Outlook Therapeutics, Inc.: Form 10-Q for the period ended Mar 31, 2026

You should read this section in conjunction with our unaudited interim consolidated financial statements and related notes included in Part I, Item 1 of this report and our audited consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations for the years ended September 30, 2025 and 2024 included in our Annual Report on Form 10-K for the year ended September 30, 2025, filed with the Securities and Exchange Commission, or SEC, on December 19, 2025.

Forward-Looking Statements

This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are identified by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “seek,” “should,” “will,” “would,” or the negative of these terms or similar expressions in this report. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other forward-looking information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. These forward-looking statements are subject to certain risks and uncertainties that could cause a material difference including, but not limited to, those discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2025, filed with the SEC on December 19, 2025, and elsewhere in this report. See “Special Note Regarding Forward-Looking Statements.” Forward-looking statements are based on our management’s current beliefs and assumptions and based on information currently available to our management. These statements, like all statements in this report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments.

Overview

We are a biopharmaceutical company that has developed LYTENAVATM (bevacizumab gamma) as the first and only ophthalmic formulation of bevacizumab approved by the European Commission in the European Union, or EU, and the Medicines and Healthcare products Regulatory Agency, or MHRA, in the United Kingdom, or UK, for use in adults for the treatment of wet age-related macular degeneration, or wet AMD. Starting in June 2025, we launched directly into the initial markets of Germany and the UK. In 2026, we expanded into Austria and are planning for launches in other EU countries either directly or with a licensing partner. Additionally, we are attempting to receive approval for ONS-5010/LYTENAVA by the U.S. Food and Drug Administration, or FDA, for the use of ONS-5010/LYTENAVA as a treatment for wet AMD in the United States. If approved in the U.S., our goal is to also launch directly in the United States as the first and only approved ophthalmic bevacizumab for the treatment of wet AMD. In addition to Europe and the United States, we may seek approval to launch the product in other markets outside of Europe and the U.S. either directly or with licensing partners.

Bevacizumab is a full-length, humanized anti-VEGF (Vascular Endothelial Growth Factor) recombinant monoclonal antibody, or mAb, that inhibits VEGF and associated angiogenic activity. Prior to the approval of ONS-5010/LYTENAVA in the EU and UK, bevacizumab had only been approved for use in the treatment of various forms of cancer and had not been optimized for use in the treatment of retina diseases. Because there previously were no approved bevacizumab products for the treatment of retinal diseases in the United States and other major markets, we submitted standard biologic therapeutic applications and are not using the biosimilar drug regulatory pathway that would be required if bevacizumab were an approved drug for the targeted disease. Off-label repackaged bevacizumab is a frequently used first-line anti-VEGF treatment in Europe (approximately 2.8 million injections annually) and the United States (approximately 2.7 million injections annually) based on data compiled from various sources (Citeline (2023), Global Data (2023) and Market Scope (2022); ASRS 2024 Membership Survey; Market Scope 2024 US Retina Quarterly Updates; GlobalData: Age-Related Macular Degeneration: Global Drug Forecast and Market Analysis to 2028 (April 2020)). We believe ONS-

5010/LYTENAVA has potential to mitigate risks associated with off-label use of unapproved bevacizumab. We believe there is significant opportunity in Europe with a total anti-VEGF retina market estimated to be approximately $3.6 billion, including approximately 1.52 million treated patients and approximately 8.3 million total anti-VEGF units (Global Data (2023); Market Scope (2022); IQVIA MIDAS data Q3 2023; Graefe's Archive for Clinical and Experimental Ophthalmology (2020) 258:503–511). We similarly see significant opportunity in the United States, with an estimated $8.5 billion total anti-VEGF retina market, where 55% of physician state off-label repackaged bevacizumab is the preferred first-line product. It is estimated that 34% of the total anti-VEGF market is off-label bevacizumab (new and maintenance therapy) (Citeline (2023); Global Data (2023); Market Scope (2022); ASRS 2024 Membership Survey; Market Scope 2024 US Retina Quarterly Updates; GlobalData: Age-Related Macular Degeneration: Global Drug Forecast and Market Analysis to 2028 (April 2020)). We estimate the global market for anti-VEGF retina to be approximately $16 billion (Citeline (2023), Global Data (2023) and Market Scope (2022)).

In May 2024, the European Commission granted the Marketing Authorization for ONS-5010/LYTENAVA for the treatment of wet AMD in the EU. The decision applied automatically in all 27 EU Member States, and, within 30 days, also to Iceland, Norway and Liechtenstein. In July 2024, the MHRA granted marketing authorization for ONS-5010/LYTENAVA for the treatment of wet AMD in the UK under the new International Recognition Procedure, or IRP, which allows the MHRA to rely on an authorization received for the same product from one of MHRA’s specified Reference Regulators, or RRs, when considering an application for marketing authorization in the UK. ONS-5010/LYTENAVA is the first and only authorized ophthalmic formulation of bevacizumab for use in treating wet AMD in the EU and UK.

Separately, in March 2022, we submitted a BLA to the FDA for ONS-5010/LYTENAVA for the treatment of wet AMD. In May 2022, we voluntarily withdrew our BLA to provide additional information requested by the FDA. We re-submitted the BLA to the FDA for ONS-5010/LYTENAVA in August 2022, and in October 2022, we received confirmation from the FDA that our BLA had been accepted for filing. In August 2023, we received a Complete Response Letter, or CRL, in which the FDA concluded it could not approve the BLA during this review cycle due to several chemical, manufacturing and control, or CMC, issues, open observations from pre-approval manufacturing inspections, and a lack of substantial evidence. At subsequent Type A meetings with the FDA, we learned that the FDA required the completion of an additional adequate and well-controlled clinical trial evaluating ONS-5010/LYTENAVA, as well as additional requested CMC data indicated in the CRL to approve ONS-5010/LYTENAVA for use in wet AMD.

