What changed in this filing

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Item 9A. Controls and Procedures

2025-03-27 compared with 2024-03-07 · 262 added, 216 removed, 745 unchanged (39% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of December 31, 2023, pursuant to and as required by Rule 13a-15(b) under the Exchange Act.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2023, our disclosure controls and procedures, as defined by Rule 13a-15(e) under the Exchange Act, were effective and designed to ensure that (i) information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and (ii) information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial & Administrative Officer, the effectiveness of our disclosure controls and procedures as of December 31, 2024, pursuant to and as required by Rule 13a-15(b) under the Exchange Act.

Based on that evaluation, our Chief Executive Officer and Chief Financial & Administrative Officer have concluded that, as of December 31, 2024, our disclosure controls and procedures, as defined by Rule 13a-15(e) under the Exchange Act, were effective and designed to ensure that (i) information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and (ii) information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial & Administrative Officer, as appropriate, to allow timely decisions regarding required disclosures.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial & Administrative Officer, we assessed the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

As a result of that assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2024 based on criteria in Internal Control - Integrated Framework (2013) issued by the COSO.

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Other Information:

During the quarter ended December 31, 2023, no officer or director of the Company adopted or terminated any contract, instruction, or written plan for the purchase or sale of securities of the Company’s common stock that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement as defined in 17 CFR § 229.408(c).

Rule 10b5-1 Trading Plans

Our policy governing transactions in our securities by our directors, officers and employees permits our directors, officers and employees to enter into trading plans complying with Rule 10b5-1 under the Exchange Act.

The following table describes the written plans for the sale of our securities terminated by our executive officers and directors during the quarter ended December 31, 2024, each of which was entered into and terminated during an open trading window and was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (each, a Trading Plan).

Name and Title

Date of Adoption of Trading Plan

Scheduled Start Date of Trading Plan

Scheduled Expiration Date of Trading Plan

Maximum Shares Subject to Trading Plan

Date Plan Terminated (1)

Matthew Pauls

Chief Executive Officer and Chair of the Board of Directors

David Lowrance

Chief Financial and Administrative Officer

(1) Each Trading Plan was terminated prior to any sales being made pursuant to such Trading Plan.

No other Company directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted , modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarter ended December 31, 2024.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Exhibit Number

Composite Amended and Restated Certificate of Incorporation, as amended, of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-3 filed on July 6, 2021.)

Certificate of Amendment to Amended and Restated Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 7, 2024).

Amended and Restated Bylaws of Savara, Inc., dated March 28, 2023 (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on March 30, 2023).

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Form of Pre-Funded Warrant (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on July 13, 2023).

Loan and Security Agreement, dated April 28, 2017, among Savara Inc., Aravas Inc.

and Silicon Valley Bank (Incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed on May 9, 2017.)

First Amendment dated October 31, 2017, to Loan and Security Agreement, dated April 28, 2017, among Savara Inc., Aravas Inc.

and Silicon Valley Bank.

(Incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed on November 8, 2017.)

Second Amendment, dated December 4, 2018, to Loan and Security Agreement, dated April 28, 2017, as amended on October 31, 2017, among Savara Inc., Aravas Inc.

and Silicon Valley Bank.

(Incorporated by reference to Exhibit 10.31 to the Registrant’s Annual Report on Form 10-K filed on March 13, 2019.)

Third Amendment, dated January 31, 2020, to Loan and Security Agreement, dated April 28, 2017, as amended on October 31, 2017 and December 4, 2018, among the Registrant, Aravas Inc.

and Silicon Valley Bank (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 3, 2020.)

Fourth Amendment, dated March 30, 2021, to Loan and Security Agreement, dated April 28, 2017, as amended on October 31, 2017, December 4, 2018 and January 31, 2021, between the Registrant, Aravas Inc.

and Silicon Valley Bank (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 1, 2021.)

Amended and Restated Loan and Security Agreement, dated April 21, 2022, between the Registrant and its subsidiary, Aravas Inc., as borrowers, and Silicon Valley Bank (Incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed on May 11, 2022.)

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Manufacture and Supply Agreement, dated as of April 26, 2019, between Savara ApS and GEMABIOTECH SAU (Incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed on May 9, 2019.)

Form of Warrant Repurchase Agreement (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 11, 2021.)

Master Services Agreement by and between Savara Inc.

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Amendment No.

2 to the Manufacture and Supply Agreement, dated December 13, 2023 entered into by and between Savara ApS GEMABIOTECH SAU .

2 to the Manufacture and Supply Agreement, dated December 13, 2023 entered into by and between Savara ApS GEMABIOTECH SAU (Incorporated by reference to Exhibit 10.36 to the Registrant’s Annual Report on Form 10-K filed on March 7, 2024.)

Master Services Agreement, dated February 13, 2024, by and between Fujifilm Diosynth Biotechnologies UK Limited, Fujifilm Diosynth Biotechnologies Texas, LLC, and Fujifilm Diosynth Biotechnologies U.S.A., Inc.

and Savara Inc.

(Incorporated by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q filed on May 9, 2024.)

2021 Inducement Equity Incentive Plan, as amended (Incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-8 filed on March 7, 2024).

2024 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K/A (Amendment No.

1) filed on June 10, 2024).

2021 Inducement Equity Incentive Plan, as amended (Incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-8 filed on October 1, 2024).

Form of Incentive Stock Option Award Agreement under the 2024 Omnibus Incentive Plan.

(Incorporated by reference to Exhibit 10.2 of the Registrant's Quarterly Report on Form 10-Q filed on November 12, 2024.)

Form of Nonqualified Stock Option Award Agreement under the 2024 Omnibus Incentive Plan.

(Incorporated by reference to Exhibit 10.3 of the Registrant's Quarterly Report on Form 10-Q filed on November 12, 2024.)

Form of Restricted Stock Unit Award Agreement under the 2024 Omnibus Incentive Plan.

(Incorporated by reference to Exhibit 10.4 of the Registrant's Quarterly Report on Form 10-Q filed on November 12, 2024.)

Executive Employment Agreement, dated October 15, 2024, between Savara Inc.

and Braden Parker.

Executive Employment Agreement, dated August 24, 2023, between Savara Inc.

and Anne Erickson.

Amended and Restated Executive Employment Agreement, dated March 13, 2025, between Savara Inc.

and Kathleen McCabe.

Master Services Agreement by and between Savara ApS and Selvita S.A., effective January 17, 2024.

List of Subsidiaries (Incorporated by reference to Exhibit 21.1 to the Registrant’s Annual Report on Form 10-K filed on March 30, 2023.

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An Van Es-Johansson

/s/ Ricky Sun

March 7, 2024

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Inde pendent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Savara Inc.

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Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with United States federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated 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 consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters 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.

Accrued Research and Development Costs

As described in Note 2 to the consolidated financial statements, the Company records expenses of research and development activities, including nonclinical studies, and third-party contract services for clinical trials and manufacturing development.

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 financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate an opinion on the critical audit matter or on the accounts or disclosures to which it relates.

As described in Note 2 to the financial statements, the Company records expenses of research and development activities, including nonclinical studies, and third-party contract services for clinical trials and manufacturing development.

Clinical trials and contract manufacturing activities performed by third parties are expensed based upon estimates of work completed with respective contract research organizations (“CROs”) or contract manufacturing organizations (“CMOs”) and other third-party vendors.

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The Company recorded an accrued liability of $3.9 million for expenses incurred but not yet invoiced, and a prepaid expense of $4.2 million for payments made to vendors in excess of costs incurred.

Given the significant judgments and estimates in accounting for accrued research and development costs, we have determined this area a critical audit matter.

