What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-27 compared with 2024-03-07 · 87 added, 73 removed, 157 unchanged (50% of the section changed)

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(together with its subsidiaries “Savara,” the “Company,” “we,” “our” or “us”) is a clinical-stage biopharmaceutical company focused on rare respiratory diseases.

Our sole program, molgramostim, is an inhaled biologic, specifically granulocyte-macrophage colony-stimulating factor in Phase 3 development for autoimmune pulmonary alveolar proteinosis (“aPAP”).

Our sole program, MOLBREEVI, is an inhaled biologic, specifically, inhaled granulocyte-macrophage colony-stimulating factor ("GM-CSF") in Phase 3 development for aPAP.

Savara previously announced positive top-line results from the Phase 3 clinical trial and plans to complete a Biological License Application submission with the FDA in the first quarter of 2025.

Savara, together with its wholly-owned subsidiaries, which include Aravas Inc.

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We have incurred operating losses and negative cash flow from operations and have no product revenue from inception to date.

From inception to December 31, 2023, we have raised net cash proceeds of approximately $476.7 million, primarily from public offerings of our common stock and pre-funded warrants to acquire our common stock, private placements of convertible preferred stock, and debt financings.

From inception to December 31, 2024, we have raised net cash proceeds of approximately $594.9 million, primarily from underwritten offerings of our common stock, private placements of common stock, and debt financings.

We have never been profitable and have incurred operating losses in each year since inception.

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Recent Events

Diagnostic Testing - aPAP ClearPath

In December 2023, we launched aPAP ClearPath, a new serum-based blood test that can be used by physicians in the U.S.

to obtain a definitive diagnosis of aPAP.

The aPAP ClearPath test is a sensitive and specific quantitative immunoassay designed to detect aPAP GM-CSF autoantibodies in human serum.

The Company partnered with Trillium Health, a modern health solutions provider and a Clinical Laboratory Improvement Amendments (CLIA)-certified lab, to develop the simple, no-cost, and noninvasive test.

A supporting disease awareness campaign was also launched to improve understanding of aPAP, highlight the hallmark signs and symptoms of the disease, and educate physicians about the need for early testing.

The Company expects to roll out a healthcare provider disease awareness campaign and GM-CSF autoantibody blood test in Europe during 2024.

In December 2023, we sold 2,071,511 shares of common stock under a Common Stock Sales Agreement with Evercore Group L.L.C., (“Evercore”) executed on July 6, 2021, to a single institutional investor resulting in net proceeds of $8.8 million.

International Conflicts

In February 2022, Russia commenced a military invasion of Ukraine, and in October 2023, Israel declared war on Hamas in Gaza.

The ongoing conflict and political and physical conditions in Ukraine, Russia, Israel and Gaza as well as in neighboring or involved countries, organizations and governments, may disrupt our supply chain and increase our costs, which may adversely affect our ability to conduct our ongoing clinical trial and impact patients’ ability to participate.

While we do not believe these conflicts will have a material impact on our current operations, given the evolving hostilities and their potential expansion beyond Ukraine, Russia, Israel, Gaza and the Middle East, the full impact of the conflicts remain uncertain.

Additionally, our primary manufacturer for drug substance operates in Argentina, which is experiencing high inflation, a weakening currency, labor strikes and social and political unrest.

Those conditions have not had a material impact on our operations to date but could result in supply chain disruptions or increased costs in the future.

Continued Funding of Federal Government Operations

On January 18, 2024, the U.S.

Congress passed a third continuing resolution ("CR") for fiscal year 2024, H.R.

2872, the “Further Additional Continuing Appropriations and Other Extensions Act, 2024,” to avoid a partial government shutdown, which President Biden signed on January 19, 2024.

The new CR extends the "laddered" approach from the current CR, with certain appropriations bills expiring on March 1, 2024 through March 8, 2024.

Additionally, the U.S.

Congress is currently trying to pass legislation consisting of a package of six spending bills to continue funding a broad portion of the federal government through the fiscal year and avoid interruptions to the operations of the government.

The outcome and impact of a potential government shutdown to our operations is uncertain;

BLA Submission Complete

On March 26, 2025, Savara announced that it had completed its submission of the BLA to the FDA for MOLBREEVI for the potential treatment of aPAP, a chronic and debilitating rare lung disease characterized by the abnormal build-up of surfactant in the alveoli of the lungs.

