AQST 10-K & 10-Q changes, risk factors and insider trading

•we may need to raise substantial funds in the future to fund our operations.operation, Theseincluding fundsto maycommercialize notAnaphylm, beif availableapproved and begin making quarterly principal amortization payments on acceptableour terms13.5% Notes starting in June 2026, unless we are able to refinance or at all and our ability to fundamend the execution of our business objectives cannot be assured.terms. A failure to obtain this necessary capital when and how needed could force us to delay, limit, scale back or cease some or all operations.

•we may be subject to damages resulting from litigation matters currently pending or that may arise in the future against Aquestive;

We cannot be certain that we will be able to successfully develop our product candidates or obtain regulatory approval for our product candidates.candidates, including following the CRL we received for Anaphylm.

In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to the numerous factors, including changes in clinical trial procedures set forth in protocols, differences in the size and type of the patient populations, adherence to the dosing regimen, and other clinical trial protocols, and the rate of dropout among clinical participants. If we fail to produce positive results in our planned preclinical studies or clinical trials of any of our product candidates, the development timeline and regulatory approval and commercialization prospects for our product candidates and, correspondingly, our business and financial prospects, would be materially adversely affected. In addition, our product candidates rely on proper administration by patients or caregivers, and difficulties with product design, packaging, or user interface could interfere with regulatory approval or limit commercial success.

It is also possible that the FDA will not approve an application that we may submit, or our product candidates may not obtain appropriate regulatory approvals necessary for us to commence clinical trials for our product candidates. Any delay or failure in obtaining required approvals could have a material adverse effect on our business. For example, we recently received a CRL which resulted in a delay in the planned launch of Anaphylm. We are working to address the issues raised in the CRL and although we believe that the issues can be addressed, additional human factors and a clinical trial will need to be completed and data submitted for FDA review. There is no assurance that we will be able to satisfy the FDA's concerns. This process from development to commercialization can take many years and will likely require the expenditure of substantial resources beyond the proceeds we currently have on hand, without any guarantee or assurance that we will be successful with regulatory approval, or commercial success, of such product candidate.

We rely on our third-party licensees to commercialize our multiple licensed products and to date have only marketed, through our own efforts and with the services of third-party outsourcing vendors, including contract sales personnel, our first self-developed product, Sympazan, launched in December 2018. With the license of Sympazan to Assertio in October 2022, we scaled back many of our commercial operations, including elimination of our sales and marketing force. However, inIn April 2024,2024 we launched Libervant for ARS patients between two and five years of age.age, however a year later the commercial efforts ceased due to marketing authorization being converted to tentative approval by the FDA because of a legal decision. In 2025 we were working towards a potential launch of Anaphylm, if approved by the FDA. Given our limited history of direct experience in commercializing product candidates, and current limited commercial operations, we have no long-term experience upon which to measure our ability or success in commercializing future product candidates, if approved, or our ability to make predictions about financial results or prospects of any future launches of product candidates, if approved.

We cannot predict whether our competitors or potential competitors, some of whom we collaborate with,competitors may bring legal action against us based on our research, development and commercialization activities, as well as any product candidates or products resulting from these activities, claiming, among other things, infringement of their intellectual property rights, breach of contract, false or disparaging statements about another company’s products or product candidates, or other legal theories. To date we have been subject to a number of claims of this nature. In defending such lawsuits, whether or not they are with or without merit or are ultimately determined in our favor, we would continue to face costly litigation and diversion of technical and management personnel. These lawsuits could hinder our ability to enter the market early with our product candidates and thereby hinder our ability to influence usage patterns when fewer, if any, of our potential competitors have entered the market, which could adversely impact our potential revenue from such product candidates. Some of our competitors have substantially greater resources than we do and could be able to sustain the cost of litigation to a greater extent and for longer periods of time than we can. Furthermore, an adverse outcome of a dispute may require us: to pay damages, potentially including treble damages and attorneys’ fees, if we are found to have willfully infringed a party’s patent or other intellectual property rights; to cease making, licensing or using products that are alleged to incorporate or make use of the intellectual property of others; to expend additional development resources to reformulate our products or prevent us from marketing a product; and to enter into potentially unfavorable royalty or license agreements in order to obtain the rights to use necessary technologies.

The pharmaceutical industry is intensely competitive and subject to rapid and significant technological change. We expect to have competitors both in the United States and internationally, including major multinational pharmaceutical companies, biotechnology companies and universities and other research institutions. Many of our competitors have substantially greater financial, technical and other resources, such as larger research and developmentR&D staff and experienced marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. As a result, these companies may obtain regulatory approval more rapidly than we are able and may be more effective in selling and marketing their products. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these companies. Our competitors may succeed in developing, acquiring or licensing on an exclusive basis drug products or drug administration technologies that are more effective than our products or product candidates. In addition, our competitors may filesubmit citizen petitions with the FDA in an attempt to persuade the FDA that our product candidates, or the clinical studies that support their approval, contain deficiencies. Such actions by our competitors could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2) or other filing pathways.

If our competitors’ market products that are more effective, safer or less expensive than our product candidates, or that reach the market sooner than our product candidates, our products may enter the market too late in the cycle and may not achieve commercial success. In addition, the biopharmaceutical industry is characterized by rapid technological change. Because we have limited research and development capabilities, it may be difficult for us to stay abreast of the rapid changes in each technology. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our technologies or product candidates obsolete, less competitive or not economical.

The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and the provisions are open to a variety of interpretations. Moreover the industry is adapting with use of technology and direct-to-patient access for medications and government initiatives are supportive of the DTC model, though this guidance is nascent and does not address the full scope of potential issues. Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

In addition, other legislative changes have been proposed and adopted since the PPACA was enacted. For example, beginning April 1, 2013, Medicare payments for all items and services, including drugs and biologics, were reduced by 2% under the sequestration (i.e., automatic spending reductions) required by the Budget Control Act of 2011, as amended by the American Taxpayer Relief Act of 2012. Subsequent legislation, including the BBA, extended the 2% reduction, on average, to 2032, subject to additional Congressional action. Sequestration may result in additional reductions in Medicare and other healthcare funding and, if we obtain regulatory approvals, may otherwise affect the prices we may obtain for our product candidates or the frequency with which our product candidates may be prescribed or used if approved. Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021 and subsequent legislation, Medicare payments to providers are subject to further reductions in 2025. Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The introduction of the Medicare quality payment program has shifted the focus of physician reimbursement from volume to value, encouraging higher quality and more cost-effective care.

