Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes included in our 2025 Annual Report. Some information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks and uncertainties. You should review the sections entitled "Forward-Looking Statements" and "Risk Factors" in our 2025 Annual Report, Quarterly Reports on Form 10-Q and other reports for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Introduction

Management's discussion and analysis of financial condition and results of operations is provided as a supplement to the consolidated financial statements and notes, included in this Quarterly Report on Form 10-Q to help provide an understanding of our financial condition, the changes in our financial condition and our results of operations. Our discussion is organized as follows:

Overview

We are a commercial-stage biotechnology company focused on improving the lives of patients by developing and commercializing therapeutic innovations that improve medical care. Our advanced science, patented technologies, and innovative approach to drug discovery and development have allowed us to create and commercialize a portfolio of products that aim to advance the standard of care for acute care and oncology patients.

Acute Care Product Portfolio

ZYNRELEF

ZYNRELEF is a dual-acting local anesthetic that delivers a fixed-dose combination of the local anesthetic bupivacaine and a low dose of the nonsteroidal anti-inflammatory drug meloxicam. ZYNRELEF is the first and only modified-release local anesthetic to be classified by the FDA as an extended-release product because ZYNRELEF demonstrated in Phase 3 studies significantly reduced pain and a significantly increased proportion of patients requiring no opioids through the first 72 hours following surgery compared to bupivacaine solution, the current standard-of-care local anesthetic for postoperative pain control.

ZYNRELEF was initially approved by the FDA in May 2021, and we commenced commercial sales in the U.S. in July 2021. In each of December 2021 and January 2024, the FDA approved an expansion of ZYNRELEF's indication. ZYNRELEF is approved for use in adults for postsurgical analgesia for up to 72 hours after soft tissue and orthopedic surgical procedures including foot and ankle, and other orthopedic surgical procedures in which direct exposure to articular cartilage is avoided. In September 2024, the FDA approved the prior approval supplement ("PAS") application for ZYNRELEF Vial Access Needle ("VAN"), which is replacing the current vented vial spike.

Through March 31, 2025, ZYNRELEF was reimbursed outside of the surgical bundle payment in the Hospital Outpatient Department ("HOPD") setting of care through pass-through status granted by the Centers for Medicare and Medicaid Services ("CMS").

Effective April 1, 2025, ZYNRELEF is reimbursed through inclusion in the Non-Opioids Prevent Addiction in the Nation ("NOPAIN") Act, which directs CMS to provide separate Medicare reimbursement for non-opioid treatments that are used to manage pain during surgeries conducted in hospital outpatient departments or in ambulatory surgical centers. To qualify, the non-opioid treatment must demonstrate the ability to replace, reduce, or avoid intraoperative or postoperative opioid use or the quantity of opioids prescribed in a clinical trial or through data published in a peer-reviewed journal. The hospital outpatient prospective payment system and ambulatory surgical center rule for calendar year 2025 includes ZYNRELEF as a qualifying non-opioid requiring CMS to provide separate Medicare reimbursement in both the hospital outpatient department and ambulatory surgical center settings through December 31, 2027.

Effective October 1, 2025, CMS has approved a new permanent Healthcare Common Procedure Coding System J-code for ZYNRELEF. ZYNRELEF will continue to qualify under the Non-Opioid Policy for Pain Relief with the J-code and will be reimbursed outside the surgical supply package for Medicare, aligning with the policy goals to remove financial barriers to qualifying non-opioid pain management options.

APONVIE

APONVIE is the first and only commercially available intravenous formulation of aprepitant, a substance P/neurokinin-1 ("NK1") receptor antagonist indicated for postoperative nausea and vomiting ("PONV") in adults. Delivered via a single 30-second intravenous ("IV") injection, APONVIE has demonstrated rapid achievement of therapeutic drug levels ideally suited for the surgical setting.

APONVIE was approved by the FDA in September 2022 and became commercially available in the U.S. in March 2023. APONVIE is indicated for the prevention of PONV in adults. CMS granted pass-through payment status for APONVIE, effective April 1, 2023, which expired March 31, 2026. Effective April 1, 2026, CMS has approved a new permanent Healthcare Common Procedure Coding System J-code for APONVIE.

