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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)

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

For the quarterly period ended September 30, 2025

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission File Number: 001-38410

BioXcel Therapeutics, Inc.

(Exact name of registrant as specified in its charter)



Delaware	82-1386754
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

555 Long Wharf Drive
New Haven, CT	06511
(Address of principal executive offices)	(Zip Code)

(475) 238-6837

(Registrant’s telephone number, including area code)

N/A

(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
Common Stock, $0.001 par value per share	BTAI	Nasdaq Capital Market

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

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

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


Large accelerated filer ☐	Accelerated filer ☐

Non-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 ☐ No ☒

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding at November 11, 2025 was 21,869,491.

Table of Contents

Table of Contents


		Page
PART I - FINANCIAL INFORMATION

	Forward Looking Statements	3
	Summary Risk Factors	4
Item 1.	Financial Statements (Unaudited)	7
	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	7
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024	8
	Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) Equity for the three and nine months ended September 30, 2025 and 2024	9
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4.	Controls and Procedures	70

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	71
Item 1A.	Risk Factors	71
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	136
Item 3.	Defaults Upon Senior Securities	136
Item 4.	Mine Safety Disclosures	136
Item 5.	Other Information	136
Item 6.	Exhibits	137
Signatures		139

Table of Contents

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “anticipate,” “believe,” “can,” “continue,” “could,” “designed,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. All statements contained in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements, including, without limitation, statements regarding:

●

our sales strategy for IGALMI^®;

●

strategy relating to, anticipated benefits from, and cost savings from our Reprioritization (as defined herein);

●

our ability to raise additional capital and continue as a going concern;

●

developments relating to our TRANQUILITY program;

●

the size of our total addressable markets and related underlying estimates;

●

our plans relating to clinical trials and marketing applications for our product candidates;

●

our plans to research, develop and commercialize our current and future product candidates;

●

our plans to seek to enter into collaborations for the development and commercialization of certain product candidates;

●

the potential benefits of any future collaboration;

●

the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;

●

the timing of and results of discussions we have with regulators;

●

the rate and degree of market acceptance, clinical utility, number of prescribers and formulary wins of IGALMI^® and any product candidates for which we receive marketing approval;

●

our commercialization, marketing and manufacturing capabilities and strategy, including the potential benefits from any advertising campaigns;

●

our participation in, and any potential benefits from, events, conferences, presentations and conventions;

●

our intellectual property position and strategy;

●

our estimates regarding expenses, future revenue, capital requirements and need for additional financing;

●

potential investments in, or other strategic options for, our subsidiary, OnkosXcel Therapeutics, LLC (“OnkosXcel”);

●

developments relating to our competitors and our industry;

●

compliance with covenants under our financing arrangements;

●

the impact of government laws and regulations;

●

developments related to legal proceedings and investigations; and

●

our relationship with BioXcel LLC.

These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, those listed under “Summary Risk Factors,” Part II, Item 1A. “Risk Factors,” and Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q. These and other important factors discussed under the caption “Risk Factors” in our other filings with the Securities and Exchange Commission (“SEC”) could cause actual results to differ materially from those indicated by the forward-looking statements made in this filing. Given these uncertainties, you should not rely on these forward-looking statements as predictions of future events. While we may elect to update forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

As used in this Quarterly Report on Form 10-Q, unless otherwise specified or the context otherwise requires, the terms “we,” “our,” “us,” the “Company” or “BTI” refer to BioXcel Therapeutics, Inc. and “BioXcel LLC” refers to the Company’s former parent company, BioXcel LLC and its predecessor, BioXcel Corporation.

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We may use our website as a distribution channel for material information about the Company. Financial and other important information regarding the Company is routinely posted on and accessible through the Investors & Media section of its website at www.bioxceltherapeutics.com. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” option under the News / Events menu of the Investors & Media section of our website at www.bioxceltherapeutics.com. The information contained in, or accessible through, our website does not constitute part quarterly of this report and the inclusion of our website address in this quarterly report is an inactive textual reference only.

SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. You should carefully consider these risks and uncertainties when investing in our common stock. The principal risks and uncertainties affecting our business include the following:

●

We have a limited operating history and have not generated substantial product revenues to date, which may make it difficult to evaluate the success of our business to date and to assess our future viability.

●

We have incurred significant operating losses since inception and anticipate that we will continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability.

●

We could be delisted from The Nasdaq Capital Market, which could seriously harm the liquidity of our stock and our ability to raise capital or complete a strategic transaction.

●

We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts or otherwise seek strategic alternatives. In addition, the failure to raise additional financing in accordance with the minimum capital raising requirements of our Credit Agreement (as defined herein) would trigger an event of default thereunder.

●

We have significant indebtedness and other contractual obligations that could impair our liquidity, restrict our ability to do business and thereby harm our business, results of operations and financial condition. We may not have sufficient cash flow from operations to satisfy our obligations under the Credit Agreement.

●

We have identified conditions and events that raise substantial doubt about our ability to continue as a going concern.

●

Our strategic reprioritization and other workforce reductions in force may not achieve our intended outcome.

●

We have limited experience in drug discovery and drug development.

●

Developments relating to our TRANQUILITY II Phase 3 trial may impact the timing of our development plans for, and prospects for seeking or obtaining regulatory approval of, BXCL501 for the acute treatment of agitation (non-daily) associated with dementia in patients with probable Alzheimer’s disease.

●

We have limited clinical data supporting potential safety or efficacy of BXCL501 for use in the at-home setting in the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease.

●

In the near term, we are dependent on the success of IGALMI^®, and four of our product candidates, BXCL501, BXCL502, BXCL701 and BXCL702. If we are unable to complete the clinical development of or obtain marketing approval for our product candidates or successfully commercialize IGALMI^® or our other product candidates, either alone or with a collaborator, or if we experience significant delays in doing so, our business could be substantially harmed.

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●

Interim “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

●

The regulatory approval processes of the Food and Drug Administration (“FDA”), and comparable foreign authorities are lengthy, expensive and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

●

Clinical trials are expensive, time-consuming, difficult to design, difficult to conduct and involve an uncertain outcome.

●

We depend on enrollment and evaluation of patients in our clinical trials to continue development of our product candidates. If we are unable to enroll patients in our clinical trials, our research and development efforts could be adversely affected.

●

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval.

●

The discovery and development of product candidates based on EvolverAI, BioXcel LLC’s proprietary pharmaceutical discovery and development engine, and our AI platform is novel and unproven, and we do not know whether we will be able to develop any products of commercial value.

●

Although the FDA has approved IGALMI^® for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder, we will still face extensive and ongoing regulatory requirements and obligations for IGALMI^® and for any product candidates for which we obtain approval.

●

If we are found in violation of federal, state or foreign health care “fraud and abuse” laws, we may be required to pay significant fines and penalties, including, without limitation, debarment, suspension or exclusion from participation in federal, state or similar health care programs, which may adversely affect our business, financial condition and results of operations.

●

We continue to depend on BioXcel LLC to provide us with certain administrative services for our business.

●

We are substantially dependent on third parties for the manufacture of our clinical supplies of our product candidates and our commercial supplies of IGALMI^®, and we intend to rely on third parties to produce commercial supplies of any other approved product candidate. Therefore, our development of our products could be stopped or delayed, and our commercialization of any future product could be stopped, delayed or made less profitable if third-party manufacturers fail to obtain approval of the FDA or comparable regulatory authorities or fail to provide us with drug product in sufficient quantities or at acceptable prices.

●

We rely on third parties to conduct our preclinical and clinical trials. If these third parties do not successfully perform their contractual legal and regulatory duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.

●

Unfavorable global political or economic events and conditions could adversely affect our business, financial condition or results of operations.

●

Data breaches or cyber-attacks could disrupt our business operations and information technology systems or those of third parties on which we rely, adversely impact our financial results, or result in the loss or exposure of confidential or sensitive product candidate, clinical trial, employee, or Company information.

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●

Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.

●

Increased scrutiny of and evolving expectations for environmental, social and governance (“ESG”) initiatives may impose additional costs or otherwise adversely impact our business.

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It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection. If our patent position does not adequately protect our product candidates, others could compete against us more directly, which would harm our business, possibly materially.

●

We are and may in the future be subject to legal proceedings, claims and investigations in or outside the ordinary course of business. Such proceedings, claims and investigations could be costly and time-consuming to defend and could result in unfavorable outcomes, which may have a material adverse effect on our business, operating results and financial condition, and negatively affect the price of our common stock.

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

This Quarterly Report includes our trademarks, trade names and service marks, including, without limitation, “IGALMI^®” and our logo, which are our property and are protected under applicable intellectual property laws. Solely for convenience, trademarks, trade names and service marks may appear in this Quarterly Report without the ^®, ^TM and ^SM symbols, but such references are not intended to indicate, in any way, that we or the applicable owner forgo or will not assert, to the fullest extent permitted under applicable law, our rights or the rights of any applicable licensors to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply a relationship with, or endorsement or sponsorship of us by, these other parties.

INDUSTRY AND OTHER DATA

Unless otherwise indicated, information contained in this Quarterly Report concerning our industry and the markets in which we operate, including our general expectations, market position and market opportunity, is based on our management’s estimates and research, as well as industry and general publications and research, surveys and studies conducted by third parties. While we believe the information from these third-party publications, research, surveys and studies included in this Quarterly Report is reliable, we do not guarantee the accuracy or completeness of such information, and we have not independently verified this information. Management’s estimates are derived from publicly available information, their knowledge of our industry and their assumptions based on such information and knowledge, which we believe to be reasonable. This data involves a number of assumptions and limitations which are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in this Quarterly Report under “Forward-Looking Statements” and Part II, Item 1A “Risk Factors.” These and other factors could cause our future performance and market expectations to differ materially from our assumptions and estimates.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BIOXCEL THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share amounts)




	September 30,
	2025		December 31,
	(unaudited)		2024
ASSETS
Current assets
Cash and cash equivalents	$	36,176	$	29,854
Restricted cash		1,144		—
Accounts receivable, net		—		131
Inventory		459		679
Prepaid expenses		5,690		5,290
Other current assets		934		1,440
Total current assets		44,403		37,394
Property and equipment, net		249		475
Operating lease right-of-use assets		140		382
Other assets		—		87
Total assets	$	44,792	$	38,338

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities
Accounts payable	$	16,276	$	15,990
Accrued expenses		4,363		5,762
Current portion of long-term debt		16,823		—
Due to related parties		122		107
Other current liabilities		220		374
Total current liabilities		37,804		22,233
Long-term portion of operating lease liabilities		—		65
Derivative liabilities		3,605		6,633
Long-term debt		92,302		102,508
Total liabilities		133,711		131,439

Commitments and contingencies (Note 16)
Stockholders' (deficit) equity
Preferred stock, $0.001 par value, 10,000 shares authorized; no shares issued and outstanding as of September 30, 2025 and December 31, 2024		—		—
Common stock, $0.001 par value, 200,000 shares authorized as of September 30, 2025 and December 31, 2024; 19,996 and 3,102 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		73		49
Additional paid-in-capital		618,557		557,047
Accumulated deficit		(707,549)		(650,197)
Total stockholders' (deficit) equity		(88,919)		(93,101)
Total liabilities and stockholders' (deficit) equity	$	44,792	$	38,338

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

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BIOXCEL THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share amounts)

(unaudited)


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024

Revenues
Product revenue, net	$	98	$	214	$	386	$	1,900

Operating expenses
Cost of goods sold	$	11	$	1,170		132		1,311
Research and development		8,740		5,101		23,550		24,534
Selling, general and administrative		5,381		7,683		16,689		30,398
Restructuring costs		194		1,553		194		2,409
Total operating expenses	$	14,326	$	15,507		40,565		58,652
Loss from operations	$	(14,228)	$	(15,293)		(40,179)		(56,752)
Other (income) expense
Interest expense		4,373		3,790		12,588		11,097
Interest income		(236)		(616)		(745)		(2,234)
Other (income) expense, net		12,546		(4,817)		5,330		(16,875)
Net loss	$	(30,911)	$	(13,650)	$	(57,352)	$	(48,740)
Basic and diluted net loss per share attributable to common stockholders	$	(2.18)	$	(5.15)	$	(6.38)	$	(20.60)
Weighted average shares outstanding - basic and diluted		14,196		2,649		8,992		2,366

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

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BIOXCEL THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

(amounts in thousands)

(unaudited)


				Additional
	Common stock			paid-in-		Accumulated
	Shares	Amount		capital		deficit		Total
Balance as of December 31, 2023	1,871	$	30	$	534,060	$	(590,598)	$	(56,508)
Issuance of common shares, net of offering costs	231		4		3,705		—		3,709
Stock-based compensation	—		—		3,433		—		3,433
Issuance of stock purchase warrants	—		—		224		—		224
Issuance of pre-funded stock purchase warrants	—		—		3,570		—		3,570
Net loss	—		—		—		(26,791)		(26,791)
Balance as of March 31, 2024	2,102	$	34	$	544,992	$	(617,389)	$	(72,363)
Issuance of common shares, net of offering costs	419		6		5,306		—		5,312
Stock-based compensation	—		—		1,057		—		1,057
Vesting of restricted stock units, net of employee tax obligations	3		—		(8)		—		(8)
Net loss	—		—		—		(8,299)		(8,299)
Balance as of June 30, 2024	2,524	$	40	$	551,347	$	(625,688)	$	(74,301)
Issuance of common shares, net of offering costs	129		2		451		-		453
Stock-based compensation	—		—		1,865		—		1,865
Vesting of restricted stock units, net of employee tax obligations	1		—		—		—		—
Net loss	—		—		—		(13,650)		(13,650)
Balance as of September 30, 2024	2,654	$	42	$	553,663	$	(639,338)	$	(85,633)


				Additional
	Common stock			paid-in-		Accumulated
	Shares	Amount		capital		deficit		Total
Balance as of December 31, 2024	3,102	$	49	$	557,047	$	(650,197)	$	(93,101)
Issuance of common shares, net of offering costs	2,358		10		471		—		481
Stock-based compensation	—		—		180		—		180
Issuance of pre-funded stock purchase warrants	—		—		9,523		—		9,523
Vesting of restricted stock units, net of employee tax obligations	8		—		(1)		—		(1)
Net loss	—		—		—		(7,254)		(7,254)
Balance as of March 31, 2025	5,468	$	59	$	567,220	$	(657,451)	$	(90,172)
Issuance of common shares, net of offering costs	1,146		1		135		—		136
Stock-based compensation	—		—		1,556		—		1,556
Vesting of restricted stock units, net of employee tax obligations	6		—		—		—		—
Net loss	—		—		—		(19,187)		(19,187)
Balance as of June 30, 2025	6,620	$	60	$	568,911	$	(676,638)	$	(107,667)
Issuance of common shares, net of offering costs	13,369		13		49,065		—		49,078
Stock-based compensation	—		—		581		—		581
Vesting of restricted stock units, net of employee tax obligations	7		—		—		—		—
Net loss	—		—		—		(30,911)		(30,911)
Balance as of September 30, 2025	19,996	$	73	$	618,557	$	(707,549)	$	(88,919)

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

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BIOXCEL THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)


	Nine months ended September 30,
	2025		2024
OPERATING CASH FLOW ACTIVITIES:
Net loss	$	(57,352)	$	(48,740)
Reconciliation of net loss to net cash used in operating activities
Depreciation		226		232
Accretion of debt discount and amortization of financing costs		1,183		245
Change in fair value of derivative liabilities		5,319		(16,884)
Stock-based compensation expense		2,317		6,355
Payable-in-kind interest on Credit Agreement		5,434		3,821
Operating lease right-of-use assets		242		227
Changes in operating assets and liabilities
Accounts receivable		131		68
Inventory		220		466
Prepaid expenses, other current assets and other assets		193		(1,017)
Accounts payable, accrued expenses, due to related parties, and other current liabilities		(1,039)		(997)
Accrued interest		—		(736)
Operating lease liabilities		(279)		(258)
Net cash used in operating activities		(43,405)		(57,218)

INVESTING CASH FLOW ACTIVITIES:
Purchases of equipment and leasehold improvements		—		—
Net cash from investing activities		—		—

FINANCING CASH FLOW ACTIVITIES:
Proceeds from issuance of common stock and warrants		52,380		32,687
Offering costs for common stock and warrants issuance		(1,492)		(295)
Payment of employee tax obligations related to vesting restricted stock units		(17)		(8)
Net cash provided by financing activities		50,871		32,384

Net increase in cash, cash equivalents and restricted cash	$	7,466	$	(24,834)
Cash, cash equivalents and restricted cash, beginning of the period		29,854		65,221
Cash, cash equivalents and restricted cash, end of the period	$	37,320	$	40,387

Balance sheet reconciliation:
Cash and cash equivalents	$	36,176		40,387
Restricted cash		1,144		—
Total cash and cash equivalents and restricted cash as presented above	$	37,320		40,387

Supplemental cash flow information:
Issuance of stock purchase warrants	$	—	$	224

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

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BIOXCEL THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except per share amounts and where otherwise noted)

(unaudited)

Note 1. Nature of the Business

BioXcel Therapeutics, Inc. (“BTI” or the “Company”) is a biopharmaceutical company built on artificial intelligence (“AI”) approaches to develop transformative medicines in neuroscience and immuno-oncology. The Company is focused on utilizing cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives. BTI developed a proprietary AI platform to reduce therapeutic development costs and potentially accelerate development timelines. The Company’s approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indices. BTI management believes this differentiated approach has proven its potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs.

As used in these condensed consolidated financial statements, unless otherwise specified or the context otherwise requires, the terms “BioXcel LLC” refers to the Company’s former parent, BioXcel LLC and, its predecessor, BioXcel Corporation. “OnkosXcel” refers to BTI’s wholly owned subsidiary for its advanced immuno-oncology assets, OnkosXcel Therapeutics, LLC.

On April 6, 2022, BTI announced that the United States (“U.S.”) Food and Drug Administration (“FDA”) approved IGALMI^® (dexmedetomidine or “Dex”) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults. IGALMI^® is approved to be self-administrated by patients under the supervision of a health care provider. On July 6, 2022, BTI announced that IGALMI^®, was commercially available in doses of 120 and 180 micrograms.

The Company’s most advanced neuroscience clinical development program is BXCL501. In indications other than those approved by the FDA as IGALMI^®, BXCL501 is an investigational proprietary, orally dissolving, film formulation of Dex for the treatment of agitation associated with psychiatric and neurological disorders.

The Company’s advanced immuno-oncology asset, BXCL701, is an investigational, orally administered systemic innate immune activator for the treatment of a rare form of prostate cancer and advanced solid tumors that are refractory or treatment naïve to checkpoint inhibitors.

BTI was incorporated under the laws of the State of Delaware on March 29, 2017. The Company’s principal office is in New Haven, Connecticut.

Note 2. Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements do not include all the information and notes required by Generally Accepted Accounting Principles (“GAAP”) in the U.S. The accompanying year-end balance sheet was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2025, the results of its operations for the three and nine months ended September 30, 2025 and 2024 and its cash flows for the nine months ended September 30, 2025 and 2024. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods or any future year or period. The accompanying unaudited interim condensed consolidated financial statements of the Company should be read in conjunction with the audited financial statements and notes

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thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 28, 2025.

