Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


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

For the quarterly period ended March 31, 2025


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

For the transition period from ___________ to ______________.

Commission file number: 001-38241

OPTINOSE, INC.

(Exact name of registrant as specified in its charter)


Delaware			42-1771610
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

777 Township Line Road, Suite 300

Yardley, Pennsylvania 19067

(Address of principal executive offices, including zip code)

(267) 364-3500

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, par value $0.001 per share

OPTN

Nasdaq Global Select Market

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

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

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


Large accelerated filer ☐	Accelerated filer	☐
Non-accelerated filer ☒	Smaller reporting company	☒
	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes ☐ No ☒

The number of shares of the registrant's common stock outstanding at May 1, 2025 was 10,127,381 shares.

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	NOTE REGARDING FORWARD-LOOKING STATEMENTS	1
	PART I — FINANCIAL INFORMATION

Item 1.		4
	Consolidated Balance Sheets as of March 31 , 202 5 and December 31, 202 4	4
	Consolidated Statements of Operations for the three months ended March 31 , 202 5 and 202 4	5

	Consolidated Statements of Changes in Stockholders' Deficit for the three months ended March 31 , 202 5 and 202 4	6
	Consolidated Statements of Cash Flows for the three months ended March 31 , 202 5 and 202 4	7
	Notes to Unaudited Interim Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Qualitative and Quantitative Disclosure About Market Risk	34
Item 4.	Controls and Procedures	35
	PART II — OTHER INFORMATION	36

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36


Item 5.	Other information	36

Item 6.	Exhibits	37
	Signatures	39

_________________________

Unless the context otherwise requires, all references in this Form 10-Q to "Optinose," "Company," "we," "us," and "our" refer to OptiNose, Inc. and its subsidiaries.

_________________________

Trademark Notice

XHANCE, EDS, EXHALATION DELIVERY SYSTEM, OPTINOSE and the OptiNose logo are trademarks of ours in the United States. All other trademarks, trade names and service marks appearing in this Form 10-Q are the property of their respective owners. We do not intend our use or display of other companies' trademarks, trade names or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

_________________________

Basis of Presentation

On December 30, 2024, we filed a Certificate of Amendment to our Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of Delaware to effect a 1-for-15 reverse stock split of our issued and outstanding shares of common stock, par value $0.001 per share (the “reverse split”), which became effective on that date. All historical share and per share amounts reflected throughout this Quarterly Report on Form 10-Q have been adjusted to reflect the reverse split. However, our periodic and current reports, and all other documents that were filed prior to December 30, 2024, do not give effect to the reverse split.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among others, statements relating to:

▪the potential uses for and advantages of XHANCE®, the Exhalation Delivery System™ (also referred to as, the EDS®) and related technologies;

▪the potential benefits of the FDA approval of XHANCE for the treatment of chronic rhinosinusitis without nasal polyps;

▪our commercial plans and expectations for XHANCE including, among other things, the continued launch of XHANCE for its new indication;

▪the potential to expand promotion of XHANCE into the primary care segment and our plans to seek a partner for such expansion;

▪our belief that the current practice of postoperative intranasal steroid (INS) use could support XHANCE’s adoption as a maintenance therapy to improve outcomes following sinus surgery;

▪our expectations for our implementation of a central in-take pharmacy model (commonly referred to as, a "HUB");

▪the potential for XHANCE to be the standard of care for the treatment of chronic rhinosinusitis with and without nasal polyps;

▪the potential for direct-to-consumer (DTC) advertising to be a future driver of XHANCE prescription growth;

▪the potential benefits of our patient affordability programs (including recent changes we made to the XHANCE co-pay assistance program) and their potential effect on XHANCE demand and financial results;

▪our expectation for XHANCE prescriptions to be impacted by the seasonality observed in the INS market and the seasonal variation in patient visits with their doctor;

▪our expectation for XHANCE prescriptions and average net revenue per prescription to be adversely impacted by the annual resetting of patient healthcare insurance plan deductibles and changes in individual patients' healthcare insurance coverage, both of which often occur in January;

▪XHANCE prescription, net revenue, prescriber and other business trends;

▪the potential for payor utilization management criteria to negatively impact XHANCE prescription volumes;

▪the rate and degree of market acceptance and market opportunity of XHANCE;

