Armata (NYSE: ARMP) loss, debt surge and Phase 3 bacteremia trial plan
Rhea-AI Filing Summary
Armata Pharmaceuticals’ Q1 2026 report shows a net loss of $115.3M, largely driven by a $101.1M non‑cash loss from revaluing its related‑party Convertible Loan. Grant and award revenue was $0.8M, while research and development expenses reached $6.1M and general and administrative expenses were $3.5M.
Cash and cash equivalents were only $4.8M as of March 31, 2026, and management states this will not fund operations for 12 months, raising “substantial doubt” about the company’s ability to continue as a going concern. Total liabilities were $381.4M, including a fair‑value Convertible Loan of $254.9M and term debt of $88.0M.
The company relies heavily on financing from principal stockholder Innoviva via multiple high‑interest credit agreements and a $100M at‑the‑market equity program. It is preparing a Phase 3 superiority trial of IV phage candidate AP‑SA02 in complicated S. aureus bacteremia, supported by a Qualified Infectious Disease Product designation and up to $26.2M in non‑dilutive Department of Defense funding.
Positive
- Late-stage pipeline with regulatory support: AP-SA02 for complicated Staphylococcus aureus bacteremia has completed a positive Phase 2a trial, received Qualified Infectious Disease Product designation, and has FDA feedback supporting advancement to a Phase 3 superiority study, potentially enabling priority review and extended exclusivity if ultimately approved.
Negative
- Going-concern risk and heavy leverage: With only $4.8M of cash against $381.4M of liabilities, including a $254.9M fair-value Convertible Loan and $88.0M of high-interest term debt, management states there is substantial doubt about Armata’s ability to continue as a going concern without additional financing.
Insights
Large non-cash loss, heavy related-party debt and a going-concern warning dominate this quarter.
Armata reported a Q1 2026 net loss of $115.3M, driven mainly by a $101.1M fair value increase in its Convertible Loan liability. Core cash burn was more modest: operating cash outflow was $5.8M, with grant revenue of $0.8M partly offsetting $6.1M in R&D and $3.5M in G&A.
The balance sheet is highly leveraged. Total liabilities reached $381.4M, including a $254.9M Convertible Loan (measured at fair value) and $88.0M of term debt, mostly owed to related-party Innoviva. All major loans carry steep interest rates of 14%, with principal and interest due largely at maturity, concentrating refinancing and repayment risk.
Cash and equivalents were only $4.8M at quarter-end, and management explicitly states this is insufficient to fund operations for the next 12 months, raising substantial doubt about Armata’s ability to continue as a going concern. Subsequent to quarter-end, a new $25.0M May 2026 term loan from Innoviva and a $100.0M at‑the‑market equity program expand liquidity options but also add potential interest burden and dilution. The company’s late-stage phage programs and Qualified Infectious Disease Product designation for AP‑SA02 are strategic positives, yet execution now depends heavily on Armata’s ability to raise capital on acceptable terms.
Key Figures
Key Terms
going concern financial
Convertible Loan financial
troubled debt restructuring financial
Qualified Infectious Disease Product Designation regulatory
at-the-market Sales Agreement financial
Black-Scholes valuation model financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|
For the transition period from _________________ to _______________________
Commission file number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer Identification Number) |
incorporation or organization) | |
| |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (
Not Applicable
(Former name, former address, and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company as defined in Rule 12b-2 of the Exchange Act. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | Accelerated filer ☐ |
Smaller reporting company | |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
The number of shares of the registrant’s Common Stock, par value $0.01 per share, outstanding as of May 8, 2026 was
Table of Contents
TABLE OF CONTENTS
Page | ||
PART I. FINANCIAL INFORMATION | ||
Item 1. | Financial Statements (unaudited) | 6 |
Condensed Consolidated Balance Sheets | 6 | |
| ||
Condensed Consolidated Statements of Operations | 7 | |
| ||
Condensed Consolidated Statements of Stockholders’ Deficit | 8 | |
Condensed Consolidated Statements of Cash Flows | 9 | |
| ||
Notes to Condensed Consolidated Financial Statements | 10 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 38 |
Item 4. | Controls and Procedures | 38 |
PART II. OTHER INFORMATION | 38 | |
|
| |
Item 1. | Legal Proceedings | 38 |
|
| |
Item 1A. | Risk Factors | 38 |
|
| |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38 |
|
| |
Item 3. | Defaults upon Senior Securities | 38 |
|
| |
Item 4. | Mine Safety Disclosures | 39 |
|
| |
Item 5. | Other Information | 39 |
|
| |
Item 6. | Exhibits | 39 |
|
| |
SIGNATURES | 42 | |
2
Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) and certain information incorporated herein by reference contain forward-looking statements, which are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, results or to our future financial performance and involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or events to be materially different from any future results, performance, or events expressed or implied by the forward-looking statements. Forward-looking statements in this Quarterly Report include, but are not limited to, statements regarding:
● | our estimates regarding anticipated operating losses, capital requirements and needs for additional funds; |
● | our ability to raise additional capital when needed and to continue as a going concern; |
● | our expected financial and operating performance; |
● | our ability to manufacture, or otherwise secure the manufacture of, sufficient amounts of our product candidates for our preclinical studies and clinical trials; |
● | our clinical development plans, including planned clinical trials; |
● | our research and development plans; |
● | our ability to select combinations of phages to formulate our product candidates; |
● | our development of bacteriophage-based therapies; |
● | the potential use of bacteriophages to treat bacterial infections; |
● | the potential future of antibiotic resistance; |
● | the ability for bacteriophage therapies to disrupt and destroy biofilms and restore sensitivity to antibiotics; |
● | the potential for bacteriophage technology being uniquely positioned to address the global threat of antibiotic resistance; |
● | our planned development strategy, presenting data to regulatory agencies and defining planned clinical studies; |
● | the expected timing of additional clinical trials, including Phase 1, Phase 2, Phase 2b, Phase 3 or registrational clinical trials; |
● | our ability to manufacture and secure sufficient quantities of our product candidates for clinical trials; |
● | the drug product candidates to be supplied by us for clinical trials; |
● | the safety and efficacy of our product candidates; |
● | our anticipated regulatory pathways for our product candidates; |
● | the activities to be performed by specific parties in connection with clinical trials; |
3
Table of Contents
● | our ability to successfully complete preclinical and clinical development of, and obtain regulatory approval of our product candidates and commercialize any approved products on our expected timeframes or at all; |
● | our pursuit of additional indications; |
● | the content and timing of submissions to and decisions made by the U.S. Food and Drug Administration (the “FDA”) and other regulatory agencies; |
● | our ability to leverage the experience of our management team and to attract and retain management and other key personnel; |
● | the capacities and performance of our suppliers, manufacturers, contract research organizations (“CROs”) and other third parties over whom we have limited control; |
● | our ability to staff and maintain our Los Angeles production facility under fully compliant current Good Manufacturing Practices (“cGMP”); |
● | the actions of our competitors and success of competing drugs or other therapies that are or may become available; |
● | our expectations with respect to future growth and investments in our infrastructure, and our ability to effectively manage any such growth; |
● | the size and potential growth of the markets for any of our product candidates, and our ability to capture share in or impact the size of those markets; |
● | our ability to obtain and maintain adequate coverage, pricing and reimbursement from third-party payors and governments; |
● | the benefits of our product candidates; |
● | the potential market growth and market and industry trends; |
● | maintaining collaborations with third parties including our partnerships with the Cystic Fibrosis Foundation (the “CFF”) and the U.S. Department of Defense (the “DoD”); |
● | potential future collaborations with third parties and the potential markets and market opportunities for product candidates; |
● | our ability to achieve our vision, including improvements through engineering and success of clinical trials; |
● | our ability to meet anticipated milestones in the development and testing of the relevant product; |
● | our ability to be a leader in the development of phage-based therapeutics; |
● | the expected use of proceeds from the $26.2 million DoD award; |
● | the effects of government regulation and regulatory developments, and our ability and the ability of the third parties with whom we engage to comply with applicable regulatory requirements; |
● | the accuracy of our estimates regarding future expenses, revenues, capital requirements and need for additional financing; |
● | our expectations regarding future planned expenditures; |
● | our ability to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act; |
4
Table of Contents
● | our ability to obtain, maintain and successfully enforce adequate patent and other intellectual property protection of any of our products and product candidates; |
● | our ability to protect our intellectual property, including pending and issued patents; |
● | our ability to operate our business without infringing the intellectual property rights of others; |
● | our ability to advance our clinical development programs; |
● | the effects of ongoing conflicts between Ukraine and Russia and in the Middle East, potential future bank failures or other geopolitical events; |
● | the potential economic and regulatory impacts on the biotechnology, pharmaceutical and drug manufacturing industries; |
● | the effects of artificial intelligence on our business and the industry as a whole; and |
● | statements of belief and any statement of assumptions underlying any of the foregoing. |
In some cases, you can identify these statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of those terms, and similar expressions. These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Quarterly Report and are subject to risks and uncertainties. We discuss many of these risks in greater detail in the section hereof entitled “Risk Factors” and in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”). Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain. Given these uncertainties, you should not place undue reliance on any of the forward-looking statements included in this Quarterly Report. In addition, this Quarterly Report also contains estimates, projections, and other information concerning our industry, our business, and the markets for our product candidates, as well as data regarding market research, estimates, and forecasts prepared by our management. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.
Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events, or otherwise.
This Quarterly Report includes trademarks and registered trademarks of Armata Pharmaceuticals, Inc. Products or service names of other companies mentioned in this Quarterly Report may be trademarks or registered trademarks of their respective owners.
As used in this Quarterly Report, unless the context requires otherwise, the “Company,” “we,” “us,” and “our” refer to Armata Pharmaceuticals, Inc. and its wholly owned subsidiaries.
5
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Armata Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share data)
| March 31, 2026 | | December 31, 2025 | |||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | | $ | | ||
Prepaid expenses and other current assets |
| |
| | ||
Other receivables | | | ||||
Total current assets |
| |
| | ||
Restricted cash | | | ||||
Property and equipment, net |
| |
| | ||
Operating lease right-of-use asset |
| |
| | ||
In-process research and development | | | ||||
Goodwill | | | ||||
Other assets |
| |
| | ||
Total assets | $ | | $ | | ||
Liabilities and stockholders’ deficit |
| |
| | ||
Current liabilities |
| |
| | ||
Accounts payable and accrued liabilities | $ | | $ | | ||
Accrued compensation | | | ||||
Current portion of operating lease liabilities | | | ||||
Other current liabilities | | | ||||
Total current liabilities |
| |
| | ||
Convertible Loan, non-current | | | ||||
Term debt, non-current | | | ||||
Operating lease liabilities, net of current portion | | | ||||
Deferred tax liability | | | ||||
Total liabilities |
| |
| | ||
Commitments and contingencies (Note 12) |
| |
| | ||
Stockholders’ deficit |
| |
| | ||
Common Stock, $ |
| |
| | ||
Additional paid-in capital |
| |
| | ||
Accumulated deficit |
| ( |
| ( | ||
Total stockholders’ deficit |
| ( |
| ( | ||
Total liabilities and stockholders’ deficit | $ | | $ | | ||
See accompanying notes to condensed consolidated financial statements.