The accompanying condensed consolidated financial statements include the accounts for the Company and all entities where BTI has a controlling financial interest after elimination of all intercompany accounts and transactions and have been prepared in conformity with U.S. GAAP.

As of September 30, 2025, the Company had cash, cash equivalents and restricted cash of $37,320 and an accumulated deficit of $707,549. The Company has incurred substantial net losses and negative cash flows from operating activities in nearly every fiscal period since inception and expects this trend to continue for the foreseeable future. The Company recognized net losses of $30,911 and $13,650 for the three months ended September 30, 2025 and 2024, respectively, and $57,352 and $48,740 for the nine months ended September 30, 2025 and 2024, respectively, and had net cash used in operating activities of $43,405 and $57,218 for the nine months ended September, 2025 and 2024, respectively.

Under ASC Topic 205-40, Presentation of Financial Statements - Going Concern, management is required at each reporting period to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

The Company’s history of significant losses, its negative cash flows from operations, potential near-term increased covenant-driven amortization payments under its Credit Agreement (as defined in Note 9, Debt and Credit Facilities), its limited liquidity resources currently on hand, and its dependence on its ability to obtain additional financing to fund its operations after the current resources are exhausted, about which there can be no certainty, have resulted in management’s assessment that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least 12 months from the issuance date of the financial statements included in this Quarterly Report on Form 10-Q.

This going concern evaluation takes into consideration the potential mitigating effect of management’s Reprioritization (as defined in Note 4, Restructuring). When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates the substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (i) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued and (ii) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Generally, to be considered probable of being effectively implemented, the plans need to be approved by the Company’s Board of Directors. The Company’s Reprioritization was approved by the Board of Directors on August 8, 2023; however, such plans, including the additional restructuring actions taken in the second and third quarters of 2024, will not mitigate the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments that may result from the outcome of this uncertainty. The going concern analysis does not consider possible future amendments to or restructuring of the Credit Agreement (as defined in Note 9, Debt and Credit Facilities) or other potential sources of debt or equity capital.

Successful completion of the Company’s development programs and, ultimately, the attainment of profitable operations are dependent upon future events, including obtaining adequate financing to support the Company’s cost structure and operating plan. Management’s plans to improve the Company’s liquidity and reduce its operating expenses and capital requirements include, among other actions, pursuing one or more of the following steps to raise additional capital, none of which can be guaranteed or are entirely within the Company’s control:

●

raise funding through the sale of the Company’s equity securities;

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●

raise funding through third-party investments in or other strategic options for OnkosXcel;

●

raise funding through debt financing and/or restructuring of its existing Credit Agreement;

●

establish collaborations with potential partners to advance the Company’s product pipeline;

●

establish collaborations with potential marketing partners;

●

reduce overhead and headcount to focus on core priorities; and/or

●

any combination of the foregoing.

If the Company is unable to raise capital when needed or on acceptable terms, or if it is unable to procure collaboration arrangements to advance its programs, the Company would be forced to discontinue some of its operations or develop and implement a plan, beyond its Reprioritization initiatives, to further extend payables, reduce overhead, scale back or cease some or all of its revised operating plan until sufficient additional capital is raised to support further operations.

Note 3. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and notes thereto. Estimates are used in the following areas, among others: revenue recognition, derivative liabilities, stock-based compensation expense, accrued expenses and income taxes. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates.

Significant Accounting Policies

There have been no material changes to the significant accounting policies previously disclosed in Note 3 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, except for the following:

Restricted Cash

Restricted Cash represents cash required to be set aside as collateral under a letter of credit for our annual Directors and Officers (D&O) insurance premiums which are financed and paid over the next six months. The restriction will lapse when the D&O insurance premiums are paid.

Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment reporting, which requires disclosure of incremental segment information on an annual and interim basis. The standard is effective for years beginning after December 15, 2023, and interim periods beginning after December 15, 2024 and early adoption is permitted. The Company adopted the new standard in fiscal year 2024 for annual and retrospective reporting periods with all interim disclosures beginning in the first quarter of fiscal year 2025. For additional information, see Note 17, Segment Information.

In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718) – Scope application of profit interest and similar awards, which clarifies how an entity determines whether a profits interest or similar award is within the scope of Topic 718 or if it is not a share-based payment arrangement and therefore within the scope of other guidance. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. The adoption of this guidance did not have a significant impact on our financial statements, and the Company does not expect this guidance to have a material impact prospectively.

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Accounting Pronouncements effective in future periods

In December 2023, the FASB issued ASU 2023-09, Improvements to income tax disclosures, which requires disclosure of disaggregated income taxes paid by jurisdiction, enhances disclosures in the effective tax rate reconciliation and modifies other income tax-related disclosures. The amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the effect of adopting this guidance on its condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income statement-reporting comprehensive income-expense disaggregation disclosures, which requires public entities to disclose specified information about certain costs and expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the effect of adopting this guidance on its condensed consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued or made available for issuance. We are currently evaluating the impact of this amendment and do not expect that the adoption of this guidance will have a material impact on our consolidated financial statements and accompanying notes.

Note 4. Restructuring

On May 8, 2024, the Company took actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs. The Company reduced its workforce by approximately 15% and notified impacted employees on May 8, 2024. All related restructuring costs were paid in the second quarter of 2024.

On September 17, 2024, the Company reduced its workforce by an additional 28% to extend its cash runway and prioritize clinical development of BXCL501. The Company completed the Clinical Prioritization in October 2024, paid $475 of the related costs during the first quarter of 2025, and paid the remaining $128 during the second quarter of 2025.

On April 8, 2025, the Board unanimously approved (i) the payment of a retention bonus to all non-executive employees in the total aggregate amount of $1,522, to be paid in two equal installments and (ii) the issuance of 66 RSUs which fully vest on the one-year anniversary of the grant date. The first installment of the retention bonus was paid on April 30, 2025 and the second installment was paid on September 30, 2025. Each such installment payment is subject to the applicable employee’s continued employment through December 31, 2025.

On September 16, 2025, the Company dissolved its operations in the Czech Republic and paid $194 in closure related expenses during the third quarter of 2025.

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Note 5. Inventory

Inventory consists of the following:


	September 30,		December 31,
	2025		2024

Raw materials	$	394	$	506
Work-in-process		—		—
Finished goods		65		173
Total inventory	$	459	$	679

The Company recorded inventory write-downs totaling $0 and $95 for the three and nine months ended September 30, 2025. The Company recorded inventory write downs of $1,157 and $1,202 for the three and nine months ended September 30, 2024, respectively.

Note 6. Property and Equipment, Net

Property and equipment, net consists of the following:


	September 30,		December 31,
	2025		2024

Computers and equipment	$	202	$	202
Furniture		575		575
Leasehold improvements		1,200		1,200
Total property and equipment	$	1,977	$	1,977
Accumulated depreciation		(1,728)		(1,502)
Total property and equipment, net	$	249	$	475

Depreciation expense was $75 and $77 for the three months ended September 30, 2025 and 2024, respectively, and $226 and $232 for the nine months ended September 30, 2025 and 2024, respectively.

Note 7. Accrued Expenses

Accrued expenses consist of the following:


	September 30, 2025		December 31, 2024

Accrued research and development expenses	$	2,650	$	3,107
Accrued compensation and benefits		35		35
Accrued professional fees		1,125		1,604
Accrued taxes		103		91
Other accrued expenses		450		322
Accrued restructuring costs		—		603
Total accrued expenses	$	4,363	$	5,762

Note 8. Transactions with BioXcel LLC

The Company entered into a Separation and Shared Services Agreement with BioXcel LLC that took effect on June 30, 2017, as amended and restated thereafter (the “Services Agreement”), pursuant to which BioXcel LLC has agreed to provide the Company with certain intellectual property prosecution and management and research and development activities.

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Under the Services Agreement, the Company had an option, exercisable until December 31, 2024, to enter into a separate collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing its EvolverAI. The Company agreed to pay BioXcel LLC $18 per month from March 13, 2023 to December 31, 2024 in exchange for this option. This option was not exercised. However, BioXcel LLC continues to perform certain administrative services under the terms of the original contract. We agreed to negotiate any such collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments shall not exceed $10,000 in the aggregate and not be payable prior to proof of concept in humans and (ii) commercialization milestone payments shall be based on reaching annual net sales levels, be limited to 3% of the applicable net sales level, and not exceed $30,000 in the aggregate. The Company did not exercise its option to renew the agreement for product identification and related services utilizing BioXcel LLC’s EvolverAI. Subsequent to December 31, 2024 no development activity has been carried out by BioXcel LLC and none is contemplated.

Service charges recorded under the Services Agreement for the three and nine months ended September 30, 2025 and 2024, respectively were as follows:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024

Research and development	$	105	$	230	$	369	$	708
Selling, general and administrative		1		120		86		258
Total	$	106	$	350	$	455	$	966

As of September 30, 2025, there were no outstanding service charges related to the Services Agreement included in Due to related parties in the Company’s Condensed Consolidated Balance Sheets.

Note 9. Debt and Credit Facilities

Debt, net of unamortized discounts and financing costs, consists of the following:


	September 30, 2025		December 31, 2024

Credit Agreement and Guaranty	$	102,319	$	102,319
Payable-in-kind ("PIK") interest		9,837		4,403
Total debt liability	$	112,156	$	106,722
Unamortized debt premiums, discounts and issuance costs		(3,031)		(4,214)
Total debt	$	109,125	$	102,508
Less current portion of debt		(16,823)		—
Long-term debt	$	92,302	$	102,508

On April 19, 2022, the Company entered into two strategic financing agreements: (i) a Credit Agreement and Guaranty (the “Credit Agreement”) by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto (the “Lenders”), and Oaktree Fund Administration LLC (“OFA”) as administrative agent, and (ii) a Revenue Interest Financing Agreement (the “RIFA”; and together with the Credit Agreement, the “OFA Facilities”) by and among the Company, the purchasers party thereto (the “Purchasers”) and OFA as administrative agent. Under the OFA Facilities, the Lenders and the Purchasers agreed to, in the aggregate between the two OFA Facilities, provide up to $260,000 in gross funding to support the Company’s commercial activities of IGALMI^® sublingual film. In addition, the OFA Facilities are intended to support the expansion of clinical development efforts of BXCL501, which includes a Phase 3 program for the acute treatment of agitation in patients with Alzheimer’s disease, and for general corporate purposes. The Lenders and Purchasers are comprised of affiliates of Oaktree Capital Management, L.P. and Qatar Investment Authority.

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Waiver and First Amendment to Credit Agreement and Guaranty

On November 13, 2023, the Company, the lenders party to the Credit Agreement and OFA entered into a Waiver and First Amendment to Credit Agreement and Guaranty (the “First Amendment”) that provided for (i) a waiver and a modification to the covenant in the Credit Agreement regarding investments in OnkosXcel and (ii) an agreement among the parties to further revise key financial terms in the Credit Agreement and terminate the RIFA. Pursuant to the First Amendment, the Lenders agreed to permit the Company to invest up to a maximum of $30,000 at any time outstanding in OnkosXcel, increased from $25,000 at any time outstanding. The First Amendment also waived any defaults or events of default arising under the Credit Agreement due to a breach prior to the date of the First Amendment of the OnkosXcel investment covenant, or a breach of the Company’s obligation to notify OFA of such default. In connection with the First Amendment, the Company paid the Lenders a fee of $180 (representing 0.25% of the loans outstanding under the Credit Agreement on the date of the First Amendment) and agreed to pay to the Lenders an exit fee equal to 0.25% of the loans under the Credit Agreement repaid upon maturity or prepayment of the loans.

Second Amendment to Credit Agreement and Guaranty and Termination of the RIFA

On December 5, 2023, (the “Second Amendment Effective Date”), the Company entered into the Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement (the “Second Amendment”), which further amended the Credit Agreement. On the Second Amendment Effective Date, the Credit Agreement was amended to provide up to $202,319 in senior secured term loans, including the initial Tranche A of $70,000, which was funded on April 28, 2022, and related capitalized interest on Tranche A through the Second Amendment Effective Date in the amount of $72,319. In addition, the $30,000 in financing previously provided to the Company under the RIFA on July 8, 2022 was converted to a term loan under the Credit Agreement (the “Tranche A-2 Term Loan”). The RIFA and all commitments for potential future funding thereunder were terminated. In addition, pursuant to the Second Amendment, the Lenders agreed to permit the Company to invest up to a maximum of $30,865 at any time outstanding in OnkosXcel, increased from $30,000. In connection with the Second Amendment, the Company agreed to pay to the Lenders an exit fee equal to 0.25% of the loans under the Credit Agreement repaid upon maturity or prepayment of the loans (which exit fee is in addition to, and not in lieu of, the exit fee provided for by the First Amendment). As of September 30, 2025, $80,000 in commitments under the Credit Agreement remains unfunded. The blended effective interest rate on the Tranches A-1 and A-2 as of September 30, 2025 was approximately 15.3%.

The remaining tranches may be borrowed at the Company’s option subject to satisfaction of certain conditions, including regulatory and financial milestones. Tranche B of the Credit Agreement is $20,000 and was available upon satisfaction of certain conditions and financial milestones. Tranche B expired on December 31, 2024. Tranche C of the Credit Agreement is $30,000 and is available upon satisfaction of certain conditions, including receipt of certain regulatory and financial milestones met on or before December 31, 2025. Tranche D of the Credit Agreement is $50,000 and is available upon satisfaction of the Tranche C Term Loans conditions precedent to, and the funding of Tranche C Loans, including specified minimum net sales of the Company attributable to sales of BXCL501 for a trailing twelve consecutive month period, on or before December 31, 2025. As of September 30, 2025, Tranches C and D, totaling $80,000, remain available for borrowing if the milestones above are met.

The loans under the Credit Agreement do not amortize and mature on April 19, 2027. The Company may, at its option, no earlier than September 21, 2026 and no later than October 21, 2026, request an extension of the maturity date to April, 19, 2028, provided that the Company satisfies certain conditions including receipt of certain regulatory and financial milestones. Borrowings under the Credit Agreement are issued at a 200-basis point original issue discount and bear interest at a variable annual rate of TERM SOFR (but not less than 2.5% or more than 5.5%) plus 7.5%, payable quarterly. The rate resets every three months based on the current Term SOFR rate. Of such interest, above 8% per annum is, at the Company’s option, payable in kind by capitalizing and adding such interest to the outstanding principal amount of loans from the first payment date on which such interest is owed through March 31, 2025, unless, with respect to any payment date, the Company elects to pay all or a portion of such interest in cash. The Company is required to pay a ticking fee equal to 0.75% per annum on the undrawn amount of the commitments, payable quarterly commencing 120 days after April 22, 2022 through the termination of the commitments, which is expensed as incurred and recognized as interest expense in the Consolidated Statements of Operations. The Company may voluntarily prepay the Credit Agreement at any time subject to a prepayment fee.

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The Company’s obligations under the Credit Agreement are guaranteed by BTI’s existing and subsequently acquired or organized subsidiaries, subject to certain exceptions. BTI’s obligations under the Credit Agreement and the related guarantees thereunder are secured, subject to customary permitted liens and other agreed upon exceptions, by (i) a pledge of all of the equity interests of all of the Company’s existing and any future direct subsidiaries, and (ii) a perfected security interest in all of its and the guarantors’ tangible and intangible assets (except that the guarantees provided by the BXCL701 Subsidiaries (as defined below) are unsecured).

The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions, including specific exceptions with respect to product commercialization and development activities. The Company must also comply with certain financial covenants, including (i) maintenance of cash or permitted cash equivalent investments in accounts controlled by OFA for the Lenders, of at least (a) initially, $15,000, (b) from and after the funding of the Tranche B loans, $20,000, and (c) from and after the Company’s satisfaction of the funding conditions for the Tranche C loans, $15,000, provided, that the liquidity covenant applicable at any time will be increased upon certain events related to a sale of OnkosXcel (up to a maximum amount equal to $37,500), provided that the minimum liquidity amount will in no event exceed 50% of the aggregate amount of loans outstanding under the Credit Agreement at any time; and (ii) a minimum revenue test, measured quarterly beginning with the Company’s fiscal quarter ending on December 31, 2024 (such six-month period the “Revenue Covenant Measurement Period”), that requires it and its subsidiaries’ consolidated net revenue for the six consecutive month period ending on the last day of each such fiscal quarter to not be less than a minimum revenue amount specified in the Credit Agreement (such testing date, the “Revenue Covenant Measurement Testing Date” and the covenant described in this clause (ii) the “Revenue Covenant”). The Company’s failure to comply with the financial covenants will result in an event of default, subject to certain cure rights with respect to the Revenue Covenant. If, as of a Revenue Covenant Measurement Testing Date, the Company’s revenue for the applicable Revenue Covenant Measurement Period is less than the minimum revenue amount specified for the applicable period then required under the Revenue Covenant, the Company would have a right to cure such shortfall for a total of three fiscal periods by making a revenue cure payment (which would be treated as prepayments of the loans subject to a prepayment fee) to the Lenders in an amount equal to the difference between such minimum required revenue amount and the Company’s actual revenues for such Revenue Covenant Measurement Period, such payment to not be less than $1,000. If paid, the Company will be deemed to have complied with the Revenue Covenant as of such Revenue Covenant Measurement Testing Date. Any such payment will be applied to the prepayment of the loans under the Credit Agreement.

Notwithstanding the foregoing, the Credit Agreement permits OnkosXcel (together with OnkosXcel Employee Holdings, LLC (“Employee Holdings”), a subsidiary of BTI, and their respective subsidiaries, the “BXCL701 Subsidiaries”) to receive third-party investment or transfer all or substantially all of their assets to an unaffiliated third party, in each case subject to terms and conditions set forth in the Credit Agreement, including the escrow of certain proceeds received by BTI and its subsidiaries (other than the BXCL701 Subsidiaries) in respect of these disposition events and, under circumstances set forth in the Credit Agreement, the mandatory prepayment of such escrowed amounts. The Company’s equity interests in the BXCL701 Subsidiaries have been pledged in support of its obligations under the Credit Agreement, and the BXCL701 Subsidiaries have provided direct guarantees of BTI’s obligations under the Credit Agreement on an unsecured basis. However, the pledge, guarantee and other obligations of the BXCL701 Subsidiaries under the Credit Agreement will be released upon certain agreed upon events, including an initial public offering by the BXCL701 Subsidiaries or the ownership by unaffiliated third parties of at least 20% of the equity interests in the BXCL701 Subsidiaries.

The Credit Agreement contains events of default that are customary for financings of this type relating to, among other things, payment defaults, breach of covenants, breach of representations and warranties, cross default to material indebtedness, bankruptcy-related defaults, judgment defaults, breach of the financial covenants described above, and the occurrence of certain change of control events. In certain circumstances, events of default are subject to customary cure periods. The Credit Agreement also contains certain regulatory-related events of default, which do not have cure periods. Following an event of default and any applicable cure period, the Lenders will have the right upon notice to terminate any undrawn commitments and may accelerate all amounts outstanding under the Credit Agreement, in addition to other remedies available to them as the Company’s secured creditors.