In 2025, APONVIE was included in the Fifth Consensus Guidelines for the Management of Postoperative Nausea and Vomiting as published in Anesthesia and Analgesia.

Oncology Care Product Portfolio

CINVANTI

CINVANTI is an IV formulation of aprepitant, a substance NK1 receptor antagonist. CINVANTI is the first IV formulation to directly deliver aprepitant, the active ingredient in EMEND® capsules. Aprepitant (including its prodrug, fosaprepitant) is a single-agent NK1 receptor antagonist to significantly reduce nausea and vomiting in both the acute phase (0-24 hours after chemotherapy) and the delayed phase (24-120 hours after chemotherapy). CINVANTI is the first IV formulation of an NK1 receptor antagonist indicated for the prevention of acute and delayed nausea and vomiting associated with Highly Emetogenic Cancer ("HEC") and nausea and vomiting associated with Moderately Emetogenic Cancer ("MEC") that is free of synthetic surfactants, including polysorbate 80.

CINVANTI, in combination with other antiemetic agents, is indicated in adults for the prevention of acute and delayed nausea and vomiting associated with initial and repeat courses of HEC including high-dose cisplatin as a single-dose regimen, delayed nausea and vomiting associated with initial and repeat courses of MEC as a single-dose regimen, and nausea and vomiting associated with initial and repeat courses of MEC as a 3-day regimen.

NK1 receptor antagonists are typically used in combination with 5-hydroxytryptamine ("5-HT3") receptor antagonists. The only other injectable NK1 receptor antagonist currently approved in the U.S. for both acute and delayed chemotherapy induced nausea and vomiting ("CINV"), EMEND® IV (fosaprepitant), contains polysorbate 80, a synthetic surfactant, which has been linked to hypersensitivity reactions, including anaphylaxis, and infusion site reactions. The CINVANTI formulation does not contain polysorbate 80 or any other synthetic surfactant. Our CINVANTI data has demonstrated the bioequivalence of CINVANTI to EMEND IV, supporting its efficacy for the prevention of both acute and delayed nausea and vomiting associated with HEC and

nausea and vomiting associated with MEC. Results also showed CINVANTI was better tolerated in healthy volunteers than EMEND IV, with significantly fewer adverse events reported with CINVANTI.

CINVANTI was approved by the FDA in November 2017, and we commenced commercial sales in the U.S. in January 2018.

On June 1, 2026, the U.S. District Court for the District of Delaware issued a decision in the patent litigation between the Company and Azurity Pharmaceuticals, Inc., Azurity Pharmaceuticals India LLP f/k/a Slayback Pharma India LLP, and Slayback Pharma LLC ("Azurity"), with respect to CINVANTI, holding that the asserted claims of the Company's U.S. Patent Nos. 12,115,255 and 12,290,520 are invalid under 35 U.S.C. § 112. The Court also entered a final judgment declaring that the asserted claims of U.S. Patent Nos. 9,561,229; 9,808,465; 9,974,742; 9,974,793; 9,974,794; 10,500,208; 10,624,850; 10,953,018; 11,173,118; and 11,744,800 are not infringed. This decision has no impact on any prior settlement agreement related to CINVANTI or APONVIE.

SUSTOL

SUSTOL is the first extended-release 5-HT3 receptor antagonist approved for the prevention of acute and delayed nausea and vomiting associated with both MEC and anthracycline and cyclophosphamide ("AC") combination chemotherapy regimens. A standard of care in the treatment of breast cancer and other cancer types, AC regimens are among the most commonly prescribed HEC regimens, as defined by both the National Comprehensive Cancer Network ("NCCN") and the American Society of Clinical Oncology ("ASCO").

SUSTOL is indicated in combination with other antiemetics in adults for the prevention of acute and delayed nausea and vomiting associated with initial and repeat courses of MEC or AC combination chemotherapy regimens. SUSTOL is an extended-release, injectable 5-HT3 receptor antagonist that utilizes our Biochronomer Technology to maintain therapeutic levels of granisetron for ≥5 days. The SUSTOL global Phase 3 development program was comprised of two, large, guideline-based clinical studies that evaluated SUSTOL's efficacy and safety in more than 2,000 patients with cancer. SUSTOL's efficacy in preventing nausea and vomiting was evaluated in both the acute phase (0-24 hours following chemotherapy) and the delayed phase (24-120 hours following chemotherapy).

