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Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes   ☒   No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes   ☒   No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes   ☐   No   ☒

As of November 3, 2025, the registrant had 31,439,371 shares of Common Stock ($0.0001 par value) outstanding.

 

Cidara Therapeutics, Inc., or the Company, was originally incorporated in Delaware in December 2012 as K2 Therapeutics, Inc., and its name was changed to Cidara Therapeutics, Inc. in July 2014. The Company is a biotechnology company using its proprietary Cloudbreak® platform to develop drug-Fc conjugate, or DFC, therapeutics designed to save lives and improve the standard of care for patients facing serious diseases.

The Company’s most advanced Cloudbreak product candidate is CD388, a highly potent antiviral designed to deliver universal prophylaxis and treatment of seasonal and pandemic influenza, which has completed two Phase 1 studies and one Phase 2a study under a partnership with J&J Innovative Medicine, previously Janssen Pharmaceuticals, Inc., one of the Janssen Pharmaceutical Companies of Johnson & Johnson, or Janssen. On April 23, 2024, the Company and Janssen entered into a license and technology transfer agreement, or the Janssen License Agreement, under which the Company reacquired all rights for CD388 from Janssen to develop and commercialize CD388.

In June 2025, the Company announced positive topline results for its 5,041-subject, randomized, double-blind, placebo-controlled Phase 2b clinical trial, or the NAVIGATE study, evaluating the efficacy and safety of CD388 for pre-exposure prophylaxis of seasonal influenza in unvaccinated healthy subjects. The NAVIGATE study met its primary and all secondary efficacy endpoints for all dose groups. Single doses of 450mg, 300mg and 150mg of CD388 conferred 76.1%, 61.3% and 57.7% protection, respectively, from symptomatic influenza over 24 weeks compared to placebo. The placebo attack rate was 2.8% for the primary endpoint, and a clear dose response for efficacy was observed. CD388 was well-tolerated with no safety signals observed, and there were no meaningful changes in safety across the dose groups and placebo. Loss to follow-up rates were low and similar in all arms.

In September 2025, the Company initiated a global, multicenter, randomized, double-blind, placebo-controlled Phase 3 trial, or the ANCHOR study, to evaluate the safety and efficacy of CD388 administered as a one-time 450mg subcutaneous dose in adults and adolescents.

The Company formed wholly-owned subsidiaries, Cidara Therapeutics UK Limited, in England, and Cidara Therapeutics (Ireland) Limited, in Ireland, in March 2016 and October 2018, respectively, for the purpose of developing its product candidates in Europe.

The Company’s first commercially approved product in the United States, or U.S., was REZZAYO® (rezafungin for injection) which is indicated for the treatment of candidemia and invasive candidiasis in adults with limited or no alternative treatment options.

On April 24, 2024, the Company and Napp Pharmaceutical Group Limited, or Napp, an affiliate of Mundipharma Medical Company, or Mundipharma, entered into an asset purchase agreement, or the Napp Purchase Agreement, pursuant to which the Company sold to Napp all of the Company’s rezafungin assets and related contracts. The Company completed all conditions of the sale on April 24, 2024. The Company determined that the sale of rezafungin represented a strategic shift that will have a major effect on the Company’s operations and financial results. Accordingly, the sale of rezafungin is classified as discontinued operations.

The results from discontinued operations of the rezafungin assets prior and subsequent to its sale are presented as income from discontinued operations in the condensed consolidated statements of operations and comprehensive loss for all prior year periods presented, including any gain or loss recognized on closing. There were no assets and liabilities related to discontinued operations as of September 30, 2025 and December 31, 2024, as all balances were recognized in income from discontinued operations at the completion of the transaction. See Note 9 for additional information.

On April 23, 2024, the Company effected the approved 1-for-20 reverse stock split of its shares of common stock, or the Reverse Stock Split. All references in this Quarterly Report on Form 10-Q to the number of common shares, price per share and weighted average number of shares outstanding have been adjusted to reflect the Reverse Stock Split on a retroactive basis. As a result of the Reverse Stock Split, an immaterial amount was reclassified from common stock to additional paid-in capital.

The Company has a limited operating history and the sales and income potential of the Company’s business and market are unproven. The Company has experienced net losses and negative cash flows from operating activities since its inception. At September 30, 2025, the Company had an accumulated deficit of $743.7 million. The Company expects to continue to incur net losses into the foreseeable future. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support the Company’s cost structure.

The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with U.S. generally accepted accounting principles, or GAAP, as found in the Accounting Standards Codification, or ASC, of the Financial Accounting Standards Board, or FASB. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended September 30, 2025 and 2024.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. The Company evaluates its estimates and assumptions on an ongoing basis. The most significant estimates in the Company’s condensed consolidated financial statements relate to estimated collaboration expenses related to the Company’s collaboration and license agreements, certain accruals, including those related to nonclinical and clinical activities, and the stand-alone selling price of performance obligations associated with the Company’s collaboration, license, and purchase agreements. Although the estimates are based on the Company’s knowledge of current events, comparable companies, and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or CODM, which is the Chief Executive Officer of the Company. The Company views its operations and manages its business as a single reportable segment with a single operating segment.

The Company manages research and development, or R&D, activities on a consolidated basis. The Company expects to generate future revenue from a combination of license fees and other upfront payments, funded R&D agreements, milestone payments, product sales, government and other third-party funding, and royalties, which depend on the results, regulatory approval, and timing of the successful commercialization of its product candidates.

Comprehensive loss is the measure of segment profit or loss used by CODM in making decisions regarding resource allocation and assessing performance, which is also reported on the condensed consolidated statements of operations and comprehensive loss. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.

The CODM uses comprehensive loss in making decisions regarding resource allocation and evaluating financial performance.

The following table represents the results of the Company’s reportable segment for the three and nine months ended September 30, 2025 and 2024:

The settlement of certain indirect tax liabilities resulted in the reversal of zero and $9.4 million in legal liabilities during the three and nine months ended September 30, 2025, respectively, which consisted of zero and $4.2 million in indirect tax amounts that were determined not to be due and payable during the three and nine months ended September 30, 2025, respectively, and zero and $5.2 million in indirect tax interest and penalties that were determined not to be due and payable during the three and nine months ended September 30, 2025, respectively.

The Company evaluates acquisitions of assets and other similar transactions to assess whether the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen test is met, the transaction is accounted for as an asset acquisition. If the screen test is not met, further analysis is required to determine whether the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets.

The Company presents discontinued operations when there is a disposal of a component or a group of components that represents a strategic shift that will have a major effect on operations and financial results. The results from discontinued operations of the rezafungin assets prior and subsequent to its sale are presented as net income (loss) from discontinued operations in the unaudited condensed consolidated statements of operations and comprehensive loss for all periods presented, including any gain or loss recognized on closing. There were no assets and liabilities related to discontinued operations as of September 30, 2025 and December 31, 2024, as all balances were recognized in income from discontinued operations at the completion of the transaction. See Note 9 for additional information.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash and available-for-sale investments. Cash, cash equivalents and restricted cash that are deposited into checking and sweep accounts at financial institutions may, at times, exceed federally insured limits. The Company has not experienced any losses on its deposits of cash. Management believes that the Company is not currently exposed to significant credit risk as the Company’s deposits of cash and investments in debt securities (classified as either cash equivalents or available-for sale investments) are held in custody at reputable third-party financial institutions.