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Waiver and Third and Fourth Amendments to Credit Agreement and Guaranty

On February 12, 2024, the Company entered into the Third Amendment to Credit Agreement and Guaranty (the “Third Amendment”), which amended the Credit Agreement. Pursuant to the Third Amendment, the Lenders agreed to waive the covenant that the Company shall not receive a report and opinion from the Company’s independent auditors that contains a “going concern” or like qualification or exception or emphasis of matter of going concern footnote with respect to the Company’s financial statements for the fiscal year ended December 31, 2023 and, as a result, such event shall not be an event of default. As a condition to the effectiveness of the Third Amendment, among other things, the Company shall have received at least $40,000 in gross proceeds from a registered public sale of the Company’s common stock, warrants and/or pre-funded warrants on or before February 20, 2024. The Company did not meet this condition and therefore the Third Amendment did not become effective.

On March 20, 2024 (the “Effective Date”), the Company entered into the Fourth Amendment to the Credit Agreement and Guaranty (the “Fourth Amendment”), which amended the Credit Agreement. Pursuant to the Fourth Amendment, the Lenders agreed to waive the covenant that the Company shall not receive a report and opinion from the Company’s independent registered public accounting firm that contains a “going concern” or similar qualification with respect to the Company’s financial statements for the year ended December 31, 2023. Accordingly, while the Company’s independent registered public accounting firm’s report contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 contains a “going concern” explanatory paragraph, it does not constitute an event of default under the Credit Agreement.

The Fourth Amendment includes a covenant that the Company will receive, (i) after the Effective Date and on or before April 15, 2024, at least $25,000 in gross proceeds from the issuance of its common stock, warrants and/or pre-funded warrants, and/or in non-refundable cash consideration from partnering transactions entered into after the Effective Date (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made) and (ii) after the Effective Date and on or before November 30, 2024, at least $50,000 (for the avoidance of doubt, inclusive of amounts previously counted toward the preceding clause (i)) in gross proceeds from the issuance of its common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent (as defined in the Credit Agreement) in its sole discretion ) from partnering transactions entered into after the Effective Date. Failure to perform this covenant would constitute (A) a default under the Credit Agreement and (B) an event of default under the Credit Agreement, subject to a cure period, solely in the case of clause (i) of the preceding sentence, until May 15, 2024. For the avoidance of doubt, failure to perform clause (ii) of the preceding sentence would constitute an immediate event of default under the Credit Agreement without any cure or grace period.

In addition, the Fourth Amendment provides that if the Company has not, after the Effective Date and on or before September 30, 2024, received at least $40,000 in gross proceeds from the issuance of its common stock, warrants and/or pre-funded warrants, and/or cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the Effective Date, the “Minimum Liquidity Amount” (as defined in the Credit Agreement) that the Company is required to maintain at all times will increase to $25,000 from $15,000, unless and until the Company has received, after the Effective Date and on or before November 30, 2024, at least $50,000 in gross proceeds from the issuance of the Company’s common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the Effective Date. On March 27, 2024, the Company received $25,000 in gross proceeds from the issuance of its common stock, warrants, and pre-funded warrants discussed in Note 11, Common Stock Financing Activities, satisfying the April 15, 2024 covenant requirement of the Fourth Amendment. During the third quarter of 2024, the Company received $467 of gross proceeds from the issuance of the Company’s common stock. As of September 30, 2024, the Company had satisfied $30,943 of the $40,000 required to maintain the Minimum Liquidity Amount and the $50,000 gross proceeds requirement. As a result, at September 30, 2024, the Minimum Liquidity Amount increased to $25,000.

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Waiver and Fifth Amendment to Credit Agreement and Guaranty

On November 21, 2024, the Company entered into the Fifth Amendment to Credit Agreement and Guaranty and First Amendment to Fourth Amendment to Credit Agreement and Guaranty (the “Fifth Amendment”), which amended the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto (the “Lenders”), and Oaktree Fund Administration LLC (“OFA”) as administrative agent (as amended by the Waiver and First Amendment to Credit Agreement and Guaranty, dated as of November 13, 2023, the Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement, dated as of December 5, 2023, the Third Amendment to Credit Agreement, dated as of February 12, 2024, and the Fourth Amendment to Credit Agreement and Guaranty, dated as of March 20, 2024 (the “Fourth Amendment”), the “Existing Credit Agreement”).

Pursuant to the Fifth Amendment, the Lenders agreed to, among other things, (i) waive the Credit Agreement’s covenant that the report and opinion the Company will receive from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2024 will not contain a “going concern” or similar qualification, (ii) permanently waive the Credit Agreement’s minimum revenue covenant, and (iii) waive the Fourth Amendment’s requirement that the Company raise, after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $50,000 in gross cash proceeds from the issuance of its common stock, warrants, and/or pre-funded warrants, and/or in cash and/or non-cash consideration from newly entered-into partnering transactions.

The Fifth Amendment includes a new capital raising covenant requiring that the Company receive (A) after the effective date of the Fifth Amendment and on or prior to November 27, 2024, at least $7,000 in gross cash proceeds from the issuance of the Company’s common stock, warrants and/or pre-funded warrants(“Raise 1”), (B) after the effective date of the Fifth Amendment and on or before March 15, 2025 (provided that the Company was required to use its commercially reasonable efforts to satisfy the requirement by February 15, 2025), at least $18,000 in net cash proceeds (including the proceeds of Raise 1) from (i) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions entered into after the effective date of the Fifth Amendment (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), (iii) the issuance of the Company’s subordinated debt (subject to terms set forth in the Fifth Amendment), and/or (iv) asset sales permitted pursuant to the Credit Agreement or consented to by the Lenders (such capital raise, “Raise 2”), and (C) after the effective date of the Fifth Amendment and on or prior to the earlier of (x) August 15, 2025 and (y) the date that is 30 days after the final data readout of the SERENITY At-Home Phase 3 trial, at least $29,000 in net cash proceeds (including the proceeds from Raise 1 and Raise 2) from the same permitted capital raising activities listed in the preceding clause (B) (“Raise 3”).

In connection with the Fifth Amendment and the required capital raises described in the preceding paragraph, the Lenders agreed to modify the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $7,500 (instead of $25,000) from and after the closing of Raise 1 until March 30, 2025. On March 31, 2025, the minimum liquidity amount increased to $10,000 and on September 30, 2025, the minimum liquidity amount increased to $15,000.

In connection with the Fifth Amendment, the Company paid a one-time amortization payment of $2,500 principal amount, together with accrued and unpaid interest and a portion of the prepayment fee and other fees payable in December 2024.

The Fifth Amendment also modifies the interest rate of the loans provided under the Credit Agreement from a floating rate of Term SOFR plus 7.50% per annum, to a fixed rate of 13% per annum, retroactive to and effective as of September 30, 2024. For the quarterly payment dates ending December 31, 2024, March 31, 2025, and June 30, 2025, the Company had the ability to make interest payments of up to 10% per annum “in-kind” by capitalizing and adding such interest to the outstanding principal amount of the loans under the Credit Agreement. In addition, pursuant to the Fifth Amendment, the Company will be required to make quarterly amortization payments equal to 5.0% of the principal amount of funded loans, together with applicable prepayment fees, beginning on March 31, 2026.

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On the effective date of the Fifth Amendment and as a condition to effectiveness thereof, the Company’s wholly owned subsidiaries OnkosXcel Therapeutics, LLC and OnkosXcel Employee Holdings, LLC (collectively, “OnkosXcel”), which previously provided unsecured guarantees of the Company’s obligations under the Credit Agreement, granted security interests in substantially all of their assets to support such obligations.

The Fifth Amendment amends the negative covenants under the Credit Agreement to remove flexibility the Company and its subsidiaries previously had thereunder to undertake various transactions, including, without limitation, with respect to potential dispositions of OnkosXcel or out-licenses by OnkosXcel of its intellectual property.

Pursuant to the Fifth Amendment, the Company committed to appoint a new independent board director (subject to customary background checks, applicable law, confirmation of independence and Nasdaq rules), and to provide the independent director with various privileges and committee memberships on the board of directors of the Company (including the appointment of such director on committee to be formed to focus on capital raising and evaluate strategic options). The Company also agreed to engage an investment banker reasonably acceptable to OFA and the Lenders to assist the Company and its board of directors with evaluating and exploring strategic options.

The Company also agreed to covenants requiring that the Company’s cash expenditures be monitored by the Lenders according to a board-approved budget provided to the Lenders prior to the signing of the Fifth Amendment, which cash budget will be updated on a bi-weekly basis going forward. The Company will not be permitted to make disbursements for any two-week period in excess of 115% of the aggregate budgeted amount of disbursements for the applicable period. Finally, pursuant to the Fifth Amendment, the Company is restricted from paying cash bonuses for its employees or executives during the fiscal years 2024 and 2025 without OFA’s consent or increasing the cash compensation for fiscal year 2025 for certain senior officers of the Company from their compensation for fiscal year 2024.

Sixth Amendment to Credit Agreement

On March 4, 2025, the Company entered into the Sixth Amendment to our Credit Agreement (the “Sixth Amendment”), pursuant to which the Lenders agreed to, among other things, delay the date on which the Company is required to engage an investment banker (which date has been subsequently extended to July 31, 2025). The Company retained an investment banker prior to July 31, 2025.

As of September 30, 2025, the Company was in compliance with all restrictive and financial covenants under the Credit Agreement.

Warrants and Equity Investment Right

In connection with the closing of the Second Amendment, on the Second Amendment Effective Date, the Company amended and restated the warrants granted to the Lenders on April 19, 2022 to purchase up to 17 shares of the Company’s common stock at an exercise price of $320.64 per share (the “Closing Date Warrants”). Pursuant to the amendment and restatement of the Closing Date Warrants, dated December 5, 2023 (the “Amended and Restated Closing Date Warrants”), the exercise price of the Closing Date Warrants has been reduced to $58.3232 per share. In addition, the Company granted new warrants to the Lenders to purchase up to 4 shares of the Company’s common stock (the “2023 Warrant Shares”) at an exercise price of $58.3232 per share (the “2023 Warrants” and together with the Amended and Restated Closing Date Warrants, the “Warrants”). The Amended and Restated Closing Date Warrants and the 2023 Warrants will expire on April 19, 2029 and may be net exercised at the holders election. In addition, pursuant to the Credit Agreement, the Lenders have the right to purchase shares of the Company’s common stock after the Second Amendment Effective Date, so long as borrowings under the Credit Agreement are outstanding, for a purchase price of $5,000 at a price per share equal to a 10% premium to the volume-weighted average price of the common stock over the 30 trading days prior to the Lenders’ election to proceed with such equity investment (the “Equity Investment Right”). BTI entered into a registration rights agreement (the “Registration Rights Agreement”) with the Lenders and filed a registration statement on Form S-3 to register the shares issuable upon exercise of the Warrants and, if issued, the shares related to the Equity Investment Right, for resale. The maximum shares of the Company’s common stock issuable under the Warrants (including the Closing Date Warrants and the 2023 Warrants) and Lenders’ Equity Investment Right was 366 as of March 31, 2024. On the Second Amendment Effective Date,

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Company amended and restated its Registration Rights Agreement (the “Amended and Restated Registration Rights Agreement”) with the Lenders, dated April 19, 2022, pursuant to which the Company agreed to register the 2023 Warrant Shares for resale.

As part of the Credit Agreement, OnkosXcel, a wholly owned subsidiary of BTI, granted warrants to the Lenders to purchase 175 individual limited liability company units (which number of units is not in thousands; referred to herein as the “OnkosXcel Warrants”). The strike price of the OnkosXcel Warrants is formulaic based on the value of OnkosXcel at the time of exercise and can only be exercised upon occurrence of an equity related liquidity event for OnkosXcel of at least $20,000. The exercise price per unit of the OnkosXcel Warrants will be set upon the earlier of the closing of the next sale (or series of related sales) by OnkosXcel of equity securities of OnkosXcel with aggregate proceeds of not less than $20,000 to unrelated third parties (the “Next Equity Financing”) at an exercise price per unit equal to a 10% premium over the price per unit of the equity securities sold by OnkosXcel in such Next Equity Financing or, in the event of a sale of OnkosXcel prior to the Next Equity Financing or an initial public offering constituting the Next Equity Financing, the lesser of (x) 75% of the fair value of the consideration to be paid for a unit upon the consummation of such transaction and (y) 150% of the valuation applicable to the initial profits units issued by OnkosXcel after the closing of the Credit Agreement. The OnkosXcel Warrants are transferable with approval from BTI, which cannot be unreasonably withheld, expire on April 19, 2029, and may be net exercised at the holder’s election.

In connection with the closing of the Fourth Amendment discussed below, the Company granted new warrants to the Lenders to purchase up to 6 shares of its common stock (the “2024 Warrant Shares”) at an exercise price of $49.1568 per share (the “2024 Warrants”), which represents a 10% premium over the arithmetic average of the volume-weighted average price of the Company’s common stock on the Nasdaq Capital Market during the 30 trading days preceding the Effective Date. The 2024 Warrants will expire on April 19, 2029 and may be net exercised at the holder’s election. On the Effective Date, the Company amended and restated its Amended and Restated Registration Rights Agreement (the “Second Amended and Restated Registration Rights Agreement”) with the Lenders, originally dated April 19, 2022. Pursuant to the Second Amended and Restated Registration Rights Agreement, the Company agreed to register the 2024 Warrant Shares for resale.

Fifth Amendment Warrants, Registration Rights Agreement and Equity Investment Right Termination

Prior to the Fifth Amendment, pursuant to the Credit Agreement, the Lenders had the right to purchase shares of our common stock, so long as borrowings under the Credit Agreement are outstanding, for a purchase price of $5,000 at a price per share equal to a 10% premium to the volume-weighted average price of the common stock over the 30 trading days prior to the Lenders’ election to proceed with such equity investment (the “Equity Investment Right”). The Equity investment Right was terminated as part of the Fifth Amendment. We entered into a registration rights agreement with the Lenders (as amended and restated in connection with the Second Amendment, the “Amended and Restated Registration Rights Agreement”) and filed registration statements on Form S-3 to register the shares issuable upon exercise of the Closing Date Warrants, 2023 Warrants and the New Warrants for resale. The maximum shares of our common stock issuable under the Closing Date Warrants, the 2023 Warrants and the Lenders’ Equity Investment Right was 366. On the Effective Date, we further amended and restated the Amended and Restated Registration Rights Agreement (the “Second Amended and Restated Registration Rights Agreement”) with the Lenders. Pursuant to the Second Amended and Restated Registration Rights Agreement, we agreed to register the 2024 Warrant Shares for resale.

In connection with the closing of the Fifth Amendment, the Company agreed to, substantially concurrently with the closing of Raise 1, grant new warrants to the Lenders to purchase an aggregate of 313 shares of common stock on the closing date of the Fifth Amendment, at an exercise price of $0.16 per share (the “New Warrants”). During the three months ended June 30, 2025, the Company issued 284 shares of Common Stock in connection with the cashless exercises of the 313 New Warrants.

In addition, the Company agreed to, substantially concurrently with the closing of Raise 1, amend and restate all warrants to purchase stock of the Company issued to the Lenders prior to the effective date of the Fifth Amendment, to revise the exercise price thereunder to an exercise price equal to the lower of (i) the price per share of the common stock of the Company issued in Raise 1 and (ii) arithmetic average of the volume-weighted average price of the

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Company’s common stock on the Nasdaq Capital Market during the 30 trading days preceding Raise 1 (such existing warrants, as amended and restated, the “Original Warrants”). The Original Warrants provide the Lenders with the right to purchase a total of 28 shares of common stock of the Company, and the exercise prices of $58.3232 per share and $49.1568 per share were reduced to $7.68 per share.

On the date of issuance of the New Warrants, the Company agreed to amend and restate its Second Amended and Restated Registration Rights Agreement with the Lenders, dated March 20, 2024. Pursuant to such amendment and restatement (the “Third Amended and Restated Registration Rights Agreement”), the Company will agree to register the shares of common stock issuable under the New Warrants, in addition to all Original Warrants, for resale.

As part of entering into the Credit Agreement, OnkosXcel, a wholly owned subsidiary of BTI, granted the OnkosXcel Warrants to the Lenders to purchase 175 individual limited liability company units. The strike price of the OnkosXcel Warrants is formulaic based on the value of OnkosXcel at the time of exercise and can only be exercised upon occurrence of an equity related liquidity event for OnkosXcel of at least $20,000. The exercise price per unit of the OnkosXcel Warrants will be set upon the earlier of the closing of the next sale (or series of related sales) by OnkosXcel of equity securities of OnkosXcel with aggregate proceeds of not less than $20,000 to unrelated third parties (the “Next Equity Financing”) at an exercise price per unit equal to a 10% premium over the price per unit of the equity securities sold by OnkosXcel in such Next Equity Financing or, in the event of a sale of OnkosXcel prior to the Next Equity Financing or an initial public offering constituting the Next Equity Financing, the lesser of (x) 75% of the fair value of the consideration to be paid for a unit upon the consummation of such transaction and (y) 150% of the valuation applicable to the initial profits units issued by OnkosXcel after the closing of the Credit Agreement. The OnkosXcel Warrants are transferable with approval from BTI, which cannot be unreasonably withheld, expire on April 19, 2029, and may be net exercised at the holder’s election.

Maturities of debt are expected to be as follows:


	September 30, 2025

2025	$	—
2026	$	22,431
2027	$	89,725
Thereafter	$	—

Interest expense was as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024

Interest expense	$	3,932	$	3,684	$	11,405	$	10,852
Accretion of debt discount and amortization of financing costs		441		106		1,183		245
Total interest expense	$	4,373	$	3,790	$	12,588	$	11,097

Note 10. Derivative Financial Instruments

BTI identified certain freestanding financial instruments and/or embedded features that require separate accounting from the borrowings under the OFA Facilities. This includes the OnkosXcel Warrants and Equity Investment Right held by the Lenders, along with certain put/call options. The OnkosXcel Warrants and Equity Investment Right do not meet certain scope exceptions under U.S. GAAP, primarily because the exercise prices and number of shares of the Company’s common stock issuable under the instruments are variable, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Condensed Consolidated Balance Sheets. The respective derivative liabilities were recorded at fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Condensed

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Consolidated Statements of Operations. As discussed in Note 9, Debt and Credit Facilities, the Equity Investment Right was terminated on November 25, 2024 in connection with the Fifth Amendment to the Credit Agreement, and the Company recorded a termination gain, reducing the carrying value of the Equity Investment Right to $0.

With respect to the Purchase Agreement discussed in Note 11, Common Stock Financing Activities, BTI determined that the Accompanying Warrants fail the equity classification criteria and are therefore classified as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging (“ASC 815”). The Accompanying Warrants failed to meet the requirements to be indexed to equity and equity classified, and meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Condensed Consolidated Balance Sheet as of September 30, 2025. The respective derivative liabilities were recorded at fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Condensed Consolidated Statements of Operations. We value the Accompanying Warrants using the Black-Scholes option pricing model as discussed in Note 14, Fair value measurements.

