What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-09 compared with 2025-03-20 · 643 added, 544 removed, 397 unchanged (75% of the section changed)

Financial Statements and Supplementary Data

ARS Pharmaceuticals, Inc.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Operations and Comprehensive (Loss) Income

Consolidated Statements of Stockholders’ Equity

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Notes to Consolidated Financial Statements

Nature of Business

Summary of Significant Accounting Policies

Net (Loss) Income Per Share

Collaboration, Out-Licensing, and Related Agreements

Intangible Assets

Fair Value Measurements

Balance Sheet Details

Commitments and Contingencies

In-Licensing and Supply

Common Stock and Stockholders’ Equity

Stock-Based Compensation

Related-Party Transactions

Segment Information

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of ARS Pharmaceuticals, Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive (loss) income, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Description of the Matter

As described in Note 2 to the consolidated financial statements, the Company records product revenue with each sale at the transaction price, net of reserves for variable consideration, including but not limited to commercial rebates owed to pharmacy benefit managers and managed care organizations.

The Company estimates the rebate amounts owed based on the expected number of claims and the related cost that is associated with the revenue being recognized for product that remains in the distribution channel and any rebate amounts for product that has been dispensed to a patient but not invoiced to the Company at the end of each reporting period.

Rebate estimates are recorded as other current liabilities on the consolidated balance sheet.

Auditing management's estimates of commercial rebates was especially challenging because the related accruals were dependent on certain significant assumptions including the expected number of claims and the related cost that is associated with the revenue being recognized for product that remains in the distribution channel and for which the product has been dispensed to a patient but has not been invoiced at the end of each reporting period.

How We Addressed the Matter in Our Audit

To test the commercial rebates, our audit procedures included, among others, understanding and evaluating the significant assumptions and the underlying data used in management's calculations.

This included testing contractual arrangements and management’s estimates of expected claims for product that remains in the distribution channel and for which the product has been dispensed to a patient but the Company has not been invoiced at the end of the reporting period.

In addition, we inspected the results of the Company's analysis of commercial rebates and evaluated the estimates made based on historical experience.

/s/ Ernst & Young LLP

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(in thousands, except par value and share amounts)

December 31, 2024

December 31, 2023

Current assets:

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Total current assets

Long-term inventories

Right-of-use asset

Fixed assets, net

Inventories, noncurrent

Property, plant and equipment, net

Intangible assets, net

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Contract liability, current

Lease liability, current

Other current liabilities

Total current liabilities

Term loans, net (including related party amounts of $ 4,819 and $ 0 , respectively)

Financing liability

Contract liability

Lease liability, net of current portion

Contract liability, net of current portion

Other accrued liabilities

Total liabilities

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Total liabilities and stockholders’ equity

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

ARS Pharmaceuticals, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except share and per share information)

Year Ended December 31,

Consolidated Statements of Operations and Comprehensive (Loss) Income

(in thousands, except share and per share data)

Years Ended December 31,

Product revenue, net

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Loss from operations

Other income, net

Income (loss) before income taxes

Income tax provision

Net income (loss)

Change in unrealized gains and losses on available-for-sale securities

Comprehensive income (loss)

Net income (loss) per share:

Weighted-average shares outstanding used in computing net income (loss) per share:

The accompanying notes are an integral part of these financial statements.

Other income (expense), net:

Interest income

Interest expense (including related party amounts of $ 130 and $ 0 , respectively)

Total other income, net

(Loss) income before income tax (benefit) expense

Income tax (benefit) expense

Net (loss) income

Unrealized (losses) gains on available-for-sale securities

Comprehensive (loss) income

Net (loss) income per share:

Weighted-average shares outstanding used in computing net (loss) income per share:

The accompanying notes are an integral part of these consolidated financial statements.

ARS Pharmaceuticals, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

Additional Paid-in Capital

Accumulated Other Comprehensive Gain, Net

Accumulated Deficit

Total Stockholders’ Equity

(in thousands, except share data)

Comprehensive

Stockholders’

Paid-in Capital

Gain (Loss), Net

Balance at December 31, 2023

Exercise of common stock options, shares issued under the employee stock purchase plan, and release of restricted stock units

Exercise of common stock options, release of restricted stock units, and issuance of common stock under the employee stock purchase plan

Stock-based compensation

Removal of retrospective insurance policy acquired in the Merger

Net loss and comprehensive loss

Net income and comprehensive income

Balance at December 31, 2024

Exercise of common stock options, shares issued under the employee stock purchase plan, and release of restricted stock units

Exercise of common stock options, release of restricted stock units, and issuance of common stock under the employee stock purchase plan

Stock-based compensation

Net income and comprehensive income

Net loss and comprehensive loss

Balance at December 31, 2025

The accompanying notes are an integral part of these financial statements

The accompanying notes are an integral part of these consolidated financial statements.

ARS Pharmaceuticals, Inc.

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(in thousands)

Year Ended December 31,

Years Ended December 31,

Cash flows from operating activities:

Net income (loss)

Non-cash adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net (loss) income

Non-cash adjustments to reconcile net (loss) income to net cash used in operating activities:

Stock-based compensation expense

Amortization and accretion, net

Provision for inventory reserve

Depreciation and amortization expense

Accretion on investments, net of amortization

Other non-cash items

Changes in operating assets and liabilities:

Accounts receivable

Prepaid and other assets

Accounts payable and accrued liabilities (including related party amounts of $ 478 and $ 162 , respectively)

Operating right-of-use assets and lease liabilities, net

Prepaid expenses and other assets

Accounts payable and accrued liabilities

Contract liability

Net cash provided by (used in) operating activities

Net cash and cash equivalents (used in) provided by operating activities

Cash flows from investing activities:

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Payments of milestone obligations under license agreements

Purchase of property and equipment

Net cash used in investing activities

Purchases of property and equipment

Net cash and cash equivalents provided by (used in) investing activities

Cash flows from financing activities:

Financing liability

Proceeds from exercise of common stock options and employee stock purchase plan

Net cash provided by financing activities

Net change in cash and cash equivalents

Proceeds from term loan, net of issuance costs

Proceeds from exercise of common stock options and issuance of common stock under the employee stock purchase plan

Proceeds from milestone obligations met under license agreements recognized as an increase to the financing liability

Net cash and cash equivalents provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

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Supplemental cash flow information:

Removal of retrospective insurance policy acquired in the Merger, included in prepaid and other current assets and other assets, and related reduction in additional paid in capital

Stock-based compensation capitalized into inventory

Purchases of inventories included in accounts payable

Purchases of property and equipment reclassed from prepaid expenses and other current assets

The accompanying notes are an integral part of these financial statements.

Cash paid for interest

The accompanying notes are an integral part of these consolidated financial statements.

ARS Pharmaceuticals, Inc.

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ARS Pharmaceuticals, Inc.

(“ARS”, “ARS Pharma” or the “Company”) is a biopharmaceutical company focused on the commercialization and development of neffy (previously referred to as ARS-1 and 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.

(“ARS”, “ARS Pharma” or the “Company”) is a biopharmaceutical company focused on the commercialization and development of neffy (currently identified in the European Union and United Kingdom by the trade name EURneffy and in China by the trade name 优敏速 ) for needle-free intranasal delivery of epinephrine for 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.

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

The Company has incurred net operating losses since its inception and had an accumulated deficit of $ 123.3 million as of December 31, 2024.

The Company had cash, cash equivalents, and short-term investments of $ 314.0 million as of December 31, 2024 and has not generated positive cash flows from operations.

To date, the Company has funded its operations primarily with proceeds from the merger with Silverback in November 2022 (the “Merger”), the issuance of convertible preferred stock, payments earned under collaboration agreements, bank debt, and limited net product sales.

The Company has incurred net operating losses in most years since its inception and had an accumulated deficit of $ 294.6 million as of December 31, 2025.

The Company had cash, cash equivalents, and short-term investments of $ 245.0 million as of December 31, 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 Therapeutics, Inc.

(“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 December 31, 2025 are sufficient to meet its anticipated cash requirements for at least the 12 months following the date these financial statements are issued.

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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 ever achieve profitability, or if achieved, that it will be sustained on a continuing basis.

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.

Summary of Significant Accounting Policies

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The Company’s functional and reporting currency is the U.S.

Assets and liabilities that are not d enominated in the functional currency are remeasured into U.S.

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 consolidated statements of operations and comprehensive income (loss).

Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in other income in the accompanying consolidated statements of operations and comprehensive (loss) income.

All adjustments considered necessary for a fair presentation have been included.

Use of Estimates

The preparation of the Company’s 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 consolidated financial statements and accompanying notes.

The most significant estimates in the Company’s consolidated financial statements relate to revenue recognized for its collaboration agreements, accruals for variable components of product revenue, and accruals for research and development expenses and valuation of equity awards.

These estimates and assumptions are based on curr ent 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.

The preparation of the Company’s consolidated financial statements requires management 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 consolidated financial statements and accompanying notes.

The most significant estimates in the Company’s consolidated financial statements are revenue recognized under collaboration agreements and accruals for variable consideration of product revenue.

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.

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.

Cash and Cash Equivalents

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The Company considers all highly liquid investments with remaining maturities when purchased of 90 days or less to be cash equivalents.

Trade Accounts Receivable and Allowance

Trade accounts receivable are amounts owed to the Company by its customers for product that has been delivered.

Trade accounts receivable are recorded at wholesale acquisition cost (“WAC”), less purchase price discounts, prompt pay discounts, chargebacks, and an allowance for credit losses, if any.

The Company invests excess cash in investment grade fixed income securities.

These investments are included in short-term investments on the accompanying consolidated balance sheets, classified as available-for-sale, and reported at fair value with unrealized gains and losses included in accumulated other comprehensive gain, net.

Realized gains and losses on the sale of securities are recognized in other income, net.

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 due under the Company’s collaboration agreements and 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 based on each customer’s trade accounts receivable balance and age, their financial condition, and the general economic environment.

The Company must also use professional judgment because neffy was commercially launched in September 2024 and historical data is limited.

The Company is currently operating under the Title Agreement (as defined in Note 4 - Revenue ) with its 3PL Agent (as defined in Note 4 - Revenue ) and the 3PL Agent retains all credit and collection risk on sales to the Company’s wholesale distributors and pharmacy customers.

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.

No allowance for credit losses was deemed necessary at December 31, 2024.

The Company invests excess cash in investment grade fixed income securities.

These investments are included in short-term investments on the balance sheets, classified as available-for-sale, and reported at fair value with unrealized gains and losses included in accumulated other comprehensive gain, net.

Realized gains and losses on the sale of securities are recognized in net income or 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, accounts payable, accrued liabilities, and contract liability, are considered to be representative of their respective fair values because of the short-term nature of those instruments.

The allowance for credit losses was immaterial at December 31, 2025 , and no allowance for credit losses was deemed necessary at December 31, 2024 .

Concentrations of Credit Risk

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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 trade accounts receivable from product sales.

neffy is distributed primarily through wholesale distributors and pharma cies.

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 extends credit to its customers in the normal course of business after evaluating their overall financial condition.

As stated above, t he Company is currently operating under the Title Agreement with its 3PL Agent (as defined in Note 4 - Revenue ) and the 3PL Agent retains all credit and collection risk on sales to the Company’s wholesale distributors and pharmacy customers.

As of December 31, 2024, the Company’s 3PL Agent made up 93 % of its trade accounts receivable balance.

For the year ended December 31, 2024 , the Company’s seven largest customers combined made up 94 % of its gross product sales.

Historically, the Company has not experienced any credit losses from product sales.

For the year ended December 31, 2024 , the Company’s three largest customers combined made up 100 % of its revenue under collaboration agreements.

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 the Revenue Recognition policy), under which the Title Agent (as defined in the Revenue Recognition policy) retained all credit and collection risk on product sales to the Company’s wholesale distributors and pharmacy customers.

As of August 2025, the Company ceased operating under the Title Agreement and now retains all credit and collection risk on product sales.

At December 31, 2025 , five customers accounted for 82 % of accounts receivable with each individual customer ranging from 12 % to 21 %.

As of December 31, 2024 , one customer, the Title Agent, accounted for 93 % of accounts receivable.

For the years ended December 31, 2025 and 2024 , four and six customers accounted for 79 % and 89 % of the Company’s gross product sales, with each individual customer ranging from 15 % to 22 % and 11 % to 23 % of the Company’s gross product sales, respectively.

For the year ended December 31, 2025 , three customers accounted for 94 % and 90 % of revenue under collaboration agreements, with each individual customer ranging from 18 % to 43 % of the Company’s revenue under collaboration agreements.

For the year ended December 31, 2024 , one customer accounted for 90 % of revenue under collaboration agreements.

For the years ended December 31, 2025 and 2024 , one customer accounted for 86 % and 100 % of revenue under supply agreements, respectively.

To date, the Company has not experienced any credit losses from its trade and partner accounts receivable.

Inventories consist of finished goods held for sale and distribution, raw materials and work in process, and include labor and overhead.

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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 consolidated statements of operations.

Such impairment charges, if any, are recorded in cost of goods sold on the accompanying consolidated statements of operations.

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.

As such, when regulatory approval is received, this may result in zero-cost inventory that 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.

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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 December 31, 2024.

Intangible Assets

Intangible assets are measured at fair value as of the acquisition date or, in the case of capitalized 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.

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.

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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 consolidated statements of operations and comprehensive income (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.

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 accompanying consolidated statements of operations and comprehensive (loss) income.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment, the ROU asset, 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.

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 December 31, 2025 .

Revenue Recognition

The Company’s revenues consist of product sales of neffy and revenue derived from its collaboration and out-licensing agreements.

See Note 4 - Revenue for more detail on product revenue, and Note 9 - Collaboration and Out-Licensing for more detail on revenue from collaboration and out-licensing agreements.

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

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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.

Cost of Goods Sold

Cost of goods sold consists primarily of direct and indirect costs related to the manufacture of neffy for commercial sale, including 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 will initially reflect 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 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 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.

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.

The Company’s advertising expense was $ 12.5 million for the year ended December 31, 2024 .

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.

Costs incurred to acquire technology licenses and milestone payments made on existing agreements are charged to research and development expense 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.

Acquired in-process research and development expense

Acquired in-process research and development expense (“IPR&D”) is expensed on the acquisition date if there is no alternative future use.

Contingent consideration payments in asset acquisitions are recognized when the contingency is resolved and the consideration becomes payable.

Milestone payments made to third parties subsequent to regulatory approval will be capitalized as intangible assets and amortized over the estimated remaining useful life of the related product.

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 Income (Loss)

Comprehensive income (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 income or 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.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (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 this new standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements — Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.

The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.

The standard is effective for the Company beginning in fiscal year 2025, 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.

Net Income (Loss) Per Share

Basic net income (loss) per share attributable to common stockholders is calculated using the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities.

Diluted net income (loss) per share attributable to common stockholders is calculated using the weighted-average number of common stock outstanding and, when dilutive, potential shares of common stock outstanding during the period.

The impact of potential shares of common stock outstanding is generally antidilutive during periods of net loss.

The following table provides the calculation of basic and diluted net income (loss) per share (in thousands, except share and per share information):

As of December 31,

Net income (loss) per share, basic:

Net income (loss)

Shares used in computation:

Weighted-average common shares outstanding, basic

Net income (loss) per share, basic

Net income (loss) per share, diluted:

Net income (loss)

Shares used in computation:

Weighted-average common shares outstanding, basic

Weighted-average effect of potentially dilutive securities:

Stock options

Shares to be purchased under Employee Stock Purchase Plan

Restricted stock units

Diluted weighted-average common shares outstanding

Net income (loss) per share, diluted

The following securities are excluded from the calculation of weighted-average dilutive common shares because their inclusion would have been antidilutive.

As of December 31,

Warrants to purchase common stock

Common stock options granted and outstanding

Restricted stock units

The Company’s revenues consist primarily of product sales of neffy and revenue derived from its collaboration and out-licensing agreements.

See Note 9 - Collaboration and Out-Licensing for further discussion related to those arrangements.

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.

The Company entered into a title model agreement (“Title Agreement”) with the 3PL Agent so that the 3PL Agent may purchase and take title to neffy and then sell it to the Company’s wholesale distributors and pharmacy customers that have contracted to make a purchase.

Under the Title Agreement, the economic substance of the transaction is such that the Company does not recognize revenue until neffy is sold and title has transferred from the 3PL Agent to a wholesale distributor or pharmacy.

The Company also entered into sales agreements with pharmacies that are not subject to the Title Agreement.

Under these agreements, the pharmacy holds 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.

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 income in the period of adjustment.