We agreed to conduct an additional adequate and well-controlled clinical trial following discussions with the FDA in support of our BLA for ONS-5010/LYTENAVA. In December 2023, we submitted a Special Protocol Assessment, or SPA, to the FDA for this study (NORSE EIGHT) seeking confirmation that, if successful, it would address the FDA’s requirement for a second adequate and well-controlled clinical trial to support our planned resubmission of the ONS-5010/LYTENAVA BLA. In January 2024, we received confirmation that the FDA had reviewed and agreed upon the NORSE EIGHT trial protocol pursuant to the SPA. In November 2024, we reported that ONS-5010/LYTENAVA did not meet the pre-specified non-inferiority endpoint at week 8 set forth in the SPA. Analysis of the complete week 12 data set for NORSE EIGHT provided additional evidence of improvement in vision and biological activity. We resubmitted the BLA for ONS-5010/LYTENAVA in February 2025. On August 27, 2025, we received a second CRL from the FDA. This CRL included only one deficiency, for a lack of substantial evidence of effectiveness. In the CRL, the FDA advised that, because ONS-5010 did not meet the primary efficacy endpoint in NORSE EIGHT, it was recommended that confirmatory evidence of efficacy be submitted to support the application for ONS-5010. Additionally, the FDA reiterated that NORSE TWO met its primary endpoint for effectiveness. Following a September 2025 Type A meeting with the FDA, we resubmitted the BLA in October 2025. On December 31, 2025, we reported that we had received a third CRL in which the FDA noted that the additional mechanistic and natural history data information provided in the BLA resubmission does not alter the previous review conclusion that while the one adequate and well-controlled study demonstrated efficacy, and the FDA has again recommended that confirmatory evidence of efficacy be submitted to support the application. However, the FDA did not indicate in the CRL what type of confirmatory evidence would be acceptable. In March 2026, the Company conducted a Type A meeting with the FDA to discuss the CRL and potential regulatory pathways for ONS-5010. In April 2026, the Company reported that we had submitted a formal dispute resolution request (FDRR) to the FDA as a follow-up to the March 2026 Type A meeting and that the FDA accepted the FDRR and granted a meeting with the deciding official that was conducted in April 2026. We are currently awaiting the formal decision by the deciding official, which is expected in May 2026. If approved, we expect to receive 12 years of regulatory exclusivity in the United States.

Macroeconomic and Geopolitical Factors

Global uncertainty due to tariffs and global macroeconomic conditions may have a material adverse effect on our commercialization efforts. The global financial markets recently have experienced significant disruptions due to various macroeconomic factors, including, among other things, the impacts of fluctuations in inflation and interest rates, tariffs and trade tensions, and geopolitical instability and uncertainty. If these disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our ability to pursue our business strategy. There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty. The United States may continue to announce tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue developing new trade policies, including with respect to the pharmaceutical industry. In response, certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures. These developments have created a dynamic and unpredictable trade landscape, which may adversely impact our business, results of operations, financial condition and prospects. Current or future tariffs will result in increased research and development expenses, including with respect to increased costs associated with raw materials, laboratory equipment and research materials and components. In addition, such tariffs will increase our supply chain complexity and could also potentially disrupt our existing supply chain. Trade restrictions and tariffs affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence, negatively impacting our ability to secure additional financing on favorable terms or at all. In addition, as we continue to expand our commercialization efforts, tariffs and trade restrictions could hinder our ability to establish cost-effective production capabilities, negatively impacting our growth prospects. We currently manufacture ONS-5010/LYTENAVA in the United States, which helps mitigate exposure to global tariff volatility. However, this concentration of manufacturing may adversely affect our pricing and competitiveness in the United Kingdom and European Union.

Going Concern

Through March 31, 2026, we have funded substantially all of our operations with $650.3 million in net proceeds from the sale and issuance of our equity and debt securities. We have also received $29.0 million pursuant to our collaboration and licensing agreements through such date. Our net loss for the six months ended March 31, 2026 was $27.5 million. We also had a net loss of $29.0 million for the six months ended March 31, 2025. We have not generated any significant revenue from product sales. We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of ONS-5010/LYTENAVA or any other product candidate we may develop.

We evaluated whether there are conditions or events considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern. We do not believe that the existing cash and cash equivalents as of March 31, 2026 are sufficient to fund our operations through one year from the date of this Quarterly Report on Form 10-Q. As a result, there is substantial doubt about our ability to continue as a going concern. Our unaudited interim consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Components of our Results of Operations

Revenues, net

We recognize revenue from sales of a single product, LYTENAVA (bevacizumab gamma), which became available for commercial sale and shipment to patients in the UK and Germany in June 2025.

Cost of revenues

Cost of revenues consists primarily of the cost of inventory sold, which includes direct manufacturing, production and packaging materials for LYTENAVA sales. Prior to receiving authorization to sell LYTENAVA in Europe, we expensed costs associated with manufacturing of LYTENAVA as a component of research and development expense that would have been included in cost of revenues.

Research and development expenses

Research and development expense consists of expenses incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred. These expenses include:

• expenses incurred under agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials;
• expenses incurred by us directly, as well as under agreements with contract manufacturing organizations, or CMOs, for manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials and commercial materials, including manufacturing validation batches;
• outsourced professional scientific development services;
• employee-related expenses, which include salaries, benefits and stock-based compensation;
• payments made under a third-party assignment agreement, under which we acquired intellectual property;
• expenses relating to regulatory activities, including filing fees paid to regulatory agencies;
• laboratory materials and supplies used to support our research activities; and
• allocated expenses, utilities and other facility-related costs.

The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or when, if ever, material net cash inflows may commence from any of our other product candidates. This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of clinical trials, which vary significantly over the life of a project as a result of many factors, including:

• the number of clinical sites included in the trials;
• the length of time required to enroll suitable patients;
• the number of patients that ultimately participate in the trials;
• the number of doses patients receive;
• the duration of patient follow-up;
• the results of our clinical trials;
• the establishment of commercial manufacturing capabilities;
• the receipt of marketing approvals; and
• the commercialization of product candidates.

Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals. We may never succeed in achieving regulatory approval for any of our biosimilar product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. Full product commercialization will take several years and millions of dollars in additional costs.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size, complexity and duration of later-stage clinical trials.

Selling, general and administrative expenses

Selling, general and administrative expenses consist principally of distribution expenses, salaries and related costs for personnel in executive, administrative, finance, and legal functions, including stock-based compensation, travel expenses and recruiting expenses. Other general and administrative expenses include facility-related costs, patent filing, and prosecution costs, professional fees for business development, legal, auditing and tax services, and insurance costs.

