10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

REIN THERAPEUTICS, INC.

Condensed Consolidated BALANCE SHEETS

(UNAUDITED)

(In thousands, except share and per share data)


	March 31, 2026			December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	4,445		$	3,215
Prepaid expenses and other current assets		1,008			1,111
Total current assets		5,453			4,326
Goodwill		6,330			6,330
Intangible assets		13,500			13,500
Other non-current assets		1,005			2
Total assets	$	26,288		$	24,158
Liabilities, Convertible Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	6,263		$	3,976
Accrued expenses and other current liabilities		2,451			2,204
Notes payable, net		4,923			—
Total current liabilities		13,637			6,180
Deferred tax liability		1,060			1,060
Total liabilities		14,697			7,240
Commitments and contingencies (Note 13)
Convertible preferred stock, $0.001 par value, 5,000,000 shares authorized at March 31, 2026 and at December 31, 2025; 24,610 shares issued and 12,232 shares outstanding at March 31, 2026 and at December 31, 2025		45,005			45,005
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized at March 31, 2026 and at December 31, 2025; 28,039,032 shares and 27,550,222 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively		114			113
Additional paid-in capital		373,643			373,133
Accumulated other comprehensive loss		(62	)		(62	)
Accumulated deficit		(407,109	)		(401,271	)
Total liabilities, convertible preferred stock and stockholders’ equity	$	26,288		$	24,158

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

REIN THERAPEUTICS, INC.

Condensed Consolidated STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

(In thousands, except share and per share data)


	Three Months Ended March 31,
	2026			2025
Revenue	$	—		$	—
Operating expenses:
Research and development		3,073			3,054
General and administrative		2,157			2,555
Total operating expenses		5,230			5,609
Loss from operations		(5,230	)		(5,609	)
Other (expense) income, net		(608	)		108
Net loss	$	(5,838	)	$	(5,501	)
Net loss per share—basic and diluted	$	(0.19	)	$	(0.25	)
Weighted average common shares outstanding—basic and diluted		30,354,647			21,915,891
Comprehensive loss:
Net loss	$	(5,838	)	$	(5,501	)
Other comprehensive loss:
Unrealized loss on investments, net of tax of $0		—			(45	)
Foreign currency translation adjustments		—			31
Total other comprehensive loss		—			(14	)
Total comprehensive loss	$	(5,838	)	$	(5,515	)

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

REIN THERAPEUTICS, INC.

Condensed Consolidated STATEMENT OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except share data)


	Series X Non-Voting Convertible Preferred Stock				Common Stock												Total Convertible
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Preferred Stock and Stockholders’ Equity
Balances at December 31, 2025		12,232	$	45,005		27,550,222	$	113	$	373,133	$	(62	)	$	(401,271	)	$	16,918
Issuance of common stock		—		—		488,810		1		354		—			—			355
Stock-based compensation expense		—		—		—		—		156		—			—			156
Net loss		—		—		—		—		—		—			(5,838	)		(5,838	)
Balances at March 31, 2026		12,232	$	45,005		28,039,032	$	114	$	373,643	$	(62	)	$	(407,109	)	$	11,591

Balances at December 31, 2024		12,232	$	45,005		21,666,012	$	108	$	360,697	$	(18	)	$	(351,400	)	$	54,392
Issuance of common stock		—		—		317,772		—		738		—			—			738
Stock-based compensation expense		—		—		—		—		264		—			—			264
Exercise of stock options		—		—		21,533		—		—		—			—			—
Unrealized loss on short-term investments		—		—		—		—		—		(45	)		—			(45	)
Foreign currency translation adjustments		—		—		—		—		—		31			—			31
Net loss		—		—		—		—		—		—			(5,501	)		(5,501	)
Balances at March 31, 2025	$	12,232	$	45,005	$	22,005,317	$	108	$	361,699	$	(32	)	$	(356,901	)	$	49,879

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

REIN THERAPEUTICS, INC.

Condensed Consolidated STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


	Three Months Ended March 31,
	2026			2025
Cash flows from operating activities:
Net loss	$	(5,838	)	$	(5,501	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		156			264
Net amortization of discount on notes payable		623			—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		103			(125	)
Other assets		(1,003	)		(764	)
Accounts payable		2,288			238
Accrued expenses and other current liabilities		247			(10	)
Other long-term liabilities		—			(277	)
Net cash used in operating activities		(3,424	)		(6,175	)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs		354			737
Proceeds from issuance of common stock in connection with stock option exercises		—			1
Notes payable, net		4,300			—
Net cash provided by financing activities		4,654			738
Net increase (decrease) in cash and cash equivalents		1,230			(5,437	)
Cash and cash equivalents at beginning of period		3,215			12,865
Cash and cash equivalents at end of period	$	4,445		$	7,428

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

REIN THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except share and per share data)

1. Nature of the Business

Rein Therapeutics, Inc. (“Company”) is a Delaware corporation formed in August 2001 under the name Renegade Therapeutics, Inc. In February 2007, the Company changed its name to Aileron Therapeutics, Inc. and in January 2025 changed its name to Rein Therapeutics, Inc. The Company is a clinical stage biopharmaceutical company focused on developing novel therapies for the treatment of fibrosis indications with no approved or limited effective treatments. The Company currently has one product candidate in clinical development, LTI-03.

The Company is a clinical-stage biotechnology company subject to significant risks and uncertainties, including the need for substantial additional financing, reliance on third parties, clinical trial risks, dependence on key personnel, protection of proprietary technology, and compliance with regulatory requirements. Its lead product candidate, LTI-03, is being developed for the treatment of idiopathic pulmonary fibrosis (IPF) and has completed Phase 1a and Phase 1b clinical trials; the Company is currently conducting the Phase 2 RENEW trial, a multi-center, randomized, double-blind, placebo-controlled study expected to enroll approximately 120 patients across multiple global sites, with interim topline data anticipated in the fourth quarter of 2026. The Company initiated patient screening in May 2025, received regulatory clearances in Europe and the United Kingdom, and dosed its first patient in March 2026. The Company’s second product candidate, LTI-01, previously in development for loculated pleural effusion, has been paused indefinitely as the Company prioritizes resources toward LTI-03, and the timing of any potential resumption remains uncertain and dependent on additional financing and the success of LTI-03.

Liquidity and Going Concern

In accordance with Accounting Standards Update, or ASU, No. 2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether conditions and events, in the aggregate, raise substantial doubt about its ability to continue as a going concern within one year after the date these condensed consolidated financial statements are issued. This evaluation initially excludes the potential mitigating effects of management’s plans that have not been fully implemented as of the issuance date. If substantial doubt is identified, management then assesses whether its plans alleviate such doubt. Management’s plans are considered only if it is probable that (i) they will be effectively implemented within one year after the issuance date and (ii) they will mitigate the conditions or events giving rise to the substantial doubt. Generally, for plans to be considered probable of implementation, they must be approved prior to the issuance of the financial statements.

The Company’s unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue to operate as a going concern, which contemplates the continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business.

In May 2024, the Company completed an underwritten follow-on public offering, or the Offering, pursuant to which the Company issued and sold 4,273,505 shares of the Company’s common stock, par value $0.001 per share, or the Offering Shares, and accompanying warrants, or the Offering Warrants, to purchase 4,273,505 shares of common stock, or the Offering Warrant Shares. The Offering Warrants to purchase 884,798 shares of common stock were exercised in April 2025 as part of April 2025 Transactions (as defined below). As of March 31, 2026, Offering Warrants to purchase 3,388,707 shares of common stock remained outstanding.

In April 2025, the Company entered into privately negotiated letter agreements with certain holders of the PIPE Warrants, as described in Note 3, and certain holders of the Offering Warrants, who agreed to exercise for cash the PIPE Warrants and the Offering Warrants, or the Warrant Exercises as further discussed in Note 10. The total gross proceeds for the Warrant Exercises were $1,679. Also in April 2025, the Company entered into privately negotiated letter agreements with additional holders of the PIPE Warrants who, in exchange for pre-funded warrants, or the Exchange Pre-Funded Warrants, surrendered PIPE Warrants to the Company for cancellation and made an aggregate cash payment into which the Exchange Pre-Funded Warrants are exercisable, or the Warrant Exchanges as further discussed in Note 10. The total gross proceeds for the Warrant Exchanges were $3,101. In addition, an entity affiliated with Bios Partners, or the Bios Purchaser, purchased additional pre-funded warrants in a private placement, or the Placement Pre-Funded Warrants, pursuant to a subscription agreement underlying the Placement Pre-Funded Warrants, or the Private Placement. Total gross proceeds for the Private Placement were $500. The Warrant Exercises, Warrant Exchanges and Private Placement are collectively referred to as the April 2025 Transactions. The total net proceeds from the April 2025 Transactions was $5,082.

On May 15, 2025, the Company entered into an “at the market offering” agreement, or the Wainwright Sales Agreement, with H.C. Wainwright & Co., LLC, or H.C. Wainwright, as agent and/or principal, pursuant to which the Company could offer and sell shares of its common stock having an aggregate offering price of up to $13,702 from time to time through or to H.C. Wainwright by any method permitted that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. As of March 31, 2026, the Company had issued and sold 1,296,777 shares of common stock pursuant to the Wainwright Sales Agreement for total net proceeds of $1,844, after deducting transaction fees of $67 paid by the Company. In July

2025, in connection with the Yorkville Transactions, the Company reduced the aggregate offering price of the shares of common stock that could be offered and sold under the Wainwright Sales Agreement to $8,067.

Prior to entering into the Wainwright Sales Agreement, in May 2025, the Company terminated the equity distribution agreement, dated July 26, 2024, or the Equity Distribution Agreement, with Citizens JMP Securities, LLC, or Citizens JMP, as agent and/or principal, under which the Company could offer and sell up to $50,000 of shares of its common stock from time to time through or to Citizens JMP by any method that was deemed an “at the market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. In January 2025, the Company issued and sold 317,772 shares of common stock pursuant to the Equity Distribution Agreement for total net proceeds of $712, after deducting transaction fees of $22 paid by the Company. The Company did not issue or sell any other shares of common stock pursuant to the Equity Distribution Agreement during the quarter ended March 31, 2026. The Company did not sell any shares of common stock pursuant to the Equity Distribution Agreement during the year ended December 31, 2025.