The Company’s investment policy limits investments to certain types of securities issued by the U.S. government, its agencies, and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash deposits and investments in debt securities. As of September 30, 2025 and December 31, 2024, the Company had no off-balance sheet concentrations of credit risk related to its cash deposits and investments in debt securities.

The Company is exposed to credit losses primarily through its investments in debt securities. The Company’s expected loss allowance methodology for its investments in debt securities is developed by reviewing the extent of the unrealized loss, the size, term, geographical location, and industry of the issuer, the issuers’ credit ratings and any changes in those ratings, as well as reviewing current and future economic market conditions and the issuers’ current status and financial condition.

The Company evaluates its available-for-sale investments for credit losses on a quarterly basis. If a decline in fair value below amortized cost is determined to be credit-related and the Company does not intend to sell the security, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the expected credit loss is recognized in earnings and the non-credit portion is recorded in other comprehensive income.

As of September 30, 2025, the Company determined that no allowance for credit losses was required for its available-for-sale investments.

The Company considers all short-term investments purchased with a maturity of three months or less when acquired to be cash equivalents. Restricted cash consists of cash held as collateral to secure a standby letter of credit as required by certain contracts.

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the condensed consolidated balance sheets to the total amount shown at the end of the applicable period in the condensed consolidated statements of cash flows:

The Company defines investments as income-yielding securities that can be readily converted to cash and classifies such investments as available-for-sale. The Company carries these securities at fair value and reports unrealized gains and losses as a separate component of accumulated other comprehensive income or loss. The cost of debt securities is adjusted for amortization of premiums to maturity, accretion of discounts to maturity, and accrued interest. Such amortization and accretion is included in interest income. Realized gains and losses and declines in securities are included in other income or expense. The cost of securities sold is based on the specific identification method. Interest and dividends on available-for-sale securities are included in interest income. Generally, investments with original maturities beyond three months at the date of purchase and which mature at, or less than twelve months from the condensed consolidated balance sheet date are considered short-term investments, with all others considered to be long-term investments.

Accounts receivable is stated at the original invoice amount and consists of indirect taxes collectible from customers and amounts billable under the BARDA Agreement (as defined below). The Company records accounts receivable net of any allowances for doubtful accounts for potential credit losses. An allowance for doubtful accounts is determined based on the financial condition and creditworthiness of customers and the Company considers economic factors and events or trends expected to affect future collections experience. Any allowance would reduce the net receivables to the amount that is expected to be collected. The payment history of the Company’s customers is considered in future assessments of collectability as these patterns are established over a longer period of time. The Company did not record any credit losses as of September 30, 2025 or December 31, 2024.

The Company records property and equipment at cost, which consists of laboratory equipment, computer equipment and software, office equipment, furniture and fixtures and leasehold improvements. Property and equipment is depreciated using the straight-line method over the estimated useful lives (generally three to seven years). Leasehold improvements are amortized over the lesser of their useful life or the remaining lease term, including any renewal periods that are deemed to be reasonably assured. Repair and maintenance costs are expensed as incurred.

In accordance with Accounting Standards Codification, or ASC, 842, Leases, or ASC 842, the Company determines if a contract contains a lease at inception and recognizes finance lease right-of-use assets and finance lease liabilities based on the present value of the future minimum lease payments at the commencement date. The implicit rate within the Company’s finance lease was determinable and therefore used in determining the present value of future payments at the commencement date. Lease agreements that have lease and non-lease components are accounted for as a single lease component.

The Company recognizes amortization of the right-of-use assets and interest on the lease liabilities for its finance lease. Finance lease right-of-use assets are amortized on a straight-line basis from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. However, if the lease transfers ownership of the underlying asset to the lessee or the lessee is reasonably certain to exercise an option to purchase the underlying asset, the right-of-use assets are amortized to the end of the useful life of the underlying asset.

In accordance with ASC 842, the Company determines if a contract contains a lease at inception and recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As the Company’s operating leases do not provide an implicit rate, management develops incremental borrowing rates based on the information available at the commencement date in determining the present value of future payments. Lease agreements that have lease and non-lease components are accounted for as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

The Company reports deferred income taxes in accordance with ASC 740, Income Taxes, or ASC 740. ASC 740 requires a company to recognize deferred tax assets and liabilities for expected future income tax consequences of events that have been recognized in the Company’s condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in the years in which the temporary differences are expected to reverse. Valuation allowances are provided if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions pursuant to ASC 740, which prescribes a recognition threshold and measurement process for financial statement recognition of uncertain tax positions taken or expected to be taken in a tax return. If the tax position meets this threshold, the benefit to be recognized is measured as the tax benefit having the highest likelihood of being realized upon ultimate settlement with the taxing authority. The Company recognizes interest accrued related to unrecognized tax benefits and penalties in the provision for income taxes.

The Company’s purchases of clinical drug supplies and raw materials, inventory transfers, and sales of commercial drug product were subject to indirect taxation in various jurisdictions outside of the U.S. Indirect tax payable is included in accrued indirect tax liabilities, the related expense was included in R&D expenses within discontinued operations. Prior to the sale of rezafungin, the related interest and penalties were included in selling, general and administrative, or SG&A, expenses within discontinued operations. Subsequent to the sale of rezafungin, the Company retained the liability as part of its continuing operations and continued interest expense is included in general and administrative, or G&A, expenses in continuing operations. The accrual is for the indirect tax incurred in various tax jurisdictions outside of the U.S. as a consequence of the Company’s supply chain activities or in connection with commercial sales of REZZAYO. When any accrued indirect taxes are determined to not be due and payable, then any associated liabilities and operating expenses are reversed as part of continuing operations at that time. Indirect tax amounts on the rezafungin asset transfer that can be billed to and recovered from our customers are included in accounts receivable.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, or ASC 606, which applies to all contracts with customers, except for elements of certain contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. In a contract with multiple performance obligations, the Company must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation, which determines how the transaction price is allocated among the performance obligations. The estimation of the stand-alone selling price(s) may include estimates regarding forecasted revenues or costs, development timelines, discount rates, and probabilities of technical and regulatory success. The Company evaluates each performance obligation to determine if it can be satisfied at a point in time or over time. Any change made to estimated progress towards completion of a performance obligation and, therefore, revenue recognized will be recorded as a change in estimate. In addition, variable consideration must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price.

If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in a contract, the Company recognizes revenues from the transaction price allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from the allocated transaction price. The Company evaluates the measure of progress at each reporting period and, if necessary, adjusts the measure of performance and related revenue or expense recognition as a change in estimate.

At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being reached. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or a collaboration partner’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of milestones that are within its or a collaboration partner’s control, such as operational development milestones and any related constraint, and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which will affect collaboration revenues and earnings in the period of adjustment. Revisions to the Company’s estimate of the transaction price may also result in negative collaboration revenues and earnings in the period of adjustment.