Our audit procedures related to the Company’s accrued research and development costs included the following among others:

• We evaluated, on a sample basis, the reasonableness of management’s methods and assumptions used in developing the accrued or prepaid research and development costs by:

(1) Agreeing key milestones and completion terms, activities, timing, and costs per management provided schedules to signed and executed CMO and CRO contracts,

(2) Obtaining evidence from third parties of the research and development activities performed for significant clinical trials and contract manufacturing services,

(3) Inquiring of financial and clinical personnel on the status of the clinical trials, progress to completion of clinical trials, method of allocating contractual charges to specific tasks performed during the clinical trials, and the status of change orders, and

(4) Performing a comparison of current quarterly and annual results compared to prior quarter and prior year to assess the historical accuracy of management’s analysis.

Given the significant judgments and estimates in accounting for research and development expenses, we have determined this area to be a critical audit matter.

Our audit procedures related to research and development costs included the following procedures, among others:

• For a sample of significant clinical trials and contract manufacturing services, we

o Inspected the related contracts, purchase orders, statements of work and other contractual documentation.

o Tested the completeness and accuracy of the underlying data used to develop the estimates.

o Performed corroborating inquiries with the Company’s research and development and finance personnel.

o Inspected information from third-party service providers to understand the nature and progress of the studies and confirmed study related data directly with certain third-party service providers.

o Inspected third-party service provider invoices and evidenced corresponding payments.

/s/ RSM US LLP

We have served as the Company’s auditor since 2019.

Austin, Texas

Boston, Massachusetts

March 27, 2025

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Common stock, $ 0.001 par value, 300,000,000 shares authorized as of

December 31, 2023 and 2022, respectively;

December 31, 2024 and 2023;

172,423,223 and 138,143,545 shares issued

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Loss from operations

Other income (expense), net:

Interest income (expense), net

Foreign currency exchange gain (loss)

Other income, net:

Interest income, net

Foreign currency exchange gain

Tax credit income

Total other income (expense), net

Total other income, net

Net loss per share:

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Balance on December 31, 2022

Issuance of common stock and pre-funded warrants in

underwritten public offering, net of offering cost

Issuance of common stock upon exercise

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Repurchase of shares for minimum tax withholdings

Issuance of common stock upon at the market

offerings, net

Stock-based compensation

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Balance on December 31, 2023

Issuance of common stock and pre-funded warrants in

registered direct offering, net of offering cost (1)

Issuance of common stock in underwritten public offering,

net of offering cost

Issuance of common stock upon at the market

offerings, net

Issuance of common stock upon exercise

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Repurchase of shares for minimum tax withholdings

Issuance of common stock upon at the market

offerings, net

Issuance of common stock upon exercise of prefunded

Reimbursement of commissions from prior issuance of

common stock upon at the market sales, net

Stock-based compensation

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Balance on December 31, 2024

(1) As discussed in Note 9.

Stockholders’ Equity , the Company sold (i) an aggregate of 21,000,000 shares of the Company’s common stock, par value $ 0.001 per share and (ii) pre-funded warrants to purchase an aggregate of 5,666,667 shares of the Company's common stock at an exercise price, equal to the par value, of $ 0.001 per share.

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

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Depreciation and amortization

Amortization of right-of-use assets

Foreign currency gain (loss)

Reduction in the carrying value of right-of-use assets

Foreign currency loss

Amortization of debt issuance costs

(Accretion on discount)/amortization on premium to short-term investments

Accretion on discount to short-term investments

Stock-based compensation

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Maturity of available-for-sale securities

Sale of available-for-sale securities, net

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

Repayment of long-term debt (1)

Proceeds from long-term debt, net (1)

Issuance of common stock and pre-funded warrants in registered direct offering, net of offering costs

Issuance of common stock and pre-funded warrants in underwritten offering, net of offering costs

Issuance of common stock issued in underwritten offering, net of offering costs

Issuance of common stock upon exercise of prefunded warrants

Issuance of common stock upon at the market offerings, net

Proceeds from exercise of stock options

Reimbursement of commissions from the prior issuance of common stock upon

at the market sales, net

Repurchase of shares for minimum tax withholdings

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Effect of exchange rate changes on cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents beginning of period

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Cash paid for interest

(1) As discussed in Note 7.

Debt Facility , the Amended Loan Agreement (as defined herein) executed on April 21, 2022 was accounted for as a modification.

The Company used the proceeds from the Amended Loan Agreement to repay the outstanding amounts under the Loan Agreement from Silicon Valley Bank.

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

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

The Company’s sole program, molgramostim nebulizer solution (“molgramostim”), a novel inhaled biologic, is a granulocyte-macrophage colony-stimulating factor in Phase 3 development for autoimmune pulmonary alveolar proteinosis (“aPAP”).

The Company and its wholly-owned subsidiaries operate in one segment with its principal office in Langhorne, Pennsylvania, though a significant portion of employees work remotely.

The Company’s sole program, molgramostim inhalation solution ( " MOLBREEVI" or "molgramostim") , is an investigational inhaled biologic, specifically an inhaled granulocyte-macrophage colony-stimulating factor ("GM-CSF") in Phase 3 development for autoimmune pulmonary alveolar proteinosis (“aPAP”).

The Company and its wholly-owned domestic and foreign subsidiaries operate in one segment with its principal office in Langhorne, Pennsylvania, though a significant portion of employees work remotely.

Since inception, Savara has devoted its efforts and resources to identifying and developing its product candidates, recruiting personnel, and raising capital.

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GAAP”) as defined by the Financial Accounting Standards Board (the “FASB”).

Certain prior year amounts have been reclassified for consistency with the current period presentation.

Summary of Significant Accounting Policies

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Although the Company has sufficient capital to fund many of its planned activities, it may need to continue to raise additional capital to further fund the development of, and seek regulatory approvals for, its product candidate and begin to commercialize any approved product.

The Company is currently focused on the development of molgramostim for the treatment of aPAP and believes such activities will result in the continued incurrence of significant research and development and other expenses related to this program.

If the clinical trial for the Company’s product candidate fails or produces unsuccessful results and the product candidate does not gain regulatory approval or, if approved, fails to achieve market acceptance, the Company may never become profitable.

The Company is currently focused on the development of MOLBREEVI for the treatment of aPAP and believes such activities will result in the continued incurrence of significant research and development and other expenses related to this program.

If the Company’s product candidate does not gain regulatory approval or, if approved, fails to achieve market acceptance, the Company may never become profitable.

Even if the Company achieves profitability in the future, it may not be able to sustain profitability in subsequent periods.

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The Company cannot be sure that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to the Company or its stockholders.

The Company had cash and cash equivalents of $ 26.6 million and short-term investments of $ 135.7 million as of December 31, 2023, which is sufficient to fund the Company's operations for the twelve months subsequent to the issuance date of its consolidated financial statements for the year ended December 31, 2023.

The Company had cash and cash equivalents of $ 15.1 million and short-term investments of $ 181.2 million as of December 31, 2024, which is sufficient to fund the Company's operations for at least the next twelve months subsequent to the issuance date of its consolidated financial statements for the year ended December 31, 2024.

The Company may continue to raise additional capital as needed through the issuance of additional equity securities and potentially through borrowings and strategic alliances with partner companies.

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The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company currently maintains depository accounts and has a debt facility with Silicon Valley Bank, as acquired by First Citizens BancShares, Inc.

FCNCA) on March 27, 2023 through an agreement with the Federal Deposit Insurance Corporation ("FDIC").

The acquisition included all of the assets and liabilities of Silicon Valley Bank, including all bank deposits, and allowed Silicon Valley Bank to continue its operations.

The Company currently maintains depository accounts and has a debt facility with Silicon Valley Bank, an FDIC insured entity.

In order to mitigate risks associated with our banking deposits, the Company maintains a significant portion of its liquidity in U.S.

Treasury money market funds and other short-term investments with custodial services provided by U.S.

Bank, N.A., refer to Note 5.

and FNZ, refer to Note 5.

Short-term Investments and Note 8.

Fair Value Measurements .

The Company continues to monitor the circumstances surrounding First Citizens BancShares, Inc.

and its acquisition of Silicon Valley Bank and has not experienced nor anticipates any material impacts on its financial condition or operations.