▪our expectation that we will commence the required study of XHANCE in adolescent patients with chronic rhinosinusitis without nasal polyps in 2025;

▪our potential non-compliance with certain covenants of the A&R Note Purchase Agreement, the timing of such non-compliance and the consequences of failing to achieve compliance with such covenants or obtain a waiver or modification of such covenants;

▪our belief that our existing cash and cash equivalents will be sufficient to fund our operations and debt service obligations into the first quarter of 2026 if we are able to maintain compliance with or obtain a waiver or modification of the financial and other covenants under A&R Note Purchase Agreement;

▪our expectations and the accuracy of our estimates regarding our future expenses, revenue, capital requirements, potential sources of capital and consequences of failing to obtain additional capital;

▪our ability to continue as a going concern;

▪the outcome of, the time and expense to resolve, and our intention to vigorously defend against, the Merger Litigations (as defined herein) and Demand Letters (as defined herein);

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▪our expectation that, subject to obtaining stockholder approval of the Merger Agreement (as defined herein) at the Special Meeting (as defined herein) to be held on May 16, 2025, the Merger (as defined herein) will be consummated on or around May 21, 2025;

as well as other statements relating to our future operations, financial performance and financial condition, prospects, strategies, objectives or other future events. Forward-looking statements appear primarily in the sections of this Form 10-Q entitled “Item 1. Financial Statements,” and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In some cases, you can identify forward-looking statements by words such as “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” "target," “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “scheduled” and similar expressions, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based upon our current expectations and assumptions and are subject to a number of known and unknown risks, uncertainties and other factors that could cause actual results to differ materially and adversely from those expressed or implied by such statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Form 10-Q and in our annual report on Form 10-K (as amended by the Form 10-K/A) for the year ended December 31, 2024, filed with the Securities and Exchange Commission (SEC), and in particular, the risks and uncertainties discussed therein under the caption “Risk Factors”. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors 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 may make. As a result, you should not place undue reliance on forward-looking statements.

Additionally, the forward-looking statements contained in this Form 10-Q represent our views only as of the date of this Form 10-Q (or any earlier date indicated in such statement). While we may update certain forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if new information becomes available in the future. However, you are advised to consult any further disclosures we make on related subjects in the reports that we file with the SEC.

The foregoing cautionary statements are intended to qualify all forward-looking statements wherever they may appear in this Form 10-Q. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

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MARKET, INDUSTRY AND OTHER DATA

This Form 10-Q contains estimates, projections, market research and other information concerning our industry, our business, markets for XHANCE and the size of those markets, the prevalence of certain medical conditions, XHANCE market access, prescription data and other physician, patient and payor data. Unless otherwise expressly stated, we obtain this information from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources as well as from our own internal estimates and research and from publications, research, surveys and studies conducted by third parties on our behalf. Information that is based on estimates, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are reflected in this information. As a result, you are cautioned not to give undue weight to such information.

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PART I

ITEM 1. FINANCIAL STATEMENTS

OptiNose, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)


	March 31, 2025		December 31, 2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	72,933	$	84,485
Accounts receivable, net	23,142		26,392
Inventory	11,300		11,463
Prepaid expenses and other current assets	4,631		3,503
Total current assets	112,006		125,843
Property and equipment, net	541		605
Other assets	2,307		2,337
Total assets	$	114,854	$	128,785
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	1,420	$	450
Accrued expenses and other current liabilities	30,723		35,881
Derivative liability	8,760		—
Warrant liability	6,900		—
Short term debt, net	127,205		126,482
Total current liabilities	175,008		162,813
Warrant liability	—		5,100
Other liabilities	1,212		1,232
Total liabilities	176,220		169,145
Stockholders' deficit

Common stock, $0.001 par value; 350,000,000 shares authorized;10,127,381 and 10,058,406 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively.	10		10
Additional paid-in capital	703,041		701,631
Accumulated deficit	(764,333)		(741,917)
Accumulated other comprehensive loss	(84)		(84)
Total stockholders' deficit	(61,366)		(40,360)
Total liabilities and stockholders' deficit	$	114,854	$	128,785

See accompanying notes to unaudited interim consolidated financial statements.