In July 2025, the Company entered into a Pre-Paid Advance Agreement, or the PPA, and a Standby Equity Purchase Agreement, or the SEPA, with YA II PN, Ltd., a Cayman Islands exempt limited partnership, or Yorkville. The PPA and the SEPA are collectively referred to as the Yorkville Transactions. In accordance with the terms of the PPA, the Company may request pre-paid advances of up to $6,000 from Yorkville (each, a “Pre-Paid Advance”) over a 12-month period, subject to certain limitations and conditions set forth in the PPA. Each Pre-Paid Advance will be purchased by Yorkville at 95% of the face amount of the Pre-Paid Advance. At any time there is an outstanding balance under any Pre-Paid Advances, Yorkville may provide written notice requiring the Company to issue and sell shares of its common stock to Yorkville, which shall be offset against and reduce the amounts outstanding under the Pre‑Paid Advances. An initial Pre-Paid Advance of $1,000 was purchased on July 29, 2025 by Yorkville, or the First Advance, for net proceeds of $950. On September 8, 2025, Yorkville purchased a second Pre-Paid Advance, or the Second Advance, of $1,000, for which the Company received net proceeds of $950. On October 23, 2025, Yorkville purchased a third Pre-Paid Advance, or the Third Advance, of $1,000, for which the Company received net proceeds of $950. As of March 31, 2026, Yorkville has converted the entire initial Pre‑Paid Advance, in the aggregate amount of $1,007 of principal and accrued interest, into 953,765 shares of the Company’s common stock, at a weighted average price per share of approximately $1.056, converted the Second Advance, in the aggregate amount of $1,004 of principal and accrued interest, into 927,107 shares of the Company’s common stock, at a weighted average price per share of approximately $1.082, and converted the Third Advance, in the aggregate amount of $1,001 of principal and accrued interest, into 846,290 shares of the Company’s common stock, at a weighted average price per share of approximately $1.183. Separately, under the SEPA, the Company may sell up to $15,000 of its common stock to Yorkville over a 36-month term. The Company has the sole discretion to initiate such sales, subject to volume and pricing limitations. In connection with entry into the SEPA, the Company paid Yorkville a $300 commitment fee through the issuance of 213,099 shares of common stock and paid $25 in structuring and legal fees. As of the date of this report, the Company has not elected to sell any shares of common stock to Yorkville under the SEPA. In December 2025, the Company elected to terminate the PPA and SEPA.

In January 2026 and February 2026, the Company entered into securities purchase agreements with certain institutional investors pursuant to which the Company issued unsecured promissory notes (the “Notes”). The Notes had an aggregate principal amount of approximately $5,375 and were issued for aggregate net proceeds of $4,300, reflecting an original issue discount of approximately 20%.

In May 2026, the Company completed an underwritten public offering of 57,500,000 shares of its common stock at a public offering price of $1.00 per share, or the May 2026 Offering. Aggregate gross proceeds from the May 2026 Offering were $57,500, and net proceeds to the Company were approximately $53,106 after deducting underwriting discounts, commissions, and offering expenses of approximately $4,394.

Management believes that, based on the Company’s current operating plan, the Company’s cash and cash equivalents of $4,445 as of March 31, 2026, together with the net proceeds received by the Company in the May 2026 Offering, will be sufficient to enable the Company to fund its planned operating expense and capital expenditure requirements into the first quarter of 2028. The Company believes that the funds are sufficient to enable the Company to complete the Phase 2 RENEW clinical trial of LTI-03. The Company’s estimate as to how long it expects its existing cash and cash equivalents to be able to continue to fund its operations is based on assumptions that may prove to be wrong, and the Company could use its available capital resources sooner than it currently expects.

Since its inception, the Company has not generated any revenue from product sales and has never generated an operating profit. The Company has incurred significant losses on an aggregate basis. The Company’s net losses were $5,838 and $5,501 for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, the Company had an accumulated deficit of $407,109. These losses have resulted primarily from costs incurred in connection with research and development activities, licensing and patent investment and general and administrative costs associated with the Company’s operations. The Company expects to continue to incur operating losses for the foreseeable future. The Company expects to finance its operations primarily through utilization of its current financial resources and through the sale of additional equity or debt financings, collaborations, licensing arrangements or other sources.

The Company could use its available capital resources sooner than it currently expects. The Company’s future viability is dependent on its ability to raise additional capital, enter into a financing, consummate a successful acquisition, merger, business combination, or a sale of assets or other transaction. If the Company becomes unable to continue as a going concern, it may have to

liquidate its assets and the values it receives for its assets in liquidation or dissolution could be significantly lower than the values reflected in its consolidated financial statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC, and as amended by ASUs of the Financial Accounting Standards Board, or FASB.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Lung Therapeutics, LLC, Lung Therapeutics Australia Pty Ltd, and Lung Therapeutics Limited. Lung Therapeutics Limited is currently inactive. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the prepaid research and development expenses, valuation of intangibles and goodwill, the valuation of warrants, and the value of stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Foreign Currency Transactions

The functional currency for the Company’s wholly owned foreign subsidiary, Lung Therapeutics Australia Pty Ltd., is the United States dollar. All foreign currency transaction gains and losses are recognized in the consolidated statements of operations and comprehensive loss.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission, or the SEC, for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report for the year ended December 31, 2025 that was filed with the SEC on March 26, 2026 (the “Annual Report”).

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2026, the results of its operations for the three months ended March 31, 2026 and 2025 and its cash flows for the three months ended March 31, 2026 and 2025. The financial data and other information disclosed in these notes related to the three months ended March 31, 2026 and 2025 are unaudited. The results for the three months ended March 31, 2026 are not necessarily indicative of results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period. The accompanying balance sheet as of December 31, 2025 has been derived from the Company’s audited consolidated financial statements for the year ended December 31, 2025 included in the Company’s Annual Report.

The Company’s significant accounting policies are described in Note 2 to the consolidated financial statements included in the Annual Report.

Notes Payable

The Company accounts for notes payable in accordance with applicable guidance under ASC 470, Debt. Notes payable are initially recorded at their principal amount, net of any unamortized discounts, premiums, and issuance costs. Discounts to the notes, including those arising from warrants, beneficial conversion features, or original issue discounts, are recorded as a direct reduction of the carrying amount of the related debt and are amortized to interest expense over the term of the notes using the effective interest method.

Interest expense recognized by the Company includes stated interest, amortization of debt discounts or premiums, and amortization of deferred financing costs. Such amounts are recognized over the contractual term of the related notes so as to produce a constant

effective interest rate.

Notes payable are classified as current or noncurrent based on their contractual maturity dates as of the balance sheet date. The Company evaluates the terms of its notes payable to determine whether any embedded features require separate accounting, including whether such features should be bifurcated and accounted for as derivatives in accordance with ASC 815, Derivatives and Hedging.

Accounting Pronouncements Not Yet Adopted

In December 2025, the FASB issued ASU 2025-12, Codification Improvements. The amendments include technical corrections, clarifications, and minor improvements to various Topics within the FASB ASC. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted. Adoption of this guidance is not expected to have a material impact on the Company’s condensed consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments clarify the application of interim reporting guidance, including when Topic 270 applies, and improve the consistency and usefulness of interim disclosures. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities and for interim reporting periods within annual reporting periods beginning after December 15, 2028, for entities other than public business entities. Early adoption is permitted for all entities. The Company is currently assessing the effect of this ASU on its condensed consolidated financial statements and related disclosures.

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, to clarify the effective date of ASU 2024-03, Income Statement—Reporting Comprehensive Income: Disaggregation of Income Statement Expenses. FASB clarified that all public business entities should initially adopt the disclosure requirements in the ASU 2024-03 in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently assessing the effect of this ASU on its condensed consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses, to enhance the transparency and decision usefulness of financial information presented in the income statement by requiring disaggregated information about certain income statement expense line items. The amendments apply to all public business entities. This ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently assessing the effect of this ASU on its condensed consolidated financial statements and related disclosures.

3. Fair Value of Financial Assets

The following tables present information about the Company’s assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:


	March 31, 2026
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	4,418	$	—	$	—	$	4,418
	$	4,418	$	—	$	—	$	4,418


	December 31, 2025
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	3,130	$	—	$	—	$	3,130
Treasury bills		4		—		—		4
	$	3,134	$	—	$	—	$	3,134

During the three months ended March 31, 2026 and the year ended December 31, 2025, there were no transfers between levels.

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	March 31, 2026		December 31, 2025
Prepaid research and development	$	90	$	230
Other current assets		918		881
Total prepaid expenses and other current assets	$	1,008	$	1,111

5. Goodwill and Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets and goodwill are tested for impairment at least annually. The assessment of recoverability and impairment was performed at the individual indefinite-lived intangible asset level. The Company did not incur impairment loss on indefinite-lived intangible assets or goodwill during the three months ended March 31, 2026. The Company incurred impairment loss on indefinite-lived intangible assets of $28,700 for the year ended December 31, 2025 in connection with funding constraints that are causing the delay in further clinical development of LTI-01 and other preclinical programs until additional funds are raised. In the fourth quarter of 2025, the Company decided to pause development activities related to LTI-01 for an indefinite period and focus on the development of LTI-03. The timing and likelihood of resuming development of LTI-01 are uncertain and contingent on the Company's ability to obtain additional financing and the future success of LTI-03. Therefore, the Company wrote off the total carrying value of the LTI-01 asset and other preclinical programs as of December 31, 2025.

6. Other Assets

Other assets consisted of the following:


	March 31, 2026		December 31, 2025
Non-current prepaid research and development	$	1,005	$	—
Other assets		—		2
Total other non-current assets	$	1,005	$	2

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	March 31, 2026		December 31, 2025
External research and development services	$	762	$	765
Payroll and payroll-related costs		1,146		940
Professional fees		367		401
Other		176		98
Total accrued expenses and other current liabilities	$	2,451	$	2,204

8. Notes Payable

In January 2026 and February 2026, the Company entered into securities purchase agreements with certain institutional investors pursuant to which the Company issued the Notes. The Notes had an aggregate principal amount of approximately $5,375 and were issued for aggregate net proceeds of $4,300, reflecting an original issue discount of approximately 20%. The Notes do not bear stated interest and mature on the earlier of (i) the closing of a qualifying financing transaction resulting in gross proceeds to the Company of at least $10,000 or (ii) June 30, 2026. The Notes are unsecured obligations of the Company.