Further, legislative changes to or regulatory changes under the PPACA remain possible in the U.S. Congress and under the second-term Trump administration. The nature and extent of any legislative or regulatory changes to the PPACA, including repeal and replacement initiatives, are uncertain at this time. It is possible that the PPACA repeal and replacement initiatives, if enacted into law, could ultimately result in fewer individuals having health insurance coverage or in individuals having insurance coverage with less generous benefits, including limited coverage for drugs. While Congress has not passed repeal legislation, the Tax Cuts and Jobs Act of 2017 (“TCJA”), which was signed into law by President Trump during his first administration, effectively eliminated the federal “individual mandate” penalty imposed by the PPACA on individuals who failed to maintain qualifying health coverage for all or part of a year. Shortly thereafter, the BBA amended the PPACA to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” The Inflation Reduction Act of 2022, which was signed into law by President Biden, has since eliminated the coverage gap and replaced it with a $2,000 annual cap on out-of-pocket spending for covered drugs. As the second Trump presidency has commenced, weWe will continue to evaluate the impact of the PPACA on our business, and the potential for its further repeal or replacement.

The costs of prescription pharmaceuticals in the United States have also been the subject of considerable discussion in the United States, and members of Congress and the administration have stated that they will address such costs through new legislative and administrative measures. This focus has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. In 2022, the Biden administration signed into law the Inflation Reduction Act, which included a number of significant drug pricing reforms, including the establishment of a drug price negotiation program within the HHS that, starting in 2026, will require manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance; the establishment, beginning in 2023,establishment of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation; and a redesign of the Part D benefit, as part of which manufacturers are required to provide discounts on Part D drugs, beginning in 2025.drugs. Additionally, President Biden issued a subsequent Executive Order directing the Secretary of the HHS consider whether new payment and delivery models would lower drug costs, though, on the first day of his second term, President Trump repealed that Executive Order. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Aquestive Therapeutics, Inc. is a pharmaceutical company advancing medicines to bring meaningful improvement to patients' lives through innovative science and delivery technologies. We are developing pharmaceutical products to deliver complex molecules through administrations that are alternatives to invasive and inconvenient standard of care therapies. We have a proprietary commercial product, Libervant® (diazepam) Buccal Film for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity (i.e., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy between two and five years of age, which was launched in April 2024. We are advancing aour late stage non-device based epinephrine prodrug product pipelinecandidate for the treatment of severe allergic reactions, including anaphylaxis, under the Anaphylm™ trade name "Anaphylm™",name, and our Adrenaverse™ epinephrine prodrug pipeline platform. We have fivefour licensed commercialized products which are marketed by our licensees in the U.S. and around the world. We are the exclusive manufacturer of these licensed products. Aquestive also collaborates with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm,PharmFilm®, and has proven drug development and commercialization capabilities. Our production facilities are located in Portage, Indiana, and our corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.

Co-development and research fees are earned through performance of specific tasks, activities or completion of stages of development defined within a contractual development or feasibility study agreement with a customer. The nature of these performance obligations, broadly referred to as milestones or deliverables, are usually dependent on the scope and structure of the project as contracted, as well as the complexity of the product and the specific regulatory approval path necessary for that product. Accordingly, the duration of our research and developmentR&D projects may range from several months to as long asapproximately three years. Although each contractual arrangement is unique, common milestones contained in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical and/or scale-up batches, and stability testing of those batches. Additional milestones may be established and linked to clinical results of the product submission and/or approval of the product by the FDA and the commercial launch of the product.

This net revenue is recognized when product is shipped and title passes to the customer, typically at time of delivery. At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates. For sales of Libervant for ARS patients between two to five years of age,age while Libervant had U.S. market access through April 2025, returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables. Once receivables are collected, allowances are reclassified and treated as accrued liabilities. Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, and other rebates, and these estimates are reflected as a component of accrued liabilities. Once all related variable considerations are resolved and uncertainties as to collectableincurred amounts are eliminated, estimates are adjusted to actual allowance amounts. Provisions for these estimated amounts are reviewed and adjusted as needed on no less than a quarterly basis.

Our manufacture and supply costs and expenses are impacted by our customers’ supply requirements. Costs of production reflect the costs of raw materials that are purchased at market prices and production efficiency (measured by the cost of a salable unit). These costs can increase,increase or decrease,decrease based on the amount of direct labor and materials required to produce a product and the allocation of fixed overhead, which is dependent on the levels of production.

Since our inception, we have focused significant resources on our research and developmentR&D activities. Research and developmentR&D expenses primarily consist of:

•external research and developmentR&D expenses incurred under arrangements with third parties, such as CROs, investigational sites and consultants;

We expect our research and developmentR&D expenses to continue to be significant over the next several years as we continue to develop existing product candidates such as Anaphylm, AQST-108AQST-108, and others, and as we identify and develop or acquire additional product candidates and technologies. We may hire or engage additional skilled colleagues or third parties to perform these activities, conduct clinical trials and ultimately seek regulatory approvals for any product candidate that successfully completes those clinical trials.

Selling, General and Administrative expenses consist primarily of salaries, benefits, share-based compensation, other related costs for executive, finance, and operational personnel. Other costs include facility and related costs not otherwise included in research and developmentR&D expenses such as: professional fees for patent-related expenses and for other legal expenses, legal expenditures, regulatory fees, consulting, tax and accounting services;services, insurance;insurance, market research;research, advisory board and key opinion leaders;leaders, depreciation;depreciation, and general corporate expenses, inclusive of IT systems-relatedsystems related costs. In addition, these expenses also include warehousing, distribution, selling and business developmentdevelopment, and other costs.

Our general and administrative costs include costs related to accounting, audit, legallegal, regulatory, and tax-related services required to maintain compliance with exchange listing and SEC regulations, director and officer insurance costs, and investor and public relations costs. We continue to incur significant costs in seeking to protect our intellectual property rights, including significant litigation costs in connection with seeking to enforce our rights concerning third parties’ at-risk launch of generic products.

We will continue to manage business costs to prepare for a potential future decline in Suboxone revenue and other external factors affecting our business,business. as weWe continue to focus on our core business: as well as regulatory and pre-commercial launch activities for Anaphylm.