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OptiNose, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Revenues:
Net product revenues	$	18,510	$	14,880

Total revenues	18,510		14,880
Costs and expenses:
Cost of product sales	1,750		1,231
Research and development	760		1,206
Selling, general and administrative	23,590		20,518
Total costs and expenses	26,100		22,955
Loss from operations	(7,590)		(8,075)
Other (income) expense:
Unrealized loss on fair value of warrants	1,800		1,300
Unrealized loss on fair value of derivative features	8,760		—
Interest income	(621)		(296)
Interest expense	4,887		4,970
Foreign currency loss	—		18
Net Loss	$	(22,416)	$	(14,067)



Net loss per share of common stock, basic and diluted	$	(1.92)	$	(1.87)
Weighted average common shares outstanding, basic and diluted	11,667,531		7,528,600

See accompanying notes to unaudited interim consolidated financial statements.

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OptiNose, Inc.

Consolidated Statements of Changes in Stockholders' Deficit

(in thousands, except share data)

(unaudited)


Three Months Ended March 31, 2025
	Stockholders' Equity (Deficit)
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity (Deficit)
	# of Shares	Par Amount $
Balance at December 31, 2024	10,058,406	$	10	$	701,631	$	(741,917)	$	(84)	$	(40,360)
Stock compensation expense	—	—		1,410		—		—		1,410
Vesting of restricted stock units	54,971	—		—		—		—		—
Issuance of common stock under employee stock purchase plan	14,004	—		—		—		—		—

Net loss	—	—		—		(22,416)				(22,416)
Balance at March 31, 2025	10,127,381	$	10	$	703,041	$	(764,333)	$	(84)	$	(61,366)


Three Months Ended March 31, 2024
	Stockholders' Equity (Deficit)
	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity (Deficit)
	Shares	Par Amount $
Balance at December 31, 2023	7,493,521	$	7	$	633,847	$	(720,376)	$	(84)	$	(86,606)
Stock compensation expense	—	—		1,456		—		—		1,456
Vesting of restricted stock units	31,901	1		—		—		—		1
Issuance of common stock under employee stock purchase plan	10,714	—		—		—		—		—

Net loss	—	—		—		(14,067)		—		(14,067)
Balance at March 31, 2024	7,536,136	$	8	$	635,303	$	(734,443)	$	(84)	$	(99,216)

See accompanying notes to unaudited interim consolidated financial statements.

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OptiNose, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Operating activities:
Net loss	$	(22,416)	$	(14,067)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	64		83
Stock-based compensation	1,410		1,456
Change in fair value of warrant liability	1,800		1,300
Change in fair value of derivative liability	8,760		—
Amortization of debt discount and issuance costs	723		419
Changes in operating assets and liabilities:
Accounts receivable	3,250		5,590
Prepaid expenses and other assets	(866)		(1,048)
Inventory	163		(2,263)
Accounts payable	971		(1,973)
Accrued expenses and other liabilities	(5,411)		(11,522)
Cash used in operating activities	(11,552)		(22,025)
Investing activities:
Purchases of property and equipment	—		(22)
Cash used in investing activities	—		(22)
Financing activities:



Cash paid for financing costs	—		7
Cash provided by financing activities	—		7

Net decrease in cash and cash equivalents	(11,552)		(22,040)
Cash and cash equivalents at beginning of period	84,485		73,684
Cash and cash equivalents at end of period	$	72,933	$	51,644
Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,163	$	9,218
Supplemental disclosure of noncash activities:


Recognition of right-of-use assets and lease liabilities	$	233	$	359

See accompanying notes to unaudited interim consolidated financial statements

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

1. Organization and Description of Business

OptiNose, Inc. (the Company) was incorporated in Delaware in May 2010 (inception) and has facilities in Yardley, Pennsylvania and Ewing, New Jersey. The Company's predecessor entity, OptiNose AS, was formed under the laws of Norway in September 2000. In 2010, OptiNose AS became a wholly-owned subsidiary of the Company as part of an internal reorganization. Optinose AS was liquidated in October 2023. During 2022, the Company's board of directors also approved the liquidation of Optinose UK, in order to simplify the corporate structure. Optinose UK was liquidated in July 2024.

The Company is a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. The Company's first commercial product, XHANCE® (fluticasone propionate) nasal spray, 93 microgram (mcg), is a therapeutic utilizing the Company's proprietary Exhalation Delivery System™ (EDS®) that delivers a topically-acting corticosteroid for the treatment of chronic rhinosinusitis with and without nasal polyps.