This follows our reporting, in June 2024, of top line results from our pivotal IMPALA-2 trial for the treatment of aPAP that demonstrated significant improvement in gas exchange, or DLCO, and clinical benefit, as measured SGRQ.

MOLBREEVI was also well tolerated throughout the 48-weeks and no unexpected safety signals were seen.

Previously, on December 18, 2024, the Company announced that it had initiated a rolling submission of a BLA to the FDA for MOLBREEVI.

MOLBREEVI was also granted Fast Track and Breakthrough Therapy Designations in 2019 for the treatment of patients with aPAP.

Debt Financing

On March 26, 2025, the Company announced that it had entered into a Loan and Security Agreement (the “Hercules Loan Agreement”) with the lenders party thereto (the “Lenders”) and Hercules Capital, Inc., as administrative agent and collateral agent (the “Agent”).

The Hercules Loan Agreement provides for the Company to borrow up to $200 million of term loans (the “Term Loan”) that may be advanced in multiple tranches.

The initial advance of $30 million under the Hercules Loan Agreement was drawn on March 26, 2025 and used to repay all outstanding obligations under the Company’s Amended Loan Agreement with Silicon Valley Bank as described in Footnote 7.

Debt Facility and extinguish the Company’s obligations thereunder, to pay the Company’s expenses in

connection with the Hercules Loan Agreement, including fees and expenses relating to termination of the Silicon Valley Bank term loan, and for general corporate purposes.

Further Term Loan draws may be made by the Company under the Hercules Loan Agreement as follows:

• Subject to FDA approval of MOLBREEVI for the treatment of aPAP (the “Approval Milestone”), the Company may draw (a) up to $40 million on or prior to March 15, 2026 and (b) up to $40 million on or prior to December 15, 2026.

• Subject to the Company achieving a trailing six months net product revenue from the sale of MOLBREEVI of at least seventy-five percent of an agreed upon revenue plan for any reporting period following March 31, 2027 (the “Revenue Milestone”), the Company may draw up to $20 million on or prior to December 31, 2027.

• Subject to approval by the Lenders’ investment committees, the Company may draw up to $70 million of additional funds.

Continued Funding of Federal Government Operations and Federal Debt Limit

On December 20, 2024, the U.S.

Congress advanced the American Relief Act, 2025 (H.R.

10545), a continuing resolution ("CR") that funds the federal government until March 14, 2025.

On March 14, 2025, the 119th U.S.

Congress, voted to pass an additional stopgap CR, as subsequently executed by President Trump, which continues the funding of the federal government through September 2025 and avoids interruptions to the operations of the government.

Congress will also have to address the federal debt limit, as the Fiscal Responsibility Act ("FRA") suspended the debt limit on January 2, 2025.

The outcome and impact of a potential future government shutdown and adequately addressing the federal debt limit to our operations is uncertain;

however, we are actively assessing and monitoring the potential impacts and situation.

Impact of Potential Tariffs

Effective February 1, 2025, U.S.

President Donald Trump announced the potential implementation of a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China, while energy resources from Canada are subject to a lower 10% tariff.

The tariffs since have been subject to delay, changes, and in some cases implemented.

President Trump has similarly communicated the potential implementation of additional tariffs on additional imported goods and imported goods from other countries.

Collectively, these tariffs could affect a substantial portion of available U.S.

marketed medical devices and drug substances that are manufactured solely outside of the U.S.

We continue to monitor and assess the potential impacts of potential tariffs on our operations and supply chain.

Critical Accounting Policies and Estimates

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We record the costs associated with research, nonclinical and clinical trials, and manufacturing development as incurred.

These costs are a significant component of our research and development expenses, with a substantial portion of our on-going research and development activities conducted by third party service providers, including contract research and manufacturing organizations.

We accrue for expenses resulting from obligations under agreements with CROs, CMOs, and other outside service providers for which payment flows do not match the periods over which materials or services are provided to us.

Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers.

These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services.

These estimates are typically based on contracted amounts applied to the activities performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services.

We make significant judgments and estimates in determining the accrual balance in each reporting period.

In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset which will be amortized or expensed as the contracted services are performed.