Interest expense consists of interest costs on the outstanding balances of our 12.5% Notes and 13.5% Notes at a fixed rate of 12.5% and 13.5%, respectively, payable quarterly, as well asand amortization of loanissuance costs and debt discounts. The redemptionissuance of 12.5% Notes and the issuance ofour 13.5% Notes areis discussed inPart II Item 8. Financial Statements and Supplementary Data, Note 15, Long-Term Debt, to our financial statements.Debt. In addition, see Liquidity and Capital Resources below for further detail on our 12.5% Notes and 13.5% Notes.

In connection with the issuance of the 13.5% Notes, we entered into the Royalty Rights Agreements with each of the Note Holders granting the Note Holders a tiered royalty between 1.0% and 2.0% of annual worldwide net sales of Anaphylm (epinephrine) Sublingual Film for a period of eight years from the first sale of Anaphylm on a global basis. The Note Holders are also entitled to a tiered royalty between 1.0% to 2.0% of annual worldwide net sales of Libervant (diazepam) Buccal Film until the earlier of (1) the first sale of Anaphylm and (2) eight years from the first sale of Libervant. These royalty agreements are classified as debt, and the value of the $45,000 13.5% Notes has been allocated between debt and the Royalty Obligations based on their relative fair market values. The excess of future estimated royalty payments of $56,926 over the $13,856 of the allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized as interest expense using the effective interest method. The 13.5% Notes are discussed in Part II Item 8. Financial Statements and Supplementary Data, Note 15, Long-Term Debt.

Interest income and other income, net consists of earnings derived from an interest-bearing account,accounts, investments in money market Treasury mutual fundsfunds, Treasury bills and other miscellaneous income and expense items. TheThese interest-bearing account and money market Treasury mutual fundsaccounts have no minimum amounts to be maintained in the accounts nor any fixed length of period for which interest and dividends are earned.

Revenues increaseddecreased 14%23% or $6,978$13,016 infor 2024the year ended December 31, 2025, compared to the same period in 2023.2024. The increasedecrease was primarily due to certain one-time increasesdecreases in license and royalty revenuerevenue, proprietary product revenue, net, and increases in co-development and research fees, partially offset by decreases in manufacture and supply revenue.fees.

LicenseManufacture and royaltysupply revenue increased 185%1% or $9,969$249 for the year ended December 31, 20242025 compared to the same period in 2023.2024. This increase was primarily due to thea one-time$3,795 recognitionincrease ofin deferredOndif revenues of $11,544 due to the terminations of licensing and supply agreements. These increases wererevenues, partially offset by a $1,500$3,482 decrease in milestoneSuboxone licensing revenue for Azstarys from Zevra Therapeutics recognized in the prior year.revenues.

Co-development and research fees increaseddecreased 37%34% or $523$646 for the year ended December 31, 20242025 compared to the same period in 2023.2024. The increasedecrease was driven by the timing of the achievement of research and developmentco-development performance obligations which are expected to fluctuate from oneamong reporting period to the next.periods.

The following table sets forth our expenseexpenses dataand income for the periods indicated:

Manufacture and supply costs and expenses decreasedincreased 14%,4%, or $2,959,$683, for the year ended December 31, 20242025 compared to the same period in 2023.2024. The decreaseincrease in manufacture and supply costs was due to lower volume of strips sold, changes in product mix,mix and lowerinventory productionwrite costs.downs.

Research and developmentR&D expenses increaseddecreased 55%,15%, or $7,176,$3,088, for the year ended December 31, 20242025 compared to the same period in 2023.2024. The increasedecrease in research and developmentR&D expenses is primarily due to decreases in clinical trial costs and product research expenses associated with the continued advancement of the Anaphylm andprogram, AQST-108partially programs,offset by increases in product research expenses as well as R&D personnel costs,costs and an increase in share-based compensation. The tables below provide a breakdown of the major costs included in total Research and developmentR&D expenses and project costs by type of expense for each of the main clinical development projects in which we are engaged for each period presented:

Selling, general and administrative expenses increased 58%,59%, or $18,430,$29,669, for the year ended December 31, 20242025 as compared to the same period in 2023.2024. The increase primarily represents higher legal-related expenses of approximately $14,300, higher commercial spending of approximately $3,750,$9,600 in preparation for the launch of Anaphylm, Anaphylm PDUFA fee of $4,310, higher personnel costsexpenses of approximately $3,000,$1,900, severancehigher costsregulatory expenses related to Anaphylm of approximately $2,900,$1,000, and higher share-based compensation expenses of $2,300, higher regulatory and licensing fees of approximately $1,400 related to the regulatory fee for Libervant, higher legal fees of $520, and higher expenses of $4,600 due to a change in the allocation of manufacture and supply costs compared to the prior period,$900, partially offset by lower severance expenses of approximately $2,800 including the acceleration of share-based compensation, and lower insurance expenses of $1,150.approximately $600.

Interest expense related to amortization of the discount on the royalty obligations was $5,459$5,737 and $905$5,459 for the years ended December 31, 20242025 and 2023,2024, respectively. These amounts are due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance in November 2023. The year ended December 31, 2024 reflects 12 months of activity while the year ended December 31, 2023 reflects 2 months of activity.issuance.

Interest expense related to the sale of future revenue was $236$243 and $220$236 for the years ended December 31, 20242025 and 2023.2024, respectively, and represents amortization of the issuance costs. These amounts are due to the accounting associated with the sale of future revenue related to KYNMOBI royalties sold to Marathon on November 3, 2020 and do not represent or imply a monetary obligation or cash output at any time during the life of the transaction. These amounts represent amortization of issuance costs. In June 2023, Sunovion announced that it has voluntarily withdrawn KYNMOBI from the U.S. and Canadian markets,markets. therefore,Therefore, wethe Company likely will not receive any of the additional contingent payments under the Monetization agreement. As a result, we discontinued recording interest expense related to the sale of future revenue in the fourth quarter of 2022. See Part II Item 8. Financial Statements and Supplementary Data, Note 17, Sale of Future Revenue for details.

Interest income and other income, net was $3,437$4,367 and $16,321$3,437 for the years ended December 31, 20242025 and 2023,2024, respectively. The decreaseincrease byprimarily $12,884represents isa dueERTC tocredit otherreceived incomein ofApril $6,0002025. relatedIn toJune 2024, the AmendmentCompany 11 to the Indivior Commercial Exploitation Agreement, $8,500 related to the patent litigation settlement with BioDelivery Sciences International, Inc. and the receipt of the ERTC, which were recognized in the year ended December 31, 2023 and did not recur in 2024. During the year ended December 31, 2024, we recognizedrecorded a gain of $1,500 on the termination of a license and supply agreement, which was partially offset by the adjustment of $1,200 to the remaining balance of the intangible asset due to the termination of the agreement. We also recognized higher interest income of $2,713 due to higher cash balances invested in interest-bearing and dividend-earning money market accounts.

