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

We are highly dependent upon our relationship with CSL Seqirus to further research, manufacture and commercialize self-amplifying mRNA vaccines against COVID-19, influenza and three other infectious diseases.diseases; CSL Seqirus has announced a significant write-down of the licensed collaboration programs.

If any of our product candidates cause undesirable side effects or have other properties impacting safety, theirfurther clinical trials may be denied or delayed and regulatory approval could be prevented, delayed or limited.

We are a global messenger RNA medicines company with a limited operating history. Since inception, our operations have been primarily limited to acquiring and licensing intellectual property rights, developing our product platform, undertaking research, partnering assets and running clinical product development programs. We only have one product that, through our partners CSL Seqirus and Meiji, is being commercialized, and it is currently only commercialized in Japan. Consequently, any predictions about our future success or viability, or any evaluation of our business and prospects, is difficult and may not be accurate. In 20242025 we recognized a significant portion of our revenue from non-recurring milestone payments and license revenue under our collaboration agreement with CSL Seqirus. OurWe may not receive any future milestone payments from CSL Seqirus are dependent on our ability to execute by meeting key product development and other milestones within the contract.Seqirus. We have not recognized any revenue from product sales since our inception.

Developing pharmaceutical products, including conducting studies and clinical trials, is extremely expensive. We expect our research and development expenses to substantially increase in connection with our ongoing activities, particularly as we advance our product candidates towards and through clinical trials. We expect that we will need to raise additional capital to support our operations and such funding may not be available to us on acceptable terms, or at all. As of December 31, 2024,2025, we had unrestricted cash and cash equivalents of $237.0$230.9 million, which we expect should be sufficient to fund currently planned operations for the near future.future, at least the next 12 months. But if our plans change or we face unexpected circumstances, our capital resources may be depleted more rapidly than we currently anticipate. For example, our clinical trials may encounter technical, regulatory or other difficulties. Any of these events would increase our development costs more than we expect. In order to support our long-term plans, we will need to raise additional capital or otherwise obtain funding through additional strategic alliances if we choose to initiate preclinical or clinical trials for product candidates that are not currently subject to a collaboration. In any event, we will require additional capital to obtain regulatory approval for, and to commercialize, future product candidates. Even if the results of clinical studies of our product candidates are positive, the stock market might not react favorably, which would weaken our ability to raise additional capital.

adverse decisions by a collaboration partner regarding the amount and timing of resource expenditures for the development, commercialization, distribution, and sale of our drug products;

Under the Tax Cuts and Jobs Act, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, U.S. federal net operating losses (“NOLs”) incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal NOLs is limited. It is uncertain if and to what extent various states will conform to the Tax Cuts and Jobs Act. To the extent that we continue to generate taxable losses for United States federal income tax purposes, unused NOLs will carry forward to offset future taxable income (subject to any applicable limitations), if any. Under Sections 382 and 383 of the Internal Revenue Code, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be significantly limited. We believe we may have triggered an “ownership change” limitation; however, we have not completed a study in accordance with Sections 382 and 383 of the Code to determine whether this ownership change has occurred or what the possible effects of an ownership change would be on our ability to use NOLs. We may also experience ownership changes in the future as a result of subsequent shifts in our share ownership. As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards to offset U.S. federal or state taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. Similar provisions of U.S. state tax law may also apply to limit our use of accumulated state tax attributes, including our state NOLs. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. As a result, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes, which could negatively impact our future cash flows.

We are highly dependent upon our relationship with CSL Seqirus to further research, manufacture and commercialize self-amplifying mRNA vaccines against COVID-19, influenza and three other infectious diseases.diseases; CSL Seqirus has announced a significant write-down of the licensed collaboration programs.

