Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q ("Quarterly Report"). This discussion and other parts of this Quarterly Report contain forward-looking statements that involve risk, assumptions and uncertainties, such as statements of our plans, objectives, expectations, intentions, forecasts and projections. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors, including those set forth under Part II, Item 1A, "Risk Factors," of this Quarterly Report and elsewhere in this Quarterly Report. You should carefully read Part II, Item 1A, "Risk Factors," of this Quarterly Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled "Special Note Regarding Forward-Looking Statements" below.

Special Note Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements about us and our industry within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended (the Securities Act), which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, product candidates, planned preclinical studies and clinical trials, results of preclinical studies and clinical trials, research and development plans and costs, plans for manufacturing, regulatory approvals, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "might," "should," "would," "expects," "plans," "anticipates," "could," "intends," "target," "outlook," "projects," "forecast," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

We caution you that the forward-looking statements highlighted above do not encompass all of the forward-looking statements made in this Quarterly Report.

We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations or growth prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in Part II, Item 1A,"Risk Factors," of this Quarterly Report and this Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Quarterly Report and elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and challenging environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. You should, however, review the factors and risks we describe in the reports we will file from time to time with the Securities and Exchange Commission (SEC) after the date of this Quarterly Report.

In addition, statements that "we believe" and similarly qualified statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to rely unduly upon them.

The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or

circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, other strategic transactions or investments we may make or enter into.

Throughout this Quarterly Report, unless the context otherwise requires, the terms "Aardvark," "we," "us" and "our" in this Quarterly Report refer to Aardvark Therapeutics, Inc. and its subsidiary.

Overview

We are a clinical-stage biopharmaceutical company focused on developing novel, small-molecule therapeutics to activate innate homeostatic pathways for the treatment of metabolic diseases. We target biological pathways associated with alleviating hunger that we believe have the potential to deliver transformative outcomes for patients. We have focused our efforts on developing selective compounds, targeting Bitter Taste Receptors (TAS2Rs) for hunger-associated conditions. Our initial compounds target TAS2Rs expressed in the gut lumen, which normally respond to the nutrients in food and participate in the gut-brain axis. Our research has shown that activating these receptors can induce secretion of endogenous signaling molecules, including cholecystokinin (CCK) and glucagon-like peptide-1 (GLP-1).

Our wholly-owned lead product candidate, ARD-101, is an oral gut-restricted small-molecule agonist of certain TAS2Rs expressed in the gut lumen for which we have initiated a Phase 3 clinical trial for hyperphagia associated with Prader-Willi Syndrome (PWS), which is referenced as the HERO (Hunger Elimination or Reduction Objective) trial. In our completed Phase 2 clinical trial in subjects with hyperphagia associated with PWS, ARD-101 was shown to be well-tolerated and demonstrated clinical activity through a reduction in Hyperphagia Questionnaire for Clinical Trials (HQ-CT) score. We have aligned with the FDA on a protocol for a potentially pivotal Phase 3 clinical trial, which we initiated in December 2024. In preparation for these trials, we have expanded our clinical management and regulatory capabilities, including hiring clinical, regulatory and quality personnel, and we expect to continue to need to expand our clinical management and regulatory capabilities and to rely on third parties to conduct our pivotal clinical trials. Enrollment for this trial initiated in the second quarter of 2025. In August 2025, we submitted a protocol amendment to remove the use of anti-psychotics and insulin-requiring type 2 diabetes as exclusion criteria for the clinical trial. In October 2025, we reached alignment with the FDA on a protocol amendment to change the minimum age of eligibility to participate in the trial from 13 to 10 years of age. This change broadens the eligible population for the clinical trial and expands the potential target market within the PWS market. We anticipate that topline data for the HERO clinical trial will be available in the third quarter of 2026. An Independent Advisory Review Committee will conduct an interim analysis to assess whether an increase in sample size is warranted. In addition, during the third quarter of 2025, we commenced enrollment for the HERO Open Label Extension (OLE) trial and we initiated our first clinical sites in Australia. The OLE trial is available to patients completing the HERO clinical trial.

We have delayed indefinitely our plans to evaluate ARD-101 in a Phase 2 clinical trial for hyperphagia associated with hypothalamic obesity (HO), which was referenced as the HONOR (Hypothalamic Obesity Neutralized On TAS2R) trial. This will allow us to direct more resources to focus on the application of ARD-201.