On August 2023, we entered into the Letter Agreement with the Exercising Holder of 5,000,000 of the remaining Common Stock Warrants. Pursuant to the Letter Agreement, the Exercising Holder and Aquestive agreed that the Exercising Holder would exercise all of its Existing Warrants at the then current exercise price of the Existing Warrants. The Exercising Holder subsequently exercised the Existing Warrants, with Aquestive receiving gross proceeds of $4,800. We also issued to the Exercising Holder New Warrants to purchase up to an aggregate of 2,750,000 shares of Common Stock. The New Warrants are exercisable after February 2, 2024, expire on February 2, 2029 and are exercisable only for cash, unless the shares of Common Stock underlying the New Warrants are not registered in accordance with the terms of the Letter Agreement, in which case the New Warrants may also be exercised by means of a "cashless exercise". The New Warrants have an exercise price of $2.60 per share. During the year ended December 31, 2025, 550,000 shares were issued upon the exercise of warrants with the Company receiving proceeds of $1,430 as it relates to the Warrants issued under Securities Purchase Agreements.

On November 1, 2023, we issued $45,000 aggregate principal amount of its 13.5% Notes due November 1, 2028. A portion of the net proceeds from that Offering was used to redeem all of the remaining outstanding 12.5% Notes and to pay expenses relating to that Offering, with the balance of the proceeds to be used for general corporate purposes. Interest on the 13.5% Notes accrues at a rate of 13.5% per annum and is payable quarterly in arrears on March 30, June 30, September 30 and December 30 of each year commencing on December 30, 2023. The 13.5% Notes are interest-only until June 30, 2026, whereupon on such date and each payment date thereafter we will also pay an installment of principal of the 13.5% Notes pursuant to a fixed amortization schedule, along with a portion of an Exit Fee determined as of the applicable date of prepayment, payment, acceleration, repurchase or redemption, as the case may be. We accounted for this transaction as an extinguishment of debt and recognized a debt extinguishment charge of $1,029 for the year ended December 31, 2023. The debt extinguishment charge is included in Loss on the extinguishment of debt in the Company’s Statements of Operations and Comprehensive Loss.

On March 22, 2024, we completed thean underwritten public offering of 16,666,667 shares of our common stock at the public offering price of $4.50 per share. In addition, pursuant to the partial exercise of the underwriters' option, on April 22, 2024, we sold an additional 559,801 shares of Common Stock. Net proceeds from the underwritten2024 publicUnderwritten offering,Public Offering, including the exercise of underwriters' option were $72,868, after deducting underwriting discounts of $4,651. In addition to the underwriting discounts related to this offering, we incurred professional fees and other costs totaling $894 as of December 31, 2024.$894.

Net cash used for operating activities for the year ended December 31, 20242025 increased by $29,379$16,673 compared to the same period in 2023.2024. The increase in cash used for operating activities was primarily related to the changeincreases in net loss ofby $36,267$39,647, in trade and other receivables by $11,466, and in inventories by $851, partially offset by increases in liabilities by $21,265 largely due to obligations under a confidential legal settlement, changes in deferred revenue of $13,809,$12,272, which waswere mostly attributed to the recognition of deferred revenues due to the termination of license and supply agreements during the year ended December 31, 2024, and increasesdecreases in tradeprepaid expenses and other receivablesassets ofby $4,167. Other changes were mainly due to higher amortization of debt issuance costs and discounts of $8,742 on the 13.5% Notes refinancing in November 2023 and an increase in share-based compensation of $4,410 as compared to the year ended December 31, 2023.$921.

Net cash used for investing activities for the year ended December 31, 20242025 decreasedincreased by $836$403 compared to the same period in 2023.2024. The use of cash was related to capital expenditures.

Net cash provided by financing activities for the year ended December 31, 20242025 increased by $79,618$19,025 compared to the same period in 2023.2024. The increase was primarily related to net proceeds of $79,460 from the underwritten2025 publicUnderwritten offeringPublic whichOffering providedas compared to net proceeds of $71,974,$71,974 andfrom the 2024 Underwritten Public Offering, higher ATM proceeds by $2,871$9,411 due to higher volumes and Common Stock prices as compared to the prior year.year, Thesehigher increases during the year ended December 31, 2024 were also due to the absence of 12.5% Notes principal payments and premium paid to retire debt and the absence of the financing costs associated with the issuance of the 13.5% Notes, partially offset by nonet proceeds received from the issuance of the 13.5% Notes and the issuance of the Royalty Rights Agreements as compared to the prior year, and lower proceeds by $8,142 from the exercise of warrants.warrants by $1,265, and higher net proceeds from exercise of options by $538.

Our on-going business, existing cash and equivalents, expense management activities as well as access to the equity capital markets, including through our ATM facility, and potential asset sales or product outlicensing potentially provide near term funding opportunities for Aquestive, see “Liquidity and Capital Resources”. On November 1, 2023, we issued $45,000 in aggregate principal amount of the 13.5% Notes due November 1, 2028. APrincipal portionpayments of the net13.5% proceedsNotes fromwill commence in June 2026, unless the Offering were used to redeem all of the outstanding 12.5%13.5% Notes andare torefinanced payor expenses relating to the Offering, with the balance of the proceeds to be used for general corporate purposes.amended.

We have used and intend to continue to use the net proceeds received from these transactions, together with the Company’sour existing cash and cash equivalents, primarily to advance the development and commercialization of our product pipeline, including Anaphylm™ (epinephrine) Sublingual Film for the treatment of severe life-threatening allergic reactions, including anaphylaxis, and the continued commercial expansion of Libervant® (diazepam) Buccal Film for the treatment of ARS patients aged between two and five years,pipeline and for working capital, capital expenditures and general corporate purposes. We can provide no assurance that any of these sources of funding, either individually or in combination, will be available on reasonable terms, if at all, or sufficient to fund our business objectives. In addition, we may be required to utilize available financial resources sooner than expected. We have based our expectation on assumptions that could change or prove to be inaccurate, due to unrelated factors including factors arising in the capital markets, asset monetization markets, regulatory approval process, and regulatory oversight and other factors. Key factors and assumptions inherent in our planned continued operations and anticipated growth include, without limitation, those related to the following:

In addition to the other information set forth in this report, you should carefully review and consider the information regarding certain risks and uncertainties facing the Company that could have a material adverse effect on our business prospects, financial condition, results of operations, liquidity and available capital resources set forth in Part I, Item 1A of Aquestive’s 2025 Annual Report on Form 10-K.10-K and subsequent Quarterly Reports on Form 10-Q.