Trade accounts receivable due to the Company from contracts with its customers are stated separately in the balance sheet, net of various allowances as described in the Trade Accounts Receivable and Allowance policy in Note 2 - Summary of Significant Accounting Policies .

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 services fees – The Company pays distribution service fees to its wholesale distributors.

Product revenue, net

The Company’s product, 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 sells its product to its wholesale distributor and pharmacy customers in the United States.

These customers subsequently resell the products to pharmacies and health care providers or dispense products directly to patients.

The Company uses a third-party logistics provider to support the warehousing, distribution, order processing, accounts receivable, and data management.

From September 2024 to July 2025, the Company operated under a title model agreement (the “Title Agreement”), pursuant to which an affiliate of third-party logistics provider (the “Title Agent”) purchased and took title of the Company’s product, then resold it to the Company’s customers.

Beginning in August 2025, the Company discontinued the Title Agreement and now sells its products directly to customers.

In accordance with ASC 606, the Company recognizes revenue at a point in time when the customers obtain control of the Company’s products, typically upon delivery.

The Company also enters into consignment agreements with certain pharmacies, under which revenue is recognized when the product is sold to a patient and control transfers from the Company to the patient.

Consignment agreements were not subject to the Title Agreement.

Product revenue is recorded at the net transaction price, which includes estimates for variable consideration such as distribution service fees, prompt pay discounts, product returns, chargebacks, rebates, co-payment assistance, and other incentives for certain indirect customers.

The Company establishes reserves for these estimates based on amounts earned or expected to be claimed on related sales.

Reserves are recorded as a reduction to accounts receivable if payable to a customer or as an accrued expense if payable to a third-party or related to product returns.

The Company uses the expected value method to determine the appropriate amount of variable consideration, considering factors such as contractual and statutory requirements, known market events, industry trends and data, forecasted customer buying and payment patterns, and historical actual data.

Estimates are reassessed each reporting period, and adjustments are recorded on a cumulative catch-up basis, which would affect product revenue and net (loss) income in the period of adjustment.

Variable consideration is included in net product revenue only to the extent it is probable that a significant revenue reversal will not occur in a future period.

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 consolidated balance sheets.

Commercial pharmacy discounts – The Company provides discounts to its pharmacy customers.

These fees are recorded as other current liabilities on the accompanying 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 consolidated balance sheets.

Prompt pay discounts – The Company incentivizes on time invoice payments through prompt pay discounts.

They are calculated at the time of sale based on the amount purchased.

These discounts are recorded as contra trade accounts receivable on the accompanying 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 consolidated balance sheets.

Chargebacks – Certain government entities and covered entities (e.g.

Prompt pay discount estimates are recorded as contra trade accounts receivable on the accompanying consolidated balance sheets.

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 cost that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period.

Estimated chargebacks are recorded as contra trade accounts receivable on the 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 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 accompanying consolidated balance sheets.

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 cost that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period.

Rebate estimates are recorded as other current liabilities on the 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 being recognized for product that remains in the distribution channel at the end of each reporting period.

Co-payment programs estimates are recorded as other current liabilities on the 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 lack of historical sales and returns data, the Company used professional judgment and industry data to estimate returns.

A reserve for potential product returns is recorded as other current liabilities on the consolidated balance sheets.

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.

Capitalized inventories consisted of the following (in thousands):

As of December 31,

Finished goods

Total inventory, current

Raw materials, noncurrent

Work in process, noncurrent

Finished goods, noncurrent

Total inventory

Prior to FDA approval in August 2024, costs incurred for the manufacture of neffy were recorded as research and development expenses , which upon approval resulted in zero-cost inventory.

The Company had $ 11.7 million in zero-cost inventory remaining as of December 31, 2024 , none of which was determined to be obsolete.

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;

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):

December 31, 2024

Amortized Cost

Gross unrealized gains

Gross unrealized losses

Estimated Fair Value

Cash and cash equivalents - Money market mutual funds

Cash and cash equivalents - U.S.

Treasury securities

Short-term investments - U.S.

Treasury securities

December 31, 2023

Cash and cash equivalents - Money market mutual funds

Short-term investments - U.S.

Treasury securities

There were no transfers between the Level 1 and Level 2 categories or into or out of the Level 3 category during the periods presented.

During the year ended December 31, 2024, the Company purchased $ 356.0 million in short-term investments, and there was $ 258.0 million in maturities of short-term investments.

During the year ended December 31, 2023, the Company purchased $ 272.0 million in short-term investments, and there was $ 185.0 million in maturities of short-term investments.

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 a $ 0.2 million net unrealized gain on available-for-sale securities for the year ended December 31, 2024 and a $ 0.4 million net unrealized loss on available-for-sale securities for the year ended December 31, 2023.

For the year ended December 31, 2023 , $ 0.3 million was reclassified from accumulated other comprehensive gain to other income.

Management determined that the gross unrealized losses on the Company’s available-for-sale securities as of December 31, 2024 were primarily attributable to current economic and market conditions and not credit risk.

As of December 31, 2024 and 2023, no allowance for credit losses was recorded.

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 on the Company's available-for-sale securities was $ 1.0 million as of December 31, 2024 and is included in prepaid expenses and other current assets in the accompanying consolidated balance sheet.

As of December 31, 2024 and 2023, the Company did no t have any liabilities that were measured at fair value on a recurring basis.

Balance Sheet Details

Prepaid expenses and other current assets consisted of the following (in thousands):

December 31, 2024

December 31, 2023

Prepaid expenses

Prepaid insurance

Interest receivable

Fixed assets, net consisted of the following (in thousands):

December 31, 2024

December 31, 2023

Furniture and fixtures

Leasehold improvements

Less accumulated depreciation

Depreciation expense was $ 0.1 million for the years ended December 31, 2024 and 2023.

Other long-term assets consisted of the following (in thousands):

December 31, 2024

December 31, 2023

Prepaid supply agreement fee

Capitalized software implementation costs

Security deposit

Accounts payable and accrued liabilities consisted of the following (in thousands):

December 31, 2024

December 31, 2023

Accounts payable

Accrued inventory

Accrued compensation

Accrued gross-to-net adjustments

Accrued marketing related expenses

Intangible assets, net

As described in Note 11 - In-Licensing and Supply , under the Aegis Agreement the Company capitalized a $ 2.5 million milestone payment in August 2024 and a $ 5.0 million milestone payment in September 2024.

The assets are amortized on a straight-line basis over the estimated life of the intellectual property of 14.5 years, beginning from the first commercial sale of neffy in September 2024.

Intangible assets, net, all of which are finite-lived, consisted of the following (in thousands):

December 31, 2024

December 31, 2023

Capitalized milestone payments

Less accumulated depreciation

The amortization expense for the year ended December 31, 2024 was $ 0.1 million.

As of December 31, 2024, estimated future amortization expense for capitalized intangible assets is as follows for the next five years (in thousands):

Collaboration and Out-Licensing

The Company has entered into collaboration and licensing agreements, including supply and distribution, to license certain rights to neffy to third parties.

The Company estimates the amount of 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 for product that has been dispensed to a patient but not invoiced to the Company at the end of each reporting period.

Rebate estimates are recorded as other current liabilities on the accompanying 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 accompanying 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 accompanying consolidated balance sheets.

Revenue under collaboration and supply agreements

The Company enters into collaboration agreements to license certain rights to neffy to third parties and supply neffy for distribution.

At contract inception, the Company evaluates whether the collaboration agreement involves joint operating activities in which the parties are active participants and share significant risks and rewards in accordance with ASC Topic 808, Collaborative Agreements (“ASC 808”).

Arrangements that meet these criteria are accounted for as collaborative arrangements under ASC 808.

This assessment is updated over the life of the arrangement as roles and responsibilities change.

For collaboration agreements within the scope of ASC 808 that include multiple components, the Company determines which components are accounted for under ASC 808 and which components represent vendor-customer relationships accounted for under ASC 606.

For components accounted for under ASC 808, the Company applies a consistent recognition approach based on applicable accounting guidance or a reasonable policy election.

Amounts due from or payable to collaboration partners are presented in the income statement based on the nature of the underlying activity.

When the Company is the principal in sales to third parties, revenues, cost of goods sold, and operating expenses are recorded on a gross basis.

When the Company is not the principal, its share of results is recorded on a net basis as collaboration revenue or expense.