Use of Estimates

The preparation of financial statements in conformity with U.S.

GAAP requires the Company to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

The preparation of consolidated financial statements in conformity with U.S.

GAAP requires the Company to make certain estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

Management’s estimates include those related to the accrual of research and development and general and administrative costs, certain financial instruments recorded at fair value, stock-based compensation, and the valuation allowance for deferred tax assets.

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The fair value of the investments is based on the specific quoted market price of the securities or comparable securities at the balance sheet dates.

Investments in debt securities are considered to be impaired when a decline in fair value is judged to be other than temporary because the Company either intends to sell or it is more-likely-than not that it will have to sell the impaired security before recovery.

Once a decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis in the investment is established.

We review investments for impairment whenever the fair value of an available-for-sale security is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable.

Unrealized losses are evaluated for impairment under ASC 326, Financial Instruments - Credit Losses, to determine if the impairment is credit-related or noncredit-related.

Credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to net loss, and noncredit-related impairment is recognized in other comprehensive (loss) income, net of taxes.

The fair value of the investments is based on the specific quoted market price of the securities or comparable securities at the balance sheet dates.

Refer to Note 5.

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Deposits held with the financial institutions exceed the amount of insurance provided on such deposits.

We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash equivalents and marketable securities to the extent recorded on the consolidated balance sheets.

Accrued Research and Development Costs

We are exposed to credit risk in the event of a default by the financial institutions holding our cash and cash equivalents and marketable securities to the extent recorded on the consolidated balance sheets.

Research and Development Costs

The Company records the costs associated with research, nonclinical and clinical trials, and manufacturing development as incurred.

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The Company accrues for expenses resulting from obligations under agreements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other outside service providers for which payment flows do not match the periods over which materials or services are provided to the Company.

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

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.

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Accrued Expenses and Other Current Liabilities for additional discussion.

Business Combinations

The Company accounts for business combinations in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations , and as further defined by Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) , which requires the purchase price to be measured at fair value.

When the purchase consideration consists entirely of shares of our common stock, the Company calculates the purchase price by determining the fair value, as of the acquisition date, of shares issued in connection with the closing of the acquisition and, if the transaction involves contingent consideration based on achievement of milestones or earn-out events, the probability-weighted fair value, as of the acquisition date, of shares issuable upon the occurrence of future events or conditions pursuant to the terms of the agreement governing the business combination.

If the transaction involves such contingent consideration, our calculation of the purchase price involves probability inputs that are highly judgmental due to the inherent unpredictability of drug development, particularly by development-stage companies.

The Company recognizes estimated fair values of the tangible assets and intangible assets acquired, including in process research and development (“IPR&D”), and liabilities assumed as of the acquisition date, and we record as goodwill any amount of the purchase price of the tangible and intangible assets acquired and liabilities assumed in excess of the fair value.

License and Collaboration Agreements

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Other payments made pursuant to license and collaboration agreements, which are generally related to research and development activities, are expensed as incurred.

Goodwill and Acquired In-Process Research and Development

In accordance with ASC Topic 350, Intangibles – Goodwill and Other , the Company's acquired IPR&D and goodwill, when applicable, is determined to have indefinite lives and, therefore, is not amortized.

Acquired In-Process Research and Development

In accordance with ASC Topic 350, Intangibles – Goodwill and Other , the Company's acquired 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 the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired.

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If the Company chooses to first assess qualitative factors and it determines that it is more-likely-than not acquired IPR&D is not impaired, the Company is 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 the Company performs a quantitative assessment of acquired IPR&D, it compares 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.

The Company evaluates potential impairment of its 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 or around 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 .

The Company evaluates potential impairment of its 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 the Company will record a non-cash impairment loss on its consolidated statements of operations and comprehensive loss.

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Commitments – Operating Leases for additional discussion.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance.

Our chief operating decision maker is the chief executive officer.

We have one operating segment, specialty pharmaceuticals within the respiratory system.

Property and Equipment

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• Level 3 – Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.

Financial instruments not carried at fair value include accounts payable and accrued liabilities.

The carrying amounts of these financial instruments approximate fair value due to the highly liquid nature of these short-term instruments.

The Company’s financial instruments consist primarily of cash, cash equivalents, short term investments, accounts payable, and accrued liabilities.

The Company’s cash, cash equivalents, accounts payable, and accrued liabilities

approximate fair value due to their relatively short maturities.

Refer to Note 8.

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To date, the Company has not generated any product revenue.

The Company’s ability to generate product revenues, which the Company does not expect will occur in the next several years, if ever, will depend heavily on the successful development, regulatory approval, and eventual commercialization of the Company’s product candidates.

The Company’s ability to generate product revenues, which the Company expects to commence in the upcoming year(s), if ever, will depend heavily on the successful development, regulatory approval, and eventual commercialization of the Company’s product candidates.

Net Loss per Share

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Recent Accounting Pronouncements

In December 2023, the FASB issues ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures effective for public business entities for annual periods beginning after Dec.

The Company is currently reviewing ASU 2023-09 and its impact on our consolidated financial statements.

In November 2023, the FASB issues ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.

ASU 2023-07 is effective for public entities fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently reviewing ASU 2023-07 and its impact on our consolidated financial statements.

In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (" ASU 2023-07"), to provide more disaggregated expense information about a public entity’s reportable segments.

The amendments in this update should be applied retrospectively and are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

As of January 1, 2024 , we have adopted ASU 2023-07 which did no t have a material impact on the Company's consolidated financial statements and additional required disclosures have been included in Note 13.

Segment Reporting.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09"), to require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

The amendments in this update should be applied prospectively, with an option to apply them retrospectively, and are effective for fiscal years beginning after December 15, 2024 for public entities.

We began an assessment of the impact that this guidance will have on our consolidated financial statements and related disclosures, and our analysis is currently ongoing.

In March 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (" ASU 2024-03"), to improve the disclosures about a public business entity’s expenses and to provide more detailed information about the types of expenses in commonly presented expense captions.

The amendments in this update should be applied either prospectively or retrospectively, and are effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

We began an assessment of the impact that this guidance will have on our consolidated financial statements and related disclosures, and our analysis is currently ongoing.

Prepaid Expenses and Other Current Asset s

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Prepaid Contracted Research and Development Costs

As of December 31, 2023, Prepaid contracted research and development costs are primarily comprised of contractual prepayments associated with the Company's clinical trial for molgramostim for the treatment of aPAP and for CMC related activities.

As of December 31, 2024, Prepaid contracted research and development costs are primarily comprised of contractual prepayments associated with the Company's clinical trial for MOLBREEVI for the treatment of aPAP and for CMC related activities.

This includes prepaid amounts paid under agreements with CROs, CMOs, and other outside service providers that provide services in connection with the Company's research and development activities.

Tax Credit Receivable

The Company has recorded a Danish tax credit earned by its subsidiary, Savara ApS, as of December 31, 2023 .

R&D Tax Credit Receivable

The Company has recorded a Danish R&D tax credit receivable earned by its subsidiary, Savara ApS, as of December 31, 2024 .

Under Danish tax law, Denmark remits a research and development tax credit equal to 22 % of qualified research and development expenditures, not to exceed established thresholds.

During the year ended December 31, 2022, the Company generated a Danish tax credit of $ 0.8 million which was received in the fourth quarter of 2023.

During the year ended December 31, 2023 , the Company generated a Danish tax credit of $ 0.8 million which is expected to be received in the fourth quarter of 2024.

During the year ended December 31, 2023, the Company generated a Danish R&D tax credit receivable of $ 0.8 million which was received in the fourth quarter of 2024.

During the year ended December 31, 2024 , the Company generated a Danish R&D tax credit receivable of $ 0.8 million which is expected to be received in the fourth quarter of 2025.