In November 2022, we entered into the CSL Collaboration Agreement with CSL Seqirus, for the research, manufacture and global commercialization of self-amplifying mRNA vaccines against COVID-19, influenza and three other infectious diseases. If such relationship is unsuccessful, or if CSL Seqirus terminates its collaboration agreement with us, or if we determine it wouldis in our best interests to terminate the agreement, it could negatively impact our ability to conduct our business and generate net product revenue. Failure by CSL Seqirus to perform its duties under its collaboration agreement with us may negatively affect us. TheIn potentialCSL financialLimited’s returnshalf-year results presented on February 11, 2026, CSL Limited reported an accounting write-down of approximately $430 million attributable to us under our collaboration agreementsagreement with CSL SeqirusSeqirus, dependsciting decline in largethe partCOVID-19 onmarket and more onerous U.S. regulatory requirements. Such action and CSL’s statements indicate that CSL Seqirus no longer believes that the achievementcollaboration assets will generate sufficiently probable, risk-adjusted economic benefits. The development of milestonesthe licensed assets and generationeven ofcommercialization productactivity sales.may be significantly impacted. If CSL Seqirus failsceases, to performsuspends or satisfymaterially its obligations under the collaboration agreement or if we otherwise encounter disagreement with CSL Seqirus regarding the satisfaction of milestones, thereduces development and commercialization activities of our technology under the licensedCSL programs could be delayed, hindered or may not occur andCollaboration, our business and prospects could be materially and adversely affected. TheAny fulfillmentdisagreement with CSL Seqirus regarding the satisfaction of ourmilestones, or of CSL Seqirus’ obligations undertoward development or commercialization of the CSLlicensed Collaborationprograms, Agreementcould result in a dispute that could result in termination of a program, and possibly costly litigation or arbitration which may requiredivert significantmanagement deployment of our resources, which could disrupt or delay our ability to pursue other programs, including our platform developmentattention and development of other product candidates.resources.

If the prevalence of COVID-19 and public concern about the virus continues to decline, the potential market opportunity will shrink for KOSTAIVE under our collaboration with CSL Seqirus. AsFurther, furtheras additional COVID-19 vaccines are approved,approved and production of existing COVID-19 vaccines improves and the COVID-19 impact transitions from pandemic to endemic stage,improves, there may be downward pressure on prices. Therefore, even if we and CSL Seqirus can get through the extremely costly, long and risky process of developing and obtaining regulatory approval to market a vaccine globally, it may not be commercially successful. This failure could be due to reduced demand for COVID-19 vaccines, increased regulatory hurdles, lower prices, distribution problems, competitors’ products or many other reasons. Our manufacturing process for KOSTAIVE includes a step for lyophilization to enhance the stability of the vaccine product. The additional step of lyophilization adds time and costs to the overall production output, which could adversely impact the production volumes and profitability of our COVID-19 vaccines if approval to market a vaccine is achieved. Any changes to our manufacturing processes or our product format could take a long time, be expensive and be unsuccessful. It is also still unclear if the vaccines will enable adequate long-term protection, as (i) many vaccinated individuals have become ill due to “breakthrough infections” and have transmitted the virus to many others, (ii) there are millions of individuals who refuse to be vaccinated or who cannot be vaccinated due to pre-existing conditions, (iii) it is unclear how long the vaccine protection will last, and (iv) genetic mutations or variants of the virus already have had, and are expected to continue to have, an adverse impact on the efficacy of available vaccines. If we cannot, with and through our partner, develop and commercialize a vaccine that adequately addresses some of these shortcomings of vaccines currently on the market, we cannot expect to have commercial success.

We are relying on our partner, CSL Seqirus, and CSL Seqirus’ partner, Meiji Seika Pharma (Meiji), to conduct further development and commercialization of KOSTAIVE in Japan. Even if KOSTAIVE continues to be commercialized in Japan, there might not be meaningful sales, due to competition, pricing, product profileprofile, vaccine uptake by the public or other factors. JapaneseTo regulatorydate, agenciesdemand for KOSTAIVE in Japan has been weak, and purchasersfuture mightsales requiremay involvement of Japanese companies in the domestic production of our COVID-19 vaccine,decrease and our Japanese partners andmay contract manufacturers might not be abledecide to scalecease up to commercial quantities. If any such Japanese companies do not participate or fail in such activities, then our and our partners’ ability to commercialize our COVID-19 vaccine will be materially harmed.commercialization. Although KOSTAIVE has received approval in Europe, KOSTAIVE has not, and might never, achieve commercialization in Europe, due to a numbers of factors, such as the competitiveness of different product presentations and formats and the wide market penetration of existing COVID-19 vaccine makers.