ARD-201 is planned to be a fixed-dose combination of the active ingredient in ARD-101 and a dipeptidyl peptidase-4 (DPP-4) inhibitor. Currently, both drugs are administered separately, but for ease of nomenclature, the combination treatment is referred to as ARD-201 throughout this document as it represents the intended final formulation. We previously planned to initiate a Phase 2 clinical trial referenced as the EMPOWER (Exploratory Multi-arm Prevention of WEight Regain) trial to explore the magnitude of ARD-201's effect on a variety of parameters related to obesity and obesity-related conditions. Driven by new preclinical data, we now intend to substitute the EMPOWER trial with two separate trials to explore specific potential applications of ARD-201. The first of these trials is expected to be a Phase 2 clinical trial and is referenced as POWER (Prevention Of WEight Regain), which will primarily focus on the potential effect of ARD-201 (a co-administered combination of ARD-101 and a dipeptidyl peptidase-4 (DPP-4) inhibitor) on the prevention of the commonly observed weight regain of subjects that discontinue use of GLP-1 receptor agonist (GLP-1RA) treatment after having previously achieved substantial weight loss (approximately 15%) while on GLP-1RA treatment. We estimate treatment duration to be 24 weeks, with a 12-week interim analysis. Secondary endpoints will include body composition with a focus on lean body mass preservation or recovery as well as many additional exploratory endpoints. We expect to initiate the POWER trial within a similar time period as previously envisioned for the EMPOWER trial, which is in the second half of 2025 with anticipated preliminary or interim data available in the second half of 2026. We believe that the design of the POWER trial will allow for more focused data generation to elucidate the potential of ARD-201 for preventing weight regain after GLP-1RA discontinuation.

The additional trial focusing on ARD-201 will be the STRENGTH (Sitagliptin and TAS2R for weight Reduction with Exercise, Nutrition, and GLP-1RA Trial and Hunger assessment) trial. This trial, which we expect will be a Phase 2 clinical trial, will explore the remaining key questions that were intended with the previously communicated EMPOWER trial that are not already being addressed with the POWER trial. Specifically, STRENGTH trial endpoints will include placebo adjusted weight loss and the potential

additive effect of ARD-201 given in combination with GLP-1RA therapy. Secondary endpoints will include evaluating differences in absolute weight loss as well as relative quality of weight loss in terms of proportionality of lean muscle versus fat loss with each arm. We believe that the POWER and STRENGTH trials will enhance the probability of detecting potential clinical benefit with better clarity and precision than the trial design for the previously contemplated EMPOWER trial. We plan to initiate the STRENGTH trial in the first half of 2026.

Below is a summary of our portfolio of novel and proprietary small molecule programs that we believe can induce satiety in patients with hunger-associated indications.

Our Hunger Associated TAS2R Pipeline

Recently obtained preclinical data demonstrate the synergy between ARD-101 and a DPP-4 inhibitor when used in combination (ARD-201). In a conventional high-fat diet (HFD) mouse model of diet-induced obesity (DIO mice), ARD-201 induced significant weight loss amounting to -18.8% ± 2.1% at 30 days of treatment, even while the mice remained on HFD (see figure below).

(A) Body weight changes in DIO mice treated with ARD-201, sitagliptin diet, or vehicle. Body weight trajectories following once-daily oral administration of vehicle (water + saline), 6 g/kg sitagliptin chow diet or ARD-201 (75 mg/kg ARD-101 and sitagliptin chow diet). Data are presented as means (dot symbols) ± standard error of the mean (SEM) (bars) for each treatment group.

(B)Percent change in body weight in (Day 30 relative to Day 0). Data are presented as means (bars) and SEM (error bars), with individual values overlaid (dots). Mice were maintained on high-fat diet throughout the study. N = 9 for vehicle and ARD-201 groups. N = 7 for sitagliptin diet group.

In the same preclinical study, glucose homeostasis, as indicated by glucose curves and the area under the curve (AUC) from an Intraperitoneal Glucose Tolerance Test (IPGTT), was improved on Day 14 in the ARD-201 group compared to the negative (vehicle) control.

(A) Glucose curves from mice treated with ARD-201, sitagliptin diet, or vehicle from IPGTT at Day 14. Glucose curves over a 90-minute interval of vehicle (water + saline), 6 g/kg sitagliptin chow diet, or ARD-201 (75 mg/kg ARD-101 and sitagliptin chow diet). Data are presented as means (dot symbols) ± SEM (bars) for each treatment group. N = 9 for vehicle and ARD-201 groups. N = 7 for sitagliptin diet group. N = 10 for baseline group.