On March 19, 2025, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Paratek Pharmaceuticals, Inc. (Paratek) and Orca Merger Sub, Inc., a wholly owned subsidiary of Paratek (Merger Sub). Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Paratek (the Merger).

Pursuant to the Merger Agreement, upon the closing of the Merger, each share of Company common stock issued and outstanding immediately prior to the closing of the Merger Agreement, will automatically be converted into the right to receive (i) $9.00 in cash, without interest and (ii) one contractual contingent value right (CVR) pursuant to the terms of a Contingent Value Right Agreement to be entered into between Paratek and a rights agent at the effective time of the Merger (the CVR Agreement). Each CVR represents the right to receive a cash payment of (i) $1.00 (without interest and subject to withholding of applicable taxes) per CVR, payable upon achievement of net sales (as defined in the CVR Agreement) of XHANCE in the United States in any calendar year equal to or in excess of $150 million during the period beginning on the date of the closing of the Merger Agreement and ending on December 31, 2028 and (ii) $4.00 (without interest and subject to withholding of applicable taxes) per CVR, payable upon achievement of net sales of XHANCE in the United States in any calendar year equal to or in excess of $225 million during the period beginning on the date of the closing of the Merger Agreement and ending on December 31, 2029.

The consummation of the Merger is subject to certain customary closing conditions, including the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of the Company’s common stock. The consummation of the Merger is not subject to any financing condition. A Special Meeting of the Company's Stockholders will be held on May 16, 2025 to vote on, among other things, the Merger Agreement. Subject to stockholder approval of the Merger Agreement at the Special Meeting and the satisfaction of the other closing conditions, the Company anticipates that the Merger will be consummated on or around May 21, 2025.

2. Liquidity

Since inception, the Company's operations have focused on organization and staffing, business planning, raising capital, establishing an intellectual property portfolio, conducting preclinical studies and clinical trials, pursuing regulatory approvals and commercializing XHANCE in the US. As of March 31, 2025, the Company had cash and cash equivalents of $72,933 and a working capital deficit of $63,002.

The Company is subject to a number of risks similar to other life sciences companies, including successful discovery, development and commercialization of its products and product candidates, raising additional capital, the development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company's products. The Company has incurred recurring net losses since its inception and has accumulated a deficit of $764,333 as of March 31, 2025.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

The Company entered into a Note Purchase Agreement (the Note Purchase Agreement) on September 12, 2019 with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of the BioPharma Credit Funds (BioPharma) which was subsequently amended on August 13, 2020, March 2, 2021, November 16, 2021, August 10, 2022, and November 9, 2022.

On November 23, 2022, the Company amended and restated the Note Purchase Agreement (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were modified. The Company entered into the first amendment to the A&R Note Purchase Agreement (the First Amendment) on March 5, 2024, which waived certain covenants. The Company entered into the second amendment to the A&R Note Purchase Agreement (the Second Amendment) on March 8, 2024, which further modified the financial covenants. On May 8, 2024, the Company entered into the third amendment to the A&R Note Purchase Agreement (the Third Amendment), which provided for a further waiver to the requirement that the Company's annual and quarterly consolidated financial statements not be subject to any statement as to "going concern" through the fiscal quarter ending September 30, 2025, and modified the minimum amount of cash and cash equivalents that the Company is required to maintain at all times under the A&R Note Purchase Agreement (see Note 8). The principal balance outstanding under the A&R Note Purchase Agreement was $130,000 at March 31, 2025.

The Company’s continuation as a going concern is dependent on its ability to maintain compliance with the covenants under the A&R Note Purchase Agreement, including minimum trailing twelve-month consolidated XHANCE net sales and royalties the Company is required to achieve and its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional capital through equity or debt financings, partnerships, collaborations, or other sources, as may be required. The A&R Note Purchase Agreement includes events of default, in certain cases subject to customary periods to cure, following which Pharmakon may accelerate all amounts outstanding pursuant to the Note Purchase Agreement. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

Additionally, commencing on September 30, 2025, the Company will be required to begin making principal repayments on its debt in eight quarterly installments of $16.3 million each through maturity in June 2027. The Company believes that it is probable that, absent additional capital, it will not be able to maintain compliance with the minimum cash covenant under the A&R Note Purchase Agreement beginning in the first quarter of 2026.