On November 21, 2024, the exercise price of 534 of the Accompanying Warrants was reduced from $51.20 to $9.136 per share. For the three and nine months ended September 30, 2025, the Company recorded a net loss of $352 and a net gain of $1,405, respectively, in Other (income) expense, net, in the Company’s Consolidated Statements of Operations. As of September 30, 2025, the fair value of the Accompanying Warrants was $916.

On November 25, 2024, with respect to the Underwriter Agreement discussed in Note 11, Common Stock Financing Activities, the Company issued additional warrants (the “November 2024 Accompanying Warrants”). The November 2024 Accompanying Warrants failed to meet the requirements to be indexed to equity and equity classified, and meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of September 30, 2025. The respective derivative liabilities were recorded at fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Consolidated Statements of Operations. For the three and nine months ended September 30, 2025, the Company recorded a net loss of $617 and a net gain of $2,623, respectively, in Other (income) expense, net, in the Company’s Consolidated Statements of Operations. As of September 30, 2025, the fair value of the November 2024 Accompanying Warrants was $1,650.

On March 3, 2025, with respect to the March 2025 Offering discussed in Note 11, Common Stock Financing Activities, the Company issued additional warrants (the “March 2025 Accompanying Warrants”). The March 2025 Accompanying Warrants failed to meet the requirements to be indexed to equity and equity classified, and meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of September 30, 2025. The respective derivative liabilities were recorded at fair value on the date of issuance in the amount of $2,831 and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Consolidated Statements of Operations. In August 2025, 2,300 of the March 2025 Accompanying Warrants were exercised. In connection with the exercise, the Company remeasured the fair value of the warrant liability, resulting in a recognized net loss of $10,986 recorded in Other (income) expense, net in the Company’s Consolidated Statements of Operations. As of September 30, 2025, the fair value of the remaining 1,700 March 2025 Accompanying Warrants was $1,001. For the three and nine months ended September 30, 2025, the Company recorded a net loss of $586 and a net gain of $1,268, respectively, for the remaining warrants in Other (income) expense, net, in the Company’s Consolidated Statements of Operations.

In connection with the March 2025 Offering discussed in Note 11, Common Stock Financing Activities, the Company also issued option warrants (the “Option Warrants”). The Option Warrants failed to meet the requirements to be indexed to equity and equity classified, and meet the definition of a derivative instrument. Therefore, these instruments are initially recorded as Derivative liabilities. The respective derivative liabilities were recorded at fair value on the date of issuance in the amount of $369. The Option Warrants expired on March 18, 2025 without being exercised, and the Company recorded a termination gain of $369 in Other (income) expense, net, in the Company’s

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Condensed Consolidated Statements of Operations. As of September 30, 2025, the fair value of the Option Warrants was $0.

Note 11. Common Stock Financing Activities

Jeffries At-the-Market Program

In May 2021, the Company entered into an Open Market Sale Agreement (as amended, supplemented and/or restated from time to time, the “Sale Agreement”) with Jefferies LLC (“Jefferies”) pursuant to which the Company could offer and sell shares of its common stock, having an aggregate offering price of up to $100,000, from time to time, through an “at the market offering” program under which Jefferies will act as sale agent. In November 2023, the Company amended the Sale Agreement to increase the size of the “at the market offering" program to $150,000. On March 26, 2025, the Company and Jefferies terminated that certain Open Market Sales Agreement. There have been no sales of the Company’s common stock under the Sale Agreement for the three and nine months ended September 30, 2025. For the three months ended September 30, 2024, the Company sold 22 shares under the Sale Agreement for gross proceeds of $467 and received proceeds of $453, net of issuance costs of $14. For the nine months ended September 30, 2024, the Company sold 240 shares under the Sale Agreement for gross proceeds of $7,682 and received proceeds of $7,451, net of issuance costs of $231.

March 2024 Offering

On March 25, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchasers named therein (collectively, the “Purchasers”). Pursuant to the Purchase Agreement, the Company agreed to issue and sell to the Purchasers in a registered direct offering (the “Offering”) under an effective shelf registration statement on Form S-3 (File No. 333-275261) and a related prospectus supplement filed with the Securities and Exchange Commission on March 25, 2024 (the “Prospectus Supplement”) an aggregate of 191 shares (the “Shares”) of Common Stock, and accompanying warrants (the “Accompanying Warrants”) to purchase up to 191 shares of common stock at a combined offering price of $46.416 per Share and Accompanying Warrant and pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 348 shares of common stock and Accompanying Warrants to purchase up to 348 shares of common stock, at a combined offering price of $46.40 per share underlying each Pre-Funded Warrant and Accompanying Warrant, which equals the offering price per Share and Accompanying Warrant less the $0.016 exercise price per share of the Pre-Funded Warrants. The Pre-Funded Warrants and Accompanying Warrants are not listed on the Nasdaq Capital Market or any other securities exchange or trading system and the Company does not intend to list them. On March 27, 2024, the Company received $25,000 of gross proceeds from the Offering, incurred costs of $248, and received net proceeds of $24,752.

The Pre-Funded Warrants have an exercise price per share of common stock equal to $0.016 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Pre-Funded Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The Pre-Funded Warrants are exercisable at any time after the date of issuance. The Pre-Funded Warrants meet the equity classification criteria and are therefore classified as equity. For the year ended December 31, 2024, all 348 Pre-Funded Warrants were exercised and the same number of shares of common stock were issued.

The Accompanying Warrants have an exercise price per share of common stock equal to $51.20 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Accompanying Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The Accompanying Warrants will be exercisable at any time after the date of issuance and will expire on the fifth anniversary of the date of issuance. The Accompanying Warrants do not meet certain scope exceptions under U.S. GAAP, primarily because they did not meet the requirements to be indexed to equity and equity classified, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Condensed Consolidated Balance Sheet as of September 30, 2025.

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November 2024 Offering

On November 22, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Canaccord Genuity LLC, as underwriter (the “Underwriter”), in connection with the issuance and sale by the Company in a public offering of (i) 350 shares of the Company’s common stock, and accompanying warrants (the “November 2024 Accompanying Warrants”) to purchase 350 shares of Common Stock, at a combined public offering price of $7.68 per share, and, in lieu thereof to certain investors, (ii) Pre-Funded Warrants to purchase 563 shares of Common Stock, and accompanying warrants to purchase 563 shares of Common Stock, at a combined public offering price of $7.664 per pre-funded warrant, which equals the public offering price per share of Common Stock and accompanying warrant less the $0.016 exercise price per share of the pre-funded warrants, less underwriting discounts and commissions, pursuant to an effective shelf registration statement on Form S-3 (Registration No. 333-275261) and a related prospectus supplement filed with the Securities and Exchange Commission. The Company received net proceeds from the offering of approximately $6,128, after deducting underwriting discounts and commissions and offering expenses of $871. The Company intends to use the net proceeds of the offering to fund the SERENITY At-Home trial, prepare for the initiation of the TRANQUILITY In-Care trial, working capital and general corporate purposes.

The Pre-Funded Warrants have an exercise price per share of common stock equal to $0.016 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Pre-Funded Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The Pre-Funded Warrants are exercisable at any time after the date of issuance. The Pre-Funded Warrants meet the equity classification criteria and are therefore classified as equity. For the year ended December 31, 2024, 80 Pre-Funded Warrants were exercised and the same number of shares of common stock were issued. The remaining 483 Pre-Funded Warrants were exercised and the same number of common stock were issued during the first three months of 2025 in exchange for $8 of proceeds received.

The November 2024 Accompanying Warrants have an exercise price per share of common stock equal to $7.68 per share. The exercise price and the number of shares of common stock issuable upon exercise of the November 2024 Accompanying Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The November 2024 Accompanying Warrants are exercisable at any time after the date of issuance and will expire on the fifth anniversary of the date of issuance. The November 2024 Accompanying Warrants do not meet certain scope exceptions under U.S. GAAP, primarily because they did not meet the requirements to be indexed to equity and equity classified, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Condensed Consolidated Balance Sheet as of September 30, 2025.

March 2025 Offering

On March 3, 2025, the Company entered into a purchase agreement (the “March 2025 Offering”) with a purchaser. Pursuant to the March 2025 Offering, the Company agreed to issue and sell to the purchaser and the purchaser agreed to buy in a registered direct offering (i) an aggregate of 188 shares (the “Shares”) of Common Stock at an offering price of $3.50 per Share, (ii) Pre-Funded Warrants to purchase up to 3,812 shares of Common Stock, at an offering price of $3.499 per share underlying the Pre-Funded Warrants, which equals the offering price per share less the $0.001 exercise price per share of the Pre-Funded Warrants, and (iii) an aggregate of 4,000 accompanying warrants (the “March 2025 Accompanying Warrants”) to purchase up to 4,000 shares of Common Stock at an offering price of $4.20 per accompanying warrant, pursuant to an effective registration statement on Form S-3 (File No. 333-275261), including the base prospectus included therein, and prospectus supplement filed with the SEC on March 4, 2025. The Company received net proceeds from the offering of approximately $12,957, after deducting underwriting discounts and commissions and offering expenses of $1,039.

The Pre-Funded Warrants have an exercise price per share of common stock equal to $0.001 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Pre-Funded Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The Pre-Funded Warrants are exercisable

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at any time after the date of issuance. The Pre-Funded Warrants meet the equity classification criteria and are therefore classified as equity. For the three months ended September 30, 2025, the remaining 1,359 Pre-Funded Warrants were exercised and the same number of common stock were issued in exchange for $1 of proceeds received. For the nine months ended September 30, 2025, 3,812 Pre-Funded Warrants were exercised and the same number of common stock were issued in exchange for $4 of proceeds received.

The March 2025 Accompanying Warrants have an exercise price per share of common stock equal to $4.20 per share. The exercise price and the number of shares of common stock issuable upon exercise of the March 2025 Accompanying Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The March 2025 Accompanying Warrants will be exercisable at any time after the date of issuance and will expire on the fifth anniversary of the date of issuance. The March 2025 Accompanying Warrants do not meet certain scope exceptions under U.S. GAAP, primarily because they did not meet the requirements to be indexed to equity and equity classified, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Condensed Consolidated Balance Sheet as of September 30, 2025. For the three and nine months ended September 30, 2025, 2,300 March 2025 Accompanying Warrants were exercised and the same number of common stock were issued in exchange for $9,660 of proceeds received.

In the March 2025 Offering, the Company also issued to the purchaser option warrants, to purchase up to 4,000 shares of Common Stock (or pre-funded warrants in lieu thereof) and accompanying warrants to purchase up to 4,000 shares of Common Stock. The exercise price of the Option Warrant is $3.50 per underlying share of Common Stock or $3.499 per underlying pre-funded warrant to purchase one share of Common Stock and accompanying warrant. The option accompanying warrants have an exercise price per share of common stock equal to $4.20 per share. The Option Warrants expired on March 18, 2025 without being exercised.

Canaccord At-the-Market Program

On April 3, 2025, the Company entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Canaccord Genuity LLC (“Canaccord”) to sell shares of the Company’s common stock, par value $0.001 per share, with aggregate gross sales proceeds of up to $8,135, from time to time, through an “at the market” equity offering program under which Canaccord will act as sales agent. For the three months ended September 30, 2025, the Company sold 4,627 shares of its common stock for a gross amount of $7,991, incurred issuance costs of $240, and received net proceeds of $7,751. For the nine months ended September 30, 2025, the Company sold 4,724 shares of its common stock for a gross amount of $8,130, incurred issuance costs of $244, and received net proceeds of $7,886.

On August 6, 2025, the Company increased the maximum amount of shares that are eligible to be sold pursuant to the Equity Distribution Agreement to allow for the offer and sale of up to $3,500 of its common stock. For the three and nine months ended September 30, 2025, the Company sold 1,050 shares for gross proceeds of $3,500 and received proceeds of $3,395, net of issuance costs of $105. Following the sale of common stock, the Company raised sufficient net proceeds to satisfy the Raise 3 requirement under the Fifth Amendment to the Credit Agreement.

On August 18, 2025, the Company filed a prospectus supplement with the Securities and Exchange Commission for the offer and sale of up to $80,000 shares of common stock pursuant to the Equity Distribution Agreement. For the three and nine months ended September 30, 2025, the Company sold 3,984 shares for gross proceeds of $17,082 and received proceeds of $16,740, net of issuance costs of $342.

Note 12. Stock-Based Compensation

2017 Equity Incentive Plan

The Company’s 2017 Plan became effective in August 2017. Following the effective date of the Company's 2020 Plan, the Company ceased granting awards under the 2017 Plan, however, the terms and conditions of the 2017 Plan continue to govern any outstanding awards granted thereunder.

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2020 Incentive Award Plan

The Company’s 2020 Plan was approved and became effective at the Company’s 2020 annual meeting of stockholders on May 20, 2020, and unless earlier terminated by the Board of Directors, will remain in effect until March 26, 2030. The 2020 Plan originally authorized for issuance the sum of (i) 57 shares of the Company’s common stock and (ii) 15 shares of the Company’s common stock, which represents the number of shares that remained available for issuance under the 2017 Plan immediately prior to the approval of the 2020 Plan by the Company’s stockholders. Any shares of common stock which, immediately prior to the approval of the 2020 Plan by the Company’s stockholders, were subject to awards granted under the 2017 Plan that are forfeited or lapse unexercised and are not issued under the 2017 Plan will increase the number of shares of common stock available for grant under the 2020 Plan. In addition, the number of shares available for issuance under the 2020 Plan will increase on the first day of each calendar year, beginning January 1, 2021 and ending on and including January 1, 2030, by a number of shares equal to the lesser of (A) 4% of the aggregate number of shares of the Company’s common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares of common stock as determined by the Board of Directors. The shares available for issuance under the 2020 Plan increased by 124 shares and 75 shares on January 1, 2025 and 2024, respectively.

Stock options granted under the 2020 Plan have a term of ten years. The vesting schedule of all awards granted under the 2020 Plan is determined by the Board of Directors, which is generally four years.

As of September 30, 2025, there were 39 shares available to be granted under the 2020 Plan.

BTI Restricted stock units

The table below summarizes activity relating to BTI RSUs.



		Number of
		shares

Outstanding as of January 1, 2025		27
Granted		113
Cancelled		(4)
Vested		(21)
Outstanding as of September 30, 2025		115

During the nine months ended September 30, 2025, the Company granted 113 time-based BTI RSUs. BTI RSUs granted to employees fully vest on the one-year anniversary of the grant date and BTI RSUs granted to executives fully vest on the nine-month anniversary of the grant date. The weighted average grant date fair value per share for the BTI RSUs for the nine months ended September 30, 2025 was $1.71. The outstanding BTI RSUs issued prior to 2025 generally vest over four years, with 25% vesting at the one-year anniversary of the grant date and the balance vesting ratably over the remaining 12 quarters of the vesting period. Unrecognized stock-based compensation expense related to the BTI RSUs was approximately $345 and $854 as of September 30, 2025 and 2024, respectively.

BTI Performance stock units

The table below summarizes activity relating to Performance Units related to BTI common stock.


		Number of
		shares

Outstanding as of January 1, 2025		70
Granted		—
Cancelled		(13)
Exercised		(57)
Outstanding as of September 30, 2025		—

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In July 2024, the Company granted 87 Performance Units to employees. The Performance Units vest on the one-year anniversary of the grant date, provided certain performance criteria are met. The weighted average value per share of Performance Units granted in 2024 was $19.20. All of the Performance Units had vested as of September 30, 2025. Unrecognized stock-based compensation expense related to these Performance Units expected to vest was zero as stock-based compensation expense of $1,098 was recognized in June 2025 due to certain performance criteria being met as determined by the Compensation Committee of the Board of Directors.

OnkosXcel profit sharing units

The table below summarizes activity relating to the PSUs associated with OnkosXcel as described below.



		Weighted average
	Number of	price per unit
	units	(in whole dollars)

Outstanding as of January 1, 2025	1,166	$	5,686
Granted	—	$	—
Cancelled	(94)	$	5,953
Forfeited	—	$	—
Outstanding as of September 30, 2025	1,072

Vested units as of September 30, 2025	1,003	$	5,594

During 2024, OnkosXcel Employee Holdings, LLC, a management holding company used to facilitate the grant of equity interests to service providers of OnkosXcel granted 15 individual (not in thousands) time-based PSUs related to OnkosXcel to certain employees of the Company in consideration for services provided to OnkosXcel. The PSUs represent indirect equity interests in OnkosXcel. These PSUs vest ratably over 48 months.

The fair values of PSUs granted in 2024 were estimated at the date of grant using a Black-Scholes option pricing model and assumptions below.



	2024 grant profit share unit valuation inputs

Expected volatility	97.4	%
Risk-free rate of interest	3.6	%
Expected dividend yield	—	%
Expected term	5.8	years

Unrecognized stock-based compensation expense related to these awards was $155 and $496 as of September 30, 2025 and 2024, respectively.

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OnkosXcel restricted stock units

The table below summarizes activity relating to the OnkosXcel RSUs.



		Number of
		units

Outstanding as of January 1, 2025		176
Granted		—
Vested		(5)
Cancelled		(34)
Outstanding as of September 30, 2025		137

As of September 30, 2025, the Company had 137 OnkosXcel Restricted Stock Units outstanding. Unrecognized stock-based compensation expense related to the awards expected to vest was approximately $30 and $261 as of September 30, 2025 and 2024, respectively.

BTI Stock options

A summary of the Company’s stock option activity for the nine months ended September 30, 2025 is presented below.



	Number of	Weighted average
	shares	price per share

Outstanding as of January 1, 2025	311	$	265.36
Granted	75	$	7.54
Forfeited	(7)	$	120.89
Cancelled	(29)	$	372.12
Exercised	—	$	—
Outstanding as of September 30, 2025	350	$	204.27

Options vested and exercisable as of September 30, 2025	306	$	218.99

As of September 30, 2025, the intrinsic value of options outstanding was $0. The intrinsic value for stock options is calculated based on the difference between the exercise prices of the underlying awards and the quoted stock price of the Company’s common stock as of the reporting date.

No stock options were exercised for the three and nine months ended September 30, 2025. As of September 30, 2025, the total intrinsic value of stock options exercisable was $0.

The weighted average grant date fair value per share of options granted as of September 30, 2025 was $6.21.

The weighted average grant date fair value per share of options vested as of September 30, 2025 was $161.34.

The weighted average remaining contractual life is 5.4 years for options exercisable as of September 30, 2025. The weighted average remaining contractual life was 5.7 years for options outstanding as of September 30, 2025.

Unrecognized compensation expense related to unvested stock option awards as of September 30, 2025 was $683 and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 0.9 years.

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Stock-Based Compensation

The fair value of stock options granted during the nine months ended September 30, 2025 and 2024 was estimated using the Black-Scholes pricing model with the following assumptions:



	Nine months ended				Nine months ended
		September 30, 2025			September 30, 2024

Expected term			5.5	years	5.5	years	-	6.1	years
Expected stock price volatility			112.0	%	108.0	%	-	112.5	%
Risk-free rate of interest			4.5	%	4.0	%	-	4.5	%
Expected dividend yield			0.0	%	0.0	%	-	0.0	%

In 2025, the Company continued using the historical volatility of its common stock to estimate volatility. Prior to 2023, volatility was estimated using a combination of the historical volatility of publicly traded peer companies and that of the Company’s common stock. The expected term of the awards is estimated based on the simplified method, which calculates the expected term based upon the midpoint of the life of the award and the vesting period. The Company uses the simplified method because it does not have sufficient option exercise data to provide a reasonable basis upon which to estimate the expected term. The expected dividend yield is zero percent as the Company has no history of paying dividends nor does management expect to pay dividends over the contractual terms of these options. The risk-free interest rates are determined by reference to the U.S. Treasury yield curve in effect at the time of grant, with maturities approximating the expected term of the stock options. The fair value of the underlying common stock is generally determined as the closing price of the Company’s common stock on The Nasdaq Capital Market on the grant date, with consideration of whether there is material nonpublic information that could impact that estimated fair value when it is released.