If the Company concludes that some or all components of the agreement are distinct and represent a transactions with a customer, the Company accounts for those elements of the arrangement in accordance with ASC 606 by applying the five-step model described above.

The terms of these arrangements typically include payment to the Company of one or more of the following:

non-refundable, up-front license fees;

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.

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, up-front 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 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 would be accounted for as additional financing proceeds and would increase the financing obligation on the Company’s consolidated balance sheet.

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 in the accompanying 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, up-front fees.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

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If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price.

In making the assessment of the constraint, the Company considers several factors, such as the stage of product development, the risks associated with the remaining activities required to achieve the milestones, as well as whether the achievement of the milestone is outside the control of the Company.

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.

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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).

The Company has not received any royalty or transfer price revenues as of December 31, 2024.

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.

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.

Costs for producing advertising are expensed when incurred.

For the years ended December 31, 2025 and 2024, advertising costs were $ 99.8 million and $ 12.5 million, respectively.

Costs incurred to acquire technology licenses and milestone payments made under existing agreements are expensed prior to FDA approval and capitalized after FDA approval when technological feasibility has been achieved, based on management’s assessment of the ultimate recoverability and the potential for alternative future use.

Stock-Based Compensation

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.

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the statements of operations in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized.

In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

As of December 31, 2025 and 2024, the Company maintained valuation allowances against its deferred tax assets as the Company concluded it had not met the “more likely than not” to be realized threshold.

Changes in the valuation allowance when they are recognized in the provision for income taxes may result in a change in the estimated annual effective tax rate.

The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense.

Any accrued interest and penalties are included within the related tax liability.

As of December 31, 2025 , the Company had no accrued interest or penalties.

Comprehensive (Loss) Income

Comprehensive (loss) income 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) income typically consists of the change in unrealized gains and losses on available-for-sale securities.

Segment Reporting

The Company views its operations and manages its business as one operating segment.

Recently Adopted Accounting Pronouncements

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 Company adopted ASU 2023-09 on a prospective basis effective January 1, 2025.

The adoption of ASU 2023-09 resulted in enhanced disclosures as included in Note 14 – Income Taxes .

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.

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.

Net (Loss) Income Per Share

Basic net (loss) income per share attributable to common stockholders is calculated by dividing the net (loss) income 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) income per share attributable to common stockholders is the same as basic net (loss) income per share attributable to common stockholders since the effect of potentially dilutive securities is anti-dilutive given the net (loss) income 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) income per share for the periods presented as their effect would be antidilutive.

The following table provides the calculation of basic and diluted net (loss) income per share (in thousands, except share and per share information):

Years Ended December 31,

Net (loss) income per share, basic:

Net (loss) income attributable to common stockholders

Shares used in computation:

Weighted-average common shares outstanding, basic

Net (loss) income per share, basic

Net (loss) income per share, diluted:

Net (loss) income attributable to common stockholders

Shares used in computation:

Weighted-average common shares outstanding, basic

Weighted-average effect of potentially dilutive securities:

Stock options

Shares to be purchased under Employee Stock Purchase Plan

Restricted stock units

Weighted-average common shares outstanding, diluted

Net (loss) income per share, diluted

The following securities are excluded from the calculation of weighted-average dilutive common shares because their inclusion would have been anti-dilutive:

As of December 31,

Warrants to purchase common stock

Common stock options outstanding

Restricted stock units outstanding

Collaboration, Out-Licensing and Related Agreements

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 in exchange for an upfront payment of $ 2.0 million.

In April 2020, the Company entered into a Collaboration and License Agreem ent for the rights pursuant to the LOI.

Under the 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.

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.

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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;

Unless terminated earlier by either or both parties, the term of the Alfresa Agreement will continue until the later of (i) expiration of the last-to-expire patent in Japan;

or (ii) 10 years after the 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 of 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 this collaboration, 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.

The transaction price was allocated to the performance obligations based on the estimated stand-alone selling price of each performance obligation.

In July 2020, the Company earned a $ 5.0 million milestone payment upon the completion of a clinical milestone in Japan.

In November 2024, the Company earned a $ 6.0 million milestone payment upon the completion of a regulatory milestone in Japan.

Of the $ 13.0 million in milestone payments that the company was eligible to earn, $ 11.0 million in milestone payments has been earned and a final $ 2.0 million regulatory milestone remains.

The Company recognized $ 6.0 million and less than $ 0.1 million in revenue for the years ended 2024 and 2023, respectively, in the accompanying consolidated statements of operations and comprehensive income (loss).

There was no contract liability as of December 31, 2024.

In December 2025, in connection with the Alfresa Agreement, the Company also entered into a commercial supply agreement (the “Alfresa Supply Agreement”) with Alfresa, under which ARS will supply Alfresa’s requirements (and Alfresa will purchase from ARS its requirements) for a transfer price in the low-double-digit percentage on net sales of neffy in Japan.

The Alfresa Supply Agreement is coterminous with the Alfresa Agreement.

Either the Company or Alfresa may terminate the Alfresa Supply Agreement in the event of an uncured material breach of the other party.

Pursuant to the Alfresa Agreement, at any time, Alfresa may elect to manufacture its own supply of drug product.

In the event Alfresa elects to do so, Alfresa is obligated to pay the Company a royalty payment on the net sales of drug product in the Alfresa Territory in an amount equal to monetary value the Company would receive by supplying drug product to Alfresa at the transfer price.

At inception of the Alfresa Agreement, the Company identified the following performance obligations:

(i) the license for neffy ;

and (ii) research and development services, both of which have been satisfied.

The initial transaction price was $ 7.0 million, which included the upfront payment of $ 2.0 million and a regulatory milestone of $ 5.0 million that was deemed not probable of significant reversal at the inception of the Alfresa Agreement.

Variable consideration related to future milestone payments was fully constrained at inception and excluded from the transaction price until a significant revenue reversal is no longer probable.

The transaction price was allocated to performance obligations based on their estimated stand-alone selling prices.

As of December 31, 2025, the Company has earned an aggregate of $ 15.0 million for the upfront payment and achievement of regulatory and commercial milestones, and there are no remaining regulatory or commercial milestone payments under the Alfresa Agreement.

The Company is also entitled to receive a transfer price in the low double-digit percentage on future net sales of neffy in Japan.

For the years ended December 31, 2025 and 2024 , the Company earned milestone payments of $ 2.0 million and $ 6.0 million for the achievement of regulatory and commercial milestones, respectively, which were recognized as revenue under collaboration agreements in the accompanying consolidated statements of operations and comprehensive (loss) income.

Recordati Agreement

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(“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 terms of the Recordati Agreement, the Company received an upfront payment of $ 11.8 million and a regulatory milestone payment of $ 6.0 million during 2020.

At the commencement of this collaboration, the Company identified the following performance obligations:

the license for neffy in the defined territory and the research and development services.

The Company determined the initial transaction price to be the $ 11.8 million.

Due to the uncertainty in the achievement of all the developmental and commercial milestones, at inception of the contract, the variable consideration associated with future milestone payments was fully constrained and 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 transaction price was allocated to the performance obligations based on the estimated stand-alone selling price of each performance obligation.

In November 2020, the Company earned a regulatory milestone of $ 6.0 million.

On February 22, 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 Terminat ion 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 has 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 a Recordati Licensed Product in the Recordati Territory, and (iii) royalty payments of up to € 5.0 million in the aggregate from sales of Recordati Licensed Product(s) 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 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 accompanying consolidated statements of operations and comprehensive income (loss).

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 consolidated statements of operations for the year ended December 31, 2023.

Accordingly, no revenue has been recognized subsequent to the Recordati Termination Agreement.

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 consolidated statements of operations and comprehensive income (loss).

The Company paid the EMA regulatory milestone to Recordati in July 2024.

dollars) expense was recorded in research and development expense in the accompanying consolidated statements of operations and comprehensive (loss) income.

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 million ($ 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 consolidated balance sheets.

The intangible assets will be amortized through cost of goods sold in the accompanying consolidated statements of operations and comprehensive (loss) income on a straight-line basis over the estimated life of the intellectual property of 13.5 years.

For the year ended December 31, 2025, the Company recognized $ 0.5 million in royalty expense from the sale of neffy in the Recordati Territory, as cost of goods sold in the accompanying consolidated statements of operations and comprehensive (loss) income.

Pediatrix Agreement

In March 2021, the Company entered into a Collaboration and Distribution 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.

Under the 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 defined territory, including all clinical trials, and activities related to post approval commitments and commercialization tests.