The Company evaluated the Notes under the guidance in ASC 480 and concluded that the Notes should be classified as liabilities, as they represent unconditional obligations to deliver cash and do not meet the criteria for equity classification. The original issue discount was recorded as a debt discount and is being amortized to interest expense over the term of the Notes using the effective interest method. For the three months ended March 31, 2026, the Company recognized approximately $623 of amortization of the debt discount as interest expense. As of March 31, 2026, the carrying value of $4,923 of the Notes reflected the unamortized portion of the debt discount.

In May 2026, upon the closing of the Company’s underwritten public offering as further discussed in Note 15, the Notes matured and the Company repaid in full all outstanding amounts under the Notes.

9. Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock, par value $0.001 per share. As of March 31, 2026 and December 31, 2025, the Company had issued 24,610 shares of Series X Preferred Stock, of which 12,232 shares of Series X Preferred Stock remained outstanding

At the 2023 annual meeting of stockholders, or the 2023Annual Meeting, the Company’s stockholders approved the issuance, in accordance with Nasdaq Listing Rule 5635(a), of shares of common stock, upon conversion of the Company’s outstanding Series X Preferred Stock. On March 5, 2024, based upon then existing beneficial ownership limitations, 11,957 shares of Series X Preferred Stock were automatically converted into 11,957,000 shares of common stock. On May 8, 2024, the Bios Entities (as defined below) provided notice to the Company and converted 421 shares of Series X Preferred Stock held by them into 421,000 shares of common stock. As of March 31, 2026 and December 31, 2025, 12,232 shares of Series X Preferred Stock (which are convertible into 12,232,000

shares of common stock) remained convertible at the option of the holder thereof, subject to certain beneficial ownership limitations (as described below).

The Company evaluated the Series X Preferred Stock for liability classification in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity, or ASC 480, and determined that equity treatment was appropriate because the Series X Preferred Stock did not meet the definition of the liability instruments. Specifically, the Series X Preferred Stock is not mandatorily redeemable and does not embody an obligation to buy back the shares outside of the Company’s control in a manner that could require the transfer of assets. The Company determined that the Series X Preferred Stock would be recorded as temporary equity, based on the guidance of ASC 480, given that it is contingently redeemable.

Each share of Series X Preferred Stock is convertible into 1,000 shares of Common Stock. The preferences, rights, and limitations initially applicable to the Series X Preferred Stock are set forth in the Certificate of Designation of Series X Non-Voting Convertible Preferred Stock, or the Certificate of Designation.

The Series X Preferred Stock has the following characteristics:

Voting

Except as otherwise required by law, the Series X Preferred Stock does not have voting rights. However, as long as any shares of Series X Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series X Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Series X Preferred Stock or alter or amend the Certificate of Designation, amend or repeal any provision of, or add any provision to, the Certificate of Incorporation or by-laws of the Company, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series X Preferred Stock, (ii) issue further shares of Series X Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Series X Preferred Stock, or (iii) enter into any agreement with respect to any of the foregoing.

Dividends

Holders of Series X Preferred Stock are entitled to receive dividends on shares of Series X Preferred Stock equal, on an as-if-converted-to-common-stock basis, and in the same form as dividends actually paid on shares of the common stock. Such dividends are not cumulative. Since the Company’s inception, no dividends have been declared or paid.

Liquidation, dissolution or winding up

The Series X Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

Upon liquidation, dissolution or winding up of the Company, the Series X preferred stockholders shall be entitled to receive an equivalent amount of distributions as would be paid on the common stock underlying the Series X Preferred Stock, determined on an as-converted basis, pari passu with any distributions to the common stock shareholders.

Conversion

The Series X Preferred Stock is convertible into common stock at a rate of 1,000 shares of common stock for every one share of Series X Preferred Stock that is converted. The Series X Preferred Stock is subject to certain beneficial ownership limitations, including that a holder of Series X Preferred Stock is prohibited from converting shares of Series X Preferred Stock into shares of common stock if, as a result of such conversion, such holder (together with its affiliates and any other persons acting as a group together with the holder or any of its affiliates) would beneficially own more than a specified percentage (to be initially set at 19.99% and thereafter adjusted by the holder to a number not to exceed 19.99%) of the total number of shares of common stock issued and outstanding immediately after giving effect to such conversion.

Redemption

Shares of the Series X Preferred Stock are not redeemable at the election of the holder.

Maturity

The Series X Preferred Stock shall be perpetual unless converted.

10. Common Stock

As of March 31, 2026 and December 31, 2025, the Company was authorized to issue 100,000,000 shares of common stock, par value $0.001 per share.

As of March 31, 2026 and December 31, 2025, the Company had 28,039,032 and 27,550,222 shares of common stock issued and outstanding, respectively.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Company’s Board, if any. As of March 31, 2026 and December 31, 2025, no dividends had been declared.

In the event of liquidation or dissolution, the holders of the common stock are entitled to receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock.

Issuance of Common Stock and Warrants

Wainwright Sales Agreement

On May 15, 2025, the Company entered into the Wainwright Sales Agreement with H.C. Wainwright, as agent and/or principal, pursuant to which the Company could offer and sell shares of its common stock having an aggregate offering price of up to $13,702 from time to time through or to H.C. Wainwright by any method permitted that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. As of March 31, 2026, the Company had issued and sold 1,296,777 shares of common stock pursuant to the Wainwright Sales Agreement for total net proceeds of $1,844, after deducting transaction fees of $67 paid by the Company. In July 2025, in connection with the Yorkville Transactions, the Company reduced the aggregate offering price of the shares of common stock that could be offered and sold under the Wainwright Sales Agreement to $8,067.

Warrant Exercises and Exchanges

On April 21, 2025, the Company entered into privately negotiated letter agreements with certain holders of its outstanding warrants issued on November 2, 2023, or the PIPE Warrants, and May 1, 2024, or the Offering Warrants. Pursuant to these agreements, certain holders agreed to exercise the PIPE Warrants for an aggregate of 159,500 shares of the Company’s common stock and the Offering Warrants for an aggregate of 884,798 shares of common stock, at a reduced exercise price of $1.60 per share. The original exercise prices were $4.89 per share for the PIPE Warrants and $4.68 per share for the Offering Warrants. The exercise of the PIPE Warrants was completed on April 24, 2025, and the exercise of the Offering Warrants was completed in May 2025 (collectively, the “Warrant Exercises”). The Company received total net proceeds of $1,595 from the Warrant Exercises.

Separately, in April 2025, the Company entered into agreements with additional holders of the PIPE Warrants who agreed to surrender warrants representing an aggregate of 1,939,000 shares of common stock for cancellation. In exchange, these holders received pre-funded warrants (the “Exchange Pre-Funded Warrants”) exercisable for the same number of shares at an exercise price of $0.001 per share and paid $1.599 per share in cash by April 24, 2025 (the “Warrant Exchanges”). The Company received total net proceeds of $2,984 from the Warrant Exchanges.

As part of the Warrant Exchanges, entities affiliated with Bios Equity Partners, LP (“Bios Partners”) surrendered PIPE Warrants representing an aggregate of 1,300,500 shares and provided the associated cash consideration of $2,079 for the issuance of Exchange Pre-Funded Warrants.

In addition, on April 21, 2025, an entity affiliated with Bios Partners agreed to purchase additional pre-funded warrants to acquire 312,695 shares of the Company’s common stock in a private placement at a price of $1.599 per share, resulting in total net proceeds of $481 (the “Bios Pre-Funded Warrants”). The Exchange Pre-Funded Warrants and the Bios Pre-Funded Warrants are collectively referred to as the “Pre-Funded Warrants.”

The Company assessed the Pre-Funded Warrants for appropriate classification under U.S. GAAP and determined that they are freestanding instruments that do not meet the definition of a liability pursuant to ASC 480 and do not meet the definition of a derivative pursuant to ASC 815, Derivatives and Hedging. The Pre-Funded Warrants are indexed to the Company’s common stock and meet all other conditions for equity classification under ASC 480 and ASC 815. Accordingly, the Pre-Funded Warrants are classified as equity and accounted for as a component of additional paid-in capital at the time of issuance. The Pre-Funded Warrants were initially recognized at their fair value, calculated as the fair value of the underlying common stock less the exercise price of $0.001 per share. The fair value of the common stock was determined based on the quoted market price of the Company’s common stock as of the issuance date. The Pre-Funded Warrants will not be remeasured subsequent to initial recognition.

The repricing of the PIPE Warrants and the Offering Warrants and issuance of the Exchange Pre-Funded Warrants is considered a modification under the guidance of ASU 2021-04. The modification is consistent with the “Equity Issuance” classification under that guidance as the reason for the modification was to induce the holder to cash exercise their warrants, resulting in the imminent exercise of the PIPE Warrants and the Offering Warrants, which raised equity capital and generated net proceeds for the Company of approximately $4,601. The total fair value of the consideration of the modification includes the incremental fair value of the PIPE Warrants and the Offering Warrants (determined by comparing the fair values immediately prior to and immediately after the modification) and the initial fair value of the PIPE Warrants and the Offering Warrants. The fair values of the PIPE Warrants and the Offering Warrants were calculated using the Black-Scholes model. The Company determined that the total fair value of the consideration related to the modification of PIPE Warrants and the Offering Warrants, including the initial fair value of the Exchange Pre-Funded

Warrants was $4,757. The net effect of the modification in the amount of $490, as well as the value of the replaced PIPE warrants of $1,385 and the fair value of the Exchange Pre-Funded Warrants of $5,652 were recorded in additional paid-in capital, as both the original warrants (the PIPE Warrants and the Offering Warrants) and the replacement instruments (the Exchange Pre-Funded Warrants) are equity-classified.

The Offering Warrants

In May 2024, the Company completed the Offering pursuant to which the Company issued and sold 4,273,505 shares of the Company’s common stock and accompanying Offering Warrants to purchase 4,273,505 shares of common stock. Net proceeds from the Offering were approximately $17,675, after deducting underwriting discounts and commissions and offering expenses, and excluding any proceeds that may be received from exercise of the Offering Warrants. The Offering closed on May 3, 2024.

The Company had assessed the Offering Warrants for appropriate equity or liability classification and determined the Offering Warrants are freestanding instruments that do not meet the definition of a liability pursuant to ASC 480 and do not meet the definition of a derivative pursuant to ASC 815. The Offering Warrants are indexed to the Company’s common stock and meet all other conditions for equity classification under ASC 480 and ASC 815. Accordingly, the Offering Warrants are classified as equity and accounted for as a component of additional paid-in capital at the time of issuance. The Offering Warrants were initially recognized at their relative fair value in the amount of $8.0 million at the time of issuance determined using Black-Scholes option-pricing model and will not be remeasured.

