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, 2025. 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 have utilized 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. ​ Due to the fact that we were unable to generate sufficient cash flows from operations or obtain sufficient funding to sustain operations and debt service obligations, management and our board of directors determined that it was in the best interests of the stockholders to seek strategic options. We hired advisors to explore strategic options, including, but not limited to, restructuring or refinancing our debt, seeking additional debt or equity capital investment, a sale or licensing transaction for of all or a portion of our assets, a combination of these, or other strategic options. We currently have no commitments to engage in any specific strategic transaction and there can be no assurance that we will be able to complete additional or alternative financings, business development transactions or other strategic alternatives. If we cannot continue as a viable entity, we may be required to seek relief under the U.S. Bankruptcy Code. There can be no guarantees that if we file for bankruptcy we will emerge from bankruptcy as a going concern or that holders of our common stock will receive any recovery from any bankruptcy proceedings. Further, certain strategic alternatives will require the consent of our Lenders pursuant to the covenants in our Credit Agreement. Additionally, pursuant to the Twelfth Amendment to the Credit Agreement, we are required to, on or prior to August 21, 2026 (extended from August 10, 2026, as was required under the Eleventh Amendment), to enter into definitive agreements with respect to one or more transactions acceptable to Lenders that (A) would result in the repayment of all loan and other obligations under the Credit Agreement or (B) is an alternative capital solutions transaction on terms and conditions acceptable to the Lenders, and there is no assurance that we will be able to complete a strategic alternative before that date. ​ Our Business Our most advanced neuroscience candidate is BXCL501. In indications other than those approved by the 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 36 Table of Contents 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”). ​ 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 objective. This study was designed and implemented to remove the healthcare supervision requirement and to allow multiple doses after an initial single dose. The data from this study formed the basis of the sNDA submission for a label expansion of IGALMI® into the at-home setting. The sNDA was filed with the FDA on January 14, 2026. On April 1, 2026, we announced that the FDA has accepted our sNDA for approval of IGALMI® for at-home use in the acute treatment of agitation associated with bipolar disorders or schizophrenia. The FDA has assigned a Prescription Drug User Fee Act (“PDUFA”) target action date of November 14, 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 sustained effects on agitation and consistent benefit with repeat dosing. ​ 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, have been included in the sNDA filed with the FDA on January 14, 2026. ​ 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. We have plans for initiation of the trial pending funding. ​ 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. ​ 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 Reprioritization. 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. On January 12, 2026, we announced the appointment of an Interim Chief Commercial Officer to support the potential launch of IGALMI® in the at-home setting. In conjunction with the appointment of the Interim Chief Commercial Officer, on February 12, 2026, we announced the completion of an updated market opportunity assessment for IGALMI® for acute agitation associated with bipolar disorders or schizophrenia in the at-home (outpatient) setting, informed by results from the SERENITY At-Home clinical study. The commercial opportunity assessment was based on recently completed market research leveraging an updated Target Product Profile based on results from the SERENITY At-Home clinical study. The assessment incorporated 37 Table of Contents interviews with 15 prescribers and 5 payers with leadership responsibility at large health plans as well as survey responses from 180 prescribers with extensive relevant experience. In addition, patient-level claims analyses were used to estimate the number of diagnosed and treated patients who may be candidates for IGALMI. Current agitation landscape insights: ● Prescribers reported a moderate to high unmet need, noting that current treatment options are not indicated for at-home use, may be sedating, are slow to take effect, and/or are controlled substances with the potential to cause dependence. ● Analyses of market research and claims data identified approximately 2.3 million treated bipolar disorder and schizophrenia patients experiencing frequent episodes of acute agitation in the at-home setting in the United States, of whom up to 1.8 million may be eligible for IGALMI treatment. This represents up to 86 million addressable annual episodes that may require treatment. This updated estimate is generally consistent with prior estimates of approximately 57-77 million addressable annual episodes, with further refinement based on the additional insights from market research. IGALMI opportunity in the at-home setting: ● Prescribers reported moderate to high interest in IGALMI for the treatment of acute agitation in the at-home setting, projecting use in approximately 70% of their schizophrenia and bipolar disorder patients, regardless of agitation severity. ● Prescribers anticipated that IGALMI would be used either alone or in combination with existing off-label treatments for acute agitation, and that IGALMI would most frequently replace benzodiazepines, which may cause dependence. ● Payers indicated expectations for broad formulary coverage with standard adjudication controls. ● Previously reported patient and caregiver research (N=80) indicated that patients with schizophrenia and bipolar disorder would expect to use IGALMI in approximately 80% of their acute agitation episodes. ​ 38 Table of Contents 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. ​ ​ 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. As a selective adrenergic agonist with a sublingual or buccal route of administration, BXCL501 is designed to be easy to administer and has shown a relatively rapid onset of action in multiple clinical trials, studying patients with schizophrenia, bipolar disorders, and dementia associated with Alzheimer’s disease. We believe the results from these studies suggest that BXCL501 has the potential to generate a calming effect 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 behavioral 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. 