Even with the partnering of our COVID-19 program and initial commercialization in Japan, we are already at a significant competitive disadvantage to those companies with vaccines on the market, as well as many other competitors pursuing vaccine candidates. Many other competitors have significantly greater product candidate development, manufacturing and marketing resources than we do. Larger pharmaceutical and biotechnology companies have extensive experience in clinical testing and obtaining regulatory approval for their products, and may have the resources to heavily invest to accelerate discovery and development of their vaccine candidates. Our business could be further materially and adversely affected by our competitors’ commercialization of their vaccines before our vaccine candidate is approved in various countries. If the COVID-19 vaccines of our competitors are shown to be are safer, more effective against multiple variants, have fewer or less severe side effects, have broader market acceptance, are more convenient or are less expensive than any vaccine candidate than KOSTAIVE, then KOSTAIVE may not achieve any commercial success even where approved. Furthermore, if any competitors are successful in producing a more efficacious vaccine or other treatment for COVID-19, or if any competitors are able to manufacture and distribute any such vaccines or treatments with greater efficiency, there may be a diversion of potential governmental and other funding away from us and toward such other parties.

The biotechnology and pharmaceutical industries are intensely competitive. We 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 development staff and experienced marketing, regulatory and manufacturing organizations. Additional mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors may succeed in developing, acquiring or licensing on an exclusive basis, drug products that are more effective, safer or less costly than any product candidate that we may develop. Our existing competitors and new market entrants may respond more quickly to or integrate new or emerging technologies such as artificial intelligence and machine learning, undertake more extensive marketing campaigns, have greater access to clinical information to support ongoing product position in the market, have greater financial, marketing and other resources or be more successful in attracting potential customers, employees and strategic partners. There can be no assurance that any products now in development, or that we may seek to develop in the future, will achieve technological feasibility, obtain regulatory approval or gain market acceptance. If we are unable to develop and launch new products, our ability to maintain or expand our market position in the markets in which we participate may be negatively impacted. Our competitors may achieve patent protection, regulatory approval, or product commercialization that would limit our ability to compete with them. These and other competitive pressures could have a material adverse effect on our business.

If any of our product candidates cause undesirable side effects or have other properties impacting safety, theirapprovals to proceed with further clinical trials may be denied or delayed and regulatory approval could be prevented, delayed or limited.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trialstrials, or to deny or delay approvals to proceed with further clinical trials, and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities. It is likely that there will be side effects associated with use of our product candidates. If results of our trials reveal a high and unacceptable severity and prevalence of side effects, our trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of, or deny approval of, our product candidates for any or all targeted indications. Such side effects could also affect patient recruitment, the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may materially and adversely affect our reputation and financial condition.

KOSTAIVE has received marketing approval in Japan and Europe,Europe and we intend to make efforts tomay expand into other countries outside of the United States for such product and for future potential products. As a result, we are and expect that we will be subject to additional risks related to entering into international business relationships, including:

In addition, the EU has established its own data security and privacy legal framework, including but not limited to Directive 95/46/EC (the “Data Protection Directive”). The European General Data Protection Regulation (“GDPR”) took effect on May 25, 2018, which contains new provisions specifically directed at the processing of health information, higher sanctions and extra-territoriality measures intended to bring non-Enon-EU companies under the regulation. We anticipate that over time we may expand our business operations to include additional operations in the EU, including potentially conducting preclinical and clinical trials. With such expansion, we would be subject to increased governmental regulation in the EU countries in which we might operate, including regulation due to the GDPR.

The trading price of our common stock has been and is likely to continue to be volatile. For example, during the year ended December 31, 2025, our Common Stock closed at a high price of $23.16 on October 21, 2025 and closed at a low price of $5.90 on November 20, 2025. Our share price could be subject to wide fluctuations in response to a variety of factors, including but not limited to the following factors:

If our existing shareholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline significantly. In particular, the former shareholders, warrant holders and noteholdersAs of ArcturusDecember Therapeutics,31, Inc.2025, received2,048,139 an aggregate of 6,631,712shares of our common stock pursuant to the merger with Alcobra Ltd. in an unregistered transaction, which shares may be sold pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). Those shareholders are eligible to sell those shares in the public market without restriction, except for shareholders who are deemed our “affiliates” under Rule 144 under the Securities Act. In addition, common stock that is either subject to outstanding options or reserved for future issuance under our employee benefit plans, may become eligible for sale in the public market to the extent permitted by vesting schedules and Rule 144 under the Securities Act. If common stock is sold, or if it is perceived that it will be sold, in the public market, that could cause the trading price to decline.