SUSTOL was approved by the FDA in August 2016, and we commenced commercial sales in the U.S. in October 2016. We ceased commercial sales of SUSTOL on September 30, 2026.

Biochronomer Technology

Our proprietary Biochronomer Technology is designed to deliver therapeutic levels of a wide range of otherwise short-acting pharmacological agents over a period from days to weeks with a single administration. Our Biochronomer Technology consists of polymers that have been the subject of comprehensive animal and human toxicology studies that have shown evidence of the safety of the polymer. When administered, the polymers undergo controlled hydrolysis, resulting in a controlled, sustained release of the pharmacological agent encapsulated within the Biochronomer-based composition. Furthermore, our Biochronomer Technology is designed to permit more than one pharmacological agent to be incorporated, such that multimodal therapy can be delivered with a single administration.

Recent Events

Proposed Asset Sale

On November 8, 2026, the Company entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with CorMedix, pursuant to which it has agreed to sell substantially all of its assets to CorMedix, other than certain excluded assets, including its federal income tax net operating loss carryforwards (the "NOLs") and certain other tax attributes, and CorMedix has agreed to acquire those assets and assume certain liabilities of the Company as set forth in the Asset Purchase Agreement (the "Asset Sale"). As consideration for the Asset Sale, CorMedix has agreed to (i) issue to the Company 14,583,333 shares of CorMedix common stock, (ii) pay to the Company a purchase price equal to $145.0 million in cash, subject to certain adjustments for the Company's closing cash and net working capital as set forth in the Asset Purchase Agreement, of which $2.0 million will be deposited into escrow, at the closing of the Asset Sale to secure post-closing adjustments to the cash consideration, which post-closing adjustments may not exceed $10.0 million in either direction, (iii) pay to the Company royalties equal to 5.0% of the amount, if any, by which aggregate annual net sales of CINVANTI, SUSTOL and the products covered by the Company's multi-product Development and License Agreement (the "License Agreement") with Long Grove Pharmaceuticals, LLC, a Delaware limited liability company ("Long Grove"), exceed $25.0 million in each of calendar years 2027, 2028 and 2029, if and when payable, on the terms set forth in the Asset Purchase Agreement, (iv) pay to the Company earn-out payments of $25.0 million if net sales of ZYNRELEF for calendar year 2028 equal or exceed $65.0 million and an additional $30.0 million if such net sales equal or exceed $95.0 million, payable at CorMedix's election in cash, shares of CorMedix common stock or a combination thereof (provided that any portion that would cause the

aggregate shares of CorMedix common stock issued under the Asset Purchase Agreement to exceed 19.9% of the CorMedix common stock outstanding as of the closing of the Asset Sale will be paid in cash), if and when payable, on the terms set forth in the Asset Purchase Agreement and (v) assume certain of the Company's liabilities as specified in the Asset Purchase Agreement.

The Asset Sale, which has been unanimously approved by the board of directors of the Company (the "Board"), is currently expected to close in the first quarter of 2027, subject to approval by the Company's stockholders and the satisfaction of other customary closing conditions. The Asset Purchase Agreement contains certain termination rights in favor of each of the Company and CorMedix. In addition, the Asset Purchase Agreement provides that, in connection with certain terminations of the Asset Purchase Agreement, depending on the circumstances surrounding the termination, one party may be required to pay the other party a termination fee of $4.0 million.