39 Table of Contents 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. We completed the clinical study of BXCL501 in patients with agitation associated with bipolar disorders or schizophrenia in SERENITY III, which consisted of two parts. The first part was comparable to our pivotal SERENITY I and II studies. Using similar inclusion and exclusion criterion under a well-controlled in-patient setting, acutely agitated patients with bipolar disorders or schizophrenia were randomized to self-administer either 60 mcg of BXCL501 or placebo in a double-blind placebo-controlled trial. The primary endpoint of Part I was efficacy, as measured by the change in PEC score change from baseline at two hours post-dose. The secondary objectives of Part I were safety and tolerability. On August 18, 2025 we announced that the Company had received positive pre-sNDA meeting responses from the FDA. ​ The primary purpose of the planned pre-sNDA meeting on August 20, 2025 with the FDA 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 concluded that the objectives of the pre-sNDA meeting had been accomplished based on the FDA’s written responses and 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 objective. The data from this successful study formed the basis of the sNDA submission for label expansion of IGALMI® in the at-home setting. ​ SERENITY At-Home Topline Summary ● Summary of agitation episodes: ● A total of 246 patients randomized ● Data collected 2,628 agitation episodes in 215 patients ● Treated 2,437 episodes in 208 patients ● 168 patients (81%) completed the full 12-week trial ● Average of 11.7 agitation episodes recorded per treated patient ● All patients were able to successfully self-administer the film ● Distribution of enrolled patients was 45% bipolar disorders and 55% schizophrenia ​ SERENITY AT-Home Primary Endpoint Data The 120 mcg dose of BXCL501 was safe and well-tolerated in patients with episodes of agitation in the outpatient setting and met the primary objective. ● No discontinuations due to tolerability in the BXCL501 arm ● Adverse event profile consistent with approved IGALMI® label and multiple clinical trials in the institutional setting ● No drug-related serious adverse events (SAEs), syncopes or falls reported 40 Table of Contents ● No new or unexpected treatment emergent adverse events (TEAEs) ● No severe TEAEs associated with BXCL501 treatment and most TEAEs were mild ● No trend of more frequent AEs over time or with repeat dosing ● Tolerability remained consistent throughout the repeat dosing in the trial ​ On September 10, 2025, we announced positive topline exploratory efficacy data from the SERENITY At-Home Pivotal Phase 3 safety trial, which demonstrated that BXCL501 had continued effects and consistent benefit with repeat dosing. While this trial was not powered for efficacy assessments, these findings 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. ​ 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. ​ On October 14, 2025, we announced that results from the 33 patient open label trial 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. ​ There were no serious adverse events reported and the safety profile remains consistent with the IGALMI® label. 41 Table of Contents ​ An sNDA was submitted on January 14, 2026 for the acute treatment of agitation in schizophrenia and bipolar disorders in the unsupervised (at-home) setting. On April 1, 2026 we announced that the U.S. FDA has accepted the supplemental New Drug Application (sNDA) for approval of IGALMI® for at-home use in the acute treatment of agitation in the home setting. The FDA has assigned a Prescription Drug User Fee Act (“PDUFA”) target action date of November 14, 2026. ​ 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 selected a CRO to prepare for trial initiation upon funding. 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. Adjunctive treatment in Major Depressive Disorder (“MDD”) We were previously evaluating BXCL501 as an adjunctive treatment for MDD. The initial clinical study in this program was a double-blind, placebo-controlled, multiple ascending dose (“MAD”) trial to evaluate the safety and tolerability of daily doses of BXCL501 in healthy volunteers. As part of the Clinical Reprioritization we paused our plan to develop a Phase 2 human proof-of-concept trial design to investigate BXCL501 as a potential adjunctive treatment and its potential accelerant effect in combination with first-line selective serotonin reuptake inhibitors or serotonin-norepinephrine reuptake inhibitors. Pediatric Study In June 2021, we initiated a global clinical trial designed to evaluate the safety and efficacy of BXCL501 in the acute treatment of agitation associated with schizophrenia and bipolar disorders in the pediatric population, in part to fulfill pediatric study requirements agreed to with the FDA in connection with the approval of IGALMI®. The trial protocol has been reviewed by the FDA, as well as by the European Medicines Agency, to fulfill potential commitments to study the effects of BXCL501 in pediatric patients ages 13 to 17 with schizophrenia and ages 10 to 17 with bipolar disorders. Enrollment of patients with schizophrenia, schizoaffective disorder, bipolar I, and bipolar II disorder is ongoing in this multisite, double-blind, placebo-controlled parallel group trial. Approximately 63% of the 42 Table of Contents 150 total subjects have been enrolled in the U.S. and 93 of such subjects have completed the clinical trial. In July 2023, we stopped activities in the European region as enrollment and site recruitment was unproductive. 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. The U.S. portion of this program remains active following the Clinical Reprioritization. ​ In October 2024, we submitted a request to the FDA for an extension to complete the study; a three year extension was granted in December 2024. An updated trial protocol was submitted in March 2026 to complete enrollment requirements for pediatric patients with schizophrenia or schizoaffective disorder. ​ To support pediatrics in the at-home setting, FDA has requested an at-home/ outpatient study in pediatric patients following the inpatient study. The design of this study will be discussed and agreed with FDA prior to initiating it. ​ IGALMI® Post-Marketing Requirement Study On June 25, 2024, we announced positive topline results from our post-marketing requirement study evaluating whether tolerance, tachyphylaxis, or withdrawal occur following repeat dosing of the 180 mcg (highest approved dose) of IGALMI®. This study was a single-arm, open-label study of 28 inpatient adults with frequent episodes of agitation associated with bipolar disorders or schizophrenia who self-administered 180 mcg dose of IGALMI® as needed over seven days. A total of 83 episodes were treated. The study achieved its objective and demonstrated no evidence of tachyphylaxis, tolerance, or withdrawal, and IGALMI® was generally well tolerated during the study. ​ 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 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 was 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 were 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 supplied BXCL501 for the study, which was sponsored by Columbia University. The study was subsequently stopped at 80 patients, or approximately one-half the original total. 43 Table of Contents ​ On March 5, 2026, the Company announced positive topline results from the Columbia Phase 2 investigator-sponsored trial evaluating BXCL501 for the treatment of opioid withdrawal symptoms in adults with opioid use disorder undergoing a methadone taper. In the study, BXCL501 240 µg BID reduced opioid withdrawal symptoms compared to placebo during a seven-day methadone taper, as measured by the Short Opiate Withdrawal Scale-Gossop (SOWS-Gossop). After receiving BXCL501 240 µg, patients experienced a greater than 30% reduction in SOWS-Gossop scores, with peak symptom improvement observed on days 3 and 4. The reduction in withdrawal symptoms with BXCL501 numerically exceeded that observed with lofexidine 0.54 mg administered four times daily. BXCL501 demonstrated a favorable tolerability profile, with rates of key adverse events (including dizziness, orthostatic hypotension, bradycardia and insomnia) comparable to or lower than those reported for lofexidine in the Lucemyra® (lofexidine) FDA label. This study was planned as a 4-arm trial: BXCL501 180 µg BID or 240 µg BID, placebo, and lofexidine 0.54 mg QID as a positive control. It enrolled participants who were predominantly exposed to fentanyl and included a high proportion of participants exposed to fentanyl adulterated or associated with xylazine (FAAX), which has been designated as an emerging threat by the White House Office of National Drug Control Policy. ​ 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 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 has begun, with the first patient expected to be dosed in the first half of 2026. 