The Company believes it is probable that it will not be able to maintain compliance with the trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds under the A&R Note Purchase Agreement prior to the end of 2025, which will constitute a default under the A&R Note Purchase Agreement if the Company is unable to obtain a modification or waiver of such minimum consolidated XHANCE net sales and royalties thresholds.

Further, the A&R Note Purchase Agreement includes a requirement that the Company's annual and quarterly consolidated financial statements commencing with the year ending December 31, 2025, not be subject to any statement as to “going concern” (the "Going Concern Covenant"). The Company believes that it is unlikely that it will be able comply with the Going Concern Covenant beginning with the Company's consolidated financial statements for the year ending December 31, 2025. Failure to comply with the Going Concern Covenant would also constitute a default under the A&R Note Purchase Agreement if the Company is unable to obtain a modification or waiver of this covenant.

In the event of any of the foregoing defaults, the holders of the Pharmakon Senior Secured Notes may declare an event of default under the A&R Note Purchase Agreement and may elect to accelerate the repayment of all unpaid principal, accrued interest and other amounts due, which may require the Company to delay or curtail its operations until additional funding is received. The terms of the A&R Note Purchase Agreement and the Pharmakon Senior Secured Notes, including applicable covenants, are described in Note 8.

Management’s plans to mitigate these risks include enhancing its commercial performance to accelerate growth in net revenues, seeking out partnership and collaboration opportunities to expand the market for XHANCE, and, if required, requesting a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinancing the debt. However, there can be no assurance that the Company will be successful in accelerating

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

growth in net revenues, securing a partnership or collaboration, obtaining a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinancing the debt. If the Company is unable to accelerate growth in net revenues, secure a partnership or collaboration, obtain a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinance the debt, the Company may need to delay or curtail its operations. As a result of these factors, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.

3. Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements have been prepared in conformity with US generally accepted accounting principles (GAAP). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).

In the opinion of management, the accompanying unaudited interim financial statements include all normal and recurring adjustments (which consist primarily of accruals and estimates that impact the financial statements) considered necessary to present fairly the Company's financial position as of March 31, 2025 and its results of operations for the three months ended March 31, 2025 and 2024 and cash flows for the three months ended March 31, 2025 and 2024. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. The unaudited interim financial statements, presented herein, do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2024 contained in the Company’s annual report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 26, 2025.

Reverse Stock Split

On December 30, 2024, the Company filed a Certificate of Amendment to the Company’s Certificate of Incorporation to affect a 1-for-15 reverse stock split pursuant to which each 15 shares of the Company’s issued and outstanding common stock immediately prior to the effective time on December 30, 2024, were automatically combined and converted into one issued and outstanding share of the Company’s common stock. Fractional shares were not issued and stockholders who otherwise would have been entitled to receive a fractional share as a result of the reverse stock split received an amount in cash equal to $6.20 per share for such fractional interests.

All of the share and per share amounts discussed in the accompanying consolidated financial statements have been adjusted to reflect the effect of this reverse split.

Use of estimates

The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company generally invests its cash in deposits with high credit quality financial

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements (Continued)

(in thousands , except share and per share data)

institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions.

Customer and supplier concentration

The Company has exposure to credit risk in accounts receivable from sales of product. XHANCE is sold to wholesale pharmaceutical distributors and preferred pharmacy network (PPN) partners, who, in turn, sell XHANCE to pharmacies, hospitals and other customers. Five customers represented approximately 86% and 86% of the Company's accounts receivable at March 31, 2025 and 2024, respectively. Five customers represented approximately 73% and 66% of the Company's net product sales for the three months ended March 31, 2025 and 2024, respectively.

The Company purchases XHANCE and its components from several third-party suppliers and manufacturing partners, certain of which are only available through a single source. Although the Company could obtain each of these components from alternative third-party suppliers, it would need to qualify and obtain FDA approval for another supplier as a source for each such component.

Fair value of financial instruments

The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The FASB accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of the inputs as follows:

•Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2 — Valuations based on observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

At March 31, 2025 and December 31, 2024, the Company's financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, certain liability classified warrants, and a derivative liability related to an interest make whole feature embedded in the Company's debt agreement. The carrying amounts reported in the Company's financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. In addition, at March 31, 2025, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. At March 31, 2025, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants and the derivative liability for the interest make whole feature.