6
Table of Contents
Armata Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
Three Months Ended March 31, | |||||
2026 | | 2025 | |||
Grant and award revenue | $ | | $ | | |
Operating expenses | |||||
Research and development |
| | | ||
General and administrative |
| | | ||
Total operating expenses | | | |||
Operating loss |
| ( |
| ( | |
Other income (expense) |
|
| | ||
Interest income | | | |||
Interest expense | ( | ( | |||
Change in fair value of the Convertible Loan | ( | | |||
Total other income (expense), net |
| ( |
| | |
Net loss | $ | ( | $ | ( | |
Per share information: | |||||
Net loss per share, basic | $ | ( | $ | ( | |
Weighted average shares outstanding, basic | | | |||
Net loss per share, diluted | $ | ( | $ | ( | |
Weighted average shares outstanding, diluted | | | |||
See accompanying notes to condensed consolidated financial statements.
7
Table of Contents
Armata Pharmaceuticals, Inc.
Condensed Consolidated Statements of Stockholders’ Deficit
Three Months Ended March 31, 2026 and 2025
(unaudited)
(in thousands, except share data)
Stockholders’ Deficit | ||||||||||||||
Common Stock | ||||||||||||||
Additional | Total | |||||||||||||
Paid-in | Accumulated | Stockholders’ | ||||||||||||
| Shares | | Amount | | Capital | | Deficit | | Deficit | |||||
Balances, December 31, 2024 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Issuance of Common Stock upon release of restricted stock units, net of tax withholdings | | — | ( | — | ( | |||||||||
Stock-based compensation expense |
| — | — | | — |
| | |||||||
Net loss |
| — | — | — | ( |
| ( | |||||||
Balances, March 31, 2025 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Stockholders’ Deficit | ||||||||||||||
Common Stock | ||||||||||||||
Additional | Total | |||||||||||||
Paid-in | Accumulated | Stockholders’ | ||||||||||||
Shares | | Amount | | Capital | | Deficit | | Deficit | ||||||
Balances, December 31, 2025 |
| | $ | | $ | | $ | ( | $ | ( | ||||
2026 Debt and Warrant Amendments (Note 8) | — | — | | — | | |||||||||
Exercise of stock options | | | | — | | |||||||||
Issuance of Common Stock upon release of restricted stock units, net of tax withholdings | | — | ( | ( | ||||||||||
Stock-based compensation expense | — | — | | — | | |||||||||
Net loss |
| — | — | — | ( | ( | ||||||||
Balances, March 31, 2026 |
| | $ | | $ | | $ | ( | $ | ( | ||||
See accompanying notes to condensed consolidated financial statements.
8
Table of Contents
Armata Pharmaceuticals, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Three Months Ended March 31, | ||||||
| 2026 | | 2025 | |||
Operating activities: | ||||||
Net loss | $ | ( | $ | ( | ||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation expense |
| |
| | ||
Stock-based compensation expense | | | ||||
Change in fair value of the Convertible Loan | | ( | ||||
Non-cash interest expense | | | ||||
Change in right-of-use asset | | | ||||
Changes in operating assets and liabilities: |
|
| ||||
Prepaid expenses and other assets |
| |
| | ||
Accounts payable and accrued liabilities |
| ( |
| ( | ||
Accrued compensation | | ( | ||||
Operating lease liability | ( | ( | ||||
Net cash used in operating activities |
| ( |
| ( | ||
Investing activities: |
| |
| | ||
Purchases of property and equipment | ( | ( | ||||
Net cash used in investing activities |
| ( | ( | |||
Financing activities: |
| |
| | ||
Proceeds from issuance of term debt, net of issuance costs | — | | ||||
Payments for taxes related to net share settlement of equity awards | ( | ( | ||||
Proceeds from exercise of stock options | | — | ||||
Net cash provided by financing activities |
| |
| | ||
Net change in cash, cash equivalents and restricted cash |
| ( |
| | ||
Cash, cash equivalents and restricted cash, beginning of period |
| |
| | ||
Cash, cash equivalents and restricted cash, end of period | $ | | $ | | ||
Supplemental disclosure of cash flow information: |
| |
| | ||
2026 Debt and Warrant Amendments recorded as debt discount (Note 8) | $ | | $ | — | ||
Property and equipment included in accounts payable and accrued liabilities | $ | | $ | | ||
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:
Three Months Ended March 31, | ||||||
2026 | | 2025 | ||||
Cash and cash equivalents | $ | | $ | | ||
Restricted cash | | | ||||
Cash, cash equivalents and restricted cash | $ | | $ | | ||
See accompanying notes to condensed consolidated financial statements.
9
Table of Contents
Armata Pharmaceuticals, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Organization and Description of the Business
Armata Pharmaceuticals, Inc. (“Armata”) together with its subsidiaries (the “Company”), is a late clinical-stage biotechnology company focused on the development of high-purity and potency, pathogen-specific bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using its proprietary bacteriophage-based technology.
Armata’s common stock, par value $
2. Liquidity and Going Concern
The Company has incurred significant operating losses since inception and has primarily relied on equity, debt, grant, and award financing to fund its operations. As of March 31, 2026, the Company had an accumulated deficit of $
The Company has prepared its condensed consolidated financial statements on a going concern basis, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern.
Recent Financing:
May 2026 Credit Agreement
On May 12, 2026, the Company entered into a credit and security agreement (the “May 2026 Credit Agreement”) for a secured term loan facility in the aggregate amount of $
Credit Agreements and Warrants Extensions
On January 23, 2026, the Company entered into amendments to the credit and security agreement, dated March 12, 2025 (the “March 2025 Credit Agreement”), the credit and security agreement, dated March 4, 2024 (the “2024 Credit Agreement”), the credit and security agreement, dated July 10, 2023 (the “2023 Credit Agreement”), and the secured convertible credit and security agreement, dated January 10, 2023 (the “Convertible Credit Agreement”) with Innoviva Strategic Opportunities LLC (“Innoviva Sub”), a wholly owned subsidiary of Innoviva, Inc. (NASDAQ: INVA), the Company’s principal stockholder and a related party (collectively, “Innoviva”), extending the maturity dates to June 1, 2027 (collectively, the “2026 Debt Amendments”). In exchange for the 2026 Debt Amendments, the Company also amended certain outstanding Innoviva Sub warrants to extend their expiration dates to January 26, 2031 (the “Warrant
10
Table of Contents
Amendments,” and together with the 2026 Debt Amendments, the “2026 Debt and Warrant Amendments”), and amended the related voting agreement to align with the revised warrant expiration date or FDA approval, as applicable.
December 2025 Sales Agreement
On December 1, 2025, the Company entered into a Capital on Demand™ Sales Agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC (“Jones”), relating to the offer and sale of shares of its common stock. In accordance with the terms of the Sales Agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $
August 2025 Credit Agreement
On August 11, 2025, the Company entered into a credit and security agreement (the “August 2025 Credit Agreement”) for a secured term loan facility in the aggregate amount of $
The Company plans to raise additional capital through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses and other similar arrangements. While the Company believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, these plans are not entirely within its control and cannot be assessed as being probable of occurring. The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide. The Company may not be able to secure additional financing in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity securities to raise additional funds, its existing stockholders may experience dilution, and the new equity securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders. If the Company raises additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to its potential products on terms that are not favorable to the Company. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve the development and commercialization goals would be adversely affected.
3. Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto as of and for the year ended December 31, 2025 included in the Company’s Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 25, 2026. The information as of December 31, 2025 included in the condensed consolidated balance sheets was derived from the Company’s audited financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the SEC for interim reporting. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments that are of a normal and recurring nature and that are necessary for the fair presentation of the Company’s financial position and the results of its operations and cash flows for the periods presented. Interim results are not necessarily indicative of results for the full year or any future period.
11
Table of Contents
Any reference in the condensed consolidated financial statements to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).
Significant Accounting Policies
The significant accounting policies used in preparation of the condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 are consistent with those discussed in Note 3 to the consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2025, filed with the SEC on March 25, 2026.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. On an ongoing basis, the Company evaluates estimates and assumptions, including but not limited to those related to the fair value of the Convertible Loan, stock-based compensation expense, accruals for research and development costs, the valuation of deferred tax assets, impairment of goodwill and intangible assets and impairment of long-lived assets. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates.
Concentration of Credit Risks and Certain Other Risks
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and restricted cash. As of March 31, 2026, cash equivalents and restricted cash were invested primarily in money market funds through highly rated financial institutions in accordance with the Company’s investment policy, to a concentration limit per issuer or sector.
Other receivables represent amounts due from the Medical Technology Enterprise Consortium (“MTEC”) (Note 13, “Grants and Awards”).
Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued Accounting Standards Update 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact on the Company’s consolidated financial statement disclosures.
4. Fair Value Measurements
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering
12
Table of Contents
market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following three levels:
The financial assets and liabilities measured and recognized at fair value were as follows as of March 31, 2026 and December 31, 2025 (in thousands):
March 31, 2026 | |||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||
Investments in money market fund – financial assets, included in cash and cash equivalents | $ | | $ | | $ | — | $ | — | |||
Convertible Loan– financial liabilities | | — | — | | |||||||
December 31, 2025 | |||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||
Investments in money market fund – financial assets, included in cash and cash equivalents | $ | | $ | | $ | — | $ | — | |||
Convertible Loan– financial liabilities | | — | — | | |||||||
The Company’s Convertible Loan (Note 7, “Convertible Loan”) is measured at fair value at inception and remeasured at each measurement period, with changes in fair value recorded as other income (expense) in the condensed consolidated statement of operations. The Company estimates the fair value of its Convertible Loan using a weighted probability model of various debt settlement scenarios during its term discounted to the reporting date. Conversion option scenarios are valued using option pricing models with assumptions and estimates such as volatility, expected term and risk-free interest rates. Level 3 fair value inputs include probability and timing of various settlement scenarios and selection of comparable companies.
The Company estimated the fair value of its Convertible Loan using the following inputs during the year ended December 31, 2025:
December 31, 2025 | ||
Discount rate | ||
Probabilities of settlement scenarios | ||
Volatility | ||
Expected term (in years) | ||
Risk-free rate |
13
Table of Contents
During the three months ended March 31, 2026, the Company estimated the fair value of the Convertible Loan on an as-converted basis, assuming a 100% conversion into equity.
The following table presents a summary of the changes in the fair value of its Convertible Loan for the three months ended March 31, 2026 and 2025 (in thousands):
Three Months Ended March 31, | |||||
2026 | 2025 | ||||
Convertible Loan at the beginning of the period | $ | | $ | | |
Change in fair value | |
| ( | ||
Convertible Loan at the end of the period | $ | | $ | | |
5. Net Loss per Share
The computation of basic EPS is based on the weighted-average number of the Company’s Common Stock outstanding. The computation of diluted EPS is based on the weighted-average number of the Company’s Common Stock outstanding and potential dilutive common stock. Diluted EPS is computed using the treasury stock method, which reflects the potential dilution that would occur if securities or other contracts to issue Common Stock were exercised or converted to the Company’s Common Stock. The Company’s Common Stock options, warrants, and unvested restricted stock units were not included in dilutive EPS for the periods presented as their impact would be antidilutive.