In March 2021, the Company entered into a collaboration and distribution agreement (the “Pediatrix Agreement”) with Pediatrix Therapeutics, Inc.

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 agreement for certain breaches of the agreement.

Unless terminated earlier by either or both parties, the term of the agreement will continue as long as Pediatrix has commercial sales of neffy in the region, or 10 years after the first commercial sale.

Under the terms of the agreement, the Company received an upfront payment of $ 3.0 million.

In addition, the Company is eligible to receive up to $ 84.0 million of 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 defined 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.

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.

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.

At inception of the Pediatrix Agreement, the Company identified the performance obligations as:

(i) the delivery of the license for neffy in the Pediatrix Territory;

and (ii) the manufacturing of products for clinical studies and commercial supply, both of which have been satisfied.

The license was considered distinct from potential supply obligations, which are effectively options for Pediatrix to purchase future goods and do not provide a material right.

The initial transaction price was $ 3.0 million, which includes the upfront payment received at the inception of the Pediatrix Agreement.

Variable consideration related to future milestone payments was fully constrained at inception and excluded from the transaction price until a significant revenue reversal is no longer probable.

The transaction price was allocated to performance obligations based on their estimated stand-alone selling prices, and variable consideration is reassessed each reporting period.

As of December 31, 2025, the Company has earned an aggregate of $ 7.0 million for the upfront payment and achievement of regulatory and commercial milestones and is eligible to receive up to $ 80.0 million in sales-based milestone payments.

There are no regulatory or commercial milestones remaining under the Pediatrix Agreement.

Since receiving regulatory approval in the Pediatrix Territory, the Company is also entitled to tiered royalties in the low double-digits on future net sales in the Pediatrix Territory and will receive a per unit supply price for commercial supply sold to Pediatrix.

For the year ended December 31, 2025 , the Company earned a milestone payment of $ 4.0 million for the achievement of regulatory and commercial milestones, which was recognized as revenue under collaboration agreements in the accompanying consolidated statements of operations and comprehensive (loss) income.

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”).

In March 2024, the Company entered into a license and distribution (the “Seqirus Agreement”) with Seqirus Pty Ltd.

(“Seqirus”), which was amended in December 2025, 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.

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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 of 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.

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 2024, the Company delivered the license for neffy in the Seqirus Territory in combination with the transfer of know-how and recognized $ 0.5 million in revenue.

In August 2024, the first milestone event was met and the Company recognized $ 1.5 million in revenue.

In summary, the Company recognized $ 2.0 million in revenue for the year ended December 31, 2024 in the accompanying consolidated statements of operations and comprehensive income (loss).

ALK Agreement

In November 2024, the Company entered into a Collaboration, License and Distribution Agreement (the “ALK Agreement”) with ALK-Abelló A/S (“ALK”).

Pursuant to the ALK 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 Agreement, subject to ALK bearing the costs of development of such New Product for its licensed territory.

Under the ALK Agreement, the Company is obligated to transfer to ALK the existing marketing authorizations for the Products in ALK’s 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 ALK’s 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 ALK’s territory.

Following such approval for a Product in each indication within specified countries within ALK’s 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 Agreement.

Under the ALK Agreement, ALK made a $ 145.0 million upfront payment to the Company in November 2024.

At inception of the Seqirus Agreement, the Company identified a single performance obligation:

the delivery of the license for neffy in the Seqirus Territory in combination with the transfer of know-how, which has been satisfied.

The license and know-how were considered distinct from potential supply obligations, which are effectively options for Seqirus to purchase commercial supply and do not represent a material right.

The initial transaction price was $ 0.5 million, which includes the upfront payment received at the inception of the Seqirus Agreement.

Variable consideration related to future milestone payments was fully constrained at inception and excluded from the transaction price until a significant revenue reversal is no longer probable.

The transaction price was allocated to performance obligations based on their estimated stand-alone selling prices, and variable consideration is reassessed each reporting period.

As of December 31, 2025, the Company has earned an aggregate of $ 2.6 million for the upfront payment and achievement of regulatory and commercial milestones and is eligible to receive up to $ 2.3 million in remaining regulatory and commercial milestones.

Since receiving approval in the Seqirus Territory, the Company is also entitled to receive a per unit supply price for commercial supply sold to Seqirus.

For the years ended December 31, 2025 and 2024 , the Company earned milestone payments of $ 0.6 million and $ 2.0 million for the achievement of regulatory and commercial milestones, respectively, which was recognized as revenue under collaboration agreements in the accompanying consolidated statements of operations and comprehensive (loss) income.

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.

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 the 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 regulatory and commercialization milestones of up to $ 15.0 million and sales-based milestones 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.

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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 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 Agreement for ALK’s material breach of its commercial diligence obligations.

ALK may terminate the ALK Agreement for convenience upon 12 months’ prior written notice or for a safety or regulatory concern.

The Company may terminate the ALK 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 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 Agreement if ALK commercializes a non-injectable epinephrine product or manufactures such a product in the United States.

In connection with the ALK Agreement, the Company and ALK also entered into a commercial supply agreement (the “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 Supply Agreement is coterminous with the ALK Agreement.

Either the Company or ALK may terminate the Supply Agreement in the event of an uncured material breach of the other party.

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.

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 Agreement and the Supply Agreement qualify as a contract with a customer under ASC 606 as one combined arrangement.

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:

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(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 Agreement, and (ii) the promises under the 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 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.

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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 has 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 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.

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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 p rice 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 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 Agreement, will occur upon the expiration of the contract, or exercise by the Company of the Repurchase Option.

The Company recognized the transaction price allocated to the EEA License of $ 69.4 million as a financing liability in its consolidated balance sheet as of December 31, 2024.

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 point.

The Company recognized the transaction price allocated to the ROW License of $ 73.1 million as revenue under collaboration agreements in its consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2024.

The development and regulatory services performance obligations under the ALK 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.

The Company recognized $ 0.5 million of revenue related to the development and regulatory services performance obligations during the year ended December 31, 2024 on its consolidated statements of operations and comprehensive income (loss).

As of December 31, 2024 , the accompanying consolidated balance sheet includes a contract liability of $ 0.6 million classified as current and $ 1.5 million classified as noncurrent, associated with these performance obligations, based on the expected period of performance for the development and regulatory services.

$ 73.1 million to the ROW License performance obligation;

and $ 2.6 million to the development and regulatory services performance obligations.

In November 2024, the ROW License was transferred to ALK for immediate use and benefit from intellectual property, and the related revenue was recognized at a point in time.

Accordingly, the Company recognized revenue under collaboration agreements of $ 73.1 million in the accompanying consolidated statements of operations and comprehensive (loss) income during the year ended December 31, 2024.

In June 2025, ALK completed the first commercial sale of EURneffy in the ALK Territory and earned a $ 5.0 million commercial milestone, of which $ 2.6 million was allocated to the ROW License and recognized as revenue under collaboration agreements in the accompanying consolidated statements of operations and comprehensive (loss) income.

For the year ended December 31, 2025, the Company recognized $ 0.2 million of sales-based royalties for product sales in the ALK Territory, excluding the EEA Territory, as revenue under collaboration agreements in the accompanying consolidated statements of operations and comprehensive (loss) income.

As of December 31, 2025, the Company has earned an aggregate of $ 150.0 million in milestone payments for the upfront payment and achievement of regulatory and commercial milestones, of which $ 72.1 million has been allocated to the EEA License and is accounted for as a financing liability.

The Company is eligible to receive remaining regulatory milestone payments of up to $ 15.0 million and sales-based milestone payments of up to $ 300.0 million, of which $ 55.0 million in sales-based milestones are contingent upon regulatory approval of the Product in Canada by a specified date, as well as tiered royalties on net sales in the mid- to high-teens, subject to customary reductions and offsets.

Royalties are payable on a Product-by-Product and country-by-country basis until the latest of:

(i) the expiration of the licensed patents covering such Product in such country;

(ii) 15 years from the first commercial sale of such Product in such country;

or (iii) expiration of regulatory exclusivity for such Product in such country.

The Company is also eligible to receive a per unit supply price for commercial supply sold to ALK under the ALK Supply Agreement.

Contract Liability

A reconciliation of contract liability from collaboration and licensing agreements is as follows (in thousands):

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 beginning at the inception of the ALK Collaboration Agreement and are expected to continue through 2028 .