In November 2022, the Company issued warrants in connection with a public offering. Pursuant to the terms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and is required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements (Continued)

(in thousands , except share and per share data)

measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations.

In connection with entering into and subsequently amending the Pharmakon Senior Secured Notes (Note 8), the Company bifurcated the embedded interest make-whole provision and accounted for the bifurcated feature as a derivative instrument. Historically, the estimated fair value of the bifurcated derivative feature was de minimis. In connection with entering into the Merger Agreement with Paratek in March 2025 (Note 1), the change in fair value of the derivative feature was estimated to be $8.8 million and recorded in the Company’s consolidated balance sheet and statement of operations as of and for the three months ended March 31, 2025. The derivative feature will continue to be remeasured at each reporting period with changes in fair value of the Level 3 derivative liability recorded in the consolidated statements of operations.

Net product revenues

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The Company recognizes revenue from XHANCE sales at the point customers obtain control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company’s variable consideration include the following:

Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable.

Trade Discounts and Allowances. The Company generally provides customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized.

Product Returns. Consistent with industry practice, the Company has a product returns policy that provides customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The Company estimates the amount of its product that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition to establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors.

Government Rebates. The Company is subject to discount obligations under state Medicaid programs and Medicare. Reserves related to these discount obligations are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period.

Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements (Continued)

(in thousands , except share and per share data)

Patient Assistance. Other programs that the Company offers include voluntary co-pay patient assistance programs intended to provide financial assistance to eligible patients with prescription drug co-payments required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period.

Distribution and Other Fees. The Company pays distribution and other fees to certain customers in connection with the sales of its products. The Company records distribution and other fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale.

Net loss per common share

Basic net income (loss) per common share is determined by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period. For the three months ended March 31, 2025, basic and diluted weighted average share calculations also include the weighted average of the pre-funded warrants to purchase shares of common stock at $0.0015 per share that were issued in the registered direct offering on May 10, 2024. For the three months ended March 31, 2025 and 2024, the outstanding common stock options, restricted stock units, common stock warrants and shares to be issued under the Company's 2017 Employee Stock Purchase Plan have been excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Therefore, the weighted average number of shares used to calculate both basic and diluted net loss per share are the same.

Diluted net loss per share for these periods presented on the statement of operations do not reflect the potential common shares noted below as their effect would be antidilutive.


	March 31,
	2025	2024
Stock options	679,232	619,298
Restricted stock units	875,293	328,471
Common stock warrants	2,184,533	2,184,533
Total	3,739,058	3,132,302

Income taxes

In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the three months ended March 31, 2025 and 2024, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of March 31, 2025 and December 31, 2024, the Company concluded that a full valuation allowance would be necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements (Continued)

(in thousands , except share and per share data)

Recent accounting pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This Update also includes certain other amendments to improve the effectiveness of income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating ASU No. 2023-09 and its impact on results of operations, financial position and cash flows and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. ASU No. 2024-03 requires new financial statement disclosures that disaggregate information, in a tabular format, about prescribed categories of relevant income statement captions. ASU No. 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating ASU No. 2024-03 and its impact on the Company's related disclosures.

4. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company applies the guidance in ASC 820, Fair Value Measurements, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability.

The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories:

Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level I, 2 and 3 during the three months ended March 31, 2025.

The table below presents the liabilities (in thousands) measured and recorded in the financial statements at fair value on a recurring basis at March 31, 2025 categorized by the level of inputs used in the valuation of each liability.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements (Continued)

(in thousands , except share and per share data)


	March 31, 2025
	Total		Level 1		Level 2		Level 3
Liabilities
Derivative Liability - interest make-whole feature	$	8,760	$	—	$	—	$	8,760
Warrant Liability	$	6,900	$	—	$	—	$	6,900
Total Liabilities	$	15,660	$	—	$	—	$	15,660

	December 31, 2024
Liabilities
Warrant Liability	$	5,100	$	—	$	—	$	5,100
Total Liabilities	$	5,100	$	—	$	—	$	5,100

Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis

Warrant Liability

The reconciliation of the Company's liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):



	Warrant Liability		Derivative Liability - Make-Whole Feature
Balance, December 31, 2024	$	5,100	$	—
Additions	—		—
Change in fair value of liability	1,800		8,760
Balance, March 31, 2025	$	6,900	$	8,760