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 Congressionally Directed Medical Research Program. ​ Acute Stress Disorder (“ASD”) ​ On October 15, 2024, we announced a U.S. Department of War (DoW) grant to the University of North Carolina (“UNC”) to fund a study of BXCL501 for treating ASD. The award provides $2,800 to the UNC Institute for Trauma Recovery from September 15, 2024 through September 14, 2026 to evaluate the potential efficacy of BXCL501 to reduce acute stress reactions, also known as acute stress disorder (ASD), symptom severity and/or posttraumatic neuropsychiatric symptoms. The double-blind, placebo-controlled trial is expected to enroll 100 patients experiencing acute stress reactions resulting from motor vehicle collisions. On April 8, 2026, we announced the enrollment of the first patients in this DoW-funded Phase 2a clinical trial. The trial is being led by the University of North Carolina at Chapel Hill (UNC) Institute of Trauma Recovery and marks a significant milestone in the collaboration between BioXcel Therapeutics and UNC. As of July 28, 2026, the study enrolled 20 participants. The double-blind, placebo-controlled trial (NCT06943404) is designed to enroll 100 patients experiencing ASRs following motor vehicle collisions and will evaluate the potential of BXCL501 to reduce ASR symptom severity, improve neurocognitive function, and prevent the progression to chronic posttraumatic neuropsychiatric symptoms. BioXcel Therapeutics is supplying BXCL501 for the trial. ASR symptoms occur in the days and weeks after trauma, and include anxiety, sleep disturbance, concentration difficulty, pain, and somatic symptoms such as dizziness and lightheadedness. Chronic adverse posttraumatic 44 Table of Contents neuropsychiatric symptoms occur when acute stress reactions do not resolve, and include persistent pain, posttraumatic stress, and depressive symptoms. ASRs are common among service men and women, police and other first responders, and survivors of shootings and natural disasters. ASRs affect more than 40 million Americans who seek emergency department care annually after traumatic stress exposure (e.g., motor vehicle collision) 1,2 BXCL502 Development We identified a second neuropsychiatric drug candidate, BXCL502 − Latrepirdine (Dimebon) − through our AI-based platform. We plan 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 Clinical Reprioritization. Other 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. These programs were also paused as part of the Clinical Reprioritization. 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 August 3, 2026, our neuroscience patent portfolio included 13 U.S. utility applications, 17 issued U.S. utility patents, 41 pending non-U.S. utility applications, 29 allowed or granted non-U.S. patents (including five in Japan), one pending U.S. design patent application, and 2 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. In August 2024, the Company received a Notice of Allowance from the U.S. Patent and Trademark Office (“USPTO”) for U.S. Patent Application No. 18/600,431 (the “’431 Application”). The ’431 Application claims methods of treating agitation using an oromucosal formulation of dexmedetomidine. The ‘431 Application issued as U.S. Patent 45 Table of Contents No. 12,138,247 (the ‘247 Patent) patent, issued on November 2024, and is expected to expire no earlier than January 12, 2043. The ’247 Patent is listed in the Orange Book for IGALMI®. 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 US 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 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 46 Table of Contents 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. ​ Immuno-Oncology On April 19, 2022, we announced the formation of a wholly owned subsidiary, OnkosXcel to develop potentially transformative medicines in oncology. OnkosXcel used proprietary AI capabilities to drive the capital-efficient development of innovative anti-cancer therapeutics. With the Company’s Clinical Reprioritization announcement on August 14, 2023, further work on the immuno-oncology programs was paused, except as noted below. BXCL701, an investigational, oral innate immune activator, 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 received Fast Track development designation from the FDA for 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. A potential registrational trial design in mCRPC patients with SCNC phenotype was finalized, however in light of our Clinical Reprioritization, we have not met with the FDA to discuss this, nor plan to initiate this trial at the current time. Our Immuno-Oncology Programs Below is a summary of the status of our immuno-oncology clinical development programs as of the date of this Quarterly Report. 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. ​ 47 Table of Contents 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 have been 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 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. In addition, based on the preclinical observation that BXCL701 showed direct cytotoxic activity against certain leukemic cells, we have initiated clinical development targeting relapsed or refractory acute myeloid leukemia (“AML”). Pancreatic Cancer 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 Cancer Center 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. The trial was 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 were monitored radiographically and by tumor markers for response assessment. Tumor biopsies and blood samples were collected over the course of treatment to better understand the potential mechanism of action for the combination. The human proof of concept portion of the trial started in the first half of 2024. Twenty-one patients were enrolled. Four out of 18 evaluable patients (22%) were alive and progression-free at 18 weeks. Three had partial responses (17%), and 4 had stable disease (22%), for a disease control rate of 39%. One responder had MSI-H PDAC (Microsatellite Instability High Pancreatic Ductal Adenocarcinoma), while the other 2 had MSS PDAC (Microsatellite Stable Pancreatic Ductal Adenocarcinoma). Median PFS (Progression Free Survival) was 2.3 months (95% CI 1.58 – 5.29), and median overall survival was not reached (NR, 95% CI 4.54 - NR). No new safety signals were identified. BXCL701 plus pembrolizumab in second-line advanced PDAC did not reach the preliminary efficacy endpoint to trigger the second stage. However, there were encouraging signs: this combination induced objective responses in 2 MSS pts, and the PFS exceeded 6 months in 3 pts (14%). Ongoing correlative studies should help to examine the characteristics of responders vs. non-responders and elucidate predictive markers of efficacy and resistance to this novel immunotherapy combination. Relapsed or Refractory AML 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 initiated a Phase 1b trial to assess the safety of BXCL701 and to determine the maximum tolerated dose (MTD) and RP2D of BXCL701 as a single agent administered on days 1-3, 8-10, 15-17 and 22-24 in a 4-week (28 days) cycle schedule. This trial started in the 48 Table of Contents first quarter of 2023. A total of 8 patients were treated on days 1-3, 8-10, 15-17 and 22-24 in a 4-week (28 days) cycle schedule across three cohorts as shown below: ● Cohort 1: 0.4 mg (BXCL701 0.2 mg BID); ● Cohort 2: 0.6 mg (BXCL701 0.3 mg BID); ● Final Cohort: 0.8 mg (BXCL701 0.4 mg BID) daily No DLTs were observed and the study was closed due to poor enrollment on 31 Aug 2025 with an incomplete final cohort. Pharmacokinetic analysis is underway to determine PK parameters associated with single agent dosing in AML patients using this novel dosing regimen. 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 August 3, 2026, 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, Australia, Canada, Russia, China, India, Taiwan, South Africa, and Mexico. 