Development and regulatory service performance obligations were initially recorded as contract liabilities, and revenue earned under these performance obligations is 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.

For the year ended December 31, 2025 , the Company recognized $ 0.3 million of revenue related to the development and regulatory services performance obligations, which is recorded as revenue under collaboration agreements in the accompanying consolidated statements of operations and comprehensive (loss) income.

A reconciliation of the contract liability from the ALK Collaboration Agreement is as follows (in thousands):

Balance at December 31, 2024

Contract liability at inception under the ALK Agreement

Revenue recognized under the ALK Agreement

Revenue recognized under the ALK Collaboration Agreement

Balance at December 31, 2025

Financing Liability

As discussed above, the Company retains a substantive Repurchase Option for the EEA License, which prevents control from transferring to ALK under ASC 606.

As a result, the consideration allocated to the EEA License is accounted for as a financing liability because the repurchase price exceeds the original selling price.

Accordingly, in November 2024, the $ 69.4 million allocated to the EEA License was recorded as a financing liability and will remain outstanding until the Repurchase Option lapses or is exercised.

Commercial and sales-based milestones allocated to the EEA License are recognized as increases to the financing liability when earned.

A reconciliation of the Financing Liability from the ALK Collaboration Agreement is as follows (in thousands):

Balance at December 31, 2024

Commercial milestone allocated to the EEA License

Sales-based royalties earned under the EEA License

Balance at December 31, 2025

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 and March 2026 (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.

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 concluded it represents a vendor arrangement with ALK U.S.

As a result, during the year ended December 31, 2025, the Company recognized $ 6.6 million in ALK-related selling, general, and administrative expense in the accompanying consolidated statements of operations and comprehensive (loss) income, and the corresponding liability is included in accounts payable and accrued liabilities and other accrued liabilities in the accompanying consolidated balance sheet as of December 31, 2025 .

I nventories consisted of the following (in thousands):

Raw materials

Work in process

Finished goods

Total inventories, net

Inventories, noncurrent

Total inventories, net

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 $ 6.7 million and $ 11.7 million in zero-cost inventory as of December 31, 2025 and 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.

Intangible Assets

Intangible assets, net, all of which are finite-lived, consisted of the following (in thousands):

Capitalized milestone payments (1)

Less accumulated amortization

______________

(1) As described in Note 4 – Collaboration, Out-Licensing and Related Agreements and Note 11 – In-Licensing and Supply , capitalized milestone payments were recognized from the Recordati Termination Agreement and Aegis License Agreement, respectively.

The amortization expense for the years ended December 31, 2025 and 2024 was $ 0.8 million and $ 0.1 million, respectively.

The weighted-average amortization period of intangible assets is 13.1 years.

As of December 31, 2025, estimated future amortization expense for capitalized intangible assets for the next five years is as follows (in thousands):

Year Ended December 31,

Fair Value Measurements

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, guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;

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):

December 31, 2025

Cash and cash equivalents - Money market mutual funds

Short-term investments - U.S.

Treasury securities

December 31, 2024

Cash and cash equivalents - Money market mutual funds

Cash and cash equivalents - U.S.

Treasury securities

Short-term investments - U.S.

Treasury securities

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 years ended December 31, 2025 and 2024, the Company purchased $ 242.0 million and $ 356.0 million in short-term investments, respectively, and there were $ 307.0 million and $ 258.0 million in maturities of short-term investments, respectively.

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 $ 0.1 million in net unrealized losses and $ 0.2 million in net unrealized gains on available-for-sale securities for the years ended December 31, 2025 and 2024, respectively.

Management determined that the gross unrealized losses on the Company’s available-for-sale securities as of December 31, 2025 were primarily attributable to current economic and market conditions and not credit risk.

As of December 31, 2025 and 2024 , no allowance for credit losses was recorded for available-for-sale securities.

Accrued interest receivable on the Company's available-for-sale securities was $ 1.0 million at both December 31, 2025 and 2024 and is included in prepaid expenses and other current assets in the accompanying consolidated balance sheets.

The Company’s Term Loan (as defined in Note 9 – 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.

The fair value of the Term Loan approximates fair value due to the use of current market rates that are repriced frequently.

As of December 31, 2025 and 2024 , the Company did no t have any liabilities that were measured at fair value on a recurring basis.

Balance Sheet Details

Accounts payable and accrued liabilities consisted of the following (in thousands):

Accounts payable

Accrued gross-to-net liabilities

Accrued marketing related expenses

Accrued inventory

Accrued cost of goods sold

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 total outstanding principal is due at maturity on September 29, 2030.

The Term Loans require interest-only payments and do not require scheduled principal payments prior to maturity.

The Borrower may prepay principal on the Term Loans, in whole or in part, subject to a prepayment premium and an exit fee.

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.

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.

The weighted average interest rate for the year ended December 31, 2025 was 9.49 % per annum.

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.

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 accompanying consolidated balance sheet (in thousands):

December 31, 2025

Gross proceeds

Unamortized debt discount and debt issuance costs

Commitments and Contingencies

In October 2021, the Company entered into a 38-month noncancelable lease for its current headquarters location consisting of 4,047 rentable square feet of office space in San Diego, California.

Under the terms of the agreement, there is no option to extend the lease , and the Company is subject to additional charges for common area maintenance and other costs.

Monthly rental payments due under the lease commenced on December 6, 2021 and escalate 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 of December 31, 2024, the remaining lease term of the Company’s operating lease was 2 months , and the discount rate on the Company’s operating lease was 8 %.

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.

The Company’s operating lease expense was $ 0.2 million for each of the years ended December 31, 2024 and 2023.

The Company’s variable lease expense was immaterial for each of the years ended December 31, 2024 and 2023 .

Cash paid for amounts included in the measurement of lease liabilities was $ 0.2 million for each of the years ended December 31, 2024 and 2023.

As of December 31, 2024, future minimum noncancelable operating lease payments are as follows (in thousands):

Year ending December 31,

Total lease payments

Less imputed interest

Lease liability

Less current portion of lease liability

Lease liability, net of current portion

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 August 12, 2021, Amphastar Pharmaceuticals, Inc.

(“Amphastar”) filed a Petition for Inter Partes Review with the United States Patent and Trademark Office (“USPTO”), seeking to invalidate claims 1-20 of United States Patent No.

10,682,414 (the “‘414 patent”).

The ‘414 patent issued on June 16, 2020 and is entitled “Intranasal Epinephrine Formulations and Methods for the Treatment of Disease.” The claims of the ‘414 patent are directed to methods of treating a type-1 hypersensitivity reaction, including anaphylaxis, using an aqueous nasal spray pharmaceutical formulation containing epinephrine or a salt thereof in a single dose.

On February 9, 2023, the USPTO issued a Final Written Decision finding claims 3-6 and 18-20, which encompass the Company’s neffy product candidate, patentable, and claims 1-2 and 7-17 unpatentable.

On April 12, 2023, Amphastar filed a notice of appeal with the United States Court of Appeals for the Federal Circuit.

On March 5, 2025, following the completion of briefing by the parties, Amphastar stipulated to the dismissal of its appeal.

As a result, the USPTO’s Final Written Decision stands – affirming the validity of claims 3-6 and 18-20 of the ’414 patent.

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.

The Company filed a response to the notice of opposition on December 15, 2023.

The EPO scheduled oral proceedings on October 7, 2025, and the Company will continue to vigorously defend the EP ‘649 Patent.

The results of any notice of opposition are inherently unpredictable and uncertain, and could result in the EPO finding the patent to be invalid or unenforceable.

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 issued a written decision on November 4, 2025.

The opponent filed a notice of appeal on December 17, 2025.

The deadline to file a grounds of appeal is March 4, 2026.

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 December 16, 2025, Aptar moved to dismiss or in the alternative transfer ARS’s lawsuit to the Southern District of New York.

On January 27, 2026, ARS filed an opposition to Aptar’s motion to dismiss, and Aptar filed a reply brief on February 27, 2026.

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.

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.

On February 26, 2026, 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.

The lawsuit follows a Paragraph IV certification notice letter received from Lupin on February 6, 2026, 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 © 1 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.

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These arrangements can include unconditional purchase obligations and commitments.

The total amount of unconditional purchase obligations related to the supply of raw materials is ($ 64.9 ) million as of December 31, 2024 .

Payment obligations by year are as follows:

2025 ($ 8.2 million), 2026 ($ 10.5 million), 2027 ($ 11.8 million), 2028 ($ 13.8 million), and $ 2.9 million per year thereafter through 2035.