As actual costs become known, we adjust our prepaids and accruals.

In the event advance payments are made to a CRO, CMO, or outside service provider,

the payments will be recorded as a prepaid asset which will be amortized or expensed as the contracted services are performed.

As actual costs become known, we adjust our prepaids and accruals and related expense.

Inputs, such as the services performed, the number of patients enrolled, or the trial duration, may vary from our estimates, resulting in adjustments to research and development expense in future periods.

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To date, we have not experienced any material deviations between accrued and actual research and development expenses.

Goodwill and Acquired IPR&D

In accordance with ASC Topic 350, Intangibles – Goodwill and Other , our IPR&D and goodwill, when present, is determined to have indefinite lives and, therefore, is not amortized.

Acquired IPR&D

In accordance with ASC Topic 350, Intangibles – Goodwill and Other , our IPR&D is determined to have an indefinite life and, therefore, is not amortized.

Instead, it is tested for impairment annually and between annual tests if we become aware of an event or a change in circumstances that would indicate the carrying value may be impaired.

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If we choose to first assess qualitative factors and we determine that it is more-likely-than not acquired IPR&D is not impaired, we are not required to take further action to test for impairment.

ASU 2017-04, Intangibles – Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment , outlines an impairment model providing us the option to implement a one-step method for determining impairment of goodwill, thereby simplifying the subsequent measurement of goodwill by eliminating Step 2 (quantitative calculation of measuring a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill) from the goodwill impairment test.

Under the amendments in this guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.

An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value;

however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.

When we perform a quantitative assessment of acquired IPR&D, we compare its carrying value to its estimated fair value to determine whether an impairment exists.

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Under the MPEEM, the fair value of an intangible asset is equal to the present value of the asset’s projected incremental after-tax cash flows (excess earnings) remaining after deducting the market rates of return on the estimated value of contributory assets (contributory charge) over its remaining useful life.

We evaluate potential impairment of our acquired IPR&D annually on September 30, utilizing a qualitative approach and determining if it was more-likely-than not that the fair value was impaired.

We evaluate potential impairment of our acquired goodwill, if any, annually on June 30, performing the quantitative analysis based upon market capitalization.

Our determinations as to whether, and if so, the extent to which goodwill and acquired IPR&D become impaired are highly judgmental and, in the case of applying the MPEEM approach to estimate fair value, are based on significant assumptions regarding our projected future financial condition and operating results, changes in the manner of our use of the acquired assets, development of our acquired assets or our overall business strategy, and regulatory, market, and economic environment and trends .

We evaluate potential impairment of our acquired IPR&D annually on September 30th, utilizing a qualitative approach and determining if it was more-likely-than not that the fair value was impaired.

Our determinations as to whether, and if so, the extent to which acquired IPR&D become impaired are highly judgmental and, in the case of applying the MPEEM approach to estimate fair value, are based on significant assumptions regarding our projected future financial condition and operating results, changes in the manner of our use of the acquired assets, development of our acquired assets or our overall business strategy, and regulatory, market, and economic environment and trends .

If the associated research and development effort is abandoned, the related asset will be written-off, and we will record a non-cash impairment loss on our consolidated statements of operations and comprehensive loss.

For those products that reach commercialization, the IPR&D asset will be amortized over its estimated useful life.

For those products that reach regulatory approval or commercialization, the IPR&D asset will be amortized over its estimated useful life.

Financial Operations Overview

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• regulatory expenses and technology license fees related to development activities.

We expect research and development expenses will remain significant in the future as we advance our molgramostim product candidate through clinical trials and pursue regulatory approvals, which will require a significant increased investment in regulatory support and contract manufacturing activities, including investing in the development of a second source manufacturer and clinical supplies.

We expect research and development expenses will remain significant in the future as we advance our MOLBREEVI product candidate through clinical trials and pursue regulatory approvals, which will require a significant increased investment in regulatory support and contract manufacturing activities, including investing in the development of second source manufacturers and clinical supplies.

The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming.

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The probability of success of our product candidate may be affected by numerous factors, including clinical data, competition, intellectual property rights, manufacturing capability, and commercial viability.

As a result, we are unable to accurately determine the duration and completion costs of our development projects or when and to what extent we will generate revenue from the commercialization and sale of molgramostim.