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 certain dosing regimens. We expect that any patents issuing from these applications will expire no earlier than 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. ​ 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. 49 Table of Contents 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 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 six months ended June 30, 2026 and 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ June 30, ​ June 30, ​ ​ 2026 ​ 2025 ​ 2026 ​ 2025 Direct external costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ BXCL501 ​ $ 1,464 ​ $ 7,428 ​ $ 2,569 ​ $ 10,346 BXCL701 ​ ​ 12 ​ ​ 109 ​ 22 ​ ​ 61 Other research and development programs ​ ​ — ​ ​ 114 ​ 6 ​ ​ 232 Total direct external costs ​ $ 1,476 ​ $ 7,651 ​ $ 2,597 ​ $ 10,639 Internal personnel costs ​ ​ 1,455 ​ ​ 2,233 ​ ​ 2,999 ​ ​ 3,401 Sub-total direct costs ​ $ 2,931 ​ $ 9,884 ​ $ 5,596 ​ $ 14,040 Indirect costs and overhead ​ ​ 233 ​ ​ 372 ​ ​ 523 ​ ​ 770 Total research and development expenses ​ $ 3,164 ​ $ 10,256 ​ $ 6,119 ​ $ 14,810 ​ 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 Clinical Reprioritization, 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 During both 2023 and 2024 the Company took multiple steps to reduce its headcount curtail expenses and focus on its clinical development efforts, collectively referred to as its Clinical Reprioritization. As an on-going part of the Clinical Reprioritization, 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 50 Table of Contents 30, 2025. Each such installment payment was 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. Other Expense (Income) Other (income) expense primarily consists of interest costs associated with the Credit Agreement the Company entered into in April 2022, changes in fair value of derivative financial instruments, and interest income earned on cash and cash equivalents that were comprised primarily of money market funds. Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements is set forth in Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report. Results of Operations Comparison of the Three Months Ended June 30, 2026 and 2025 Product Revenue, Net Commercial sales of IGALMI® launched in July 2022. As part of the Company’s Clinical Reprioritization, the IGALMI® commercial team shifted focus to a hospital/contracting strategy with a Corporate Account Director (“CAD”) team. The goal of the realigned CAD team is to work with large hospital/Integrated Delivery Network (“IDN”) and drive sales utilizing a top-down approach, allowing the Company to continue to make inroads into the institutional market in a more cost-efficient manner. IGALMI® product revenue, net was $182 and $120 in the three months ended June 30, 2026 and 2025, respectively. The increase in sales was primarily the result of increased gross volume due to deeper GPO discounts that went into effect in the second quarter of 2025, as well as revenue generated from new contracts that commenced during the same period. Cost of Goods Sold Cost of goods sold for the three months ended June 30, 2026 and 2025, were $22 and $107, respectively. The decrease in Cost of goods sold for the three months ended June 30, 2026 is the result of lower charges for reserves for excess or obsolete inventory compared to the same period in 2025. Charges for reserves for excess or obsolete inventory were $0 and $95 in the three months ended June 30, 2026 and 2025, respectively. Research and Development Expense Research and development expenses for the three months ended June 30, 2026 and 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change ​ % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 1,404 ​ $ 1,585 ​ $ (181) ​ ​ (11) % Non-cash stock-based compensation ​ 51 ​ 648 ​ (597) ​ ​ (92) % Professional fees ​ 501 ​ 1,007 ​ (506) ​ ​ (50) % Clinical trials expense ​ 334 ​ 6,119 ​ (5,785) ​ ​ (95) % Chemical, manufacturing and controls cost ​ 632 ​ 535 ​ 97 ​ ​ 18 % Other expenses ​ 242 ​ 362 ​ (120) ​ ​ (33) % Total research and development expenses ​ $ 3,164 ​ $ 10,256 ​ $ (7,092) ​ ​ (69) % 51 Table of Contents ​ The overall decrease of $7,092 for the three months ended June 30, 2026 relative to the same period in 2025 was primarily attributable to: ● Decreased clinical trials expense due to the completion of (i) the SERENITY At-Home pivotal Phase 3 safety trial in 2025 and (ii) the accompanying correlation study that compared caretaker agitation severity measurements to trained rater measurements in 2025. There were no studies initiated during the three months ended June 30, 2026. ● Decreased personnel and related costs as a result of lower headcount. ● Decreased non-cash stock compensation costs as a result of lower headcount. ● Decreased professional fees due to lower pharmacology costs, research and discovery costs, toxicology, and consulting costs. ● Increased chemistry, manufacturing and controls (“CMC”) costs primarily due to developmental activities to support the scale-up of the product for our outpatient indication. ● Decreased other expenses in conjunction with reduced clinical trial activity. Following IGALMI®’s approval by the FDA, we capitalize costs related to commercial production of IGALMI® as inventory and expense those CMC costs related to clinical trials. Selling, General and Administrative Expense Selling, general and administrative expenses for the three months ended June 30, 2026 and 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 1,182 ​ $ 1,031 ​ $ 151 ​ ​ 15 % Non-cash stock-based compensation ​ 307 ​ ​ 908 ​ (601) ​ ​ (66) % Professional fees ​ 4,868 ​ ​ 2,710 ​ 2,158 ​ ​ 80 % Commercial and marketing ​ ​ 52 ​ ​ 38 ​ ​ 14 ​ ​ 37 % Insurance ​ 299 ​ ​ 349 ​ (50) ​ ​ (14) % Other expenses ​ 481 ​ ​ 573 ​ (92) ​ ​ (16) % Total selling, general and administrative expenses ​ $ 7,189 ​ $ 5,609 ​ $ 1,580 ​ ​ 28 % ​ The overall increase of $1,580 for the three months ended June 30, 2026, relative to the same period in 2025 was primarily attributable to: ● Increased professional fees, primarily related to higher legal costs and consulting fees for the three months ended June 30, 2026 compared to 2025. ● Increased personnel and related costs as a result of three executive’s salaries being restored to 2024 amounts after their salaries had been reduced for 2025. ● Decreased non-cash stock compensation costs as a result of lower headcount and the Company’s lower stock price when awards were issued in 2025. 52 Table of Contents Other Expense (Income) Interest expense increased to $4,257 for the three months ended June 30, 2026 from $4,222 in the same period in 2025 primarily due to higher debt balances under the Credit Agreement. The expense was partially offset by lower interest income earned on lower levels of cash and cash equivalents that were held primarily in short-term money market funds. Interest income decreased to $131 for the three months ended June 30, 2026 compared to $230 for three months ended June 30, 2025, due to lower average cash balances during the year. Other (income) expense, net is primarily associated with changes in fair value of derivative financial instruments for the period, which relate to instruments associated with the Credit Agreement and the Company’s registered direct equity offerings. Comparison of the Six Months Ended June 30, 2026 and 2025 Product Revenue, Net IGALMI® product revenue, net was $388 and $288 in the six months ended June 30, 2026 and 2025, respectively. The increase in sales was primarily due to an increase in GPO discounts that went into effect in the second quarter of 2025, as well as revenue generated from new contracts that commenced during the same period. Cost of Goods Sold Cost of goods sold for the six months ended June 30, 2026 and 2025, were $305 and $121, respectively. Cost of goods sold is primarily related to the costs to produce, package and deliver IGALMI® to customers, as well as costs related to excess