For arrangements that include sales-based royalties, including commercial milestone payments based on the level of sales, and a license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied, or partially satisfied.

See Note 6 and Note 9 for additional information.

Contracts with government agencies, including cost reimbursement contracts, are assessed to determine if the contract should be accounted for as an exchange transaction or a contribution. A government contract is accounted for as a contribution if the government agency does not receive commensurate value in return for the assets transferred. GAAP does not contain authoritative accounting standards for contracts provided by government agencies to a for-profit entity. Absent authoritative accounting standards, interpretative guidance issued and commonly applied by financial statement preparers allows for the selection of accounting policies amongst acceptable alternatives.

On September 30, 2025, the Company entered into a contract with the Biomedical Advanced Research and Development Authority, or BARDA, part of the U.S. Department of Health and Human Services’ Administration for Strategic Preparedness and Response, or the BARDA Agreement, which is a cost-reimbursement type contract. The Company has evaluated the terms of the BARDA Agreement to assess its obligations and the classification of cost reimbursements receivable. The Company determined that the BARDA Agreement is not an exchange contract but a contribution and it is most appropriate to account for cost reimbursements as a reduction to R&D expense or G&A expense in the condensed consolidated statements of operations and comprehensive loss, as the qualified direct and indirect costs and fixed fees are incurred.

The Company will invoice BARDA for indirect costs using the provisional rates as stated in the BARDA Agreement, which are subject to future audits at the discretion of BARDA. These audits could result in an adjustment to the reduction to R&D expense or G&A expense previously recorded, which adjustments could be potentially significant.

R&D expenses consist of wages, benefits and stock-based compensation charges for R&D employees, scientific consultant fees, third-party laboratories, facilities and overhead expenses, manufacturing expenses in preclinical development and certain manufacturing expenses before FDA approval, nonclinical and clinical trial costs, and indirect taxes on clinical supplies and development materials. The Company accrues nonclinical and clinical trial expenses based on work performed, which relies on estimates of total costs incurred based on patient enrollment, completion of studies, and other events. Costs incurred in purchasing technology assets and intellectual property are charged to R&D expense if the technology has not been conclusively proven to be feasible and has no alternative future use.

G&A expenses relate to finance, human resources, legal and other administrative activities. G&A expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance, legal, business development, commercial planning and support functions. Other G&A expenses include facility and overhead costs not otherwise included in R&D expenses, consultant expenses, travel expenses, professional fees for auditing, tax, legal, and other services, and any accrued interest and penalties on accrued indirect tax liabilities.

The Company makes estimates of its accrued expenses as of each balance sheet date in the financial statements based on the facts and circumstances known at that time. Accrued expenses for preclinical studies and clinical trials are based on estimates of costs incurred and fees that may be associated with services provided by contract research organizations, or CROs, clinical trial investigational sites and other clinical trial-related activities. Payments under certain contracts with such parties depend on factors such as successful enrollment of patients, site initiation and the completion of clinical trial milestones. In accruing for these services, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If possible, the Company obtains information regarding unbilled services directly from these service providers. However, the Company may be required to estimate these services based on other available information. If the Company underestimates or overestimates the activities or fees associated with a study or service at a given point in time, adjustments to R&D expenses may be necessary in future periods. Historically, estimated accrued liabilities have approximated actual expense incurred. Subsequent changes in estimates may result in a material change in accruals.

The Company accounts for stock-based compensation expense related to stock options, restricted stock units, or RSUs, and 2015 Employee Stock Purchase Plan, or ESPP, rights by estimating the fair value on the date of grant. The Company estimates the fair value of stock options granted to employees and non-employees using the Black-Scholes option pricing model. The fair value of RSUs granted to employees is estimated based on the closing price of the Company’s common stock on the date of grant.

The assumptions included in the Black-Scholes option pricing model include (a) the risk-free interest rate, (b) the expected volatility of the Company’s stock, (c) the expected term of the award, and (d) the expected dividend yield. The Company computed the expected volatility data using the daily close prices for the Company’s common stock during the equivalent period of the calculated expected term of the Company’s stock-based awards. The Company estimated the expected life of employee stock options using the “simplified” method, whereby the expected life equals the average of the vesting term and the original contractual term of the option. The risk-free interest rates for periods within the expected life of the option are based on the yields of zero-coupon U.S. treasury securities. The expected dividend yield of zero reflects that the Company has not paid cash dividends since inception and does not intend to pay cash dividends in the foreseeable future.

For awards subject to time-based vesting conditions, including those with a graded vesting schedule, stock-based compensation expense is recognized using the straight-line method.

The Company recognizes forfeitures related to stock-based compensation as they occur and any compensation cost previously recognized for awards for which the requisite service has not been completed is reversed in the period that the award is forfeited.

The Company follows the guidance in ASC 260, Earnings Per Share, or ASC 260, which establishes standards regarding the computation of earnings per share, or EPS, by companies that have issued securities other than common stock that contractually entitle the holder to participate in dividends and earnings of a company. The guidance requires earnings to be hypothetically allocated between the common, preferred, and other participating stockholders based on their respective rights to receive non-forfeitable dividends, whether or not declared. Participating securities include Series A Convertible Voting Preferred Stock, or Series A Convertible Preferred Stock, Series X Convertible Preferred Stock, and pre-funded warrants, see Note 4 for additional information. Basic net EPS is then calculated by dividing the net income attributable to common stockholders (after the reduction for any preferred stock and assuming current income for the period had been distributed) by the weighted-average number of common shares outstanding for the period. The Company calculates diluted net EPS by using the more dilutive of the (1) treasury stock method, reverse treasury stock method or if-converted method, as applicable, or (2) the two-class method. Dilutive common stock equivalents are comprised of warrants (excluding pre-funded warrants), Series A Convertible Preferred Stock, Series X Convertible Preferred Stock, RSUs and options outstanding under the Company’s stock option plans and ESPP, on an as converted basis.

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. Diluted net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and dilutive stock equivalents outstanding for the period determined using the treasury stock method or if-converted method. Under the two-class method, the net loss attributable to common stockholders is not allocated to the Series A Convertible Preferred Stock or the Series X Convertible Preferred Stock as the preferred stockholders do not have a contractual obligation to share in the Company’s losses. In loss periods, basic and diluted net loss per share are identical because the otherwise dilutive potential common shares become anti-dilutive and are therefore excluded.

In accordance with ASC 260, if a company had a discontinued operation, the Company uses income (loss) from continuing operations as its control number to determine whether potential common shares are dilutive or anti-dilutive for purposes of reporting basic and diluted net earnings (loss) per common share from discontinued operations.

As discussed in Note 4, as part of its November 2024 Private Placement (as defined below), the Company issued and sold pre-funded warrants to purchase up to an aggregate of 3,149,035 shares of common stock at a purchase price of $14.9119 per pre-funded warrant (representing the $14.912 per share purchase price less the exercise price of $0.0001 per pre-funded warrant share). Since the $0.0001 exercise price per pre-funded warrant share represents little consideration and is non-substantive in relation to the purchase price of $14.9119 per pre-funded warrant, and as the pre-funded warrants are exercisable at any time after their original issuance with no further vesting conditions or contingencies associated with them, the shares underlying the pre-funded warrants are therefore included in the calculation of basic net loss per common share.