Accrued Expenses and Other Current Liabilities

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Accrued Contracted Research and Development Costs

As of December 31, 2023, Accrued contracted research and development costs are primarily comprised of costs associated with molgramostim for the treatment of aPAP, including expenses resulting from obligations under agreements with CROs, CMOs, and other outside service providers that provide services in connection with the Company's research and development activities.

As of December 31, 2024, Accrued contracted research and development costs are primarily comprised of costs associated with MOLBREEVI for the treatment of aPAP, including expenses resulting from obligations under agreements with CROs, CMOs, and other outside service providers that provide services in connection with the Company's research and development activities.

Short-term Investments

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Total short-term investments

* Designated custodial institution, U.S.

The Company has classified its investments as available-for-sale securities.

These securities are carried at estimated fair value with the aggregate unrealized gains and losses related to these investments reflected as a part of Accumulated other comprehensive loss in the consolidated balance sheet.

Classification as short-term or long-term is based upon whether the maturity of the debt securities is less than or greater than twelve months.

Classification as short-term or long-term is based upon whether the maturity of the debt securities is less than or greater than twelve months, as further discussed in Note 8.

Fair Value Measurements.

There were no significant realized gains or losses related to investments for the years ended December 31, 2024 and 2023 .

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Property and equipment, net

Depreciation expense for the years ended December 31, 2023 and 2022 was minimal, respectively.

Depreciation expense for the years ended December 31, 2024 and 2023 was minimal.

Debt Facility

On April 21, 2022 , the Company and its subsidiary, Aravas Inc.

(“Aravas”), entered into a loan and security agreement with Silicon Valley Bank, as amended by the First Amendment on October 31, 2017 , the Second Amendment on December 4, 2018 , the Third Amendment on January 31, 2020 , and the Fourth Amendment on March 30, 2021 (the “Loan Agreement”), pursuant to which Silicon Valley Bank provided a term loan to us in the principal amount of $ 25.0 million.

On April 21, 2022 , the Company and Aravas entered into an Amended and Restated Loan and Security Agreement (the “Amended Loan Agreement”), as co-borrowers, and Silicon Valley Bank, as lender (the “Lender”), which amended and restated the Loan Agreement in its entirety.

The Amended Loan Agreement provides for a $ 26.5 million term loan facility.

The Company used the proceeds from the Amended Loan Agreement to repay outstanding amounts under the Loan Agreement, including principal of $ 25.0 million, a prepayment fee of $ 0.1 million, and an end of term charge of $ 1.4 million.

(“Aravas”) entered into an Amended and Restated Loan and Security Agreement (the “Amended Loan Agreement”), as co-borrowers with Silicon Valley Bank, a division of First Citizens BancShares, as lender (the “Lender”) which provides for a $ 26.5 million term loan facility.

Pursuant to the Amended Loan Agreement, the loan has an interest-only monthly payment through April 21, 2026 (the “Interest-Only Period”) and thereafter equal monthly installments of principal plus interest over 12 months until April 21, 2027 (the “Maturity Date”).

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

Savara is obligated to pay customary closing fees and a final payment of 2.75 % of the principal amount advanced under the facility.

The Company may prepay the loan in whole or in part at any time, subject to a prepayment fee of 1.0 % if prepaid between the first and second anniversaries of the closing date.

Following the second anniversary, there is no prepayment fee.

The Company is obligated to pay customary closing fees and a final payment of 2.75 % of the principal amount advanced under the facility.

The Company may currently prepay the loan in whole or in part at any time without penalty or prepayment fee.

The Lender was granted a perfected first priority lien in all of the Company's assets with a negative pledge on intellectual property.

The Amended Loan Agreement contains customary affirmative and negative covenants, including among others, covenants that limit the Company's and its subsidiaries’ ability to dispose of assets, permit a change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments, and enter into transactions with affiliates, in each case subject to certain exceptions.

consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments, and enter into transactions with affiliates, in each case subject to certain exceptions.

Additionally, the Amended Loan Agreement contains an affirmative covenant providing that if the Company’s balance of cash and cash equivalents falls below $ 40.0 million, the Company is required to maintain cash and cash equivalents equal to at least (i) six months of operating expenses and (ii) 1.2 times the outstanding principal amount of the loan (or 1.75 in the final year of the loan if the Interest-Only Period is extended).

In accordance with FASB ASC Topic 470-50, Debt – Modifications and Extinguishments , the Company evaluated the Amended Loan Agreement to determine whether it should be accounted for as a modification or extinguishment.

As a result of this analysis, the Amended Loan Agreement was accounted for as a modification.

Accordingly, no gain or loss is recognized.

The Company was obligated to issue warrants to purchase shares of its common stock as part of the initial funding of the loan, as further described in Note 9.

Stockholders’ Equity .

Approximately $ 0.1 million of fees paid to the Lender were capitalized and will be amortized over the term of the Amended Loan Agreement.

Expenses paid to third parties associated with the Amended Loan Agreement were immediately expensed and recorded in the Interest income (expense) line item in our consolidated statement of operations.

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.

Summary of Carrying Value

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government securities

* Designated custodial institution, U.S.

The Company did no t transfer any assets measured at fair value on a recurring basis to or from Level 1, Level 2, and Level 3 during the years ended December 31, 2024 and 2023.

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Certain assets and liabilities are measured at fair value on a nonrecurring basis.

These assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments annually or whenever events or

circumstances indicate that the carrying value of those assets may not be recoverable.

These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments annually or whenever events or circumstances indicate that the carrying value of those assets may not be recoverable.

These assets and liabilities can include acquired IPR&D and other long-lived assets that are written down to fair value if they are impaired.

As of December 31, 2023, the Company had IPR&D of approximately $ 11.0 million .

For the years ended December 31, 2023 and 2022, the Company experienced an increase of approximately $ 0.3 million and a decrease of approximately $ 0.6 million, respectively, in the carrying value of IPR&D, which was due to foreign currency translation.

As of December 31, 2024 and 2023, the Company had IPR&D of approximately $ 10.3 million and $ 11.0 million, respectively.

For the years ended December 31, 2024 and 2023, the Company experienced a decrease of approximately $ 0.6 million and an increase of approximately $ 0.3 million, respectively, in the carrying value of IPR&D, which was due to foreign currency translation.

Stockh olders’ Equity

Registered Direct Offering of Common Stock

On July 17, 2023, the Company sold (i) an aggregate of 21,000,000 shares of the Company’s common stock (the “Common Stock”) for $ 3.00 per share which represented a 1 % premium over the closing price on that date and (ii) pre-funded warrants to purchase an aggregate of 5,666,667 shares of Common Stock at an exercise price of $ 0.001 per share (the “2023 Pre-Funded Warrants”) for $ 2.999 per warrant pursuant to a Registered Direct Offering (the “July 2023 Offering”).

The Common Stock and 2023 Pre-Funded Warrants were offered by the Company pursuant to its existing shelf registration statement (File No.

333-257709) filed with the SEC on July 6, 2021 and declared effective on July 16, 2021 (the "Registration Statement").

Underwritten Offering of Common Stock

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

The July 2024 Offering was made pursuant to the Registration Statement on Form S-3 (File No.

333-279274), which was filed with the SEC on May 9, 2024 and declared effective on May 21, 2024 (the "2024 Registration Statement"), and a prospectus supplement filed with the SEC on June 28, 2024.

The July 2024 Offering resulted in net proceeds of $ 93.8 million after taking into consideration underwriter commissions, legal fees, and other customary closing costs, as follows (in thousands):

Financial instruments

Offering expenses

On July 17, 2023, the Company sold (i) an aggregate of 21,000,000 shares of the Company’s common stock for $ 3.00 per share which represented a 1 % premium over the closing price on that date and (ii) pre-funded warrants to purchase an aggregate of 5,666,667 shares of the Company's common stock at an exercise price of $ 0.001 per share (the “2023 Pre-Funded Warrants”) for $ 2.999 per warrant pursuant to an underwritten offering (the “July 2023 Offering”).