Following the launch of our product in Germany and the UK, we have incurred additional expenses related to commercial operations, including sales and marketing activities in these regions. We anticipate that our general and administrative expenses will continue to increase as we expand our commercial presence, support ongoing operations in these markets, and as the Company prepares for potential launches in additional territories.

Loss on equity method investment

Loss on equity method investment represents our proportionate share for the period of the net loss of our investee to which the equity method of accounting is applied. We account for equity investments where we own a non-controlling interest, but have the ability to exercise significant influence, under the equity method of accounting.

Interest income

Interest income is earned from short-term investments, primarily money market investments.

(Gain) loss from change in fair value of promissory notes

The change in fair value relates to convertible promissory notes that we elected to account for at fair value. As permitted under ASC 825, we elected the fair value option to account for our convertible promissory notes. We recorded the convertible promissory note at fair value with changes in fair value recorded in the consolidated statements of operations.

Gain on extinguishment of debt

In March 2026 we recognized a gain on a $17,000,000 partial repayment of the Avondale convertible promissory note, based on the fair value of the note at March 16, 2025. The gain represents the difference between the fair value and the cash paid.

Gain from change in fair value of warrant liability

We issued warrants to purchase our common stock in conjunction with convertible senior secured notes issued pursuant to a certain Note and Warrant Purchase Agreement dated December 22, 2017. Additionally, we issued warrants in connection with private placements that closed on March 18, 2024 and April 15, 2024. These warrants are categorized as liabilities and recorded at fair value. The warrants are subject to re-measurement at each balance sheet date, and we recognize any change in fair value in our statements of operations.

Income taxes

Since inception, we have not recorded any U.S. federal or state income tax benefits (excluding the sale of New Jersey state NOLs and research credits) for the net losses we have incurred in each year or on our earned research and development tax credits, due to our uncertainty of realizing a benefit from those items. As of September 30, 2025, we had federal and state NOL carryforwards of $441.0 million and $243.6 million, respectively, that will begin to expire in 2030 and 2039, respectively. As of September 30, 2025, we had federal foreign tax credit carryforwards of $0.1 million available to reduce future tax liabilities, which begin to expire starting in 2024. As of September 30, 2025, we also had federal and state research and development tax credit carryforwards of $11.6 million and $0.8 million, respectively, that will begin to expire in 2032 and 2033, respectively.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income. We have not completed a study to assess whether an ownership change has occurred in the past. Our existing NOLs may be subject to limitations arising from previous ownership changes, and if we undergo an ownership change in connection with or after our initial public offering, our ability to utilize NOLs could be further limited by Section 382 of the Code. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code. Our NOLs are also subject to international regulations, which could restrict our ability to utilize our NOLs.

Furthermore, our ability to utilize NOLs of companies that we may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.

On July 4, 2025, the One Big Beautiful Bill Act, or the OBBBA, was enacted in the United States. The legislation includes significant corporate tax reforms, including the permanent reinstatement of the ability to deduct domestic research and development expenditures as incurred beginning in fiscal 2026, replacing the previous requirement to capitalize and amortize such expenditures over five years. The OBBBA also introduces modifications to the international tax framework, including changes to the foreign-derived intangible income, or FDII, regime. Under the legislation, FDII is renamed foreign-derived deduction-eligible income, or FDDEI, with the current FDDEI effective tax rate of 13% maintained through fiscal 2026, followed by a permanent adjustment to a 14% rate beginning in fiscal 2027 (compared to 16% under prior law). The legislation contains multiple effective dates, with certain provisions effective in 2025 and others becoming effective in subsequent years. The effects of OBBBA are not expected to have a material impact on our financial statements.

Segment reporting

We operate in a single reportable segment focused on the development and commercialization of ONS-5010/LYTENAVA™, an ophthalmic formulation of bevacizumab for treating wet AMD. Our Chief Executive Officer serves as the chief operating decision maker, or CODM, and manages our operations on a consolidated basis.

Our segment’s accounting policies align with those outlined in the summary of significant accounting policies. To date, we have generated minimal product revenue and expect to continue incurring significant expenses and operating losses as we advance product candidates through development, clinical trials, and regulatory review.

The CODM evaluates segment performance based on net loss, as reported in our consolidated statements of operations, and uses budget-to-forecast comparisons and cash flow models to guide decision-making. Segment assets are reported as total assets on our consolidated balance sheet.

Results of Operations

Comparison of Three Months Ended March 31, 2026 and 2025

Revenues, net

During the three months ended March 31, 2026, net revenue was $0.1 million, compared to zero for the same period in the prior year. Returns reserves are reviewed quarterly and may be adjusted based on our ongoing assessment of business conditions and distributor-level sales forecasts. In addition, we recognized administrative fees assessed under contractual arrangements with our wholesalers during the three months ended March 31, 2026.

Cost of revenues

Cost of revenues for the three months ended March 31, 2026 was $0.1 million. Prior to receiving regulatory approval for LYTENAVA for the treatment of wet AMD by the European Commission in the EU and the MHRA in the UK, inventory and related manufacturing costs were recognized as research and development expenses. Accordingly, the research and development expenses that would have been classified as cost of revenues for the current period were also immaterial.

Research and development expenses

The following table summarizes our research and development expenses by functional area for the three months ended March 31, 2026 and 2025:

Research and development expenses for the three months ended March 31, 2026 increased by $0.1 million compared to the three months ended March 31, 2025.

Selling, general and administrative expenses

The following table summarizes our selling, general and administrative expenses by type for the three months ended March 31, 2026 and 2025:

Selling, general and administrative expenses for the three months ended March 31, 2026 increased by $1.5 million when compared to the three months ended March 31, 2025. The increase was primarily due to increased Europe commercial expenses of $2.2 million offset by a decrease in stock-based compensation of $0.9 million,

Interest income

During the three months ended March 31, 2026 and 2025 interest income was immaterial.