The Offering Warrants to purchase 884,798 shares of common stock were exercised in April 2025 as part of April 2025 Transactions. As of March 31, 2026 and December 31, 2025, Offering Warrants to purchase 3,388,707 shares of common stock remained outstanding.

Prepaid Purchase Agreement

On July 29, 2025, the Company entered into a PPA with Yorkville, pursuant to which the Company may request pre-paid advances of up to $6,000 from Yorkville over a 12-month period, subject to certain limitations and conditions set forth in the PPA. Each Pre-Paid Advance is subject to the consent of Yorkville. Interest shall accrue on the outstanding balance of any Pre-Paid Advance at an annual rate of 8%, subject to an increase to 18% upon events of default described in the PPA. All Pre-Paid Advances are due and payable on the 12-month anniversary of their issuance. At any time that there is an outstanding balance under any Pre-Paid Advances, Yorkville may provide written notice, or Purchase Notice, requiring the Company to issue and sell shares of its common stock to Yorkville, which shall be offset against and reduce the amounts outstanding under the Pre-Paid Advance. The initial advance under the PPA of $1,000 was purchased on July 29, 2025, with net proceeds of $950 after a 5% original issue discount, or OID. On September 8, 2025, the Company entered into a second PPA with Yorkville for an additional $1,000 advance, with net proceeds of $950 after the 5% OID. On October 23, 2025, the Company entered into a third PPA with Yorkville for an additional $1,000 advance, with net proceeds of $950 after the 5% OID.

The Company elected the fair value option under ASC 825, Financial Instruments, or ASC 825, to measure the PPAs at fair value, with changes in fair value recognized in earnings. The initial fair value was determined to be equal to the net proceeds received ($950 per PPA), as this amount represented the cash consideration exchanged, consistent with ASC 825. OID costs of $100 related to the first and second PPA were expensed as incurred in the third quarter of 2025, as required under the fair value option. Additionally, the Company incurred legal costs of $118 which were expensed in the consolidated statements of operations and other comprehensive loss.

Under the terms of the PPAs, the Company issued shares of common stock to Yorkville in satisfaction of the advances. The number of shares issued was determined based on the applicable purchase price per share equal to the lower of (a) 115% of the daily volume weighted average price, or the VWAP, of the Company’s common stock on the last full trading day immediately prior to the date of such Pre‑Paid Advance and (b) 95% of the lowest daily VWAP of the Company’s common stock during the seven consecutive trading days immediately preceding the date on which Yorkville provides the Purchase Notice to the Company, but in no event less than the floor price set forth in the PPA. The carrying value of the PPA and accrued interest were reduced by the issuance of the shares.

Under the terms of the PPAs, through September 24, 2025, the Company issued an aggregate of 1,880,872 shares of common stock to Yorkville (953,765 shares under the first PPA through September 9, 2025, and 927,107 shares under the second PPA), based on the principal of $2,000 from the PPA and $11 of interest expense. The shares were recorded at par value of $0.001 per share with the remainder credited to additional paid-in capital, or APIC.

On October 23, 2025, Yorkville purchased a third PPA of $1,000, for which the Company received net proceeds of $950. The third PPA was converted to 846,290 shares of the Company’s common stock in October 2025, with no remaining outstanding balance. The shares were recorded at par value of $0.001 per share with the remainder credited to APIC.

The initial, the second and the third PPAs were fully settled in 2025, with no remaining outstanding balance. Accordingly, the fair value of the liabilities at March 31, 2026, was $0, and no adjustment for changes in fair value was required.

On December 11, 2025, the Company terminated the PPA.

As of March 31, 2026, there were:

•

12,469,000 shares of common stock reserved for issuance upon conversion of the Series X Preferred Stock;

•

3,143,997 shares of common stock issuable upon the exercise of options under existing equity incentive plans;

•

228,000 shares of common stock issuable for vested but unsettled restricted stock units (Note 10);

•

2,106,194 and 7,500 shares of common stock reserved for issuance under the 2021 Plan (Note 10) and 2017 ESPP (Note 10), respectively, as well as any automatic increases in the number of shares of the common stock reserved under these plans; and

•

6,621,839 shares of common stock reserved for issuance upon exercise of outstanding warrants. The warrants consist of (i) warrants to purchase 726,437 shares of the Company’s common stock, with an exercise price of $5.66, which expire on May 20, 2029, which were assumed in connection with the Lung Acquisition, (ii) warrants to purchase 255,000 shares of the Company’s common stock, with an exercise price of $4.89 per share, which were issued and sold in the PIPE Financing as described above and expire on May 2, 2027, (iii) warrants to purchase 3,388,707 shares of the Company’s common stock, with an exercise price of $4.68 per share, which were issued and sold in the Offering as described above and expire on May 3, 2027, (iv) the Exchange Pre-Funded Warrants to purchase 1,939,000 shares of the Company's common stock, with an exercise price of $0.001 per share, which were issued and sold in the Warrant Exchanges as described above can be exercised at any time after their original issuance until such Exchange Pre-Funded Warrants are exercised in full, and (v) the Bios Pre-Funded Warrants to purchase 312,695 shares of the Company's common stock, with an exercise price of $0.001 per share, which were issued and sold in April 2025 as described above and can be exercised at any time after their original issuance until such Bios Pre-Funded Warrants are exercised in full.

Accordingly, as of March 31, 2026, out of the 100,000,000 shares of common stock presently authorized, 52,615,562 shares are issued and outstanding or reserved for issuance and 47,384,438 shares of common stock remain available for future issuance.

11. Stock-Based Awards

As of March 31, 2026, the Company had five equity compensation plans, each of which was approved by its stockholders: 2006 Equity Incentive Plan, as amended, or the 2006 Plan, 2016 Stock Incentive Plan, or the 2016 Plan, 2017 Stock Incentive Plan, or the 2017 Plan, 2021 Stock Incentive Plan, or the 2021 Plan, and 2017 Employee Stock Purchase Plan, or the 2017 ESPP. The Company also assumed Lung’s 2013 Long-Term Incentive Plan, or the 2013 Plan, as a result of the Lung Acquisition.

As of March 31, 2026, the Company had no shares issuable upon exercise of outstanding options under the 2006 Plan; 8,404 shares to be issued upon exercise of outstanding options under the 2016 Plan, 98,528 shares to be issued upon exercise of outstanding options under the 2017 Plan and 1,520,179 shares to be issued upon exercise of outstanding options under the 2021 Plan. No shares remained available for future awards under the 2006 Plan, the 2016 Plan, and the 2017 Plan as of March 31, 2026. Shares that are expired, terminated, surrendered or canceled without having been fully exercised under the 2017 Plan will be available for future awards under the 2021 Plan. In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for the grant of awards under the 2021 Plan.

Under the 2021 Plan, shares that are expired, terminated, surrendered or canceled without having been fully exercised will be available for future awards. In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for the grant of awards.

The exercise price for stock options granted may not be less than the fair market value of the common stock as of the date of grant.

2021 Stock Incentive Plan

The Company’s 2021 Plan was approved by the Company’s stockholders on June 15, 2021 and became effective on June 16, 2021. At the 2023 Annual Meeting, the stockholders of the Company approved an amendment, or the Plan Amendment, to the 2021 Plan to increase the number of shares of common stock issuable under the 2021 Plan by 3,000,000 shares to 3,840,254. Other than increasing the number of shares issuable under the 2021 Plan, the Plan Amendment does not make any changes to the 2021 Plan.

Under the 2021 Plan, the Company may grant incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, awards of restricted stock units and other stock-based awards. The Company’s employees, officers, directors, consultants and advisors are eligible to receive awards under the 2021 Plan; however, incentive stock options may only be granted to employees. The 2021 Plan is administered by the Board or, at the discretion of the Board, by a committee of the Board. The number of shares of common stock covered by options and the date those options become exercisable, type of options to be granted, exercise prices, vesting and other restrictions are determined at the discretion of the Board, or its committee if so delegated.

Stock options granted under the 2021 Plan with service-based vesting conditions generally vest over four years and may not have a duration in excess of ten years, although options have been granted with vesting terms of less than four years.

The total number of shares of common stock that may be issued under the 2021 Plan was 3,840,254 as of March 31, 2026, of which 2,106,194 shares remained available for grant. The Company initially reserved 625,000 shares of common stock, plus the number of shares of common stock subject to outstanding awards under the 2017 Plan, the 2016 Plan and the 2006 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right up to 314,006 shares. As of March 31, 2026, the Company had 1,520,179 shares to be issued upon exercise of outstanding options under the 2021 Plan.

2013 Stock Incentive Plan

The Company assumed the 2013 Plan as a result of the Lung Acquisition. In October 2013, Lung’s Board of Directors, or the Lung Board, approved the 2013 Plan to provide long-term incentives for its employees, non-employee directors and certain consultants. As of March 31, 2026, 1,516,886 shares were reserved to be issued upon exercise of options outstanding under the 2013 Plan. These options were assumed by the Company in connection with the Lung Acquisition.

Before the Lung Acquisition, the 2013 Plan was administered by the Lung Board or, at the discretion of the Lung Board, by a committee of the Lung Board. The exercise prices, vesting and other restrictions were determined at the discretion of the Lung Board, or its committee if so delegated, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of stock option may not be greater than ten years. The contractual term for stock option awards is ten years. The vesting periods for equity awards were determined by the Lung Board, but generally were four years. The contractual term for stock option awards is ten years. Following the closing of the Lung Acquisition on October 31, 2023, no further awards can be granted under the 2013 Plan.

Stock Option Valuation

There were no stock awards granted in the three months ended March 31, 2026 and 2025.

Stock Options

The following table summarizes the Company’s stock option activity since January 1, 2026:


	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2026		3,143,997	$	5.21		6.1	$	158
Exercised		—		—		—		—
Forfeited/Canceled		—		—		—		—
Expired		—		—		—		—
Outstanding at March 31, 2026		3,143,997	$	5.21		5.9	$	319

Options exercisable at March 31, 2026		2,471,114	$	5.93		5.2	$	292
Options vested and expected to vest at March 31, 2026		3,124,534	$	5.22		5.9	$	318
Options exercisable at December 31, 2025		2,418,033	$	6.00		5.4	$	138
Options vested and expected to vest at December 31, 2025		3,120,459	$	5.23		6.1	$	157

The aggregate fair value of stock options that vested during the three months ended March 31, 2026 and 2025, was $131 and $46, respectively.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. There were no stock options exercised during the three months ended March 31, 2026. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2025 was $18.