During the year ended December 31 2024, the Company made $ 0.2 million in purchases under these obligations.

The total amount of unconditional purchase obligations related to hosted software license subscription fees is $ 3.3 million as of December 31, 2024 .

Payments by year are as follows:

2025 ($ 1.4 million), 2026 ($ 1.5 million), and 2027 ($ 0.4 million).

During the year ended December 31 2024, the Company made $ 0.6 million in payments under this agreement.

The total amount of commitments related to a corporate sponsorship agreement with Food Allergy Research and Education, Inc.

Unconditional purchase obligations and commitments are satisfied as services are performed or upon receipt of the related goods.

The total remaining unconditional purchase obligations related to the supply of raw materials is $ 55.3 million as of December 31, 2025.

Purchase obligations by year are as follows:

2026 ( $ 9.1 million), 2027 ( $ 11.8 million), 2028 ( $ 13.8 million), and $ 2.9 million per year thereafter through 2035.

During the years ended December 31, 2025 and 2024, the Company made $ 8.0 million and $ 0.2 million in payments under these agreements, respectively.

The total remaining commitments related to the ALK Co-Promotion Agreement is $ 20.2 million as of December 31, 2025.

Commitments by year are as follows:

2026 ( $ 8.3 million), 2027 ( $ 5.2 million), 2028 ( $ 4.7 million), and 2029 ( $ 2.0 million).

No payments were made under this agreement during the years ended December 31, 2025 and 2024.

The total remaining commitment related to a corporate sponsorship agreement with Food Allergy Research and Education, Inc.

is $ 6.0 million as of December 31, 2025.

Payments by year are as follows:

Commitments by year are as follows:

2026 ( $ 5.0 million) and 2027 ( $ 1.0 million).

During the year ended December 31 2024, the Company made $ 2.0 million in payments under this agreement.

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.

During the years ended December 31, 2025 and 2024, the Company made $ 6.0 million and $ 2.0 million in payments under this agreement, respectively.

The amounts above do not represent the entire anticipated expenditure 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.

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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 consolidated statement of operations.

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 consolidated statements of operations for the year ended December 31, 2018.

The Company is required to make aggregate milestone payments of up to $ 20.0 million upon achievement of certain regulatory and commercial milestones.

Regulatory 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 consolidated statement of operations.

Prior to the FDA approval of neffy in August 2024, regulatory milestone payments were recorded as research and development expenses in the accompanying consolidated statements of operations.

The Company made a $ 0.5 million milestone payment to Aegis upon the achievement of a regulatory milestone during 2019, and a $ 1.0 million milestone payment to Aegis upon the FDA’s acceptance of the Company’s new drug application submission for neffy , which occurred in the third quarter of 2022.

Since the approval of neffy in August 2024 , regulatory milestone payments have been capitalized as intangible assets in the accompanying consolidated balance sheets.

Amortization expense has been recorded to cost of goods sold, in the accompanying consolidated statements of operations and comprehensive income (loss), on a straight-line basis over the estimated life of the intellectual property of 14.5 years.

In August 2024, a $ 2.5 million milestone was met for achieving FDA approval of neffy.

In September 2024, a $ 5.0 million milestone was met for the first commercial sale of neffy .

As a result, the Company capitalized $ 7.5 million as intangible assets in the accompanying consolidated balance sheets in the third quarter of 2024.

The Company paid the $ 2.5 million milestone for achieving FDA approval of neffy in September 2024, and paid the $ 5.0 million milestone for the first commercial sale of neffy in October 2024.

The next milestone payment of $ 2.0 million is due upon the achievement of certain annual net sales.

As of December 31, 2025 , the Company’s remaining milestone payment obligation is $ 9.0 million upon the achievement of certain annual net sales.

Since the FDA approval of neffy in August 2024 , regulatory and commercial milestone payments have been capitalized as intangible assets in the accompanying consolidated balance sheets upon achievement.

Amortization expense for capitalized milestone payments has been recognized as cost of goods sold in the accompanying consolidated statements of operations and comprehensive (loss) income 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.

In September 2025, a milestone payment of $ 2.0 million milestone was recognized for achieving certain annual net product sales of neffy .

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.

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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 .

Therefore the Company will make all future payments under the Aegis Agreement to OrbiMed.

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.

There were no expenses recognized in connection with legal patent fees for the years ended December 31, 2024 and 2023.

The Company is responsible for reimbursing Aegis for certain patent costs incurred in connection with prosecuting and maintaining patent rights that are specific to epinephrine or epinephrine products.

For the year ended December 31, 2025 , the Company incurred legal patent expenses of $ 0.3 million under the Aegis Agreement.

No legal patent expenses were incurred during the year ended December 31, 2024.

The Company may terminate the Aegis Agreement with 30 days written notice or either party may terminate the Aegis Agreement for certain breaches of the Aegis Agreement.

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The Aegis Supply Agreement term may be extended by mutual written agreement.

Under the Aegis Supply Agreement, the Company paid $ 0.7 million and $ 0.3 million for the years ended December 31, 2024 and 2023, 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 and September 2024 (the “Renaissance Agreement”).

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”).

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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.

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.

Pursuant to the amendment in September 2024, the amended initial term of the Renaissance Agreement commenced on September 17, 2024, and will terminate on (a) December 31, 2029 for Renaissance Product designated for commercial sale in the U.S.

Initial Term”), and (b) December 31, 2030 for Renaissance Product designated for commercial sale in the EU (“EU Initial Term”), in each case unless earlier terminated by one of the parties.

Initial Term and EU Initial Term automatically renew for successive two-year terms (“Renewal Term”).

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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 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 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 supply price for the glass microvials is specified in the Ompi 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 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 Agreement and fails to cure such breach within 90 days after receipt of notice thereof from the non-breaching party.

Common Stock and Stockholders’ Equity

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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:

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Common stock reserved for future awards or option grants

Common stock reserved for future employee stock purchase plan issuances

Warrants to purchase common stock

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 December 31, 2025 , no securities have been sold pursuant to the Shelf Registration Statement or Equity Sales Agreement.

Stock-Based Compensation

Stock-based compensation expense recognized for all equity awards has been reported in the consolidated statements of operations and comprehensive income (loss) as follows (in thousands):

Year Ended December 31,

Stock-based compensation expense recognized for all equity awards has been reported in the accompanying consolidated statements of operations and comprehensive (loss) income as follows (in thousands):

Years Ended December 31,

Research and development expense

Selling, general and administrative expense

Total stock-based compensation expense

During the years ended December 31, 2024 and 2023, $ 0.3 million and no stock compensation expense was capitalized into inventory, respectively.

During the years ended December 31, 2025 and 2024, $ 1.1 million and $ 0.3 million of stock compensation expense was capitalized into inventory, respectively.

As of December 31, 2025, the total unrecognized stock-based compensation expense related to outstanding employee options was $ 42.4 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.2 years.

There were 2,763 and 4,144 and restricted stock units outstanding as of December 31, 2024 and 2023, respectively,

As of December 31, 2025 and 2024 , there were 1,382 and 2,763 restricted stock units outstanding, respectively.

Equity Incentive Plans

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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”).

During the years ended December 31, 2024 and 2023, there were 69,686 and 44,961 shares of common stock purchased under the ESPP, respectively.

There were 200,537 shares and 43,679 shares of common stock purchased under the ESPP during the years ended December 31, 2025 and 2024 , respectively.

As of December 31, 2025 , 25,737,116 shares were authorized under the 2016 and 2020 Equity Incentive Plans, of which 7,787,841 shares were available for future grant, and 12,822,226 shares were outstanding.

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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.

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 one- to four-year period.

The Company issues new shares of common stock upon the exercise of stock options.

A summary of the Company’s stock option activity for the year ended December 31, 2025 is as follows:

Value (in thousands)

(in thousands)

Outstanding at December 31, 2024

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The total fair value of shares vested during the years ended December 31, 2025 and 2024 was $ 24.6 million and $ 14.1 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:

Year Ended December 31,

The fair value of stock options granted was estimated using a Black-Scholes option-pricing model (“Black-Scholes”) with the following assumptions:

Years Ended December 31,

Expected term (in years)

Expected volatility

83.2 % – 87.3 %

91.9 % – 94.2 %

Risk-free interest rate

3.8 % – 4.4 %

3.6 % – 4.3 %

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 .