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of basic and diluted net loss per share because doing so would be anti-dilutive (in common stock equivalent shares):

The Company follows ASC 820-10, Fair Value Measurements and Disclosures, or ASC 820-10, with respect to fair value reporting for financial assets and liabilities. The guidance defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance does not apply to measurements related to share-based payments. The guidance discusses valuation techniques such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, accrued compensation and benefits, and lease liabilities. The carrying amount of these financial instruments are generally considered to be representative of their respective fair values because of their short-term nature.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date.

In December 2023, the FASB issued Accounting Standards Update, or ASU, 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company plans to adopt this guidance for the fiscal year ending December 31, 2025, and believes, based on its preliminary assessment, that this new guidance will not have a material impact on the Company’s condensed consolidated financial statements or related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is currently evaluating the impact that the adoption of this ASU will have on its condensed consolidated financial statements.

The Company believes, based on its preliminary assessment, that any other recently issued, but not yet adopted, accounting pronouncements will not have a material impact on the Company’s condensed consolidated financial statements or related disclosures, or do not apply to the Company.

The Company follows ASC 820-10, which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement determined based on assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions, which reflect those that a market participant would use.

The following tables summarize the Company’s Level 1 and Level 2 financial assets measured at fair value on a recurring basis (in thousands):

The Company classifies investments in U.S. Treasury bills, U.S. Treasury notes and money market funds within Level 1 as the prices are available from quoted prices in active markets.

The Company classifies investments in agency bonds, agency discount notes, corporate bonds and commercial paper within Level 2 because they are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. The Company obtains the fair value of its Level 2 investments from third-party pricing services. The pricing services utilize industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable. The Company validates the prices provided by the third-party pricing services by reviewing their pricing methods and matrices and obtaining market values from other pricing sources. The Company did not adjust or override any fair value measurements provided by these pricing services as of September 30, 2025.

The Company recognized total net unrealized losses of $0.1 million and zero during the three and nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, no securities have contractual maturities of longer than two years.

None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

On June 26, 2025, the Company completed an underwritten public offering with J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Guggenheim Securities, LLC and Cantor Fitzgerald & Co., or Cantor, or the underwriters, pursuant to which it issued and sold an aggregate of 9,147,727 shares of its common stock, which includes the exercise in full by the underwriters of their option to purchase an additional 1,193,181 shares of common stock, each at a price of $44.00 per share, or the 2025 Public Offering. The total gross proceeds from the 2025 Public Offering were approximately $402.5 million, before deducting underwriting discounts and commissions and offering expenses. The Company received total net proceeds of approximately $376.9 million, after deducting underwriting discounts, commissions, and offering expenses payable by the Company.

On May 8, 2025, the Company entered into an Open Market Sale AgreementSM, or the Jefferies Sales Agreement, with Jefferies LLC, or Jefferies, under which the Company may offer and sell, from time to time at its sole discretion, shares of the Company’s common stock through Jefferies as the Company’s sales agent. On May 8, 2025, the Company filed a sales agreement prospectus with the Securities and Exchange Commission, or SEC, covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $150.0 million of the Company’s common stock under the Jefferies Sales Agreement, which was declared effective by the SEC on May 15, 2025, or ATM Prospectus. During the nine months ended September 30, 2025, the Company sold 177,121 shares of common stock, at a weighted average sale price of $24.05 per share, for net proceeds of approximately $4.1 million after deducting sales agent fees. On June 24, 2025, the Company delivered written notice to Jefferies that it was suspending and terminating the ATM Prospectus. The Company will not make any sales of its common stock pursuant to the Jefferies Sales Agreement, unless and until a new prospectus or prospectus supplement is filed with the SEC. Other than the termination of the ATM Prospectus, the Jefferies Sales Agreement remains in full force and effect.

On November 20, 2024, the Company entered into a securities purchase agreement with certain institutional accredited investors, pursuant to which the Company issued and sold, in a private placement, or the November 2024 Private Placement, (i) an aggregate of 3,892,274 shares of the Company’s common stock at a purchase price of $14.912 per share, and (ii) in lieu of shares of common stock to certain investors, pre-funded warrants to purchase up to an aggregate of 3,149,035 shares of common stock at a purchase price of $14.9119 per pre-funded warrant (representing the $14.912 per share purchase price less the exercise price of $0.0001 per pre-funded warrant share). The pre-funded warrants are exercisable at any time after their original issuance and will not expire. The closing of the November 2024 Private Placement took place on November 26, 2024, and the Company received total gross proceeds of $105.0 million. The Company received total net proceeds of approximately $98.2 million, after deducting issuance costs payable by the Company.

On April 23, 2024, the Company entered into a securities purchase agreement with certain institutional and other accredited investors, pursuant to which the Company issued and sold, in a private placement, or the April 2024 Private Placement, 240,000 shares of Series A Convertible Preferred Stock at a purchase price of $1,000 per share. The closing of the April 2024 Private Placement took place on April 24, 2024, and the Company received total gross proceeds of $240.0 million. The Company received total net proceeds of approximately $239.1 million, after deducting issuance costs payable by the Company.

Under the Company’s amended and restated certificate of incorporation, as amended, the Company’s board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding. The Company had 10,000,000 shares of preferred stock authorized at September 30, 2025.

In April 2024, the Company designated 240,000 shares of preferred stock as Series A Convertible Preferred Stock with a par value of $0.0001 per share.

In July 2024, the Company’s stockholders approved, for purposes of Nasdaq Listing Rule 5635(b), the issuance of up to 16,800,000 shares of common stock upon conversion of 240,000 shares of Series A Convertible Preferred Stock issued in the April 2024 Private Placement.

In July 2024, the Company issued 2,469,250 shares of common stock upon the automatic conversion of 35,275 shares of Series A Convertible Preferred Stock, subject to the terms and limitations contained in the Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Voting Preferred Stock, or Series A Certificate of Designation, including that shares of Series A Convertible Preferred Stock shall not be convertible if the conversion would result in a holder beneficially owning more than 9.99% of the Company’s outstanding shares of common stock as of the applicable conversion date.

During the nine months ended September 30, 2025, 84,813 shares of Series A Convertible Preferred Stock were converted to an aggregate of 5,936,910 shares of the Company’s common stock.

After conversion, the converted shares of Series A Convertible Preferred Stock resumed the status of authorized but unissued shares of preferred stock and are no longer designated as Series A Convertible Preferred Stock.

As of September 30, 2025 and December 31, 2024, preferred stock designated as Series A Convertible Preferred Stock totaled 119,912 shares and 204,725 shares, respectively.

The specific terms of the Series A Convertible Preferred Stock are as follows:

Conversion: Each share of Series A Convertible Preferred Stock is convertible at the option of the holder into 70 shares of common stock. Holders are not permitted to convert Series A Convertible Preferred Stock into common stock if, after conversion, the holder, its affiliates, and any other person whose beneficial ownership of common stock would be aggregated with the holder’s for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after the conversion.