General and Administrative Expenses

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Other G&A expenses include facility lease and insurance costs.

Other Income (Expense), Net

Other Income, Net

Other income (expense) includes amortization expense related to capitalized debt issuance costs and debt discount under our Amended Loan Agreement with Silicon Valley Bank.

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Research and development expenses increased $33.8 million, or 76.3%, to $78.0 million for the year ended December 31, 2024 from $44.3 million for the year ended December 31, 2023.

This increase is primarily due to the performance of tasks related to our molgramostim program which includes approximately $6.8 million of costs related to our chemistry, manufacturing, and controls activities, $4.4 million of costs related to our IMPALA-2 pivotal trial, including CRO-related activities, $1.6 million of costs related to quality assurance, and $3.6 million due to an increase in personnel and related costs.

This increase is primarily due to the performance of tasks related to our MOLBREEVI program which includes approximately $19.9 million of costs related to our chemistry, manufacturing, and controls activities, primarily driven by initiatives to establish our second drug substance manufacturer, $2.8 million of costs related to our IMPALA-2 trial, IMPACT trial, and Savara EAP, including CRO-related activities, $4.1 million of costs related to regulatory affairs and quality assurance, and $7.0 million due to an increase in personnel and related costs and other departmental overhead.

General and Administrative

General and administrative expenses increased $9.4 million, or 59.8%, to $25.0 million for the year ended December 31, 2024 from $15.7 million for the year ended December 31, 2023.

The increase is primarily attributable to costs related to the strategic addition of personnel for key positions to facilitate the management of our business and operations of approximately $3.6 million and certain commercial activities of $1.1 million.

Other Income (Expense), Net

The increase is due to personnel and related costs of $4.3 million, certain commercial activities of $3.8 million, and other overhead of $1.3 million primarily driven by patient advocacy activities and consultant costs.

Other Income, Net

Other income, net increased $2.0 million to $7.3 million for the year ended December 31, 2024 from $5.3 million for the year ended December 31, 2023.

The change is primarily related to the increase in interest income during the year ended December 31, 2023 as a result of both an increase in our short-term investments following the registered direct offering of our common stock and pre-funded warrants in July 2023 (the “July 2023 Offering”) and an increase in market interest rates.

Refer Note 9.

The increase is primarily related to an increase in interest income as a result of higher

balances and more favorable rates and returns on our short-term investments following various equity financings.

Refer to Note 9.

Stockholders’ Equity of the consolidated financial statements in this annual report on Form 10-K for additional discussion of the July 2024 Offering.

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Sources of Liquidity

As of December 31, 2023, we had $26.6 million in cash, $135.7 million in short-term investments, and an accumulated deficit of $393.4 million.

Since inception through December 31, 2023, our operations have been financed primarily by net cash proceeds of approximately $476.7 million, primarily from public offerings of common stock, registered direct offerings of common stock, private placements, and debt financings.

As of December 31, 2024, we had $15.1 million in cash and cash equivalents, $181.2 million in short-term investments, and an accumulated deficit of $489.3 million.

Since inception through December 31, 2024, our operations have been financed primarily by net cash proceeds of approximately $594.9 million, primarily from underwritten offerings of our common stock, private placements of common stock, and debt financings.

We have used and intend to use the net proceeds from these offerings for working capital and general corporate purposes, which include, but are not limited to, the funding of clinical development of and pursuing regulatory approval for our product candidate and general and administrative expenses.

As we continue to progress on the IMPALA-2 pivotal trial, we will continue to monitor our liquidity and capital requirements.

As we continue to progress on the IMPALA-2 trial, pursue regulatory approval, and invest in pre-commercial activities, we will continue to monitor our liquidity and capital requirements.

Debt Facility

As discussed in Note 16.

Debt Facility in the notes to the consolidated financial statements included in this annual report on Form 10-K, we entered into our Amended Loan Agreement with Silicon Valley Bank during the year ended December 31, 2017, which was subsequently amended and then amended and restated in April 2022.

As of December 31, 2023, the carrying value of the secured loan was $26.3 million.

On March 10, 2023, the FDIC took control and was appointed receiver of Silicon Valley Bank, and on March 27, 2023, First Citizens BancShares, Inc.

announced that it had entered into an agreement with the FDIC to purchase all of the assets and liabilities of Silicon Valley Bank.