(B)AUC from IPGTT at Day 14. Data are presented as means (bars) and SEM (error bars), with individual values overlaid (dots). Mice were maintained on high-fat diet throughout the study. N = 9 for vehicle and ARD-201 groups. N = 7 for sitagliptin diet group. *** P < 0.001 for AUC0-90minvs. the vehicle group.

Additional data suggest that ARD-201 may curtail weight regain experienced after discontinuation of GLP-1RA agents. In DIO mice that were transiently treated with tirzepatide (used as a representative of the GLP-1RA class of agents), ARD-201 as a monotherapy showed improved weight maintenance compared to the negative (vehicle) control and demonstrated similar weight maintenance compared to continued treatment with high-dose tirzepatide (see figure below). Moreover, the combination of ARD-201 and the low dose of tirzepatide that was modestly effective on its own showed continued weight loss compared to high-dose tirzepatide. Details of the study have been submitted for peer review publication.

(A) Body weight trajectories over two parts. In Part 1, mice were given a high dose of tirzepatide (10 nmol/kg body weight) once daily for two weeks. In Part 2, mice were dosed once daily with either vehicle (water + saline), low-dose tirzepatide (1 nmol/kg body weight), high-dose tirzepatide (10 nmol/kg body weight), ARD-201 (ARD-101, 75 mg/kg body weight and sitagliptin chow, 6 g/kg diet), or ARD-201-tirzepatide combo for two and a half weeks. Data are presented as means (dot symbols) ± SEM (error bars) for each treatment group. N = 40 in Part 1; N = 8 per group in Part 2, randomized from Part 1 according to body weight.

(B) Percent change in body weight in Part 2 (Day 15 to end of study). Mice were maintained on high-fat diet throughout the study. Data are presented as means (bars) and SEM (error bars), with individual values overlaid (dots). Weight maintenance with ARD-201 and the high-dose tirzepatide group was comparable (no statistical difference detected), but weight loss preservation with the ARD-201-tirzepatide combo was substantially greater than with 10 nmol/kg tirzepatide alone (** P < 0.01).

In the same preclinical study on Day 37, data suggest that ARD-201, as monotherapy and in combo, showed significant improvement in glucose tolerance compared to the negative (vehicle) control. The combination of ARD-201 and low-dose tirzepatide achieved the most rapid glucose clearance.

(A) Glucose curves from mice treated once daily with either vehicle (water + saline), low-dose tirzepatide (1 nmol/kg body weight), high-dose tirzepatide (10 nmol/kg body weight), ARD-201 (ARD-101, 75 mg/kg body weight and sitagliptin chow, 6 g/kg diet), or ARD-201-tirzepatide combo, over a 90-minute period. Data are presented as means (dot symbols) ± SEM (bars) for each treatment group.

(B)AUC from IPGTT. Data are presented as means (bars) and SEM (error bars), with individual values overlaid (dots). N = 8 per group. *** P< 0.001 for AUC0-90minvs. the vehicle group.

At termination of the preclinical study, high-dose tirzepatide, ARD-201 monotherapy, and ARD-201 combined with low-dose tirzepatide showed significant reductions in fat mass via DEXA scan compared to vehicle. High-dose tirzepatide and the ARD-201 combo reduced lean body mass compared with vehicle, whereas ARD-201 alone showed no significant reduction in lean mass.

(A) Fat and lean body mass measured at termination, in grams. DEXA values of vehicle (water + saline), low-dose tirzepatide (1 nmol/kg body weight), high-dose tirzepatide (10 nmol/kg body weight), ARD-201 (ARD-101, 75 mg/kg body weight and sitagliptin chow, 6 g/kg diet), or ARD-201-tirzepatide combo. Data are presented as means (bars) and SEM (error bars), with individual values overlaid (dots). N = 8 per group. * P< 0.05, ** P < 0.01, and *** P < 0.001 vs the vehicle group.

Beyond our lead product candidate, ARD-101, and our ARD-201 program, we are also developing other programs for the potential treatment of indications with high unmet need, including other indications that may be treated by activating TAS2R signaling.

Since we commenced operations in 2017, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, discovering and developing ARD-101 and developing ARD-201, establishing and maintaining our intellectual property portfolio, conducting research, preclinical studies, and clinical trials, manufacturing of ARD-101 and related raw materials, and providing general and administrative support for these operations.