The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the three months ended March 31, 2026 and 2025 (in thousands, except share and per share data):
Three Months Ended March 31, | |||||||
| 2026 | | 2025 | ||||
Numerator: |
| |
| |
| ||
Net loss attributable to common stockholders, basic | $ | ( | $ | ( | |||
Change in fair value of the Convertible Loan | — | ( | |||||
Net loss attributable to common stockholders, diluted | $ | ( | $ | ( | |||
Denominator: | |||||||
Weighted average shares outstanding, basic | | | |||||
Shares issuable upon the conversion of the Convertible Loan | — | | |||||
Weighted average common shares outstanding, diluted |
| |
| | |||
Net loss per share, basic | $ | ( | $ | ( | |||
Net loss per share, diluted | $ | ( | $ | ( | |||
14
Table of Contents
The following outstanding securities as of March 31, 2026 and March 31, 2025 have been excluded from the computation of dilutive weighted-average shares outstanding, as they would have been anti-dilutive:
| March 31, 2026 | | March 31, 2025 | | |
Outstanding stock options |
| |
| | |
Unvested restricted stock units | | | |||
Shares issuable upon the conversion of the Convertible Loan | | (1) | — | ||
Outstanding warrants | | | |||
| |
| |
|
(1) The Company determined the number of shares issuable upon the conversion of the Convertible Loan as of March 31, 2026, based on the Convertible Loan principal amount of $
6. Balance Sheet Details
Property and Equipment, net
Property and equipment as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
| March 31, 2026 | | December 31, 2025 | |||
Laboratory equipment | $ | | $ | | ||
Furniture and fixtures | | | ||||
Office and computer equipment |
| |
| | ||
Leasehold improvements |
| |
| | ||
Total | | | ||||
Less: accumulated depreciation |
| ( |
| ( | ||
Property and equipment, net | $ | | $ | | ||
Depreciation expense totaled $
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
March 31, 2026 | | December 31, 2025 | ||||
Accounts payable | $ | | $ | | ||
Accrued clinical trial expenses | | | ||||
Other accrued expenses | | | ||||
$ | | $ | | |||
7. Convertible Loan
On January 10, 2023, the Company received the convertible loan in the aggregate amount of $
The Convertible Loan principal and accrued interest are payable at maturity. Repayment of the Convertible Loan is guaranteed by the Company’s domestic subsidiaries and foreign material subsidiaries, and the Convertible Loan is secured by substantially all of the assets of the Company and the subsidiary guarantors.
15
Table of Contents
The Convertible Credit Agreement provides that if there is a financing from new investors of at least $
The Company evaluated authoritative guidance for accounting for the Convertible Loan and concluded that the Convertible Loan should be accounted for at fair value under ASC 480, Distinguishing Liabilities from Equity, due to the fact that the Convertible Loan will predominately be settled with the Company’s Common Stock. Consequently, the Company recorded the Convertible Loan in its entirety at fair value on its consolidated balance sheet, with changes in fair value recorded as other income (expenses) in the consolidated statements of operations during each reporting period.
On January 23, 2026, the Company entered into amendments to the Convertible Credit Agreement, the March 2025 Credit Agreement, the 2024 Credit Agreement, and the 2023 Credit Agreement with Innoviva Sub, which, among other things, extended the maturity dates of the respective agreements to June 1, 2027 as well as extended maturity dates of certain outstanding warrants (Note 9) till January 26, 2031 (collectively, the “2026 Debt and Warrant Amendments”).
The Company determined that the 2026 Debt and Warrant Amendments should be accounted for as a single combined transaction. The Company further concluded that the amendments constitute a troubled debt restructuring (“TDR”) for accounting purposes, as the Company was experiencing financial difficulty, and Innoviva Sub, in connection with the 2026 Debt and Warrant Amendments, granted a concession to the Company.
Following the January 23, 2026 amendment of the Convertible Loan, the Company continues to account for the Convertible Loan at fair value on its consolidated balance sheets, with changes in fair value recognized in other income (expense), net, in the consolidated statements of operations in each reporting period. The Company recognized a loss of $
8. Term Debt
The 2023 Credit Agreement, 2024 Credit Agreement, March 2025 Credit Agreement, and August 2025 Credit Agreement each contains customary affirmative and negative covenants and representations and warranties, including financial reporting obligations and certain limitations on indebtedness, liens, investments, distributions (including dividends), collateral, investments, mergers or acquisitions and fundamental corporate changes. Each of the 2023 Credit Agreement, the 2024 Credit Agreement, March 2025 Credit Agreement, and August 2025 Credit Agreement also includes customary events of default, including payment defaults, breaches of provisions under the loan documents, certain losses or impairment of collateral and related security interests, the occurrence of certain events that could reasonably be expected to have a “material adverse effect” as set forth therein, certain bankruptcy or insolvency events, and a material deviation from the Company’s operating budget. In addition, each of the credit agreements include customary mandatory prepayment provisions that require the Company to apply specified proceeds received by the Company to prepay outstanding borrowings under the respective credit facilities. Mandatory prepayment events are triggered upon the receipt of proceeds from asset sales or other dispositions, casualty or condemnation events, the incurrence of indebtedness not otherwise permitted under the agreements, or the issuance of certain equity interests.
On July 10, 2023, the Company entered into the 2023 Credit Agreement. The 2023 Credit Agreement provides for a secured term loan facility in an aggregate amount of $
16
Table of Contents
Loan”), and is scheduled to mature on June 1, 2027. Principal and accrued interest are payable at maturity. Repayment of the 2023 Loan is guaranteed by the Company’s domestic subsidiaries, and the 2023 Loan is secured by substantially all of the assets of the Company and the subsidiary guarantors. The 2023 Loan was initially recognized at fair value of $
On March 4, 2024, the Company entered into the 2024 Credit Agreement for a secured term loan facility in an aggregate amount of $
Repayment of the 2024 Loan is guaranteed by the Company’s domestic subsidiaries, and the 2024 Loan is secured by substantially all of the assets of the Company and the subsidiary guarantors. The 2024 Loan was initially recognized at cash proceeds of $
On March 12, 2025, the Company entered into the March 2025 Credit Agreement for a secured term loan facility in an aggregate amount of $
On August 11, 2025, the Company entered into the August 2025 Credit Agreement for the August 2025 Loan in an aggregate amount of $
Since the 2026 Debt and Warrant Amendments constitute a TDR and the total undiscounted future cash payments under the amended debts terms exceed the carrying amount of the existing debts as of the 2026 Debt and Warrant Amendments date, no adjustment to the carrying amounts of the debts was recorded and no gain was recognized. Instead, the Company established a revised effective interest rate based on the modified contractual cash flows. The revised effective interest rate of
The Company recorded a $
The debt discount is subsequently amortized to interest expense over the remaining term of the amended debts using the effective interest method.
17
Table of Contents
The Company estimated the increase in the fair value of the warrants associated with the 2026 Debt and Warrant Amendments utilizing the Black-Scholes valuation model with the following assumptions:
Three Months Ended March 31, 2026 | ||
Discount rate | ||
Expected Volatility | ||
Expected term (in years) | ||
Expected dividend yield |
9. Stockholders’ Deficit
Warrants
As of March 31, 2026, outstanding warrants to purchase shares of the Company’s Common Stock were as follows:
Shares | Exercise Price | | Expiration Date | ||
| $ | | |||
| $ | | |||
| $ | | |||
| $ | | |||
| $ | | None | ||
|
| | | ||
On January 23, 2026, the Company extended the expiration date of
Shares Reserved for Future Issuance
As of March 31, 2026, the Company had reserved shares of its Common Stock for future issuance as follows:
| March 31, 2026 | |
Stock options outstanding | | |
Unvested restricted stock units | | |
Shares issuable under the Employee Stock Purchase Plan | | |
Shares available for future grants under the 2016 Plan | | |
Warrants outstanding | | |
Shares issuable upon the conversion of the Convertible Loan | | |
Total shares reserved | |
10. Equity Incentive Plans
Stock Award Plans
The Company maintains a 2016 Equity Incentive Plan (the “2016 Plan”), which provides for the issuance of incentive share awards in the form of non-qualified and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and performance-based stock awards. As of March 31, 2026, there were
18
Table of Contents
Stock option transactions during the three months ended March 31, 2026 are presented below:
Options Outstanding | ||||||||||
Weighted | ||||||||||
Average | ||||||||||
Weighted | Remaining | |||||||||
Average | Contractual | Aggregate | ||||||||
Exercise | Term | Intrinsic | ||||||||
| Shares | | Price | | (Years) | | Value (in thousands) | |||
Outstanding at December 31, 2025 |
| | $ | |
| $ | | |||
Granted |
| | $ | |
|
| $ | — | ||
Exercised | ( | $ | | $ | | |||||
Forfeited/Cancelled/Expired |
| ( | $ | |
|
| $ | — | ||
Outstanding at March 31, 2026 |
| | $ | |
| $ | | |||
Vested and expected to vest at March 31, 2026 |
| | $ | |
| $ | | |||
Exercisable at March 31, 2026 |
| | $ | |
| $ | | |||
The aggregate intrinsic value of options at March 31, 2026 is based on the Company’s closing stock price on that date of $
Restricted stock unit award transactions during the three months ended March 31, 2026 are presented below:
Weighted Avg | |||||
Grant Date | |||||
| Shares | | Fair Value | ||
Outstanding at December 31, 2025 | | $ | | ||
Granted | — | $ | — | ||
Vested | ( | $ | | ||
Cancelled | — | $ | — | ||
Outstanding at March 31, 2026 | | $ | | ||
Stock-based Compensation
The Company estimates the fair value of stock options with performance and service conditions using the Black-Scholes valuation model (“Black-Scholes”). Compensation expense related to stock options granted is measured at the grant date based on the estimated fair value of the award and is recognized on the accelerated attribution method over the requisite service period.
The assumptions used in the Black-Scholes model during the three months ended March 31, 2026 and 2025 are presented below:
Three Months Ended March 31, | ||||
| 2026 | | 2025 | |
Risk-free interest rate | ||||
Expected volatility | ||||
Expected term (in years) | ||||
Expected dividend yield | ||||
The table below summarizes the total stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the periods presented (in thousands):
Three Months Ended March 31, | ||||||
| 2026 | | 2025 | |||
Research and development | $ | | $ | | ||
General and administrative |
| |
| | ||
Total stock-based compensation expense | $ | | $ | | ||
19
Table of Contents
As of March 31, 2026, there was $
11. Income Taxes
The Company did
12. Commitments and Contingencies
Operating Leases
The Company leases office and research and development space under a non-cancelable operating lease in Marina del Rey, California, with the lease term running through December 31, 2031. Annual base rent is from $
On October 28, 2021, the Company entered into a lease for office and research and development space under a non-cancellable lease in Los Angeles, California (the “2021 Lease”). The 2021 Lease payment start date was May 1, 2022 and the total lease term is for
In connection with the execution of the 2021 Lease, the Company delivered an irrevocable standby letter of credit in the amount of $
Future minimum annual lease payments under the Company’s non-cancelable operating leases as of March 31, 2026 are as follows (in thousands):
| Operating | ||
Leases | |||
2026 (remaining) | $ | | |
2027 | | ||
2028 | | ||
2029 | | ||
2030 | | ||
Thereafter | | ||
Total minimum lease payments | | ||
Less: amount representing interest | ( | ||
Present value of operating lease obligations | | ||
Less: current portion | ( | ||
Noncurrent operating lease obligations | $ | | |
Operating lease expenses were $
20
Table of Contents
The following table summarizes supplemental cash flow information related to the Company’s operating leases for the three months ended March 31, 2026 and 2025 (in thousands):
Three Months Ended March 31, | ||||||
2026 | | 2025 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows from operating leases | $ | | $ | | ||
The following table summarizes the weighted-average remaining lease term and weighted-average discount rate related to the Company’s operating leases as of March 31, 2026 and December 31, 2025:
March 31, 2026 | December 31, 2025 | |||||
Weighted-average remaining lease term, years | ||||||
Weighted-average discount rate, % |
Impairment of ROU Asset
During the year ended December 31, 2025, an impairment charge of $
Legal Proceedings
From time to time, the Company may be involved in disputes, including litigation, relating to claims arising out of operations in the normal course of business. Any of these claims could subject the Company to costly legal expenses and, while management generally believes that there is adequate insurance to cover many different types of liabilities, the Company’s insurance carriers may deny coverage or policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on the Company’s consolidated results of operations and financial position. Additionally, any such claims, whether or not successful, could damage the Company’s reputation and business. The Company is currently not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on our consolidated results of operations or financial position.