On December 23, 2022, we entered into a Controlled Equity Offering℠ Sales Agreement (as amended, the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) and Wells Fargo Securities, LLC (“Wells Fargo”), relating to shares of our common stock. On August 7, 2023, we entered into Amendment No. 1 to the Sales Agreement with Cantor, Wells Fargo and William Blair & Company (“William Blair”). In accordance with the terms of the Sales Agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $200,000,000 from time to time through Cantor, Wells Fargo, or William Blair, each acting as our sales agent. As of the date hereof, we have not offered or sold anyan aggregate of 1,179,201 shares of our common stock pursuantunder tothe Sales Agreement for aggregate gross proceeds of approximately $12 million, leaving an aggregate of approximately $188 million of shares of our common stock remaining for future sale under the Sales Agreement.

We are a messenger RNA medicines company focused on the development of infectious disease vaccines and opportunities within liver and respiratory rare diseases. We developed the world’s first approved self-amplifying messenger RNA (sa-mRNA) vaccine, KOSTAIVE® (“KOSTAIVE”)., which we have partnered with Seqirus, Inc. (“CSL Seqirus”), a part of CSL Limited. KOSTAIVE has achieved approval in JapanJapan, inthe 2023European Union and the United Kingdom as a vaccine against COVID-19.COVID-19, Salesand sales of KOSTAIVE began in Japan in October 2024, marking our transition to a commercial stage company.2024.

We have several key platform technologies that we leverage to develop and advance a pipeline of mRNA-based vaccines and therapeutics for infectious diseases and for rare genetic disorders with significant unmet medical needs.needs and vaccines for infectious diseases. Current mRNA medicines have two critical components: the messenger RNA (“mRNA”) constructs and the lipid nanoparticles (“LNP”) which help deliver the mRNA to disease-relevant target tissues. We believe we are among the world leaders in both areas. We have extensive expertise in the design and optimization of mRNA constructs, including with respect to a type of mRNA technology known as self-amplifying mRNA (sa-mRNA). Our proprietary self-amplifying mRNA technology platform, or STARR® (“STARR”), has been demonstrated to induce a robust, longer-lasting and broader humoral immune response at lower dose levels than conventional mRNA-based vaccines. Our proprietary LNP delivery system, LUNAR® (“LUNAR”), is intended to address the major hurdle in RNA drug development, namely the effective and safe delivery of RNA therapeutics to disease-relevant target tissues. LUNAR may enable multiple nucleic acid medicines. TheWe approval of KOSTAIVE in Japan was a significant milestone which validates our LUNAR and STARR platforms, as well as sa-mRNA more generally as a meaningful modality. Finally, wealso have significant expertise and valuable know-how in the development and scalability of complex and robust manufacturing processes required to deliver the next generation of nucleic acid medicines.

Our internal pipeline includes RNA therapeutic candidates to potentially treat ornithine transcarbamylase (OTC) deficiency and cystic fibrosis (CF), both rare diseases. In our vaccine program, we have partnered with Seqirus, Inc. (“CSL Seqirus”), a part of CSL Limited andSeqirus, one of the world’s leading influenza vaccine providers, on the development and commercialization of mRNA vaccines for COVID-19, influenza and certainthree other infectious diseases. In CSL Limited’s half-year results presented on February 11, 2026, CSL Limited reported an accounting write-down of approximately $430 million attributable to our collaboration agreement with CSL Seqirus, citing declining COVID-19 disease burden and more onerous U.S. regulatory requirements.

In our OTC program, we completedhave dosingcontinued ofto eight subjects in August 2024 inconduct a Phase 2 double-blind multiple-dose study of ARCT-810. InFive patients with OTC deficiency have now completed dosing, and a sixth patient has initiated dosing. A type C meeting with the secondFDA quarterto discuss our plans for a proposed future pediatric study under the RDEP (Rare Disease Evidence Principles) is scheduled for the first half of 2024, we expanded the Phase 2 clinical program of ARCT-810 with an open-label, multiple-dose study which initiated dosing in December 2024.2026. ARCT-810 has received Orphan Drug Designation from the FDA and Orphan Medicinal Product Designation from the European Medicines Agency (the “EMA”) for treatment of OTC deficiency, as well as Fast Track Designation and Rare Pediatric Disease Designation from the FDA.