Restricted Stock Units

The Company has granted restricted stock units with service-based vesting conditions. Unvested shares of restricted common stock may not be sold or transferred by the holder.

There were no restricted stock units granted in the three months ended March 31, 2026. In August 2025, the Company granted 1,000,000 restricted stock units that were immediately vested. As of March 31, 2026, there were 228,000 vested restricted stock units that were not issued.

Stock-Based Compensation

The Company recorded stock-based compensation expense related to stock options in the following expense categories of its statements of operations and comprehensive loss:


	Three Months Ended March 31,
	2026		2025
Research and development expenses	$	32	$	64
General and administrative expenses		124		200
Total stock-based compensation expense	$	156	$	264

As of March 31, 2026, the Company had an aggregate of $1,319 of unrecognized stock-based compensation expense, which it expects to recognize over a weighted average period of 2.58 years. As of March 31, 2025, the Company had an aggregate of $2,130 of unrecognized stock-based compensation expense, which it expects to recognize over a weighted average period of 3.15 years.

12. Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows:


	Three Months Ended March 31,
	2026			2025
Numerator:
Net loss	$	(5,838	)	$	(5,501	)
Denominator:
Weighted average common shares outstanding—basic and diluted		30,354,647			21,915,891
Net loss per share attributable to common stockholders—basic and diluted	$	(0.19	)	$	(0.25	)

As part of the April 2025 Transactions, the Pre-Funded Warrants to purchase an aggregate of 2,251,695 shares of common stock at an exercise price of $0.001 per share are included within the denominator for basic net loss per share purposes and considered outstanding as of the date of issuance.

The 228,000 restricted stock units vested but not issued as of March 31, 2026, are included in earnings per share calculation as all conditions for issuance have been satisfied making the underlying shares contingently issuable and economically equivalent to outstanding shares.

The Company’s potential dilutive securities, which include stock options as of March 31, 2026 and 2025, have been excluded from the computation of diluted net loss per share attributable to common stockholders whenever the effect of including them would be to reduce the net loss per share. In periods where there is a net loss, the weighted average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The following potential shares of common stock, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:


	Three Months Ended March 31,
	2026		2025
Options to purchase common stock		3,143,997		3,080,582
Warrants to issue shares of common stock		6,621,839		7,353,442
Series X Preferred Stock issued and outstanding, as converted		12,232,000		12,232,000
Total		21,997,836		22,666,024

13. Commitments and Contingencies

Legal Proceedings

The Company may from time to time be party to litigation arising in the ordinary course of business. As of March 31, 2026, the Company was not party to any legal proceedings and no material legal proceedings are currently pending or, to the best of the Company’s knowledge, threatened.

Intellectual Property Licenses

Harvard and Dana-Farber Agreement

In August 2006, the Company entered into an exclusive license agreement with President and Fellows of Harvard College, or Harvard, and Dana-Farber Cancer Institute, or DFCI. The agreement granted the Company an exclusive worldwide license, with the right to sublicense, under specified patents and patent applications to develop, obtain regulatory approval for and commercialize specified product candidates based on cell-permeating peptides. Under the agreement, the Company is obligated to use commercially

reasonable efforts to develop and commercialize one or more licensed products and to achieve specified milestone events by specified dates. In connection with entering into the agreement, the Company paid an upfront license fee and issued to Harvard and DFCI shares of its common stock.

In February 2010, the agreement was amended and restated, or the Harvard/DFCI agreement, under which additional patent rights were added to the scope of the license agreement and the annual license maintenance fees were increased. Under the Harvard/DFCI agreement, the Company is obligated to make aggregate milestones payments of up to $7,700 per licensed therapeutic product upon the Company’s achievement of specified clinical, regulatory and sales milestones with respect to such product and up to $700 per licensed diagnostic product upon the Company’s achievement of specified regulatory and sales milestones with respect to such product. In addition, the Company is obligated to pay royalties of low single-digit percentages on annual net sales of licensed products sold by the Company, its affiliates or its sublicensees. The royalties are payable on a product-by-product and country-by-country basis and may be reduced in specified circumstances. In addition, the agreement obligates the Company to pay a percentage, up to the mid-twenties, of fees received by the Company in connection with its sublicense of the licensed products. In accordance with the terms of the agreement, the Company’s sublicense payment obligations may be subject to specified reductions.

The Harvard/DFCI agreement requires the Company to pay annual license maintenance fees of $110 each year, which was reduced to $35 starting in 2023. Any payments made in connection with the annual license maintenance fees will be credited against any royalties due.

As of March 31, 2026, the Company had not developed a commercial product using the licensed technologies and no royalties under the agreement had been paid or were due.

Under the Harvard/DFCI agreement, the Company is responsible for all patent expenses related to the prosecution and maintenance of the licensed patents and applications in-licensed under the agreement as well as cost reimbursement of amounts incurred for all documented patent-related expenses. The agreement will expire on a product-by-product and country-by-country basis upon the last to expire of any valid patent claim pertaining to licensed products covered under the agreement. The Company incurred $9 license maintenance fees in the three months ended March 31, 2026 and 2025, respectively.

Agreement with the University of Texas Health Science Center at Tyler

In June 2013, the Company entered into a patent and technology license agreement with UT System, on behalf of UTHSCT. The patent and technology license agreement with UT System, or the UTHSCT Agreement, provides the Company access to patents and technology related to the development of LTI-01 and LTI-03. As part of the UTHSCT Agreement, the Company has (i) a royalty-bearing, exclusive license under the patent rights to manufacture, distribute, and sell certain intellectual property; (ii) a non-exclusive license under the technology rights to manufacture, distribute and sell the licensed product; and (iii) a sublicensing right that allows the Company to grant sublicenses to affiliates and third parties to use the licensed product in the field of use and approved territories outlined in the UTHSCT Agreement. In December 2013, the UTHSCT Agreement was amended and restated to include certain patents in all fields worldwide. In May 2017, the UTHSCT Agreement was amended and restated to modify the specific milestone criteria.

In consideration of the UTHSCT Agreement, the Company agreed to pay past and ongoing patent expenses, and the Company owes UTHSCT sublicensing fees, assignment fees, and single digit royalties on worldwide net product sales, with fixed minimum royalty payments that started in 2015.

Pursuant to the UTHSCT Agreement, the Company is required to use diligent efforts to commercialize the licensed technology as soon as commercially practicable, including maintaining active research and development, regulatory, marketing and sales program, all as commercially reasonable.

The Company may terminate the UTHSCT Agreement for convenience with 90 days’ notice. UTHSCT may also terminate the UTHSCT Agreement, but only if the Company breaches the terms of the agreement. The Company did not incur any expense under the UTHSCT Agreement in the three months ended March 31, 2026 and 2025.

Agreement with the University of Texas at Austin

In May 2015, the Company entered into a patent license agreement with UT Austin on behalf of UT System. This license agreement with UT Austin, or the UT Austin 6607 Agreement, relates to the patent rights to polypeptide therapeutics and uses thereof. Pursuant to the UT Austin 6607 Agreement the Company has (i) a royalty-bearing, exclusive license under the patent rights to manufacture, distribute, and sell the licensed product; and (ii) a sublicensing right that allows the Company to grant sublicenses to affiliates and third parties to use the licensed product in the field of use and approved territories outlined in the agreement. The UT Austin 6607 Agreement was amended and restated in January 2017, November 2018, and June 2019. The amendments related to extension of milestone payment dates and specific terminology around the milestone achievement criteria.

In consideration of the UT Austin 6607 Agreement, the Company agreed to pay past and ongoing patent expenses, milestone fees upon certain development and regulatory milestone events, annual license fees, tiered sublicense fees, assignment fees, low single digit royalties on net sales and a Food and Drug Administration, or FDA, Priority Review Voucher fee if the Company sells or transfers this voucher.

Pursuant to the UT Austin 6607 Agreement, the Company is required to use diligent efforts to commercialize the licensed products, including maintaining active research and development, regulatory, marketing and sales program. Moreover, the Company is required to meet certain development and regulatory milestones by specific dates.

The Company may terminate the UT Austin 6607 Agreement for convenience with 90 days’ notice. UT Austin may also terminate the UT Austin 6607 Agreement, but only if the Company breaches the terms of the agreement. The Company did not incur any expense under the UT Austin 6607 Agreement in the three months ended March 31, 2026 and 2025.

Agreement with Medical University of South Carolina

In March 2016, the Company entered into a license agreement with Medical University of South Carolina Foundation for Research Development, or MUSC. Pursuant to this license agreement with MUSC, or the MUSC Agreement, the Company has patent rights related to protecting against lung fibrosis by up regulating Cav1. The MUSC Agreement granted (i) a royalty-bearing, exclusive license under the patent rights to make, use and sell the license product; and (ii) a sublicensing right that allows the Company to grant sublicenses to affiliates and third parties to use the licensed product in the field of use and approved territories outlined in the agreement. In September 2018, the agreement was amended and restated to include definitions of related methods, related products and related rights.

In consideration of the MUSC Agreement, the Company agreed to pay a non-refundable license fee, patent expenses, milestone fees upon certain development, regulatory and commercial milestone events, sublicense fees, assignment fees and low single digit royalties on net sales, with a fixed minimum royalty payment starting in 2019 and a transaction fee upon the Company’s liquidation.

Pursuant to the MUSC Agreement, the Company is required to use diligent efforts to develop, manufacture and sell the licensed products.

The Company may terminate the MUSC Agreement for convenience by providing a written notice to MUSC effective 90 days following the receipt of notice, and either party may terminate the agreement for a breach of contract. The Company did not incur any license fees under the MUSC Agreement in the three months ended March 31, 2026 and 2025.

Agreement with Vivarta Therapeutics LLC

In March 2018, the Company entered into a license agreement with Vivarta Therapeutics, LLC, or Vivarta. This license agreement with Vivarta, or the Vivarta Agreement, relates to intellectual property relating to epithelial sodium channel inhibitors and methods to treat pulmonary disease. Pursuant to the Vivarta Agreement the Company has (i) a royalty-bearing, exclusive license under the intellectual property rights to make, use and sell the licensed product, and (ii) a sublicensing right that allows the Company to grant sublicenses to affiliates and third parties to use the licensed product in the field of use and approved territories outlined in the agreement.