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Therefore, the Company uses an expected dividend yield of zero.

Income tax (benefit) expense consisted of the following (in thousands):

The components of (loss) income before income tax (benefit) expense consisted of the following (in thousands):

Years Ended December 31,

Total current

Total deferred

Income tax provision

A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows (in thousands):

United States

(Loss) income before income tax (benefit) expense

Income tax (benefit) expense consisted of the following (in thousands):

Years Ended December 31,

Total current income tax (benefit) expense

Total deferred income tax (benefit) expense

Income tax (benefit) expense

A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate, after the adoption of ASU 2023-09 on a prospective basis, is as follows (in thousands, except percentages):

Year Ended December 31,

Tax computed at federal statutory rate

State income taxes, net of federal income tax effect (1)

Foreign tax effects

Non-taxable or non-deductible items

Stock-based compensation

Officer compensation

Changes in valuation allowance

Federal R&D credit

Changes in unrecognized tax benefits

Effective tax rate

______________

(1) State taxes in California comprise the majority (greater than 50 percent) of the tax effect in this category.

A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate for the prior year not impacted by the adoption of ASU 2023-09 is as follows (in thousands):

Year Ended December 31,

Tax computed at federal statutory rate

State income taxes, net of federal benefit

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Valuation allowance

Provision for income taxes

Income tax expense

For the year ended December 31, 2025, the Company paid income taxes, net of refunds received totaling $ 0.2 million, including $ 0.2 million of federal income taxes and less than $ 0.1 million of other state income taxes.

Significant components of the Company’s net deferred tax assets were as follows (in thousands):

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Equity compensation

Deferred revenue

Total deferred tax assets

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At December 31, 2025, the Company had federal and state net operating loss carryforwards (“NOL”) of $ 150.5 million and $ 16.7 million, respectively.

Federal NOL carryforwards of $ 60.5 million, generated after 2017, may be carried forward indefinitely but can only be utilized to offset 80 % of future taxable income.

Federal NOL carryforwards of $ 150.5 million, generated after 2017, may be carryforward indefinitely but can only be utilized to offset 80 % of future taxable income.

The state NOL carryforwards begin expiring in 2035.

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Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate.

The evaluation of uncertainty in a tax position is a two-step process.

The first step involves recognition.

The Company determines whether it is more likely than not that a tax position will be sustained upon tax examination, including resolution of any related appeals or litigation, based on only the technical merits of the position.

The technical merits of a tax position are derived from both statutory and judicial authority (legislation and statutes, legislative intent, regulations, rulings, and case law) and their applicability to the facts and circumstances of the tax position.

If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements.

The second step is measurement.

A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements.

The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate resolution with a taxing authority.

The following table summarizes the reconciliation of the unrecognized tax benefits activity during the years ended December 31, 2024 and 2023 (in thousands):

The following table summarizes the reconciliation of the unrecognized tax benefits activity (in thousands):

Years Ended December 31,

Unrecognized tax benefits – beginning

Gross increases – current-period tax positions

Gross decreases – tax positions in prior period

Gross increases – tax positions in prior period

Gross increase – current-period tax positions

Unrecognized tax benefits – ending

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If recognized, none of these amounts would affect the Company’s effective tax rate, since it would be offset by an equal corresponding adjustment in the deferred tax asset valuation allowance.

The Company does not foresee material changes to its liability for uncertain tax benefits within the next twelve months.

The Company files income tax returns in the United States, various states, and Ireland.

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The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense.

As of December 31, 2024 , there were no significant accruals for interest related to unrecognized tax benefits or tax penalties.

At December 31, 2025, there were no significant accruals for interest related to unrecognized tax benefits or tax penalties.

The Company has not incurred any material interest or penalties as of the current reporting date with respect to income tax matters.

The Company does not expect that there will be unrecognized tax benefits of a significant nature that will increase or decrease within 12 months of the reporting date.

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.

The plan allows eligible employees to defer, at the employee’s discretion, pretax compensation up to the Internal Rev enue 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 $ 0.6 million and $ 0.4 million for the years ended December 31, 2024 and 2023, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which enacts significant changes to U.S.

tax and related laws.

Some of the provisions of the new tax law affecting corporations include, but are not limited to, current deduction of domestic research expenses, increasing the limit of the deduction of interest expense deduction to thirty percent of earnings before interest, taxes, depreciation and amortization, and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025.

The Company has evaluated the impact the new tax law had on its financial condition and results of operations.

The impact of the tax law changes from the OBBBA is included in the Company’s financial statements.

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 expense related to this agreement totaling $ 2.2 million and $ 1.9 million during the years ended December 31, 2024 and 2023, 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 totaling $ 0.2 million for both of the years ended December 31, 2024 and 2023.

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-year period.

The Company incurred stock-based compensation expense related to this agreement totaling $ 0.1 million for both of the years ended December 31, 2024 and 2023.

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 .

The Company incurred consulting expenses related to this agreement totaling $ 2.4 million and $ 2.2 million for the years ended December 31, 2025 and 2024, respectively.

As described in Note 9 – Term Loans , in September 2025, the Company entered into the Credit Agreement with a Lender whom is an affiliate 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 OrbiMed upon achievement of certain regulatory and commercial milestones, and royalty payments based on net product sales of neffy .

A member of the Company’s Board of Directors is a General Partner at OrbiMed.

The Company incurred $ 0.2 million in expense to OrbiMed for the year ended December 31, 2024.

The Company incurred $ 4.8 million and $ 0.2 million in royalty expense payable to an affiliate of OrbiMed during the years ended December 31, 2025 and 2024 , respectively, and $ 2.0 million in sales-based milestone payments to an affiliate of OrbiMed during the year ended December 31, 2025 .

Segment Information

The Company reports segment information using the management approach and views its operations and manages its business as a single operating segment.

Revenue is generated in the United States through product sales.

Outside of the United States, revenue is generated through collaboration and license agreements including supply and distribution.

For the year ended December 31, 2024 , the Company had six customers that each accounted for more than 10 % of the Company ’ s gross product revenue.

Those customers ’ revenue amounts for the year ended December 31, 2024 were:

$ 2.2 million, $ 1.7 million, $ 1.3 million, $ 1.2 million, $ 1.1 million, and $ 1.1 million.

For the year ended December 31, 2024 , the Company had one customer, ALK, which accounted for more than 10 % of the Company ’ s revenue under collaboration agreements.

Under the ALK agreement, the Company recognized $ 73.5 million during the year ended December 31, 2024.

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, potential licensing opportunities, segment operating expenses, and consolidated net income, as reflected in the accompanying consolidated statements of operations and comprehensive income (loss), which is the segment measure of profit or loss.

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 consolidated net (loss) income, as reflected in the accompanying consolidated statements of operations and comprehensive (loss) income, which is the segment measure of (loss) income.

The segment reports that are provided to the CODM are tracked against the Company’s internally budgeted expenses.

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therefore, this information is not presented.

Segment reporting provided to the CODM for the years ended December 31, 2024 and 2023 (in thousands):

Year Ended December 31,

Product revenue, net

Revenue under collaboration agreements

Revenue under supply agreements

Segment reporting for the years ended December 31, 2025 and 2024 (in thousands):

Years Ended December 31,

Total revenue

Segment operating expenses:

Less segment operating expenses:

Cost of goods sold

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Stock-based compensation

Total segment operating expenses

Loss from operations

Other income, net

Income (loss) before income taxes

Income tax provision

Net income (loss)

Subsequent Events

Lease Amendment

On January 24, 2025, the Company entered into a lease amendment for its headquarters location lease (“Headquarters Amendment”), pursuant to which the Company will relocate to a new premises located in the same building which consists of 9,254 rentable square feet of office space.

The Company will take possession of the new office space when the landlord’s work is substantially complete, which is estimated to be July 1, 2025.

The Company must vacate its current office space within 15 days of taking possession of the new premises.

Under the Headquarters Amendment, the term of the lease will be extended to 36 full calendar months following the date the Company takes possession of the new office space.

The monthly lease payments will increase when the Company takes possession of the new space and 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 .

The monthly payment amounts would be determined by the landlord at the then-prevailing rate.

Other segment operating expenses

Other segment (income) expense:

Interest income

Interest expense

Income tax (benefit) expense

Segment net (loss) income

The following table summarizes revenue by geographic area based on the customers’ location (in thousands):

Years Ended December 31,

United States

Rest of world

Total revenue

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data