The Company recognized stock-based compensation expense related to awards issued under the 2017 Plan and the 2020 Plan, as well as the OnkosXcel RSUs and PSUs, of $581 and $1,865 for the three months ended September 30, 2025 and 2024, respectively, and $2,317 and $6,355 for the nine months ended September 30, 2025 and 2024, respectively, which were comprised as follows:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024

Research and development	$	192	$	884	$	326	$	2,446
Selling, general and administrative		389		981		1,991		3,909
Total	$	581	$	1,865	$	2,317	$	6,355

2020 Employee Stock Purchase Plan

The Company’s 2020 Employee Stock Purchase Plan (the “ESPP”) was also approved and became effective at the Company’s 2020 annual meeting of stockholders on May 20, 2020. The ESPP is designed to assist eligible employees of the Company with the opportunity to purchase the Company’s common stock at a discount through accumulated payroll deductions during successive offering periods. The aggregate number of shares that were initially available to be issued pursuant to rights granted under the ESPP was 6 shares of common stock. In addition, the number of shares available for issuance under the ESPP increases on the first day of each calendar year, beginning on January 1, 2021 and ending on and including January 1, 2030, by a number of shares of common stock equal to the lesser of (a) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board of Directors. The number of shares that may be issued or transferred pursuant to rights granted under the component of the ESPP that is intended to qualify for favorable U.S. federal tax treatment under Section 423 of the Internal Revenue Code (the “Section 423 Component”) shall not exceed 31 shares. The purchase price will be determined by the administrator of the ESPP and, for purposes of the Section 423 Component, shall not be less than 85% of the fair value of a share on the first trading day or on the last trading day of the applicable offering period, whichever is lower. The shares available for issuance under the ESPP increased by 31 shares and 19

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shares on January 1, 2025 and 2024, respectively. To date, no shares have been sold under the ESPP. There were 106 shares available for issuance as of September 30, 2025.

Note 13. Leases

BTI leases office space for its corporate headquarters at 555 Long Wharf Drive, New Haven, Connecticut (the “HQ Lease”) under an operating lease that expires in February 2026. The Company has an option to renew the HQ Lease for one additional five-year term. Payments under the HQ Lease are fixed.

The Company also leases equipment such as copiers and information technology equipment.

The future minimum annual lease payments under operating leases, as of September 30, 2025, are as follows:


Year ending December 31,	Amount

Remainder of 2025	$	98
2026		65
Thereafter		—
Total lease payments	$	163
Imputed interest		(2)
Total lease liability	$	161
Less current portion of lease liability		(161)
Long-term portion of operating lease liability	$	—

The current portion of the Company’s operating lease liability of $161 as of September 30, 2025, is included in Other current liabilities on the Condensed Consolidated Balance Sheets.

Lease expense was $104 and $101 for the three months ended September 30, 2025 and 2024, respectively, and $307 and $299 for the nine months ended September 30, 2025 and 2024, respectively.

Lease renewal options are not included in the ROU asset or lease liability.

Note 14. Fair Value Measurements

The Company groups its assets and liabilities measured at fair value in three levels based on the nature of the inputs and assumptions used to determine fair value. Refer to Note 3, Summary of Significant Accounting Policies, for additional information on the accounting policies related to fair value.

The carrying amounts of cash and cash equivalents, accounts receivable, net, and accounts payable approximate fair value due to the short-term nature of these instruments. As of September 30, 2025 and December 31, 2024, the Company had $33,765 and $29,036, respectively, primarily in money market funds that hold U.S. government cash equivalent instruments (included in cash and cash equivalents) which were valued based on Level 1 inputs. There were no transfers between levels within the hierarchy during the three and nine months ended September 30, 2025 and the year ended December 31, 2024.

Derivative liabilities measured at fair value on a recurring basis are summarized below.


	As of
	September 30, 2025
	Fair Value		Level 1		Level 2		Level 3		Total

Derivative liability - BTI Warrants	$	3,567	$	—	$	2,566	$	1,001	$	3,567
Derivative liability - OnkosXcel Warrants		38		—		—		38		38
Total derivative liabilities	$	3,605	$	—	$	2,566	$	1,039	$	3,605

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	As of
	December 31, 2024

	Fair Value		Level 1		Level 2		Level 3		Total

Derivative liability - BTI Warrants	$	6,593	$	—	$	6,593	$	—	$	6,593
Derivative liability - OnkosXcel Warrants		40		—		—		40		40
Total derivative liabilities	$	6,633	$	—	$	6,593	$	40	$	6,633

Derivative liabilities are comprised of the OnkosXcel Warrants, BTI Warrants, and Option Warrants. The fair value of the derivative liabilities was determined using Binomial Option Pricing and Distribution models for the OnkosXcel Warrants and Option Warrants, and using a Black Scholes model for the BTI Warrants.

The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended September 30, 2025. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category.


	Nine months ended
	September 30,
	2025		2024

Derivative liabilities, Balance - January 1	$	40	$	1,905
Addition of derivative liabilities - BTI Warrant (March 2025 Accompanying Warrants)		2,831		—
Addition of derivative liabilities - Option Warrant		369		—
Termination of derivative liabilities - Option Warrant		(369)		—
Reclassification of derivative liabilities - BTI Warrant to permanent equity upon exercise		(11,548)		—
Change in fair value		9,716		(473)
Derivative liabilities, Balance - September 30	$	1,039	$	1,432

The change in fair value of the derivative liabilities was reported in the Condensed Consolidated Statements of Operations as Other (income) expense, net, for the three and nine months ended September 30, 2025.

In estimating the fair value of the derivative liability related to the OnkosXcel Warrants, inputs included third-party fair value estimates of OnkosXcel limited liability company units along with the volatility of those units (which was set at 115% based on the historical volatility of the Company’s stock, along with a peer group of comparable publicly traded companies), and the timing and probability of the relevant capital transactions occurring.

In estimating the fair value of the derivative liability related to the Option Warrants, the valuation inputs used were a strike price of $3.50, the Company’s stock price of $2.70, volatility of 39.2% (adjusted to set the value of securities in the March 2025 Offering equal to the consideration paid), a term of 0.04 years and a risk-free rate of 4.39%. The Option Warrants expired on March 18, 2025 without being exercised, and the Company recorded a termination gain of $369 in Other (income) expense, net, in the Company’s Condensed Consolidated Statements of Operations.

In estimating the fair value of the derivative liability related to the BTI Warrants – March 2025 Accompanying Warrants, the valuation inputs used were a strike price of $4.20, the Company’s stock price of $2.70, volatility of 39.2% (adjusted to set the value of securities in the March 2025 Offering equal to the consideration paid), a term of 5 years and a risk-free rate of 4.01%. The Company remeasured the fair value of the remaining warrants at September 30, 2025 of $1,001, and for the three and nine months ended September 30, 2025 recorded a net loss of $586 and a net gain of $1,268, respectively, within Other (income) expense, net in the Company’s Condensed Consolidated Statements of Operations. The valuation inputs used as of September 30, 2025 were a strike price of $4.20, the Company’s stock price of $2.56, volatility of 41.0%, term of 4.4 years and risk-free rate of 3.71%.

The estimated fair value of the Credit Agreement as of September 30, 2025 and December 31, 2024 was $107,363 and $94,204, respectively. Both observable and unobservable inputs were used to determine the fair value of long-term debt, which was classified within the Level 3 category.

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The following table presents the BTI warrants issued and outstanding by the Company and the corresponding balance sheet classification:


Warrant Recipient	Warrant Type	Issue Date	Exercise Price		Number of Warrants	Classification

Lenders and RIFA Purchasers	Closing Date Warrants	4/19/2022	$	7.68	17	Equity
Lenders and RIFA Purchasers	2023 Warrants	12/5/2023	$	7.68	4	Equity
Lenders and RIFA Purchasers	2024 Warrants	3/20/2024	$	7.68	6	Equity
Armistice Capital Master Fund Ltd.	Accompanying Warrants	3/25/2024	$	9.136	534	Derivative Liability
Armistice Capital Master Fund Ltd.	Accompanying Warrants	3/25/2024	$	51.20	5	Derivative Liability
Armistice Capital Master Fund Ltd.	November 2024 Accompanying Warrants	11/25/2024	$	7.68	846	Derivative Liability
Heights Capital Management	November 2024 Accompanying Warrants	11/25/2024	$	7.68	27	Derivative Liability
Hudson Bay Capital Management	November 2024 Accompanying Warrants	11/25/2024	$	7.68	27	Derivative Liability
IntraCoastal Capital, LLC	November 2024 Accompanying Warrants	11/25/2024	$	7.68	13	Derivative Liability
Murchison Capital Partners, LP and assignees	March 2025 Accompanying Warrants	3/4/2025	$	4.20	1,700	Derivative Liability
Total warrants issued					3,179

The fair value of the Closing Date Warrants, which was a non-recurring fair value, was determined as of the date of issuance using a Black-Scholes pricing model and the fair value of $3,245 was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Condensed Consolidated Balance Sheets, with the offset recorded as a discount on the amounts funded under the OFA Facilities. This non-recurring measurement is classified as Level 2. The inputs used were a strike price of $320.64, the Company’s stock price of $238.88, volatility of 95%, term of 7 years and risk-free rate of 2.95%.

As discussed in Note 9, Debt and Credit Facilities, in connection with the closing of the Second Amendment of the Credit Agreement, on the Second Amendment Effective Date, the Company amended and restated the Closing Date Warrants granted to the Lenders to have an exercise price of $58.3232 per share.

Using a Black-Scholes pricing model, the Company determined that the Closing Date Warrants’ fair values at the original strike price of $320.64 and the amended strike price of $58.3232 were $548 and $802, respectively, as of the Second Amendment Effective Date. The Closing Date Warrants’ incremental increase in fair value for the repricing of $254, was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Condensed Consolidated Balance Sheets, with the offset recorded as a discount on the amounts refinanced under the Credit Agreement.

In connection with the Second Amendment, the Company issued 4 “2023 Warrants” at a strike price of $58.3232 per share. The fair value of the 2023 Warrants, which is a non-recurring fair value, was determined as of the date of issuance using a Black-Scholes pricing model and the fair value of $200 was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Condensed Consolidated Balance Sheets, with the offset recorded as a discount on the amounts funded under the Credit Agreement. This non-recurring measurement is classified as Level 2. The inputs used were a strike price of $58.3232, the Company’s stock price of $59.36, volatility of 99%, term of 5.4 years and risk-free rate of 4.14%.

In connection with the Fourth Amendment, the Company issued 6 “2024 Warrants” at a strike price of $49.1568 per share. The fair value of the “2024 Warrants”, which was a non-recurring fair value, was determined as of the date of issuance using a Black-Scholes pricing model and the fair value of $224 was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Condensed Consolidated Balance Sheets, with the offset recorded as a discount on the amounts funded under the OFA Facilities. This non-recurring measurement is classified as Level 2. The inputs used were a strike price of $49.1568, the Company’s stock price of $44.48, volatility of 112.2%, term of 5 years and risk-free rate of 4.25%.

In addition, in connection with the Fifth Amendment of the Credit Agreement, on the Fifth Amendment Effective Date of November 25, 2024, the Company amended and restated the Closing Date Warrants, 2023 Warrants, and 2024 Warrants granted to the Lenders to have an exercise price of $7.68 per share.

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Using a Black-Scholes pricing model, the Company determined that the Closing Date Warrants, 2023 Warrants, and 2024 Warrants’ fair values at the previously amended strike price of $58.3232 and original strike price of $49.1568 the amended strike price of $7.68 were $105 and $164, respectively, as of the Fifth Amendment Effective Date. The Closing Date Warrants, 2023 Warrants, and 2024 Warrants’ incremental increase in fair value for the repricing of $59, was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Condensed Consolidated Balance Sheets, with the offset recorded as a discount on the amounts refinanced under the Credit Agreement.

The fair value of the Accompanying Warrants at issuance on March 25, 2024 was determined using a Black-Scholes pricing model and was recorded as a derivative liability with the offset recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Condensed Consolidated Balance Sheets. This fair value measurement is classified as Level 2. On November 25, 2024, 534 of the 539 Accompanying Warrants’ strike price were amended to $9.136. The Company remeasured the Accompanying Warrants’ fair value at September 30, 2025 of $916, and for the three and nine months ended September 30, 2025 recorded a net loss of $352 and a net gain of $1,405, respectively, within Other (income) expense, net in the Company’s Condensed Consolidated Statements of Operations. The valuation inputs used as of September 30, 2025 were strike prices of $9.136 and $51.20 for 534 and 5 Accompanying Warrants, respectively, the Company’s stock price of $2.56, volatility of 137.1%, term of 3.5 years and risk-free rate of 3.64%.

The fair value of the November 2024 Accompanying Warrants at issuance on November 25, 2024 was determined using a Black-Scholes pricing model and was recorded as a derivative liability with the offset recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Condensed Consolidated Balance Sheets. This fair value measurement is classified as Level 2. The Company remeasured the November 2024 Accompanying Warrants’ fair value at September 30, 2025 of $1,650, and for the three and nine months ended September 30, 2025 recorded a net loss of $617 and a net gain of $2,623, respectively, within Other (income) expense, net in the Company’s Condensed Consolidated Statements of Operations. The valuation inputs used as of September 30, 2025 were a strike price of $7.68, the Company’s stock price of $2.56, volatility of 128.4%, term of 4.1 years and risk-free rate of 3.69%.

Note 15. Net Loss Per Share

Basic and diluted net loss per share are as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024

Net loss (numerator)	$	(30,911)	$	(13,650)	$	(57,352)	$	(48,740)
Weighted average shares (denominator)		14,196		2,649		8,992		2,366
Basic and diluted net loss per share	$	(2.18)	$	(5.15)	$	(6.38)	$	(20.60)

Potentially dilutive securities outstanding consists of stock options, RSUs and performance units, and BTI warrants. The Company had common stock equivalents outstanding are as follows:

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	As of
	September 30,
	2025		2024

Stock options		350		327
Restricted stock units		115		8
Performance stock units		-		112
BTI Warrants		3,179		567
Total common stock equivalents		3,644		1,014

Note 16. Commitments and Contingencies

From time to time, in the ordinary course of business, the Company may be subject to litigation and regulatory examinations as well as information gathering requests, inquiries and/or investigations. Other than the items below, the Company is not currently subject to any matters where it believes there is a reasonable possibility that a material loss may be incurred.

On July 7, 2023, plaintiff Katelyn Martin filed a class action complaint against the Company and certain executives in the United States District Court for the District of Connecticut, captioned Martin v. BioXcel Therapeutics, et al., 3:23-cv-00915 (D. Conn). The case has since been renamed to Hills et al v. BioXcel Therapeutics, Inc. et al. On October 4, 2023, pursuant to the Private Securities Litigation Reform Act, the court appointed two co-Lead Plaintiffs. The co-Lead Plaintiffs filed an amended complaint on December 5, 2023, alleging violations of Sections 10(b) and 20A of the Securities and Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 promulgated thereunder. On July 11, 2024, the Court dismissed the amended complaint without prejudice and, on August 1, 2024, co-Lead Plaintiffs filed a second amended complaint. The second amended complaint alleges that defendants made false or misleading statements regarding the TRANQUILITY II trial and the development of BXCL501 for an expanded indication related to the treatment of certain Alzheimer’s-related agitation. The Company moved to dismiss the second amended complaint on September 6, 2024. On February 24, 2025, while the Company’s motion to dismiss remained pending, Plaintiffs moved for leave to further amend their complaint. On September 29, 2025, the Court issued an order granting Plaintiffs’ motion for leave to amend, denying Defendants’ motion to dismiss as moot, and allowing Plaintiffs to proceed on certain of their claims. The Company filed an answer to the third amended complaint on October 28, 2025.

On November 28, 2023, Plaintiffs Pratheesan Panancherry and Jeffrey Bastress filed a stockholder derivative complaint in the United States District Court for the District of Connecticut purportedly on behalf of the Company and against Vimal Mehta, Richard I. Steinhart, Peter Mueller, June Bray, Sandeep Laumas, Michael Miller, Michal Votruba, and Krishnan Nandabalan as Defendants, and the Company as Nominal Defendant under the caption Panancherry et al v. Mehta et al, 3:23-cv-1554. Following the initial action, Plaintiffs Maria Vomvolakis (3:24-cv-3) and Kelly Fowler (3:24-cv-203) each filed separate stockholder derivative complaints in the District of Connecticut raising similar claims as Panancherry and Bastress, including business torts and violations of the Securities Exchange Act of 1934. The cases have been consolidated under the caption In re BioXcel Therapeutics, Inc. Stockholder Derivative Litigation, 3:23-cv-1554 (D. Conn.). On October 30, 2025, the Court entered the parties’ joint stipulation staying the consolidated action until the resolution of Hills v. BioXcel et al, 3:23-cv-00915 (D. Conn.).

On January 11, 2024, Plaintiff Jeremy Smith filed a stockholder derivative complaint in the United States District Court for the District of Delaware purportedly on behalf of the Company and against Vimal Mehta, Peter Mueller, June Bray, Sandeep Laumas, Michael Miller, Michal Votruba, Richard I. Steinhart, Robert Risinger, and Krishnan Nandabalan as Defendants, and the Company as Nominal Defendant under the caption Smith v. Mehta et al, 1:24-cv-00041. Following the initial action, Plaintiff Janice Korff filed a stockholder derivative complaint in the District of Delaware raising similar claims as Smith (1:24-cv-130), including business torts and violations of the Securities Exchange Act of 1934. The cases have been consolidated under the caption In re BioXcel Therapeutics, Inc. Derivative Litigation, 1:24-cv-00041 (D. Del.). On October 30, 2025, the Court entered the parties’ joint stipulation staying the consolidated action until the resolution of Hills v. BioXcel et al, 3:23-cv-00915 (D. Conn.).

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On May 7, 2025, Plaintiff Yaakov Portnoy filed a stockholder derivative complaint in the Court of Chancery of the State of Delaware purportedly on behalf of the Company and against Vimal Mehta, Peter Mueller, June Bray, Sandeep “Steve” Laumas, Michael P. Miller, Michal Votruba, Richard I. Steinhart, Robert Risinger, and Krishnan Nandabalan, and the Company as Nominal Defendant under the caption Yaakov Portnoy, derivatively on behalf of BioXcel Therapeutics, Inc. v. Vimal Mehta, et al, 2025-0508-BWD (Del. Ch.). The complaint alleges similar claims to those raised in In re BioXcel Therapeutics, Inc. Derivative Litigation, 1:24-cv-00041 (D. Del.), including business torts.

At this time, the Company does not believe the claims in the above-captioned matters have merit, and intends to vigorously defend against them; however, the potential costs and liabilities associated with this litigation are uncertain.

In April 2022, the Company signed a commercial supply agreement that requires minimum annual payments for the first three years of the agreement that in aggregate total $10,000 for the three-year period, of which $5,000 was originally due in year ended 2024. On July 11, 2024, the Company entered into an amendment to the commercial supply agreement (the “Product Supply Agreement Amendment”) that reduces the specified minimum annual payment over the next three years starting in the year ended 2024 and, thereafter, for a specified interval, provides for minimum annual payments to the extent that the Company receives approval of a supplemental new drug application (sNDA) or a new drug application (NDA) from the FDA for enumerated indications. The Company’s renegotiated agreement reduced the minimum commitment for 2024 to $1,000 and thereafter for the term of the agreement in annual amounts ranging from $2,000 to $5,000 subject, in certain instances, to the extent that the Company receives approval of an sNDA or NDA from the FDA for enumerated indications. In accordance with the Product Supply Agreement Amendment, the minimum commitments were reduced to $1,000, $2,000 and $2,000 in the years 2024, 2025, and 2026. In addition, the Company agreed to make a reconciliation payment of $1,200 in the third quarter of 2024 for full settlement for amounts due prior to the July 11, 2024 amendment.

Note 17. Segment Information

The Company views its operations and manages its business as one operating and reportable segment, utilizing artificial intelligence (“AI”) to develop transformative medicines in neuroscience and immuno-oncology. The Company is focused on utilizing cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives. The Company’s approach employs a unique AI platform to reduce therapeutic development costs and potentially accelerate development timelines.

Consistent with the operational structure, the Chief Executive Officer, as the chief operating decision maker (“CODM”), reviews weekly cash usage and allocates resources based on consolidated net loss that also is reported on the consolidated statements of operations. The measure of segment assets is reported on the balance sheet as total consolidated assets. The CODM utilizes consolidated net loss by comparing actual results against budgeted amounts on a quarterly basis. As part of this process, consolidated net loss is a critical performance measure used to evaluate the Company’s operating performance and guide strategic decisions and resource allocations, including additional investments in research and development and commercialization activities.

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	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024

Product revenue, net	$	98	$	214	$	386	$	1,900
Less:
Cost of goods sold	$	11	$	1,170	$	132	$	1,311
Research and development costs:
Personnel and related costs	$	1,841	$	1,225	$	5,108	$	8,050
Non-cash stock-based compensation		192		884		326		2,446
Professional fees		972		1,316		2,758		4,079
Clinical trials expense		4,599		1,014		12,736		6,915
Chemical, manufacturing and controls cost		743		207		1,453		1,534
Other expenses		393		455		1,169		1,510
Total research and development costs	$	8,740	$	5,101	$	23,550	$	24,534
Commercial costs:
Personnel and related costs		88		463		251		2,415
Non-cash stock-based compensation		—		62		—		226
Professional fees		14		236		151		339
Commercial and marketing		115		279		322		907
Travel related expenses		5		99		26		302
Other expenses		12		162		(121)		576
Total commercial costs	$	234	$	1,301	$	629	$	4,765
Selling, general and administrative costs:
Personnel and related costs		773		490	$	2,713	$	4,227
Non-cash stock-based compensation		389		919		1,991		3,682
Professional fees		3,102		4,049		8,547		14,730
Travel related expenses		117		95		364		344
Other expenses		766		829		2,445		2,650
Total selling, general and administrative costs	$	5,147	$	6,382	$	16,060	$	25,633
Restructuring costs		194		1,553		194		2,409
Total operating expenses	$	14,326	$	15,507	$	40,565	$	58,652
Other (income) expense
Interest expense		4,373		3,790		12,588		11,097
Interest income		(236)		(616)		(745)		(2,234)
Other (income) expense, net		12,546		(4,817)		5,330		(16,875)
Segment net loss	$	(30,911)	$	(13,650)	$	(57,352)	$	(48,740)
Adjustments and reconciling items		—		—		—		—
Consolidated Net Loss	$	(30,911)	$	(13,650)	$	(57,352)	$	(48,740)

Note 18. Subsequent Events

As discussed in Note 11, Common Stock Financing Activities, the Company filed a prospectus supplement with the Securities and Exchange Commission for the offer and sale of up to $80,000 shares of common stock pursuant to the Equity Distribution Agreement with Canaccord. After September 30, 2025 but before financial statement issuance, the Company sold 1,870 shares under the Equity Distribution Agreement for gross proceeds of $4,863 and received proceeds of $4,766, net of issuance costs of $97.

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

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this report and the audited financial statements and related notes contained in our Annual Report on Form 10-K for the year ended December 31, 2024. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below and in the forward-looking statements. Factors that could cause or contribute to these differences include, without limitation, those discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, those listed under “Summary Risk Factors,” and those discussed in the section titled “Risk Factors” included in Part II, Item 1A. of this report. All dollar amounts in the below Management’s Discussion and Analysis of Financial Condition and Results of Operations are presented in U.S. dollars, and all dollar and share amounts are presented in thousands, unless otherwise noted or the context otherwise provides.

Overview

BioXcel Therapeutics, Inc. (Nasdaq: BTAI, “the Company”) is a biopharmaceutical company built on artificial intelligence (“AI”) to develop transformative medicines in neuroscience. Our wholly owned subsidiary, OnkosXcel Therapeutics, is focused on the development of medicines in immuno-oncology. We utilize cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives. We developed a proprietary AI platform to reduce therapeutic development costs and potentially accelerate development timelines. Our approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indications. We believe this differentiated approach has proven its potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs.

Our Business

Our most advanced neuroscience candidate is BXCL501. In indications other than those approved by the U.S. Food and Drug Administration (FDA) as IGALMI^®, BXCL501 is an investigational, proprietary, orally dissolving sublingual film formulation of dexmedetomidine in development for the treatment of agitation associated with psychiatric and neurological disorders. Our most advanced immuno-oncology asset, BXCL701, is an investigational oral innate immune activator from OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors.

On April 6, 2022, we announced that the FDA approved IGALMI^® (dexmedetomidine) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults. IGALMI^® is approved to be self-administrated by patients under the supervision of a health care provider. On July 6, 2022, we announced that IGALMI^® was commercially available in doses of 120 and 180 micrograms (“mcg”).

We have recently completed our SERENITY At-Home pivotal Phase 3 safety trial intended to support a supplemental new drug application (“sNDA”) submission to potentially expand the label of IGALMI^®into the outpatient or at-home setting. On September 5, 2024, we announced the initiation of the trial, a double-blind, placebo-controlled study to evaluate the safety of a 120 mcg dose of BXCL501 in 200 patients for acute treatment of agitation associated with bipolar disorders or schizophrenia in the outpatient or at-home setting.

On August 27, 2025 we announced that the SERENITY At-Home Pivotal Phase 3 trial evaluating the safety of BXCL501, as an acute treatment for agitation associated with bipolar disorders or schizophrenia in the at-home setting, met its primary endpoint. The data from this successful study will form the basis of the sNDA submission for label expansion of IGALMI^® in the at-home setting planned for early first quarter of 2026.

On September 10, 2025 we further announced positive topline exploratory efficacy data from the SERENITY At-Home Pivotal Phase 3 safety trial, which demonstrated BXCL501 had continued effects and consistent benefit with repeat dosing.

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On October 10, 2025 we announced positive results from the correlation study related to exploratory efficacy outcomes from the SERENITY At-Home trial. The results demonstrated a strong correlation between the clinician assessments and the patient or caregiver (informant) assessments. The results, along with the data from the SERENITY At-Home trial, are expected to be included in the planned sNDA submission.

Our TRANQUILITY program is designed to evaluate BXCL501 as a potential treatment option for agitation associated with Alzheimer’s dementia in the outpatient or at-home setting and in-care facilities. We have had several FDA meetings to discuss the development program, and the FDA has commented on the proposed protocol for our TRANQUILITY In-Care Phase 3 trial, which is designed to evaluate the efficacy and safety of a 60 mcg dose of BXCL501 for agitation associated with Alzheimer’s dementia. The Company is advancing plans for initiation of the trial upon funding. See further discussion in “Our Neuroscience Clinical Programs” below.

As described further below, we have deprioritized the development of BXCL501 for certain other proposed indications.

Our most advanced immuno-oncology candidate, BXCL701, is an investigational oral innate immune activator from OnkosXcel Therapeutics as a potential therapy for the treatment of aggressive forms of prostate cancer, pancreatic cancer, and other solid and liquid tumors. As described further below, we have deprioritized the development of our BXCL701 programs, except as noted under “Immuno-Oncology” below.

2024 Clinical Prioritization

On May 8, 2024 the Company took actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs. The Company reduced its workforce by approximately 15% and notified impacted employees on May 8, 2024. All related restructuring costs were paid in the second quarter of 2024.

In the quarter ended September 30, 2025, we also reduced our investment in and utilization of our proprietary AI platform until additional funding is available.

IGALMI^® Commercialization Strategy

We are continuing to supply IGALMI^® through existing distribution channels. At the same time, while seeking potential commercial partners, we are maintaining IGALMI’s market presence with minimal commercial resources following our Clinical Prioritization in 2024. Our commercialization efforts are designed to build the foundation to launch additional potential follow-on indications. If IGALMI^® would be approved outside the U.S., we would consider launching the product through collaborations with third parties. However, no foreign applications have been made at this time.

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Our Neuroscience Clinical Programs and Investigator-Sponsored Trials

The following is a summary of the status of our major neuroscience clinical development programs and investigator-sponsored trials as of the date of this Quarterly Report on Form 10-Q.

About BXCL501

BXCL501 is our most advanced neuroscience clinical candidate. In indications other than those approved by the FDA as IGALMI^®, BXCL501 is an investigational, proprietary, orally dissolving sublingual film formulation of dexmedetomidine, a selective alpha-2 receptor agonist, targeting symptoms from stress-related behaviors such as agitation. BXCL501 is currently being evaluated for the acute treatment of agitation related to bipolar disorders or schizophrenia in the outpatient or at-home setting.

As a selective adrenergic agent with sublingual or buccal administration, BXCL501 is designed to be easily administered and has shown a relatively rapid onset of action in multiple clinical trials, including those studying patients with bipolar disorders, schizophrenia, and Alzheimer’s disease. We believe results from these studies suggest that BXCL501 has the potential to reduce agitation without producing excessive sedation. We also believe BXCL501 is highly differentiated from antipsychotics and benzodiazepines, which are currently used as first-line standard-of-care treatment for agitation despite often producing unwanted side effects such as excessive sedation or extra pyramidal motor effects. Managing patient agitation in neuropsychiatric and neurodegenerative disorders represents a significant challenge for physicians and caregivers. We believe BXCL501 has the potential to address these challenges and, if approved for the respective indications, has the potential to become the standard of care for the acute treatment of agitation associated with these disorders.

In addition, based on its mechanism of action, we believe BXCL501 has the potential to address some symptoms of several additional diseases or conditions, including opioid use disorder (“OUD”), acute stress disorder (“ASD”) and post-traumatic stress disorder (“PTSD”). BXCL501 is currently being evaluated for treatment of patients with those conditions in clinical trials sponsored by leading academic research institutions. See Government-Supported Investigator-Sponsored Trials (“ISTs”) below.

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BXCL501 Late-Stage Clinical Programs

SERENITY Program: Acute Treatment of Agitation Associated with Bipolar I or II Disorder or Schizophrenia

Under our SERENITY program, we are focused on the continued development of BXCL501 (currently marketed and commercialized as IGALMI^®)as a potential treatment option for agitation associated with bipolar I or II disorder or schizophrenia in the outpatient or at-home setting. The Company has completed its SERENITY At-Home pivotal Phase 3 trial, which is designed as a double-blind, placebo-controlled study to evaluate the safety of a 120 mcg dose of BXCL501 in over 200 patients for acute treatment of agitation associated with bipolar disorders or schizophrenia in the outpatient or at-home setting.

On August 18, 2025 we announced that the Company had received positive pre-sNDA meeting responses from the U.S. Food and Drug Administration (FDA). Based on the FDA’s feedback, the Company believes that the planned sNDA regulatory package will be sufficient to support the sNDA submission, which remains on track for early first quarter of 2026.

The primary purpose of the planned meeting was to gain alignment with the FDA regarding the content and format of the Company’s planned sNDA submission for the at-home (outpatient) use of BXCL501, including the clinical, nonclinical, and chemistry and manufacturing and controls (CMC) requirements. The Company concludes that the objectives of the pre-sNDA meeting have been accomplished based on the FDA’s written responses and has determined that the meeting, originally scheduled for August 20, 2025, was no longer required. The pre-sNDA preliminary meeting comments received from FDA on August 14, 2025, will serve as the official record. Acceptance of the sNDA will be subject to the FDA’s review of the complete filing.

On August 27, 2025 we announced that the SERENITY At-Home Pivotal Phase 3 trial evaluating the safety of BXCL501, the Company’s proprietary, sublingual film formulation of dexmedetomidine, as an acute treatment for agitation associated with bipolar disorders or schizophrenia in the at-home setting, met its primary endpoint. The data from this successful study will form the basis of the sNDA submission for label expansion of IGALMI^® in the at-home setting.

SERENITY At-Home Topline Summary

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Summary of agitation episodes:

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A total of 246 patients randomized

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Data collected 2,628 agitation episodes in 215 patients

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Treated 2,437 episodes in 208 patients

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168 patients (81%) completed the full 12-week trial

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Average of 11.7 agitation episodes recorded per treated patient

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All patients were able to successfully self-administer the film

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Distribution of enrolled patients was 45% bipolar disorders and 55% schizophrenia

SERENITY AT-Home Primary Endpoint Data

The 120 mcg dose of BXCL501 was well-tolerated in patients with episodes of agitation in the outpatient setting and met the primary objective. This tolerability outcome was observed across repeat dosing and through the duration of the trial.

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No discontinuations due to tolerability in the BXCL501 arm

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Adverse event profile consistent with approved IGALMI^® label and multiple clinical trials in the institutional setting

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No drug-related serious adverse events (SAEs), syncopes or falls reported

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No new or unexpected treatment emergent adverse events (TEAEs)

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No severe TEAEs associated with BXCL501 treatment and most TEAEs were mild

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No trend of more frequent AEs over time or with repeat dosing

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Tolerability remained consistent throughout the repeat dosing in the trial

BXCL501 120 mcg Tolerability Profile Consistent with IGALMI^® Label

Treatment-Emergent Adverse Events ²	Serenity I & II (IGALMI® Label¹)		Serenity At-Home Adverse Event by Dose (Episode)¹
		Single Dose		First Dose		All Doses (2437 episodes)
		IGALMI® N=255 n (%)	Placebo N=252 n(%)	BXCL501 N=102 n (%)	Placebo N=106 n (%)	BXCL501 N=1160 n (%)	Placebo N=1277 n (%)
Somnolence ³	56 (22%)	16 (6%)	23 (22.5%)	18 (17%)	161 (13.9%)	103 (8.1%)
Oral Paresthesia/Hypoesthesia	14 (6%)	2 (1%)	2 (2.0%)	1 (0.9%)	6 (0.5%)	1 (0.1%)
Dizziness	10 (4 %)	2 (1%)	5 (4.9%)	1 (0.9%)	19 (1.6%)	2 (0.2%)
Dry mouth	19 (7%)	3 (1%)	7 (6.9%)	1 (0.9%)	56 (4.8%)	24 (1.9%)
Nausea	6 (2%)	4 (2%)	1 (1.0%)	0(0%)	6 (0.5%)	1 (0.1%)
Headache	12 (5%)	12 (5%)	0 (0%)	2 (1.9%)	4 (0.3%)	4 (0.3%)

¹ SERENITY I and II evaluated a single agitation episode in patient in clinic. SERENITY AT-Home evaluated 2437 episodes in 208 patients. Adverse events are presented on an episode basis as each episode was evaluated as an independent event. Only AEs observed in Serenity At-Home Pivotal Phase 3 trial are listed

²AEs within 24 hours following dosing

³Includes fatigue

BXCL501 Tolerability Profile Consistent with Repeat Dosing¹

	Doses 1-3		Doses 4 to 12		Doses 13 and beyond
Treatment-Emergent Adverse Event ²	BXCL501 N=265 n (%)	PLACEBO N=274 n (%)	BXCL501 N=398 n (%)	PLACEBO N=483 n (%)	BXCL501 N= 496 n (%)	PLACEBO N=517 n (%)
Somnolence³	58 (22.0%)	43 (16.0%)	61 (15.3%)	52 (10.8%)	42 (8.5%)	8 (1.5%)
Oral Paresthesia/Hypoesthesia	4 (1.5%)	1 (0.4%)	2 (0.5%)	0 (0%)	0 (0%)	0 (0%)
Dizziness	10 (3.8%)	1 (0.4%)	7 (1.8%)	1 (0.2%)	2 (0.4%)	0 (0%)
Dry mouth	14 (5.3%)	2 (0.7%)	29 (7.3%)	2 (0.4%)	13 (2.6%)	20 (3.9%)
Nausea	1 (0.4%)	1 (0.4%)	3 (0.8%)	0 (0%)	2 (0.4%)	0 (0%)
Headache	3 (1.1%)	2 (0.7%)	0 (0%)	2 (0.4%)	1 (0.2%)	0 (0%)

¹Adverse events are presented on an episode basis

²AEs within 24 hours following dosing

³Includes fatigue

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BXCL501 Tolerability Profile Consistent over the Trial Duration


	Weeks 1 to 4		Weeks 5 to 8		Weeks 9 to 12
Treatment-Emergent Adverse Event²	BXCL501 N=452 n (%)	PLACEBO N=473 n (%)	BXCL501 N=369 n (%)	PLACEBO N=432 n (%)	BXCL501 N=337 n (%)	PLACEBO N=368 n (%)
Somnolence³	74 (16.4%)	53 (11.2%)	47 (12.7%)	29 (6.7%)	36 (10.7%)	19 (5.2%)
Oral Paresthesia/Hypoesthesia	6 (1.3%)	1 (0.2%)	0 (0%)	0 (0%)	0 (0%)	0 (0%)
Dizziness	13 (2.9)	2 (0.4%)	3 (0.8%)	0 (0%)	3 (0.9%)	0 (0%)
Dry mouth	25 (5.5%)	2 (0.4%)	20 (5.4%)	10 (2.3%)	11 (3.3%)	12 (3.3%)
Nausea	3 (0.7%)	1 (0.2%)	2 (0.5%)	0 (0%)	1 (0.3%)	0 (0%)

¹Adverse events are presented for agitation episodes in the weeks indicated

²AEs within 24 hours following dosing

³Includes fatigue

On September 10, 2025, we announced positive topline exploratory efficacy data from the SERENITY At-Home Pivotal Phase 3 safety trial, which demonstrated BXCL501 had continued effects and consistent benefit with repeat dosing. The trial in the home setting evaluated 120 mcg dose of BXCL501, the Company’s proprietary, sublingual film formulation of dexmedetomidine, IGALMI^®, for treatment of agitation associated with bipolar disorders or schizophrenia. While this trial was not powered for efficacy assessments, continued effects and consistent benefits with repeat dosing seen in the trial further support the potential of BXCL501 for use in the outpatient setting.