In consideration for the Vivarta Agreement, the Company agreed to grant Vivarta a warrant to purchase an aggregate of 75,000 shares of common stock of Lung for $0.12 per share, to pay a license fee of $10,000 upon the Vivarta Agreement effective date and $40,000 within 30 days of the receipt of a positive freedom to operate analysis from legal counsel. The Company also agreed to pay patent expenses, milestone fees upon certain development and regulatory milestone events, sublicense fees, assignment fees and low single digit royalties on net sales.

Pursuant to the Vivarta Agreement, the Company is required to use diligent efforts to develop, manufacture and sell the licensed products.

The Company may terminate the Vivarta Agreement for convenience by providing a written notice to Vivarta effective 90 days following the receipt of notice, and either party may terminate the agreement for a breach of contract. The Company did not incur any expenses under the Vivarta Agreement in the three months ended March 31, 2026 and 2025.

Letter Agreement with Rients

In August 2025, the Company entered into a letter agreement with Rients for Rients to evaluate the legacy ALRN-6924 compound, or the Compound Asset. During the term of the letter agreement, Rients shall pay the Company for all fees and expenses incurred by the Company to maintain the Compound Asset.

Project Addendum

In December 2025, the Company entered into a project addendum with a third party Contract Research Organization, or CRO, for the purposes of setting forth the responsibilities and obligations of the parties in regards to conducting a certain clinical research program entitled “A Phase 2, Randomized, Double-Blind, Placebo-Controlled Study of the Safety, Tolerability and Efficacy of Caveolin-1-Scaffolding-Protein-Derived Peptide in Patients with IPF” under the Company’s Protocol LTI-03-2001. Pursuant to the project addendum, the Company have contracted to receive up to $19.8 million of master services as the Company may request from time to time at its discretion.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. As of the date of this report, the Company has not incurred any material costs or claims as a result of such indemnifications.

14. Segment Reporting

The Company has one reportable segment which focuses on developing novel therapies for the treatment of orphan pulmonary and fibrosis indications with no approved or limited effective treatments. The Company’s CODM, the CEO, manages the Company’s operations on a consolidated basis as one operating segment for the purposes of evaluating financial performance and allocating resources.

The Company has not generated any revenue yet. The CODM assesses the financial performance of the segment and decides how to allocate resources based on net loss on a consolidated basis. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

The CODM uses net loss predominantly in the annual operating budget and in the strategic planning and forecasting process. Such loss measure is used to monitor budget versus actual results on an ongoing basis by the CODM and determine how resources are allocated to the various activities of the Company. The CODM also uses net loss to evaluate the Company’s performance and assist in determination of management’s incentive compensation.

All of the Company’s tangible assets are held in the United States. The Company views its operations and manages its business in one operating segment operating exclusively in the United States.

The table below is a summary of the segment loss, including significant segment expenses:


	Three Months Ended March 31,
	2026			2025
Revenues	$	—		$	—
Research and development expenses:
LTI-01 program-related expenses:
CMC activities		67			537
Clinical operation activities		—			65
Total LTI-01 program-related expenses		67			602
LTI-03 program-related expenses:
Preclinical study costs		—			556
CMC activities		520			560
Clinical operation activities		1,961			673
Total LTI-03 program-related expenses		2,481			1,789
Other program-related expenses		—			8
Employee related expenses		500			622
Professional fees for services		—			17
Facilities and other expenses		25			16
Total research and development expenses		3,073			3,054
General and administrative expenses:
Employee related expenses		859			947
Professional fees for services		790			1,138
Facilities and other expenses		508			470
Total general and administrative expenses		2,157			2,555
Other (expense) income, net		(608	)		108
Segment and consolidated net loss	$	(5,838	)	$	(5,501	)

15. Subsequent Event

On May 4, 2026, the Company completed an underwritten public offering of 50,000,000 shares of its common stock at a public offering price of $1.00 per share. In connection with the offering, the Company granted the underwriters a 45-day option to purchase up

to an additional 7,500,000 shares of its common stock at the public offering price, less underwriting discounts and commissions, which was fully exercised on May 5, 2026. The Company refers to these transactions collectively as the May 2026 Offering. Aggregate gross proceeds from the May 2026 Offering were $57,500, and net proceeds to the Company were approximately $53,106 after deducting underwriting discounts, commissions, and offering expenses of approximately $4,394.

Following the closing of the offering, the Company had 85,539,032 shares of common stock outstanding.

The Company issued to the underwriters warrants to purchase 1,725,000 of the Company’s shares of common stock in connection with the May 2026 Offering. The warrants are exercisable at $1.50 per share for a five year period ending April 30, 2031 in compliance with FINRA Rule 5110(g)(8)(A). The warrants have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to FINRA Rule 5110(e).

The Company intends to use the net proceeds from the May 2026 Offering for working capital and general corporate purposes. In connection with the May 2026 offering, the Company repaid unsecured promissory notes with an aggregate original principal amount of $5,375 that were issued in January 2026 and February 2026.

Pursuant to the underwriting agreement, the Company is subject to a lock-up period of up to 120 days following the closing of the May 2026 Offering, during which it has agreed, subject to certain exceptions, not to sell, transfer, or dispose of, directly or indirectly, any shares of its capital stock or securities convertible into or exercisable or exchangeable for such shares.

On April 30, 2026, the Company entered into a letter agreement with Bios Partners, L.P., on behalf of certain Bios entities holding securities of the Company, pursuant to which the Bios entities agreed to defer the conversion of 12,232 shares of Series X Preferred Stock of the Company held by the Bios entities, and waive the Company’s obligation in the Company’s Certificate of Designation of Series X Preferred Stock to reserve the shares of common stock (“Underlying Shares”) issuable upon exercise of Series X Preferred Stock shares until such time as the Company has amended its Restated Certificate of Incorporation to increase its authorized common stock. In addition, the Bios entities have agreed, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any Series X Preferred Stock shares or Underlying Shares for a period ending April 30, 2029. In consideration of the agreements and waivers of the Bios entities, the Company issued to the Bios entities at the closing of the May 2026 Offering warrants to purchase 3,000,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrants issued to the Bios entities are on substantially the same terms as the underwriter’s warrants, except for the exercise price.

On May 8, 2026, the Company granted Brian Windsor, Ph.D., the Company’s President and Chief Executive Officer, an option to purchase 150,000 shares of the Company’s common stock with an exercise price of $1.17 per share. In addition, the Company granted options to purchase an aggregate of 252,000 shares of the Company’s common stock to members of the Company’s management team, excluding the Chief Executive Officer. The options have a ten-year contractual term and vest as to 25% of the underlying shares one year from the grant date, with the remaining shares vesting in equal monthly installments through May 8, 2031. The management team options have an exercise price equal to the closing price of the Company’s common stock on May 7, 2026.

The Company evaluated subsequent events through the date of filing of this Quarterly Report on Form 10-Q and determined that no other events have occurred that would require adjustment to or disclosure in the unaudited condensed financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis are meant to provide material information relevant to an assessment of the financial condition and results of operations of our Company, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources, so as to allow investors to better view our Company from management’s perspective. You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements for the quarter ended March 31, 2026, included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this report, including those set forth under Item 1A. "Risk Factors" in the Company’s Annual Report for the fiscal year ended December 31, 2025 filed with the SEC on March 26, 2026 (the “Annual Report”).

Overview and Recent Developments

We are a clinical stage biopharmaceutical company focused on developing novel therapies for the treatment of orphan pulmonary and fibrosis indications with no approved or limited effective treatments. We currently have one lead product candidate in clinical development, LTI-03. Our pipeline includes:

•

LTI-03, a peptide, for which we conducted a Phase 1b dose-ranging, placebo-controlled safety, tolerability, and pharmacodynamic biomarker activity trial in development for the treatment of Idiopathic Pulmonary Fibrosis, or IPF, that has demonstrated the ability to protect healthy lung epithelial cells and reduce pro-fibrotic signaling;

•

LTI-01, a proenzyme that completed a Phase 2a dose-ranging, placebo-controlled trial and a Phase 1b safety, tolerability and proof of mechanism trial in loculated pleural effusion, or LPE, patients, an indication that has no approved drug treatment; and

•

preclinical programs targeting cystic fibrosis and a peptide program focused on the Cav1 protein for systemic fibrosis indications.

In the fourth quarter of 2025, we decided to pause development activities related to LTI-01 for an indefinite period.

In May 2025, we initiated screening and recruitment of patients in the RENEW Phase 2 clinical trial of LTI-03. The RENEW trial is a Phase 2 multi-center, randomized, double-blind, placebo-controlled study evaluating the safety, tolerability, and efficacy of LTI-03 patients with IPF. In addition, the trial is designed to assess the activity of inhaled dry powder LTI-03 across multiple biomarkers and to measure lung function and the potential for healthy tissue regeneration. The trial is designed to enroll approximately 120 patients diagnosed with IPF within 5 years of screening, who may be receiving standard of care antifibrotic therapy, across up to 50 sites globally, including sites in the United States, United Kingdom, Germany, Austria and Poland. Patients will be randomized into two blinded placebo-controlled cohorts that will run concurrently. Patients in the low dose cohort will receive 2.5 mg of either LTI-03 or placebo administered twice daily, or BID, for a total dose of 5 mg/day, while participants in the high dose cohort will receive 5 mg BID for a total dose of 10 mg/day. The primary endpoint is the incidence of treatment-emergent adverse events from Day 1 through Week 24. The key secondary endpoint is the efficacy of LTI-03 measured through forced vital capacity, percent predicted FVC and high-resolution computer tomography, in collaboration with Qureight Ltd. Patients will undergo a 28-day screening period prior to being randomized and entering the 24-week treatment period, with a four-week follow-up.

In October 2025, we received authorization from the European Medicines Agency, or the EMA, to initiate our Phase 2 RENEW trial of our lead candidate, LTI-03, at sites in Germany and Poland. We had previously received regulatory clearance from the U.K.’s Medicines and Healthcare products Regulatory Agency, or the MHRA. In January 2026, we received orphan drug designation from the EMA for LTI-03.

As of the date of this Quarterly Report, we activated sites and are enrolling patients in the U.S. and are seeking to activate additional sites, enroll patients and initiate the RENEW trial throughout the U.S., UK, Europe and other jurisdictions. In March 2026, we dosed our first patient in the RENEW Phase 2 clinical trial of LTI-03. We expect to report initial interim topline data on some proportion of patients in the fourth quarter of 2026.

We have not completed the development of any of our product candidates, have not generated any revenue from product sales and have never generated an operating profit.