Dividends: Holders of Series A Convertible Preferred Stock are not entitled to receive any dividends except to the extent that dividends are paid on the Company’s common stock. If dividends are paid on shares of common stock, holders of Series A Convertible Preferred Stock are entitled to participate in such dividends on an as-if-converted basis.

Liquidation: Upon the liquidation, dissolution, or winding up of the Company, each holder of Series A Convertible Preferred Stock will participate pari passu with any distribution of proceeds to holders of Series X Convertible Preferred Stock and common stock.

Voting: Holders of the Series A Convertible Preferred Stock are entitled to vote together with the holders of common stock on an as-if-converted basis on all matters submitted to a vote of stockholders; provided that holders of Series A Convertible Preferred Stock are not permitted to vote with respect to matters submitted to a vote of stockholders, to the extent that after giving effect to such action, such holder, its affiliates, and any other person whose beneficial ownership of common stock would be aggregated with the holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after the action. In addition, the consent of the holders of at least 65% of the outstanding Series A Convertible Preferred Stock, voting together as a single class, will be required to alter or change adversely the powers, preferences or rights given to the Series A Convertible Preferred Stock or alter or amend the Series A Certificate of Designation.

The Company evaluated the Series A Convertible Preferred Stock for liability or equity classification under ASC 480, Distinguishing Liabilities from Equity, and determined that equity treatment is appropriate as it does not meet the criteria for liability accounting. Additionally, the Series A Convertible Preferred Stock is not redeemable for cash or other assets (i) on a fixed or determinable date, (ii) at the option of the holder, and (iii) upon the occurrence of an event that is not solely within control of the Company. As such, the Series A Convertible Preferred Stock is recorded as permanent equity.

In May 2018, the Company designated 5,000,000 shares of preferred stock as Series X Convertible Preferred Stock with a par value of $0.0001 per share.

During the year ended December 31, 2020, 52,241 shares of Series X Convertible Preferred Stock were converted to an aggregate of 26,120 shares of the Company’s common stock.

During the nine months ended September 30, 2025, 2,104,472 shares of Series X Convertible Preferred Stock were converted to an aggregate of 1,052,235 shares of the Company’s common stock.

After conversion, the converted shares of Series X Convertible Preferred Stock resumed the status of authorized but unissued shares of preferred stock and are no longer designated as Series X Convertible Preferred Stock.

As of September 30, 2025 and December 31, 2024, preferred stock designated as Series X Convertible Preferred Stock totaled 2,843,287 shares and 4,947,759 shares, respectively.

The specific terms of the Series X Convertible Preferred Stock are as follows:

Conversion: Each share of Series X Convertible Preferred Stock is convertible at the option of the holder into 0.5 shares of common stock. Holders are not permitted to convert Series X Convertible Preferred Stock into common stock if, after conversion, the holder, its affiliates, and any other person whose beneficial ownership of common stock would be aggregated with the holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after the conversion.

Dividends: Holders of Series X Convertible Preferred Stock are not entitled to receive any dividends except to the extent that dividends are paid on the Company’s common stock. If dividends are paid on shares of common stock, holders of Series X Convertible Preferred Stock are entitled to participate in such dividends on an as-converted basis.

Liquidation: Upon the liquidation, dissolution, or winding up of the Company, each holder of Series X Convertible Preferred Stock will participate pari passu with any distribution of proceeds to holders of Series A Convertible Preferred Stock and common stock.

Voting: Shares of Series X Convertible Preferred Stock will generally have no voting rights, except as required by law and except that the consent of the holders of a majority of the outstanding Series X Convertible Preferred Stock will be required to amend the terms of the Series X Convertible 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 Convertible Preferred Stock, or to increase or decrease (other than by conversion) the number of authorized shares of Series X Convertible Preferred Stock.

The Company evaluated the Series X Convertible Preferred Stock for liability or equity classification under ASC 480, Distinguishing Liabilities from Equity, and determined that equity treatment was appropriate because the Series X Convertible Preferred Stock did not meet the definition of liability instruments defined thereunder as convertible instruments. Additionally, the Series X Convertible Preferred Stock is not redeemable for cash or other assets (i) on a fixed or determinable date, (ii) at the option of the holder, and (iii) upon the occurrence of an event that is not solely within control of the Company. As such, the Series X Convertible Preferred Stock is recorded as permanent equity.

On April 23, 2024, the Company effected the Reverse Stock Split of its shares of common stock and decreased its authorized number of shares of common stock from 200,000,000 shares to 20,000,000 shares.

On July 18, 2024, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized number of shares of common stock from 20,000,000 shares to 50,000,000 shares, which amendment was filed by the Company with the Secretary of State of the State of Delaware on July 18, 2024 and was effective as of such date.

On June 18, 2025, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized number of shares of common stock from 50,000,000 shares to 100,000,000 shares, which amendment was filed by the Company with the Secretary of State of the State of Delaware on June 18, 2025 and was effective as of such date.

The Company had 100,000,000 shares of common stock authorized as of September 30, 2025. Holders of outstanding shares of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the holders of common stock. Subject to the rights of the holders of any class of the Company’s capital stock having any preference or priority over common stock, the holders of common stock are entitled to receive dividends that are declared by the Company’s board of directors out of legally available funds. In the event of a liquidation, dissolution or winding-up, the holders of common stock are entitled to share ratably in the net assets remaining after payment of liabilities, subject to prior rights of preferred stock, if any, then outstanding. The common stock has no preemptive rights, conversion rights, redemption rights or sinking fund provisions, and there are no dividends in arrears or default. All shares of common stock have equal distribution, liquidation and voting rights, and have no preferences or exchange rights.

As of September 30, 2025, (i) warrants to purchase up to an aggregate of 866 shares of the Company’s common stock were outstanding, each with an exercise price of $230.95 per share and (ii) pre-funded warrants to purchase up to an aggregate of 1,286,786 shares of the Company’s common stock were outstanding, each with an exercise price of $0.0001 per share. During the nine months ended September 30, 2025, pre-funded warrants to purchase up to 1,862,249 shares of common stock were cashless exercised resulting in the issuance of 1,862,229 shares of the Company’s common stock and immaterial cash payments by the Company in lieu of fractional shares.

As of December 31, 2024, (i) warrants to purchase up to an aggregate of 866 shares of the Company’s common stock were outstanding, each with an exercise price of $230.95 per share and (ii) pre-funded warrants to purchase up to an aggregate of 3,149,035 shares of the Company’s common stock were outstanding, each with an exercise price of $0.0001 per share.

The warrants had no intrinsic value as of September 30, 2025 and December 31, 2024, and the pre-funded warrants had a total aggregate intrinsic value of $123.2 million and $84.6 million as of September 30, 2025, and December 31, 2024, respectively. The intrinsic value of a warrant and pre-funded warrant exercisable for common stock is the difference between the market price of the common stock at the measurement date and the exercise price of the warrant.