Loss (gain) from change in fair value of promissory notes

The change in fair value relates to the promissory notes that we elected to account for at fair value. As permitted under ASC 825, we elected the fair value option to account for our promissory note. We record the promissory note at fair value with changes in fair value recorded in the unaudited interim consolidated statements of operations. The gain recognized during the three months ended March 31, 2026, was primarily driven by the conversion of debt into equity. The loss recognized in the comparative period was primarily due to a reduction in the remaining term of the instrument and increased volatility.

Gain from change in fair value of warrant liability

The gain recognized during the three months ended March 31, 2026, resulted from a decrease in the price per share of common stock from December 31, 2025 to March 31, 2026. The gain recorded during the three months ended March 31, 2025, was primarily due to the reduction in the price per share of common stock from December 31,2024 to March 31, 2025.

Gain on extinguishment of debt

The gain recognized during the three months ended March 31, 2026 resulted from the partial repayment of the March 2025 Avondale unsecured convertible promissory note.

Comparison of Six Months Ended March 31, 2026 and 2025

Revenues, net

During the six months ended March 31, 2026, net revenue was negative $1.1 million, compared to zero for the same period in the prior year. The negative revenue for the six months ended March 31, 2026 was primarily due to a $1.1 million increase in the returns reserve related to estimated product returns from our UK distributor due to lower-than-forecasted sell-through during the three months ended December 31, 2025. There were no adjustments for these batches in the three months ended March 31, 2026, and we do not anticipate further adjustments for these batches in fiscal 2026. Returns reserves are reviewed quarterly and may be adjusted based on our ongoing assessment of business conditions and distributor-level sales forecasts. In addition, we recognized administrative fees assessed under contractual arrangements with our wholesalers during the six months ended March 31, 2026. When combined with the increase in the returns reserve, these fees contributed to the negative net revenue for the period.

Cost of revenues

Cost of revenues for the six months ended March 31, 2026 exceeded net revenues for the same period. Prior to receiving regulatory approval for LYTENAVA for the treatment of wet AMD by the European Commission in the EU and the MHRA in the UK, inventory and related manufacturing costs were recognized as research and development expenses. Accordingly, the research and development expenses that would have been classified as cost of revenues for the current period were also immaterial.

Research and development expenses

The following table summarizes our research and development expenses by functional area for the six months ended March 31, 2026 and 2025:

Research and development expenses for the six months ended March 31, 2026 decreased by $6.0 million compared to the six months ended March 31, 2025. The decrease was primarily due to a decrease of $6.1 million in ONS-5010/LYTENAVA development expenses related to conducting the NORSE EIGHT clinical trial, which was initiated and began enrolling patients in January 2024 and completed enrollment in September 2024.

Selling, general and administrative expenses

The following table summarizes our selling, general and administrative expenses by type for the six months ended March 31, 2026 and 2025:

Selling, general and administrative expenses for the six months ended March 31, 2026 decreased by $1.8 million when compared to the six months ended March 31, 2025. The decrease was primarily due to a $5.0 million combined decrease in cash and stock-based compensation, which was primarily related to severance costs from the departure of our former Chief Executive Officer and reductions in headcount in December 2024. In addition, professional fees declined by $1.2 million due to ongoing efforts to reduce expenditures unrelated to launch activities. These decreases were partially offset by a $4.2 million increase in commercial expenses associated with LYTENAVA in Europe.

Interest income

During the six months ended March 31, 2026 and 2025 interest income was immaterial.

Loss from change in fair value of promissory notes

The change in fair value relates to the promissory notes that we elected to account for at fair value. As permitted under ASC 825, we elected the fair value option to account for our promissory note. We record the promissory note at fair value with changes in fair value recorded in the unaudited interim consolidated statements of operations. The loss recognized during the six months ended March 31, 2026, was primarily driven by favorable conversion feature triggered by the Major Trigger Event, and increased stock price volatility. The loss recognized in the comparative period was primarily due to a reduction in the remaining term of the instrument and increased volatility.

Gain from change in fair value of warrant liability

The gain recognized during the six months ended March 31, 2026, resulted from an decrease in the price per share of common stock from September 30, 2025 to March 31, 2026. The gain recorded during the six months ended March 31, 2025, was primarily due to the reduction in the price per share of common stock from September 30, 2024 to March 31, 2025.

Gain on extinguishment of debt

The gain recognized during the six months ended March 31, 2026 resulted from the partial repayment of the March 2025 Avondale unsecured convertible promissory note in March 2026.

Liquidity and Capital Resources

We have not generated any significant revenue from product sales. Since inception, we have incurred net losses and negative cash flows from our operations. Through March 31, 2026, we have funded substantially all of our operations with $650.3 million in net proceeds from the sale and issuance of our equity securities, debt securities and borrowings under debt facilities. We have also received an aggregate of $29.0 million pursuant to emerging markets collaboration and licensing agreements for our inactive biosimilar development programs.

We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of ONS-5010/LYTENAVA or any other product candidate we may develop. We will need additional financing to fund our operations in the future, fully commercialize ONS-5010/LYTENAVA, to develop any other product candidates and to continue as a going concern. Management is currently evaluating various strategic opportunities to obtain the required funding for future operations. These strategies may include but are not limited to potential licensing and/or marketing arrangements or collaborations with pharmaceutical or other companies, the issuance of equity securities, including through an at-the-market offering program, the issuance of additional debt, and revenues from potential future product sales, if any. Alternatively, we may be required to, among other things, modify our clinical trial plans for ONS-5010/LYTENAVA in additional indications, make reductions in our workforce, scale back our plans and place certain activities on hold, discontinue our development programs, liquidate all or a portion of our assets, and/or seek protection under the provisions of the U.S. Bankruptcy Code.

On May 16, 2023, we entered into an At-the-Market Sales Agreement with BTIG, LLC, or BTIG, as sales agent, as amended, the ATM Agreement or the ATM Offering, under which we may issue and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through BTIG. Under the ATM Agreement, we pay BTIG a commission equal to 3.0% of the aggregate gross proceeds of any sales of common stock under the ATM Agreement. The offering of common stock pursuant to the ATM Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the ATM Agreement or (ii) termination of the ATM Agreement in accordance with its terms.

During the six months ended March 31, 2026, we sold 15,227,166 shares of common stock under the ATM Offering and generated approximately $17.4 million in net proceeds after paying fees to BTIG and other issuance costs of $0.5 million.