We also improved our platform technologies and advanced our early-stage research activities and manufacturing process development and operations. We conducted exploratory platform development activities, including the evaluation of genome editing, and new targeting approaches, where our LUNAR and STARR platforms could potentially be useful for identification and development of additional products for our portfolio. Also, with our sourcing partners, we manufactured cGMP (current good manufacturing practices) batches yielding significant quantities of clinical trial materials for global studies of our candidates, and with our collaborator, CSL Seqirus, we have established commercial production processes for the COVID-19 vaccine program.

From the Company’s inception through the year ended December 31, 2024,2025, the Company has funded its operations principally with the proceeds from revenues earned through collaboration agreements and government contracts, the sale of capital stock and long-term debt. During fiscal year 2024,2025, we received milestone payments totaling $96.0$39.1 million from CSL Seqirus. We expect to receive future payments from CSL Seqirus primarily by meeting future milestones related to the CSL Collaboration Agreement. At December 31, 2024,2025, the Company’s balance of cash and cash equivalents, including restricted cash, was $293.9$232.8 million.

In November 2022, we entered into the CSL Collaboration Agreement with CSL Seqirus, a part of CSL Limited, one of the world’s leading influenza vaccine providers,Seqirus for the global exclusive rights to research, develop, manufacture and commercialize self-amplifying mRNA vaccines. The CSL Collaboration Agreement became effective on December 8, 2022, following clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

The CSL Collaboration Agreement sets forth how CSLthe Seqirusparties and we shallwill collaborate to research and develop vaccine candidates. In the COVID-19 field, we will leadundertake activities for certain regulatory filings for ARCT-154our leading self-amplifying mRNA vaccine candidate in COVID-19, ARCT-154, in the USUnited States and Europe and for research and development activities of a next-generation COVID vaccine candidate. CSL Seqirus will leadleads and beis responsible for all other research and development in COVID-19, influenza and the other fields.

On April 21, 2023, the Company’s wholly-owned subsidiary, Arcturus Therapeutics, Inc. entered into a credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”) whereby Wells Fargo agreed to make a $50.0 million revolving credit line available to the Company (as amended, the “Wells Fargo Loan”) with each Wells Fargo Loan evidenced by a revolving line of credit note (each, a “Note”). On June 26, 2024, the parties entered into Amendment No. 1 to the Wells Fargo Loan, whereby the term was extended by one year to April 2026. As of December 31, 2024, no borrowings were made against the Wells Fargo Loan.

Borrowings under the agreement will bearbore interest at a rate of 1.00% above either the Daily Simple SOFR or Term SOFR (as such terms are defined in the Wells Fargo Loan), with “SOFR” being the rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York. If an Event of Default (as defined in the credit agreement) occurs,had occurred, then all Wells Fargo Loans shallwould bear interest at a rate equal to 2.00% above the interest rate applicable immediately prior to the occurrence of the Event of Default.

The original term of the agreement iswas two years, with an option for one-year renewals subject to Wells Fargo approval and the Company furnishing to Wells Fargo a non-refundable commitment fee equal to 0.25% of the Wells Fargo Loan amount for each such renewal. There iswas no penalty for terminating the agreement.agreement There isand no penalty for terminating the facility prior to the maturity date of the Wells Fargo Loan. As collateral, the Company hashad agreed to pledge $55.0 million in cash to be held at the Company’s securities accounts with Wells Fargo Securities, LLC, an affiliate of Wells Fargo, pursuant to a security agreement.

A portion of our current cash balance is expected to be utilized during fiscal year 20252026 to fund (i) advances to our LUNAR-CF program in clinical trials, (ii) the continued Phase 2 trial of ARCT-810, our LUNAR-OTC candidate, (ii) advances to our LUNAR-CF program in clinical trials, (iii) expenses incurred prior to customer payments under the CSL Collaboration Agreement and BARDA agreement and (iv) continued exploratory activities related to our platform and other general administrative activities.