13. Grants and Awards
MTEC Award
On June 15, 2020, the Company entered into an agreement (the “MTEC Agreement”) with MTEC, pursuant to which the Company received a $
21
Table of Contents
2 meeting with the FDA. The MTEC Agreement specifies that the award will be paid to the Company over the term of the award through a cost reimbursable model, based on agreed upon cost share percentages, and the money received is not refundable to MTEC.
Upon license or commercialization of intellectual property developed with the funding from the MTEC Agreement, additional fees will be due to MTEC. The Company will elect whether to (a) pay a fixed royalty amount, which is subject to a cap based upon total funding received, or (b) pay an additional assessment fee, which would also be subject to a cap based upon a percentage of total funding received.
The MTEC Agreement is effective through September 30, 2026, and may be terminated, in whole or in part, upon 30 calendar days’ prior written notice from the Company to MTEC. In addition, MTEC has the right to terminate the MTEC Agreement upon material breach by the Company.
The Company determined that the MTEC Agreement is not in the scope of ASC 808 or ASC 606. Applying ASC 606 by analogy the Company recognizes proceeds received under the MTEC Agreement as grant and award revenue in the statement of operations when related costs are incurred. The Company recognized $
CFF Therapeutics Development Award
On March 13, 2020, the Company entered into an award agreement (the “Award Agreement”) with the CFF, pursuant to which the Company received a Therapeutics Development Award of up to $
The first payment under the Award Agreement, in the amount of $
If the Company ceases to use commercially reasonable efforts directed to the development of AP-PA02, or any other Product (as defined in the Award Agreement), for a period of
Upon commercialization by the Company of any Product, the Company will owe a fixed royalty amount to CFF, which is to be paid in installments determined, in part, based on commercial sales volumes of the Product. The Company will be obligated to make an additional fixed royalty payment upon achieving specified sales milestones. The Company may also be obligated to make a payment to CFF if the Company transfers, sells or licenses the Product in the CF Field, or if the Company enters into a change of control transaction.
The term of the Award Agreement commenced on March 10, 2020 and expires on the earlier of the date on which the Company has paid CFF all of the fixed royalty payments set forth therein, the effective date of any license granted to CFF following an Interruption, or upon earlier termination of the Award Agreement. Either CFF or the Company may terminate the Award Agreement for cause, which includes the Company’s material failure to achieve certain development milestones. The Company’s payment obligations survive the termination of the Award Agreement.
22
Table of Contents
The Company concluded that the CFF Award is in the scope of ASC 808. Accordingly, as discussed in Note 3, “Significant Accounting Policies” of its 2025 Annual Report, the Company recognizes the award upon achievement of certain milestones as credits to research and development expenses.
14. Segment Reporting
The Company operates and manages its business as
The following table includes certain segment information for the periods presented (in thousands):
Three Months Ended March 31, | ||||||
2026 | 2025 | |||||
Grant and award revenue | $ | | $ | | ||
Operating expenses | ||||||
Research and development expenses: | ||||||
AP-PA02: Non-Cystic Fibrosis Bronchiectasis | ( | ( | ||||
AP-PA02: Cystic Fibrosis | - | | ||||
AP-SA02: Bacteremia | | | ||||
AP-SA02: Prosthetic Joint Infection | - | | ||||
Expenses not allocated by projects | | | ||||
Total external research and development expenses | | | ||||
Research and development personnel expenses | | | ||||
Other research and development expenses | | | ||||
Total research and development expenses | | | ||||
General and administrative expenses: | ||||||
General and administrative personnel expenses | | | ||||
Other general and administrative expenses | | | ||||
Total general and administrative expenses | | | ||||
Total operating expenses | | | ||||
Operating loss | ( | ( | ||||
Other income (expense), net | ( | | ||||
Net loss | $ | ( | $ | ( | ||
15. Subsequent Event
May 2026 Credit Agreement
On May 12, 2026, the Company entered into the May 2026 Credit Agreement for the May 2026 Loan in the aggregate amount of $
23
Table of Contents
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report, and our audited financial statements and notes thereto as of and for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed on March 25, 2026 with the U.S. Securities and Exchange Commission (the “SEC”).
Our common stock, par value $0.01 per share (the “Common Stock”) is traded on the NYSE American exchange under the symbol “ARMP.” We are headquartered in Los Angeles, California, and we have a research and development facility (the “McConnell Facility”) to support advancing phage products from discovery to the clinic. The facility is also equipped with approximately 10,000 square feet of licensed current good manufacturing practice (“cGMP”) drug manufacturing suites enabling the production, testing and release of clinical trial material.
Statements contained in this Quarterly Report that are not statements of historical fact are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements concerning product development plans, commercialization of our products, the expected market opportunity for our products, the use of bacteriophages and synthetic phages to kill bacterial pathogens, future funding sources, general and administrative expenses, clinical trial and other research and development expenses, costs of manufacturing, costs relating to our intellectual property, capital expenditures, the expected benefits of our targeted phage therapies strategy, the potential market for our products, tax credits and carry-forwards, and litigation-related matters. Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “will,” “goal,” “potential” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements necessarily contain these identifying words. These statements are subject to risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed on March 25, 2026 with the SEC, and under Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. These forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to update any forward-looking statements.
Overview
We are a late clinical-stage biotechnology company focused on the development of high-purity and potency, pathogen-specific bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using our proprietary bacteriophage-based technology. We have completed three Phase 2 clinical trials to date.
We see bacteriophages as a potentially safer and effective alternative to antibiotics and an essential response to the growing bacterial resistance to current classes of antibiotics. Bacteriophages or “phages” have a powerful and highly differentiated mechanism of action that enables binding to and killing of specific targeted bacteria while uniquely preserving the normal human microbiome or “healthy bacteria”. This is in direct contrast to traditional broad-spectrum antibiotics which can alter the human microbiome increasing susceptibility to opportunistic pathogens, such as Clostridium difficile. We believe that phages represent a promising means to effectively treat bacterial infections as an alternative to broad-spectrum antibiotics, especially for patients with bacterial infections resistant to current standard of care therapies, including the multidrug-resistant or “superbug” strains of bacteria. We are a leading developer of clinical-stage phage therapeutics of high purity and potency, and believe we are uniquely positioned to address the growing worldwide threat of antibiotic-resistant bacterial infections.
We are combining our proprietary approach and expertise in identifying, characterizing and developing both naturally occurring and engineered bacteriophages with our proprietary phage-specific host-engineered cGMP manufacturing capabilities to advance a clinical pipeline of high-quality bacteriophage product candidates. We believe that we are uniquely advancing two distinct clinical candidates, referred to as AP-PA02 and AP-SA02, targeting two different bacterial pathogens with the potential to treat chronic pulmonary disease complicated by bacterial infection as well as acute systemic bacterial infection. To date, we have completed three critical Phase 2 randomized, double-blind,
24
Table of Contents
placebo controlled clinical trials. We have combined our clinical data with rigorous and innovative in vitro science to extend our knowledge of phage biology enabling continued enhancement of in vivo phage function.
Importantly, we have improved our manufacturing processes, which significantly increases phage titers and purity, and improves production efficiency. Aligned with these improvements, we have been able to reproducibly produce high titer and high purity phages with lot-to-lot consistency, configuring our phage platform for full commercialization with the goal of ensuring commercial viability of our current and future phage product candidates across a variety of potential use cases.
We remain committed to our mission to evaluate phage-based therapeutics in randomized controlled clinical trials that evaluate safety and efficacy required to support potential regulatory approval and commercialization of our phage products as alternatives to traditional antibiotics, providing a potential method of treating patients suffering from drug-resistant and difficult-to-treat bacterial infections.
Pseudomonas aeruginosa Phage Product Candidate, AP-PA02
Clinical Development of AP-PA02 in Cystic Fibrosis: Completed Phase 1b/2a Study
Our first phage candidate, inhaled AP-PA02, is focused primarily on the treatment of chronic pulmonary infections due to Pseudomonas aeruginosa (“P. aeruginosa”). On October 14, 2020, we received the approval to proceed from the U.S. Food and Drug Administration (the “FDA”) for our Investigational New Drug (“IND”) application for AP-PA02. In the first quarter of 2023, we announced positive topline results from the completed “SWARM-P.a.” study – a Phase 1b/2a, multicenter, double-blind, randomized, placebo-controlled, single ascending dose and multiple ascending dose clinical trial to evaluate the safety and tolerability of inhaled AP-PA02 in subjects with cystic fibrosis (“CF”) and chronic pulmonary P. aeruginosa infection. Data indicate that AP-PA02 was well-tolerated with a treatment emergent adverse event profile similar to placebo. Pharmacokinetics findings confirm that AP-PA02 can be effectively delivered to the lungs through nebulization with minimal systemic exposure, with single ascending doses and multiple ascending doses resulting in a proportional increase in exposure as measured in induced sputum. AP-PA02 exposures were generally consistent across subjects. Additionally, bacterial levels of P. aeruginosa in the sputum measured at several timepoints suggest improvement in bacterial load reduction for subjects treated with AP-PA02 at the end of treatment as compared to placebo after ten days of dosing. In addition, a correlation was seen between increasing phage dose (higher AP-PA02 exposures) and reduction in the bacterial load, supporting the biologic plausibility of a bacterial specific mechanism of action and creating the opportunity for phage as a therapeutic alternative to inhaled antibiotics. This study was supported by the CFF, which granted us a Therapeutics Development Award of $5.0 million. The total amount of the CFF Award was recognized through December 2023, and the final payment was received in 2024. Following the promising Phase 1b/2a results of favorable safety and tolerability profile and plausible mechanism of action, an additional confirmatory Phase 2 trial was initiated in non-cystic fibrosis bronchiectasis (“NCFB”) patients with similar chronic pulmonary disease with infections due to P. aeruginosa.
