There have been no material changes to the risk factors previously disclosed by us in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 17, 2026, except as set forth below: Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the notes. As of June 30, 2026, following the completion of the Exchange Offer in June 2026, we had $18,948,000 in aggregate principal amount of 5.00% convertible senior notes due 2027 and $65,174,000 in aggregate principal amount of 7.50% convertible senior secured first lien notes due 2030 outstanding and approximately $134.8 million million of other liabilities, including trade payables. The 2030 Notes Indenture contains covenants that restrict our ability to incur additional debt, create liens, engage in certain asset sales, mergers or acquisitions, make restricted payments and investments, and enter into transactions with affiliates, among other restrictions. The 2030 Notes Indenture also requires us to maintain minimum liquidity of $40 million, subject to reduction upon achievement of certain milestones, and contains a springing maturity date of March 2, 2027 if more than $4.0 million of the 2027 Notes remain outstanding at such time. If we are unable to reduce the outstanding 2027 Notes to $4.0 million or below prior to March 2, 2027, the 2030 Notes would also become due on that date, and we may not have sufficient resources to satisfy our obligations thereunder. We may also incur additional indebtedness or liabilities to meet our future financing needs. Our indebtedness and liabilities could have significant negative consequences for our stockholders and our business, results of operations and financial condition by, among other things: • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; • limiting our flexibility to plan for, or react to, changes in our business; • making it more difficult or expensive for a third party to acquire us; 46 Table of Contents • diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the notes; and • placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital. Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, including the 2027 Notes and 2030 Notes, and our cash needs may increase in the future. Given the uncertainty regarding the path forward for seralutinib following the results of our Phase 3 PROSERA study, we may be unable to raise additional capital or repay or refinance our existing indebtedness on acceptable terms, or at all. Our ability to satisfy our obligations under the 2030 Notes and repay or refinance the remaining 2027 Notes, which mature in May 2027, will depend on our financial condition, the capital markets and investor sentiment of our prospects. If we are unable to satisfy our obligations under the 2030 Notes and/or repay or refinance the 2027 Notes at maturity, we could be required to restructure our indebtedness and/or obtain additional equity capital on terms that may be onerous, unfavorable and highly dilutive, delay or curtail our development programs, sell assets, or seek protection under applicable bankruptcy or insolvency laws, any of which could have a material adverse effect on our business, prospects, financial condition and results of operations. In addition, any future indebtedness that we may incur may contain, financial and other restrictive covenants that limit our ability to operate our business, raise capital or make payments under our other indebtedness. If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full. Additionally, if our liquidity position is impaired, we may be required to take further actions in relation to management of liabilities on our balance sheet. Any actions in relation to liability management and balance sheet restructuring may materially reduce the value of our common stock, dilute existing holders of our common stock by the conversion of existing liabilities into equity or result in the cancellation of existing common stock. Raising additional capital has caused and may continue to cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or seralutinib. Until such time, if ever, as we can generate substantial product revenues, we have and continue to expect to finance our cash needs through equity offerings, debt financings or other capital sources including potentially collaborations, licenses and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. For example, the 2030 Notes Indenture includes incurrence based negative covenants, including but not limited to, limitations on debt, limitations on liens and entry into restrictive agreements, limitations on mergers, consolidations or sales of all or substantially all assets, limitations on transactions with affiliates, limitations on restricted payments and investments, limitations on disposals of assets, limitations on foreign subsidiaries and limitations on impairment of security. In connection with the Exchange Offer completed in June 2026, we issued 254,150,441 shares of common stock, 33,402,727 Prefunded Warrants and 135,789,000 Purchase Warrants, which resulted in substantial dilution to our existing stockholders. Additional shares of common stock may be issuable upon conversion of the 2027 Notes or the 2030 Notes, and additional shares of common stock may be issuable upon exercise of the Prefunded Warrants and Purchase Warrants. The issuance of these securities has significantly increased the number of shares of our common stock outstanding and the potential for further dilution remains substantial. Additionally, on July 14, 2026, the Company filed a certificate of amendment to the Charter with the Secretary of State of the State of Delaware, which became effective upon filing, to increase the number of authorized shares of its common stock from 700,000,000 to 4,000,000,000 in order to support, among other things, these potential share issuances. Any additional issuances of equity or debt securities may be for cash or in exchange for any of our outstanding convertible