These forward-looking statements include, but are not limited to, statements regarding the advancement and related timing of our product candidate Anaphylm™ (dibutepinephrine) sublingual film through clinical development and approval by the FDA, including our ability to address the concerns raised by the FDA in the Complete Response Letter (CRL) dated January 30, 2026 and Type A meeting with the FDA on March 26, 2026, and for the FDA to approve Anaphylm or whether the FDA may request further information from us, disagree with our protocols, study designs, or findings or otherwise undertake a lengthy review of our resubmission, and challenges regarding the following commercial launch of Anaphylm, if approved by the FDA; the advancement and related timing of potential international regulatory filings and marketing authorization of Anaphylm outside of the U.S.; Anaphylm’s potential to be the first and only oralnon-invasive administrationorally ofdelivered epinephrine product and to be accepted as an alternative to existing standards of care, if approved by the FDA; the expected growth of the U.S. epinephrine market including in value and the opportunity such growth presents to the Company should Anaphylm be approved by the FDA; the advancement, growth and related timing of our AdrenaVerse™ pipeline epinephrine prodrug product candidates, including AQST-108 (epinephrine) topical gel, through clinical development and FDA regulatory approval process, including design and timing of clinical studies including those necessary to support the targeted indication of alopecia areata and atopic dermatitis for AQST-108 or other possible indications; the potential sale or outlicensing of Anaphylm, Libervant or other product candidates; anticipated timelines, milestones, and guidance relating to regulatory submissions, clinical studies, regulatory interactions, and potential approvals, which are subject to change based on regulatory feedback, protocol alignment, data sufficiency, and other factors outside the Company’s control; the approval for U.S. market access of Libervant and overcoming the orphan drug market exclusivity of an FDA approved nasal spray product of another company extending to January 2027; the commercial opportunity of Libervant, Anaphylm, AQST-108 and our other product candidates, should these product candidates be approved by the FDA; the focus on continuing to manufacture Suboxone®, Emylif®, Sympazan®, Ondif® and other licensed products; the potential benefits our products and product candidates could bring to patients; the achievement of clinical and commercial milestones, product orders and fulfillment; our cash requirements, cash funding and cash burn; short-term and longer term liquidity and the ability to fund our business operations; our growth and future financial and operating results and financial position, including with respect to our 2026 financial outlook; and business strategies, market opportunities, and other statements that are not historical facts.

These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include, but are not limited to, risks associated with our development work, including any delays or changes to the timing, cost and success of our product development activities and clinical trials and plans, including those relating to Anaphylm, AQST-108, and our other product candidates; risks related to our existing indebtedness and potential future obligations under our Credit Agreement, including the risk that, should Anaphylm receive FDA approval, our indebtedness will increase substantially, and there is no assurance that revenues from the commercialization of Anaphylm will be sufficient to service or repay such obligations; and that, if Anaphylm does not receive FDA approval, we will be required to maintain larger cash reserves to fund ongoing operations and will not be able to deploy those funds for other purposes; risks that restrictive covenants contained in our Credit Agreement could limit our operational flexibility, including restrict our ability to incur additional indebtedness or make investments, and impair our ability to raise additional capital when needed; risk of delays in advancement of the regulatory approval process through the FDA of our product candidates, including the filing of the respective NDAs, for Anaphylm, AQST-108, Libervant and other product candidates, or failure to receive FDA approval at all of any offor these product candidates; risk of FDA inspections of manufacturing and clinical study sites for any of our product candidates, including Anaphylm; risk of government shutdowns or actions to reduce government workforces on the ability of the FDA to act on the approval of our product candidates, including Anaphylm and Libervant; risk of the Company’s ability to generate sufficient clinical and other human factor data, including with respect to our submission of pharmacokinetics and pharmacodynamics (PK/PD) comparability data for FDA approval of Anaphylm; risks associated with our ability to address the FDA’s comments on and identified deficiencies in our NDA for Anaphylm, including the concerns raised by the FDA in the CRL and Type A Meeting; risks associated with the success of any competing products, including generics; risks and uncertainties inherent in commercializing a new product (including technology risks, financial risks, market risks and implementation risks and regulatory limitations); risk of development of a sales and marketing capability for commercialization of our product candidates, including Anaphylm, if approved by the FDA; risks associated with the potential impact on the value of the Company of the sale or outlicensing of our product and product candidates, including Libervant and Anaphylm and other product candidates; risk of insufficient capital and cash resources, including insufficient access to available debt and equity financing, including under our ATM facility and the RTW Funding Agreement, and revenues from operations, to satisfy all of our short-term and longer-term liquidity and cash requirements to support our growth strategy, and other cash needs, at the times and in the amounts needed, and to fund future clinical development and commercial activities for our product candidates, including Anaphylm, AQST-108 and Libervant should these product candidates be approved by the FDA; risk of the impact of our obligations under the Company's Purchase Agreement and the Royalty Rights Agreement with third parties, each of which agreements requires the Company to make payments to each counterparty thereof, respectively, of a portion of our revenues, on our ability to contribute to the funding of our operations and the payment of interest on our debt; risk that our manufacturing capabilities will be insufficient to support demand of our product candidates in the U.S. and abroad, including Anaphylm, if such product candidates should be approved by the FDA and other regulatory authorities, and our licensed products in the U.S. and abroad; risk of eroding market share for Suboxone® as a sunsetting product, which accounts for a substantial part of our current operating revenue; risk of default of our debt instruments; risks related to the outsourcing of certain sales, marketing and other operational and staff functions to third parties; risk of the rate and degree of market acceptance in the U.S. and abroad of Anaphylm, AQST-108, Libervant and our other product candidates, should these product candidates be approved by the FDA and other regulatory authorities, and for our licensed products in the U.S. and abroad; risk associated with the size and growth of our product markets; risk associated with our compliance with all FDA and other governmental and customer requirements for our manufacturing facilities; risks associated with intellectual property rights and infringement claims relating to our products; risk that our patent applications for our product candidates, including for Anaphylm, will not be timely issued, or issued at all, by the United States Patent and Trademark Office (PTO) or, if issued, will be sufficient to provide long-term commercial success of these product candidates; risk of unexpected patent developments; risk of legislation and regulatory actions and changes in laws or regulations affecting our business, including relating to our products and product candidates and product pricing, reimbursement or access therefor; risk of loss of significant customers; risks related to claims and legal proceedings against us including patent infringement, securities, business torts, investigative, product safety or efficacy and antitrust litigation matters; risk of product recalls and withdrawals; risks related to any disruptions in our information technology networks and systems, including the impact of cybersecurity attacks; risk of increased cybersecurity attacks and data accessibility disruptions due to remote working arrangements; risk of adverse developments affecting the financial services industry; risks related to inflation and changing interest rates; risks related to the impact of pandemic diseases on our business; risks and uncertainties related to general economic, political (including the Ukraine, Israel and Iran wars and other acts of war and terrorism), business, industry, regulatory, financial and market conditions and other unusual items; risks related to uncertainty about presidential administration initiatives and their impact on our business, including imposition of government tariffs and other trade restrictions; and other uncertainties affecting the Company including those described in the "Risk Factors" section and in other sections included in this Quarterly Report on Form 10-Q. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include the matters discussed and referenced in the risk factors of the Company’s 2025 Annual Report on Form 10‑K and our other Quarterly Reports on Form 10‑Q and in our Current Reports on Form 8-K and our other filings with the SEC. Given these uncertainties, you should not place undue reliance on these forward-looking statements, which speak only as the date made. All subsequent forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We assume no obligation to update forward-looking statements, or outlook or guidance after the date of this Quarterly Report on Form 10-Q, whether as a result of new information, future events or otherwise, except as may be required by applicable law. Readers should not rely on the forward-looking statements included in this Quarterly Report on Form 10-Q as representing our views as of any date after the date of the filing of this Quarterly Report on Form 10‑Q.