Assumptions Used in Determining Fair Value of Liability-Classified Warrants

The Company issued warrants to purchase 2,017,866 shares of Common Stock at a public offering price of $0.01 per warrant (the Warrants). Each Warrant has an exercise price of $15.00 per share of common stock and is exercisable until the expiration date, which is the fifth anniversary of the date of issuance (November 23, 2027). After such date, any unexercised Warrants will expire and have no further value. If the Company issues or sells, or is deemed pursuant to the terms of the Warrants to have issued or sold, any shares of common stock (which includes, among other things, options and securities convertible into shares of common stock), subject to certain exceptions and excluding certain issuances defined in the Warrants as "excluded issuances", for a price per share less than the exercise price of the Warrants in effect immediately prior to such issuance or sale or deemed issuance or sale (such event, a "dilutive issuance"), then immediately after such dilutive issuance the exercise price then in effect of the Warrants shall be reduced to the price of the shares of common stock issued or sold or deemed to be issued or sold in the dilutive issuance in the manner set forth in the Warrant.

A holder of Warrants will not have the right to exercise any portion of a Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or on election of such holder, prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants; provided, however, such holder may increase or decrease such percentage to any other percentage not in excess of 19.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to the Company.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements (Continued)

(in thousands , except share and per share data)

Pursuant to the terms of the Warrant, the Company could be required to settle the Warrants in cash in the event of a "fundamental transaction" as defined in the Warrant (which includes, among other things, an acquisition of the Company) and, as a result, the Warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet.

The Company utilizes a Monte Carlo simulation valuation model which incorporates assumptions as to the stock price volatility, the expected life of the warrants, a risk-free interest rate, as well as timing and probability of equity financing. The Company values the warrant liability at each reporting period, with changes in fair value recognized in the consolidated statements of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. The inputs and values were as follows:



	March 31, 2025			December 31, 2024
Stock price	$	9.17		$	6.68
Strike price	$	15.00		$	15.00
Expected volatility	72.5		%	70.0		%
Risk-free interest rate	3.8		%	4.2		%
Expected dividend yield	—		%	—		%
Expected life (years)	2.6			2.9
Fair value per warrant	$	3.40		$	2.53

On May 10, 2024, the Company completed a registered direct offering which resulted in the exercise price of the Warrants being reduced from $38.55 to $15.00 (which was the offering price of each share sold in the registered direct offering) pursuant to the anti-dilution price protection provisions of such Warrants. All other terms of the Warrants remain unchanged.

Assumptions Used in Determining Fair Value of Derivative Liability – Interest Make-Whole Feature

The fair value of the derivative liability associated with the interest make-whole feature within the Pharmakon Senior Secured Notes (Note 8) is classified as Level 3 in the table above and was estimated using a with and without approach with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include the probability and timing assessments of expected future change of control events and the discount rate used to present value future cash payments under the Pharmakon debt obligation.

5. Inventory

Inventory consisted of the following:


	March 31, 2025		December 31, 2024
Raw materials	$	1,160	$	1,728
Work-in-process	7,967		7,832
Finished goods	2,173		1,903
Total inventory	$	11,300	$	11,463

Inventories are stated at the lower of cost or net realizable value, as determined on a first-in, first-out, basis.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

6. Property and Equipment

Property and equipment, net, consisted of the following:


	March 31, 2025		December 31, 2024
Computer equipment and software	$	1,465	$	1,465
Furniture and fixtures	366		366
Machinery and equipment	3,150		3,150
Leasehold improvements	655		655
Construction in process	115		115
	5,751		5,751
Less: accumulated depreciation	(5,210)		(5,146)
	$	541	$	605

Depreciation expense was $64 and $83 for the three months ended March 31, 2025 and 2024, respectively.