If the Asset Sale closes, the Company will exit the operation of its current biotechnology business and other historical operations, but it does not intend to liquidate and will remain a publicly traded company. The Company will retain other material assets following the closing of the Asset Sale, including the shares of CorMedix common stock issued to the Company in the Asset Sale, the right to receive future royalties, earn-out payments, significant NOLs and cash on hand. Following the closing of the Asset Sale, the Board intends to actively evaluate various strategic transactions and opportunities for the use of the proceeds of the Asset Sale, including acquiring or investing in additional businesses or assets, which may or may not be pharmaceutical or biotechnology businesses or assets. Such opportunities may include, but are not limited to, the acquisition of products, product candidates, milestone payments and royalty streams, programs or technologies as well as pursuing strategic alliances, joint ventures, investments in complementary businesses, out-licensing and in-licensing agreements, divestitures or other transactions. It is currently uncertain what businesses or assets the Company may acquire or invest in following the closing of the Asset Sale, and the Board intends to evaluate opportunities to create value for the benefit of stockholders.

Long Grove Development and License Agreement

On September 23, 2026, we entered into a multi-product License Agreement with Long Grove, and Capstone Development Services Company, LLC, a Delaware limited liability company ("Capstone"). For additional information regarding the License Agreement, see "Contractual Obligations and Commitments-Licensing Commitments" below.

Fifth Amendment to Working Capital Facility

On September 17, 2026, we entered into the Fifth Amendment to the Working Capital Facility Agreement (the "Fifth Amendment to the Working Capital Facility Agreement") to the Initial Working Capital Facility Agreement with Hercules Capital, Inc., as administrative agent, collateral agent, and lender ("Hercules"). See Note 8 - Long-Term Debt and Convertible Notes.

Amendment No. 1 and Amendment No. 2 to Tax Benefit Preservation Plan

On August 14, 2026, we entered into Amendment No. 1 to Tax Benefit Preservation Plan ("Amendment No. 1"), which amends our Tax Benefit Preservation Plan, dated as of August 14, 2025 (the "Original Plan"), with Computershare Trust Company, N.A., as rights agent. Amendment No. 1 revises the definition of "Final Expiration Date" and all references to August 14, 2026 in the Plan to mean August 14, 2029.

On November 8, 2026, we entered into Amendment No. 2 to the Plan ("Amendment No. 2," together with the Original Plan and Amendment No. 1, the "Plan"), which amends the Original Plan, as amended by Amendment No. 1, with Computershare Trust Company, N.A., as rights agent. Amendment No. 2 revises the Plan to (i) include an exception to the definition of "Acquiring Person" in the Plan providing that no person will become an Acquiring Person as a result of an agreement pursuant to which such person has the right to acquire, vote or dispose of, or otherwise beneficially own, shares of the Company's common stock, if such agreement is executed by the Company and approved by the Board for purposes of such exception before such person would otherwise become an Acquiring Person and (ii) provide that, upon the closing of any merger, acquisition or other transaction of the type described in the Plan, the Plan and the Rights (as defined in the Plan) will terminate only if the Board approves such termination, and absent such approval, the Plan will continue in full force and effect following the closing of such transaction.

Material Trends and Developments

There are no material changes to our material trends and developments disclosures included in our 2025 Annual Report during the three and nine months ended September 30, 2026.

Contractual Obligations and Commitments

Purchase Obligations

Framework Agreement

On August 6, 2025, we entered into a Framework Agreement (the "Framework Agreement") with Patheon Austria GmbH & Co KG ("Patheon") and Thermo Fisher Scientific Inc. (solely for purposes as specified therein). Under the Framework Agreement, Patheon will manufacture and supply specific quantities of certain products, continue to perform certain ongoing stability studies related to such products and provide warehousing services, subject to the terms of a manufacturing and supply agreement previously entered into by us and Patheon, as amended by the amendments set forth in the Framework Agreement. We are required to purchase certain quantities of such products through December 31, 2026, but our monthly payment for such products may be reduced for unreleased products or non-conforming products if the products are not released by specified release dates. On November 13, 2025, we entered into Amendment No. 1 to Framework Agreement, pursuant to which certain payment terms were amended. On July 20, 2026, we entered into Amendment No. 2 to Framework Agreement (the "Amendment No. 2 to Framework Agreement"), pursuant to which certain scheduled payments were deferred. The Framework Agreement was effective on August 6, 2025 and will be in effect through and terminate automatically on December 31, 2026, other than with respect to any ongoing project addendums for stability studies entered into prior to December 31, 2026 and the payment of the scheduled payments deferred pursuant to Amendment No. 2 to Framework Agreement.