We expect to continue to incur additional losses in the long term, and we will need to execute on milestones within the CSL Collaboration Agreement, raise additional debt or equity financing or enter into additional partnerships to fund development. Our ability to transition to profitability is dependent on regulatory approvals and subsequent sales of KOSTAIVE, executing on milestones within the CSL Collaboration Agreement and identifying and developing other successful mRNA drug and vaccine candidates. If we are not able to achieve planned milestones or incur costs in excess of our forecasts, we will need to reduce discretionary spending, discontinue the development of some or all of our programs, which will delay part of our development programs, all of which will have a material adverse effect on our ability to achieve our intended business objectives.

the development of our LUNAR-COV19cystic fibrosis and LUNAR-FLUOTC vaccinedeficiency therapeutic candidates;

Net cash provided by financing activities was $5.4$13.4 million for the year ended December 31, 2024,2025, compared to a net cash outflow of $24.1$5.4 million in 2023 ,representing a $29.5 million increase.2024. The primary drivers of this increase were the repaymentsdriver of the Singaporeincrease Loanwas andan $11.7 million increase in proceeds from the Loanissuance andof Securitycommon stock under our Sales Agreement withfor Westernat‑the‑market Allianceequity Bankofferings, duringpartially 2023,offset withby noa similar$3.6 debtmillion repayments occurringdecrease in 2024.proceeds from the exercise of stock options.

Revenue decreased by $14.5$70.3 million during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The decrease during 20242025 primarily relates to a $15.9$72.2 million decrease in revenue related to the CSL collaboration agreement, primarily due to ana $82.0$33.1 million decrease in milestone achievements during 20242025 as compared to 2023,2024, offset byand a $23.4$15.8 million increasedecrease in revenue related to CSL commercial supply agreementsagreements, andalong increasedwith decreased revenue recognition from amortization dueduring to2025 theas progressa result of the CSLreduced development programs during 2024. The remaining decrease is primarily due to a decrease of $1.8 million related to the completion of the amortization of the upfront payment during 2023 from the 2015 Research Collaboration and License Agreement with Ultragenyx Pharmaceuticals, Inc., as well as $0.7 million less revenue in 2024 due the termination of the 2017 Research Collaboration and License Agreement with Janssen Pharmaceuticals, Inc.activities. The decrease was primarilypartially offset by an increase in thegrant revenue of $4.8$0.9 million related to the increase in reimbursable research and development expenses for the grant agreementagreements with BARDA.BARDA and the Gates Foundation.

Payroll and benefits primarily consists of employee salaries and benefits, share-based compensation and consultant costs. We expect that payroll and benefits costs will not increase over the next twelve months Facilities and equipment expenses include rent, common area maintenance (“CAM”) costs, depreciation, shipping costs and various other costs related to the operation of our two office and laboratory locations. These costs decreasedincreased duringprimarily 2024 as compareddue to 2023a aslease‑related weimpairment downsizedrecognized from three to two facilities. Facilities and equipment expenses are not expected to increase duringin the nextfourth twelvequarter months.after the Company vacated an office location with no further operational use.

General and administrative expenses were $52.8$46.1 million and $52.9$52.8 million for the years ended December 31, 20242025 and 2023,2024, respectively. We expect that general and administrative expenses willThe decrease slightlywas during the next twelve monthsprimarily due to reduced share-based compensation fromexpense fullyas vestedwell stockas options.reduced payroll and benefits associated with reductions in headcount.

Research and development costs consist of salaries and benefits, including share-based compensation, laboratory supplies and facility costs, as well as fees paid to other entities that conduct certain research and development activities on our behalf, such as clinical research organizations, or CROs, and contract manufacturing organizations, or CDMOs.CMOs. Research and development costs are expensed as incurred.

The following is a discussion of the financial condition and results of operations of Arcturus Therapeutics Holdings Inc. for the three-monththree periodand six months ended MarchJune 31,30, 2026. Unless otherwise specified herein, references to the “Company,” “Arcturus,” “we,” “our” and “us” mean Arcturus Therapeutics Holdings Inc. and its consolidated subsidiaries. You should read the following discussion and analysis together with the interim condensed consolidated financial statements and related notes included elsewhere herein. For additional information relating to our management’s discussion and analysis of financial conditions and results of operations, please see our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), which was filed with the U.S. Securities and Exchange Commission (the “Commission”) on March 3, 2026. Unless otherwise defined herein, capitalized words and expressions used herein shall have the same meanings ascribed to them in the 2025 Annual Report.

We developed the world’s first approved self-amplifying messenger RNA (sa-mRNA) vaccine, KOSTAIVE® (“KOSTAIVE”), which we have partnered with Seqirus, Inc. (“CSL Seqirus”), a part of CSL Limited.. KOSTAIVE has achieved approval in Japan, the European Union and the United Kingdom as a vaccine against COVID-19, and sales of KOSTAIVE began in Japan in October 2024.