Common stock reserved for future issuance is as follows (in common stock equivalent shares):

In May 2024, the Company’s board of directors approved and adopted and in July 2024, the Company’s stockholders approved the Company’s 2024 Equity Incentive Plan, which was amended in June 2025, or 2024 EIP. The 2024 EIP is the successor to and continuation of the Company’s 2015 Equity Incentive Plan, or 2015 EIP, previously approved and adopted in March 2015 by the Company’s board of directors and stockholders. The 2024 EIP became effective on July 18, 2024. Upon the effectiveness of the 2024 EIP, no additional awards were or will be granted under the 2015 EIP, although all outstanding stock awards granted under the 2015 EIP continue to be governed by the terms of the 2015 EIP. Under the 2024 EIP, the Company may grant stock options, stock appreciation rights, restricted stock, RSUs, and other awards to individuals who are employees, officers, directors or consultants of the Company.

In December 2020, the Company’s board of directors approved and adopted the 2020 Inducement Incentive Plan, which was most recently amended in February 2025, or 2020 IIP. Under the 2020 IIP, the Company may grant stock options, stock appreciation rights, restricted stock, RSUs, and other awards to individuals who were not previously employees or directors of the Company, or who are returning to employment following a bona fide period of non-employment with the Company, as an inducement material to such persons entering into employment with the Company.

Terms of stock award agreements, including vesting requirements, are determined by the board of directors (or the compensation and human capital committee thereof), subject to the provisions of the 2024 EIP, 2020 IIP and 2015 EIP. Stock options granted by the Company generally vest over a three- or four-year period. Certain stock options are subject to acceleration of vesting in the event of certain change of control transactions. The stock options may be granted for a term of up to 10 years from the date of grant. The exercise price for stock options granted under the 2024 EIP, 2020 IIP and 2015 EIP must be at a price no less than 100% of the fair value of the shares on the date of grant, provided that for an incentive stock option granted to an employee who at the time of grant owns stock representing more than 10% of the voting power of all classes of stock of the Company, the exercise price shall be no less than 110% of the value on the date of grant.

In March 2015, the Company’s board of directors and stockholders approved and adopted the ESPP.

The ESPP allows substantially all employees to purchase the Company’s common stock through a payroll deduction at a price equal to 85% of the lower of the fair market value of the stock as of the beginning or the end of each purchase period. An employee’s payroll deductions under the ESPP are limited to 15% of the employee’s eligible compensation.

During the nine months ended September 30, 2025 and 2024, 3,242 shares and 7,050 shares, respectively, were issued pursuant to the ESPP. As of September 30, 2025, total unrecognized compensation expense related to the ESPP was immaterial and is expected to be recognized over approximately 0.5 years.

The following table summarizes RSU activity during the nine months ended September 30, 2025:

The weighted-average grant date fair value of RSUs granted by the Company during the nine months ended September 30, 2024 was $12.30 per share. The total fair value of RSUs vested during the nine months ended September 30, 2025 and 2024 was approximately $0.9 million and $1.0 million, respectively.

As of September 30, 2025, total unrecognized share-based compensation expense related to unvested RSUs was approximately $6.1 million. This unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2.6 years.

The following table summarizes stock option activity during the nine months ended September 30, 2025:

The intrinsic value of a stock option is the difference between the market price of the common stock at the measurement date and the exercise price of the option.

The weighted-average grant date fair value of stock options granted by the Company during the nine months ended September 30, 2025 and 2024 was $17.13 and $8.05 per share, respectively.

As of September 30, 2025, total unrecognized share-based compensation expense related to unvested stock options was approximately $20.8 million. This unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2.2 years.

Stock-based compensation expense recognized for RSUs, stock options, and the ESPP has been reported in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

On September 30, 2025, the Company entered into the BARDA Agreement to support expanded manufacturing and clinical development of CD388. The BARDA Agreement is a hybrid cost reimbursement contract with cost plus fixed-fee and cost share contract line item numbers.

Effective Date and Initial Term. The BARDA Agreement has an initial term that commenced on September 30, 2025, and extends through September 29, 2027, or the base period, which may be extended by mutual agreement of the Company and BARDA.

Base Period. The objective of the base period is to (a) evaluate the effectiveness of CD388 as a long-lasting prophylactic antiviral drug candidate for the long-term prevention of health impacts from both seasonal influenza and influenza strains of pandemic potential through comprehensive nonclinical testing; (b) establish a robust and secure domestic manufacturing infrastructure for CD388 by transferring production processes to a U.S.-based contract development and manufacturing organization; and (c) perform a bridging safety/PK clinical trial in healthy adults 18-64 years old to support higher concentration formulation of CD388.

Option Periods. There are nine option periods that can be exercised by BARDA, provided that the total duration of the BARDA Agreement shall not extend beyond July 3, 2030. No options have been exercised as of September 30, 2025.

Termination. The BARDA Agreement is terminable by BARDA or the Company at any time for any reason with 60 days’ prior written notice, following consultation between the parties, or by BARDA for cause, if the Company materially fails to comply with the provisions of the BARDA Agreement (subject to a standard cure period). In the case of termination other than for cause, certain termination costs incurred by the Company may be reimbursable by BARDA.

Financial Terms. The BARDA Agreement provides for potential total investments by BARDA of up to $339.2 million. BARDA estimates that it will pay the Company approximately $58.1 million initially over the base period, to support the onshoring of CD388 manufacturing to the U.S. as an addition to the initial commercial supply chain and conduct a clinical trial to demonstrate the comparability of a higher-concentration formulation and different presentations of CD388, further characterize its activity against pandemic influenza strains in non-clinical models and initiate the development of clinical trial protocols for expanded populations. The balance of the award is subject to BARDA exercising the up to nine options and would support additional clinical and non-clinical studies of CD388 in specific populations, as a complement to the Company’s plans for a potential Biologics License Application submission to the FDA, and consists of up to $281.1 million for up to such nine options. In addition, the Company may be responsible for up to $192.3 million for the Company’s portion of cost sharing applicable to up to a certain three of such options.

Estimated Value of the Contract for the Base Period. The base period of the BARDA Agreement includes an estimated $58.1 million payment for cost reimbursements of qualified direct and indirect costs and a fixed fee. The Company’s cost share for the base period of the BARDA Agreement is zero.

As of September 30, 2025, the Company recorded no accounts receivable associated with the BARDA Agreement.

During the three and nine months ended September 30, 2025, the Company recognized no amounts in R&D expense or G&A expense related to the BARDA agreement in the condensed consolidated statements of operations and comprehensive loss.

On April 23, 2024, the Company reacquired all rights to develop and commercialize CD388 when the Company and Janssen entered into the Janssen License Agreement, which also effectively terminated the Janssen Collaboration Agreement (as defined below), including the license granted by the Company to Janssen.

Under the Janssen License Agreement, the Company assumed responsibility for further clinical development, manufacture, registration and commercialization of DFCs based on the Company’s Cloudbreak platform for the prevention and treatment of influenza, including CD388 and products or compounds containing CD388. Janssen granted the Company an exclusive, worldwide, fee-bearing royalty-free license for certain Janssen-controller technology to develop, manufacture, and commercialize compounds and products, including CD388. Janssen agreed to (i) transfer and disclose to the Company certain Janssen-controlled know-how related to CD388, including manufacturing know-how, data and documentation, (ii) transfer all existing quantities of CD388 clinical materials, and (iii) transfer the cell banks used by or on behalf of Janssen for the production of CD388. The Janssen License Agreement includes standard termination provisions upon material breach or insolvency.