We have incurred significant net losses and negative cash flows from operations since our inception and, as of September 30, 2025, we had an accumulated deficit of $98.3 million. Our net losses for the three and nine months ended September 30, 2025 were $16.3 million and $40.0 million, respectively, and $4.2 million and $11.8 million for the three and nine months ended September 30, 2024, respectively. We expect our expenses and operating losses will increase substantially for the foreseeable future as we:

If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of and level of expense related to our clinical trials and preclinical studies and our other research and development activities and capital expenditures and the timing and amount of any milestone or royalty payments due under our existing or future license or collaboration agreements.

From inception and up to the date of our IPO in February 2025, we had raised a total of $129.1 million in gross proceeds to fund our operations from the sale and issuance of shares of our convertible preferred stock. In February 2025, we completed our IPO with the sale of 6,120,661 shares of common stock, which included the partial exercise by the underwriters of their option to purchase 232,661 additional shares, at an IPO price of $16.00 per share and received net proceeds of approximately $87.5 million. As of September 30, 2025, we had cash, cash equivalents and short-term investments of $126.4 million. Based upon our current operating plans, we believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our projected operations into 2027. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

We do not have any products approved for sale and have not generated any revenue to date. We do not expect to generate any revenue from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and may never occur. We will need substantial additional funding in addition to the net proceeds of our IPO to support our continuing operations and pursue our long-term business plan, including to complete the development and commercialization of ARD-101 and our other product candidates, if approved. Accordingly, until such time as we can generate significant revenue from sales of ARD-101 or our other product candidates, if ever, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar

arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce, or terminate our research and development programs or other operations, or grant rights to develop and market our product candidates that we would otherwise prefer to develop and market ourselves.

We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We rely, and expect to continue to rely, on third parties for the manufacture of our ARD-101 and our other product candidates for preclinical and clinical testing, as well as for commercial manufacture if ARD-101 or any of our other product candidates obtain marketing approval. We are working with our current manufacturers to ensure that we will be able to scale up our manufacturing capabilities to support our clinical plans. In addition, we rely on third parties to package, label, store, and distribute ARD-101, and we intend to rely on third parties for our commercial products if marketing approval is obtained. We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment, and personnel while also enabling us to focus our expertise and resources on the discovery and development of ARD-101 and our other product candidates.

Given our stage of development, we do not yet have a marketing or sales organization or commercial infrastructure; however, we intend to build the necessary sales, marketing and commercialization capabilities and infrastructure over time as our product candidates advance through clinical development. We expect to spend a significant amount in commercial development and marketing costs prior to obtaining regulatory and marketing approval of one or more of our product candidates.

Macroeconomic Trends

We may be affected by unfavorable economic conditions and challenges in the United States and abroad, such as the effects of the ongoing geopolitical conflicts in Ukraine, ongoing conflicts in the Middle East, tensions in U.S.-China relations, changes in tariff rates and the implementation of any trade barriers, disruptions in the banking industry and inflationary trends. The fiscal years 2024 and 2023 were marked by significant market uncertainty and increasing inflationary pressures. These market dynamics have continued into 2025, and these and similar adverse market conditions may negatively impact our business, financial position, results of operations and growth prospects. For further discussion of the potential impacts of macroeconomic events on us, refer to Part II, Item 1A, "Risk Factors," of this Quarterly Report.

Components of Our Results of Operations

Revenue

To date, we have not generated any revenue from the sale of products. We do not expect to generate any such revenue unless and until such time as ARD-101, ARD-201 and our other product candidates have advanced through clinical development and regulatory approval, if ever. If we fail to complete preclinical and clinical development of any product candidates or obtain regulatory approval for them, our ability to generate future revenues, and our results of operations and financial position would be adversely affected.

Operating Expenses

Our operating expenses consist of (i) research and development expenses, (ii) general and administrative expenses and (iii) credit losses recorded on related party convertible promissory note and accounts receivable.

Research and Development

Our research and development (R&D) expenses consist primarily of external and internal costs incurred in performing preclinical and clinical development activities. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

Our research and development expenses consist principally of:

We do not track our research and development expenses on a program-specific basis or allocate our internal costs associated with our discovery and development efforts because these costs are deployed across multiple programs and, as such, are not separately classified. Since our inception and through September 30, 2025, substantially all of our external costs have been related to the research and development of ARD-101.