Lease Obligations

We have entered into two operating leases for laboratory and office space. Our laboratory and office space in San Diego, California, a portion of which had been subleased to a third party, had a lease term that expired on December 31, 2025. The lease for office space in Cary, North Carolina has commenced on May 1, 2026 and expires 111 months from the lease commencement date, with the option to extend for one additional period of 84 months upon written notice.

Licensing Commitments

On September 23, 2026, we entered into a multi-product License Agreement with Long Grove, and Capstone Development Services Company, LLC, a Delaware limited liability company ("Capstone"), which provided for, among other things, the grant by Long Grove to us of an exclusive (as to the licensed patents), sublicensable license to import, distribute, sell and market certain products in the United States, including its territories, commonwealths and possessions (the "Territory"), and a non-exclusive license to manufacture such products worldwide for sale in the Territory and certain obligations to collaborate on developing and commercializing such products. Capstone is a party to the License Agreement solely to provide certain exclusivity covenants and backstop obligations. Under the License Agreement, the Company shall pay to Long Grove certain regulatory milestone payments, sales-based milestone payments, and royalty payments and be reimbursed for certain expenses. The License Agreement has an initial term of ten (10) years following the first commercial sale of any product, with automatic two (2)-year renewal terms, and may be terminated by either party upon the occurrence of certain conditions customary for agreements of this type.

Other Obligations and Contingencies

We are, from time to time, subject to a variety of litigation and other proceedings incidental to our business, including lawsuits involving claims relating to intellectual property matters, employment matters, commercial disputes, as well as regulatory investigations or enforcement. We may also become subject to lawsuits as a result of past or future acquisitions, or as a result of liabilities retained from, or representations, warranties or indemnities provided in connection with divested businesses. Some of these lawsuits may include claims for punitive and consequential as well as compensatory damages. The outcomes of the Company's legal proceedings and other contingencies are inherently unpredictable and subject to significant uncertainties. We have not reserved any amounts for contingencies related to such litigation because they are neither probable nor reasonably estimable based on information currently available. See "Part II. Item 1. Legal Proceedings" in this Quarterly Report on Form 10-Q for further discussion of pending legal proceedings. There can be no assurance that there will not be a change in the scope of one or more of these matters or that any other future legal matters will or will not be material to our financial position, results of operations or cash flows for a particular period.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related to revenue recognition, investments, inventory and the related reserves, accrued clinical and manufacturing liabilities, income taxes, stock-based compensation and accounting for debt and equity transactions. We base our estimates on historical experience and on assumptions that we believe to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Our critical accounting estimates include: revenue recognition, investments, inventory and the related reserves, accrued clinical and manufacturing liabilities, income taxes, stock-based compensation and accounting for debt and equity transactions. There are no material changes to our critical accounting estimates disclosures included in our 2025 Annual Report during the three and nine months ended September 30, 2026.

Recent Accounting Pronouncements

See Note 3 - Accounting Policies - Recent Accounting Pronouncements to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Results of Operations for the Three and Nine Months Ended September 30, 2026 and 2025

The following table summarizes the results of our operations for the three and nine months ended September 30, 2026 and 2025 (in thousands):

Net Product Sales

Total acute care net product sales increased by $2.8 million or 22.5% during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily attributable to an increase in units sold, as a result of an increase in market share and new customers for both ZYNRELEF and APONVIE.

Total acute care net product sales increased by $10.8 million or 32.4% during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily attributable to an increase in units sold, as a result of an increase in market share and new customers for both ZYNRELEF and APONVIE.

Total oncology net product sales decreased by $5.7 million or 22.2% during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The decrease was primarily attributable to a decrease in units sold as a result of continued competitive pressure.

Total oncology net product sales decreased by $17.5 million or 21.6% during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The decrease was primarily attributable to a decrease in units sold as a result of continued competitive pressure.

Cost of Product Sales and Gross Profit

Cost of product sales decreased by $3.0 million or 24.8% during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025 and as a percentage of sales decreased 5.8% during the same period.

Cost of product sales increased by $0.9 million or 3.1% during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025 and as a percentage of sales increased 2.6% during the same period.