The Company paid Janssen an upfront payment of $85.0 million on April 24, 2024. The Company is also obligated to pay Janssen up to $150.0 million in development and regulatory milestone payments and up to $455.0 million in commercialization milestone payments, with respect to CD388. The Company has no obligation to pay any royalties to Janssen for future sales of any commercialized CD388 product. The Company’s contingent future obligation to pay Janssen with respect to CD388 will be recognized if and when the contingency is resolved and the consideration is paid or becomes payable.

As the Company had an existing license and collaboration agreement with Janssen, or the Janssen Collaboration Agreement, the Company considered the contract modification and consideration payable to a customer guidance in ASC 606. The Company determined this bundled arrangement would be accounted for as a termination of the existing revenue contract and the creation of a new arrangement. No amounts paid or payable to Janssen were recorded against revenue as the consideration payable to Janssen does not exceed the fair value of the distinct assets acquired in the Janssen License Agreement.

In accordance with authoritative guidance, the Company was determined to be the accounting acquirer and substantially all of the fair value of the gross assets acquired is concentrated in the acquired in-process research and development, or IPR&D, of CD388. The reacquired license to develop, manufacture, and commercialize activities of CD388 is part of the acquired IPR&D. The transaction was accounted for as an asset acquisition. The acquired IPR&D did not have an alternative future use as of the acquisition date. Therefore, the initial purchase price of $85.4 million, inclusive of $0.4 million in direct transaction costs, was expensed as of the acquisition date as acquired IPR&D in the condensed consolidated statements of operations and comprehensive loss during the second quarter of 2024.

Prior to the acquisition, the Company had $0.5 million in contract liabilities related to deferred revenue balances and unearned cancelled performance obligations associated with the Janssen Collaboration Agreement. The settlement of the preexisting contract liabilities was recorded as an offset to the Janssen License Agreement’s initial purchase price resulting in $84.9 million expensed as acquired IPR&D in the condensed consolidated statements of operations and comprehensive loss.

In September 2025, the Company incurred a $45.0 million development/regulatory milestone under the Janssen License Agreement, upon dosing the first five subjects in the ANCHOR study, which will be paid to Janssen in the fourth quarter of 2025 and is included in accrued liabilities in the condensed consolidated balance sheet as of September 30, 2025. The $45.0 million milestone was expensed as acquired IPR&D in the condensed consolidated statements of operations and comprehensive loss during the three and nine months ended September 30, 2025.

In March 2021, the Company and Janssen entered into the Janssen Collaboration Agreement to develop and commercialize one or more DFCs based on the Company’s Cloudbreak platform, for the prevention and treatment of influenza, including CD388.

Collaboration. The Company and Janssen collaborated in the research, preclinical development and early clinical development of CD388, or the Development Candidate, under a mutually-agreed R&D plan, or the Research Plan, with the objective of advancing such Development Candidate through the completion of mutually-agreed Phase 1 clinical trials and the first Phase 2 clinical trial, or Phase 2 Study. Unless otherwise agreed by the parties, the Company was responsible for performing, or having performed, all investigational new drug application, or IND, -enabling studies and clinical trials under the Research Plan, and the Company was the IND holder for the Research Plan clinical trials. Both parties were responsible for conducting certain specified chemistry, manufacturing and controls, or CMC, development activities under the Research Plan.

In September 2023, Janssen delivered its Election to Proceed Notice for CD388, whereby Janssen assumed the future development, manufacturing and commercialization activities of CD388 under the Janssen Collaboration Agreement. The Company continued to work in collaboration with Janssen to complete the Phase 1 and Phase 2a clinical trials and was reimbursed for all ongoing development activities by Janssen as per the Janssen Collaboration Agreement. Following Janssen’s Election to Proceed Notice, Janssen was obligated at its sole expense to diligently continue development and commercialization.

Termination. The Janssen Collaboration Agreement was terminated upon the effectiveness of the Janssen License Agreement on April 24, 2024, and all potential future milestone payments and royalties were forfeited by the Company.

Prior to the Janssen Collaboration Agreement termination on April 24, 2024, the Company determined the transaction price is equal to the up-front fee of $27.0 million, plus the R&D funding of $47.8 million, plus milestones achieved of $10.0 million. The transaction price included the total estimated costs related to R&D and clinical supply services. No revenue was reversed due to the change in transaction price as revenue is recognized based on actual amounts billed. The transaction price was allocated to the performance obligations on the basis of the relative stand-alone selling price estimated for each performance obligation. In estimating the stand-alone selling price for each performance obligation, the Company utilized discounted cash flows and developed assumptions that required judgment and included forecasted revenues, expected development timelines, discount rates, probabilities of technical and regulatory success, costs to continue the R&D efforts and costs for manufacturing clinical supplies.

A description of the distinct performance obligations identified under the Janssen Collaboration Agreement was as follows:

Licenses of Intellectual Property. The license to the Company’s intellectual property, bundled with the associated know-how, represented a distinct performance obligation. The license and associated know-how was transferred to Janssen in May 2021.

Research and Development Services. The R&D services performed represented a distinct performance obligation. The Company recognized revenue based on actual amounts incurred as the underlying services were provided and billed at fair value.

Clinical Supply Services. The Company’s initial obligation to supply drug supply for ongoing development represents a distinct performance obligation. The Company recognized revenue based on actual amounts incurred as the underlying services were provided and billed at fair value.

Milestone Payments. In March 2022 and September 2023, the Company achieved milestones under the Janssen Collaboration Agreement that the Company deemed to be tied to all the performance obligations identified in the original agreement. Revenue associated with these milestones was allocated proportionately to the original transaction price which was allocated to the performance obligations on the basis of the relative stand-alone selling price estimated for each performance obligation. In conjunction with the performance obligations already delivered, revenue was recognized based on the progress of these performance obligations, the unrecognized portion was recorded as contract liabilities at the reporting period end and was expected to be recognized as revenue over the remaining progress of these performance obligations.

As of the termination date of the Janssen Collaboration Agreement, there was no aggregate transaction price allocated to performance obligations that were unsatisfied.

As of September 30, 2025 and December 31, 2024, the Company recorded no accounts receivable or contract liabilities associated with the Janssen Collaboration Agreement.

The following table presents collaboration revenue under the Janssen Collaboration Agreement for the three and nine months ended September 30, 2024 (in thousands):

The Company entered into a finance lease for lab equipment in November 2023. The finance lease had a term of 36 months, monthly lease payments of $25,009, and an option to purchase the lab equipment for $1 at the end of the finance lease term. In March 2025, the Company entered into an assignment and assumption agreement whereby the Company agreed to transfer and assign to a third party all of the Company’s present and future rights, interests, duties, obligations and liabilities under the finance lease, resulting in a derecognition of the finance lease right-of-use asset and finance lease liabilities and the recognition of a $0.2 million loss on disposal in other expense, net in continuing operations during the first quarter of 2025.