The treatment was generally safe and well tolerated. Bronchospasm was not reported in these participants, either with or without pretreatment with a bronchodilator. Treatment-related AEs that were identified in the single-dose Phase 1 study were also observed in some participants for the first few doses but ceased with continued dosing. Two subjects experienced SAEs after the dosing period that were unrelated to ARCT-032, and the safety review committee approved the study to proceed. After amending the protocol, a fourth cohort of up to 20 subjects began enrolling in March 2026.2026 and continues to advance with active screening and enrollment in the United States and Israel. The fourth cohort willwas monitorinitiated with 10 mg administered once daily dosingvia inhalation over 12a weeks12-week forperiod safetyto better assess longer term safety, tolerability and early evidence of early clinical benefits.efficacy.

We continuehave tocompleted enroll participantsenrollment in the open-label multiple ascending dose Phase 2 study of ARCT-810.ARCT-810 and all enrolled subjects have completed study drug dosing. The study evaluates safety and pharmacodynamics in adult and adolescent patients requiring clinical management for OTC-deficiency.OTC deficiency. We continue to evaluate supplementary data to inform regulatory discussions and preparation for an End-of-Phase 2 meeting regarding the potential path forward across adult and pediatric development.

Termination of Vaccine Collaboration with CSL Seqirus

Meiji has launched in Japan the two-dose vial of KOSTAIVE updated for the JN.1 variant XEC in August 2025,2025. followingIn approvalJune from2026, Meiji filed a Partial Change Application for KOSTAIVE updated for the NB.1.8.1 variant in a two-dose vial with Japan’s Pharmaceuticals and Medical Devices Agency (PMDA). to support commercialization for the 2026-2027 season in Japan.

Revenue decreased by $27.3$25.3 million during the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The decline was primarily driven by lower revenue recognized under the CSL collaboration, reflecting reduced supply agreement revenue and decreased amortization of deferred revenue as KOSTAIVE transitions from development to the commercial phase. RevenueGrant revenue also decreased due to lower grant revenue, primarily related to our agreement with BARDA, partially offset by increased grant revenue from the Gates Foundation.

Research and development expenses were $21.5$17.5 million for the three months ended MarchJune 31,30, 2026, compared with $34.9$29.6 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by lower manufacturing costs expenses related to LUNAR-COVID and BARDA, as well as reduced clinical trial expenses associated with the BARDA, LUNAR-CF, and LUNAR-OTC programs, as well as reduced manufacturing costs related to the LUNAR-COVID program.and LUNAR-OTC programs. Additional decreases were attributable to lower payroll and benefits costs associated with lower stock‑basedshare-based compensation expense and a reduction in headcount. These reductions were partially offset by higher manufacturing costs related to LUNAR-OTC.

AEarly-stage fewprograms ofrepresent programs that are in the preclinical or Phase 1 clinical stage and may be partnered or unpartnered. Early-stage programs include our programsPhase 1 clinical stage LUNAR-FLU program which was formerly partnered with CSL Seqirus. Discovery technologies represent our efforts to expand our product pipeline and are partprimarily ofrelated ourto collaborativepre-partnered relationships.studies and new capabilities. The related expenses may be partially offset with funds that have been reimbursed or awarded to us and consist of external manufacturing costs, lab supplies, equipment, and consulting and professional fees. Expenses for both early-stage programs and discovery technologies are expected to decreaseincrease slightly over the next twelve months as we shiftcontinue to advance both our focusearly- toand later-stage programs.

General and administrative expenses were $9.5$11.0 million for the three months ended MarchJune 31,30, 2026, compared with $11.3$10.3 million for the three months ended MarchJune 31,30, 2025. The slight increase was related to legal and professional fees offset by reduced share-based compensation. General and administrative expenses were $20.5 million for the six months ended June 30, 2026, compared with $21.7 million for the six months ended June 30, 2025. The decrease was primarily due to reducedlower share-based compensation expense as well asexpense, reduced payroll and benefits associatedcosts withresulting reductionsfrom inlower headcount.headcount, and lower facilities costs.

Interest income is generated onby the Company’s cash and cash equivalents. The decrease in interest income for the three and six months ended MarchJune 31,30, 2026, compared to the same period in 2025, was primarily due to lower interest rates and a reduced cash balance.