The Company determined that the securities issued in the July 2023 Offering were free-standing and that the 2023 Pre-Funded Warrants meet the equity classification requirements pursuant to ASC 480, Distinguishing Liability from Equity , ASC 815, Derivatives and Hedging and Subtopic 815-40, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

The 2023 Pre-Funded Warrants were sold at the same price as the underlying common stock, less $ 0.001 (which represents the exercise price of the warrants).

The July 2023 Offering resulted in net proceeds to the Company of approximately $ 74.9 million , after deducting final underwriting discounts, commissions and offering expenses, as follows (in thousands):

The July 2023 Offering resulted in net proceeds to the Company of approximately $ 74.9 million, after deducting final underwriting discounts, commissions, and other estimated offering expenses, as follows (in thousands):

Financial instruments

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(“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 Agreement was effective on July 16, 2021 , the date the Registration Statement was declared effective by the SEC.

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

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 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 , the Company sold 2,071,511 shares of common stock under the Evercore Sales Agreement resulting in net proceeds of $ 8.8 million.

The Company’s amended and restated certificate of incorporation, as amended, authorizes the Company to issue 301 million shares of capital stock, consisting of 300 million shares of common stock with $ 0.001 par value per share and one million shares of preferred stock with $ 0.001 par value per share.

During the year ended December 31, 2024 and 2023 , the Company 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 to a single institutional investor pursuant to the Sales Agreement, respectively.

The Company’s amended and restated certificate of incorporation, as amended, authorizes the Company to issue 301,000,000 shares of capital stock, consisting of 300,000,000 shares of common stock with $ 0.001 par value per share and 1,000,000 shares of preferred stock with $ 0.001 par value per share.

The following is a summary of the Company’s common stock at December 31, 2024 and 2023:

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On February 28, 2023, the Company entered into the first amendment (the “Lease Amendment”) to its existing lease agreement, dated July 7, 2021 and which originally commenced on October 1, 2021 .

The Lease Amendment commenced on July 1, 2023 , continues through June 30, 2026 , or an additional thirty-six

months , expands the existing office space, and increases the average monthly rent to an average of approximately $ 14.5 thousand, paid over monthly installments during the Lease Amendment term.

The Lease Amendment commenced on July 1, 2023 , continues through June 30, 2026 , or an additional thirty-six months , expands the existing office space, and increases the average monthly rent to approximately $ 14.5 thousand, paid over monthly installments during the Lease Amendment term.

As of December 31, 2024, the carrying value of the right-of-use assets for the operating lease was $ 0.2 million, which is reflected in Other non-current assets and the carrying value of the lease liabilities for the operating lease increased to $ 0.3 million, of which approximately $ 0.2 million related to the current portion of the lease liabilities is recorded in Accrued expenses and other current liabilities and approximately $ 0.1 million related to the non-current portion of the lease liabilities is recorded in Other long-term liabilities .

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Manufacturing and Other Commitments and Contingencies

The Company is subject to various royalties and manufacturing and development payments related to its product candidate, molgramostim.

Under a manufacture and supply agreement with the active pharmaceutical ingredients (“API”) manufacturer for molgramostim, as amended on December 7, 2022 and December 13, 2023, Savara must make certain payments to the API manufacturer upon achievement of the milestones outlined in the table set forth below.

Additionally, upon first receipt of marketing approval by Savara from a regulatory authority in a country for a product containing the API for therapeutic use in humans and ending the earlier of (i) ten (10) years thereafter or (ii) the date a biosimilar of such product is first sold in such country, Savara shall pay the API manufacturer a royalty equal to low-single digits of the net sales in that country.

Additionally, the Company is subject to a purchase requirement under which for ten years following the date of receipt of approval by a regulatory authority of the first regulatory filing for the marketing and sale of the first molgramostim product in any country, each year, the Company will purchase from the API manufacturer the API required to produce a percentage of such molgramostim product it sells (the “Purchase Requirement”);

The Company is subject to various royalties and manufacturing and development payments related to its product candidate, MOLBREEVI .

Under a manufacture and supply agreement with an active pharmaceutical ingredients (“API”) manufacturer for MOLBREEVI , as amended, the Company must make certain payments to the API manufacturer upon achievement of the milestones outlined in the table set forth below.

Additionally, upon first receipt of marketing approval by the Company from a regulatory authority in a country for a product containing the API for therapeutic use in humans and ending the earlier of (i) ten (10) years thereafter or (ii) the date a biosimilar of such product is first sold in such country, the Company shall pay the API manufacturer a royalty equal to low-single digits of the net sales in that country of products containing API supplied by the API manufacturer.

Additionally, the Company is subject to a purchase requirement under which for ten years following the date of receipt of approval by a regulatory authority of the first regulatory filing for the marketing and sale of the first product containing the API in any country, the Company will purchase from the API manufacturer the API required to produce a percentage of such product it sells each year (the “Purchase Requirement”);

provided, however, that the Purchase Requirement will no longer apply if (i) the price charged by the API manufacturer exceeds a certain price charged by an alternative supplier, (ii) there is a shortage of supply, or (iii) API manufacturer at any time fails to materially fulfill a purchase order of the Company.

Similarly, the Company may become subject to additional milestone payments for the achievement of certain manufacturing protocols of molgramostim pursuant to a services agreement with a second source product manufacturer, as well as, an integrated contract research and CDMO, pursuant to a service agreement, serving as an additional source of manufacturing of molgramostim drug substances.

As of December 31, 2023, the Company had no significant obligations for any such milestone payments to either of these additional source product manufacturers.

The Company is also subject to certain contingent milestone payments, disclosed in the following table, payable to the manufacturer of the nebulizer used to administer molgramostim.

The change in the amount of the milestone payments from December 31, 2022 to December 31, 2023 was related to foreign currency translation fluctuations.

The Company is also subject to certain contingent milestone payments, disclosed in the following table, payable to the manufacturer of the nebulizer used to administer MOLBREEVI .

In addition to these milestones, the Company will owe a royalty of three-and one-half percent ( 3.5 %) to the manufacturer of the nebulizer based on net sales.

The following table summarizes manufacturing commitments and contingencies as of the period indicated (in thousands):

Manufacturing, Development, and Other Contingent Milestone Payments (in thousands):

December 31, 2024

Molgramostim manufacturer:

MOLBREEVI manufacturer:

Achievement of certain milestones related to validation of API and regulatory approval of

Molgramostim nebulizer manufacturer:

MOLBREEVI nebulizer manufacturer:

Achievement of various development activities and regulatory approval of nebulizer

utilized to administer molgramostim

utilized to administer MOLBREEVI

Total manufacturing and other commitments

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and (iii) not accrued, as the activities are not deemed probable or reasonably estimable, as of December 31, 2024.

Further, in February 2024, the Company entered into a master services agreement with an additional manufacturer to provide development and manufacturing services related to API for the Company’s MOLBREEVI product candidate in accordance with the terms of separate scope of work agreements and to perform a manufacturing campaign for process performance qualification of the API of MOLBREEVI.

Under that master services agreement, work orders and subsequent change orders, the Company is currently obligated to pay the second source manufacturer, in total, estimated fees of $ 24.7 million of which $ 15.9 million has been recognized as expense during the year ended December 31, 2024.

No expense was recognized in relation to this master services agreement during the year ended December 31, 2023.

These costs are subject to various cancellation fees ranging from ten percent ( 10 %) to one hundred percent ( 100 %) of the cost of the respective activity based upon the timing of the commencement date and status of the activity.

Contract Research

On March 5, 2021, the Company entered into a Master Services Agreement (“MSA”) with Parexel International (IRL) Limited (“Parexel”) pursuant to which Parexel will provide contract research services related to clinical trials.

Contemporaneously with entering the MSA, a work order was executed with Parexel, under which they will provide services related to the IMPALA-2 pivotal trial.

Under that work order and subsequent change orders, the Company will pay Parexel service fees and pass-through expenses estimated to be approximately $ 41.5 million over the course of the IMPALA-2 pivotal clinical trial.