Although R&D activities are central to our business model, the successful development of ARD-101 and our other product candidates is highly uncertain. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of ARD-101, ARD-201, or any future product candidates due to the inherently unpredictable nature of preclinical and clinical development. There are numerous factors associated with the successful development of a product candidate, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our clinical development programs. Product candidates in later stages of development generally have higher development costs than those in earlier stages of development. As a result, we expect that our R&D expenses will increase substantially for the foreseeable future as we continue to conduct our ongoing R&D activities, advance preclinical research programs toward clinical development, conduct clinical trials, hire additional personnel, and maintain, expand, protect, and enforce our intellectual property portfolio.

At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates. Our future R&D expenses may vary significantly based on a wide variety of factors such as:

A change in the outcome of any of these variables with respect to development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate.

The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for ARD-101 or any future product candidates may be affected by a variety of factors.

We may never succeed in achieving regulatory approval for any of our product candidates. Preclinical and clinical development timelines, the probability of success, and total development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments, and our ongoing assessments as to each product candidates' commercial potential. We will need to raise substantial additional capital in the future. In addition, we cannot forecast which product candidate may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

General and Administrative

Our general and administrative (G&A) expenses consist primarily of personnel-related costs such as salaries, bonuses, payroll taxes, employee benefits, travel, and stock-based compensation expense for employees involved in executive, accounting and finance, legal, and other administrative functions. Other significant costs include allocated facility-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services, insurance costs, and business development expenses.

We expect that our G&A expenses will increase substantially for the foreseeable future as we continue to increase our general and administrative headcount to support our continued R&D activities and, if ARD-101 or our other product candidates receive marketing approval, commercialization activities, as well as to support our operations generally. We also expect to incur increased expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs associated with operating as a public company.

Credit Loss - Accounts Receivable and Related Party Convertible Promissory Note

In connection with a Transition Services Agreement (the Transition Services Agreement) entered into with Aardwolf Therapeutics, Inc. (Aardwolf), which was effective through May 31, 2024, we performed certain services and billed Aardwolf monthly. As Aardwolf currently does not have the ability to repay the related party receivables, these amounts are deemed uncollectible and have been written off until such time as Aardwolf has the ability to repay. In addition, in August 2022, we loaned Aardwolf $1.0 million in the form of a convertible promissory note, which, based on its current inability to repay, we also have written off as uncollectible. We will reassess the estimated recovery on previous written off balances at each reporting period.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest income earned on our invested cash and cash equivalents, dividend income and changes in the fair value of equity securities held as investments.

Results of Operations

Comparison of the Three Months ended September 30, 2025 and 2024

The following table summarizes our results of operations for each of the periods indicated:

Research and Development Expenses

The following table summarizes our R&D expenses for each of the periods indicated:

R&D expenses were $13.7 million and $4.1 million for the three months ended September 30, 2025 and 2024, respectively. The $9.7 million increase for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 resulted primarily from an increase of $7.8 million for external expenses incurred for clinical studies and chemistry, manufacturing and controls (CMC) primarily related to the development of ARD-101 and a $1.8 million increase in personnel-related costs due to increased headcount.

General and Administrative (G&A) Expenses

G&A expenses were $4.0 million and $1.0 million for the three months ended September 30, 2025 and 2024, respectively. The $2.9 million increase for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 primarily resulted from a $1.7 million increase in personnel-related costs due to increased headcount, a $0.8 million increase in facilities and other costs and a $0.4 million increase in legal and other professional costs. The increase in non-facilities costs were partially related to commencing operations as a public company in February 2025.

Other Income, Net

Other income, net was $1.4 million and $0.9 million for the three months ended September 30, 2025 and 2024, respectively. The $0.5 million increase for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 resulted primarily from higher interest income generated by our higher invested cash balances.

Comparison of the Nine Months ended September 30, 2025 and 2024

The following table summarizes our results of operations for each of the periods indicated:

Research and Development Expenses

The following table summarizes our R&D expenses for each of the periods indicated:

R&D expenses were $34.6 million and $9.3 million for the nine months ended September 30, 2025 and 2024, respectively. The $25.3 million increase for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 resulted primarily from an increase of $19.9 million for external expenses incurred for clinical studies and CMC primarily related to the development of ARD-101 and a $5.0 million increase in personnel-related costs due to increased headcount.

General and Administrative (G&A) Expenses

G&A expenses were $9.4 million and $3.9 million for the nine months ended September 30, 2025 and 2024, respectively. The $5.5 million increase for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 primarily resulted from a $2.7 million increase in personnel-related costs, a $1.9 million increase in facilities and other costs and a $0.9 million increase in legal and other professional costs. The increase in non-facilities costs were partially related to commencing operations as a public company in February 2025.