Subsequent Events in the notes to the consolidated financial statements in this annual report on Form 10-K, on March 26, 2025, we entered into the Hercules Loan Agreement which provides for a loan facility of up to $200 million.

Proceeds from the initial $30 million tranche drawn under the Hercules Loan Agreement were used to repay all outstanding obligations under the Amended Loan Agreement with Silicon Valley Bank, a division of First Citizens BancShares, with a carrying value of $26.6 million as described in Note 16.

Subsequent Events , to pay certain expenses incurred in connection with the financing, and for general corporate purposes.

Subject to satisfaction of certain conditions, including attainment of FDA approval of MOLBREEVI for the treatment of aPAP, we may draw future tranches under the Hercules Loan Agreement to fund our ongoing business operations including the development, regulatory approval, marketing and commercialization of MOLBREEVI.

Common Stock Sales Agreement

Evercore Sales Agreement

On July 6, 2021, the Company entered into a Common Stock Sales Agreement with Evercore, as sales agent (the “Sales Agreement”), pursuant to which the Company may offer and sell, from time to time, through Evercore, shares of our common stock ("Shares"), having an aggregate offering price of not more than $60 million.

The Agreement was effective on July 16, 2021, the date the Company’s shelf registration agreement on Form S-3, as filed with the SEC on July 6, 2021, was declared effective by the SEC (the “New Registration Statement”).

The Shares will be offered and sold pursuant to the New Registration Statement.

On July 6, 2021, the Company entered into a Common Stock Sales Agreement with Evercore Group L.L.C.

(“Evercore”), as sales agent (the “Sales Agreement”), pursuant to which the Company may offer and sell, from time to time, through Evercore, shares of Savara’s common stock, par value $0.001 per share (the “Shares”), having an aggregate offering price of not more than $100.0 million.

The Sales Agreement was effective on July 16, 2021, the date the Company’s Registration Statement on Form S-3 (File No.

333-257709) (the “2021 Registration Statement”), filed with the SEC on July 6, 2021, was declared effective by the SEC.

From July 16, 2021 through May 20, 2024, Shares were sold pursuant to the 2021 Registration Statement.

Since May 21, 2024, the Shares have been offered and sold pursuant to the Company’s Registration Statement on Form S-3 (File No.

333-279274), filed with the SEC on May 9, 2024 (the “2024 Registration Statement”).

Subject to the terms and conditions of the Sales Agreement, Evercore will use commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions.

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The Company has no obligation to sell any of the Shares and may at any time suspend sales under the Sales Agreement or terminate the Sales Agreement.

During the year ended December 31, 2023, we sold 2,071,511 shares of common stock under the Evercore Sales Agreement to a single institutional investor resulting in net proceeds of $8.8 million.

During the year ended December 31, 2022, we did not sell any shares of common stock under the Evercore Sales Agreement.

Recent Registered Direct Offering of Common Stock

On July 17, 2023, we completed a registered direct offering of our common stock and pre-funded warrants for gross proceeds of approximately $80 million and net proceeds, after deducting underwriting discounts, commissions and

offering expenses, of approximately $74.9 million as discussed in Note 9.

During the year ended December 31, 2024 and 2023, we sold 6,038,650 shares of the Company’s common stock resulting in net proceeds of $24.4 million and 2,071,511 shares of common stock resulting in net proceeds of $8.8 million, in each case, to a single institutional investor pursuant to the Sales Agreement, respectively.

Recent Underwritten Offerings of Common Stock

On July 1, 2024, we sold an aggregate of 26,246,720 shares of our common stock, par value $0.001 per share, pursuant to an underwritten offering of our common stock (the "July 2024 Offering") at an offering price of $3.81 per share.

The July 2024 Offering resulted in net proceeds of $93.8 million as discussed in Note 9.

Stockholders’ Equity in the notes to the consolidated financial statements included in this annual report on Form 10-K.

On July 17, 2023, we completed an underwritten offering of our common stock and pre-funded warrants (the "July 2023 Offering") resulting in net proceeds of approximately $74.9 million as discussed in Note 9.