As part of its development of MOLBREEVI for the treatment of aPAP, the Company entered into a Master Services Agreement (“MSA”) with Parexel International (IRL) Limited (“Parexel”) pursuant to which Parexel will provide contract research services related to clinical trials.

Contemporaneously with entering the MSA, a work order was executed with Parexel, under which they will provide services related to the IMPALA-2 trial.

Under that work order and subsequent change orders, the Company is obligated to pay Parexel service fees, pass-through expenses, and investigator fees estimated to be approximately $ 48.5 million over the course of the IMPALA-2 clinical trial and trial close-out activities of which $ 9.2 million and $ 10.8 million has been recognized as expense during the years ended December 31, 2024 and 2023, respectively.

In the second quarter of 2024, the Company initiated an open-label, multicenter clinical trial of MOLBREEVI in pediatric subjects with aPAP ("IMPACT") under a separate work order with Parexel.

Pursuant to the IMPACT trial, Parexel currently

has the opportunity to earn up to approximately $ 4.8 million in various milestone payments primarily dependent upon patient enrollment, site management, project oversight and the compliance with defined study protocols of which $ 1.3 million was recognized in the year ended December 31, 2024.

No expense was recognized in relation to this work order during the year ended December 31, 2023.

Risk Management

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Employment Agreements

On December 8, 2020, the Company entered into an employment agreement with the CEO, as amended and restated on December 13, 2022, whereby the CEO is entitled to payments and benefits upon certain events.

On December 8, 2020, the Company entered into an employment agreement with the Chief Executive Officer ("CEO"), as amended and restated on December 13, 2022, whereby the CEO is entitled to payments and benefits upon certain events.

Upon (i) termination without cause, (ii) termination due to the CEO’s death or disability, or (iii) the CEO’s resignation for good reason, the CEO is entitled to receive (i) a lump sum payment equal to 18 months of base salary, (ii) a lump sum payment equal to 100 % of his target bonus, (iii) a pro-rated portion of the unpaid target bonus based upon the number of days he was employed by the Company during the relevant performance period, (iv) reimbursement for continued coverage under medical benefit plans for 18 months or until covered under a separate plan from another employer, and (v) the immediate and full vesting of outstanding non-vested Company equity awards.

Additionally, all of the CEO’s outstanding stock options will be exercisable through the earlier of (x) the 18 month anniversary of the termination date or (y) the original expiration date.

Upon a termination other than for cause, death or disability or resignation for good reason within three months prior to or 12 months following a change in control, the CEO is entitled to receive (i) a lump sum payment of an amount equal to 24 months of base salary, (ii) 100% of the unpaid target bonus, (iii) a pro-rated portion of the unpaid target bonus based on the number of days he was employed by the Company during the relevant performance period, (iv) reimbursement for continued coverage under medical benefit plans for 24 months or until covered under a separate plan from another employer, and (v) the immediate and full vesting of outstanding non-vested Company equity awards.

Upon a termination other than for cause, death or disability or upon resignation for good reason within three months prior to or 12 months following a change in control, the CEO is entitled to receive (i) a lump sum payment of an amount equal to 24 months of base salary, (ii) 100% of the unpaid target bonus, (iii) a pro-rated portion of the unpaid target bonus based on the number of days he was employed by the Company during the relevant performance period, (iv) reimbursement for continued coverage under medical benefit plans for 24 months or until covered under a separate plan from another employer, and (v) the immediate and full vesting of outstanding non-vested Company equity awards.

Additionally, all of the CEO’s outstanding stock options will be exercisable through the earlier of (x) the 24-month anniversary of the termination date or (y) the original expiration date.

Each of the Company’s Chief Financial & Administrative Officer (“CFO”), Chief Medical Officer (“CMO”) and Chief Operating Officer ("COO") is entitled to payments and benefits if the CFO, CMO or COO, respectively, is (i) terminated without cause, (ii) terminated due to the CFO, CMO, or CCO's death or disability, or (iii) resigns for good reason, which includes (i) a lump sum payment equal to 12 months of base salary and a pro-rated portion of their unpaid bonus, (ii) reimbursement for continued coverage under medical benefit plans for 12 months or until covered under a separate plan from another employer, and (iii) accelerated vesting of outstanding non-vested Company equity awards equal to 12 months.

Upon a termination other than for cause, death or disability or resignation for good reason within three months prior to or 12 months following a change in control, the CFO, CMO and COO is entitled to receive (i) a lump sum payment of an amount equal to 18 months of base salary, plus 100% of their target bonus, plus a pro-rated portion of their unpaid target bonus, (ii) a lump sum payment equal to the amount required to continue coverage under medical benefit plans for 18 months, and (iii) the immediate and full vesting of outstanding non-vested options at the time of such termination.

Related Parties

As an investor with the right to designate a member of the Company’s board of directors, Bain Capital Life Sciences Fund II, L.P., BCIP Life Sciences Associates, LP and their affiliates (collectively "Bain") has significant influence over the Company and is thereby considered a related party.

Pursuant to the July 2023 Offering (as further discussed in Note 9.

Stockholders' Equity ), Bain acquired 5,666,667 of the 2023 Pre-Funded Warrants.

Each of the Company’s Chief Financial & Administrative Officer (“CFO”), Chief Medical Officer (“CMO”), Chief Operating Officer ("COO"), Chief Business Officer ("CBO"), and Chief Commercial Officer ("CCO") is entitled to payments and benefits if the CFO, CMO, COO, CBO, or CCO, respectively, is (i) terminated without cause, (ii) terminated due to death or disability, or (iii) resigns for good reason, which includes (i) a lump sum payment equal to 12 months of base salary and a pro-rated portion of their unpaid bonus, (i i) reimbursement for continued coverage under medical benefit plans for 12 months or until covered under a separate plan from another employer, and (iii) accelerated vesting of outstanding non-vested Company equity awards equal to 12 months.

Upon a termination other than for cause, death or disability or upon resignation for good reason within three months prior to or 12 months following a change in control, the CFO, CMO, COO, CBO, or CCO is entitled to receive (i) a lump sum payment of an amount equal to 18 months of base salary, plus 100% of their target bonus, plus a pro-rated portion of their unpaid target bonus, (ii) a lump sum payment equal to the amount required to continue coverage under medical benefit plans for 18 months, and (iii) the immediate and full vesting of outstanding non-vested options at the time of such termination.

Stock -Based Compensation

Equity Incentive Plans

2008 Stock Option Plan

The Company adopted the Savara Stock Option Plan (the “2008 Plan”), pursuant to which the Company had reserved shares for issuance to employees, directors, and consultants.

The 2008 Plan includes (i) the option grant program providing for both incentive and non-qualified stock options, as defined by the Internal Revenue Code, and (ii) the stock issuance program providing for the issuance of awards that are valued based upon common stock, including restricted stock, dividend equivalents, stock appreciation rights, phantom stock, and performance units.

The 2008 Plan also allows eligible persons to purchase shares of common stock at an amount determined by the plan administrator.

Upon a participant’s termination, the Company retains the right to repurchase non-vested shares issued in conjunction with the stock issuance program at the fair market value per share as of the date of termination.

The Company had previously issued incentive and non-qualified options and restricted stock to employees and non-employees under the 2008 Plan.

The terms of the stock options, including the exercise price per share and vesting provisions, were determined by the board of directors.

Stock options were granted at exercise prices not less than the estimated fair market value of the Company’s common stock at the date of grant based upon objective and subjective factors including:

third-party valuations, preferred stock transactions with third parties, current operating and financial performance, management estimates and future expectations.

The Company no longer issues stock-based awards under the 2008 Plan.

2015 Omnibus Incentive Option Plan

The Company operates the 2015 Omnibus Incentive Plan (the “2015 Plan”), as amended and restated with approval by our stockholders in June 2018 and amended with approval by our stockholders in May 2020 and June 2022.