Clinical Development of AP-PA02 in Non-Cystic Fibrosis Bronchiectasis: Completed Phase 2 Study
On February 22, 2022, Armata announced that it had received from the FDA the approval to proceed for our IND application for AP-PA02, in a second indication, NCFB. On December 19, 2024, Armata announced encouraging results from the completed “Tailwind” study – a Phase 2 multicenter, double-blind, randomized, placebo-controlled study to evaluate the safety, phage kinetics, and efficacy of inhaled AP-PA02 in subjects with NCFB and chronic pulmonary P. aeruginosa infection. Data indicated that inhaled AP-PA02 provides a durable reduction of P. aeruginosa in the lung, with a favorable safety and tolerability profile. The Tailwind study was conducted in two cohorts running in parallel: subjects in one cohort (cohort A) received inhaled AP-PA02 as monotherapy, while subjects in another cohort (cohort B) received inhaled AP-PA02 in combination with inhaled anti-pseudomonal antibiotic treatment. Subjects in both cohorts were dosed at home by nebulization with study drug administered every 12 hours for 10 days and were followed for approximately four weeks after receiving their last dose of study drug. The primary efficacy endpoint was the reduction in P. aeruginosa colony forming units (“CFUs”) in lung sputum at one week following completion of dosing (day 17) compared to baseline. Per the statistical analysis plan, efficacy analysis of each independent cohort showed no significant difference between subjects treated with AP-PA02 and placebo due to small numbers of subjects in each
25
Table of Contents
cohort. Notably, a post-hoc intent-to-treat analysis (n=33 active and n=15 placebo; all subjects from both cohorts) demonstrated a statistically significant reduction of P. aeruginosa CFUs in the lung at day 17 (AP-PA02 vs. placebo; P=0.05). The reduction in P. aeruginosa CFUs persisted two weeks following completion of dosing with AP-PA02 when compared with placebo at day 24 (AP-PA02 vs. placebo; P=0.015). Additionally, paired analysis of P. aeruginosa CFU density at baseline compared to day 10 (P=0.03), day 11 (P=0.01), day 17 (P=0.003) and day 24 (P=0.018) was significant in the AP-PA02-treated cohort. We believe the data suggest that AP-PA02 alone is as effective as the combination therapy of phage and antibiotics in reducing P. aeruginosa CFUs in the lung. Additionally, approximately one-third of subjects treated with phage monotherapy exhibited at least a 2-log CFU reduction in P. aeruginosa compared to no reduction in placebo treated subjects. Safety data indicate that inhaled AP-PA02 was well-tolerated with treatment-emergent adverse events mild and self-limiting. There was one possibly related serious adverse event that was linked to an acute pulmonary event requiring hospitalization that was responsive to antibiotics. We believe the safety and tolerability of AP-PA02 offers a promising profile for treating chronically infected NCFB patients.
Results from the Phase 2 Tailwind study demonstrate the potential of Armata’s high-purity phage cocktail, AP-PA02, as a new monotherapy treatment alternative for chronic pulmonary disease caused by P. aeruginosa infection, including drug-resistant bacteria, and indicate the potential for phage therapy to reduce reliance on chronic antibiotic use. The Phase 2 Tailwind study represents the second successful clinical trial for AP-PA02, Armata’s lead pulmonary candidate, which was first evaluated in people with cystic fibrosis in the Phase 1b/2a SWARM-P.a. trial that completed in 2023. We believe the learnings on dose-schedule regimens gained from the two completed Phase 2 studies position us to define a safe and promising biologic correlation for a Phase 3 definitive trial to evaluate inhaled AP-PA02 as an alternative to antibiotics in chronic pulmonary P. aeruginosa infection.
Contingent upon securing sufficient additional funding, we may at the appropriate time in the future resume clinical development of AP-PA02 for NCFB, which may include the execution of a definitive Phase 3 clinical trial. We are also actively exploring potential strategic partnerships as a means to further advance this important program.
Pseudomonas aeruginosa Phage Product Candidate, AP-PA03: Platform Expansion
Based on clinical findings with our intravenously administered S. aureus phage product candidate AP-SA02 (described below), and the approach that the Company’s P. aeruginosa phage cocktails are formulated with the same high potency and purity standards, we are exploring preclinical development of an intravenously administered P. aeruginosa phage cocktail for the treatment of acute ventilator-associated pneumonia (“VAP”) and other severe and difficult-to-treat infections caused by antibiotic-resistant and multidrug-resistant P. aeruginosa. Recognizing the distinct physiology of acute hospitalized pneumonia compared to chronic respiratory infections such as CF and NCFB, we are developing a novel phage cocktail specifically for acute bacterial pneumonia and have leveraged our extensive P. aeruginosa clinical isolate collection and phage library to identify AP-PA03 as a potential clinical candidate for this indication. Contingent upon securing sufficient funding, we may at the appropriate time in the future file an IND application in order to initiate clinical development of AP-PA03 for the treatment of VAP.
Staphylococcus aureus Phage Product Candidate, AP-SA02
Clinical Development of AP-SA02 in Bacteremia: Completed Phase 1b/2a Study
In parallel to developing novel phage therapeutics that target chronic bacterial infections, we have an acute bacterial infection clinical development program focused on S. aureus bacteremia, a difficult-to-treat and often life-threatening human infection that can result in high morbidity and mortality and for which bacterial resistance to antibiotics is growing.
We believe a key advantage of our phage manufacturing expertise is the purity profiles and the lot-to-lot consistency of our phage products, including AP-SA02, our phage product candidate for S. aureus; this has enabled us to pursue treatment of complicated S. aureus bacteremia, where repetitive intravenous (“IV”) dosing is required. On November 17, 2021, we announced that we had received approval from the FDA to proceed with our IND application for AP-SA02.
26
Table of Contents
On May 19, 2025, we announced positive topline data from the Phase 1b/2a diSArm study of intravenously administered AP-SA02 in complicated S. aureus bacteremia. The diSArm study (NCT05184764) was a Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled, multiple ascending dose escalation study of the safety, tolerability, and efficacy of intravenous AP-SA02 in addition to best available antibiotic therapy (“BAT”) compared to BAT alone (placebo) for the treatment of adults with complicated SAB. All doses of AP-SA02 were dosed intravenously every six hours for five days. The primary clinical efficacy endpoint for the Phase 2a portion of the diSArm study was clinical outcome (responder rate) in subjects with complicated bacteremia, measured at (i) Test of Cure (“TOC”) for AP-SA02, defined as one week following the end of IV treatment with AP-SA02 (day 12), (ii) TOC for BAT, defined as one week following the end of IV BAT, and (iii) end of study (“EOS”), defined as four weeks following the end of IV BAT. Clinical outcome was evaluated by both the blinded site investigators and a blinded Clinical Efficacy Adjudication Committee (the “CEAC”) in the intent-to-treat (“ITT”) population.
Safety and efficacy were assessed in the ITT population, which included all subjects (n=50) who received at least one dose of AP-SA02 or placebo. The Phase 2a study enrolled and dosed 42 patients, with 29 randomized to AP-SA02 in addition to BAT and 13 to placebo (BAT alone). Methicillin-resistant S. aureus (“MRSA”) was the causative pathogen in ~38% of both the AP-SA02 and placebo groups.
AP-SA02 was well-tolerated with no serious adverse events related to the study drug. Two subjects had adverse events that were possibly related to the study drug: one with transient liver enzyme elevation and one with hypersensitivity that resolved with discontinuation of vancomycin.
A statistically significant increase in clinical response rate was observed at TOC for AP-SA02 (day 12) in AP-SA02 treated subjects (88%; 21/24) versus placebo (58%; 7/12) (p = 0.047) as assessed by blinded site investigators, and 83% (20/24) in the AP-SA02 group versus 58% (7/12) in the placebo group as assessed by the blinded CEAC. At TOC for BAT and at EOS, 100% of the AP-SA02 treated subjects had clinically responded (p = 0.017) versus 25% of placebo subjects considered non-responsive due to either relapse or treatment failure, consistent with the non-responder rate reported in the literature for recent Phase 3 trials. Of note, the clinical response with AP-SA02 occurred regardless of whether subjects were infected with Methicillin-sensitive S. aureus (“MSSA”) or MRSA. All subjects infected with MRSA and treated with AP-SA02 and BAT cleared their infection by TOC for BAT with no evidence of relapse through EOS, as compared to the relapse rate of BAT alone as noted above. Supporting the investigator assessment, clinical outcome was assessed by the CEAC, who agreed that subjects who received placebo had a 22% and 25% non-responder rate at TOC with BAT and at EOS, respectively, while 100% of the subjects who received AP-SA02 clinically responded (p = 0.025: TOC BAT; p = 0.020: EOS).
Additionally, and consistent with the clinical response rate, patients treated with AP-SA02 showed trends toward rapid normalization of key predictors of mortality and complications in SAB including C-reactive protein and interleukin-10, shorter time to negative blood culture, quicker time to resolution of signs and symptoms at the infection site, shorter intensive care unit and hospital utilization.
Clinical efficacy was observed independent of the BAT utilized, in that all patients responded despite receiving different classes of antibiotics. The active and placebo arms were well-matched for antibiotics utilized. The clinical response rate also occurred independent of the site of infection, which were well-matched between the active and placebo arms, and were diverse ranging from endocarditis, to osteomyelitis, to septic joints, to deep wounds, and pneumonia. Moreover, phages in AP-SA02 administered systemically by IV push, were able to hone to the site of infection, bind to, penetrate and kill the target bacteria, enabling phage progeny to exit the burst bacteria and reenter the intravascular space including further target any remaining local bacteria. Phage are not able to continue to exist and replicate once all target bacteria have been killed.
Defined and reproducible laboratory derived stable genomic variants present in the AP-SA02 drug product may provide an immediate advantage, enabling rapid, strain-specific response to each patient’s S. aureus isolate. These characterized variants can expand from as little as 2% to dominance when infecting certain patient isolates in vitro, highlighting that these variants are favored for their enhanced ability to infect those clinical strains and the importance of integrating this diversity into Armata’s phage cocktail from the outset. This inherent flexibility may be central to achieving optimal therapeutic efficacy in the clinic.
27
Table of Contents
Conclusions:
| • | AP-SA02, combined with BAT, had a higher and earlier cure rate compared to placebo in patients with complicated SAB at day 12 as assessed by both blinded site investigators and independent adjudicators. |
| • | No patients who received AP-SA02 demonstrated non-response or relapse at one week post-BAT or at EOS, as assessed by both blinded site investigators and the independent adjudication committee, compared with approximately 25% non-response or relapse in the placebo group. |
| • | AP-SA02 appears safe with clinical efficacy against both MRSA and MSSA and trends toward earlier resolution and shorter hospitalization, with no evidence of relapse four weeks post-therapy. |
| • | We previously demonstrated the persistence of AP-SA02 in the IV space on multiple days one hour post IV push. These trial results support AP-SA02 homing to different sites of infection, presumably penetrating biofilms, and infecting and lysing the target S. aureus bacteria, independent of both antibiotic resistance patterns and site of infection. |
| • | Defined phage variants in AP-SA02 drug product ensure an intrinsic adaptive mechanism — a flexibility that may be key to achieving effective phage therapy from patient to patient. |
On October 22, 2025, we highlighted the positive results from our Phase 2a diSArm clinical study of AP-SA02 in an oral presentation at IDWeek 2025TM. The abstract, titled, “A Phase 2a Randomized, Double-Blind, Controlled Trial of the Efficacy and Safety of an Intravenous (IV) Bacteriophage Cocktail (AP-SA02) vs. Placebo in Combination with Best Available Antibiotic Therapy (BAT) in Patients with Complicated Staphylococcus aureus Bacteremia,” was accepted as a late-breaking oral presentation, and was presented by Dr. Loren G. Miller, M.D., M.P.H., Professor of Medicine, David Geffen School of Medicine at UCLA, Chief, Division of Infectious Diseases at Harbor-UCLA Medical Center and the Lundquist Institute.