To date, we have financed operations primarily through $145.5 million in net proceeds from sales of common stock and warrants, $2.6 million in net proceeds from sales of common stock under our “at the market” offering program, $131.2 million from sales of preferred stock prior to our initial public offering, or IPO, $34.9 million from a collaboration agreement in 2010, $17.5 million in net proceeds in connection with a private placement following the Lung Acquisition in 2023, $17.7 million in net proceeds in connection with an underwritten offering of our common stock and accompanying warrants to purchase common stock in May 2024, $5.1 million in net proceeds from the April 2025 Transactions (as defined below), $2.9 million in net proceeds from the Yorkville Transactions

described below and $4.3 million in net proceeds from our securities purchase agreements with three institutional investors in January 2026 and February 2026 described below. As of March 31, 2026, we had $4.4 million in cash and cash equivalents, without giving effect to the May 2026 Offering.

Since our inception, we have incurred significant losses on an aggregate basis. Our net losses were $5.8 million and $5.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $407.1 million. These losses have resulted primarily from costs incurred in connection with research and development activities, licensing and patent investment and general and administrative costs associated with our operations as well as the impairment loss on intangible assets. We expect to continue to incur operating losses for the foreseeable future.

In May 2026, we completed an underwritten public offering of 57,500,000 shares of our common stock at a public offering price of $1.00 per share, or the May 2026 Offering. Aggregate gross proceeds from the May 2026 Offering were approximately $57.5 million, and net proceeds to the Company were approximately $53.1 million after deducting underwriting discounts, commissions, and offering expenses of approximately $4.4 million.

As of March 31, 2026, we had cash and cash equivalents of $4.4 million. Based on our current operating plan, we believe that our existing cash and cash equivalents as of March 31, 2026, together with the net proceeds received by us in the May 2026 Offering, will be sufficient to enable us to fund our planned operating expense and capital expenditure requirements into the first quarter of 2028. We also believe the funds will be sufficient to enable us to complete the Phase 2 RENEW clinical trial of LTI-03.

2026 Bridge Loans

In January 2026 and February 2026, we entered into separate securities purchase agreements, or the Purchase Agreements, with three institutional investors pursuant to which we issued and sold to the investors, in a private placement, unsecured promissory notes in the aggregate original principal amount of $5.4 million, or the Notes. Pursuant to the Purchase Agreements, we issued and sold the Notes to the investors for the aggregate purchase price of $4.3 million, inclusive of an original issue discount of 20%.

The Notes have a stated maturity date of the earlier of (i) the date of the closing of the next issuance and sale of our securities, in a single transaction or series of related transactions, to investors resulting in gross proceeds to us of at least $10.0 million (exclusive of the Notes proceeds) or (ii) June 30, 2026. Our obligations under the Notes are unsecured. There is no interest payable under the Notes other than the 20% original issue discount. The Purchase Agreements contained representations, warranties, covenants and other terms customary for agreements of such nature. The Notes were repaid in full upon the close of the May 2026 Offering.

Pre-Paid Advance Agreement and Standby Equity Purchase Agreement with Yorkville

On July 29, 2025, we entered into a Pre-Paid Advance Agreement, or the PPA, and a Standby Equity Purchase Agreement, or the SEPA, with YA II PN, Ltd., a Cayman Islands exempt limited partnership, or Yorkville. The PPA and the SEPA are collectively referred to as the Yorkville Transactions.

Under the PPA, we may request up to $6.0 million in pre-paid advances from Yorkville over a 12-month period, subject to certain limitations and conditions set forth in the PPA. Each pre-paid advance will be purchased by Yorkville at 95% of the face amount of the pre-paid advance. An initial pre-paid advance of $1.0 million was purchased on July 29, 2025 by Yorkville, for net proceeds of $0.95 million. Each additional pre-paid advance shall be subject to the consent of Yorkville. Interest shall accrue on the outstanding balance of any pre-paid advance at an annual rate of 8%, subject to an increase to 18% upon events of default described in the PPA. At any time that there is an outstanding balance under any pre-paid advances, Yorkville may provide a written notice to require us to issue and sell shares of common stock to offset against and reduce the balance under the pre-paid advances at a price per share equal to the lower of (i) 115% of the daily volume weighted average price, or the VWAP, of our common stock on the Nasdaq Capital Market on the last full trading day immediately prior to the date of such pre-paid advance and (ii) 95% of the lowest daily VWAP on the Nasdaq Capital Market during the seven consecutive trading days immediately preceding the date on which Yorkville provides such a purchase notice, subject to a floor price of $0.28 per share. Cash amortization payments will be triggered if the daily VWAP falls below the floor price for five of seven consecutive trading days, or in the event of any shares issued pursuant to the PPA are not eligible to be sold pursuant to an effective registration statement for a period of 10 consecutive trading days, or if we have issued substantially all of the shares available under certain exchange cap limitations.

On September 8, 2025, Yorkville purchased a second Pre-Paid Advance, or the Second Advance, of $1.0 million, for which we received net proceeds of $0.95 million. On October 23, 2025, Yorkville purchased a third Pre-Paid Advance, or the Third Advance, of $1.0 million, for which we received net proceeds of $0.95 million. As of the date of this report, we have issued 953,765 shares of our common stock, at a weighted average price per share of approximately $1.056, to Yorkville, which were offset against $1.0 million of the outstanding principal and accrued interest under the initial Pre-Paid Advance, and issued 927,107 shares of our common stock, at a weighted average price per share of approximately $1.082, to Yorkville, which were offset against $1.0 million of the outstanding principal and accrued interest under the Second Pre-Paid Advance, and issued 846,290 shares of our common stock, at a weighted average price per share of approximately $1.183, to Yorkville, which were offset against $1.0 million of the outstanding principal and accrued interest under the Third Pre-Paid Advance. All three Pre-Paid Advances were fully settled as of March 31, 2026, with no remaining outstanding balance. Accordingly, the fair value of the liabilities at March 31, 2026, was $0, and no

adjustment for changes in fair value was required during the three months ended March 31, 2026.

Separately, under the SEPA, we may sell up to $15.0 million of our common stock to Yorkville over a 36-month period at our discretion. Sales under the SEPA are based on our advance notices and may be for a number of shares up to 100% of the average daily trading volume of our common stock during the five trading days immediately prior to the date of each such notice, priced at 96% of the lowest daily VWAP of our common stock on the Nasdaq Capital Market during the three consecutive trading days commencing on the date of delivery each notice, subject to a minimum price floor set by us. As consideration for Yorkville’s commitment to purchase our common stock under the SEPA, we agreed to pay to Yorkville a commitment fee of $0.3 million, which was satisfied by the issuance to Yorkville of an aggregate of 213,099 shares of our common stock. We did not issue shares of our common stock to Yorkville under the SEPA.

The issuance of shares under both the PPA and SEPA was subject to a cap equal to 19.9% of our outstanding common stock as of July 29, 2025, unless stockholder approval is obtained or other specified conditions are met.

On December 11, 2025, we terminated the PPA and SEPA.

Sales Agreement with H.C. Wainwright

On May 15, 2025, we entered into an “at the market offering” agreement, or the Wainwright Sales Agreement, with H.C. Wainwright & Co., LLC, or H.C. Wainwright, as agent and/or principal, pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $13.7 million from time to time through or to H.C. Wainwright by any method permitted that is deemed to be an “at the market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. During the three months ended March 31, 2026, we had issued and sold 296,810 shares of common stock pursuant to the Wainwright Sales Agreement for a net proceeds of $0.4 million. As of March 31, 2026, we had issued and sold 1,296,777 shares of common stock pursuant to the Wainwright Sales Agreement for a net proceeds of $1.8 million. In July 2025, in connection with the Yorkville Transactions, we reduced the aggregate offering price of the shares of common stock that could be offered and sold under the Wainwright Sales Agreement to $8.1 million.

Prior to entering into the Wainwright Sales Agreement, in May 2025, we terminated the equity distribution agreement, dated July 26, 2024, or the Equity Distribution Agreement, with Citizens JMP Securities, LLC, or Citizens JMP, as agent and/or principal, under which we could offer and sell up to $50.0 million of shares of our common stock from time to time through or to Citizens JMP by any method that was deemed to be an “at the market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Through May 2025, we issued and sold 317,772 shares of common stock pursuant to the Equity Distribution Agreement for total net proceeds of $0.7 million. We did not issue or sell any other shares of common stock pursuant to the Equity Distribution Agreement in 2025.

April 2025 Warrant Transactions and Private Placement

On April 21, 2025, we entered into privately negotiated letter agreements with certain holders of the PIPE Warrants (as defined below) and certain holders of the Offering Warrants (as defined below). Pursuant to these letter agreements, these holders agreed to exercise for cash the PIPE Warrants for the purchase of an aggregate of 159,500 shares of common stock and the Offering Warrants for the purchase of an aggregate of 884,798 shares of common stock at a reduced exercise price of $1.60 per share, or the Warrant Exercises. The total net proceeds for the Warrant Exercises were $1.6 million.

On April 21, 2025, we entered into privately negotiated letter agreements with additional holders of the PIPE Warrants pursuant to which such holders surrendered PIPE Warrants exercisable for an aggregate of 1,939,000 shares of common stock for cancellation in exchange for pre‑funded warrants (the “Exchange Pre-Funded Warrants”) to purchase the same number of shares at an exercise price of $0.001 per share (the “Warrant Exchanges”). In connection with these exchanges, the holders also made an aggregate cash payment of $1.599 per underlying share. The total net proceeds for the Warrant Exchanges were $3.0 million. In the Warrant Exchanges, entities affiliated with Bios Equity Partners, LP, or Bios Partners, surrendered the PIPE Warrants to purchase an aggregate of 1,300,500 shares common stock plus provided the associated cash consideration of $2.1 million for Exchange Pre-Funded Warrants.

In addition, on April 21, 2025, an entity affiliated with Bios Partners, or the Bios Purchaser, purchased additional pre-funded warrants to purchase 312,695 shares of the common stock in a private placement, or the Placement Pre-Funded Warrants, pursuant to a subscription agreement at a price of $1.599 per share underlying the Placement Pre-Funded Warrants, or the Private Placement. The Private Placement closed on April 24, 2025. The total net proceeds for the Private Placement were $0.5 million. We refer to the Warrant Exercises, the Warrant Exchanges and the Private Placement as the April 2025 Transactions.