On December 22, 2022, we entered into a Securities Purchase Agreement and issued an unsecured convertible promissory note with a face amount of $31.8 million, or the December 2022 Note, to Streeterville Capital, LLC. On March 13, 2025, we used the proceeds from the March 2025 Note (as defined below) to pay off the December 2022 Note.

On March 13, 2025, we issued an unsecured convertible promissory note for $33.1 million, or the March 2025 Note, to Avondale Capital, LLC, or Avondale, pursuant to a Securities Purchase Agreement, or the Purchase Agreement, dated January 31, 2025. For a description of the Purchase Agreement and the March 2025 Note, see “Description of Indebtedness” below for additional detail.

On December 31, 2025, we did not meet the required $3.0 million Quarterly Debt Reduction Obligation, as defined below. The failure to make this required payment constituted a Major Trigger Event, as defined below, under the March 2025 Note. Pursuant to the terms of the March 2025 Note, the occurrence of a Major Trigger Event resulted in (i) an automatic 10% increase to the outstanding balance, effective January 1, 2026, and (ii) an adjustment to the Conversion Price. Following the adjustment, the Conversion Price is equal to the lesser of the fixed conversion price of $2.26 or 90% of the lowest closing bid price during the three trading days immediately preceding the delivery of a conversion notice, provided that the Conversion Price may not be reduced below the contractual floor price of $0.404. During the six months ended March 31, 2026, Avondale converted 6.9 million of principal and accrued interest on the March 2025 Note into 15,057,649 shares of our common stock. As a result of this conversion, the Quarterly Debt Reduction Obligation was satisfied for the quarters ended December 31, 2025 and March 31, 2026. For additional information regarding the March 2025 Note, refer to Note 7 to the unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

On March 16, 2026, we made a cash repayment of $17,000,000 of outstanding principal and accrued interest under the March 2025 Note using proceeds from the issuance of the March 2026 Note, see below. In connection with the issuance of the March 2026 Note, we amended the March 2025 Note to extend its maturity date to December 31, 2026.

We evaluated whether there are conditions or events considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern. We do not believe that the existing cash and cash equivalents as of March 31, 2026 are sufficient to fund the Company’s operations through one year from the date of this Quarterly Report on Form 10-Q. As a result, there is substantial doubt about the Company’s ability to continue as a going concern. Our unaudited interim consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Our future operations are highly dependent on a combination of factors, including: (i) the timely and successful completion of additional financing discussed above; (ii) our ability to successfully commercialize ONS-5010/LYTENAVA, including executing marketing arrangements, or complete revenue-generating partnerships with other companies; (iii) the success of our research and development; (iv) the development of competitive therapies by other biotechnology and pharmaceutical companies; and, ultimately; (v) regulatory approval and market acceptance of our proposed future products. See “Overview—Macroeconomic and Geopolitical Factors” for additional information regarding the macroeconomic and geopolitical factors that could have a material adverse effect on our business and results of operations.

Funding Requirements

We plan to focus in the near term on working with the FDA to discern a potential regulatory pathway for ONS-5010 and to prepare for the potential launch of ONS-5010/LYTENAVA, if approved, to support the generation of commercial revenues, in the U.S. We anticipate we will incur net losses and negative cash flow from operations for the foreseeable future. We may not be able to successfully commercialize ONS-5010/LYTENAVA if, among other things, the FDA does not approve our BLA when we expect, or at all, or if we are not able to secure sufficient funding of our expected post-launch commercial costs.

Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, manufacturing and facility costs, external research and development services, legal and other regulatory expenses and administrative and overhead costs. Our future funding requirements will be heavily determined by the resources needed to support the development of our lead product candidate and any other product candidates we may choose to pursue.

We do not believe that the existing cash and cash equivalents as of March 31, 2026, together with $5.0 million in gross proceeds from the Registered Direct Stock Offering completed in April 2026, are sufficient to fund our operations through one year from the date of this Quarterly Report on Form 10-Q. Our unaudited interim consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

We plan to finance our future operations with a combination of proceeds from potential licensing and/or marketing arrangements or collaborations with pharmaceutical or other companies, sale of the development and commercial rights to our drug product candidates in regions outside of the U.S., the issuance of additional debt, the issuance of equity securities, including accessing capital through at-the-market offering agreements, and revenues from potential future product sales, if any. If we raise additional capital through the sale of equity or convertible debt securities, your ownership will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. Further, due to current market volatility, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. There are no assurances that we will be successful in obtaining an adequate level of financing for the commercialization of ONS-5010/LYTENAVA or the development of any other current or future product candidates. Alternatively, we will be required to, among other things, modify our clinical trial plans for ONS-5010/LYTENAVA in additional indications, make reductions in our workforce, scale back our plans and place certain activities on hold, discontinue our development programs, liquidate all or a portion of our assets, and/or seek protection under the provisions of the U.S. Bankruptcy Code.

Cash Flows

The following table summarizes our cash flows for each of the periods presented:

Operating Activities

During the six months ended March 31, 2026, we used $22.7 million of cash in operating activities resulting primarily from our net loss of $27.5 million. This use of cash was partially offset by $1.6 million of non-cash items such as stock-based compensation, loss from change in fair value of promissory notes, gain from change in fair value of warrant liability, loss on equity method investment and amortization expense. The net cash inflow of $3.0 million from changes in operating assets and liabilities was driven primarily by a $6.9 million increase in accounts payable and accrued expenses due to payment timing, partially offset by a $2.6 million increase in prepaid expenses, a $1.2 million increase in accounts receivable, and minor changes in inventory and lease liabilities.

During the six months ended March 31, 2025, we used $27.6 million of cash in operating activities resulting primarily from our net income of $29.0 million. This use of cash was partially offset by $0.5 million of non-cash items such as stock-based compensation, loss from change in fair value of promissory notes, warrant inducement expenses, gain from change in fair value of warrant liability, loss on equity method investment and depreciation and amortization expense. The net cash inflow of $1.0 million from changes in our operating assets and liabilities was primarily due to a decrease in prepaid expenses of $5.8 million associated with ONS-5010/LYTENAVA development costs relating to clinical trial and drug development costs, partially offset by an increase in inventory of $3.6 million relating to commercial inventory manufactured during the period and a decrease in accounts payable and accrued expenses of $1.2 million, primarily due to timing of payments.