or obsolete inventory. The increase in Cost of goods sold for the six months ended June 30, 2025 was primarily the result of the increase in inventory write-downs of $170 compared to the prior year. Research and Development Expense Research and development expenses for the six months ended June 30, 2026 and 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 2,869 ​ $ 3,267 ​ $ (398) ​ ​ (12) % Non-cash stock-based compensation ​ 130 ​ 134 ​ (4) ​ ​ (3) % Professional fees ​ 1,043 ​ 1,786 ​ (743) ​ ​ (42) % Clinical trials expense ​ 717 ​ 8,137 ​ (7,420) ​ ​ (91) % Chemical, manufacturing and controls cost ​ 823 ​ 710 ​ 113 ​ ​ 16 % Other expenses ​ 537 ​ 776 ​ (239) ​ ​ (31) % Total research and development expenses ​ $ 6,119 ​ $ 14,810 ​ $ (8,691) ​ ​ (59) % ​ The overall decrease of $8,691 for the six months ended June 30, 2026 relative to the same period in 2025 was primarily attributable to: ● Decreased clinical trials expense due to the completion of (i) the SERENITY At-Home pivotal Phase 3 safety trial in 2025 and (ii) the accompanying correlation study that compared caretaker agitation severity measurements to trained rater measurements in 2025. There were no studies initiated during the six months ended June 30, 2026. ● Decreased personnel and related costs as a result of lower headcount in 2026 compared to 2025. ● Decreased professional fees due to lower pharmacology costs, research and discovery costs, toxicology, and consulting costs. ● Increased chemistry, manufacturing and controls (“CMC”) costs primarily due to developmental activities to support the scale-up of the product for our outpatient indication. 53 Table of Contents ● Decreased other expenses in conjunction with reduced clinical trial activity. Following IGALMI®’s approval by the FDA, we capitalize costs related to commercial production of IGALMI® as inventory and expense those CMC costs related to clinical trials. Selling, General and Administrative Expense Selling, general and administrative expenses for the six months ended June 30, 2026 and 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Change % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel and related costs ​ $ 2,316 ​ $ 2,103 ​ $ 213 ​ ​ 10 % Non-cash stock-based compensation ​ 663 ​ ​ 1,602 ​ (939) ​ ​ (59) % Professional fees ​ 9,404 ​ ​ 5,582 ​ 3,822 ​ ​ 68 % Commercial and marketing ​ ​ 146 ​ ​ 207 ​ ​ (61) ​ ​ (29) % Insurance ​ ​ 834 ​ ​ 732 ​ ​ 102 ​ ​ 14 % Other expenses ​ 1,017 ​ ​ 1,082 ​ (65) ​ ​ (6) % Total selling, general and administrative expenses ​ $ 14,380 ​ $ 11,308 ​ $ 3,072 ​ ​ 27 % ​ The overall increase of $3,072 for the six months ended June 30, 2026, relative to the same period in 2025 was primarily attributable to: ● Increased professional fees, primarily related to higher legal costs and consulting fees for the six months ended June 30, 2026 compared to 2025. ● Increased personnel and related costs as a result of three executive’s salaries being restored to 2024 amounts after their salaries had been reduced for 2025. ● Decreased non-cash stock compensation costs as a result of lower headcount and the Company’s lower stock price when awards were issued in 2025. ● Decreased commercial and marketing expense. Other Expense (Income) Interest expense increased to $8,455 for the six months ended June 30, 2026 from $8,215 in the same period in 2025 primarily due to higher debt balances under the Credit Agreement. The expense was partially offset by lower interest income earned on lower levels of cash and cash equivalents that were held primarily in short-term money market funds. Interest income decreased to $342 for the six months ended June 30, 2026 compared to $509 for six months ended June 30, 2025, due to lower average cash balances during the year. Other (income) expense, net is primarily associated with changes in fair value of derivative financial instruments for the period, which relate to instruments associated with the Credit Agreement and the Company’s registered direct equity offerings. Inflation Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation has had a material effect on our results of operations during the periods presented. For a discussion of inflationary risks to our future revenues under the Inflation Reduction Act, see “Health care reform measures could hinder or prevent our product candidates’ commercial success.” in Part II, Item 1A, “Risk Factors” elsewhere in this Quarterly Report. Liquidity and Capital Resources As of June 30, 2026, we had cash, cash equivalents and restricted cash of $13,801, negative working capital of $108,449 and stockholders’ deficit of $115,460. Net cash used in operating activities was $17,907 and $24,618 for the 54 Table of Contents six months ended June 30, 2026 and 2025, respectively. We incurred losses of approximately $27,404 and $26,441 for the six months ended June 30, 2026 and 2025, respectively. We will need to generate significant product revenues to achieve profitability. Our history of significant losses, negative cash flows from operations, potential near-term increased covenant-driven amortization payments or full repayment obligations under our Credit Agreement, the regulatory event of default triggers under the Credit Agreement, other funding requirement covenants under the Credit Agreement, limited liquidity resources currently on hand, and dependence on our ability to obtain additional financing to fund our 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 our 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. Management and the Company’s board of directors, with the assistance of advisors, have been actively pursuing a sale, merger, or other strategic transaction and additional financing alternatives, but to date these efforts have not resulted in a signed definitive agreement or committed source of additional capital. To date, we have continued research and development activities while managing our cash position. However, we require additional funding to continue as a going concern, and we have been unsuccessful to date in securing sufficient additional funding, notwithstanding an active process to identify and complete a sale, merger, financing or other strategic transaction. If we do not complete a strategic transaction, or do not receive sufficient financing from other sources of equity or debt financings, we may be required to file for protection under the U.S. Bankruptcy Code. Even if we are successful in raising additional capital, we will require substantial additional financing to service our debt facilities and achieve our goals and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts. In connection with our efforts to pursue strategic alternatives, the Company is engaged in contingency planning in the event a strategic transaction acceptable to the Lenders is not completed on or prior to August 21, 2026, as required pursuant to the Twelfth Amendment to the Credit Agreement described below. The Company has not made any determination to commence a bankruptcy proceeding, and there can be no assurance as to which, if any, of these alternatives will be pursued or completed. Further, certain strategic alternatives will require the consent of our Lenders pursuant to the covenants in our Credit Agreement. See “Risks Related to Financial Position and Need for Additional Capital — 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 Part II. Item 1A., “Risk Factors” elsewhere in this Quarterly Report. Sources of Liquidity We have primarily focused our efforts on raising capital and building the products in our pipeline, and, although we generate revenue from sales of IGALMI®, we do not expect to generate positive cash flows from operations in the near term. Since our inception, our operations have been financed primarily from proceeds from the sale of equity securities, including our initial public offering, private placements of our common stock, registered offerings of our common stock, an Equity Distribution Agreement with Canaccord