Gross profit for the three months ended September 30, 2026 was 74.6%, compared to 68.8% during the three months ended September 30, 2025.

Gross profit for the nine months ended September 30, 2026 was 71.0%, compared to 73.6% during the nine months ended September 30, 2025.

The decrease in cost of product sales for the three months ended September 30, 2026, as compared to the same period in 2025, is primarily attributable to a reduction in inventory reserves recorded in the three months ended September 30, 2026 as compared to the same period in 2025 of $1.7 million and a reduction in the units sold during the three months ended September 30, 2026 as compared to the same period in 2025 of $1.1 million.

The increase in cost of product sales for the nine months ended September 30, 2026, as compared to the same period in 2025, is primarily attributable to an increase in units sold during the nine months ended September 30, 2026 as compared to the same period in 2025 of $2.0 million, offset by a reduction in inventory reserves recorded in the nine months ended September 30, 2026 as compared to the same period in 2025 of $1.0 million.

Research and Development Expense

Research and development expense consisted of the following (in thousands):

Research and development expense decreased by $0.4 million or 10.7% during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The decrease was primarily attributable to a $0.4 million decrease in personnel and related expenses due to lower headcount and a decrease in expense with external vendors of $0.5 million due to timing. These decreases were offset by the expense for the first regulatory milestone with Long Grove of $0.5 million.

Research and development expense decreased by $0.5 million or 5.7% during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The decrease was primarily attributable to a $0.7 million decrease in personnel and related expenses due to lower headcount and a decrease in expense with external vendors of $0.2 million due to timing. These decreases were offset by the expense for the first regulatory milestone with Long Grove of $0.5 million.

General and Administrative Expense

General and administrative expense decreased by $1.6 million or 11.7% during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The decrease was primarily attributable to a $0.9 million decrease in rent expense due to the closure of our San Diego, California office in December 2025 and a $0.7 million decrease in legal spend due to timing of litigation.

General and administrative expense decreased by $5.4 million or 13.1% during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The decrease was primarily attributable to a $4.2 million decrease in legal spend due to timing of litigation, a $2.7 million decrease in rent expense due to the closure of our San Diego, California office in December 2025 and a $0.2 million decrease in expense with external vendors due to timing. These decreases were offset by a $1.8 million increase in personnel and related expenses due to an increase in headcount.

Sales and Marketing Expense

Sales and marketing expense decreased by $0.4 million or 3.3% during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The decrease was primarily attributable to a $1.4 million decrease in expense with external vendors, due to timing. This decrease was offset by a $0.4 million increase in marketing spend related to ZYNRELEF and a $0.5 million increase in personnel and related cost due to an increase in headcount.

Sales and marketing expense increased by $4.2 million or 11.3% during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was primarily attributable to a $3.6 million increase in personnel and related expenses due to an increase in headcount and a $1.7 million increase in marketing spend related to ZYNRELEF. These increases were offset by a $1.1 million decrease in expense with external vendors due to timing.

Other Expense, Net

For the three months ended September 30, 2026, other expense, net was $3.3 million, compared to $13.4 million, for the three months ended September 30, 2025. The decrease was primarily attributable to the loss on debt extinguishment recognized during the three months ended September 30, 2025 of $11.3 million, offset by an increase in interest expense of $0.9 million, a decrease in sublease income of $0.3 million related to the San Diego, California lease that ended on December 31, 2025, and a decrease in interest income of $0.2 million.

For the nine months ended September 30, 2026, other expense, net was $10.1 million, compared to $14.7 million, for the nine months ended September 30, 2025. The decrease was primarily attributable to the loss on debt extinguishment recognized during the three months ended September 30, 2025 of $11.3 million, offset by an increase in interest expense of $5.5 million, a decrease in sublease income of $0.9 million related to the San Diego, California lease that ended on December 31, 2025, and a decrease in interest income of $0.4 million.