Financing Activities

During the six months ended March 31, 2026, net cash provided by financing activities was $22.4 million, driven primarily by $21.8 million in net proceeds from the sale of common stock and $0.6 million from the exercise of common stock warrants.

During the six months ended March 31, 2025, net cash provided by financing activities was $20.2 million, primarily attributable to net proceeds of $19.9 million from the issuance of common stock and $33 million from the issuance of debt, offset by $32.9 million of debt repayment.

Description of Indebtedness

As of March 31, 2026, the Company’s outstanding indebtedness primarily consisted of an unsecured promissory note issued in March 2026, the March 2026 Note, and a remaining balance under a convertible promissory note issued in March 2025, the March 2025 Note.

March 2025 Note

On March 13, 2025, we issued the March 2025 Note for $33,100,000 to Avondale pursuant to the Purchase Agreement. Certain terms of the March 2025 Note were approved at our annual meeting of stockholders on March 11, 2025, and we used the proceeds from the March 2025 Note to pay off the December 2022 Note. On March 28, 2025, we filed a registration statement registering the resale of common stock issuable upon conversion of the March 2025 Note.

The March 2025 Note will initially bear interest at the prime rate as published in the Wall Street Journal, plus an additional 3%, subject to a floor of 9.5%. The March 2025 Note is scheduled to mature on July 1, 2026, and will be convertible into common stock. We are obligated to repay a minimum of $3,000,000 of the outstanding balance of the March 2025 Note each calendar quarter starting with the second calendar quarter of 2025, subject to adjustments for conversions by Avondale and the payment of an exit fee of 7.5%, or the Quarterly Debt Reduction Obligations. Any amount converted by

Avondale during a given calendar quarter in excess of the Quarterly Debt Reduction Obligations will be credited toward meeting the Quarterly Debt Reduction Obligations for the next quarter or quarters.

Effective March 28, 2025, or the Conversion Commencement Date, Avondale has the right to convert all or any portion of the outstanding balance under the March 2025 Note into shares of common stock, calculated by dividing the amount of the March 2025 Note being converted by the Conversion Price (as defined below). Furthermore, we retain the right to convert any portion of the outstanding balance under the March 2025 Note into shares of common stock at the Conversion Price, provided certain conditions are met at the time of conversion, including, but not limited to, the condition that the daily volume-weighted average price of our common stock on Nasdaq equals or exceeds $3.00 per share (subject to adjustments for stock splits and combinations) for a period of 30 consecutive trading days, and that the median daily dollar trading volume during the preceding 30 trading day period meets or exceeds $1,000,000. We reserve the right to make payments (i) in cash, (ii) in shares of common stock, calculated as the applicable payment amount divided by the Conversion Price, or (iii) a combination of both cash and shares of common stock. Any cash payments made by us, including prepayments or payments made at maturity, will incur an additional fee of 7.5%.

The March 2025 Note stipulates that we shall not permit any conversion of the March 2025 Note if, following such conversion, Avondale and its affiliates would beneficially own shares of common stock exceeding 4.99% of the total number of outstanding shares as of that date, or the Beneficial Ownership Limitation. However, this limitation shall increase to 9.99% when our market capitalization falls below $25,000,000. Avondale may, by written notice to us, adjust the Beneficial Ownership Limitation for itself, though any such adjustment will not take effect until the 61st day after such notice is received.

In the event of specific occurrences outlined in the March 2025 Note, such as our failure to fulfill payment obligations, non-compliance with the Quarterly Debt Reduction Obligations, insolvency or bankruptcy events, breaches of covenants in the Purchase Agreement and the March 2025 Note, and unauthorized transactions without Avondale’s consent, collectively referred to as Trigger Events, Avondale reserves the right to increase the balance of the March 2025 Note by 10% in the case of a Major Trigger Event (as defined in the March 2025 Note) and by 5% for a Minor Trigger Event (as defined in the March 2025 Note). Should any Trigger Event persist without resolution for ten trading days following written notification from Avondale, this will constitute an event of default, such event, an Event of Default. Upon an Event of Default, Avondale may accelerate the March 2025 Note, resulting in all amounts becoming immediately due and payable, with interest accruing at a rate of 22% per annum until full payment is made.

Under the terms of the March 2025 Note, the “Conversion Price” is defined as $2.26 per share prior to a Major Trigger Event (subject to adjustments for stock splits and combinations). Following a Major Trigger Event, the Conversion Price will be the lesser of (i) $2.26 per share (subject to adjustments) or (ii) 90% of the lowest closing bid price over the three trading days preceding the conversion notice. Furthermore, if the Conversion Price falls below $0.404 per share (subject to adjustments), we will be required to fulfill a conversion notice from Avondale in cash.

On December 31, 2025, we did not meet the required $3.0 million Quarterly Debt Reduction Obligation. The failure to make this required payment constituted a Major Trigger Event under the terms of the March 2025 Note. Subsequent to December 31, 2025, Avondale converted $6.9 million of principal and accrued interest on the March 2025 Note into 15,057,649 shares of our common stock. This Major Trigger Event has not resulted in an Event of Default. As a result of this conversion, the Quarterly Debt Reduction Obligation was satisfied for the quarters ended December 31, 2025 and March 31, 2026.

On March 16, 2026, we made a cash repayment of $17,000,000 of outstanding principal and accrued interest under the March 2025 Note using proceeds from the issuance of the March 2026 Note, see below. In connection with the issuance of the March 2026 Note, we amended the March 2025 Note to extend its maturity date to December 31, 2026.

Pursuant to the terms of the March 2025 Note, the occurrence of a Major Trigger Event resulted in (i) an automatic 10% increase to the outstanding balance, effective January 1, 2026, and (ii) an adjustment to the Conversion Price. Following the adjustment, the Conversion Price is equal to the lesser of the fixed conversion price of $2.26 or 90% of the lowest closing bid price during the three trading days immediately preceding the delivery of a conversion notice, provided that the Conversion Price may not be reduced below the contractual floor price of $0.404.