Aquestive is a pharmaceutical company advancing medicines to bring meaningful improvement to patients' lives through innovative science and delivery technologies. The worldwide leader in delivering trusted, quality medications on oral film, Aquestive operates as both a developer of its own proprietary products and a Contract Development and Manufacturing Organization (CDMO) for licensees, with its headquarters in New Jersey and U.S.-based manufacturing facilities in Indiana. The Company is the exclusive manufacturer of four commercialized products marketed by its licensees across six continents using proprietary, best-in-class technologies like PharmFilm®. Aquestive's AdrenaVerse™ platform contains a library of more than 20 epinephrine prodrugs enabling the pursuit of various potential allergy and dermatological indications. The Company is advancing Anaphylm™ (dibutepinephrine) sublingual film for the treatment of severe allergic reactions, including anaphylaxis, and AQST-108 (epinephrine) topical gel for various potential dermatological conditions, including alopecia areata, atopic dermatitis, rosacea, and psoriasis.conditions.

•Anaphylm™ (dibutepinephrine) sublingual film – the first and only non-device based,non-invasive, orally delivered epinephrine prodrug product candidate in development that has shown clinical results comparable to auto-injectors (such as EpiPen® and Auvi-Q®) for the emergency treatment of allergic reactions, including anaphylaxis. Epinephrine is the standard of care in the treatment of anaphylaxis and is typically administered via intramuscular injection, including manual auto-injectors such as EpiPen and Auvi-Q, which require patients or their caregivers to inject epinephrine into the patient’s thigh during an emergency allergic reaction. As a result of this route of administration, many patients and their caregivers are reluctant to use injectable products. In August 2024, a nasal spray device was approved by the FDA for the treatment of severe allergic reactions, including anaphylaxis. However, Anaphylm would, if approved by the FDA, allow a patient to simply place a dissolvable strip, approximately the size and weight of a postage stamp, under the tongue, providing an appropriate medication where it is needed and when it is needed.

The Company is concurrently pursuing regulatory strategies outside the United States. Based on feedback from regulatory agencies, the Company remains expects to submit regulatory applications in Canada, the European UnionEU and United Kingdom by utilizing its existing clinical data. In addition, the Company submitted its initial Pediatric Investigational Plan (PIP) to the European Medicines Agency (EMA), an important step in preparing for full submission of the Company's Market Authorization Application for the European Union. The Company expects to file its New Drug Submission in Canada in 2026.2026 and the EU in 2027. The Company believes that these markets represent important opportunities to potentially expand access to the Company's non-invasive epinephrine therapy globally.

In the fourth quarter of 2023, we received comments from the FDA on the protocol for our pivotal clinical study for Anaphylm, which comments indicated that our proposed endpoints, sample size, and statistical analysis for the proposed pivotal clinical study were reasonable and provided clarity on PK sustainability with repeat-dose requirements. We incorporated the FDA’s feedback into the pivotal clinical study design, which study commenced in in the fourth quarter of 2023.

The Company recently completed its second phase 1 clinical trial, which was designed to further characterize the safety, tolerability, and pharmacologic profile of the topical epinephrine prodrug gel. There were no drug related adverse events observed in the study and the data did not indicate signs of systemic absorption. In addition, Aquestive identified a biomarker signal through the suppression of the cytokine Thymic Stromal Lymphopoietin (TSLP) when compared to placebo. The TSLP signaling pathway involves the activation of Janus Kinase (JAK) 1 and JAK2. This signal will be explored further in upcoming studies. AQST-108 is believed to have potential immunomodulatory effects, including downregulation of certain chemoattractants and inflammatory mediators, while stabilizing mast cells. We continue to believe AQST-108 has potential application across a variety of dermatologicaldermatologic conditions,inflammatory indications, including alopecia areata, atopic dermatitis, rosacea, and psoriasis.dermatitis. We plan to furtherconduct studyadditional pre-clinical and clinical studies for AQST-108 by utilizing an atopic dermatitis study design in the upcomingsecond months.half of 2026 through the first half of 2027.