The 2015 Plan provides for the grant of incentive and non-statutory stock options, as well as share appreciation rights, restricted shares, restricted stock units, performance units, shares and other stock-based awards.

Share-based awards are subject to terms and conditions established by our board of directors or the compensation committee of our board of directors.

As of December 31, 2023, the number of shares of our common stock available for grant under the 2015 Plan was 1,061,102 shares.

Shares of common stock that are subject to awards granted under the 2015 Plan shall be counted against the shares available for issuance under this plan as one share for each share subject to a stock option or stock appreciation right and as 1.34 shares for each share subject to an award other than a stock option or a stock appreciation right such as a restricted stock unit (“RSU”).

If any shares of common stock subject to an award granted under any of our stockholder-approved, equity-based incentive plans are forfeited, or an award expires or is settled for cash pursuant to the terms of an award, the shares subject to the award may be used again for awards under the 2015 Plan to the extent of the forfeiture, expiration or cash settlement.

The shares of common stock will be added back as one share for every share of common stock if the shares were subject to a stock option or stock appreciation right, and as 1.34 shares for every share of common stock if the shares were subject to an award other than a stock option or stock appreciation right.

Under the 2015 Plan, the purchase price of shares of common stock covered by a stock option cannot be less than 100 % of the fair market value of the common stock on the date the stock option is granted.

Fair market value of the common stock is generally equal to the closing price for the common stock on the principal securities exchange on which the common stock is traded on the date the stock option is granted (or if there was no closing price on that date, on the last preceding date on which a closing price was reported).

Under the 2008 and 2015 Plan, stock option grants typically vest quarterly over four years and expire ten years from the grant date and restricted stock unit grants typically cliff vest after two years .

2021 Inducement Equity Incentive Plan

The Company adopted the 2021 Inducement Equity Incentive Plan (the “Inducement Plan”) with approval by the Company's board of directors in May 2021.

The Inducement Plan provides for the grant of non-statutory stock options,

restricted stock, restricted stock units, stock appreciation rights, performance units or performance shares.

Each award under the Inducement Plan is intended to qualify as an employment inducement grant in accordance with Nasdaq Listing Rule 5635(c)(4).

The Company’s 2024 Omnibus Incentive Plan (the “2024 Plan”) was adopted by the Company’s board of directors in March 2024, was approved by the Company’s stockholders on June 6, 2024, and became effective on June 7, 2024.

The 2024 Plan was intended to replace the Company’s Amended and Restated 2015 Omnibus Incentive Plan (the “2015 Plan”), and upon the effectiveness of the 2024 Plan, no further grants may be made under the 2015 Plan.

All outstanding awards under the 2015 Plan will continue in accordance with the 2015 Plan and any award agreement executed in connection with such outstanding awards.

The 2024 Plan provides for the grant of stock options (both incentive stock options and non-statutory stock options), stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance units, shares, and other stock-based awards.

Stock-based awards are subject to terms and conditions established by the board of directors or the compensation committee of the board of directors.

As of December 31, 2024 , the number of shares of common stock available for grant under the 2024 Plan was 7,153,602 shares.

Under the Inducement Plan, stock option grants typically vest quarterly over four years and expire ten years from the grant date and restricted stock unit grants typically cliff vest after two years .

The Company’s 2021 Inducement Equity Incentive Plan (the “Inducement Plan”) was adopted by the Company’s board of directors in May 2021 and subsequently amended to increase the shares available for grant.

The Inducement Plan provides for the grant of non-statutory stock options, restricted stock, RSUs, stock appreciation rights, performance units, and performance shares.

Each award under the Inducement Plan is intended to qualify as an employment inducement grant in accordance with Nasdaq Listing Rule 5635(c)(4).

As of December 31, 2024 , the number of shares of common stock available for grant under the Inducement Plan was 1,272,799 shares.

Under the Inducement Plan and 2024 Plan, stock option grants typically vest quarterly over four years and expire ten years from the grant date and restricted stock unit grants typically cliff vest after two years .

The Savara Inc.

Stock Option Plan (the “2008 Plan”) was adopted in 2008, and the Company no longer issues awards under the 2008 Plan.

As of December 31, 2024 , the Company had options outstanding to purchase 139,332 shares of common stock under the 2008 Plan.

The outstanding awards granted under the 2008 Plan are fully vested and generally have a maximum contractual term of ten years .

Stock Options and Restricted Stock Units

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Restricted stock units are valued at the closing market price of the Company’s common stock on the date of grant.

Fair Value Assumptions for 2015 Plan

Fair Value Assumptions for the Equity Incentive Plans

The following table summarizes the assumptions used for estimating the fair value of stock options granted to employees for the years ended December 31, 2024 and 2023:

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Options exercisable at December 31, 2024

Vested and expected to vest at December 31, 2023

The weighted-average grant date fair values for the Company’s stock options granted during the years ended December 31, 2024 and 2023 were $ 3.47 per share and $ 2.79 per share, respectively.

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Stock-Based Compensation

Stock-based compensation expense is included in the following line items in the accompanying statements of operations and comprehensive loss for the years ended December 31, 2023 and 2022 (in thousands):

Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023 (in thousands):

Year ended December 31,

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The components of loss before income taxes for the years ended December 31, 2024 and 2023 are as follows (in thousands):

The Company did no t record a federal tax benefit or expense for the year ended December 31, 2023 .

The Company recorded no state provision for income taxes for the years ended December 31, 2023 and 2022 due to revenues below the minimum tax threshold.

The components of the benefit for income taxes are as follows for the years ended December 31, 2023 and 2022 (in thousands):

The Company did no t record a federal tax benefit or expense for the years ended December 31, 2024 and 2023.

The Company recorded a minimal state provision for income taxes for the year ended December 31, 2024 and no state provision for income taxes for the year ended December 31, 2023 due to revenues below the minimum tax threshold.

The components of the income tax expense are as follows for the years ended December 31, 2024 and 2023 (in thousands):

Total Current

Total Deferred

Total income tax expense (benefit)

Total income tax expense

A reconciliation of the expected income tax results computed using the federal statutory income tax rate to the Company’s effective income tax rate is as follows for the years ended December 31, 2024 and 2023 (in thousands):

Income tax benefit computed at federal statutory tax rate

State taxes, net of federal

Change in valuation allowance

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Foreign deferred tax asset - true up

Actualization and deferred tax asset - true up

Imputed interest

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In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of 5 % shareholders in the stock of a corporation by more than 50 percentage points in the aggregate over a three-year period.

Since the Company's formation, it has raised capital through public or private issuance of common stock on several occasions which have ultimately resulted in multiple changes in ownership, as defined by Section 382.

As a result of these ownership changes, $ 47.4 million of NOLs and $ 15.3 million of research and orphan drug credits have been fully restricted from use and were removed from the ending deferred tax assets and 2021 carryforwards mentioned above.

As of December 31, 2023 and 2022 , the Company still has $ 52.4 million and $ 50.6 million of federal Section 382 NOLs, respectively, which are included in the federal NOL carryforwards below, that are severely limited in future years.

Since the Company's formation, it has raised capital through public and private issuance of common stock on several occasions which have ultimately resulted in multiple changes in ownership, as defined by Section 382.

As of December 31, 2024 and 2023, the Company still has $ 52.4 million of federal Section 382 NOLs, collectively, which are included in the federal NOL carryforwards below, that are severely limited in future years.

As of December 31, 2024 and 2023, the Company had foreign NOL carryforwards of approximately $ 137.7 million and $ 96.0 million, respectively, which have an indefinite carryforward period.

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Federal NOL carryforwards of $ 5.2 million begin to expire in 2037 , with $ 120.8 million not having an expiration date.

As of December 31, 2023 and 2022 , the Company had state NOL carryforwards of approximately $ 9.5 million and $ 3.5 million, respectively.

As of December 31, 2024 and 2023 , the Company had state NOL

carryforwards of approximately $ 25.0 million and $ 9.5 million, respectively.