Finance lease costs were immaterial for the three and nine months ended September 30, 2025 and immaterial and $0.1 million for the three and nine months ended September 30, 2024, respectively.

The Company entered into an operating lease for laboratory and office space in San Diego, California in June 2014. Amendments for additional space were entered into in February 2015, March 2015 and August 2015. On April 20, 2023, the Company entered into a seventh amendment to its operating lease with Nancy Ridge Technology Center, L.P. which extended the term of the operating lease by an additional 36 months and increased the base rent to $133,371 per month effective January 1, 2024, subject to 4% increases every January. The operating lease expires on December 31, 2026 with options for two individual two-year extensions, as described in the original lease agreement, which have not been exercised, and remain in effect and available to the Company. As of September 30, 2025, the Company was not reasonably certain that it would exercise the extension options, and therefore did not include these options in the determination of the total operating lease term for accounting purposes. The incremental borrowing rate used in measuring the Company’s operating lease liability was 12.0%.

The following table presents information about the amount and timing of cash flows arising from the Company’s operating lease as of September 30, 2025 (in thousands):

The balance sheet classification of the Company’s operating lease is as follows (in thousands):

As of September 30, 2025, the weighted average remaining operating lease term was 1.3 years.

Cash paid for amounts included in the measurement of operating lease liabilities was $1.2 million for each of the nine months ended September 30, 2025 and 2024.

Operating lease costs were $0.4 million and $1.3 million for the three and nine months ended September 30, 2025, respectively, and $0.5 million and $1.3 million for the three and nine months ended September 30, 2024, respectively. These costs are primarily related to the Company’s operating lease, but also include immaterial amounts for variable leases and short-term leases with terms greater than 30 days.

The Company enters into contracts in the normal course of business with vendors for R&D activities, manufacturing, and professional services. These contracts generally provide for termination either on notice or after a notice period.

On September 9, 2024, management of the Company, as authorized by the board of directors of the Company, approved a reduction in the Company’s workforce, or the Reduction, of 20 employees, which represented approximately 30% of the Company’s workforce. The Reduction reflects the Company’s focus on the clinical development of CD388, its influenza product candidate. The Reduction was completed on November 1, 2024.

As a result of the Reduction, the Company incurred charges of $1.2 million for severance payments and employee benefits in 2024. The Company does not expect to incur additional charges related to the Reduction. As of September 30, 2025, all amounts have been paid.

On December 11, 2024, the Company established a standby letter of credit with its banking institution, Wells Fargo, for $6.0 million for the benefit of its indirect tax service provider, as it relates to indirect tax compliance services in various tax jurisdictions outside of the U.S. in connection with the rezafungin supply chain activities and commercial sales of REZZAYO. The letter of credit expires on November 30, 2025 and is automatically extended without amendment for an additional one-year period from the current expiration date, unless notified by the Company to terminate prior to 90 days from the expiration date. On August 28, 2025, the Company provided a notice that the letter of credit will not be extended beyond November 30, 2025. The cash held as collateral for this standby letter of credit is recorded as restricted cash and is held in an interest-bearing account.

The Company estimates an annual effective income tax rate based on projected results for the year and applied the rate to net loss before taxes to calculate income tax expense or (benefit). When applicable, the income tax provision also includes adjustments for discrete tax items. Any refinements made due to subsequent information that affects the estimated annual effective income tax rate are reflected as adjustments in the current period. For the three and nine months ended September 30, 2025, and 2024 the Company recognized no income tax expense or (benefit) from continuing operations.

On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law enacting significant changes to U.S. tax and related laws. Some of the provisions of the new tax law affecting corporations include but are not limited to expensing of domestic research expenses, calculating the limit on the deduction of interest expense based on thirty percent of EBITDA (rather than EBIT), and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025. The impact of the tax law changes from the OBBBA is included in the Company’s financial statements for the three-months ended September 30, 2025. There have been no material changes to the Company’s effective income tax rate or its net deferred federal income tax assets as a result of the OBBBA as the Company maintains a full valuation allowance for all U.S. deferred tax assets.

On April 24, 2024, the Company and Napp entered into the Napp Purchase Agreement, pursuant to which the Company sold to Napp, effective as of April 24, 2024, the following:

•all of the Company’s rezafungin assets, including all of the Company’s right to receive future milestones and royalties under a license agreement between Melinta Therapeutics, LLC, or Melinta, and the Company, or the Melinta License Agreement, and a collaboration and license agreement between Mundipharma and the Company, or the Mundipharma Collaboration Agreement,

•all rezafungin intellectual property rights, including patents and know-how, all product data, regulatory approvals and documentation,

•rezafungin and comparator inventory,

•specified prepaid assets and specified contracts, in exchange for Napp’s assumption of certain liabilities of the rezafungin business, including the ongoing costs of the ReSPECT Phase 3 clinical trial and the ReSTORE Phase 3 clinical trial in China and the Company’s obligations from and after closing under the Melinta License Agreement,

•the Commercial Supply Agreement between the Company and Melinta, and

•the Commercial Supply Agreement between the Company and Mundipharma, or the Mundipharma Commercial Supply Agreement.

No Company employees were transferred to Napp.

The Company, Napp and Mundipharma also entered into an Assignment and Novation Agreement to transfer the Mundipharma Collaboration Agreement and Mundipharma Commercial Supply Agreement from the Company to Napp, or the Novation Agreement. In the Novation Agreement, Mundipharma agreed to forgive the Company’s obligation to refund a $11.1 million development milestone advance due as of December 31, 2024, net of royalties, to Mundipharma under the Mundipharma Collaboration Agreement, provided that (a) the Company performed its obligation to provide carryover services under a Transition Services Agreement with Napp, or the TSA, for a period of 45 days following the closing, (b) the Company delivered all of the purchased assets, including product know-how and product-data, in accordance with the Napp Purchase Agreement and a know-how transfer plan delivered in connection with the Napp Purchase Agreement and (c) the Company performed its obligation to provide other services in accordance with the TSA for 75 days following the closing. On July 18, 2024, the Company received a notice of satisfaction from Mundipharma that it had completed the required performance obligations under the TSA and, accordingly, the $11.1 million development milestone advance previously made to the Company, and reimbursable to Mundipharma, was forgiven by Mundipharma.

The action to divest rezafungin was taken because of the Company’s strategy to streamline its portfolio and focus on the Cloudbreak platform and other financial considerations.

The Company has determined that the sale of rezafungin represents a strategic shift that had a major effect on its result of operations. Rezafungin met the criteria to be reported as discontinued operations at the time of the sale. The Company has separately reported the financial results of rezafungin as discontinued operations in the condensed consolidated statements of operations and comprehensive loss for all prior year periods presented.

There were no assets and liabilities related to discontinued operations as of September 30, 2025 and December 31, 2024, as all balances were recognized in income from discontinued operations at the completion of the transaction.

There were no discontinued operations during the three and nine months ended September 30, 2025. The results of operations from discontinued operations during the three and nine months ended September 30, 2024, have been reflected as loss from discontinued operations, net of income taxes in the condensed consolidated statements of operations and comprehensive loss and consisted of the following (in thousands):