notes, which could have a further highly dilutive effect on current stockholders and could negatively affect the trading price of our common stock. Similarly, if holders exercise their Purchase Warrants or Prefunded Warrants, the resulting issuance of shares of our common stock would have an additional dilutive effect on our current stockholders and could negatively affect the trading price of our common stock. Sales or issuances of our common stock, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock and could impair our ability to raise capital through 47 Table of Contents the sale of additional equity securities. We cannot predict the size of future sales or issuances of our common stock or securities convertible into our common stock or the effect, if any, that any such future sales or issuances will have on the market price of our common stock. In addition, if we raise funds through future collaborations, licenses and other similar arrangements, we may have to relinquish valuable rights to our future revenue streams or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock. The results from the PROSERA Phase 3 clinical trial may not be sufficient to support FDA approval or continued development of seralutinib, which would materially and adversely harm our business. In February 2026, we announced topline results from the Phase 3 PROSERA clinical trial of seralutinib in PAH, including that the study did not meet its primary endpoint. Following a Pre-NDA Type B meeting with the FDA held in mid-June 2026 and receipt of the official meeting minutes, we plan to proceed with an NDA submission for seralutinib for the treatment of PAH in September 2026. Based on the meeting minutes, the FDA characterized the degree of statistical significance and the magnitude of the treatment effect observed in PROSERA as review issues rather than filing issues. The Company’s planned NDA submission is based in part on its views following its meeting with the FDA and the official minutes therefrom, and later feedback from, or developments with, the FDA may be inconsistent with such meeting or the Company’s views from such meeting. The FDA's ultimate determination on approvability will be made upon review of the complete NDA, and there can be no assurance that the FDA will accept the NDA for filing or ultimately approve seralutinib. In general, the FDA has substantial discretion in the approval process and may decide that the totality of our datasets, including the Phase 3 PROSERA and Phase 2 TORREY studies, have not demonstrated a favorable overall benefit-risk assessment or may otherwise determine are insufficient for approval and require additional clinical trials or other studies, especially given that the PROSERA study did not meet its primary endpoint. Any such decision or feedback from the FDA would result in additional development costs and could significantly delay the potential for regulatory approval, or even if we are approved, a more narrow or limited labeled indication. We also may be unable to identify a viable development path towards approval for seralutinib, based on FDA feedback, our internal analysis of the data and market opportunity, or other factors. Even if we do identify a path to approval for seralutinib, we may require substantial additional capital and other resources to pursue such a path, and may be unable to raise such capital in the amounts needed or on attractive terms. There is also no assurance that any future trials or studies we may need to conduct will be successful. We may also pursue business development arrangements or other strategic collaborations; however, we may be unable to secure such arrangements on a timely basis or at all. If we are unable to develop or seek marketing approval for seralutinib or secure other strategic arrangements with third parties, or if we experience delays as a result of any of the above factors or otherwise, our business would be significantly harmed. We have entered into, and may in the future seek to enter into, collaborations, licenses and other similar arrangements and we may not realize the benefits of such relationships, or may not be successful in entering into such relationships We have entered into, and may in the future seek to enter into collaborations, joint ventures, licenses and other similar arrangements for the development or commercialization of our product candidates, due to capital costs required to develop or commercialize such product candidates or manufacturing constraints. We may not be successful in our efforts to establish or maintain collaborations because third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy or significant commercial opportunity. For example, in May 2024, we entered into a collaboration agreement with Chiesi Farmaceutici S.p.A., or Chiesi, for the development and commercialization of seralutinib around the world, and in July 2026, we and Chiesi entered into a Rights Reacquisition Agreement, pursuant to which the parties agreed to terminate the collaboration agreement, subject to survival of certain provisions, and we reacquired seralutinib assets and worldwide development and commercial rights to seralutinib, in return for which we have agreed to make certain success-based milestone payments to Chiesi and pay royalties on net sales of certain products previously licensed under the collaboration agreement up to a capped amount. In addition, we face significant competition in seeking appropriate strategic partners, and the negotiation process can be time consuming and complex. Further, in connection with any such collaborations, we may have to relinquish valuable rights to our future revenue streams, or grant licenses on terms that may not be favorable to us, as part of any such arrangement, and such arrangements may restrict us from entering into additional agreements with potential collaborators. We cannot be certain that, following any strategic