The results from our Phase 1b/2a diSArm study are an important step forward in our effort to confirm the potent antimicrobial activity of phage therapy and the completion of the study represents a significant milestone in the development of AP-SA02, moving us one step closer to introducing an effective new treatment option to patients suffering from complicated SAB. This is the first clear evidence in a randomized controlled trial of the efficacy of phage against a serious systemic pathogen that is responsible for significant morbidity and mortality in the United States.
Findings from the Phase 1b/2a study, including the favorable safety and tolerability profile of AP-SA02, inform the design of a larger definitive efficacy study to demonstrate superiority of AP-SA02 in treating complicated SAB. In January 2026, the Company announced the conclusion of an End-of-Phase 2 (“EOP2”) meeting written response from the FDA. The FDA’s Center for Biologics Evaluation and Research (“CBER”) division, upon reviewing our detailed EOP2 meeting package, confirmed that the safety and efficacy data from our Phase 2a diSArm study support advancement to Phase 3. The FDA provided critical guidance on key elements of the Phase 3 clinical study design, which will assess the superiority of AP-SA02 over the current standard of care for the treatment of complicated S. aureus bacteremia. The FDA provided comments on Chemistry, Manufacturing, and Controls (“CMC”) which we are aligning with our existing Phase 3 manufacturing and quality strategy. The FDA also included recommendations for the future Biologics License Application (“BLA”). As of the date of this filing, we are continuing to address many of the clinical and CMC comments from the FDA.
On February 20, 2026, under Section 505E of the Federal Food, Drug, and Cosmetic Act, the FDA designated AP-SA02 for intravenous use as a Qualified Infectious Disease Product Designation (“QIDP”) for adjunct treatment of complicated bacteremia caused by methicillin-sensitive or methicillin-resistant S. aureus. To achieve QIDP designation, a drug candidate must be intended to treat serious or life-threatening infections, particularly those caused by bacteria and fungi that are resistant to treatment, or that treat qualifying resistant pathogens identified by the FDA. The QIDP designation makes AP-SA02 eligible to benefit from certain incentives for the development of new antibacterials provided under the Generating Antibiotic Incentives Now (“GAIN”) Act, including an additional five-year extension of Hatch-
28
Table of Contents
Waxman market exclusivity. Further, the QIDP designation makes AP-SA02 eligible for Fast Track status, which provides an opportunity for more frequent meetings and communication with the FDA, priority and rolling review, leading to potential accelerated approval of its BLA. As of the date of this filing, the Company has submitted to the FDA a request for Fast Track Designation for AP-SA02.
On June 15, 2020, we entered into an agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which we received a $15.0 million award and entered into a multi-year program administered by the U.S. Department of Defense (the “DoD”) through MTEC and managed by the Naval Medical Research Command – Naval Advanced Medical Development with funding from the Defense Health Agency and Joint Warfighter Medical Research Program. On September 29, 2022, the MTEC Agreement was modified to increase the total award by $1.3 million to $16.3 million and extend the term into the second half of 2024. On July 29, 2024, the MTEC Agreement was modified to increase the total award by $5.3 million to $21.6 million and extend the term into the third quarter of 2025. On April 29, 2025, we received $4.65 million of additional non-dilutive award funding through MTEC, thereby increasing the total MTEC award to $26.2 million, and the MTEC Agreement was modified to extend the term to September 30, 2025. On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026. On March 26, 2026, the MTEC Agreement was modified to extend the term to September 30, 2026. This award has been used to partially fund the Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled dose escalation study to assess the safety, tolerability and efficacy of AP-SA02 for the treatment of adults with complicated S. aureus bacteremia (the “diSArm” study), and to support activities related to the EOP2 meeting with the FDA.
Clinical Development of AP-SA02 in Bacteremia: Phase 3 Superiority Study
The current proposed Phase 3 clinical study design, which incorporates feedback from the Company’s EOP2 meeting with the FDA, is intended to assess the superiority of AP-SA02 administered as an adjunct to 4–6 weeks of BAT for the treatment of adults with complicated S. aureus bacteremia. The trial will evaluate clinical response at 7 days post BAT and/or 28 days post BAT as the primary study endpoint, and defined as resolution of all baseline signs and symptoms of bacteremia and negative blood cultures. Secondary endpoints include clinical response at day 14 (TOC), time to hospital discharge, microbiologic eradication evidenced by two consecutive negative blood cultures, and S. aureus-specific and all-cause mortality at day 14, 7 days post BAT and/or 28 days post BAT. The study is expected to enroll approximately 450 patients in a 2:1 randomization, powered to detect a 15% absolute improvement with 90% power at a 0.05 alpha level, and is designed to provide safety data from approximately 300 AP-SA02-treated subjects (receiving the full 7-day course and followed for 28 days post-BAT) to support a potential BLA. Safety and healthcare resource impact analyses will be included.
The Phase 3 study is anticipated to initiate in the second half of 2026.
S. aureus Bacteremia Clinical Strategy: Moving AP-SA02 to Frontline Therapy, Expanding Patient Populations and Indications
The Company believes that, if clinical superiority of AP-SA02 is demonstrated in the Phase 3 registrational study in adults with complicated S. aureus bacteremia, it is plausible the Phase 3 safety and efficacy data may potentially drive changes to infectious disease clinical treatment guidelines, requiring the use of AP-SA02 with antibiotics as new standard of care. With demonstration of superiority and following a potential initial approval of AP-SA02 in adults with complicated S. aureus bacteremia, the Company believes there may be additional development opportunities for AP-SA02, including use as adjunct therapy with shorter antibiotic treatment durations, and evaluation of AP-SA02 as a potential front-line therapy. Moreover, a potential future bridging study may support label expansion, including expanding into adults with uncomplicated S. aureus bacteremia, and a potential opportunity to expand into the pediatric population given the high titer formulation of AP-SA02 enables administration at small volume doses.
Additional Clinical Indications for AP-SA02
On August 1, 2022, we announced FDA approval to proceed with our IND application for AP-SA02 in a second indication, PJI with S. aureus. We had planned to initiate a Phase 1b/2a trial; however, in light of the growing concerns of both PJI and wound infections, we are considering revising the protocol to include both indications. Driven by data
29
Table of Contents
from the bacteremia studies, and with sufficient funding, we may in the future initiate a Phase 1b/2a trial to assess the safety and tolerability of intravenous and intra-articular AP-SA02 as an adjunct to standard of care antibiotics in adults undergoing treatment of periprosthetic joint infections and/or wound infections caused by S. aureus.
The following chart summarizes the status of our phage product candidate development programs and partners.
*End-of-Phase 2 meeting completed; FDA agreed that data from the Phase 2a diSArm study support advancement of AP-SA02 to a Phase 3 superiority study; anticipated to start 2H 2026.
1. QIDP: Qualified Infectious Disease Product; FTD: Fast Track Designation.
2. Department of Defense (DoD) award received through the Medical Technology Enterprise Consortium (MTEC) and managed by the Naval Medical Research Command (NMRC) – Naval Advanced Medical Development (NAMD) with funding from the Defense Health Agency and Joint Warfighter Medical Research Program.
PJI: prosthetic joint infection; CF: cystic fibrosis; NCFB: non-CF bronchiectasis.
diSArm NCT05184764; SWARM-P.a. NCT04596319; Tailwind NCT05616221.
We have incurred net losses since our inception and our operations to date have been primarily limited to research and development and raising capital. As of March 31, 2026, we had an accumulated deficit of $616.9 million. We currently expect to use our existing cash and cash equivalents for the focused research and development of our current product candidates and for working capital and other general corporate purposes. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the development of and seeking to obtain regulatory approval for our product candidates. We do not expect to generate product revenue unless and until we successfully complete development and obtain marketing approval for at least one of our product candidates. We may also use a portion of our existing cash and cash equivalents for the potential acquisition of, or investment in, product candidates, technologies, formulations or companies that complement our business, although we have no current understandings, commitments or agreements to do so.
Our existing cash and cash equivalents of $4.8 million as of March 31, 2026 will not be sufficient to enable us to complete all necessary development of any potential product candidates and fund our operations for the next 12 months from the date the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, we will be required to obtain further funding through one or more other public or private equity offerings, debt financings, collaboration, strategic financing, grants or government contract awards, licensing arrangements or other sources. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and potential disruptions to, and volatility in, financial markets in the United States and worldwide. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of assets, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations and result in a loss of investment by our stockholders.
30
Table of Contents
Recent Events
Appointment of Daniel B. Gilmer, Ph.D. to Board of Directors
Effective April 24, 2026, Daniel B. Gilmer, Ph.D. joined our Board of Directors. Dr. Gilmer brings 20 years of experience in healthcare commercialization, management consulting, and academic research. Most recently, Dr. Gilmer led an organization at Pfizer responsible for quality and promotional review across 50+ U.S. brands, working closely with medical, legal, and regulatory subject matter experts to advise commercial stakeholders on content quality, compliance, and risk-benefit balance. Previously, from April 2022 to February 2025, Dr. Gilmer led cross-functional teams in Pfizer’s Antiviral and Diagnostics Business, where he launched PAXLOVIDTM in the United States as it received New Drug Approval from the FDA. Earlier at Pfizer, from April 2021 to April 2022, Dr. Gilmer worked in Inflammation & Immunology Commercial Development, where he helped shape strategy for a portfolio of rheumatology and immunology assets. Dr. Gilmer joined Pfizer in Research & Development in May 2019, where he contributed to Pfizer’s COVID-19 vaccine-enabling operating model and R&D portfolio strategy. Dr. Gilmer is an equal co-inventor on the patent for Exebacase (also termed “CF-301” or “PlySs2”), a first-in-class Staphylococcus bacteriophage endolysin. Exebacase received Fast Track and Breakthrough Therapy designations from the FDA before advancing to Phase 3 clinical trials. Dr. Gilmer has authored multiple peer-reviewed publications on phage lysins and antimicrobial resistance. Prior to joining Pfizer, Dr. Gilmer worked at McKinsey & Co. focusing on commercial growth strategies, market access, and lean manufacturing in the United States, Canada, and France. Earlier in his career, he conducted microbiology and infectious disease research at leading academic institutions and the National Institutes of Health. He has a Ph.D. in Microbiology from Rockefeller University (“RU”) and a B.S. from Howard University. As an RU alum, he serves on both the RU Board of Trustees Educational Affairs Committee and the RU Ford Center Incubator selection committee. He is a member of the New York Academy of Sciences and a term member at the Council on Foreign Relations.