Effect Across Total Number of Agitation Episodes

Across 2,433 treated episodes in the trial, BXCL501 demonstrated a significant mean reduction in the modified Clinical Global Impression–Severity (mCGI-S) score from baseline compared to placebo at 2 hours (p<.05).

Effect Across Severity of Agitation Episodes

Patients experienced a complete resolution of agitation symptoms measured by mCGI-S at significantly higher rates with BXCL501 compared to placebo across severity of agitation episodes, with an overall resolution of 50% in the BXCL501 arm, compared to 33% on placebo (p <.0001). Severe agitation episodes fully resolved (no agitation) in 61% of episodes in the BXCL501 arm, compared to 18% on placebo (p <.0001). Moderate agitation episodes fully resolved in 43% of cases for patients in the BXCL501 arm, compared to 34% on placebo (p <.0005). Mild agitation episodes fully resolved in 60% of cases for patients in the BXCL501, compared to 40% on placebo (p <.0001). In sum, complete resolution of agitation was significantly higher with BXCL501 compared to placebo regardless of agitation episode severity.

Effect Across Number of Treated Agitation Episodes

The mean reduction in agitation symptoms experienced by patients following administration of BXCL501 was maintained throughout repeated dosing in the trial. There was a mean reduction in mCGI-S score of 1.2 following the first 12 doses and a mean reduction of 1.4 following 13 or more doses of BXCL501. This underscores the potential of BXCL501 to continue to provide benefit across repeated dosing.

Efficacy Across Duration of the Trial

The reduction in agitation symptoms experienced by patients following administration of BXCL501 was also maintained throughout the trial’s duration. Evaluating the 12-week trial period on a time-based scale, agitation episodes treated with BXCL501 during weeks 1-4, 5-8 and 9-12 all had a mean reduction in mCGI-S score of 1.3. This underscores the potential of BXCL501 to maintain a sustained benefit across longer treatment durations.

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On October 14, 2025 We announced positive results from the correlation study related to exploratory efficacy outcomes from the SERENITY At-Home trial. The results, along with the data from the SERENITY At-Home trial, are expected to be included in the planned sNDA submission.

The standard method for measuring acute agitation associated with schizophrenia and bipolar disorder is the Positive and Negative Syndrome Scale – Excited Component (PEC) administered by a trained clinician, which was used in the Serenity I & II Pivotal Trials. In order to evaluate BXCL501 for continued clinical effect with repeat dosing in the at-home setting using an exploratory efficacy measurement, the Company, in consultation with FDA, developed the modified CGI-S (mCGI-S) scale, which can be scored by patients and/or caregivers. The study assessed the correlation between PEC and mCGI-S in this prospective, open label, in-clinic trial in 33 patients.

The results demonstrated a strong correlation between the clinician assessments and the patient or caregiver (informant) rated outcomes, providing support for using mCGI-S to assess efficacy in the outpatient setting. A statistically significant and strong correlation between the PEC and mCGI-S with a correlation of ρ=0.89; p<0.0001 for patients and ρ=0.88; p<0.0001 for informants was observed.

TRANQUILITY Program: Acute Treatment of Agitation Associated with Dementia due to Probable Alzheimer’s Disease (“AAD”)

Under our TRANQUILITY program, we are evaluating BXCL501 as a potential treatment option for the acute treatment of agitation associated with Alzheimer’s dementia (“AAD”). On June 29, 2023, we announced positive topline results from our TRANQUILITY II Phase 3 trial. The randomized, double-blind, placebo-controlled, parallel group trial evaluated the safety and efficacy of BXCL501 for the acute treatment of AAD in adults 65 years and older with mild to moderate dementia in assisted living facilities and residential care settings who required minimal assistance with activities of daily living.

On June 29, 2023, we also announced that we had learned that an investigator in the TRANQUILITY II study engaged in misconduct. Since that time, we have taken steps to further investigate and evaluate the conduct of the trial at the investigator’s clinical site. On October 25, 2023, we announced that an independent third-party audit of data integrity at the trial site did not identify any findings that they believed impacted the data reliability or integrity, nor did they find any evidence of additional misconduct or fraud. On March 3, 2025, we announced that the FDA concluded that the inspection of the single site in the trial was closed under 21 C.F.R.20.64(d)(3) and released the Establishment Inspection Report, designating “Voluntary Action Indicated” for the site. Based on these steps to date, we believe that there have been no further instances of misconduct or fraud or other findings that adversely impact the data integrity or reliability of the eligibility, safety, and efficacy data obtained at the clinical trial site in question.

Based on subsequent meetings with and feedback from the FDA, we plan to generate additional Phase 3 efficacy and safety data, in relevant care-facility settings and across severity of dementia, in our TRANQUILITY In-Care trial. On September 5, 2024, we submitted to the FDA the proposed protocol for the trial, a double-blind, placebo-controlled study to evaluate the efficacy and safety of a 60 mcg dose of BXCL501 for acute treatment of AAD in the care setting. On November 12, 2024, we announced that we had received FDA feedback on the proposed protocol. The Company is advancing plans for initiation of the trial upon funding and has received proposals from CROs to prepare for trial initiation. At a future meeting with the FDA, we plan to further discuss our trial design and the details of the requirement for long-term safety data.

Pediatric Study

In June 2021, we initiated a clinical trial designed to evaluate the safety and efficacy of BXCL501 in the acute treatment of agitation associated with pediatric schizophrenia or bipolar disorders to fulfill pediatric study requirements agreed to with the FDA in connection with the approval of IGALMI^®. The trial protocol has been reviewed and agreed to by the FDA, to fulfill the commitment to study BXCL501 in pediatric patients ages 13 to 17 with schizophrenia and ages 10 to 17 with bipolar disorders. This double-blind, placebo-controlled study is ongoing. Approximately 63% of the 150 total subjects have been enrolled in the U.S. and 95 of such subjects have completed the clinical trial. Similar to our registration trials in schizophrenia and bipolar disorder (SERENITY I and II), the primary endpoint is the change from baseline PEC total score at two hours.

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In October 2024, we submitted a request to the FDA for a deferral extension to complete enrollment requirements for pediatric patients with schizophrenia or schizoaffective disorder. The FDA granted a 3-year extension to complete the study.

IGALMI^® Post-Marketing Requirement Study

On June 25, 2024, we announced topline results from our post-marketing requirement study evaluating whether tolerance, tachyphylaxis, or withdrawal occur following repeat dosing of IGALMI^®. During the single-arm, open-label study, 28 inpatient adults with frequent episodes of agitation associated with bipolar disorders or schizophrenia self-administered 180 mcg dose of IGALMI^® as needed over seven days. A total of 83 episodes were treated. There was no evidence of tachyphylaxis, tolerance, or withdrawal, and IGALMI^® was generally well tolerated.

Additional Neuroscience Opportunities

BXCL501 Pipeline Opportunities for Franchise Expansion

Based on its potential mechanism of action, we believe BXCL501 has the potential for broad applicability across several indications where agitation is a symptom of a condition or underlying disease. Research published in the journal Frontiers in Pharmacology showed that BXCL501 caused a significant reduction in behaviors induced by stress in translatable behavioral models related to psychiatric disorders, providing further support for the drug’s mechanism of action and potential suitability for broadly addressing stress-related disorders in addition to agitation.

Government-Supported Investigator-Sponsored Trials (“ISTs”)

Our research partners have been awarded grants for the development of BXCL501 in alcohol use disorder (“AUD”) with comorbid post-traumatic stress disorder (“PTSD”), opioid use disorder (“OUD”), and acute stress disorder (“ASD”). The Company is providing, or has provided, regulatory and operational support and investigational product for these development opportunities, which are being funded through Cooperative Agreements with the U.S. Department of Defense Congressionally Directed Medical Research Program and National Institute on Drug Abuse (“NIDA”). Clinical and regulatory responsibilities are led by clinical researchers and regulatory staff at the Veterans Affairs Connecticut Healthcare System, Yale University Medical School, RTI International, Columbia University New York State Psychiatric Institute, and University of North Carolina at Chapel Hill.

Opioid Use Disorder (“OUD”)

As the Company previously announced, NIDA awarded a grant to Columbia University to fund clinical testing of BXCL501 as a potential treatment for mitigation of opioid withdrawal symptoms in patients diagnosed with OUD. The original 160-patient, three-site, four-arm study is a randomized, double-blind, double-dummy inpatient study comparing BXCL501 (180 mcg and 240 mcg BID), lofexidine (as a positive control), and placebo. The study’s goal is to evaluate the safety and efficacy of BXCL501 relative to lofexidine and placebo in subjects with OUD. A majority of OUD patients participating in the study are anticipated to be exposed to fentanyl adulterated or associated with xylazine. To date, four different sites have recruited, enrolled, and dosed patients diagnosed with OUD who are physically dependent on opioids, including prescription opioids. The Company is supplying BXCL501 for the study, which is sponsored by Columbia University. The study was subsequently stopped at 80 patients, or approximately one-half the original total, and the results are currently being analyzed. We expect that the results from the current study will read out in the fourth quarter of 2025.

Alcohol Use Disorder (“AUD”) with Comorbid Post-traumatic Stress Disorder (“PTSD”)

In December 2020, the Veterans Affairs Connecticut Healthcare System and Yale University Medical School were awarded a grant by the U.S. Department of Defense’s Congressionally Directed Medical Research Program with the overall objective to evaluate BXCL501 in patients who suffer from AUD with comorbid PTSD. The Company provided BXCL501 for the inpatient Alcohol Interaction Study, which has been completed. Yale has received approval from the Institutional Review Board (“IRB”) and allowance from the FDA to proceed with a trial to evaluate the effects of up to

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80 mcg BID of BXCL501 per day for 28 days on alcohol consumption, PTSD symptoms, cognitive function, memory, sleep, and mood in patients diagnosed with mild, moderate, or severe AUD and who meet Criterion A for comorbid PTSD. The outpatient study has received funding approval from the Pharmacotherapies for Alcohol and Substance Use Disorders Alliance (funded through a Cooperative Agreement between the U.S. Department of Defense Congressionally Directed Medical Research Program and RTI International). Patient screening and enrollment is expected to begin in 2025, with the study expected to begin before the end of 2025. Study results may be used to inform a Phase 3 study in patients diagnosed with PTSD intended to commence with support by the Department of Defense Congresionally Directed Medical Research Program.

Acute Stress Disorder (“ASD”)

On October 15, 2024, we announced a U.S. Department of Defense grant to the University of North Carolina at Chapel Hill (“UNC”) through award contract HT94252411108 to fund a study of BXCL501 for treating ASD. The award provides approximately $2,827 to the UNC Institute for Trauma Recovery from September 15, 2024 through September 14, 2026 to evaluate the potential efficacy of BXCL501 to reduce ASD symptom severity and/or posttraumatic neuropsychiatric symptoms. The double-blind, placebo-controlled trial is expected to enroll 100 patients experiencing ASD resulting from motor vehicle collisions beginning in the second half of 2025, with BXCL501 supplied by the Company.

BXCL502

We identified a second neuropsychiatric drug candidate, BXCL502 − Latrepirdine (Dimebon) − through our AI-based platform. We had planned to evaluate BXCL502 initially as a monotherapy and possibly in combination with BXCL501 for the chronic treatment of agitation in patients with dementia and acute stress disorder. The active pharmaceutical ingredient (“API”) underlying BXCL502 affects serotonergic signaling in the brain. Our preclinical data suggests BXCL502 has the potential to treat stress-related neuropsychiatric symptoms in dementia and other stress-related disorders. In previously published third-party clinical trial data, daily administration of the API of BXCL502 demonstrated improvement in behaviors using a well-established, clinically validated symptom scale. Formulation and further clinical development planning for BXCL502 was paused as part of the Reprioritization.

Additional Product Candidates Identified Leveraging our AI Platform

Our AI platform is comprised of a series of customized and specific AI applications aimed at identifying, predicting efficacy and testing of late-stage assets with known mechanisms of action and associated pharmacology and safety data. We target neuropsychiatric and neurological rare disorders, where the compounds are either disease-modifying or symptom-mitigating. Compounds are tested in relevant models of disease and rank-ordered based on the potential to enter the clinic and ease of development. Disease areas of interest are stress-related such as agitation, or neuropsychiatric symptoms associated with dementia and responsible for increased levels of healthcare burden. For example, our pipeline concepts BXCL503 and BXCL504 putatively have the potential to address apathy and aggression in dementia, respectively. Further development of these concepts is currently paused and investment in our AI capabilities have been reduced.

Neuroscience Intellectual Property

Our policy is to protect and enhance the proprietary technologies, inventions, and improvements that are commercially important to our business by filing patent applications in the U.S. and other jurisdictions related to our proprietary technology, inventions, improvements, and product candidates. We also rely on trademarks, trade secrets, and know-how relating to our proprietary technologies and product candidates, continuing innovation, and in-licensing technology and products. This reliance is expected to develop, maintain, and strengthen our proprietary position for novel therapeutics and novel formulations of existing therapeutics across multiple therapeutic areas. We also plan to rely on data exclusivity, market exclusivity, and patent term extensions when available.

We have multiple patent families filed to protect our neuroscience program, including BXCL501. As of November 1, 2025, our neuroscience patent portfolio included three Patent Cooperation Treaty (“PCT”) applications not yet in national phase, 11 U.S. utility applications, 17 issued U.S. utility patents, 46 pending non-U.S. utility applications, 26

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allowed or granted non-U.S. patents (including four in Japan), one pending U.S. design patent application, and two registered design patents in Japan. Fourteen U.S. utility patents, directed to our proprietary sublingual film formulation of dexmedetomidine and methods of treating agitation, are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the “Orange Book”) for IGALMI^®with expiration dates between 2037 and 2043. In the formulation family, we have granted or allowed patents in China, Europe, Eurasia, Japan, Mexico, and the U.S., and pending applications in the U.S., China, and other major markets. We expect that patents issued in this family will expire no earlier than 2039. We have also filed applications in additional patent families that are relevant to BXCL501. We have one granted European patent and applications pending in the U.S. and Japan directed to methods of treating insomnia using sublingual dexmedetomidine. We expect that patents issued from these applications will expire no earlier than 2035. We also have granted patents and pending applications filed in major markets, including the U.S., Europe, Japan, and China, directed to methods of treating agitation. We expect that patents issued from these applications will expire between 2039 and 2043. We also have three PCT applications directed to treating mania, depression, stress, and agitation. If patents are issued from those cases, we expect them to expire no earlier than 2044.

The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the U.S., the patent term is 20 years from the earliest filing date of a non-provisional patent application. Depending upon the timing, duration, and specifics of FDA approval of our product candidates, a U.S. patent that we own or license may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (a.k.a., the “Hatch-Waxman Act”). The act permits a patent restoration term of up to five years as compensation for patent term lost during product development and the drug approval regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND, and the submission date of a new drug application (“NDA”), plus the time between the submission date of an NDA and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension, and the application for extension must be made prior to patent expiration. The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we intend to apply for restorations of patent term for some of our currently owned or licensed patents to add patent life beyond their current expiration date, depending on the expected length of clinical trials and other factors involved in the submission of the relevant NDA.

The term of a patent can also be extended by PTA established in 35 U.S.C. 154(b). The intention of the PTA is to accommodate for delays caused by the USPTO during the prosecution of a U.S. utility or plant patent application. Under PTA, the USPTO delay is divided into three types: type A (delays after 14 months from the filing date of the application until the USPTO issues a first Office Action and delays after four months from the filing of certain actions by the applicant until the USPTO responds to such actions); type B (delays after three years from the earliest effective filing date until a patent is granted); and type C (delays due to interferences, secrecy orders, and successful appeals). The total amount of PTA is calculated by adding the types A, B, and C delays, and then subtracting any delay that is overlapped among three types or that is attributable to the applicant.

The term of a patent can also be shortened by a terminal disclaimer. A terminal disclaimer is a statement filed by a patent owner in which the owner disclaims or dedicates to the public the terminal part of the term of a patent. Often, the terminal disclaimer is filed in cases where at least one claim of a pending application would have been obvious in light of at least one claim in an earlier-filed patent, (or non-statutory obviousness-type double patenting rejection).

The patent positions of companies such as ours are generally uncertain and involve complex legal and factual questions. No consistent policy regarding the scope of claims allowable in patents in the field of method of use patents or reformulation patents has emerged in the U.S. patent laws and their interpretation outside of the U.S. are also uncertain. Changes in either the patent laws or their interpretation in the U.S. and other countries may diminish our ability to protect our technology or product candidates and enforce the patent rights that we license and also could affect the value of such intellectual property. In particular, our ability to stop third parties from making, using, selling, offering to sell, or importing products that infringe our intellectual property will depend in part on our success in obtaining and enforcing patent claims that cover our technology, inventions, and improvements. With respect to both licensed and company owned intellectual property, we cannot guarantee that patents will be granted with respect to any

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of our pending patent applications or with respect to any patent applications we may file in the future, nor can we be sure that any patents that may be granted to us in the future will be commercially useful in protecting our products, the methods of use, or the manufacture of those products. In addition, if a pending patent application is granted, it is possible that only a subset of the claims that are currently contained in the pending patent application will be issued. Further, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. Patent and other intellectual property rights in the pharmaceutical and biotechnology space are evolving and involve many risks and uncertainties. For example, third parties may have blocking patents that could be used to prevent us from commercializing our product candidates and practicing our proprietary technology, and the issued patents that we in-license and those that may issue in the future may be challenged, invalidated, or circumvented, which could limit our ability to stop competitors from marketing related products or could limit the term of patent protection that otherwise may exist for our product candidates. In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies outside the scope of the rights granted under any issued patents that we own or exclusively in license. For these reasons, we may face competition with respect to our product candidates. Moreover, because of the extensive time required for development, testing, and regulatory review of a potential product, it is possible that, before any particular product candidate can be commercialized, any patent protection for such product may expire or remain in force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides. For additional information regarding intellectual property regulations and risks, see below under “Immuno-Oncology Intellectual Property” and Part II, Item 1A, “Risk Factors - Risks Related to Our Intellectual Property” elsewhere in this Quarterly Report on Form 10-Q.

Immuno-Oncology

On April 19, 2022, we announced the formation of a wholly owned subsidiary, OnkosXcel Therapeutics (“OnkosXcel”) to develop potentially transformative medicines in oncology. OnkosXcel uses proprietary AI capabilities to drive the capital-efficient development of innovative anti-cancer therapeutics. The Company is continuing to evaluate strategic options for OnkosXcel and further work on the immuno-oncology programs described below has been paused.