March 2026 Note

On March 16, 2026, the Company issued the March 2026 Note with an original principal balance of $18,360,000, which was issued at an original issue discount of $1,360,000, resulting in net proceeds of $17,000,000. The March 2026 Note bears interest at the prime rate, as published in The Wall Street Journal, plus 3%, subject to a minimum interest rate of 9.5%, and matures 15 months from issuance. Interest is calculated on the basis of a 360‑day year and compounds daily. Beginning on the six‑month anniversary of issuance, the holder has the right to redeem up to $3,000,000 of the outstanding balance per calendar quarter. All cash payments under the March 2026 Note, including prepayments, redemptions, or repayment at maturity, are subject to a 7.5% exit fee. The March 2026 Note is unsecured and contains customary representations and warranties, affirmative and negative covenants, and provisions governing Trigger Events, events of default, and remedies, subject to customary cure periods. Upon the occurrence of certain Trigger Events or an event of default, the holder may exercise customary remedies, including acceleration of amounts due, application of default interest, and enforcement of its rights under the note and applicable law.

The Company used the proceeds from the March 2026 Note to partially repay its convertible promissory note issued in March 2025. On March 16, 2026, the Company repaid $17,000,000 of outstanding principal and accrued interest under the March 2025 Note, after which $10,806,991 remained outstanding. In connection with the issuance of the March 2026 Note, the Company amended the March 2025 Note to extend its maturity date to December 31, 2026.

Critical Accounting Policies and Significant Judgments and Estimates

The Critical Accounting Policies and Significant Judgments and Estimates included in our Form 10-K for the fiscal year ended September 30, 2025, filed with the SEC on December 19, 2025, have not materially changed.

None. However, as described in Note 7 to the unaudited interim consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, on December 31, 2025, the Company did not satisfy the required $3,000,000 Quarterly Debt Reduction Obligation under the March 2025 Note, which constituted a “Major Trigger Event” (as defined in the March 2025 Note) and resulted in (i) an automatic 10% increase to the outstanding balance and (ii) an adjustment to the Conversion Price. Subsequent to December 31, 2025, Avondale converted $6,910,000 of principal and accrued interest into 15,057,649 shares of common stock, satisfying the Quarterly Debt Reduction Obligation for both the quarters ended December 31, 2025 and March 31, 2026. Avondale has confirmed that this Major Trigger Event has not resulted in an Event of Default (as defined in the March 2025 Note).

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Because there are inherent limitations in all control systems, a control system, no matter how well conceived and operated, can provide only reasonable, as opposed to absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during our first fiscal quarter ended March 31, 2026.

The following risk factors supplement and, to the extent inconsistent therewith, supersede the risk factors previously disclosed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended September 30, 2025, filed with the SEC on December 19, 2025 (the “Annual Report”). You should carefully consider these risk factors together with all other information contained in this Quarterly Report on Form 10-Q and in our Annual Report before making any investment decision. If any of these risks occurs, our business, financial condition, results of operations and prospects could be materially adversely affected.

There is substantial doubt about our ability to continue as a going concern. We will continue to need to raise substantial additional funding to complete the development of ONS-5010/LYTENAVA outside the EU and UK and support our operations until we are able to generate sufficient revenue from the sales of ONS-5010/LYTENAVA in the EU and UK. This additional funding may not be available on acceptable terms or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.

Developing product candidates is an expensive, risky and lengthy process. We have received a marketing authorization from the European Commission and the MHRA for ONS-5010/LYTENAVA for the treatment of wet AMD in the EU and UK, respectively. We are currently advancing ONS-5010/LYTENAVA through the regulatory approval process in the United States, which may ultimately require additional clinical and/or non-clinical studies. Our expenses may increase in connection with our ongoing activities, particularly as we continue the research and development of, continue and initiate clinical trials of, and seek marketing approval for, ONS-5010/LYTENAVA outside the EU and UK.

As of March 31, 2026, our cash and cash equivalents balance was $7.7 million. We do not believe that our cash and cash equivalents as of March 31, 2026, together with the $4.5 million of net proceeds of the Registered Direct Offering and concurrent private placement in April 2026 are sufficient to fund our operations through one year from the date of this Quarterly Report on Form 10-Q. On March 13, 2025, we issued a $33.1 million promissory note, or the March 2025 Note, to Avondale Capital, LLC, or Avondale. The March 2025 Note bears interest at the prime rate plus 3%, with a minimum rate of 9.5%, and is convertible into common stock. We must repay at least $3.0 million (by cash or conversions into common stock) of the outstanding balance on the March 2025 Note each quarter starting in the second calendar quarter of 2025 (subject to adjustments for conversions and to payment of a 7.5% exit fee), or the Quarterly Debt Reduction Obligations. Any amount converted by Avondale during a given calendar quarter in excess of the Quarterly Debt Reduction Obligations will be credited toward meeting the Quarterly Debt Reduction Obligations for the next quarter or quarters. The failure to make this required payment constituted a Major Trigger Event under the March 2025 Note. This Major Trigger Event has not resulted in an Event of Default. During the three months ended March 31, 2026, we completed multiple conversions of outstanding principal and accrued interest under the March 2025 Note into shares of our common stock and accordingly the Quarterly Debt Reduction Obligation was satisfied as of March 31, 2026. On March 16, 2026, we entered into a Note Purchase Agreement with Atlas, pursuant to which we agreed to issue to Atlas the March 2026 Note, which we agreed to use for the partial repayment of $17 million of the March 2025 Note. As of March 31, 2026, there were approximately $9.7 million in remaining obligations under the March 2025 Note. In connection with entry into the Note Purchase Agreement with Atlas, we and Avondale entered into an amendment to the March 2025 Note to extend the maturity thereof to December 31, 2026.