Credit Loss - Related Party Accounts Receivable

Amounts written off as uncollectible related to the Transition Services Agreement with Aardwolf were zero and $0.1 million for the nine months ended September 30, 2025 and 2024, respectively. The $0.1 million decrease for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 was due to the expiration of the Transition Services Agreement in May 2024.

Other Income, Net

Other income, net was $4.0 million and $1.5 million for the nine months ended September 30, 2025 and 2024, respectively. The $2.5 million increase for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 resulted primarily from higher interest income generated by our higher invested cash balances.

Liquidity and Capital Resources

Sources of Liquidity

We have not generated any revenue from product sales and have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. From inception and up to the date of our IPO in February 2025, we had raised a total of $129.1 million in gross proceeds to fund our operations from the sale and issuance of shares of our convertible preferred stock. In February 2025, we completed our IPO with the sale of 6,120,661 shares of common stock, which included the partial exercise by the underwriters of their option to purchase 232,661 additional shares, at an IPO price of $16.00 per share and received net proceeds of $87.5 million.

Future Funding Requirements

As of September 30, 2025, we had cash, cash equivalents and short-term investments of $126.4 million. Based upon our current operating plans, we believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our projected operations into 2027. However, our forecast of the period of time through which our financial resources will be adequate to support

our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies, manufacturing and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

We have incurred significant operating losses since our inception and, as of September 30, 2025, we had an accumulated deficit of $98.3 million. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase substantially for the reasons described above.

Our future capital requirements are difficult to predict and depend on many factors, including but not limited to:

We have no other committed sources of capital. Until we can generate a sufficient amount of product revenue to finance our cash requirements, if ever, we expect to finance our future cash needs primarily through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through other collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to our future revenue streams, product candidates, research programs, intellectual property or proprietary technology, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce, or terminate our R&D programs or other operations, or grant rights to develop and market our product candidates to third parties that we would otherwise prefer to develop and market ourselves, or on less favorable terms than we would otherwise choose.

Cash Flows

The following table summarizes our cash flows for each of the periods indicated:

Operating Activities

Net cash used in operating activities was $37.4 million and $10.4 million for the nine months ended September 30, 2025 and 2024, respectively. The net cash used in operating activities during the nine months ended September 30, 2025 was primarily due to our reported net loss of $40.0 million, net of non-cash items (including amortization of discount on short-term investments, unrealized gains on short-term investments, stock-based compensation expense, and non-cash lease expense) totaling $1.6 million and a $1.0 million net change of our net operating assets. Net cash used in operating activities during the nine months ended September 30, 2024 was primarily due to our reported net loss of $11.8 million, net of non-cash charges (including unrealized losses on short-term investments, credit losses, stock-based compensation expense, and non-cash lease expense) totaling $0.7 million and a $0.8 million net decrease of our net operating assets. The increase in cash used in operations during the nine months ended September 30, 2025 in comparison to the nine months ended September 30, 2024 was primarily attributable to increased research and development activities.

Investing Activities

Net cash used in investing activities was $74.0 million during the nine months ended September 30, 2025 primarily as a result of the purchase of short-term investments during the period, offset by maturities of short-term investments during the period and purchases of equipment. Net cash used in investing activities was $0.1 million during the nine months ended September 30, 2024 as a result of the purchase of property and equipment during the period.

Financing Activities

Net cash provided by financing activities was $89.0 million during the nine months ended September 30, 2025 primarily as a result of proceeds from the sale and issuance of shares of our common stock in our IPO in February 2025 for proceeds of $91.1 million, net of underwriting discounts, offset by payments for IPO costs of $2.4 million. Net cash provided by financing activities was $83.0 million during the nine months ended September 30, 2024 primarily as a result of the sale and issuance of shares of our Series C convertible preferred stock in May 2024 for net proceeds of $82.9 million.

Contractual Obligations and Other Commitments

There have been no material changes to our contractual obligations and other commitments from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Contractual Obligations and Other Commitments" included in our Annual Report on Form 10-K filed with the SEC on March 31, 2025.

During the normal course of our business, we enter into contracts for research and professional services and for the purchase of lab supplies used in our research activities. These contracts generally provide for termination after a notice period, and, therefore, are cancelable contracts and not separately presented.

Critical Accounting Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation expense. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies and estimates from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" included in our Annual Report on Form 10-K filed with the SEC on March 31, 2025.