Master Services Agreement

In April 2025, we entered into a master services agreement with a third party Contract Research Organization, or CRO, under which the CRO has agreed to perform certain services in accordance with written work orders. The work orders set forth the obligations of the parties with regard to conducting the clinical research study entitled “A Randomized, Double-Blind, Placebo-Controlled, Phase 2, Safety, Tolerability and Efficacy Study of Caveolin1-Scaffolding-Protein-Derived Peptide (LTI-03) in Patients with IPF”, under our

Protocol LTI-03-2001. Pursuant to the agreement, we had contracted for up to $17.0 million of master services. In August 2025, this master services agreement was terminated with no future commitment for the Company.

In December 2025, we entered into a project addendum with a third party CRO for the purposes of setting forth the responsibilities and obligations of the parties in regards to conducting a certain clinical research program entitled “A Phase 2, Randomized, Double-Blind, Placebo-Controlled Study of the Safety, Tolerability and Efficacy of Caveolin-1-Scaffolding-Protein-Derived Peptide in Patients with IPF” under our Protocol LTI-03-2001. Pursuant to the project addendum, we have contracted to receive up to $19.8 million of master services as we may request from time to time at our discretion.

Components of Our Results of Operations

Revenue

We have not generated any revenue from product sales and we do not expect to generate any revenue from the sale of products in the foreseeable future.

Operating Expenses

Our expenses since inception have consisted solely of research and development costs, general and administrative, and restructuring costs.

Research and Development Expenses

For the periods presented in this Quarterly Report on Form 10-Q, research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include:

•

salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;

•

expenses incurred in connection with the clinical development of our product candidates, including under agreements with third parties, such as consultants and CROs;

•

the cost of manufacturing product candidates for use in our clinical trials and preclinical studies, including under agreements with third parties, such as consultants and contract manufacturing organizations, or CMOs;

•

expenses incurred in connection with the preclinical development of our product candidates, including outsourced professional scientific development services, consulting research fees and payments made under sponsored research arrangements with third parties;

•

the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;

•

third-party license fees;

•

costs related to compliance with regulatory requirements; and

•

facility-related expenses, which included direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expense research and development costs as incurred. We recognize costs for certain development activities, such as clinical trials, based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided to us by our vendors and our clinical investigative sites. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid or accrued research and development expenses.

In addition, we typically use our employee and infrastructure resources across our development programs. We track outsourced development costs and milestone payments made under our licensing arrangements by product candidate or development program, but we do not allocate personnel costs, license payments made under our licensing arrangements or other internal costs to specific development programs or product candidates because these costs are deployed across multiple programs and, as such, are not separately classified.

Research and development activities are central to our business model. The duration, costs and timing of clinical trials and development of a product candidate will depend on a variety of factors, including:

•

the scope, rate of progress, expense and results of clinical trials of the product candidates that we are developing and other research and development activities that we have conducted;

•

uncertainties in clinical trial design and patient enrollment rates;

•

significant and changing government regulation and regulatory guidance;

•

the timing and receipt of any marketing approvals; and

•

the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

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 another regulatory authority were to require us to conduct clinical trials beyond those that we anticipated would be required for the completion of clinical development of a product candidate, or if we experience significant trial delays due to patient enrollment or other reasons, we could be required to expend significant additional financial resources and time on the completion of clinical development.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance and corporate and administrative functions. General and administrative expenses are comprised of professional fees associated with being a public company including costs of accounting, auditing, legal, regulatory, tax and consulting services associated with maintaining compliance with exchange listing and the SEC requirements, director and officer insurance costs; and both public and investor relations costs. General and administrative expenses also include legal fees relating to patent and corporate matters; legal and other professional fees relating to our strategic process; other insurance costs; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

Other (Expense) Income, net

Interest and Other Income

Interest income consists of interest income earned on our cash and cash equivalents. Historically, our interest income had not been significant due to low investment balances and low interest earned on those balances. We anticipate that our interest income will fluctuate in the future in response to our cash and cash equivalents and the interest rate environment.

Other (expense) income, net consists of the income recognized under the Option Agreement with Advancium, gains or losses recognized from non-routine items such as accretion on short-term investments, and gains or losses recognized from foreign currency transactions, original issue discount, or OID, related to the PPA, the promissory notes, and the disposal of fixed assets.

We anticipate that our interest income and investment accretion will fluctuate in the future in response to our then-current cash and cash equivalents, and then-current interest rates.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,						Increase
	2026			2025			(Decrease)
	(in thousands)
Operating expenses:
Research and development		3,073			3,054			19
General and administrative		2,157			2,555			(398	)
Total operating expenses		5,230			5,609			(379	)
Loss from operations		(5,230	)		(5,609	)		379
Other income, net		(608	)		108			(716	)
Net loss	$	(5,838	)	$	(5,501	)	$	(337	)

Research and Development Expenses

Research and development expenses for the three months ended March 31, 2026 were $3.1 million, compared to $3.1 million for the three months ended March 31, 2025. Direct research and development services costs increased $0.1 million, which is offset by the decrease of $0.1 million in employee and related expenses, as compared to the three months ended March 31, 2025.

General and Administrative Expenses

General and administrative expenses were $2.2 million for the three months ended March 31, 2026, compared to $2.6 million for the three months ended March 31, 2025. The decrease of $0.4 million in the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily due to decreased professional fees of $0.3 million as a result of decrease in legal expense.

Other (Expense) Income, net

Other (expense) income, net of $0.6 million for the three months ended March 31, 2026 primarily consisted of interest expense as a result of the amortization of discount on notes payable related to the promissory notes, offset by interest income in our then-current cash and cash equivalents. We anticipate that our interest income and investment accretion will fluctuate in the future in response to our then-current cash and cash equivalents, and then-current interest rates.

Liquidity and Capital Resources

Since inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our lead product candidate, LTI-03, or any future product candidates. We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials and manufacturing for our lead product candidates or any future product candidates to support potential future commercialization and providing general and administrative support for our operations, including the costs associated with operating as a public company.

As of March 31, 2026, we had cash and cash equivalents of $4.4 million. Based on our current operating plan, we believe that our existing cash and cash equivalents as of March 31, 2026, together with the net proceeds of $53.1 million received by us in the May 2026 Offering, will be sufficient to enable us to fund our planned operating expense and capital expenditure requirements into the first quarter of 2028.

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented:


	Three Months Ended March 31,
	2026			2025
	(in thousands)
Cash used in operating activities	$	(3,424	)	$	(6,175	)
Cash provided by financing activities		4,654			738
Net increase (decrease) in cash and cash equivalents	$	1,230		$	(5,437	)

Operating Activities.

During the three months ended March 31, 2026, net cash used in operating activities was $3.4 million primarily due to our net loss of $5.8 million, offset by non-cash charges of $0.8 million, and cash provided in the change in operating assets and liabilities of $1.6 million. Non-cash charges resulted primarily from net amortization of discount on notes payable of $0.6 million and stock-based compensation expense of $0.2 million. Changes in our operating assets and liabilities during the three months ended March 31, 2026 consisted primarily of a decrease of $0.1 million in prepaid expenses and other current assets, an increase of $0.2 million in accrued expenses and other current liabilities and an increase of $2.3 million in accounts payable, offset by an increase of $1.0 million in other non-current assets.

During the three months ended March 31, 2025, net cash used in operating activities was $6.2 million primarily due to our net loss of $5.5 million and cash used in the change in operating assets and liabilities of $1.0 million, offset by non-cash charges of $0.3 million. Non-cash charges resulted primarily from stock-based compensation expense of $0.3 million. Changes in our operating assets and liabilities during the three months ended March 31, 2025 consisted primarily of a decrease of $0.3 million in other long-term liabilities and accrued expenses and other current liabilities, and increase of $0.8 million in other non-current assets, and an increase of $0.1 million in prepaid expenses and other current assets, offset by an increase of $0.2 million in accounts payable.

Financing Activities.

During the three months ended March 31, 2026, net cash provided by financing activities was $4.7 million primarily due to the net proceeds of $4.3 million from our securities purchase agreements with three institutional investors in January 2026 and February 2026, and “at the market” offering programs described above.

During the three months ended March 31, 2025, net cash provided by financing activities was $0.7 million, primarily due to the sale of 317,772 shares of common stock pursuant to the Equity Distribution Agreement.

Contractual and other obligations

We enter into contracts in the normal course of business with CROs for clinical and preclinical research studies, external manufacturers for product for use in our clinical trials, and other research supplies and other services as part of our operations. These contracts generally provide for termination on notice, and therefore are cancelable contracts.


Delaware		13-4196017
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

12407 N. Mopac Expy. Suite 250 #390 Austin, TX		78758
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value per share	RNTX	The Nasdaq Capital Market


		Page
PART I.	FINANCIAL INFORMATION		4
Item 1.	Financial Statements (Unaudited)		4
	Condensed Consolidated Balance Sheets		4
	Condensed Consolidated Statements of Operations and Comprehensive Loss		5
	Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity		6
	Condensed Consolidated Statements of Cash Flows		7
	Notes to Condensed Consolidated Financial Statements		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		29
Item 4.	Controls and Procedures		29
PART II.	OTHER INFORMATION		31
Item 1A.	Risk Factors		31
Item 5.	Other Information		31
Item 6.	Exhibits		31
	Signatures		33


Exhibit Number		Description

3.1		Restated Certificate of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 11, 2021).

3.2		Certificate of Amendment of Restated Certificate of Incorporation of the Registrant, dated as of November 10, 2022 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 10, 2022).

3.3		Certificate of Amendment of Restated Certificate of Incorporation of the Registrant, dated February 28, 2024 (incorporated by reference to Exhibit 3.3 of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2024).

3.4		Certificate of Amendment to Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 10, 2025).

3.5		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 10, 2025).

4.1		Form of Unsecured Promissory Note (incorporated by reference from Company’s Current Report on Form 8-K filed on March 2, 2026)

10.1		Form of Securities Purchase Agreement between the Registrant and the Investors (incorporated by reference from Company’s Current Report on Form 8-K filed on March 2, 2026)

31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


+	In accordance with Item 601(b)(10)(iv) of Regulation S-K, certain information (indicated by “[**]”) has been excluded from this exhibit because it is both not material and private or confidential. A copy of the omitted portion will be furnished to the SEC upon request.
#	Certain schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.


	Rein Therapeutics, Inc.

Date: May 15, 2026	By:	/s/ Brian Windsor, Ph.D.
		Brian Windsor, Ph.D.
		President and Chief Executive Officer (Principal Executive Officer)

Date: May 15, 2026	By:	/s/ Timothy M. Cunningham
		Timothy M. Cunningham
		Interim Chief Financial Officer (Principal Financial Officer)


*	Indicates management contract or compensatory plan.