We do not believe our cash and cash equivalents, together with net proceeds of $[__] million from the April 2026 Offering, will be adequate to fund our currently planned operations through at least the next 12 months from the date of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. As a result, there is substantial doubt about our ability to continue as a going concern. We will require substantial additional capital to continue to operate as a going concern. Although we continue to pursue discussions with additional potential strategic partners for ONS-5010/LYTENAVA outside of the United States, there is no guarantee that we will be successful in reaching any such agreement, nor that such agreement, if successful, will cover the anticipated commercialization costs for ONS-5010/LYTENAVA. Moreover, on December 31, 2025, we reported that we had received a third CRL with respect to our BLA for ONS-5010, and the FDA has again recommended that confirmatory evidence of efficacy be submitted to support the application. However, the FDA did not indicate in the CRL what type of confirmatory evidence would be acceptable, and it is possible that we may need to conduct additional clinical and/or non-clinical studies of ONS-5010 in order to satisfy the FDA’s requirements, which would require substantial resources, which may be difficult to obtain or which may be unavailable to us on acceptable terms or at all. Our operating plan may also change as a result of many factors currently unknown to us, and, we will continue to actively seek substantial additional capital through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as through other collaborations, strategic alliances and licensing arrangements, or a combination of these approaches. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations. Additionally, we may not achieve the expected benefits of these cost reduction measures and other cost reduction plans on the anticipated timeline, or at all, which could otherwise accelerate our liquidity needs and could force us to further curtail or suspend our operations. If we are unable to obtain the substantial additional funding needed to operate our business, our business and prospects would be materially and adversely affected, and we may be required to cease operations entirely, liquidate all or a portion of our assets, and/or seek protection under the U.S. Bankruptcy Code, and you may lose all or part of your investment.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. We may experience difficulties in accessing the capital markets due to external factors beyond our control, such as volatility in the equity markets for emerging biotechnology companies and general economic and market conditions both in the United States and abroad. For example, our ability to raise additional capital may be adversely impacted by global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide, such as has been experienced recently due in part to, among other things, the impacts of inflation, geopolitical instability and uncertainty, and disruptions in access to bank deposits and lending commitments due to bank failure. In addition, our financial position may make it more difficult for us to secure additional funding. We cannot be certain that we will be able to obtain financing on terms acceptable to us, or at all. Our failure to obtain adequate and timely funding will adversely affect our business and our ability to develop our technology and products candidates. Moreover, the terms of any financing may negatively impact the holdings or the rights of our stockholders, and the issuance of additional securities, whether equity or debt, by us or the possibility of such issuance may cause the market price of our securities to decline. The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, in order to obtain necessary funding, any of which may harm our business, operating results and prospects. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or for specific strategic considerations. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our development programs or the commercialization of ONS-5010/LYTENAVA or any product candidates, if approved. We may also be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could harm our business, financial condition and results of operations.

Raising additional capital, modifications to our existing convertible securities, may cause dilution to our securityholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

Until such time, if ever, as we can generate sufficient product revenues, we expect to finance our cash needs through a combination of equity and debt financings, as well as selectively continuing to enter into collaborations, strategic alliances and licensing arrangements. We do not currently have any committed external source of funding. To the extent that we raise additional capital through the sale of equity, including via the HCW ATM Agreement, or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a securityholder.

We are obligated to repay a minimum of $3.0 million of the outstanding balance of the March 2025 Note each calendar quarter starting with the second calendar quarter of 2025, subject to adjustments for conversions by Avondale and the payment of an exit fee of 7.5%. Any amount converted by Avondale during a given calendar quarter in excess of the Quarterly Debt Reduction Obligations will be credited toward meeting the Quarterly Debt Reduction Obligations for the next quarter or quarters.

Avondale may convert any portion of the March 2025 Note into common stock at a conversion price of $2.26, as further described in the March 2025 Note. In addition, we may convert the March 2025 Note if our stock trades at or above $3.00 per share for 30 consecutive days with an average daily trading volume of at least $1.0 million. Trigger Events (e.g., payment default, covenant breaches) may increase the March 2025 Note balance by 5-10%. Unresolved issues after 10 trading days trigger default, accelerating the March 2025 Note with 22% interest. If the Conversion Price drops below $0.404, conversions must be paid in cash. Conversions of amounts outstanding under the March 2025 Note may result in the issuance of a substantial number of shares of common stock. On December 31, 2025, we did not satisfy the required $3.0 million Quarterly Debt Reduction Obligation, which constituted a Major Trigger Event under the March 2025 Note. As of March 31, 2026, Avondale had converted $6.9 million of principal and accrued interest on the March 2025 Note into shares of common stock at a weighted average conversion price of $0.46. If we are unable to satisfy future repayment obligations under the March 2025 Note, Avondale may continue to effectuate conversions at prices significantly below the initial $2.26 conversion price, with such conversion price to be determined in accordance with the terms set out in the March 2025 Note. Such conversion could result in significant dilution.

Additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, and may be secured by all or a portion of our assets. If we secure development funds for ONS-5010/LYTENAVA or any future product candidate through entering into collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish additional valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts, including for ONS-5010/LYTENAVA, or grant rights to develop and market ONS-5010/LYTENAVA or other product candidates that we would otherwise prefer to develop and market ourselves, terminate product development or future commercialization efforts, including for ONS-5010/LYTENAVA, or to cease operations altogether.

Our common stock may be delisted from The Nasdaq Capital Market and begin trading in the over-the-counter markets if we are not successful in regaining compliance with Nasdaq’s continued listing standards, which may negatively impact the price of our common stock and our ability to access the capital markets.

On February 18, 2026, we received a letter from the Listing Qualifications Staff, or the Nasdaq Staff, of The Nasdaq Stock Market LLC, or Nasdaq, notifying us that for the last 30 consecutive business days, the bid price of our common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements of Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a period of 180 calendar days, or until August 17, 2026, or the Compliance Date, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days before the Compliance Date. If we do not achieve compliance by the Compliance Date, we may be eligible for an additional 180-day period to regain compliance if we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the bid price requirement, and provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to the Nasdaq Staff that we will not be able to cure the deficiency, or if we are otherwise not eligible for the additional compliance period, and we do not regain compliance by the Compliance Date, The Nasdaq Capital Market will provide written notification to us that our common stock is subject to delisting. At that time, we may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq listing rules. However, there can be no assurance that, if we do appeal the delisting determination by Nasdaq to the panel, such appeal would be successful.

We intend to actively monitor the closing bid price of our common stock between now and the Compliance Date and will evaluate available options to resolve the deficiency and regain compliance with the minimum bid price rule.