The state NOL carryforwards begin to expire in 2038 .

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There are currently no federal, state, or foreign income tax audits in progress.

Segment Reporting

We follow the accounting guidance of ASC Topic 280, Segment Reporting , which establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers.

Operating segments are defined as components of an enterprise engaging in business activities for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision-makers in deciding how to allocate resources and assess performance.

The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer , who reviews consolidated results including operating expenses and operating losses at a consolidated level only.

The Company and its CODM do not distinguish between potential markets for the purpose of making decisions about resource allocation and performance assessment of its sole pre-revenue development program, MOLBREEVI, for the treatment of aPAP.

Therefore, the Company has only one operating segment and one reportable segment, specialty pharmaceuticals within the respiratory system.

The Company's only significant long-lived asset, IPR&D, is located in Denmark, and the Company currently does not generate any revenues and its operating expenses and losses are viewed on a consolidated basis by the CODM.

Therefore, no geographical segmen ts are presented.

In addition to the significant expense categories included on the Company's consolidated statements of operations, refer below for disaggregated amounts that comprise research and development expenses and the segment net loss (in thousands):

Year Ended December 31,

Operating expenses:

Research and development operating costs and expenses excluding

non-cash stock-based compensation:

Primary program research and development expenses (a)

Other research and development expenses:

Payroll and benefits

Occupancy and other overhead and operating costs

Total other research and development expenses

Research and development operating costs and expenses excluding

non-cash stock-based compensation:

General and administrative expense excluding non-cash stock-based

Other segment income (expense), net (b)

Segment net loss

(a) Primary program research and development expenses are comprised primarily of costs paid to third parties for clinical trials and product development manufacturing, nonclinical, regulatory, and quality assurance activities, and the portion of related research and development expenses incurred by our collaborators and third-party service providers, including contract research and manufacturing organizations that we are obligated to reimburse.

(b) Other segment income (expense), net includes interest income, interest expense, foreign currency exchange gain or loss, depreciation and amortization, non-cash stock-based compensation and tax credit income.

Net L oss per Share

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Warrants to purchase common stock

The following table calculates basic earnings per share of common stock and diluted earnings per share of common stock for the years ended December 31, 2023 and 2022 (in thousands, except share and per share amounts):

The following table calculates basic net loss per share of common stock and diluted net loss per share of common stock for the years ended December 31, 2024 and 2023 (in thousands, except share and per share amounts):

Year ended December 31,

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Weighted-average common shares outstanding, basic

Basic and diluted EPS

Subsequent Events

In February 2024, the Company entered into a Master Services Agreement (the “Agreement”) with Fujifilm Diosynth Biotechnologies UK Limited, Fujifilm Diosynth Biotechnologies Texas, LLC, and Fujifilm Diosynth Biotechnologies U.S.A., Inc.

(collectively, “Fujifilm”), pursuant to which Fujifilm will continue to provide development and manufacturing services related to active pharmaceutical ingredient for the Company’s molgramostim product candidate in accordance with the terms of separate scope of work agreements to be entered into by the parties.

In conjunction with execution of the Agreement, the Company executed Scope of Work #03 between the parties, under which Fujifilm will perform a manufacturing campaign for Process Performance Qualification of the active pharmaceutical ingredient of molgramostim.

The Agreement includes standard and customary provisions regarding, among other things, confidentiality, intellectual property, limitations on liability, indemnification obligations, compliance with laws, and dispute resolution.

The Agreement will continue until it is terminated by the Company or Fujifilm, which either party may do upon three months’ notice if no activities under a scope of work are in process.

The Company may terminate activities under a scope of work at any time by providing written notice, subject to the payment of termination fees, as well as payment for services performed and non-cancelable costs.

The Agreement and any scope of work may also be terminated by either party due to a material uncured breach by the other party, and Fujifilm may terminate for certain unforeseen technical issues.

The Company has evaluated subsequent events through the date these consolidated financial statements were issued and determined there were no additional events that required disclosure or recognition in these consolidated financial statements.

Basic and diluted net loss per share

Employee Benefits

The Company offers a defined contribution 401(k) plan for its employees.

Employees are eligible to participate in the plan beginning on the first day following the three month anniversary date of hire.

Under the terms of the plan, employees may make voluntary contributions as a percent of compensation.

The Company makes discretionary contributions to the 401(k) plan equal to 100 percent of each employee’s pretax contributions up to the IRS annual contribution limit.

The Company’s total contributions to the 401(k) plan were $ 0.6 million and $ 0.5 million for the years ended December 31, 2024 and 2023 , respectively.

Subs equent Events

The Company has evaluated subsequent events through the date these consolidated financial statements were issued.

The Company determined there were no events, other than as described below, that required disclosure or recognition in these condensed consolidated financial statements.

Loan Agreement

On March 26, 2025 (the “Closing Date”), the Company, as borrower, 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”).

The initial advance of $30 million under the Hercules Loan Agreement was drawn on the Closing Date and used to repay all outstanding obligations under the Company’s prior term loan with Silicon Valley Bank, described in Footnote 7.

Debt Facility , to pay the Company’s expenses in connection with the Hercules Loan Agreement, and for general corporate purposes.

The Company may draw further Term Loans in the following tranches:

(i) subject to FDA approval of the Company’s MOLBREEVI product candidate for the treatment of aPAP (the “Approval Milestone”), (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;

(ii) 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”), up to $20 million on or prior to December 31, 2027;

and (iii) subject to approval by the Lenders’ investment committees, up to $70 million.

The Term Loan will mature April 1, 2030 (the “Maturity Date”).

The Term Loan bears interest at a floating rate equal to (i) the greater of (a) the prime rate reported in The Wall Street Journal or (b) 6.0%, plus (ii) 1.45%, or, subject to the Company meeting the Revenue Milestone, 1.20% after the full fiscal quarter following such achievement.

The Term Loan has an interest-only monthly payment through March 2028 (the “Interest-Only Period”), and beginning April 1, 2028, requires equal monthly installments of principal plus interest until the Maturity Date.

If the Company achieves the Approval Milestone, the Interest-Only period will extend until the Maturity Date.

The Company's obligations under the Hercules Loan Agreement are secured, subject to customary permitted liens and other agreed-upon exceptions, by a first-priority perfected security interest in all of the tangible and intangible assets of the Company, other than intellectual property, on which there is a negative pledge.

The Hercules Loan Agreement includes customary affirmative and negative covenants, repayment and prepayment terms, representations and warranties, and events of default.

The Hercules Loan Agreement contains an affirmative covenant requiring the Company to maintain unrestricted cash under an account control agreement equal to 50% of the outstanding principal of the Term Loan beginning April 1, 2026 (the “Cash Requirement”), which will decrease to 35% upon achievement of the Revenue Milestone and compliance with the Conditional Minimum Revenue Covenant (defined below).

However, if the Approval Milestone has not been achieved, the Cash Requirement increases to 70% of the outstanding principal until the Approval Milestone is achieved.

Notwithstanding the foregoing, the Cash Requirement will not apply during any period when the Company’s market capitalization exceeds $600 million.

Additionally, if the Company draws more than $50 million under the Term Loan, beginning nine months after achievement of the Approval Milestone, the Company will be required to have achieved, and to maintain, trailing six months of net product revenue of at least (i) 65% of a provided sales forecast or (ii) $100 million (“Conditional Minimum Revenue Covenant”).

If the Company raises at least $75 million in net cash proceeds from the issuance of equity and/or upfront business development proceeds before June 30, 2026, the Conditional Minimum Revenue Covenant will not apply until 15 months after achievement of the Approval Milestone.

Notwithstanding the foregoing, the Conditional Minimum Revenue Covenant will not apply during any period when the Company’s market capitalization exceeds $500 million and the Company maintains minimum unrestricted cash under an account control agreement equal to 50% of the outstanding principal amount of the Term Loan.

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 9A. Controls and Procedures