Genuity LLC (“Canaccord”), and borrowings under our Credit Agreement (as described below). We have not yet established an ongoing source of revenue sufficient to cover our operating costs and will need to do so in future periods. Financing Agreements The Company maintains a senior secured credit facility (the “Credit Agreement”), as amended, with lenders (the “Lenders”) managed by Oaktree Fund Administration LLC (“OFA”), as administrative agent. The Lenders are comprised of affiliates of Oaktree Capital Management, L.P. The facility provides for term loans that are secured by substantially all of the assets of the Company and its guarantor subsidiaries, subject to customary exceptions. ​ As of June 30, 2026, borrowings under the Credit Agreement consisted of funded term loans, inclusive of previously capitalized interest and net of required principal repayments made to date. The loans are not revolving and no additional tranches remain available, as all undrawn commitments have expired. ​ The term loans bear interest at a fixed annual rate of 13.0%. Interest is payable quarterly in cash. The Company previously had the ability to elect PIK interest through June 30, 2025, which resulted in additional amounts being 55 Table of Contents capitalized as principal. Pursuant to the Tenth Amendment, the Company subsequently regained the ability to elect PIK interest only for the second quarter of 2026 and elected such treatment for interest accrued from April 1, 2026 through June 30, 2026, with the related amounts capitalized to principal. The blended effective interest rate as of June 30, 2026 was approximately 16.6%. ​ In addition to interest, the Credit Agreement includes customary fees, including prepayment premiums and amendment-related fees. There are no remaining commitment fees as all undrawn commitments have expired. An exit fee of 0.50% of the principal amount repaid is payable upon maturity or prepayment of the loans. 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. ​ 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 are unsecured). ​ The Credit Agreement includes customary events of default, including payment defaults, covenant breaches, cross-defaults, bankruptcy-related events, and certain regulatory-related events. Upon an event of default, the lenders may accelerate the obligations and exercise remedies against the collateral. ​ The Credit Agreement contains, among other things, a covenant requiring that our audited annual financial statements included in our Annual Report be delivered without a “going concern” or like qualification or exception. ​ Ninth Amendment to Credit Agreement On March 27, 2026, we entered into the Ninth Amendment to Credit Agreement and Guaranty (the “Ninth Amendment”). Pursuant to the Ninth Amendment, the Lenders agreed to (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, 2025 will not contain a “going concern” or similar qualification, and (ii) reduce the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $12,500 from and after March 31, 2026 (instead of $15,000). ​ The Ninth Amendment’s effectiveness was subject to various customary conditions precedent, as well as conditions subsequent requiring the Company to: ​ ● on or before March 31, 2026, make a one-time prepayment of the principal amount of $2,500, together with accrued and unpaid interest thereon; ​ ● on April 15, 2026, grant new warrants to the Lenders to purchase 1,354 shares of common stock of the Company, at an exercise price of $0.01 per share (the “April 2026 Warrants”); and ​ ● in connection with the receipt by the Company of any gross cash proceeds 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 to the Credit Agreement, (iii) the issuance of the Company’s subordinated debt and/or (iv) sales by the Company of its assets, in each case ((i) through (iv)), in transactions permitted under the Credit Agreement, make a prepayment of the loans under the Credit Agreement in an aggregate principal amount equal to 50% of such gross cash proceeds, together with accrued interest thereon and any fees or premia (including prepayment premium) payable in connection therewith; provided, that the foregoing requirement will not apply (A) with respect to the first $2,500 in the aggregate of proceeds raised from Capital Raise Activities (as defined in the Credit Agreement) and (B) once the aggregate principal amount of the Loans prepaid pursuant to one or more Capital Raise Prepayments equals $2,500. 56 Table of Contents ​ Tenth Amendment to Credit Agreement On July 3, 2026, the Company entered into the Tenth Amendment to the Credit Agreement (the “Tenth Amendment”) by and among the Company, as the borrower, the Lenders and OFA as administrative agent, which included (i) payment in kind of accrued and unpaid interest through and including June 30, 2026, by capitalizing and adding such interest to the outstanding principal amount of the Loans as of such date, (ii) defer the payment of principal that was originally due on June 30, 2026 until July 31, 2026, at which point the Company will be obligated to make a payment of $9,017 (constituting the principal and interest that were due and payable on June 30, 2026), plus all accrued interest and fees on such amount through and including July 31, 2026 and (iii) reduce the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $7,500 (instead of $12,500). In addition, pursuant to the Tenth Amendment: ● The Company is required to, on or prior to July 31, 2026, enter into definitive agreements with respect to one or more transactions acceptable to Lenders that (a) would result in the repayment of all loan and other obligations under the Credit Agreement or (b) is an alternative capital solutions transaction on terms and conditions acceptable to the Lenders. ● The Company agreed to permit any and all transfers or assignments of all or any portion of the loans, commitments, claims or other rights, interests or obligations of any Lender under or in respect of the Credit Agreement to any third party. In addition, the Company agreed to waive or otherwise release any and all restrictions contained in any contract between the Company and a third party on such third party’s ability to receive such assignments or transfers. ● The Company agreed to establish and maintain a strategic process committee of its board of directors, which committee shall be comprised solely of David Mack (and/or such other independent director acceptable to the Lenders and that is not a member of the Board as of the Tenth Amendment Effective Date), that will have the full and exclusive authority to evaluate, negotiate, oversee, coordinate and implement any sale, restructuring or other material transaction, including any equity raise, sale or business combination transaction, out-of-court restructuring, in-court restructuring, bankruptcy or insolvency filing or similar transaction and any other matters or actions as may be necessary or advisable to effectuate any of the foregoing. ● The Company agreed to certain additional reporting and information covenants, including a requirement to hold a weekly meeting with the Lenders and the Company’s financial advisors, and a requirement to deliver to the Lenders a 13-week cash flow budget and financial report on a bi-weekly basis. 