Prior to the FDA approval of Libervant for ARS patients between two to five years, the FDA granted tentative approval in August 2022 for Libervant for the same indication in patients with epilepsy 12 years of age and older, finding that Libervant had met all required quality, safety, and efficacy standards for approval. However, due to the existing FDA regulatory grant of ODE for Valtoco for use in ARS patients 6 years of age and older, the FDA determined that Libervant was not yet eligible for marketing in the United States for this patient population of 12 years of age and older. We expect to filefiled for FDA approval for use of Libervant for these ARS patients aged between 6 and 11 years in Q2 2026. However, as a result of the ODE granted by the FDA to Valtoco and the District Court's ruling, the FDA cannot give final approval for U.S. market access for Libervant for any age group until the expiration of the ODE or a determination by the FDA of inapplicability of the ODE for Libervant, unless the District Court's ruling vacating the FDA approval of Libervant for ARS patients aged between two and five years is overturned on appeal. In the event that the District Court's ruling is reversed without further right of appeal, and the tentative approval of Libervant for ARS patients aged between two and five is converted to a final approval by the FDA, the Company would only be able to market Libervant for ARS patients aged between two and five years and would continue to be restricted from market access of Libervant for older ARS patients until the expiration of the ODE for Valtoco. However, overcoming the orphan drug marketing exclusivity determination is difficult to establish, with limited precedent, and there can be no assurance that the FDA will agree with our position seeking to overcome such market exclusivity and approve Libervant for U.S. market access for any age group earlier than January 2027, the scheduled date for expiration of ODE for Valtoco. See “Licensed Commercial Products, Product Candidates and Other Products – Libervant” for a discussion of the licensing arrangement for Libervant.

Our portfolio also includes other products and product candidates that we have licensed, or will seek to license, or for which we have licensed our intellectual property for commercialization. In the threesix months ended MarchJune 31,30, 2026 and 2025, our licensed product portfolio generated $14,446$28,265 and $8,720$18,723 in revenue to Aquestive, respectively. Those products include:

•Suboxone® – a sublingual film formulation of buprenorphine and naloxone, respectively an opioid agonist and antagonist, that is marketed in the United States and internationally for the treatment of opioid dependence. Suboxone was launched by our licensee, Indivior, in 2010. Suboxone is the most prescribed branded product in its category and was the first sublingual film product for the treatment of opioid dependence. We are the sole and exclusive supplier and manufacturer of Suboxone and have produced over 3.0 billion doses of Suboxone since its launch in 2010. As of MarchJune 31,30, 2026, Suboxone branded products retain approximately 25%24% film market share as generic film-based products have penetrated this market.

Interest expense consists of interest costs on the outstanding balances of the Term Loan Facility at a floating rate equal to three-month SOFR, subject to a floor of 2.75%, plus an applicable margin of 6.25%, payable quarterly and interest costs on the outstanding balances of our 13.5% Notes prior to redemption at a fixed rate of 13.5%, payable quarterly, amortization of the discount associated with the long-term portion of the legal settlementsettlement, annual agency fee related to the Term Loan Facility, as well as amortization of issuance costs and debt discounts.discounts for the Term Loan Facility and the 13.5% Notes. The issuance of the Term Loan Facility and the repayment of the 13.5% Notes isare discussed in Note 13, Long-Term Debt, to our Condensed Financial Statements. See Liquidity and Capital Resources below for further detail on ourthe 13.5%Term Notes.Loan Facility.

In connection with the issuance of the 13.5% Notes, we entered into the Royalty Rights Agreements with each of the Note Holders granting the Note Holders a tiered royalty between 1.0% and 2.0% of annual worldwide net sales of Anaphylm (dibutepinephrine) sublingual film for a period of eight years from the first sale of Anaphylm on a global basis. The Note Holders are also entitled to a tiered royalty between 1.0% to 2.0% of annual worldwide net sales of Libervant until the earlier of (1) the first sale of Anaphylm and (2) eight years from the first sale of Libervant. These royalty agreements are classified as debt, and the value of the $45,000 13.5% Notes has been allocated between debt and the Royalty Obligations based on their relative fair market values. The excess of future estimated royalty payments over the allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized as interest expense using the effective interest method. The 13.5%Royalty NotesRights Agreements are discussed in Note 13, Long-Term Debt to our Condensed Financial Statements.

On November 3, 2020, we entered into the Monetization Agreement with Marathon. Under the terms of the Monetization Agreement, we sold to Marathon all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion’s apomorphine product, KYNMOBI®, an apomorphine film therapy for the treatment of off episodes in Parkinson’s disease patients, which received approval from the FDA on May 21, 2020. In exchange for the sale of these rights, we received an upfront payment from Marathon of $40,000 and an additional payment of $10,000 through the achievement of the first milestone. We have received an aggregate amount of $50,000 through MarchJune 31,30, 2026 under the Monetization Agreement.

Interest income and other income, net consists of earnings derived from interest-bearing accounts, money market Treasury mutual funds, and other miscellaneous income and expense items.items including expenses associated with the issuance of the RTW Warrants. These interest-bearing accounts have no minimum amounts to be maintained in the accounts for which interest and dividends are earned.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

For the three months ended MarchJune 31,30, 2026, total revenues increased 66%,38%, or $5,726,$3,816, compared to the same period in the prior year primarily due to increases in manufacture and supply revenue, license and royalty revenuerevenue, and increasesproprietary inproduct manufacturerevenue, and supply revenue.net.

Manufacture and supply revenue increased approximately 22%,24%, or $1,600,$2,328, for the three months ended MarchJune 31,30, 2026 compared to the same period in the prior year. This increase was primarily due to higher Suboxone revenues of approximately $2,600,$4,600, partially offset by lower Ondif revenues of approximately $1,500.$2,200.

License and royalty revenue increased 583%,58%, or $4,605,$487, for the three months ended MarchJune 31,30, 2026 compared to the same period in the prior year. This increase was primarily due to the recognition of royalty revenue from Zevra.

Co-development and research fees decreasedincreased 38%,54%, or $160,$204, for the three months ended MarchJune 31,30, 2026 compared to the same period in the prior year. This decreaseincrease was driven by the timing of the achievement of research and co-development performance obligations which are expected to fluctuate among reporting periods.

Proprietary product revenue, net decreasedincreased by $319$797 for the three months ended MarchJune 31,30, 2026 compared to the same period in the prior year. This decreaseincrease was primarily due to the change in the estimated returns allowance provision in the prior year period due to the withdrawal of Libervant from the marketproduct as U.S. market access ended in April 2025.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Manufacture and supply costs and expenses decreased 5%,12%, or $183,$544, for the three months ended MarchJune 31,30, 2026 compared to the same period in the prior year. The decrease in manufacture and supply costs was due to changes in product mix.