May 2026 Credit Agreement
On May 12, 2026, we entered into a credit and security agreement (the “May 2026 Credit Agreement”) for a secured term loan facility in the aggregate amount of $25.0 million (the “May 2026 Loan”) with Innoviva Sub. The May 2026 Loan bears interest at an annual rate of 14.0% and matures on January 11, 2029. Principal and accrued interest are payable at maturity. Repayment of the May 2026 Loan is guaranteed by our domestic subsidiaries, and the May 2026 Loan is secured by substantially all of our and the subsidiary guarantors’ assets.
Credit Agreements and Warrants Extensions
On January 23, 2026, we entered into amendments to the credit and security agreement, dated March 12, 2025 (the “March 2025 Credit Agreement”), the credit and security agreement, dated March 4, 2024 (the “2024 Credit Agreement”), the credit and security agreement, dated July 10, 2023 (the “2023 Credit Agreement”), and the secured convertible credit and security agreement, dated January 10, 2023 (the “Convertible Credit Agreement”) with Innoviva Strategic Opportunities LLC (“Innoviva Sub”), extending the maturity dates to June 1, 2027 (collectively, the “2026 Debt Amendments”). In exchange for the 2026 Debt Amendment, we also amended certain outstanding Innoviva Sub warrants to extend their expiration dates to January 26, 2031, and amended the related voting agreement to align with the revised warrant expiration date or FDA approval, as applicable. Refer to Note 7, “Convertible Loan” and Note 8, “Term Debt”, in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details.
December 2025 Sales Agreement
On December 1, 2025, we entered into a Capital on Demand™ Sales Agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC (“Jones”), relating to the offer and sale of shares of its common stock. 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 $100,000,000 from time to time subject to certain conditions, through or to Jones, acting as agent or principal.
31
Table of Contents
August 2025 Credit Agreement
On August 11, 2025, we entered into a credit and security agreement (the “August 2025 Credit Agreement”) for a secured term loan facility in the aggregate amount of $15.0 million (the “August 2025 Loan”) with Innoviva. The August 2025 Loan bears interest at an annual rate of 14.0% and matures on January 11, 2029. Principal and accrued interest are payable at maturity. Repayment of the August 2025 Loan is guaranteed by our domestic subsidiaries, and the August 2025 Loan is secured by substantially all of our and the subsidiary guarantors’ assets.
MTEC Agreement Modification
On March 26, 2026, the MTEC Agreement was further modified to extend the term to September 30, 2026. We will continue to recognize additional grant and award revenue until the full amount of the amended award is utilized.
Results of Operations
Comparison of three months ended March 31, 2026 and 2025 (in thousands):
Three Months Ended March 31, | Change | |||||||||||
| 2026 | | 2025 | | Amount | | % | |||||
Grant and award revenue | $ | 789 | $ | 491 | $ | 298 | 60.7% | |||||
Operating expenses | ||||||||||||
Research and development |
| 6,111 | 5,429 |
| 682 | 12.6% | ||||||
General and administrative |
| 3,463 | 3,253 |
| 210 | 6.5% | ||||||
Total operating expenses | 9,574 | 8,682 | 892 | 10.3% | ||||||||
Loss from operations |
| (8,785) |
| (8,191) |
| (594) |
| 7.3% | ||||
Other income (expense) |
| |
| |
| |
| | ||||
Interest income | 60 | 59 |
| 1 |
| 1.7% | ||||||
Interest expense | (5,559) | (3,602) | (1,957) | 54.3% | ||||||||
Change in fair value of the Convertible Loan | (101,062) | 5,203 | (106,265) | (2042.4%) | ||||||||
Total other income (expense), net |
| (106,561) |
| 1,660 |
| (108,221) |
| (6519.3%) | ||||
Net loss | $ | (115,346) | $ | (6,531) | $ | (108,815) |
| 1666.1% | ||||
Grant and Award Revenue
We recognized $0.8 million and $0.5 million of grant and award revenue during the three months ended March 31, 2026 and 2025, respectively, which represents MTEC’s share of the costs incurred for our AP-SA02 program for the treatment of SAB.
32
Table of Contents
Research and Development
The following table summarizes our research and development expenses for the three months ended March 31, 2026 and 2025 (in thousands):
Three Months Ended March 31, | Change | |||||||||||
| 2026 | | 2025 | | Amount | | % | |||||
External costs: | ||||||||||||
Clinical trials | $ | 62 | $ | 117 | $ | (55) | (47.0)% | |||||
Other research and development costs, including consulting, laboratory supplies and other | 921 | 627 | 294 | 46.9% | ||||||||
Total external costs |
| 983 | 744 |
| 239 | 32.1% | ||||||
Internal costs: |
|
| ||||||||||
Personnel-related costs | 2,625 | 2,313 | 312 | 13.5% | ||||||||
Facilities and overhead costs |
| 2,503 |
| 2,372 |
| 131 |
| 5.5% | ||||
Total research and development expense: | $ | 6,111 | $ | 5,429 | $ | 682 |
| 12.6% | ||||
Research and development expenses increased by $0.7 million, from $5.4 million for the three months ended March 31, 2025 to $6.1 million for the three months ended March 31, 2026.
Other external research and development costs increased by $0.3 million from $0.6 million for the three months ended March 31, 2025 to $0.9 million for the three months ended March 31, 2026. The increase was primarily due to an increase of lab supplies related to the end-of-Phase 2 FDA meeting and engineering runs.
Our expenses by product and by project for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Three Months Ended March 31, | |||||||
2026 | | 2025 | |||||
Product | Project name | ||||||
AP-PA02 | Non-Cystic Fibrosis Bronchiectasis | $ | (26) | $ | (440) | ||
AP-PA02 | Cystic Fibrosis | 0 | 11 | ||||
AP-SA02 | Bacteremia | 115 | 652 | ||||
AP-SA02 | Prosthetic Joint Infection | 0 | 1 | ||||
Expenses not allocated by projects* | 894 | 520 | |||||
Total external costs | $ | 983 | $ | 744 | |||
* Expenses not allocated by projects include consultants, laboratory supplies and outsourced services expenses.
Personnel-related costs, including employee payroll and related expenses, increased by $0.3 million, from $2.3 million for the three months ended March 31, 2025 to $2.6 million for the three months ended March 31, 2026. The increase was primarily due to a $0.2 million increase in incentive compensation, salaries and wages, and employee benefits and a $0.1 million increase in stock-based compensation.
Facilities and overhead costs increased by $0.1 million, from $2.4 million for the three months ended March 31, 2025 to $2.5 million for the three months ended March 31, 2026. The increase was primarily due to an increase in lab equipment maintenance costs.
33
Table of Contents
General and Administrative
General and administrative expenses were $3.5 million and $3.3 million for the three months ended March 31, 2026 and 2025, respectively. The increase of $0.2 million is primarily related to an increase in stock-based compensation expense.
Interest Income
Interest income remained consistent at $0.1 million for the three months ended March 31, 2026 and 2025, and related to interest earned on our money market fund investments.
Interest Expense
We recognized interest expense of $5.6 million and $3.6 million for the three months ended March 31, 2026 and 2025 respectively. The increase is primarily related to increased debt balances as compared to the prior year period. Interest expense related to the amortization of debt discount and issuance costs for the secured term loan facility in an aggregate amount of $25.0 million pursuant to the 2023 Credit Agreement (the “2023 Loan”), the secured term loan facility in an aggregate amount of $35.0 million pursuant to the 2024 Credit Agreement (the “2024 Loan”), the secured term loan facility in an aggregate amount of $10.0 million pursuant to the March 2025 Credit Agreement (the “March 2025 Loan”) and August 2025 Loan. Stated interest is accrued and is payable at the maturity of the 2023 Loan, 2024 Loan and March 2025 Loan in June 2027, and the August 2025 Loan in January 2029.
Change in Fair Value of the Convertible Loan
We recognized a loss of $101.1 million and gain of $5.2 million on the change in the fair value of the Convertible Loan for the three months ended March 31, 2026 and 2025, respectively.
The Convertible Loan received from Innoviva Sub in January 2023 and amended in July 2023, November 2024, March 2025, and January 2026 is accounted for at fair value using a weighted probability of various settlement scenarios of the Convertible Loan during its term discounted to each reporting date. Conversion option scenarios are valued using an option pricing model with significant assumptions and estimates such as volatility, expected term and risk-free interest rates. Changes in fair value for the three months ended March 31, 2026 and 2025 were primarily due to fluctuations of our stock price. Refer to Note 7, “Convertible Loan”, in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details.
Liquidity, Capital Resources and Financial Condition
We have incurred net losses since our inception and have negative operating cash flows. Our cash and cash equivalents of $4.8 million as of March 31, 2026 will not be sufficient to fund our operations for the next 12 months from the date the condensed consolidated financial statements included elsewhere in this Quarterly Report are issued. We plan to control our expenses and to raise additional capital through a combination of public and private equity, debt financing, strategic alliances, and grant and award arrangements. These circumstances raise substantial doubt about our ability to continue as a going concern. While management believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt, these plans are not entirely within our control and cannot be assessed as being probable of occurring. We may not be able to secure additional financing in a timely manner or on favorable terms, if at all.
On May 12, 2026, we entered into the May 2026 Credit Agreement for the May 2026 Loan in the aggregate amount of $25.0 million with Innoviva Sub. The May 2026 Loan bears interest at an annual rate of 14.0% and matures on January 11, 2029. Principal and accrued interest are payable at maturity. Repayment of the May 2026 Loan is guaranteed by our domestic subsidiaries, and the May 2026 Loan is secured by substantially all of our and the subsidiary guarantors’ assets.
34
Table of Contents
On January 23, 2026, we entered into amendments to the March 2025 Credit Agreement, the 2024 Credit Agreement, the 2023 Credit Agreement and the Convertible Credit Agreement with Innoviva Sub, extending the maturity dates to June 1, 2027. Refer to Note 7, “Convertible Loan” and Note 8, “Term Debt”, in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details. In addition, we amended certain outstanding Innoviva Sub warrants to extend their expiration dates to January 26, 2031, and amended the related voting agreement to align with the revised warrant expiration date or FDA approval, as applicable.
On December 1, 2025, we entered into the Sales Agreement with Jones, relating to the offer and sale of shares of its common stock. 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 $100,000,000 from time to time subject to certain conditions, through or to Jones, acting as agent or principal.
On August 11, 2025, we entered into the August 2025 Credit Agreement for a secured term loan facility in the aggregate amount of $15.0 million. The August 2025 Loan bears interest at an annual rate of 14.0% and matures on January 11, 2029. Principal and accrued interest are payable at maturity. Repayment of the August 2025 Loan is guaranteed by our domestic subsidiaries, and the loan is secured by substantially all of our and the subsidiary guarantors’ assets.
On March 12, 2025, we entered into the March 2025 Credit Agreement for the March 2025 Loan in an aggregate amount of $10.0 million. The March 2025 Loan bears interest at an annual rate of 14.0% and matures on June 1, 2027. Principal and accrued interest are payable at maturity. Repayment of the March 2025 Loan is guaranteed by our domestic subsidiaries, and the loan is secured by substantially all of our and the subsidiary guarantors’ assets.
On July 29, 2024, we amended the MTEC Agreement and increased the amount of the award by $5.3 million to a total of $21.6 million. We will recognize grant and award revenue from the third quarter of 2024 until the full amount of the amended award is utilized.