Our approach to drug discovery leverages the application and methodology of our proprietary AI-based research and development platform with the aim of efficiently identifying and developing immuno-oncology product candidates. We believe that BXCL701 reflects the potential of this discovery approach in immuno-oncology. BXCL701 is an investigational, oral innate immune activator which demonstrated a 25% composite response rate in a Phase 2a clinical trial to treat patients with small cell neuroendocrine carcinoma (“SCNC”) phenotype metastatic castration-resistant prostate cancer (“mCRPC”). On February 12, 2024, the Company announced that the FDA designated as a Fast Track development program the investigation of BXCL701 in combination with a checkpoint inhibitor for the treatment of patients with metastatic SCNC with progression on chemotherapy and no evidence of microsatellite instability. We have finalized a potential registrational trial design in mCRPC patients with SCNC phenotype. However due to our Clinical Prioritization, further planning on the trial has been paused.

mCRPC is often characterized as a “cold” tumor, which is a tumor with an immunosuppressive tumor microenvironment (“TME”) and poor immune cell infiltration. Currently approved checkpoint inhibitors (“CPIs”) that target programmed cell death 1 (“PD-1”) or cytotoxic T-lymphocyte-associated protein 4 (“CTLA-4") have failed to demonstrate meaningful single-agent activity against such difficult-to-treat tumor types, including mCRPC. BXCL701 is designed to promote an immune-induced inflammatory response in the TME primarily via inhibition of dipeptidyl peptidases (“DPP”) 8 and 9, which we believe can provide enhanced CPI therapeutic utility. We believe BXCL701 can potentially provide significant benefits for the approximately 20% of the estimated 299,010 men diagnosed with prostate cancer in the U.S. in 2024 and who we are expected to progress to the more aggressive mCRPC form of the disease, including approximately 20%, or 11,960, of those patients expected to develop the SCNC phenotype, for which there are currently limited treatment options. While CPIs have proven to be a significant advancement in cancer therapy, those currently approved by the FDA do not produce meaningful results in a majority of patients, as the clinical benefit is generally viewed to be limited to between 13% and 30% of cancer patients, and the duration of response is relatively short.

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We believe the limited efficacy of approved CPIs results primarily from their intervention at later stages of the immune response. As a result, other targets and pathways can be exploited by the tumor to create a TME that can evade the enhanced immunological response enabled by approved CPIs. While numerous agents designed to target the earlier stages of an immune response are in development for use in combination with CPIs, their activity is restricted to a single component of the immune response. In contrast, we have developed BXCL701 to simultaneously address multiple components of the immune response, including:

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Cancer antigen presentation by dendritic cells: stimulation of dendritic cell trafficking to tumor draining lymph nodes.

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Priming and activation of T cells: acceleration of tumor-induced priming of T cells and the formation of potent cytotoxic T lymphocytes (“CTLs”).

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Infiltration of immune cells into the tumor: stimulation of release of chemokines that attract effector T cells but block regulatory T cells and also induce NK cell and neutrophil migration.

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Killing of tumor cells: induction of formation of CTLs and NK cells expressing tumor-killing perforins and granzymes, as well as the formation of memory T cells that can selectively kill returning tumor cells.

Accordingly, we believe BXCL701 may have utility in stimulating increased activation, proliferation, and infiltration of tumor cells by immune effector cells, enabling its potential application in combination with currently approved CPIs, across a range of solid tumors and hematological malignancies, to potentially:

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Convert immunological cold tumors into ones sensitive to CPIs;

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Enhance hot tumors’ response rate and depth of response to CPIs; and

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Restore CPI sensitivity to tumors that were previously responsive.

Central to our drug discovery initiatives are proprietary, AI-driven platform technologies we employ to identify novel therapeutic uses for approved therapeutics and candidates in clinical evaluation. The first and most advanced of our AI-driven discovery programs is our innate immune modulation program, which supported the pursuit of BXCL701 as a development candidate. We believe the application of this program provides us actionable insights into the inflammasome, a component of the innate immune system responsible for activation of the inflammatory response.

Our Immuno-Oncology Programs and Investigator-Sponsored Trials

Below is a summary of the status of our immuno-oncology clinical development programs as of the date of this Quarterly Report on Form 10-Q. We believe our product candidates, if successfully developed and approved, have the potential to become compelling treatment options for their respective indications. However, further work on our immuno-oncology programs has been paused, other than as noted below.

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Immuno-Oncology Clinical Trials

Leveraging the insights enabled by the application and methodology of our proprietary AI-based platform which was used to identify novel therapeutic uses for our approved therapeutics and product candidates in clinical evaluation, and our industry expertise, we are pursuing two proprietary discovery programs to advance our goal of developing anti-cancer therapeutics. The first program, which encompasses BXCL701 across a range of indications, is based on the application of innate immune modulation technology. This program has been constructed to embrace key distinguishing characteristics of the innate immune system and we believe it is supported by our development efforts. This approach has driven the development of BXCL701, as a potential treatment for mCRPC with either SCNC or adenocarcinoma phenotype. Fundamental to the innate immune modulation program is BXCL701’s potential to:

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Convert cold tumors into ones sensitive to CPIs;

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Enhance hot tumors’ response rate and depth of response to CPIs; and

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Restore CPI sensitivity to tumors which had previously been responsive.

BXCL701 as a Potential Treatment for mCRPC

We believe BXCL701 may have utility in stimulating increased activation, proliferation, and infiltration of tumor cells by immune effector cells, enabling its potential use in combination with currently approved CPIs to treat cold tumors, such as mCRPC. We elected to pursue mCRPC as an indication for BXCL701 due to its enrichment for DPP mutations, which are especially prevalent in tumors with SCNC phenotype.

We received initial comments from the FDA on our proposed clinical development plan and received positive feedback regarding dose-optimization around the recommended Phase 2 dose (“RP2D”) for use in future studies. However, the start of any such additional trial is paused following the Company’s Reprioritization

The Phase 2a portion of the trial was segregated into two 28-patient trial cohorts, one cohort consisting of mCRPC patients with SCNC phenotype and a second cohort consisting of mCRPC patients with adenocarcinoma phenotype. Initially, we focused on mCRPC with SCNC phenotype as the primary patient population for BXCL701, since DPP9 is amplified in approximately 17% of treatment-emergent mCRPC with SCNC phenotype, compared to 5% or less in the broader prostate cancer population. However, we also observed responses in mCRPC patients with adenocarcinoma phenotype who were microsatellite stable in the Phase 1b portion of the trial. On this basis, we widened our Phase 2a

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trial to include relapsed mCRPC patients with either SCNC or adenocarcinoma phenotype. Both cohorts employed a Simon two-stage trial design of 15 trial participants followed by 13 additional patients. The primary endpoint of the Phase 2a portion of this trial was a composite response rate, determined as either a RECIST 1.1 response (defined as a reduction in RECIST score of 30% or more), and/or a reduction in prostate specific antigen (“PSA”) level of 50% or more, and/or a conversion in circulating tumor cells (“CTCs”) from 5 or more CTCs/7.5 milliliter (“ml”) to less than 5 CTCs/7.5 ml. Secondary endpoints included duration of response, progression-free survival, overall survival, changes in circulating cytokines, and certain disease-specific biomarkers.

We believe the results observed in the Phase 2a trial of BXCL701 administered in combination with pembrolizumab support further development.

We were particularly encouraged by the results observed in the cohort consisting of mCRPC patients with SCNC phenotype. Updated Phase 2a results for the SCNC cohort were presented at the 30^th Annual Prostate Cancer Foundation Scientific Retreat (PCF 2023). BXCL701 in combination with pembrolizumab demonstrated a 25% (seven out of 28 evaluable patients) composite response rate in mCRPC patients with SCNC phenotype, for whom there is no standard of care. As of a data cutoff of September 6, 2023, five of these responders were RECIST 1.1 responders (four confirmed responses and one unconfirmed response) with decreases in tumor size ranging from -45% to -67% and a median duration of response of 7.6 months. Overall survival (OS) results from the Phase 2a portion of the trial in SCNC patients. BXCL701 in combination with pembrolizumab demonstrated a compelling median OS and 12-month survival rate.

The most frequently observed TEAEs (≥15% of patients) that appear to be related to talabostat included Fatigue, Hypotension, Dizziness, Nausea, and Pruritus. The events have generally been manageable and reversible. When combined with the immune checkpoint inhibitor pembrolizumab, the most frequently reported talabostat-related TEAEs (≥15% of patients) have been Fatigue, Hypotension, Pruritus, Dizziness, Nausea and Diarrhoea.

The Phase 2a trial has also been completed for the adenocarcinoma cohort. The CRR was 18.2% (n = 6). In 29 patients with disease evaluable for response, the confirmed ORR per RECIST 1.1 per investigator assessment was 13.8% (n = 4). Decreases in tumor size ranged from -67% to -90%. Two patients had an unconfirmed RECIST 1.1 response, 5 patients had a PSA₅₀ response, and 2 patients had a CTC response.

The median OS of evaluable patients was 12.1 months (95% CI 5.5 – 16.4) and the 12-month survival rate was 53.4%. Median rPFS was 1.9 months and the 6-month rPFS rate was 16.8%.

The most frequently observed TEAEs >15% of patients that appear to be related to talabostat included Fatigue, Nausea, Hypotension, Platelet count decreased, Vomiting, Dizziness, White blood cell count decreased and decreased appetite. The events have generally been manageable and reversible. When combined with the immune checkpoint inhibitor pembrolizumab, the most frequently reported talabostat-related AEs have been Fatigue, Nausea, Vomiting, Hypotension, Platelet count decreased, Pruritus, Dizziness, White blood cell count decreased, Diarrhoea and Decreased appetite.

BXCL701 as a Potential Treatment for Small Cell Lung Cancer (“SCLC”)

We are encouraged by the therapeutic potential of BXCL701 for SCLC given the activity it has demonstrated in the SCNC clinical trial. We have prepared a robust synopsis for a Phase 1b/2 trial design to be a dose-escalation safety lead-in to establish a RP2D in combination with atezolizumab, a CPI approved for SCLC. However, the start of any such trial has been paused.

BXCL701 as a Potential Treatment for Other Cancers

In addition to its potential use in combination with CPIs to treat mCRPC, an immunologically cold tumor, we are developing BXCL701 as a therapeutic for pancreatic cancer, and other solid tumors with greater, or “non-cold,” immunological activity that are nonetheless regarded as difficult-to-treat, and hematological malignancies. We believe the synergistic potential of BXCL701 and CPIs, when administered in combination, could increase cancer cell susceptibility to an enhanced immune response, potentially increasing the clinical benefit of CPIs, whose single-agent

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efficacy in treating these tumor types is generally viewed to be limited to between 13% and 30% of cancer patients and the duration of response to treatment is often short. As such, we envision the potential therapeutic benefit of BXCL701 increasing the sensitivity of cold tumors to CPI therapy, enabling the potential treatment of a range of cancers including pancreatic cancer, breast cancer, colorectal cancer, and ovarian cancer, as well as enhancing the depth of response to CPIs in other cancers. Based on the preclinical observation that BXCL701 showed direct cytotoxic activity against certain leukemic cells, an investigator sponsored trial was pursued at the Dana Farber Cancer Institute.

Pancreatic Cancer

The American Cancer Society estimated that in 2024, approximately 66,000 cases of pancreatic cancer were expected to be diagnosed in the U.S. We are supporting a Phase 2 investigator-sponsored trial (“IST”) sponsored by Georgetown Lombardi Comprehensive Cancer Center (“Georgetown Lombardi”), designed to evaluate the use of BXCL701 along with pembrolizumab to treat pancreatic cancer. Few therapeutic options are available for patients with this disease, which has a five-year survival rate of less than 10%, among the lowest of all cancers. Pancreatic cancer has among the highest levels of overexpression and amplification of DPPs. Preclinical models demonstrated synergy between DPP inhibition with BXCL701 and anti-PD-1 antibody in the pancreatic cancer tumor microenvironment. Based on these preclinical observations, Georgetown Lombardi has initiated a Phase 2 IST to assess the safety of BXCL701 when administered in combination with pembrolizumab (safety lead-in), as well as to estimate the 18-week progression-free survival rate (primary objective of the efficacy phase) in previously treated metastatic pancreatic ductal adenocarcinoma. This trial started in the third quarter of 2023. On February 6, 2024, we announced the completion of patient enrollment in the safety lead-in portion of the trial. As part of the trial’s safety lead-in, the first six patients have been enrolled and will be observed for a six-week safety window period. The trial is then expected to enroll approximately 39 patients in its efficacy phase in a Simon 2-stage single-arm, open-label design (19 patients in stage 1 and 20 patients in stage 2). Patients will be monitored radiographically and by tumor markers for response assessment. Tumor biopsies and blood samples will also be collected over the course of treatment to better understand the potential mechanism of action for the combination. As 6 or fewer patients achieved progression free responses out of 19 at 18 weeks, the study is now closed and will be amended for futility.

Relapsed or Refractory AML

The American Cancer Society estimated that in 2024, approximately 21,000 new cases of AML were expected to be diagnosed in the U.S. We are supporting a Phase 1b IST sponsored by the Dana-Farber Cancer Institute (“Dana-Farber”) designed to evaluate the use of BXCL701, along with the current standard of care to treat relapsed or refractory AML. We believe that pyroptosis triggered by BXCL701 may provide potent single agent cytotoxicity directed towards AML. We also believe that DPP9 copy number may provide an actionable biomarker, as high copy number has been observed to correlate with BXCL701 toxicity in human AML cell lines. DPP8/9 inhibition has been shown to be cytotoxic to THP-1 cells, monocytic cancer cells cultured from a patient with AML, but not other cell lines, suggesting a specific vulnerability of AML to these inhibitors which we believe can be exploited for therapeutic benefit. Based on these preclinical observations, Dana-Farber has initiated a Phase 1b trial to assess the safety of BXCL701 and to determine the maximum tolerated dose or the RP2D of BXCL701 as a single agent in AML. This trial started in the first quarter of 2023. The study was closed on August 31, 2025. At the time of study closure, the final cohort (BXCL701 0.4 mg BID;0.8 mg total daily dose) had been open since January 2025 and had enrolled two-thirds of patients. PK/PD analysis of samples is being pursued to see if the higher doses were delivered using this new dosing schedule.

Other Potential Anti-cancer Programs

We believe BXCL701 may have potential application in breast cancer, as its use in combination with monoclonal antibody therapy generated encouraging in vivo data in a preclinical disease model where enhanced antibody-dependent cellular cytotoxicity was observed.

The FDA has granted BXCL701 orphan drug designation for the treatment of AML, stage IIb to IV melanoma, pancreatic cancer, and soft tissue sarcoma. As we consider BXCL701’s mechanistic potential to be combined with other CPIs for additional indications that represent unmet medical needs we may be able to apply for additional orphan drug

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designations for BXCL701 plus CPI combinations. However, all BXCL701 ongoing development activity has been paused.

Immuno-Oncology Intellectual Property

Intellectual property is of vital importance in our field and in biotechnology generally. We seek to protect and enhance proprietary technology, inventions, and improvements that are commercially important to the development of our business by seeking, maintaining, enforcing, and defending patent and other intellectual property rights, whether developed internally or licensed from third parties. We will also seek to rely on regulatory protection afforded through inclusion in expedited development and review, data exclusivity, market exclusivity, and patent term extensions where available.

As of July 28, 2025, we have multiple patent families filed to protect our immuno-oncology program, including our core patent family directed to methods of using BXCL701 with immune checkpoint inhibitors, which is granted in the U.S., Japan, Canada, China, India, Taiwan, Mexico, Europe, and United Arab Emirates. Additional applications in this family are pending in major markets. Patents issued from this family are expected to expire no earlier than 2036. We have an additional patent issued in the U.S. directed to a method of selecting patients based on a biomarker and methods of treating certain cancers, with an expected expiration date no earlier than 2039. A corresponding European Patent case directed to selecting patients is issued and is expected to expire no earlier than 2038.

Additional applications are directed to administering BXCL701 in combination with various other molecules, biomarkers, and dosing regimens. We also have three PCT applications directed to novel formulations of BXCL701, various dosing regimens, methods of use, combination therapies, and to methods of treating small cell lung cancer. We expect that any patents issuing from the PCT and provisional applications will expire no earlier than 2043 to 2044.

We expect to file additional patent applications in support of current and new immuno-oncology clinical candidates as well as new platform and core technologies. For additional information regarding intellectual property regulations and risks, see above under “Neuroscience Intellectual Property” and Part II, Item 1A, “Risk Factors - Risks Related to Our Intellectual Property” elsewhere in this Quarterly Report on Form 10-Q.

Basis of Presentation

The Company’s condensed consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles.

Components of Our Results of Operations

Product Revenue, Net

Revenue relates to sales of IGALMI^® and reflect limited market access since commercial launch in July 2022. The revenues are net of rebates, chargebacks, discounts, and other adjustments. During the fourth quarter of 2022, we began contracting directly with intermediaries such as GPOs.

Operating Costs and Expenses

Cost of Goods Sold

Cost of goods sold primarily relates to the costs of producing, packaging, and delivering our product to customers, as well as costs related to excess or obsolete inventory.

Research and Development

Our research and development expenses reflect costs associated with the identification of our preclinical and clinical product candidates. Expenditures primarily consist of salary, benefits and non-cash stock-based compensation for our research and development personnel, costs incurred under agreements with contract research organizations and sites that conduct our non-clinical studies and clinical trials, costs of outside consultants engaged in research and

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development activities, travel expenses, the cost of acquiring, developing and manufacturing preclinical and clinical trial materials and lab supplies, and depreciation and other expenses. Payments to BioXcel LLC are also included in research and development expenses. Costs associated with third parties that provide non-clinical services such as toxicology, pharmacology, research and discovery, biomarker studies and similar services are included in the professional fees category of research and development expenses.

We expense research and development costs as incurred.

Our research and development costs by program for the three and nine months ended September 30, 2025 and 2024 were as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Direct external costs
BXCL501	$	6,141	$	2,089	$	16,487	$	10,112
BXCL701		102		208		163		1,638
Other research and development programs		42		197		274		663
Total direct external costs	$	6,285	$	2,494	$	16,924	$	12,413
Internal personnel costs		2,032		2,109		5,433		10,497
Sub-total direct costs	$	8,317	$	4,603	$	22,357	$	22,910
Indirect costs and overhead		423		498		1,193		1,624
Total research and development expenses	$	8,740	$	5,101	$	23,550	$	24,534

Selling, General and Administrative

Selling, general and administrative expenses primarily consist of salaries, benefits and non-cash stock-based compensation for our sales, executive and administrative personnel. Selling, general and administrative expenses also include legal expenses to pursue patent protection of our intellectual property and other corporate matters, professional fees for audit and tax services and insurance charges. We may also incur increased costs to comply with corporate governance, internal controls, investor relations and disclosures and similar requirements applicable to public companies.

As a result of our restructuring activities completed during 2024, we expect that our selling, general and administrative expenses will decline due to IGALMI^®’s restructured commercialization plan and reduced personnel costs. However, we may also experience increased selling, general and administrative expenses due to higher fees for outside consultants, attorneys, and accountants.

Restructuring Costs

2023 Strategic Reprioritization

On August 8, 2023, our Board of Directors approved a broad-based strategic reprioritization (the “Reprioritization”). We took actions to reduce certain operational and workforce expenses that were no longer deemed core to ongoing operations in order to extend our cash runway and drive innovation and growth in high potential clinical development and value creating opportunities. These actions included a shift in commercial strategy for IGALMI^® in the institutional setting, a reduction of in-hospital commercialization expenses, a susp

BioXcel Therapeutics, Inc. 10-Q