Research and development expenses decreased 22%3% or $1,157$143 for the three months ended MarchJune 31,30, 2026 compared to the same period in the prior year. The decrease in Research and developmentR&D expenses is primarily due to lower clinicaldevelopment trialand manufacturing costs associated with the Anaphylm program, partially offset by increases in R&Dpreclinical personnelcosts costs.associated with AQST-108.

Total project expenses for Anaphylm decreased 56%,12%, or $1,403$149 over the comparable period in 2025. Anaphylm clinical trial expensesdevelopment and product researchmanufacturing expenses decreased by $1,251$199, andpartially $291,offset respectively.by increases in clinical trial costs of $95. Total project expenses for AQST-108 increaseddecreased $363,$38, over the comparable period in 2025. AQST-108 clinical trial expenses increaseddecreased $375$28 over the comparable period in 2025 due to the second Phase 1 clinical trial in the current period.2025.

Selling, general and administrative expenses decreasedincreased 42%,11%, or $8,095$1,358 for the three months ended MarchJune 31,30, 2026 as compared to the same period in the prior year. The decreaseincrease primarily represents the one-time Anaphylm PDUFA fee of $4,310 in the prior year period, lowerhigher legal fees of approximately $3,400, lower commercial spending of approximately $2,000, and lower regulatory and licensing fees of approximately $500 related to the regulatory fee for Libervant, partially offset by$2,100, higher severance costs of approximately $600$1,400 which includes the acceleration of share-based compensation, higher personnel costs of approximately $500$900, and higher share-based compensation expenses of approximately $500.$300 as well as other expenses, partially offset by lower commercial spending of approximately $2,600, lower regulatory and licensing fees of approximately $1,000 related to the regulatory fee for Libervant, and lower regulatory expenses related to Anaphylm of approximately $240.

Interest expense was $2,903$2,807 and $2,782$2,781 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. These amounts represent interest incurred on the outstandingTerm Loan Facility, the 13.5% Notes,Notes prior to redemption, amortization of the debt and legal settlement discounts and capitalized debt issuance costs.

Interest expense related to amortization of the discount on the royalty obligations was $973$972 and $1,437$1,434 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. These amounts are due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance. The decrease from the comparable period is due to a lower effective interest rate as a result from the update to the probability-weighted cash flows for future sales as of December 3131, 2025.

Interest expense related to the sale of future revenue was $60 and $59$61 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and represents amortization of the issuance costs. These amounts are due to the accounting associated with the sale of future revenue related to KYNMOBI royalties sold to Marathon on November 3, 2020 and do not represent or imply a monetary obligation or cash outflow at any time during the life of the transaction. In June 2023, Sunovion announced that it had voluntarily withdrawn KYNMOBI from the U.S. and Canadian markets. Therefore, the Company likely will not receive any of the additional contingent payments under the Monetization agreement.Agreement. As a result, the Company discontinued recording interest expense related to the sale of future revenue in the fourth quarter of 2022. See Note 15, Sale of Future Revenue to our Condensed Financial Statements for details.

Interest income and other income, net decreased 88%,58%, or $630$1,214 for the three months ended MarchJune 31,30, 2026 as compared to the same period in the prior year. The decrease from the comparable period is primarily due to the expensesERTC associatedcredit withreceived thein issuanceApril of the RTW Warrants recognized within other expenses during the current period.2025.

We had $110,734$98,490 in cash and cash equivalents as of MarchJune 31,30, 2026. While our ability to execute our business objectives and achieve profitability over the longer term cannot be assured, our on-going business, existing cash and cash equivalents, expense management activities, potential asset sales or product outlicensing as well as access to the equity capital markets, including through the ATM facility, provide near term liquidity for us to fund our operating needs for at least the next twelve months as we continue to execute our business strategy.

We established our first ATM facility in September 2019, and since inception to MarchJune 31,30, 2026, we have sold 28,506,216 shares of Common Stock which has generated net cash proceeds of approximately $86,563,$86,518, net of commissions and estimated other transactions costs of $4,142.$4,188. On April 3, 2024, we filed a new shelf registration statement on Form S-3 to register the offer and sale of up to $250,000 worth of shares of Common Stock, preferred stock, debt securities, warrants, rights and units ("Registration Statement No. 333-278498" or the "2024 Registration Statement"), that was effective by the SEC on April 23, 2024. Included as part of the 2024 Registration Statement was a $100,000 ATM facility prospectus covering the offering, issuance and sale of Common Stock pursuant to the Amended Equity Distribution Agreement with Piper Sandler & Co.

ForDuring the three months ended MarchJune 31,30, 2026, there were no shares of Common Stock sold under the ATM facility. For the six months ended June 30, 2026, the Company sold 1,191,071 shares of Common Stock under the ATM facility, which provided net proceeds of approximately $4,810$4,765 after deducting commissions and estimated other transaction costs of $252.$297. ForDuring the three months ended MarchJune 31,30, 2025, there were no shares of Common Stock sold under the ATM facility. For the six months ended June 30, 2025, the Company sold 7,457,627 shares under the ATM facility which provided net proceeds of approximately $21,306$21,271 after deducting commissions and other transaction costs of $694.$729. The remaining authorized balance of the ATM facility was approximately $73,000 as of MarchJune 31,30, 2026..2026.

On November 1, 2023, we issued $45,000 aggregate principal amount of its 13.5% Notes due November 1, 2028. A portion of the net proceeds from that offering was used to repay all of the outstanding 12.5% Notes and to pay expenses relating to that offering, with the balance of the proceeds to be used for general corporate purposes. Interest on the 13.5% Notes accruesaccrued at a rate of 13.5% per annum and iswas payable quarterly in arrears on March 30, June 30, September 30 and December 30 of each year commencing on December 30, 2023. The 13.5% Notes arewere interest-only until June 30, 2026, whereupon on such date and each payment date thereafter we willwould alsohave paypaid an installment of principal of the 13.5% Notes pursuant to a fixed amortization schedule, along with a portion of an Exitexit Feefee determined as of the applicable date of prepayment, payment, acceleration, repurchase or redemption, as the case may be. On May 12, 2026, we issued the Term Loan Facility and used the proceeds from the issuance to repay the outstanding principal balance under the 13.5% Notes of $45,000, and $2,000 exit fee. We also incurred a prepayment penalty of $3,825 and other transaction expenses. We recognized a loss on extinguishment of debt of $11,683 on the accompanying Condensed Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2026.