transaction or license, we will achieve an economic benefit that justifies such transaction. If we are successful in our efforts to establish any additional collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such collaborations if, for example, development or approval of seralutinib is delayed, the safety of seralutinib is questioned or sales of seralutinib, if approved, are unsatisfactory. In addition, any potential future 48 Table of Contents collaborations may be terminable by our strategic partners in certain circumstances, and we may not be able to adequately protect our rights under these agreements. Furthermore, our strategic partners may negotiate for certain rights to control decisions regarding the development and commercialization of seralutinib. The termination of the collaboration with Chiesi or of any other collaborations we enter into in the future, or any delay in entering into collaborations related to seralutinib, could delay the development and commercialization of seralutinib and reduce its competitiveness if it reaches the market, which could have a material adverse effect on our business, financial condition and results of operations. Our failure to meet the continued listing requirements of the Nasdaq could result in a delisting of our common stock. If we fail to satisfy the continued listing requirements of the Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our common stock. On April 8, 2026, we received written notice from the Nasdaq Stock Market staff notifying us that, for the last 30 consecutive business days, the bid price for our common stock had closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(a)(1). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided an initial period of 180 calendar days, or until October 5, 2026, to regain compliance. We will regain compliance under this rule if at any time before October 5, 2026, the bid price of our common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days. The Nasdaq notice had no immediate effect on the listing or trading of our common stock, which continues to trade on the Nasdaq Global Select Market. We intend to monitor the bid price of our common stock and consider available options if our common stock does not trade at a level likely to result in us regaining compliance with Nasdaq’s minimum bid price rule by October 5, 2026. If we do not regain compliance by October 5, 2026, we may be eligible for an additional 180 calendar day compliance period. To qualify for the additional compliance period, we would be required to transfer our listing to the Nasdaq Capital Market. In addition, we would be required to meet the continued listing requirement for the market value of publicly held shares and all other applicable initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of our intention to cure the deficiency during the additional compliance period, such as by effecting a reverse stock split, if necessary. However, if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, the Nasdaq staff would notify us that our securities would be subject to delisting. In the event of such a notification, we may appeal the Nasdaq staff’s determination to delist our securities, but there can be no assurance the Nasdaq staff would grant our request for continued listing. Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements. We have obtained stockholder approval to effect a reverse stock split of our common stock at a ratio ranging from 1-for-10 and 1-for-150, which if implemented may have adverse effects on our common stock. On July 14, 2026, at our special meeting of stockholders, our stockholders approved a series of 30 alternate amendments to our Amended and Restated Certificate of Incorporation to effect a reverse stock split of the issued and outstanding shares of common stock at a ratio ranging from not less than 1-for-10 to not greater than 1-for-150, together with a proportionate reduction in the number of authorized shares of common stock, with the exact ratio within such range, and the implementation and timing of the reverse stock split, to be determined in the discretion of our board of directors. Our board of directors plans to effect the reverse stock split with the intent of improving the perception of our common stock as an investment security, resetting our stock price to more normalized trading levels, decreasing price volatility, facilitating our ability to raise additional equity capital, and increasing the per-share price of our common stock to meet the price criteria for continued listing of our common stock on the Nasdaq Global Select Market. Although we expect that the reverse stock split will result in an increase in the market price of our common stock, we cannot assure you that the reverse stock split, if effected, will increase the market price of our common stock in proportion to the reduction in the number of shares of our common stock outstanding or result in a permanent increase in the market price. The effect that the reverse stock split may have upon the market price of our common stock cannot be predicted with any certainty, and the history of similar reverse stock splits for companies in similar circumstances to ours is varied. The market price of our common stock is dependent on many factors, including our business and financial performance, general market conditions, prospects for future growth and other factors detailed from time to time in the reports we file, or have filed, with the SEC, including this Quarterly Report on Form 10-Q. Accordingly, the total market capitalization of our common stock after the proposed reverse stock split may be lower than the total market capitalization before the proposed reverse stock split and, in the 49 Table of Contents future, the market price of our common stock following the reverse stock split may not exceed or remain higher than the market price prior to the proposed reverse stock split.