Stockholders’ Equity in the notes to the consolidated financial statements included in this annual report on Form 10-K.

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

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Cash used in operating activities

Cash provided by (used in) investing activities

Cash used in investing activities

Cash provided by financing activities

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Cash flows from operating activities

Cash used in operating activities for the year ended December 31, 2024 was $89.1 million, consisting of a net loss of $95.9 million offset by a net increase in operating assets and liabilities of $1.8 million and $5.0 million of net noncash charges.

The change in our net operating assets and liabilities was primarily due to an increase in accrued liabilities, specifically, compensation and research and development costs for MOLBREEVI.

Net noncash charges are mainly comprised of amortization of debt issuance costs, accretion on discount to short-term investments, and stock-based compensation.

Cash used in operating activities for the year ended December 31, 2023 was $51.1 million, consisting of a net loss of $54.7 million and a net increase in operating assets and liabilities of $4.1 million.

The change in our net operating assets and liabilities was primarily due to an increase in accrued liabilities, specifically, compensation and research and development costs for molgramostim.

The change in our net operating assets and liabilities was primarily due to an increase in accrued liabilities, specifically, compensation and research and development costs for MOLBREEVI.

This was partially offset by approximately $0.5 million of non-cash charges, mainly comprised of amortization of debt issuance costs, accretion on discount/amortization on premium to short-term investments, and stock-based compensation.

Cash used in operating activities for the year ended December 31, 2022 was $34.6 million, consisting of a net loss of $38.2 million, which was partially offset by non-cash charges of $2.6 million, mainly comprised of amortization of right-of-use assets, depreciation, amortization of debt issuance costs, and stock-based compensation, and further offset by a net increase in assets and liabilities of $1.0 million.

The change in our net operating assets and liabilities was primarily due to a decrease in accrued liabilities mostly related to research and development costs for molgramostim and a decrease related to a cessation of residual costs of the wind-down of a prior ancillary product trial.

Cash flows from investing activities

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Stockholders’ Equity of the consolidated financial statements in this annual report on Form 10-K for additional discussion of the July 2024 Offering.

There was minimal cash provided by financing activities for the year ended December 31, 2022.

Cash provided by financing activities of $82.8 million for the year ended December 31, 2023 was primarily the result of net proceeds from the July 2023 Offering and at the market offerings.

Refer to Note 9.

Stockholders’ Equity of the consolidated financial statements in this annual report on Form 10-K for additional discussion of the July 2023 Offering.

Future Funding Requirements

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Manufacturing and Other Commitments and Contingencies

We are subject to various manufacturing royalties and payments and other commitments related to molgramostim.

We are subject to various manufacturing royalties and payments and other commitments related to MOLBREEVI.

For a summary of the contingent milestone payments and commitments, refer to Note 10.

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As such, we do not believe that our cash, cash equivalents, and short-term investment securities have significant risk of default or illiquidity.

We have vendors in Denmark and elsewhere in Europe and pay those vendors in local currency, Danish Krone or Euros, respectively.

We did not recognize any significant exchange rate losses during the years ended December 31, 2023 and 2022.

A 10% change in the Krone-to-dollar or Euro-to-dollar exchange rate on December 31, 2023 would not have had a material effect on our results of operations or financial condition.

We have vendors in Denmark and elsewhere in Europe and pay those vendors in local currency, Danish Krone, British Pound sterling or Euros, respectively.

We did not recognize any net exchange rate losses during the years ended December 31, 2024 and 2023.

A 10% change in the Krone-to-dollar, British Pound sterling-to dollar exchange rate or Euro-to-dollar exchange rate on December 31, 2024 would not have had a material effect on our results of operations or financial condition.

We also have interest rate exposure as a result of our Amended Loan Agreement with Silicon Valley Bank.

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As of December 31, 2024, the carrying value of the secured term loan was $26.6 million.

The loan bears interest at a floating rate equal to the greater of (i) 3% or (ii) the prime rate reported in The Wall Street Journal, minus a spread of 0.5%.

The loan bears interest at a floating rate equal to the greater of (i) 3% or (ii) the prime rate reported in The Wall Street Journal, which was 7.5% as of December 31, 2024, minus a spread of 0.5%.

Changes in the prime rate may therefore affect our interest expense associated with our secured term loan.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis