to insect stings or bites, foods, medicinal products and other allergens as well as idiopathic or exercise induced anaphylaxis, for adults and children with a body weight 30 kg or greater. We are focusing a significant portion of our activities and resources on neffy , and we believe our near-term revenues are highly dependent on, and a meaningful portion of the value of our company relates to, our ability to successfully commercialize neffy in the United States and the EU (under the trade name EURneffy) . Successful commercialization of neffy is subject to many risks. Prior to neffy , we have not, as an organization, commercialized any product, and there is no guarantee that we will be able to do so successfully with neffy . There are numerous examples of unsuccessful product launches and failures to meet high expectations of market potential, including by pharmaceutical companies with more experience and resources than we have. The commercial success of neffy depends on the extent to which patients and physicians accept and adopt neffy as a treatment of Type I allergic reactions, including anaphylaxis, and we do not know whether our or others’ estimates in this regard will be accurate. For example, if the population of patients who may suffer a Type I allergic reaction is smaller than we estimate or if physicians are unwilling to prescribe or patients are unwilling to use neffy for any reason, the commercial potential of neffy will be limited. It is too soon to tell how physicians, patients and payors will respond to the pricing of neffy . Physicians may not prescribe neffy and patients may be unwilling to use neffy if coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost. Additionally, any negative development for neffy in post-approval trials or potential additional indications, including urticaria, or in regulatory processes in other jurisdictions, may adversely impact the commercial results and potential of neffy . Thus, significant uncertainty remains regarding the commercial potential of neffy . If the commercialization of neffy is unsuccessful or perceived as disappointing, our stock price could decline significantly and the long-term success of the product and our company could be harmed. 54 If we are unable to fully develop and maintain our sales, marketing and distribution capabilities on our own or through collaborations with marketing partners, we may not be successful in commercializing neffy.* We have built a sales force and entered into the ALK Co-Promotion Agreement to commercialize neffy in the United States. In order to successfully commercialize neffy , we must, among other things, continue to build our sales, marketing, distribution, managerial and other non-technical capabilities. Factors that may hinder our ability to successfully market and commercially distribute our products include: • inability of sales personnel to obtain access to or educate adequate numbers of physicians on the benefits and safety of prescribing neffy ; • inability to recruit, retain and effectively manage adequate numbers of effective sales personnel, including ALK U.S. sales personnel; • lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies that have more extensive product lines; and • unforeseen delays, costs and expenses associated with maintaining our sales organization and receive the intended benefits to be provided by the ALK Co-Promotion Agreement. If we are unable to maintain an effective sales force, including through the ALK Co-Promotion Agreement, for neffy , we may not be able to generate significant product revenue in the United States. In addition, until the commencement of our commercial launch in September 2024, no one in our sales force had promoted neffy . We are required to expend significant time and resources to train our sales force, including through the ALK Co-Promotion Agreement, to be credible in educating physicians and pharmacists on the benefits of neffy . In addition, we must continually train our sales force, including through the ALK Co-Promotion Agreement, to ensure that a consistent and appropriate message about neffy is being delivered to our potential customers. We currently have limited resources compared to some of our competitors, and the continued development of our own commercial organization to market neffy and any additional products we may develop or acquire will be expensive and time-consuming. We also cannot be certain that we will be able to continue to successfully develop this capability. We have entered into the ALK Co-Promotion Agreement with ALK U.S. for the co-promotion of neffy to up to 9,000 specified pediatricians and other prescribers in the U.S. The commercial success of neffy in the United States, will be influenced in part by the efforts and allocation of resources by ALK U.S. Currently, ALK U.S. has limited experience promoting neffy , and while we will continue to work with ALK U.S. to optimize their commercialization activities, we cannot guarantee that such efforts will be successful. We also depend on ALK U.S. to comply with all applicable laws relative to the promotion of neffy . Because we do not control the individual efforts of ALK U.S., they may take actions or fail to take actions in a manner that is inconsistent with our interests. As a result, we may not realize the full potential benefits from the ALK Co-Promotion Agreement, and such actions or inactions could result in more limited or reduced sales, reputational harm, or regulatory or other adverse legal implications, any of which could adversely affect our business and results of operations. We entered into exclusive licensing and collaboration agreements for the development and commercialization of neffy with Alfresa Pharma Corporation in Japan; Pediatrix Therapeutics, Inc. in China, Macau, Hong Kong and Taiwan; CSL Seqirus in Australia and New Zealand; and ALK in all other unpartnered geographies outside the United States. If these third parties do not effectively engage or maintain their sales force for neffy if approved in the applicable territories, our ability to recognize milestone payments and royalties from the sales in such territories will be adversely affected. We will need to continue to expend significant time and resources to train our sales forces to be credible in discussing neffy with the specialists treating the patients indicated under the product’s label. In addition, if we are unable to effectively train our sales force and equip them with effective marketing materials our ability to successfully commercialize neffy could be diminished, which would have a material adverse effect on our business, results of operations and financial condition. 55 neffy and our current and future intranasal epinephrine technology product candidates may fail to achieve the degree of market acceptance by allergists, pediatricians and other physicians, patients, caregivers, third-party payors and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or profits. We have never commercialized a product before our U.S. commercial launch of neffy in September 2024, and neffy may fail to gain sufficient market acceptance by allergists, pediatricians and other physicians, patients, caregivers, third-party payors and others in the medical community. Physicians may be reluctant to prescribe neffy or our current and future intranasal epinephrine technology product candidates in place of well-established epinephrine intra-muscular injectable devices or other available treatments. Further, patients and caregivers may be reluctant to switch unless their physicians recommend switching products or are required to switch due to lack of coverage and adequate reimbursement. In addition, even though neffy has been determined to be safe and effective by the FDA and the EMA, safety or efficacy concerns in the medical community may hinder market acceptance. The degree of market acceptance of neffy and any future intranasal epinephrine technology product will depend on a number of factors, including: • the ability to provide acceptable evidence of safety and efficacy; • the potential advantages of the product compared to competitive therapies and our ability to successfully publicize these advantages or highlight them in any marketing materials; • the scope of the approved indication(s) for the product; • the inclusion of any warnings or contraindications in the product label; • the relative convenience and ease of administration; • the willingness of the target patient population to try, and of physicians to prescribe, the product; • the prevalence and severity of any adverse side effects; • the availability of alternative treatments and products from our competitors; • pricing and cost effectiveness, which may be subject to regulatory control; • changes in the standard of care for the targeted indications for the product; • effectiveness of our or our collaborators’ sales and marketing strategy; and • our ability to obtain sufficient third-party insurance coverage or adequate reimbursement levels. The market for neffy and our intranasal epinephrine technology may be smaller than we expect. We have focused our development of our intranasal epinephrine technology initially for the emergency treatment of Type I allergic reactions. We base our market opportunity estimates on a variety of factors, including our estimates of the number of people who have experienced severe Type I allergic reactions and are at risk of anaphylaxis, the continued growth rate of our patient population, the number of those in our patient population who we expect will fill a prescription for neffy , including those that currently do not fill prescriptions for epinephrine intra-muscular injectable devices or whose prescriptions have lapsed, the estimated increase in per patient device acquisition of neffy as compared to epinephrine intra-muscular injectable devices and the net sales of epinephrine intra-muscular injectable devices. These estimates are based on many assumptions and may prove incorrect, and new studies or market research may reduce our estimated patient population and potential sales. If our market opportunities are smaller than we expect, our future product revenues may be smaller than anticipated, which would adversely affect our business, financial condition, results of operations and prospects. If we are unable to achieve and maintain adequate levels of third-party payor coverage and reimbursement for neffy on reasonable pricing terms, its commercial success may be severely hindered.* Successful sales of any approved products, including neffy , depend on the availability of adequate coverage and reimbursement from third-party payors. Patients who are prescribed medicine for the treatment of their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs. Coverage and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available. Even with coverage for neffy , the resulting reimbursement payment rates might not be adequate or may require co-payments that patients find unacceptably high. Patients may not use neffy if coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost of those products. 56 Payors may require documented proof that patients meet certain eligibility criteria in order to be reimbursed for neffy . Payors may even require that pre-approval, or prior-authorization, be obtained from the payor for reimbursement of neffy . Patients are unlikely to use neffy unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of neffy . In addition, the market for neffy may depend significantly on access to third-party payors’ medical policies, drug formularies, or lists of medications for which third-party payors provide coverage and reimbursement. The industry competition to be included in such formularies often leads to downward pricing pressures on pharmaceutical companies, and we will be required to offer discounted rates to state Medicaid programs to ensure Medicaid coverage of our drugs. Also, third-party payors may refuse to include a particular branded drug in their formularies or otherwise restrict patient access to a branded drug when a less costly generic equivalent or other alternative is available, even if not approved for the indication(s) for which neffy is approved. Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. The current environment is putting pressure on companies to price products below what they may feel is appropriate. Selling neffy at less than an optimized price could impact our revenues and overall success as a company. In addition, in the United States, no uniform policy of coverage and reimbursement for drug products exists among third-party payors. Therefore, coverage and reimbursement for neffy may differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of neffy to each payor separately, with no assurance that coverage will be obtained, or that payment levels will be adequate for neffy or any other products we may market. Further, coverage policies and third-party payor reimbursement rates may change at any time. Therefore, even if favorable coverage and reimbursement status is attained for neffy or more products for which we receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future. In addition, physicians may limit how much or under what circumstances they will prescribe or administer neffy , or any other products we may market, and patients may decline to purchase them. This in turn could affect our ability to successfully commercialize neffy , or any other products we may market, and thereby adversely impact our profitability, results of operations, financial condition and future success. neffy has only been studied in a limited number of patients. neffy is now available to a much larger number of patients, and we do not know whether the results of neffy’s use in such larger number of patients will be consistent with the results from our clinical studies. Prior to commercialization, neffy had been administered only to a limited number of patients in clinical studies. While the FDA and European Commission granted approval of neffy based on the data included in the NDA and marketing authorization application (“MAA”), respectively, we do not know whether the results when a large number of patients are exposed to neffy , including results related to safety and efficacy, will be consistent with the results from earlier clinical studies of neffy that served as the basis for the approval of neffy . New data relating to neffy may result in changes to the product label and may adversely affect sales, or result in withdrawal of neffy from the market. The FDA and regulatory authorities in other jurisdictions may also consider the new data in reviewing neffy ’s marketing applications for additional indications and/or in other jurisdictions, or impose post-approval requirements. If any of these actions were to occur, it could result in significant expense and delay or limit our ability to generate sales revenues. Competitive products may reduce or eliminate the commercial opportunity for neffy or our current and future intranasal epinephrine technology product candidates. If our competitors develop technologies or product candidates more rapidly than us, or their technologies or product candidates are more effective or safer than ours, our ability to develop and successfully commercialize neffy and our current and future intranasal epinephrine technology product candidates may be adversely affected.* The clinical and commercial landscape for the emergency treatment of Type I allergic reactions is highly competitive and subject to significant technological change. We face competition with respect to our current indications for our intranasal epinephrine technology, including neffy , and will face competition with respect to any future indications of our intranasal epinephrine technology or other product candidates that we may seek to develop or commercialize in the future from large pharmaceutical and biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions. Based on the initially approved indications for neffy , we anticipate that neffy will compete primarily against epinephrine intra-muscular injectable products, for the emergency treatment of Type I allergic reactions including EpiPen and its generics, which is marketed by Viatris, Inc. and Teva Pharmaceuticals, Inc.; Adrenaclick, which is marketed by Amneal Pharmaceuticals, Inc.; Auvi-Q, which is marketed by Kaleo, Inc.; and Symjepi, which is marketed by Sandoz, Inc., a Novartis division. Several other companies are also clinically developing larger dose intranasal epinephrine product candidates that may compete with neffy , including Bryn Pharma, Nasus Pharma, Hikma Pharmaceuticals, Inc. (previously INSYS Therapeutics, Inc.), Orexo AB and Belhaven BioPharma. Aquestive Therapeutics is developing a sublingual candidate based on a prodrug of epinephrine. If our current and future intranasal epinephrine technology product candidates are approved for other indications, they would also compete with a range of other therapeutic treatments that are well established such as antihistamines or in development. 57 Many of our potential competitors have substantially greater financial, technical, commercial and human resources than we do and significantly more experience in the discovery, development and regulatory approval of product candidates and the commercialization of those products. Accordingly, our competitors may be more successful than we may be in obtaining regulatory approval for therapies and achieving widespread market acceptance. Our competitors’ products may be more effective, safer, or more effectively marketed and sold, than any product candidate we may commercialize and may render neffy or our current and future intranasal epinephrine technology product candidates obsolete or non-competitive before we can recover development and commercialization expenses. In addition, our competitors may succeed in developing, acquiring or licensing technologies and drug products that are more effective or less costly than neffy or our current and future intranasal epinephrine technology product candidates, which could render such products or product candidates obsolete and noncompetitive. We face competition based on many different factors, including the efficacy, safety and tolerability of neffy and our current and future intranasal epinephrine technology product candidates, the ease with which neffy and our current and future intranasal epinephrine technology product candidates can be administered, the scope of regulatory approval for neffy and our current and future intranasal epinephrine technology product candidates, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position. Such competitors could also recruit our employees, which could negatively impact our level of expertise and our ability to execute our business plan. In addition, our competitors may obtain patent protection, regulatory exclusivities or regulatory approval and commercialize products more rapidly than we do, which may impact future approvals or sales of any of our products that receive regulatory approval. We will also be competing with respect to marketing capabilities and manufacturing efficiency for neffy as an early commercial stage product. We expect competition among future products, if any, will be based on product efficacy and safety, the timing and scope of regulatory approvals, availability of supply, marketing and sales capabilities, product price, reimbursement coverage by government and private third-party payors, regulatory exclusivities and patent position. Our profitability and financial position will suffer if our product or future products cannot compete effectively in the marketplace. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early commercial stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites, as well as in acquiring technologies complementary to, or necessary for, our activities. 58 If the FDA, the European Commission or other comparable foreign regulatory authorities approve generic versions of neffy or our current or future intranasal epinephrine technology product candidates that receives regulatory approval, or such authorities do not grant our products appropriate periods of non-patent exclusivity before approving generic versions of such products, the sales of such products could be adversely affected.* In the United States, once an NDA is approved, the product covered thereby becomes a “reference listed drug” in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” or the Orange Book. The FDA may not finally approve an ANDA for a generic product or a Section 505(b)(2) NDA of a competitor until any applicable period of non-patent exclusivity and patent exclusivity for the reference listed drug in the Orange Book has expired. We have not received U.S. non-patent marketing exclusivity for neffy , which was approved by the FDA under the 505(b)(2) regulatory pathway. We have 8 patents with claims covering neffy listed in the Orange Book. Any applicant who files an ANDA seeking approval of a generic equivalent version of neffy or an NDA submitted under the 505(b)(2) regulatory pathway referencing neffy must make one of the following certifications to the FDA concerning the patents listed in the Orange Book for neffy : (a) the patents that are listed have expired; (b) the date on which such patents will expire; or (c) such patents are invalid or will not be infringed upon by the manufacture, use or sale of the generic equivalent version of neffy or the drug product submitted under the 505(b)(2) regulatory pathway referencing neffy . This last certification is known as a paragraph IV certification. A notice of the paragraph IV certification must be provided to us for each patent to which the ANDA or 505(b)(2) application refers. Following receipt of a paragraph IV notice, we may bring a lawsuit for patent infringement against the paragraph IV filer, and we may be entitled to a statutory 30-month stay of approval of the proposed product of the paragraph IV filer. We received a Paragraph IV certification notice letter from Lupin in August 2025, providing notification to us that Lupin submitted an ANDA to the FDA seeking approval to manufacture, use, or sell a generic version of neffy 2 mg. See Note 10 – Commitments and Contingencies to the unaudited condensed consolidated financial statements in this Form 10-Q for additional discussion. In support of an ANDA, a generic manufacturer generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration, and adequate labeling as the reference listed drug and that the generic version is bioequivalent to the reference listed drug, meaning, in part, that it is absorbed in the body at the same rate and to the same extent. Generic products may be significantly less costly to bring to market than the reference listed drug and companies that produce generic products are generally able to offer them at lower prices. Moreover, third-party insurers require, and many states allow or require, substitution of therapeutically equivalent generic drugs at the pharmacy level even if the branded drug is prescribed. Thus, following the introduction of a generic drug, a significant percentage of the sales of any branded product or reference listed drug may be lost to the generic product. Upon receiving a marketing authorization in the EU from the European Commission, innovative medicinal products are generally entitled to receive eight years of data exclusivity and 10 years of market exclusivity. Data exclusivity, if granted, prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic application or biosimilar application for eight years from the date of authorization of the innovative product, after which a generic or biosimilar MAA can be submitted, and the innovator’s data may be referenced. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU. The overall ten-year period may, occasionally, be extended for a further year to a maximum of 11 years if, during the first eight years of those 10 years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity. Comparable regimes to those in the US and EU exist in some other major markets, including the United Kingdom. Obtaining regulatory approval of neffy or our current or future intranasal epinephrine technology product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval in other jurisdictions.* Even though we have obtained regulatory approval of neffy in the United States and the EU, there is no guarantee that we will be able to maintain these regulatory approvals or obtain or maintain regulatory approval in any other jurisdiction. A failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even though the FDA and European Commission have granted marketing approval of neffy , comparable regulatory authorities in other foreign jurisdictions must also approve the manufacturing, marketing and promotion of neffy before it can be marketed in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States or the EU including additional nonclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States including certain jurisdictions in the EU, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. 59 We have submitted and plan to submit additional or supplemental marketing applications in the United States and in the EU. Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions and such regulatory requirements can vary widely from country to country. Obtaining other regulatory approvals and compliance with other regulatory requirements could result in significant delays, difficulties and costs for us and could require additional nonclinical studies or clinical trials, which could be costly and time-consuming and could delay or prevent the introduction of our products in certain countries. The foreign regulatory approval process involves all of the risks associated with FDA approval. We have one product approved for sale. We have limited experience in obtaining regulatory approval in domestic and international markets. If we or our collaboration partners fail to comply with the regulatory requirements in international markets and/or obtain and maintain applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of neffy will be harmed. If we are unable to successfully develop our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, or experience significant delays in doing so, the commercial potential of our current or future intranasal epinephrine technology product candidates or neffy will be more limited.* Successful continued development and ultimate regulatory approval of our current or future intranasal epinephrine technology product candidates and neffy for additional indications is important to the future success of our business. The future regulatory and commercial success of our current or future intranasal epinephrine technology product candidates and neffy for additional indications is subject to a number of risks, including the following: • successful completion of nonclinical studies and clinical trials; • successful patient enrollment in clinical trials; • successful data from our nonclinical studies and clinical trials that support an acceptable risk-benefit profile of our intranasal epinephrine technology in the intended populations and indications; • satisfaction of applicable regulatory requirements, including to satisfy applicable rules governing combination products; • potential unforeseen safety issues or adverse side effects; • receipt and maintenance of marketing approvals from applicable regulatory authorities; • remaining in compliance with post-marketing regulatory requirements; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our intranasal epinephrine technology; • making arrangements or maintaining existing arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our intranasal epinephrine technology; • entry into collaborations to further the development of neffy and our current and future intranasal epinephrine technology product candidates in other jurisdictions or for additional indications; • continuing to grow our sales, marketing and distribution capabilities and commercializing any approved products, whether alone or in collaboration with others; • successfully commercializing neffy and our current and future intranasal epinephrine technology product candidates; • acceptance by patients, the medical community and third-party payors of neffy and our current and future intranasal epinephrine technology product candidates; • obtaining and maintaining third-party coverage and adequate reimbursement; • products, following approval, maintaining a continued acceptable safety profile; • effectively competing with other therapies; • ensuring that we promote and distribute our products consistent with all applicable healthcare laws; and • enforcing and defending intellectual property rights and claims. Many of these risks are beyond our control, including the risks related to clinical development, the regulatory submission and review process, maintaining regulatory approval, potential threats to our intellectual property rights and the manufacturing, marketing and sales efforts of any current or future collaboration partner. If we or a collaboration partner are unable to develop, receive regulatory approval for our intranasal epinephrine technology for the additional indications we are developing it for, including urticaria, or if we experience delays as a result of any of these risks or otherwise, our ability to grow our business will be limited. 60 If the FDA does not conclude that our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates or additional indications under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates or additional indications will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.* The Hatch Waxman Act added Section 505(b)(2) to the FDCA. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Section 505(b)(2), if available to us, would allow an NDA we submit to the FDA to rely in part on data in the public domain or the FDA’s prior conclusions regarding the safety and effectiveness of approved compounds, which could expedite the development program for any additional indications by potentially decreasing the amount of nonclinical and/or clinical data that we would need to generate in order to obtain FDA approval. This pathway does not, however, expedite the FDA review process timelines. If the FDA does not allow us to proceed under the Section 505(b)(2) regulatory pathway for our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, we may need to conduct additional nonclinical studies and/or clinical trials, provide additional data and information, and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval for any such product candidates or additional indications, including for urticaria, and complications and risks associated with such product candidates, would likely substantially increase. Moreover, inability to pursue the Section 505(b)(2) regulatory pathway could result in new competitive products reaching the market more quickly than any product candidates we develop, which could adversely impact our competitive position and prospects. We cannot assure you that our current or future intranasal epinephrine technology product candidates or neffy for additional indications will receive the requisite approval for commercialization. In addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2), certain pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA’s interpretation of Section 505(b)(2) is successfully challenged, the FDA may change its Section 505(b)(2) policies and practices, which could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2). In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to certain requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in approval of our NDAs for up to 30 months or longer depending on the outcome of any litigation. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions can significantly delay, or even prevent, the approval of a new product. Even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition. Finally, a competitor might receive FDA approval and obtain non-patent market exclusivity before we obtain approval of any such product candidates or additional indications, including urticaria, which could delay approval of potential additional indications, including urticaria, for our intranasal epinephrine technology. We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, further development and the commercialization of our current and future intranasal epinephrine technology product candidates.* To obtain the requisite regulatory approvals to market and commercialize our current and future intranasal epinephrine technology product candidate, including for urticaria, we must demonstrate through extensive nonclinical studies and clinical trials that such product candidates are safe and effective for their intended use in humans. Nonclinical and clinical testing are expensive and can take many years to complete, and their outcome is inherently uncertain. Failure can occur at any time during the clinical trial process and our future clinical trial results may not be successful. 61 We may experience delays in completing our clinical trials or nonclinical studies and initiating or completing additional studies or clinical trials. We may also experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize for our current and future intranasal epinephrine technology product candidates, including for urticaria, including: • regulators, IRBs, ethics committees or other reviewing bodies may not authorize or issue positive opinions permitting us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site; • we may not reach an agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • a delay in receiving study or clinical trial material from outside the United States; • the number of subjects or patients required for clinical trials of our current and future intranasal epinephrine technology product candidates, including for urticaria, may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors, including those manufacturing neffy or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may have to amend clinical trial protocol(s) submitted to regulatory authorities or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to resubmit to an IRB or ethics committee and regulatory authorities for re-examination; • unforeseen safety events may occur during the course of a clinical trial and these events may result in the temporary suspension or termination of a clinical trial, or require urgent safety measures or restrictions to protect human subjects during the conduct of a clinical trial; • regulators, IRBs, ethics committees or other reviewing bodies may fail to approve or issue positive opinions or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we have entered and may enter into agreement for clinical and commercial supplies, or the supply or quality of our current and future intranasal epinephrine technology product candidates or other materials necessary to conduct clinical trials of our current and future intranasal epinephrine technology product candidates, including for urticaria, may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; and • the potential for policies or regulations of the FDA, the EMA, the EU or any other applicable foreign regulatory authorities to significantly change in a manner rendering our clinical data insufficient for approval. Regulators, IRBs and ethics committees of the institutions in which clinical trials are being conducted, or data monitoring committees may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to appear to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. Negative or inconclusive impressions of the results from our earlier clinical trials of neffy for the emergency treatment of Type I allergic reactions or any other clinical trial or nonclinical studies in animals that we have conducted, could mandate repeated or additional nonclinical studies or clinical trials and could delay marketing approvals or result in changes to or delays in nonclinical studies or clinical trials of our current and future intranasal epinephrine technology product candidates, including for urticaria. While data from our studies of our intranasal epinephrine technology product candidates demonstrated nasally delivered epinephrine reached blood levels comparable to those of already approved epinephrine injectable products, we do not know whether any future clinical trials or studies that we may conduct will demonstrate adequate efficacy and safety necessary to result in obtaining regulatory approval to market our current and future intranasal epinephrine technology product candidates, including for urticaria. If later stage clinical trials do not produce favorable results that meet regulatory authority criteria, our ability to obtain regulatory approval for our current and future intranasal epinephrine technology product candidate, including for urticaria, may be adversely impacted. 62 Our failure to successfully initiate and complete clinical trials of our current and future intranasal epinephrine technology product candidates, including for urticaria, and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market our current and future intranasal epinephrine technology product candidates, including for urticaria, would significantly harm our business. Our product candidate development costs will also increase if we experience delays in testing or regulatory approvals and we may be required to obtain additional funds to complete clinical trials. We cannot assure you that our clinical trials will begin as planned or be completed on schedule, if at all, or that we will not need to restructure our trials after they have begun. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our current and future intranasal epinephrine technology product candidates, including for urticaria, or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize such product candidates, which may harm our business and results of operations. In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately lead to the denial of regulatory approval of our current and future intranasal epinephrine technology product candidates, including urticaria. We may not be successful in our efforts to expand our pipeline by identifying additional indications for which to investigate intranasal epinephrine technology in the future or by developing or acquiring new products or product candidates. We may expend our limited resources to pursue a particular indication or formulation for our intranasal epinephrine technology and fail to capitalize on product candidates, indications or formulations that may be more profitable or for which there is a greater likelihood of success. Although neffy is approved in the United States for the emergency treatment of Type I allergic reactions, including anaphylaxis, in patients who are four years of age and older and weigh 15 kg to less than 30 kg (in the case of neffy 1 mg), and in adults and children who weigh 30 kg or greater (in the case of neffy 2 mg), and in the EU (under the trade name EURneffy , and only in the 2 mg form) for the emergency treatment of allergic reactions (anaphylaxis) due to insect stings or bites, foods, medicinal products and other allergens as well as idiopathic or exercise induced anaphylaxis, for adults and children with a body weight 30 kg or greater, as part of our longer-term growth strategy, we are evaluating and plan to continue to evaluate our intranasal epinephrine technology, including neffy , for use in other potential indications. We may evaluate opportunities to in-license or acquire other development programs, product candidates, as well as commercial products, including for the treatment of other indications like Type I allergic reactions. Other than our intranasal epinephrine technology, we do not currently have any other programs in development. Our development of our intranasal epinephrine technology for other indications remains at an early clinical development stage and will require significant further investment and regulatory approvals prior to commercialization in such indications. Because we have limited financial and managerial resources, we are focused on specific indications for our intranasal epinephrine technology. As a result, we may fail to generate additional clinical development opportunities for our intranasal epinephrine technology for a number of reasons, including, that our intranasal epinephrine technology may in certain indications, on further study, be shown to have harmful side effects, limited to no efficacy or other characteristics that suggest it is unlikely to receive marketing approval and achieve market acceptance in such additional indications. In addition, we may forgo or delay pursuit of opportunities with other indications that could have had greater commercial potential or likelihood of success. We may not be able to develop our intranasal epinephrine technology for any additional indications based on resource allocation decisions and other reasons. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development activities for specific indications may not yield any commercially viable products. Research activities to identify additional indications for our intranasal epinephrine technology require substantial technical, financial and human resources. Additionally, any future potential indications for our intranasal epinephrine technology will require the selection of suitable patients for our clinical trials and additional clinical development, management of clinical, preclinical and manufacturing activities, obtaining regulatory approval, obtaining manufacturing supply, continued build out of a commercial organization, substantial investment and significant marketing efforts before we generate any revenues from product sales in such additional indications, if approved. We are not permitted to market or promote any future indications before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval. By such time, if ever, as we may receive necessary regulatory approvals for any potential additional indications for our intranasal epinephrine technology, including urticaria, the standard of care for such treatments may have evolved such that it would be necessary to modify our plans for full approval and commercial acceptance of such products may be limited by a change in the standard of care. Additionally, if we receive the necessary approval for any additional indications for our intranasal epinephrine technology, we may not realize the full potential benefits from the sale of our intranasal epinephrine technology for such indications due to our existing collaboration and marketing arrangements. 63 Even if we develop, license, or otherwise acquire potential product candidates or development programs, and obtain the required financing or establish a collaboration to enable us to conduct pre-clinical and clinical development of such product candidates, we cannot be certain that such development would be successful, or that we will obtain regulatory approval or be able to successfully commercialize any other product candidates and generate revenue. Further, even if any product candidate we develop or acquire was to receive marketing approval, we would continue to bear the risks that the FDA or similar foreign regulatory authorities could revoke, vary or suspend approval of our product candidate or that safety, efficacy, manufacturing or supply issues could arise with such product candidate. The results of early-stage clinical trials and preclinical studies may not be predictive of future results. Initial data in our clinical trials may not be indicative of results obtained when these trials are completed or in later stage trials. The results of preclinical studies may not be predictive of the results of clinical trials, and the results of any early-stage clinical trials we commence may not be predictive of the results of the later-stage clinical trials. In addition, initial data in clinical trials may not be indicative of results obtained when such trials are completed. There can be no assurance that any of our ongoing, planned or future clinical trials will ultimately be successful or support further clinical development or regulatory approval of our current or future intranasal epinephrine technology product candidates. There is a high failure rate for drugs and biologics candidates proceeding through clinical trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies, and any such setbacks in our clinical development could have a material adverse effect on our business and operating results. Interim topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. From time to time, we may publish interim topline or preliminary data from our clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or topline results also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could significantly harm our reputation and business prospects. neffy or our current or future intranasal epinephrine technology product candidates may cause undesirable side effects, adverse events, or have other properties that could delay or prevent its regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if obtained.* Undesirable side effects or adverse events caused by neffy or our current or future intranasal epinephrine technology product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay, denial, or withdrawal of regulatory approval by the FDA, the European Commission or comparable foreign regulatory authorities. Although our clinical studies to date have demonstrated that neffy is well-tolerated by patients with no serious treatment-related adverse events, and reported adverse events generally no more severe than grade 1 and comparable with injection products, and with no meaningful pain or irritation based on formal scoring, results of our ongoing or future clinical trials for neffy or our current or future intranasal epinephrine technology product candidates could reveal a high and unacceptable severity and prevalence of side effects, adverse events, or unexpected characteristics. Many compounds that initially showed promise in clinical or earlier stage testing are later found to cause undesirable or unexpected side effects or adverse events that prevented further development of the compound. 64 If unacceptable side effects or adverse events are observed following the commercialization of neffy or our current or future intranasal epinephrine technology product candidates, including for urticaria, we, the FDA or comparable foreign regulatory authorities, the IRBs, or independent ethics committees at the institutions in which our trials are conducted, or the independent safety monitoring committee could suspend or terminate our clinical trials or regulatory authorities could order us to cease clinical trials, restrict us or neffy or our current or future intranasal epinephrine technology product candidates, including withdrawing the marketing approval of neffy or our current or future intranasal epinephrine technology product candidates or deny approval for or all targeted indications. Treatment-emergent side effects and adverse events that are deemed to be drug-related could also affect subject recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims, an unwillingness of physicians to prescribe neffy or our current or future intranasal epinephrine technology product candidates for approved indications, patients’ unwillingness to purchase neffy or our current or future intranasal epinephrine technology product candidates, or payors’ willingness to cover neffy or our current or future intranasal epinephrine technology product candidates. Undesirable side effects or adverse events resulting from the use of neffy or our current or future intranasal epinephrine technology product candidates (whether by patients in our clinical studies or through the commercialization of neffy or our current or future intranasal epinephrine technology product candidates) could adversely affect enrollment in clinical trials, regulatory approval and commercialization of neffy or our current or future intranasal epinephrine technology product candidates. Additionally, there may be negative findings regarding components of neffy or our current or future intranasal epinephrine technology product candidates by other parties. Any negative findings by third parties may impact neffy for its initially approved indications and labeling, or the future approvability or labeling of our current or future intranasal epinephrine technology product candidates, including for urticaria. In addition, all side effects and adverse events may not be appropriately recognized or managed by the treating medical staff. Inadequate training in recognizing or managing the potential side effects and adverse events of neffy or our current or future intranasal epinephrine technology product candidates could result in patient injury or death. Any of these occurrences may harm our business, financial condition, and prospects significantly. In addition, clinical trials of our intranasal epinephrine technology product candidates are and have been conducted in carefully defined sets of patients who have agreed to enter into clinical trials. Consequently, it is possible that our clinical trials, or those of any future collaborator, may indicate an apparent positive effect of our intranasal epinephrine technology product candidates that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects. Finally, our intranasal epinephrine technology product candidates are comprised of epinephrine and Intravail that is delivered via an intranasal device. Intra-muscular injection of epinephrine has been approved by the FDA and other regulatory authorities for the emergency treatment of Type I allergic reactions. In addition, Intravail has previously been included in the formulations of FDA approved products such as VALTOCO and TOSYMRA nasal sprays. The intranasal apparatus we use to deliver our intranasal epinephrine technology product candidates has been used to deliver several drugs approved by the FDA and other regulatory authorities, including VALTOCO, TOSYMRA and NARCAN. Even though neffy has received marketing approval for its initial indication, we are subject to the risks that the FDA, European Commission or similar regulatory authorities could revoke approval of intra-muscular epinephrine injection products, other drug formulations containing Intravail or utilizing the same intranasal apparatus, or that efficacy, manufacturing or supply issues could arise with epinephrine API, Intravail or our intranasal apparatus. This could result in our own products being removed from the market or being less commercially successful. We received Fast Track designation for neffy in the United States and may in the future pursue Fast Track designation for other product candidates that we may develop, but we might not receive such future designations, and Fast Track designations may not lead to a faster development or regulatory review or approval process. If the FDA determines that a product candidate is intended for the treatment of a serious or life-threatening condition and preclinical or clinical data demonstrate the potential to address an unmet medical need for this condition, the FDA may grant a product candidate Fast Track designation. Fast Track designation is intended to expedite or facilitate the process for reviewing new drug products meeting the specified criteria and gives the sponsor of a Fast Track product opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA is submitted, the product candidate may be eligible for priority review. We were granted Fast Track designation for neffy for the emergency treatment of Type I allergic reactions and may in the future request Fast Track designation for additional indications for our current or future intranasal epinephrine technology product candidates, however, we cannot assume that any such applications will meet the criteria for that designation. The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it. Even if we do receive Fast Track Designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may rescind the Fast Track designation if it believes that the designation is no longer supported by data from our clinical development activities. 65 We may seek priority review by the FDA for potential additional indications, including urticaria, for our current or future intranasal epinephrine technology product candidates, and we may be unsuccessful. If we are successful, the designation may not actually lead to a faster development or regulatory review or approval process. A priority review designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months. We may in the future request priority review designation for potential additional indications, including urticaria, for our current or future intranasal epinephrine technology product candidates, however, we cannot assume that any application for priority review will meet the criteria for that designation. A product is eligible for priority review if it is designed to treat a serious condition, and if approved, would provide a significant improvement in the treatment, diagnosis or prevention of a serious condition compared to marketed products. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if we believe a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Moreover, a priority review designation does not necessarily mean a faster development or regulatory review or approval process or necessarily confer any advantage with respect to approval compared to standard FDA review and approval. Receiving priority review from the FDA does not guarantee approval within the six-month review cycle or at all. Product liability lawsuits against us or any of our current and future licensing and collaboration partners could divert our resources and attention, cause us to incur substantial liabilities and limit commercialization of neffy or our current or future intranasal epinephrine technology product candidates. We are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing, marketing, commercialization, and use of pharmaceutical products. Currently, we have one product, neffy , that has been approved for commercial sale. The sale of neffy and the use of neffy by us and any current and future licensing and collaboration partners in clinical trials may expose us to liability claims. Product liability claims may be brought against us or our partners by participants enrolled in our clinical trials, patients, health care providers, pharmaceutical companies, our current and future licensing and collaboration partners or others using, administering, or selling any of our future products, if approved. If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities or be required to limit commercialization of neffy or our current or future intranasal epinephrine technology product candidates. Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for neffy or our current or future intranasal epinephrine technology product candidates; • injury to our reputation; • withdrawal of clinical trial participants; • termination of clinical trial sites or entire trial programs; • significant litigation costs, including with respect to potential class action lawsuits; • substantial monetary awards to, or costly settlements with, patients or other claimants; • product recalls or a change in the indications for which they may be used; • loss of revenue; • diversion of management and scientific resources from our business operations; and • the inability to successfully commercialize neffy or our current or future intranasal epinephrine technology product candidates. We face an inherent risk of product liability as a result of the commercialization and clinical testing of neffy or our current or future intranasal epinephrine technology product candidates. Although the clinical trial process is designed to identify and assess potential side effects and adverse events, clinical development does not always fully characterize the safety and efficacy profile of a new drug, and it is always possible that a drug, even after regulatory approval, may exhibit unforeseen side effects. If neffy or our current or future intranasal epinephrine technology product candidates causes adverse events or side effects, we may be exposed to substantial liabilities. Physicians may not prescribe or patients may not use neffy or our current or future intranasal epinephrine technology product candidates for its approved indications or in accordance with neffy ’s our current or future intranasal epinephrine technology product candidates’ instructions or any warnings that identify known potential adverse effects, side effects, and patients who should not use neffy or our current or future intranasal epinephrine technology product candidates. We are highly dependent upon consumer perceptions of us regarding the safety and efficacy of neffy and our current or future intranasal epinephrine technology product candidates. We could be adversely affected if we are subject to negative publicity associated with illness or other adverse effects resulting from patients’ use or misuse of our products or any similar products distributed by other companies. 66 Although we maintain product liability insurance coverage in the amount of up to $10.0 million in the aggregate, including commercial product liability and clinical trial liability, this insurance may not fully cover potential liabilities that we may incur. The cost of any product liability litigation or other proceeding, even if resolved in our favor, could be substantial. In addition, insurance coverage is becoming increasingly expensive. If we are unable to maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development and commercial production and sale of neffy or our current or future intranasal epinephrine technology product candidates, which could harm our business, financial condition, results of operations and prospects. If our information technology systems or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.* In the ordinary course of our business, we and the third parties with whom we work collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, “process”) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, sensitive third-party data, business plans, transactions, and financial information (collectively, “sensitive data”). As a result, we and such third parties face a variety of evolving threats, including but not limited to ransomware attacks, which could cause security incidents. Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties with whom we work. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors. Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, which could materially disrupt our systems and operations, supply chain, and ability to conduct our business. We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as a fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats. In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. It may be difficult and/or costly to detect, investigate, mitigate, contain, and remediate a security incident. Our efforts to do so may not be successful. Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain, and remediate a security incident could result in outages, data losses, and disruptions of our business. Threat actors may also gain access to other networks and systems after a compromise of our networks and systems. Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations. Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program. 67 In addition, our reliance on third-party service providers could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations. We rely on third-party service providers and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, content delivery to customers, and other functions. We also rely on our licensing and collaboration partners, our CROs, third-party logistics providers, distributors and other contractors and consultants to utilize information technology systems and networks to process, transmit and store electronic information in connection with our business activities, including in connection with our clinical trials. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If our third-party service providers experience a security incident or other interruption, we could, and in certain cases have, experienced adverse consequences. While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work have not been compromised. Any of the previously identified or similar threats have in the past and may in the future cause a security incident or other interruption that have in the past and may in the future result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties with whom we work. For example, we have been the target of unsuccessful phishing attempts in the past, as well as successful phishing attempts that did not have a material adverse effect, and expect such attempts will continue in the future. In addition, we have become aware of certain security incidents whereby vendor email accounts have been hacked and the bad actors impersonated our vendors in email communications with us. None of these incidents have had a material adverse effect on our business. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to operate our business. We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents. Additionally, certain data privacy and security obligations have required us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data. While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. We take steps designed to detect, mitigate and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work). We have not and may not in the future, however, detect and remediate all such vulnerabilities, including on a timely basis. Vulnerabilities could be exploited and result in a security incident. Any unremediated critical or high risk vulnerabilities could pose material risks to our business. Further, we have and may in the future experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents, or to take other actions, such as providing credit monitoring and identity theft protection services. Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences. If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms. Security incidents and attendant consequences may negatively impact our ability to operate our business. For example, the loss of clinical trial data from completed, ongoing or future clinical trials for neffy could result in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data. In addition, we may suffer reputational harm or face litigation or adverse regulatory action as a result of cyber-attacks or other data security breaches and may incur significant additional expense to implement further data protection measures. Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims. 68 In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.* We operate in a global economy, and our business depends on a global supply chain for the development, manufacturing, and distribution of neffy , and for the advancement of our clinical development programs. There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty. We source raw materials, active pharmaceutical ingredient (“API”) and other important components related to the manufacture of neffy and our intranasal epinephrine technology product candidates, including Intravail and our nasal sprayer apparatus, from international suppliers located in the European Union. Although we anticipate that our current supply of materials for neffy and our product candidates will be sufficient for at least the next 18-24 months, tariff policies, particularly those affecting the Europe Union and pharmaceutical products could materially increase our costs and reduce our margins, including as a result of our inability to adjust pricing in formulary-based markets. Recent and potential future changes in international trade policies, particularly regarding pharmaceutical-specific tariffs, present material risks to our operations and financial performance. Recent policy discussions have included potential targeted tariffs or other trade measures specifically aimed at pharmaceutical products and ingredients as part of broader healthcare cost control or national security initiatives. Unlike consumer goods, pharmaceuticals face unique regulatory constraints that make rapid supply chain adjustments particularly difficult and costly. Should additional tariffs be imposed, including those specifically targeting pharmaceutical imports, our production costs could rise significantly, and it would be difficult and costly to qualify alternative sources within another country with a lower tariff rate or within the United States, as developing and qualifying alternative sources typically requires at least 18-24 months and substantial investment and regulatory approvals. Moreover, the dynamic and unpredictable tariff and trade landscape creates substantial uncertainty and significant planning challenges for our operations. Changes in tariff classifications, country-of-origin requirements, or customs procedures can occur with limited notice. This uncertainty complicates our long-term investment decisions regarding manufacturing facilities, supply chain optimization, and research and development locations. Unlike many industries, our ability to pass increased costs to customers is limited by the structure of pharmaceutical pricing and reimbursement systems. neffy is included in formularies with pricing established through annual or multi-year contracts with commercial, third-party payors and pharmacy benefit managers, and reimbursement methodologies established by government programs, such as Medicare. These arrangements typically include fixed pricing terms that were negotiated prior to the implementation of the recently announced tariffs. As a result, and depending on the timing and scope of the implementation of these tariffs, cost increases due to tariffs may be difficult or impossible to pass through to customers until the next negotiation cycle, which could be up to 36 months away. Current or future tariffs may also result in increased research and development expenses, including with respect to increased costs associated with raw materials, API, laboratory equipment and research materials and components. Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence and negatively impact our business, results of operations, financial condition and growth prospects. The complexity of announced or future tariffs may also increase the risk that we or our customers or suppliers may be subject to civil or criminal enforcement actions in the United States or foreign jurisdictions related to compliance with trade regulations. Foreign governments may also adopt non-tariff measures, such as procurement preferences or informal disincentives to engage with, purchase from or invest in U.S. entities, which may limit our ability to compete internationally and attract non-U.S. investment, employees, customers and suppliers. Foreign governments may also take other retaliatory actions against U.S. entities, such as decreased intellectual property protection, increased enforcement actions, or delays in regulatory approvals, which may result in heightened international legal and operational risks. In addition, the United States and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity to our business. 69 Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition, and prospects. While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial condition and prospects. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this report. A pandemic, epidemic, or outbreak of an infectious disease may materially and adversely affect our business, including our nonclinical studies, clinical trials, third parties on whom we rely, our supply chain, our ability to raise capital, our ability to conduct regular business and our financial results. We are subject to risks related to public health crisis and any efforts to halt the spread of any public health crises. For example, COVID-19 and policies and regulations implemented by governments in response to its outbreak, such as directing businesses and governmental agencies to cease non-essential operations at physical locations, prohibiting certain nonessential gatherings and ceasing non-essential travel had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages occurred, supply chains were disrupted, facilities and production were suspended, and demand for certain goods and services, such as medical services and supplies, spiked, while demand for other goods and services fell. We experienced certain impacts of COVID-19, including inability to conduct clinical trial site monitoring for certain earlier phase clinical trials and delays in completing clinical trials, bioanalytical sample analysis and study reports. There can be no guarantee we will not experience other impacts from other pandemics, epidemics or infectious disease outbreaks, such as being forced to further delay or pause enrollment, experiencing potential interruptions to our supply chain, facing difficulties or additional costs in enrolling patients in future clinical trials or being able to achieve full enrollment of our studies within the timeframes we anticipate, or at all. Additionally, pandemics, epidemics or other infectious disease outbreaks could have extensive impacts in many aspects of society and could result in significant disruptions to the global economy, as well as businesses and capital markets around the world. Other global health concerns could also result in social, economic, and labor instability in the countries in which we or the third parties with whom we engage operate. While we have been working closely with our third-party manufacturers, distributors and other partners to manage our supply chain activities and mitigate potential disruptions to the production of neffy or our current or future intranasal epinephrine product candidates as a result of pandemics, epidemics or other infectious disease outbreaks, if such a public health crisis were to persist for an extended period of time, there could be significant and material disruptions to our supply chain and operations, and associated delays in the manufacturing and supply of neffy or our current or future intranasal epinephrine product candidates. Any such supply disruptions, including disruptions in procuring items that are essential for our development activities and securing manufacturing slots for the products needed for such activities, could adversely impact our ability to initiate and complete nonclinical studies or clinical trials and generate sales of and revenue from neffy or our current or future intranasal epinephrine product candidates, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 70 COVID-19 affected and other public health crises may in the future affect employees of third-party CROs located in affected geographies that we rely upon to carry out our clinical trials. If any future public health crisis is not contained, we may experience disruptions that could severely impact our business and clinical trials, including: • delays or difficulties in our commercialization efforts; • delays or difficulties in enrolling patients in our clinical trials; • delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of sites or facilities serving as our clinical trial sites and staff supporting the conduct of our clinical trials, including our trained therapists, or absenteeism that reduces site resources; • interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal, state or national governments, employers and others or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data; • risk that participants enrolled in our clinical trials will acquire a virus or illness while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events or patient withdrawals from our trials; • limitations in employee resources that would otherwise be focused on conducting our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; • delays in receiving authorizations from regulatory authorities to initiate our future clinical trials; • delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials; • interruption in global shipping that may affect the transport of clinical trial materials, such as neffy used in our clinical trials; • changes in local regulations as part of a response to the public health crisis which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or the discontinuation of the clinical trials altogether; • interruptions or delays in nonclinical studies due to restricted or limited operations at research and development laboratory facilities; • delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and • refusal of the FDA, the EMA or the other regulatory bodies to accept data from clinical trials in affected geographies outside the United States, the EU or other relevant local geographies. Any negative impact a public health crisis has on patient enrollment or treatment, or the commercialization of neffy and the development of any additional indications could cause costly delays to clinical trial activities, which could adversely affect our ability to obtain regulatory approval for potential additional indications, including urticaria, for our current or future intranasal epinephrine technology product candidates, increase our operating expenses, which could have a material adverse effect on our financial results. COVID-19 caused significant volatility in public equity markets and disruptions to the United States and global economies and any future pandemic, epidemic, infectious disease outbreak or similar public health crisis could lead to market dislocation. Any such volatility and economic dislocation may make it more difficult for us to raise capital on favorable terms, or at all. If we or any of the third parties with whom we engage were to experience shutdowns or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively affected, which could have a material adverse impact on our business and our results of operations and financial conditions. To the extent a future pandemic, epidemic, infectious disease outbreak or other public health crisis adversely affects our business and financial results, it may also heighten many of the other risks described in this “Risk Factors” section, such as those relating to the timing and completion of our clinical trials and our ability to obtain future financing. 71 The increasing use of social media platforms presents new risks and challenges. Social media is increasingly being used to communicate about our clinical development activities and the indications our intranasal epinephrine technology product candidates has been approved to treat and is being developed to treat, and we intend to utilize appropriate social media in connection with our commercialization efforts for neffy . Advertising and promotional materials must comply with FDA rules concerning the advertising and promotion of our intranasal epinephrine technology product candidates and are subject to FDA review, in addition to other potentially applicable federal and state laws. Failure to comply with these regulations can result in warning letters and further liability if off-label promotion is involved. The FDA’s Office of Prescription Drug Promotion has sent warning letters to sponsors for alleged violative labeling and promotional materials, including those disseminated through social media. Social media practices in the biotechnology and biopharmaceutical industries continue to evolve and regulations and regulatory guidance relating to such use are evolving and not always clear. This evolution creates uncertainty and risk of noncompliance with regulations applicable to our business, resulting in potential regulatory actions against us, along with the potential for litigation related to off-label marketing or other prohibited activities and heightened scrutiny by the FDA, the Federal Trade Commission, the SEC and other regulators. For example, patients may use social media channels to comment on their experience in an ongoing clinical trial or to report an alleged side effect or adverse event. If such disclosures occur, there is a risk that trial enrollment may be adversely impacted, that we may fail to monitor and comply with applicable adverse event reporting obligations or that we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about any potential additional indications. There is also a risk of inappropriate disclosure of sensitive or confidential information or negative or inaccurate posts or comments about us on any social networking website. In addition, we may encounter attacks on social media regarding us, our management or our current or future intranasal epinephrine technology product candidates. Moreover, information communicated on social media must take into consideration applicable rules governing the advertising and promotion of medicinal products. In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices. General requirements for advertising and promotion of medicinal products, such as direct-to-consumer advertising of prescription medicinal products are established in EU law. However, the details are governed by regulations in individual EU Member States and can differ from one country to another. For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (“SmPC”), which may require approval by the competent national authorities in connection with an MA. The SmPC is the document that provides information to physicians concerning the safe and effective use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions or incur other harm to our business. Risks Related to Our Results of Operations and Financial Position We expect that our timing of sales and our results of operations will fluctuate for the foreseeable future, which may make it difficult to predict our future performance from period to period. Our operating results have fluctuated in the past and are likely to do so in future periods, especially in the near term as we continue our ongoing commercial launch of neffy . Some of the factors that could cause our operating results to fluctuate from period to period include the factors described elsewhere in the “Risk Factors” section of this report as well as in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this report. We believe that comparisons from period to period of our financial results are not necessarily meaningful and should not be relied upon as indications of our future performance. 72 We have incurred significant losses since our inception.* Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. We have one product approved for commercial sale and have generated only limited revenue from product sales to date, and we will continue to incur significant expenses related to our commercialization activities, clinical development and ongoing operations. As a result, we have incurred significant losses in most periods since our inception. Since our inception, we have devoted substantially all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, performing research and development activities, pre-commercialization activities, the commercial launch of neffy and providing general and administrative support for these operations. Our financial condition and operating results, including net losses, may fluctuate significantly from quarter to quarter and year to year. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance. Additionally, net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. Our net income was $8.0 million for the year ended December 31, 2024 and our net loss was $54.4 million for the year ended December 31, 2023. Our net loss was $130.0 million for the nine months ended September 30, 2025. As of September 30, 2025, we had an accumulated deficit of $253.3 million. We expect to continue to incur significant losses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we: • maintain and expand our sales, marketing, distribution, manufacturing, supply chain and other commercial infrastructure to support the commercialization of neffy and any other product candidates for which we may obtain regulatory approval; • continue to develop and conduct nonclinical studies and clinical trials for our current or future intranasal epinephrine technology product candidates and for neffy on a post-approval basis; • seek regulatory approvals in the United States and in other geographic regions for our current or future intranasal epinephrine technology product candidates; • seek to identify future product candidates; • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, negative or mixed clinical trial results, safety issues or other regulatory challenges, the risk of which in each case may be exacerbated by tariffs, trade wars, geopolitical conflicts and a health epidemic or pandemic; • add clinical, scientific, operational, sales, financial and management information systems and personnel, including personnel to support our product candidate development and commercialization efforts and help us comply with our obligations as a public company; • incur and pay the interest expense under the Credit Agreement; • maintain, expand and protect our intellectual property portfolio; and • acquire or in-license other product candidates and technologies. Our expenses could increase beyond our expectations if we are required by the FDA, the EMA or other regulatory authorities to perform clinical trials or conduct nonclinical studies in addition to those that we currently expect, or if there are any delays in completing our clinical trials or the development of our current or future intranasal epinephrine technology product candidates, or if we choose to develop or acquire any future product candidates. Our expenses could also increase significantly as a result of tariffs, trade wars and geopolitical conflicts. We may need additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development activities or commercialization efforts.* Our operations have consumed significant amounts of cash since inception. Based upon our current operating plan, we believe that our cash and cash equivalents will fund our operating and capital expenses for at least three years. We expect to incur significant expenses related to commercialization, such as product sales, medical affairs, marketing, manufacturing and distribution of neffy . Further, we expect to incur additional costs associated with operating as a public company. We may require significant additional amounts of cash in order to commercialize neffy for its currently approved indications in the United States, or for our current or future intranasal epinephrine technology product candidates which receive regulatory approval. In addition, other unanticipated costs may arise in the course of our continued development and commercialization efforts. Because the outcome of our commercialization efforts and continued development of our current or future intranasal epinephrine technology product candidates is highly uncertain, we cannot reasonably estimate the actual amounts of cash necessary to commercialize neffy for its approved indications in the United States, or any other indications we are pursuing. 73 Our future capital requirements depend on many factors, including: • the costs of commercialization activities for neffy for its approved indications and our current or future intranasal epinephrine technology product candidates that receives regulatory approval, to the extent such costs are not the responsibility of any current or future licensing and collaboration partners, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities; • revenue received from commercial sales of neffy or any current or future intranasal epinephrine technology product candidates that receives regulatory approval; • the scope, progress, results and costs of researching and developing our intranasal epinephrine technology for potential additional indications, including urticaria; • the timing of, and the costs involved in, obtaining regulatory approval for the marketing of our current or future intranasal epinephrine technology product candidates and neffy for additional indications; • the amount and timing of potential royalty and milestone payments to our current or future licensing and collaboration partners; • the receipt of licensing fees, royalties and potential milestone payments under our current or future out-licensing arrangements; • the extent to which we in-license or acquire rights to other products, product candidates or technologies; • our headcount growth and associated costs as we expand our personnel, including personnel to support our product development and commercialization efforts and help us comply with our obligations as a public company; • our ability to service our current credit facility under the Credit Agreement and access, if and when needed, additional amounts of principal provided for under the Credit Agreement; • the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and • the ongoing costs of operating as a public company. We cannot be certain that additional funding will be available on acceptable terms, or at all. The global credit and financial markets have experienced extreme volatility and disruptions and have been adversely impacted, and may continue to be adversely impacted or further adversely impacted, by macroeconomic factors such as tariffs, trade wars, inflation, high interest rates, recessionary concerns, recessions, bank failures, geopolitical conflicts and general economic uncertainty. If the equity and credit markets do not improve or further deteriorate, it may make any necessary debt or equity financing more difficult, more costly or more dilutive. We believe that our existing cash and cash equivalents will be sufficient to fund our planned operations for at least three years. This estimate may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned. We have no committed source of additional capital other than potential milestone payments, potential draw-downs under the Credit Agreement, each subject to its own conditions, and royalties under our collaboration and licensing agreements. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development and commercialization of neffy . We may need to seek licensing and collaboration partners for neffy for commercialization in additional indications on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to neffy in markets where we otherwise would seek to pursue development or commercialization ourselves. Any of the above events could significantly harm our business, prospects, financial condition, and results of operations. 74 Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidate.* We expect our expenses to increase in connection with our planned operations. Based upon our current operating plan, we believe that our cash and cash equivalents will fund our operating and capital expenses for at least three years. However, unless and until we can generate a substantial amount of revenue from our current or future intranasal epinephrine technology product candidates, we may seek to finance our future cash needs through public or private equity offerings, royalty-based or debt financings, collaborations, licensing arrangements or other sources, or any combination of the foregoing. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. On January 31, 2025, we entered into a Controlled Equity Offering SM Sales Agreement (the “ATM Sales Agreement”) pursuant to which we may from time to time offer and sell our common stock to or through Cantor Fitzgerald & Co., acting as sales agent, in any manner deemed to be an “at-the market offering”. We have filed a sales agreement prospectus with the SEC pursuant to which we may offer and sell up to $200.0 million of our common stock pursuant to the ATM Sales Agreement. To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, stockholders’ interests may be diluted, and the terms of these securities could include liquidation or other preferences and anti-dilution protections that could adversely affect our stockholders’ rights. In addition, new debt financing, if available, may result in fixed payment obligations and may involve agreements that include restrictive covenants that further limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, which could adversely impact our ability to conduct our business. On September 29, 2025, we entered into the Credit Agreement, which subjects us to a number of restrictive covenants, including among others (subject to certain qualifications and exceptions), limitations on our ability to incur additional debt; create liens and encumbrances; merge, dissolve, liquidate or consolidate; make acquisitions, investments, or advances, dispose of or transfer assets, pay dividends, and enter into transactions with affiliates. In addition, securing financing could require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect their ability to oversee the commercialization of neffy and the development and potential future commercialization of neffy or our intranasal epinephrine technology product candidates for additional indications. If we raise additional funds through collaborations or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. Our Credit Agreement contains conditions and restrictions that limit our flexibility in drawing on the additional funds thereunder and in operating our business. We may be required to repay our outstanding indebtedness under the Credit Agreement earlier than we expect and possibly at a time when we do not have sufficient capital to meet such obligations if an event of default occurs (including a material adverse change affecting our business), which could have a material adverse effect on our financial condition and results of operations.* As of September 30, 2025, we had an outstanding principal balance under our Credit Agreement of $100.0 million. We may also draw, at our election, up to an additional (i) $25.0 million under the Term B Loan during the period commencing on the six-month anniversary of the Closing Date and ending no later than the one-year anniversary of the Closing Date, (ii) $25.0 million under the Term C Loan will be made available at our election during the period commencing on and including the Closing Date and ending no later than the two-year anniversary of the Closing Date, subject to the satisfaction of a certain revenue requirement under the Credit Agreement, and (iii) $100.0 million under the Term D Loan, subject to the consent of the Lenders. If we are unable to achieve the revenue requirement by the applicable date, we would be unable to borrow additional funds under the Term C Loan under the Credit Agreement, which could negatively impact our ability to fund our operations. Furthermore, the Credit Agreement contains various covenants that limit or restrict our ability to engage in specified types of transactions. Subject to certain exceptions, these covenants limit our ability to, among other things, incur additional indebtedness; create liens and encumbrances; merge, dissolve, liquidate or consolidate; make acquisitions, investments, or advances, dispose of or transfer assets, pay dividends, and enter into transactions with affiliates. The Credit Agreement also contains a minimum liquidity covenant that requires us to maintain at all times at least $25.0 million of unrestricted cash and cash equivalents. These covenants may limit our flexibility in operating our business and our ability to take actions that might be advantageous to us and our shareholders. In the case of a continuing event of default under the Credit Agreement, including an event of default that arises due to our failure to comply with the covenants (subject to applicable notice and grace periods), the Lenders under the Credit Agreement could elect to declare all amounts outstanding to be immediately due and payable, proceed against the collateral in which we granted to the Lenders a security interest, or otherwise exercise the rights of a secured creditor. We are currently in compliance with the Credit Agreement covenants. 75 We cannot assure you that we will maintain a level of cash reserves or cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our existing or future indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We cannot assure you that we would be able to take any of these actions, or that these actions would permit us to meet our scheduled debt service obligations. We may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments, and the Lenders could seek to enforce security interests in the collateral securing such indebtedness, which would harm our business and financial condition. We cannot be certain that future working capital, borrowings or equity financings will be available to repay or refinance our debt to the Lenders or any other debt we may incur in the future. To the extent we are required to use cash from operations or the proceeds of any future financing to service our indebtedness instead of funding working capital, capital expenditures or other general corporate purposes, we will be less able to plan for, or react to, changes in our business, industry and in the economy generally. This may place us at a competitive disadvantage compared to our competitors that have less indebtedness. Changes in tax law could adversely affect our business and financial condition.* The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service, the U.S. Treasury Department, and state and local taxing authorities. Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our common stock. In recent years, many such changes have been made and changes are likely to continue to occur in the future. For example, legislation informally titled the One Big Beautiful Bill Act (“OBBBA”) and the Inflation Reduction Act of 2022 (“IRA”) enacted many significant changes to the U.S. tax laws. Future guidance from the Internal Revenue Service and other tax authorities with respect to new and existing legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation. Future changes in tax laws could have a material adverse effect on our business, cash flow, financial condition, realization of tax assets or results of operations. Our ability to use net operating loss carryforwards and certain other tax attributes may be limited. We have incurred substantial losses during our history. Unused federal net operating losses (“NOLs”) for the tax years beginning before January 1, 2018, will carry forward to offset future taxable income, if any, until such unused losses expire. Unused federal NOLs generated in tax years beginning after December 31, 2017, will not expire and may be carried forward indefinitely, but the deductibility of such federal NOL carryforwards is limited to 80% of taxable income. In addition, both current and future unused losses and other tax attributes may be subject to limitation under Sections 382 and 383 of the Code if we undergo an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in our equity ownership by certain stockholders over a three-year period. The Merger resulted in an ownership change of our company. The NOL carryforwards of pre-Merger, privately-held ARS Pharma may also be subject to limitation as a result of prior shifts in equity ownership and/or the Merger. Additional ownership changes in the future could result in additional limitations on our NOL carryforwards. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. For example, California recently imposed limits on the usability of California state NOL carryforwards and certain state tax credits in tax years beginning after 2023 and before 2027. Consequently, even if we achieve profitability in the future, we may not be able to utilize a material portion of our NOL carryforwards and other tax attributes, which could adversely affect our business, cash flow, financial condition or results of operations. 76 Risks Related to our Legal and Regulatory Environment neffy and our current or future intranasal epinephrine technology product candidates are subject to ongoing obligations and continued regulatory review, which may result in significant additional expense. neffy and our current or future intranasal epinephrine technology product candidates could be subject to post-marketing restrictions or withdrawal from the market and we, or any current or future licensing and collaboration partners, may be subject to substantial penalties if we, or they, fail to comply with regulatory requirements or if we, or they, experience unanticipated problems with our products following approval.* neffy and our current or future intranasal epinephrine technology product candidates, as well as, among other things, the manufacturing processes, post-approval studies, labeling, post-approval pharmacovigilance monitoring, advertising and promotional activities for neffy , is subject to ongoing requirements of and review by the FDA, the EMA and other applicable regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping. For certain commercial prescription drug products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA and comparable foreign regulatory authorities of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States or relevant territory. We and our contract manufacturers will also be subject to user fees and periodic inspection by regulatory authorities to monitor compliance with these requirements and the terms of any product approval we may obtain. Even if regulatory approval of a product candidate is granted, the approval may be subject to limitations on the indications or uses for which the product may be marketed or to the conditions of approval, including the requirement in the United States to implement a Risk Evaluation and Mitigation Strategy or the inclusion of a Boxed Warning, which highlights a specific life-threatening safety risk, or comparable foreign strategies and requirements. The FDA or other regulatory authorities may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of a product. For example, the FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling. Regulatory authorities impose stringent restrictions on manufacturers’ communications regarding off-label use. However, companies generally may share truthful and not misleading information that is otherwise consistent with a product’s approved labeling. If we, or any current or future licensing and collaboration partners, do not market neffy or our current or future intranasal epinephrine technology product candidates, for only its approved indications, we, or they, may be subject to warnings or enforcement action for off-label marketing if it is alleged that we are doing so. Violation of laws and regulations relating to the promotion and advertising of prescription drugs may lead to investigations or allegations of violations of federal and state health care fraud and abuse laws and state consumer protection laws, including the False Claims Act and any comparable foreign laws. In the EU, the direct-to-consumer advertising of prescription-only medicinal products is prohibited. Violations of the rules governing the promotion of medicinal products in the EU could be penalized by administrative measures, fines and imprisonment. These laws may further limit or restrict the advertising and promotion of our products to the general public, and may also impose limitations on our promotional activities with health care professionals. 77 In addition, later discovery of previously unknown side effects, adverse events or other problems with our products or their manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including: • restrictions on the manufacturing of such products; • restrictions on the labeling or marketing of such products; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning letters or untitled letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • restrictions on coverage by third-party payors; • fines, restitution or disgorgement of profits or revenues; • exclusion from federal health care programs such as Medicare and Medicaid or comparable foreign programs; • suspension, variation or withdrawal of regulatory approvals; • refusal to permit the import or export of products; • product seizure; or • injunctions or the imposition of civil or criminal penalties. The FDA and other regulatory agencies also closely regulate and monitor the post-approval marketing and promotional claims that may be made about drug products to ensure that the product is not promoted in a manner that results in the company making false or misleading claims. If the FDA or other agency determines that any of our advertising or promotional claims are misleading, not substantiated or not permissible, we may be subject to enforcement actions, including warning letters, and we may be required to revise our promotional claims and make other corrections or restitutions. Recently enacted and future legislation may increase the difficulty and cost for us to commercialize neffy or our current or future intranasal epinephrine technology product candidates and affect the prices we may obtain.* In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system, including cost-containment measures, that could reduce or limit coverage and reimbursement for newly approved drugs, prevent or delay marketing approval of neffy or our current or future intranasal epinephrine technology product candidates for potential additional indications, including urticaria, restrict or regulate post-approval activities and affect our ability to profitably sell neffy or our current or future intranasal epinephrine technology product candidates for which we obtain marketing approval. For example, in 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”), was signed into law. The ACA was intended, among other things, to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. The ACA and subsequent regulations increased the Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program for both branded and generic drugs and revised the definition of “average manufacturer price” for reporting purposes, which could further increase the amount of Medicaid drug rebates to states. However, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap for single source and innovator multiple source drugs, effective January 1, 2024. Further, the ACA imposed a significant annual fee on companies that manufacture or import branded prescription drug products, increased the number of entities eligible for discounts under the 340B program and included a discount on brand name drugs for Medicare Part D beneficiaries in the coverage gap, or “donut hole.” Substantial provisions affecting compliance have also been enacted, which may require us to modify our business practices with healthcare practitioners. 78 Since its enactment, there have been amendments and judicial, executive and Congressional challenges to certain aspects of the ACA. For example, on August 16, 2022, the IRA was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is unclear how any such challenges, and the healthcare reform measures of the second Trump administration will impact the ACA and our business. In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, on July 4, 2025, the annual reconciliation bill, the OBBBA, was signed into law which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. OBBBA also narrows access to ACA marketplace exchange enrollment and declines to extend the ACA enhanced advanced premium tax credits, set to expire at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. Additional changes include aggregate reductions to Medicare payments to providers of up to two percent per fiscal year pursuant to the Budget Control Act of 2011, which went into effect on April 1, 2013, and due to subsequent legislative amendments, will remain in effect until 2032, unless additional Congressional action is taken. Recently there has also been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. Presidential executive orders, congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. At the federal level, the IRA, among other things, (i) directs the U.S. Department of Health and Human Services (“HHS”) to negotiate the price of certain high-expenditure, single-source drugs that have been on the market for at least 7 years covered under Medicare (the “Medicare Drug Price Negotiation Program”), and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” for such drugs under the law, and (ii) imposes rebates with respect to certain drugs covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation. The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs as implemented. These provisions took effect progressively starting in fiscal year 2023. On August 15, 2024, HHS announced the price of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges. On January 17, 2025, HHS selected fifteen additional products covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. 79 The current administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, the Centers for Medicare & Medicaid Services (“CMS”) and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. These actions include, for example: (1) directives to reduce agency workforce and cut programs; (2) rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation to consider new payment and healthcare models to limit drug spending; (3) eliminating the Biden administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan; (4) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing “Most-Favored-Nation” pricing for pharmaceutical products; (5) imposing tariffs on imported pharmaceutical product; (6) directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans; and (7) as part of the Make America Healthy Again (MAHA) Commission’s recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. These actions and policies may significantly reduce U.S. drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks. If implemented, a “Most-Favored-Nation” pricing policy that is determined to apply to us and neffy based on a reference to the lowest ex-U.S. list price for our intranasal epinephrine product could significantly reduce the U.S. list price for neffy and likewise reduce our annual market opportunity for neffy in the United States. Additionally, in its June 2024 decision in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA. Congress may introduce and ultimately pass health care related legislation that could, among others, impact the drug approval process, modify the Medicare Drug Price Negotiation Program, expand the orphan drug exclusion in the IRA, and reduce Medicaid enrollment and funding. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. As an example, the regulatory landscape related to clinical trials in the EU has evolved. The EU Clinical Trials Regulation (“CTR”), which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each EU Member State, leading to a single decision for each EU Member State. The assessment procedure for the authorization of clinical trials has been harmonized as well, including a joint assessment by all EU Member States concerned, and a separate assessment by each EU Member State with respect to specific requirements related to its own territory, including ethics rules. Each EU Member State’s decision is communicated to the sponsor via the centralized EU portal. Once the clinical trial approved, clinical study development may proceed. The CTR foresaw a three-year transition period which ended on January 31, 2025. Since this date, all new or ongoing trials are subject to the provisions of the CTR Compliance with the CTR requirements by us and our third-party service providers, such as CROs, may impact our developments plans. In addition, on April 26, 2023, the European Commission adopted a proposal for a new Directive and Regulation to revise the existing pharmaceutical legislation. On April 10, 2024, the Parliament adopted its related position and on June 4, 2025, the European Council agreed on its position. The Council, the Parliament and the European Commission have begun trilogue negotiations with a view to reaching an agreement on the package. A decrease in data and market exclusivity opportunities for our current or future intranasal epinephrine technology product candidates in the EU could make them open to generic or biosimilar competition earlier than is currently the case with a related reduction in reimbursement status. Following Brexit, the UK and the EU signed an EU-UK Trade and Cooperation Agreement (“TCA”) which became provisionally applicable on January 1, 2021 and entered into force on May 1, 2021. This agreement sets out some aspects of the UK and EU’s relationship post-Brexit. The TCA primarily focuses on ensuring free trade between the EU and the UK in relation to goods, including medicinal products. Among the changes that have occurred are that the UK is treated as a “third country”, a country that is not a member of the EU and whose citizens do not enjoy the EU right to free movement (Northern Ireland continues to follow certain limited EU regulatory rules, including in relation to medical devices, but not in relation to medicinal products). As part of the TCA, the EU and the UK recognize GMP inspections carried out by the other party and the acceptance of official GMP documents issued by the other party. The TCA also encourages, although it does not oblige, the parties to consult one another on proposals to introduce significant changes to technical regulations or inspection procedures. Among the areas of absence of mutual recognition are batch testing and batch release. The UK has unilaterally agreed to accept EU batch testing and batch release. However, the EU continues to apply EU laws that require batch testing and batch release to take place in the EU territory. This means that medicinal products that are tested and released in the UK must be retested and re-released when entering the EU market for commercial use. 80 On February 27, 2023, the UK Government and the European Commission reached a political agreement on the so-called “Windsor Framework”. The Windsor Framework is intended to revise the Northern Ireland Protocol to address some of the perceived shortcomings in its operation. The agreement was adopted at the Withdrawal Agreement Joint Committee on March 24, 2023, and the arrangements under the Windsor Framework relating to medicinal products took effect on January 1, 2025. As it relates to marketing authorizations, the United Kingdom has a separate regulatory submission process, approval process and a separate national marketing authorization. Northern Ireland continued, until January 1, 2025, to be covered by the marketing authorizations granted by the European Commission but the Windsor Framework provides that the UK MHRA is the sole regulatory body responsible for granting marketing authorizations for Northern Ireland as of January 1, 2025. A significant proportion of the regulatory framework in the UK applicable to medicinal products is currently derived from EU Directives and Regulations. The potential for UK legislation to diverge from EU legislation following Brexit could materially impact the regulatory regime with respect to the development, manufacture, import, approval, and commercialization of our product candidates in the UK or the EU. All of these changes could increase our costs and otherwise adversely affect our business. Any delay in obtaining, or an inability to obtain, any regulatory approvals, as a result of Brexit or otherwise, would prevent us from commercializing our product candidates in the UK and restrict our ability to generate revenue and achieve and sustain profitability in the future. Any further changes in international trade, tariff and import/export regulations as a result of Brexit or otherwise may impose unexpected duty costs or other non-tariff barriers on us. These developments, or the perception that any of them could occur, may significantly reduce global trade and, in particular, trade between the impacted nations and the UK. These laws and the regulations and policies implementing them, as well as other healthcare reform measures that may be adopted in the future, particularly in light of any U.S. presidential and Congressional election, may have a material adverse effect on our industry generally and on our ability to successfully develop and commercialize neffy or our current or future intranasal epinephrine technology product candidates. Disruptions at the FDA, including due to a reduction in the FDA’s workforce and/or inadequate funding for the FDA, could prevent the FDA from performing normal functions on which our business relies.* The ability of the FDA to review and approve new products or review other regulatory submissions can be affected by a variety of factors, including statutory, regulatory and policy changes, inadequate government budget and funding levels, a reduction in the FDA’s workforce and its ability to hire and retain key personnel. Disruptions at the FDA and other agencies may also increase the time to meet with and receive agency feedback, review and/or approve our submissions, conduct inspections, issue regulatory guidance, or take other actions that facilitate the development, approval and marketing of regulated products, which would adversely affect our business. In addition, government proposals to reduce or eliminate budgetary deficits may include reduced allocations to the FDA and other related government agencies. For example, government shutdowns and reductions in the FDA’s workforce and budgetary pressures could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the marketing of our products which could have a material adverse effect on our business. 81 Governments outside the United States may impose strict price controls, which may adversely affect our revenues, if any.* In some countries, including certain Member States of the EU, the pricing of prescription drugs is, in part, subject to governmental control. Additional countries may adopt similar approaches to the pricing of prescription drugs. In such countries, pricing negotiations with governmental authorities can take considerable time after receipt of regulatory approval for a product. The EU provides options for the EU Member States to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU Member States may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other EU Member States allow companies to fix their own prices for drug products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after coverage and reimbursement have been obtained. Reference pricing used by various countries and parallel distribution, or arbitrage between low-priced and high-priced countries, can further reduce prices. In some countries, we may be required to conduct a clinical study or other studies that compare the cost-effectiveness of our current or future intranasal epinephrine technology product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval, which is time-consuming and costly. This Health Technology Assessment (“HTA”) of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country. The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between EU Member States. In December 2021, Regulation No 2021/2282 on HTA amending Directive 2011/24/EU, was adopted in the EU. This Regulation, which entered into force in January 2022 and began to apply on January 12, 2025 through a phased implementation, is intended to boost cooperation among EU Member States in assessing health technologies, including new medicinal products, and providing the basis for cooperation at EU level for joint clinical assessments in these areas. The Regulation permits EU Member States to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU Member States continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement. We cannot be sure that such prices and reimbursement will be acceptable to us. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If pricing is set at unsatisfactory levels or if reimbursement of our products is unavailable or limited in scope or amount, our revenues from sales by us or our strategic partners and the potential profitability of our current or future intranasal epinephrine technology product candidates in those countries would be negatively affected. Our business activities may be subject to the FCPA and similar anti-bribery and anti-corruption laws of other countries in which we may operate, as well as U.S. and certain foreign export controls, trade sanctions, and import laws and regulations. Compliance with these legal requirements could limit our ability to compete in foreign markets and subject us to liability if we violate them. If we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate. Our business activities may be subject to the Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate. The FCPA generally prohibits companies and their employees and third-party intermediaries from offering, promising, giving or authorizing the provision of anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action or otherwise obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S. governments. Additionally, in many other countries, hospitals owned and operated by the government, and doctors and other hospital employees would be considered foreign officials under the FCPA. Recently the SEC and Department of Justice have increased their FCPA enforcement activities with respect to biotechnology and pharmaceutical companies. There is no certainty that all of our employees, agents or contractors, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or employees, disgorgement, and other sanctions and remedial measures, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer neffy in one or more countries and could materially damage our reputation, brand, international activities, ability to attract and retain employees, and business, prospects, operating results and financial condition. 82 In addition, neffy or our current or future intranasal epinephrine technology product candidates may be subject to U.S. and foreign export controls, trade sanctions and import laws and regulations. Governmental regulation of the import or export of neffy or our current or future intranasal epinephrine technology product candidates, or our failure to obtain any required import or export authorization for neffy or our current or future intranasal epinephrine technology product candidates, when applicable, could harm our international sales and adversely affect our revenue. Compliance with applicable regulatory requirements regarding the export of neffy or our current or future intranasal epinephrine technology product candidates may create delays in the introduction of any additional indications in international markets or, in some cases, prevent the export of neffy or our current or future intranasal epinephrine technology product candidates to some countries altogether. Furthermore, U.S. export control laws and economic sanctions prohibit the shipment of certain products and services to countries, governments, and persons targeted by U.S. sanctions. If we fail to comply with export and import regulations and such economic sanctions, penalties could be imposed, including fines and/or denial of certain export privileges. Moreover, any new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or in the countries, persons, or products targeted by such regulations, could result in decreased use of neffy or our current or future intranasal epinephrine technology product candidates by, or in our decreased ability to export neffy or our current or future intranasal epinephrine technology product candidates to existing or potential customers with international operations. Any decreased use of neffy or our current or future intranasal epinephrine technology product candidates or limitation on our ability to export or sell neffy or our current or future intranasal epinephrine technology product candidates would likely adversely affect our business. 83 Our relationships with customers, health care professionals and third-party payors may be subject to applicable healthcare laws, which could expose us to penalties, including administrative, civil or criminal penalties, damages, fines, imprisonment, exclusion from participation in federal healthcare programs such as Medicare and Medicaid, reputational harm, the curtailment or restructuring of our operations and diminished future profits and earnings.* Healthcare professionals and third-party payors will play a primary role in the recommendation and prescription of neffy or our current or future intranasal epinephrine technology product candidates for which we obtain marketing approval. Our current and future arrangements with customers, healthcare professionals and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we conduct research, market, sell and distribute neffy or our current or future intranasal epinephrine technology product candidates for which we obtain marketing approval. Restrictions under applicable federal and state healthcare laws and regulations include the following, among others: • the federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Although there are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Further a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • federal civil and criminal false claims laws, including the False Claims Act, prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, or causing to be made, a false statement to get a false claim paid. Over the past few years, several pharmaceutical and other healthcare companies have been prosecuted under these laws for a variety of alleged promotional and marketing activities, including: allegedly providing free items and services, sham consulting fees and grants and other monetary benefits to prescribers; reporting to pricing services inflated average wholesale prices that were then used by federal programs to set reimbursement rates; engaging in off-label promotion that caused claims to be submitted to government healthcare programs for non-covered, off-label uses; and submitting inflated best price information to the Medicaid Drug Rebate Program to reduce liability for Medicaid rebates. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act; • federal civil monetary penalties laws impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies; • HIPAA which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, of any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless or the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services; like the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • the Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, which impose obligations on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” and their covered subcontractors that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; 84 • federal price reporting laws require manufactures to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products; • federal and state consumer protection and unfair competition laws broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous state and foreign laws and regulations of each of the laws described above, such as anti-kickback and false claims laws, that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; laws that require biotechnology companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; laws that require biotechnology companies to report information on the pricing of certain drug products; and laws require the registration or pharmaceutical sales representatives. For example, in the EU, interactions between pharmaceutical companies and healthcare professionals and healthcare organizations are also governed by strict laws, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct both at EU level and in the individual EU Member States. Because of the breadth of these laws and the narrowness of available statutory exceptions and regulatory safe harbors, it is possible that some of our business activities, particularly any sales and marketing activities from neffy or our current or future intranasal epinephrine technology product candidates that have been approved for marketing in the United States or elsewhere, could be subject to legal challenge and enforcement actions. If our operations, or those of our partners and collaborators, are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to significant penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, exclusion from governmental health care programs, a corporate integrity agreement or other agreement to resolve allegations of non-compliance, imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results. We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security. Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.* In the ordinary course of business, we process sensitive data. Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security. In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). For example, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM”) and the Telephone Consumer Protection Act of 1991 (“TCPA”) impose specific requirements on communications with customers. The TCPA, for example, imposes various consumer consent requirements and other restrictions on certain telemarketing activity and other communications with consumers by phone, fax or text message. TCPA violations can result in significant financial penalties, including penalties or criminal fines imposed by the Federal Communications Commission or fines of up to $1,500 per violation imposed through private litigation or by state authorities. Numerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide any product that receives regulatory approval. Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the California Consumer Privacy Act of 2018 (the “CCPA”), applies to personal information of consumers, business representatives, and employees, and requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights. The CCPA provides for civil penalties and allows private litigants affected by certain data breaches to recover significant statutory damages. Although the CCPA exempts some data processed in the context of clinical trials, the CCPA increases compliance costs and potential liability with respect to other personal data we maintain about California residents. Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future. 85 Additionally, we are subject to new laws governing the privacy of consumer health data, including reproductive, sexual orientation, and gender identity privacy rights. For example, Washington’s My Health My Data Act (“MHMD”) broadly defines consumer health data, places restrictions on processing consumer health data (including imposing stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law. Other states are considering and may adopt similar laws. Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security. For example, the EU’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”) (collectively, “GDPR”) and Australia’s Privacy Act, impose strict requirements for processing personal data. For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR. 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests. Furthermore, we also conduct clinical trials in Asia and have operations in Japan and are subject to new and emerging data privacy regimes in Asia, including China’s Personal Information Protection Law, Japan’s Act on the Protection of Personal Information, and Singapore’s Personal Data Protection Act. China’s PIPL imposes a set of specific obligations on covered businesses in connection with their processing and transfer of