Liquidity and Capital Resources

Sources of Liquidity

As of September 30, 2026, we had cash, cash equivalents and short-term investments of $23.4 million. Our net loss for the three months ended September 30, 2026 was $5.0 million, or loss per share of $0.03, compared to net loss of $17.5 million, or loss per share of $0.10, for the same period in 2025. Our net loss for the nine months ended September 30, 2026 was $18.6 million, or loss per share of $0.10, compared to net loss of $17.2 million, or $0.11 loss per share, for the same period in 2025. We have incurred significant operating losses and negative cash flows from operations and had an accumulated deficit of $2.0 billion as of September 30, 2026. From our inception through September 30, 2026, we have financed our operations, including technology and product research and development, primarily through the issuance of common stock, convertible notes and warrants, product sales and debt financings.

Based on our current operating plan and projections, management believes that our cash, cash equivalents and short-term investments will be sufficient to meet our anticipated cash requirements for operations for at least one year from the date of issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. However, our Working Capital Facility Agreement contains a minimum cash covenant, a minimum revenue covenant and a minimum EBITDA covenant. Based on our results of operations for the nine months ended September 30, 2026 and without additional funding from the closing of the Asset Sale or otherwise, there is a possibility we may not satisfy one or more covenants under our Working Capital Facility Agreement within the next twelve months, absent a waiver, consent or amendment under our Working Capital Facility Agreement. If an event of default occurs under the Working Capital Facility Agreement due to the failure to satisfy certain covenants, our lenders could declare

all outstanding principal, together with accrued and unpaid interest and end of term fee, to be immediately due and payable. If the payment of the debt is accelerated, absent any additional funding, cash flows from our operations will be insufficient to repay such debt in full. Therefore, if all outstanding amounts under the Working Capital Facility Agreement are accelerated, management expects there will be substantial doubt about our ability to continue as a going concern for a period of at least one year from the date of issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. If an event of default occurs under the note purchase agreement in connection with the 2031 Convertible Notes (the "2031 Convertible Notes Purchase Agreement") due to the acceleration of all outstanding amounts under the Working Capital Facility Agreement, the required purchasers under the 2031 Convertible Notes Purchase Agreement could also declare the acceleration of all outstanding amounts under the 2031 Convertible Notes, subject to applicable notice requirements and cure periods.

Pursuant to the Asset Purchase Agreement, a portion of the cash consideration in the Asset Sale will be used to repay all amounts outstanding under the Working Capital Facility Agreement. A portion of the stock consideration in the Asset Sale will be used to exchange all or a portion of the outstanding 2031 Convertible Notes as described in Note 8 - Long-Term Debt and Convertible Notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. The completion of the Asset Sale is subject to approval by the Company's stockholders and the satisfaction of other customary closing conditions, and there can be no assurance that the Company will be successful in obtaining stockholder approval or closing the Asset Sale on the anticipated timeline, on the terms currently contemplated, or at all.

Cash Flows

The net change in cash and cash equivalents consisted of the following:

Our net cash used in operating activities for the nine months ended September 30, 2026 and 2025 was $4.5 million and $18.4 million, respectively. The decrease in net cash used in operating activities of $13.9 million or 75.3%, was primarily attributable to the loss on debt extinguishment recognized during the nine months ended September 30, 2025 and variability in payments for operating assets and liabilities including, inventory, prepaid expenses and other assets, accounts payable and accrued clinical and manufacturing liabilities.

Our net cash provided by investing activities for the nine months ended September 30, 2026 was $5.9 million compared to net cash provided by investing activities for the nine months ended September 30, 2025, which was $21.5 million. The change in net cash used in investing activities of $15.6 million, was primarily attributable to net maturities of short-term investments of $6.5 million for the nine months ended September 30, 2026 compared to net maturities of short-term investments of $21.7 million for the nine months ended September 30, 2025.

Our net cash used in financing activities for the nine months ended September 30, 2026 was $18.4 million, compared to net cash provided by financing activities for the nine months ended September 30, 2025, which was $14.2 million. The change in net cash used in financing activities was primarily attributable to net cash provided by the financing transactions during the nine months ended September 30, 2025, compared to net cash used in financing transactions during the nine months ended September 30, 2026 of $18.4 million for principal payments for the Working Capital Facility Agreement.

Material Cash Requirements

There are no material changes to our material cash requirements disclosures included in our 2025 Annual Report during the three and nine months ended September 30, 2026.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.