On April 29, 2025, we received $4.65 million of additional non-dilutive award funding through MTEC, thereby increasing the total MTEC award to $26.2 million, and the MTEC Agreement was modified to extend the term to September 30, 2025. On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026. On March 26, 2026, the MTEC Agreement was modified to extend the term to September 30, 2026. We will continue to recognize additional grant and award revenue until the full amount of the amended award is utilized.
Future Capital Requirements
We will need to raise additional capital in the future to continue to fund our operations. Our future funding requirements will depend on many factors, including:
| ● | the costs and timing of our research and development activities; |
| ● | the progress and cost of our clinical trials and other research and development activities; |
| ● | manufacturing costs associated with our targeted phage therapies strategy and other research and development activities; |
| ● | the costs and timing of seeking regulatory approvals; |
| ● | the costs of filing, prosecuting and enforcing any patent applications, claims, patents and other intellectual property rights; and |
| ● | the costs of potential lawsuits involving us or our product candidates. |
35
Table of Contents
We may seek to raise capital through a variety of sources, including:
| ● | the public equity market; |
| ● | private equity or debt financings; |
| ● | collaborative arrangements; |
| ● | government grants or awards; or |
| ● | strategic financing. |
Any additional fundraising efforts may divert our management team from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. Our ability to raise additional funds will depend, in part, on the success of our product development activities, including our targeted phage therapies strategy and any clinical trials we initiate, regulatory events, our ability to identify and enter into in-licensing or other strategic arrangements, and other events or conditions that may affect our value or prospects, as well as factors related to financial, economic and market conditions, many of which are beyond our control. We cannot be certain that sufficient funds will be available to us when required or on acceptable terms. If we are unable to secure additional funds on a timely basis or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of technology or assets, pursue an acquisition of our company by a third party at a price that may result in a loss on investment for our stockholders, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations, increase the risk of insolvency and loss of investment by our stockholders. To the extent that additional capital is raised through the sale of equity or convertible loan securities, the issuance of such securities could result in dilution to our existing stockholders. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide.
Cash Flows
The following table summarizes our sources and uses of cash for the periods presented (in thousands):
Three Months Ended March 31, | ||||||
2026 | | 2025 | ||||
Net cash provided by (used in): | ||||||
Operating activities | $ | (5,782) | $ | (7,580) | ||
Investing activities | (63) | (99) | ||||
Financing activities | 641 | 9,986 | ||||
Net change in cash, cash equivalents and restricted cash | $ | (5,204) | $ | 2,307 | ||
Cash Flows Used in Operating Activities
Net cash used in operating activities was $5.8 million and $7.6 million for the three months ended March 31, 2026 and 2025, respectively.
Cash used in operating activities in the three months ended March 31, 2026 was primarily due to our net loss for the period of $115.3 million, adjusted by non-cash items of $108.7 million and an increase of $0.9 million in our net operating assets and liabilities. The non-cash items consist of $101.1 million related to a loss from the change in fair value of the Convertible Loan, $5.6 million of non-cash interest expense on the 2023 Loan, 2024 Loan, March 2025 Loan, and August 2025 Loan, $1.1 million related to stock-based compensation expense, $0.5 million related to depreciation expense, and $0.5 million related to change in right-of-use asset. The increase in our net operating assets
36
Table of Contents
and liabilities was primarily due to an increase of $0.6 million in accrued compensation, a decrease of $0.4 million in accounts payable and accrued liabilities, a decrease of $0.3 million in the operating lease liability, and an increase of $0.9 million in prepaid expenses and other current assets.
Cash used in operating activities in the three months ended March 31, 2025 was primarily due to our net loss for the period of $6.5 million, adjusted by non-cash items of $0.1 million and a decrease of $1.2 million in our net operating assets and liabilities. The non-cash items consist of $5.2 million related to a gain from change in fair value of the Convertible Loan, $3.6 million of non-cash interest expense on the 2023 Loan, 2024 Loan and 2025 Loan, $0.8 million related to stock-based compensation expense, $0.4 million related to depreciation and amortization expense and $0.6 million related to change in right-of-use asset. The decrease in our net operating assets and liabilities was primarily due to a decrease of $0.9 million in accrued compensation, a decrease of $0.6 million in accounts payable and accrued liabilities, a decrease of $0.3 million in the operating lease liability, and a decrease of $0.5 million in prepaid expenses and other current assets.
Cash Flows Used in Investing Activities
Net cash used in investing activities was $0.1 million for each of the three months ended March 31, 2026 and 2025, respectively, which is attributable to purchases of laboratory and manufacturing equipment for office, laboratory and manufacturing space at our leased facility in Los Angeles, California.
Cash Flows from Financing Activities
Cash provided by financing activities for the three months ended March 31, 2026 was $0.6 million, which consisted primarily of proceeds from option exercises, partially offset by the payment for taxes related to net share settlement of equity awards.
Cash provided by financing activities for the three months ended March 31, 2025 was $10.0 million, which consisted primarily of proceeds from issuance of short-term debt.
Off-Balance Sheet Arrangements
As of March 31, 2026, we did not have off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate estimates and assumptions, including but not limited to those related to the Convertible Loan, stock-based compensation expense, accruals for research and development costs, lease assets and liabilities, the valuation of deferred tax assets, valuation of uncertain income tax positions, impairment of goodwill and intangible assets and impairment of long-lived assets. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Refer to Note 3 to the consolidated financial statements and critical accounting policies and estimated included in our Form 10-K filed with the SEC on March 25, 2026. There were no material changes to our critical accounting policies from December 31, 2025.
37
Table of Contents
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are not required to provide the information required under this item.
Item 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Under the supervision of our Chief Executive Officer (“CEO”) and Senior Vice President, Finance and Principal Financial Officer (“PFO”), we evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act (the “Exchange Act”) as of March 31, 2026. Based on that evaluation, our CEO and PFO have concluded that our disclosure controls and procedures were effective as of March 31, 2026 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and PFO, as appropriate to allow timely discussion regarding required disclosures.
In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined by Rules 13a-15(d) and 15d-15(d) of the Exchange Act) that occurred during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
From time to time, we are a party to certain litigation that is either judged to be not material or that arises in the ordinary course of business. We intend to vigorously defend our interests in these matters. We expect that the resolution of these matters will not have a material adverse effect on our business, financial condition or results of operations. However, due to the uncertainties inherent in litigation, no assurance can be given as to the outcome of these proceedings.
Item 1A. RISK FACTORS
Our business is subject to a number of risks, including those identified in Item 1A of Part I of our 2025 Form 10-K. There have been no material changes to the risk factors described in our 2025 Form 10-K.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
38
Table of Contents
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
Insider Trading Arrangements
During the three months ended March 31, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
Credit and Security Agreement
On May 12, 2026, the Company entered into, as borrower, a credit and security agreement (the “May 2026 Credit Agreement”) with Innoviva Strategic Opportunities LLC (“Innoviva”), a wholly owned subsidiary of Innoviva, Inc., a principal shareholder of the Company. The May 2026 Credit Agreement provides for a secured term loan facility in an aggregate amount of $25.0 million (the “May 2026 Loan”) at an interest rate of 14.0% per annum, and has a maturity date of January 11, 2029. Repayment of the May 2026 Loan is guaranteed by the Company’s domestic subsidiaries, and the May 2026 Loan is secured by substantially all of the assets of the Company and the subsidiary guarantors.
The May 2026 Credit Agreement contains customary affirmative and negative covenants and representations and warranties, including financial reporting obligations and certain limitations on indebtedness, liens, investments, distributions (including dividends), collateral, investments, mergers or acquisitions and fundamental corporate changes. The May 2026 Credit Agreement also includes customary events of default, including payment defaults, breaches of provisions under the loan documents, certain losses or impairment of collateral and related security interests, the occurrence of certain events that could reasonably be expected to have a “material adverse effect” as set forth in the May 2026 Credit Agreement, certain bankruptcy or insolvency events, and a material deviation from the Company’s operating budget.
The foregoing description of the May 2026 Credit Agreement is qualified in its entirety by the full text of such document, which is filed as Exhibit 10.6 to this Quarterly Report on Form 10-Q, and is incorporated herein by reference.
Item 6. EXHIBITS
Number | | Description |
3.1 | Amended and Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 16, 2015). | |
3.2 | Articles of Amendment to Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K (File No. 001-37544), filed with the SEC on April 24, 2017). | |
3.3 | Statement of Correction to Articles of Amendment to Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q, filed on November 8, 2018). | |
3.4 | Articles of Amendment to Amended and Restated Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on December 18, 2018). | |
3.5 | Articles of Amendment to Amended and Restated Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on May 10, 2019). | |
39
Table of Contents
3.6 | Articles of Amendment to Amended and Restated Articles of Incorporation of the registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the SEC on December 11, 2019). | |
3.7 | Articles of Amendment to Articles of Incorporation of the Company (effective March 26, 2020) (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 30, 2020). | |
3.8 | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2019). | |
3.9 | Amendment to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on December 11, 2019). | |
3.10 | Amendment to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 26, 2020). | |
4.1 | Reference is made to Exhibits 3.1 through 3.10. | |
4.2 | Warrant Amendment, dated January 23, 2026 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 26, 2026). | |
10.1 | First Amendment, dated as of January 23, 2026, to that certain Credit and Security Agreement, dated as of March 12, 2025, by and among the Company, the Guarantors party thereto, and Innoviva Strategic Opportunities, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 26, 2026). | |
10.2 | Second Amendment, dated as of January 23, 2026, to that certain to that certain Credit and Security Agreement, dated as of March 4, 2024, by and among the Company, the Guarantors party thereto, and Innoviva Strategic Opportunities, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on January 26, 2026). | |
10.3 | Fourth Amendment, dated as of January 23, 2026, to that certain Credit and Security Agreement, dated as of July 10, 2023, by and among the Company, the Guarantors party thereto, and Innoviva Strategic Opportunities, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on January 26, 2026). | |
10.4 | Fifth Amendment, dated as of January 23, 2026, to that certain Secured Convertible Credit and Security Agreement, dated as of January 10, 2023, by and among the Company, the Guarantors party thereto, and Innoviva Strategic Opportunities LLC (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the SEC on January 26, 2026). | |
10.5 | Amendment No.2, dated as of January 23, 2026, to that certain Second Amended and Restated Voting Agreement, dated as of February 9, 2022 (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed with the SEC on January 26, 2026). | |
10.6 | Credit and Security Agreement, dated as of May 12, 2026 by and among the Company, the Guarantors party thereto, and Innoviva Strategic Opportunities, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 13, 2026). | |
31.1 | Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a). | |
31.2 |
| Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a). |
40
Table of Contents
32.1† |
| Certification of Principal Executive Officer Required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. |
32.2† |
| Certification of Principal Financial Officer Required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. |
101.INS |
| Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document. |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document. |
104 | Cover Page Interactive Data File Cover Page Interactive Data File (embedded within the Inline XBRL document) |
† | The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. |
41
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ARMATA PHARMACEUTICALS, INC. | |||
Date: May 13, 2026 | By | /s/ Deborah L. Birx | |
Name: Deborah L. Birx, M.D. | |||
Title: Chief Executive Officer | |||
(Principal Executive Officer) | |||
By | /s/ David House | ||
Name: David House | |||
Title: Senior Vice President, Finance and Principal Financial Officer | |||
(Principal Financial Officer) | |||
42