Through MarchJune 31,30, 2026, we have not entered into and did not have any relationships with unconsolidated entities or financial collaborations, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

From the Company’s inception through the quarter ended MarchJune 31,30, 2026, the Company has funded its operations principally with the proceeds from revenues earned through collaboration agreements and government contracts, the sale of capital stock and long-term debt. Through the firstsecond quarter of 2026, we have achievedreceived a total of approximately $514.1$514.3 million in upfront payments and milestones from CSL Seqirus. As of MarchJune 31,30, 2026, the Company’s balance of cash and cash equivalents, including restricted cash,equivalents was $213.4$191.5 million.

In November 2022, we entered into the CSL Collaboration Agreement with CSL Seqirus, a part of CSL Limited, one of the world’s leading influenza vaccine providers, for the global exclusive rights to research, develop, manufacture and commercialize mRNA vaccines. Following the end of the second quarter of 2026, we entered into the Termination Agreement with CSL Seqirus, pursuant to which we mutually terminated the CSL Collaboration Agreement effective as of August 3, 2026.

On August 31, 2022, we entered into a cost reimbursement contract (the “BARDA Contract”) with the Biomedical Advanced Research and Development Authority (“BARDA”), a division of the Office of the Assistant Secretary for Preparedness and Response (“ASPR”) within the U.S. Department of Health and Human Services (“HHS”) to support the development of a low-dose pandemic influenza candidate based on our proprietary self-amplifying messenger RNA-based vaccine platform. The BARDA Contract is to support our non-clinical and pre-clinical development, early-stage clinical development through Phase 1, and associated drug product manufacturing, regulatory and quality-assurance activities over a period of three years. It provides for reimbursement by BARDA of our permitted costs up to $63.2 million. As of MarchJune 31,30, 2026, the remaining available funding net of revenue earned was $25.8$24.6 million.

A portion of our current cash balance is expected to be utilized during fiscal year 2026 to fund (i) advances to our LUNAR-CF program in clinical trials, (ii) the continued Phase 2 trial of ARCT-810, our LUNAR-OTC candidate, (iii) expenses incurred prior to customer payments under the BARDA agreement and any transition or settlement-related activities following termination of the CSL Collaboration Agreement and BARDA agreement and (iv) continued exploratory activities related to our platform and other general administrative activities.

Net cash used in operating activities was $19.4$39.4 million for the threesix months ended MarchJune 31,30, 2026, compared to $35.1$40.9 million for the threesix months ended MarchJune 31,30, 2025. The decrease in cash outflows was primarily driven by improved collections in accounts receivable.receivable It was also impacted byand more favorable changes in accrued liabilities and deferred revenue. These factors were partially offset by aless higherfavorable netchanges lossin accounts payable and aprepaid reduction in non-cash stock-based compensation.expenses.

Net cash provided by investing activities was nominal$0.1 million for the threesix months ended MarchJune 31,30, 2026, compared with net cash used of $0.1 million for the threesix months ended MarchJune 31,30, 2025. ActivityThe increase in bothcash periodsprovided by investing activities was primarily reflecteddriven by the purchase and saleabsence of property and equipment.equipment purchases during the current year period.

Net cash provided by financing activities was nominal for the threesix months ended MarchJune 31,30, 2026, compared to $15.2$0.5 million for the threesix months ended MarchJune 31,30, 2025. The decrease in cash inflowsprovided by financing activities was primarily driven by borrowingslower underproceeds thefrom Company’semployee linestock ofoption credit in the prior year period, with no comparable activity in the current year period.exercises.

We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin commercialization of our products. As a result, we will require additional capital to fund our operations in order to support our long-term plans. We believe that our current cash position will be sufficient to meet our anticipated cash requirements through at least the next twelve months, assuming, among other things, no significant unforeseen expenses and continued funding fromunder partnersexisting agreements at anticipated levels. We intend to seek additional capital through equity and/or debt financings, collaborative or other funding arrangements with partners or through other sources of financing when and as needed. Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to scale back or discontinue the advancement of product candidates, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with another entity, or cease operations.

the development of our LUNAR-COV19cystic fibrosis and LUNAR-FLUOTC vaccinedeficiency therapeutic candidates;

the terms and timing of any other strategic alliance, licensing and other arrangements that we may establish, including thosetransition arrangements with CSL SeqirusSeqirus, arrangements with Meiji and CSLany Seqirus’new arrangementcollaboration with Meiji,arrangements, and any related payments thereunder, including payments related to completion of milestones under our arrangements with any of these partiesthereunder;