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. ● The Company agreed to certain additional negative covenants applicable following the Tenth Amendment Effective Date, which, among other things, prohibit the Company from, subject to limited exceptions, (i) making any dividend, distribution or repurchase with respect to its equity interests, (ii) making any investments, (iii) disposing of or granting any license in the Company’s assets, (iv) incurring or suffering to exist any indebtedness or liens, and (v) becoming party to or bound by, or canceling, terminating, modifying or amending in any material respect, or waiving any material rights under any material contract. ● Through July 31, 2026, the Company is prohibited from entering into, terminating, or otherwise modifying any compensation arrangement with its directors, officers or employees, or making any non-ordinary course payments to, or materially increasing the compensation or benefits of, such persons. ● The Company paid to the Lenders a fee equal to 100 basis points (or 1.00%) of the principal amount of the Loans outstanding as of the effective date of the Tenth Amendment, which was paid in kind by adding 57 Table of Contents such amount to the outstanding principal amount of the Loans on the effective date of the Tenth Amendment. Eleventh Amendment to Credit Agreement On July 31, 2026, the Company entered into the Eleventh Amendment to the Credit Agreement (the “Eleventh Amendment”), which amended the Credit Agreement. Pursuant to the Eleventh Amendment, the Lenders agreed to (i) defer the payment of principal that was originally due on June 30, 2026, which was previously deferred to July 31, 2026 pursuant to the Tenth Amendment, until August 31, 2026 at which point the Company is obligated to make a payment of $9,017 (constituting the principal and interest that were due and payable on June 30, 2026) plus all accrued interest and fees through August 31, 2026 and (ii) reduce the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $6,250 (instead of $7,500). In addition, pursuant to the Eleventh Amendment: ● The Company is required to, on or prior to August 10, 2026, enter into definitive agreements with respect to one or more transactions acceptable to Lenders that (a) would result in the repayment of all loan and other obligations under the Credit Agreement or (b) is an alternative capital solutions transaction on terms and conditions acceptable to the Lenders. ● Through August 10, 2026 (extended from July 31, 2026, as was provided under the Tenth Amendment), the Company is prohibited from entering into, terminating, or otherwise modifying any compensation arrangement with its directors, officers or employees, or making any non-ordinary course payments to, or materially increasing the compensation or benefits of, such persons. Twelfth Amendment to Credit Agreement On August 10, 2026, the Company entered into the Twelfth Amendment to Credit Agreement (the “Twelfth Amendment”), which amended the Credit Agreement. Pursuant to the Twelfth Amendment, the Company is required to, on or prior to August 21, 2026 (extended from August 10, 2026, as was required under the Eleventh Amendment), enter into definitive agreements with respect to one or more transactions acceptable to Lenders that (A) would result in the repayment of all loan and other obligations under the Credit Agreement or (B) is an alternative capital solutions transaction on terms and conditions acceptable to the Lenders. Pursuant to the Twelfth Amendment, the Lenders also agreed to reduce the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $3,000 (instead of $6,250, as under the Eleventh Amendment). ​ As of June 30, 2026, we had aggregate principal indebtedness of $107,152 outstanding under the Credit Agreement. ​ As of June 30, 2026, the Company was in compliance with all financial and restrictive covenants under the Credit Agreement. ​ March 2025 Registered Direct Offering ​ On March 3, 2025, we entered into a purchase agreement (the “March 2025 Offering”) pursuant to which we agreed to issue and sell an aggregate of (i) 188 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. The Pre-Funded Warrants have an exercise price per share of common stock equal to $0.001 per share. All 3,812 Pre-Funded Warrants were exercised and the same number of common stock were issued in exchange for $4 of proceeds during the year ended December 31, 2025. There were no warrant exercises for the three and six months ended March 31, 2026. For the year ended December 31, 2025, 2,300 of the March 2025 Accompanying Warrants were exercised and the same number of common stock were issued in exchange for $9,660 of proceeds. ​ 58 Table of Contents ATM Program - Canaccord In April 2025, we entered into an Equity Distribution Agreement with Canaccord to sell shares of our common stock, 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. In August 2025, we 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 our common stock. In August 2025, we again 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 $80,000 shares of common stock. For the three months ended June 30, 2026, we sold 2,706 shares for gross proceeds of $3,109 and received proceeds of $3,047, net of issuance costs of $62. For the six months ended June 30, 2026, the Company sold 2,951 shares for gross proceeds of $3,607 and received proceeds of $3,535, net of issuance costs of $72. March 2026 Registered Direct Offering ​ On March 10, 2026, we entered into a purchase agreement (the “March 2026 Offering”) pursuant to which we agreed to issue and sell an aggregate of (i) 2,480 shares of common stock at an offering price of $1.739 per Share, (ii) Pre-Funded Warrants to purchase up to 2,020 shares of common stock, at an offering price of $1.738 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 4,500 accompanying warrants (the “March 2026 Accompanying Warrants”) to purchase up to 4,500 shares of common stock at an offering price of $1.614 per accompanying warrant. The Pre-Funded Warrants have an exercise price per share of common stock equal to $0.001 per share. During the three months ended March 31, 2026, all 2,020 Pre-Funded Warrants were exercised and the same number of common stock were issued in exchange for $2 of proceeds. There were no warrant exercises for the three and six months ended June 30, 2026. ​ Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Cash (used in) provided by: ​ ​ ​ ​ ​ ​ Operating activities ​ $ (17,907) ​ $ (24,618) Investing activities ​ $ — ​ $ — Financing activities ​ $ 2,951 ​ $ 13,339 ​ Operating Activities Net cash used in operating activities for the six months ended June 30, 2026 was $17,907 and was primarily attributable to our net loss of $27,404 and a $1,125 non-cash gain from the change in fair value of our derivative liabilities, offset by a $4,048 increase in accounts payable, accrued expenses, due to related parties, and other current liabilities, $3,409 in payable in kind interest on our credit agreement, $1,276 in accretion of debt discount and amortization of financing costs, and $793 in non-cash stock-based compensation, and a $639 decrease in prepaid expenses and other current assets. Net cash used in operating activities for the six months ended June 30, 2025 was $24,618 and was primarily attributable to our net loss of $26,441, a $7,222 increase in the change in the fair value of our derivative liability, in part offset by $5,433 in payable in kind interest on our credit agreement, $1,736 in non-cash stock-based compensation, $743 in accretion of debt discount and amortization of financing costs, and a $673 decrease in prepaid expenses, other current assets and other assets. Investing Activities Net cash used in investing activities for the six months ended June 30, 2026 and 2025 was $0 and $0, respectively. 59 Table of Contents Financing Activities Net cash provided by financing activities for the six months ended June 30, 2026, was $2,951 and was primarily attributable to net proceeds of $6,879 received from the March 2026 registered direct offering and net proceeds from the sale of common stock under the Equity Distribution Agreement with Canaccord of $3,535, offset by $8,412 in long-term debt principal repayments. Net cash provided by financing activities for the six months ended June 30, 2025, was $13,339 and was primarily attributable to net proceeds of $12,957 received from the March 2025 registered direct offering and net proceeds from the sale of common stock under the Equity Distribution Agreement with Canaccord of $135. Operating Capital and Capital Expenditure Requirements We expect to continue to incur significant and increasing operating losses at least for the next several years as we commercialize IGALMI® and as we expand our clinical trials of and seek marketing approval focused on BXCL501 while pursuing development of additional product candidates for BXCL502, BXCL701 and BXCL702. We expect to continue to incur net losses in the near term. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials and our expenditures on other research and development activities. We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development, and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. We anticipate that our expenses will increase substantially as we: ● initiate and continue our clinical development of our product candidates; ● conduct additional research and development with our product candidates; ● seek to identify, acquire, license, develop and commercialize product candidates; ● integrate acquired technologies into a comprehensive regulatory and product development strategy; ● maintain, expand and protect our intellectual property portfolio; ● hire scientific, clinical, quality control and administrative personnel and utilize professional services, including consultants, lawyers, and accountants; ● add operational, financial and management information systems and personnel, including personnel to support our drug development and commercial efforts; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● fully develop a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize IGALMI® and any product candidates for which we may obtain regulatory approval; and ● continue to operate as a public company. ​ We believe that our existing cash, cash equivalents and restricted cash as of June 30, 2026 will not be sufficient to enable us to fund operating expenses and capital expenditure requirements for at least the next 12 months from the date of the issuance of the condensed consolidated financial statements included in this Quarterly Report, including funding our ongoing research and development and commercialization efforts. In particular, we believe that our cash, cash equivalents and restricted cash of $13,801 as of June 30, 2026 is not sufficient to fund our operations and meet our liquidity requirements through the end of August 2026. We expect that we will need to obtain substantial additional funding to fund our ongoing operations. To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, the ownership interests of our existing stockholders may be materially diluted, and the terms of these securities could include liquidation or other preferences that could adversely affect the rights of our existing stockholders. Under the terms of the Ninth Amendment, following receipt of aggregated gross proceeds from (a) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (b) non-refundable cash consideration from partnering transactions, (c) the issuance of the Company’s subordinated debt and/or (d) sales by the Company of its assets, in each case ((a) through (d)), in transactions permitted under the Credit Agreement (“Capital Raise Activities”), make a 60 Table of Contents prepayment of the loans under the Credit Agreement in an aggregate principal amount equal to 50% of such gross cash proceeds, together with accrued interest thereon and any fees or premia (including prepayment premium) payable in connection therewith; provided that such prepayment requirement shall not be applicable (A) with respect to the first $2,500 gross proceeds received from Capital Raise Activities and (B) once the aggregate principal amount of the prepaid pursuant to one or more of such prepayments equals $2,500. In addition, debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends, which could adversely impact our ability to conduct our business. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. If we are unable to raise capital when needed or on attractive terms, we could be forced to significantly delay, scale back or discontinue the development or commercialization of our product candidates, seek collaborators at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available, and relinquish or license, potentially on unfavorable terms, our rights to our product candidates that we otherwise would seek to develop or commercialize ourselves. To date, we have continued research and development activities while managing our cash position. However, we can provide no assurance that will be successful in obtaining additional necessary resources and, if we are unable to fund our operations, including our clinical trials, we may need to focus on advancing fewer of our product candidates or otherwise consider strategic alternatives. ​ Due to the fact that we were unable to generate sufficient cash flows from operations or obtain sufficient funding to sustain operations and debt service obligations, management and our board of directors determined that it was in the best interests of the stockholders to seek strategic options. We hired advisors to explore strategic options, including, but not limited to, restructuring or refinancing our debt, seeking additional debt or equity capital investment, a sale or licensing transaction for of all or a portion of our assets, a combination of these, or other strategic transactions. We currently have no commitments to engage in any specific strategic transaction and there can be no assurance that we will be able to complete additional or alternative financings, business development transactions or other strategic alternatives. If we cannot continue as a viable entity, we may be required to seek relief under the U.S. Bankruptcy Code. There can be no guarantees that if we file for bankruptcy we will emerge from bankruptcy as a going concern or that holders of our common stock will receive any recovery from any bankruptcy proceedings. ​ Contractual Obligations and Commitments In July 2024, the Company signed an amendment to its commercial supply agreement that requires minimum annual payments for the first five years of the agreement ending in 2026 that in aggregate total $10,000. The Company has met the minimum requirements for the first 4 years ending in 2025. The remaining minimum commitments for year 2026 is $2,000. In February 2022, we signed a distribution agreement with a third-party to distribute product related to BXCL501 in the U.S. The distributor will be paid defined fees for its services under the agreement, which can be terminated by either party for cause. The distribution agreement can also be terminated by us without cause, subject to payment of agreed upon termination fees. BTI leases office space for its corporate headquarters at 555 Long Wharf Drive, New Haven, Connecticut (the “HQ Lease”) under an operating lease that was set to expire in February 2026. The Company did not exercise the option to renew the HQ Lease for an additional five-year term. Prior to the expiration of the HQ Lease, on February 17, 2026, we agreed to amend the lease agreement to extend the lease on a month-to-month basis with a fixed monthly base rent payment of $33. For additional details, see Note 13, Leases in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information relating to the Company’s leases. In addition, we are obligated to make quarterly interest payments under our Credit Agreement. For additional details, see Note 9, Debt and Credit Facilities in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information relating to the Company’s debt payment obligations. 61 Table of Contents Critical Accounting Policies and Estimates Our critical accounting policies and estimates are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We have reviewed and determined that those critical accounting policies and estimates remain our critical accounting policies and estimates as of and for the six months ended June 30, 2026. No material changes were made to our existing critical accounting policies and estimates during the period presented. Refer to Note 3, Summary of Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements elsewhere in this Form 10-Q.