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of:


	March 31, 2025		December 31, 2024
Accrued expenses:
Product revenue allowances	$	17,372	$	21,791
Selling, general and administrative expenses	7,453		5,522
Research and development expenses	392		291
Payroll expenses	3,768		5,692

Other	557		1,338
Total accrued expenses	$	29,542	$	34,634
Other current liabilities:
Lease liability	$	1,181	$	1,247
Total other current liabilities	1,181		1,247
Total accrued expenses and other current liabilities	$	30,723	$	35,881

8. Debt

On September 12, 2019 (the Closing Date), the Company entered into a Note Purchase Agreement with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of BioPharma Credit Funds (BioPharma). The Note Purchase Agreement provided the Company with $130,000 in debt financing, of which $80,000 of senior secured notes (the Pharmakon Senior Secured Notes) was issued on the Closing Date, $30,000 was issued on February 13, 2020 and $20,000 was issued on December 1, 2020.

On November 23, 2022, the Company amended and restated the Note Purchase Agreement, initially entered into on September 12, 2019 and amended through November 9, 2022, among the Company, its subsidiaries, OptiNose US, Inc., OptiNose AS and OptiNose UK, Ltd., and BioPharma Credit PLC, as collateral agent, and the purchasers party thereto from time to time (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, certain modifications to the affirmative and negative covenants, events of default and other provisions were made, including, without limitation, (i) the requirement for the Company to deliver quarterly and annual financial statements that, commencing with the Company's consolidated financial statements for the year ending December 31, 2023 and subject to certain exceptions, are not subject to a “going concern” statement (the Going Concern Covenant) and (ii) the removal of certain exceptions to the negative covenants which previously

permitted the Company to enter into certain transactions without the consent of the holders of the Pharmakon Senior Secured Notes, including permitted acquisitions, swap contracts, convertible bonds and revolving credit facilities. The financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were reduced.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

The A&R Note Purchase Agreement extended the maturity date of the Pharmakon Senior Secured Notes from September 12, 2024 to June 30, 2027 (New Maturity Date), extended the interest-only period from September 2023 to September 2025, after which principal repayments will commence starting on September 30, 2025 and will be made in eight equal quarterly installments of principal and interest through the New Maturity Date. As part of the A&R Note Purchase Agreement the Pharmakon Senior Secured Notes now bear an amended interest rate through the New Maturity Date equal to the 3-month Secured Overnight Financing Rate (subject to a 2.50% floor), determined as of the date that is two business days prior to the commencement of each quarter, plus 8.50% per annum, which interest rate shall be increased by an additional 3.00% per annum upon the occurrence and during the continuation of any event of default. The effective interest rate as of March 31, 2025 was 13.61%.

As an inducement for the holders of the Pharmakon Senior Secured Notes to enter into the A&R Note Purchase Agreement, the Company was required to pay the holders of the Pharmakon Senior Secured Notes an amendment fee of $3,900 (representing 3.00% of the then outstanding principal balance of such notes) due on the New Maturity Date or the earlier repayment of the Pharmakon Senior Secured Notes, which amendment fee shall be reduced to $2,600 in the event that the Company repays the Pharmakon Senior Secured Notes in full on or after the one year anniversary of the date of the A&R Note Purchase Agreement and prior to second anniversary of the date of the A&R Note Purchase Agreement. Additionally, the $1,300 fee payable under the Fourth Amendment to the Note Purchase Agreement that the Company entered into on November 9, 2022 will be credited against the amendment fee payable in connection with the A&R Note Purchase Agreement.

On March 5, 2024, the Company entered into a first amendment and waiver (the First Amendment) to the A&R note Purchase Agreement. The First Amendment provided for a waiver of Going Concern Covenant for the audited financial statements for the year ended December 31, 2023 and unaudited quarterly financial statements for the quarter ending March 31, 2024.

On March 8, 2024, the Company entered into a second amendment (the Second Amendment) to the A&R Note Purchase Agreement. Pursuant to the Second Amendment, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties was modified as follows (amounts in thousands):


Trailing Twelve-Months Ending			As Revised Pursuant to Second Amendment
March 31, 2024			$70,000
June 30, 2024			$70,000
September 30, 2024			$72,500
December 31, 2024			$75,000
March 31, 2025			$80,000
June 30, 2025			$87,500
September 30, 2025			$95,000
December 31, 2025			$102,500
March 31, 2026			$120,000
June 30, 2026			$130,000
September 30, 2026			$145,000
December 31, 2026			$150,000
March 31, 2027			$155,000
June 30, 2027			$160,000

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

In addition, the "make-whole" premium payment due in connection with any principal prepayments (whether mandatory or voluntary) was modified as part of the Second Amendment to provide that the Company will be required to pay a make-whole premium in the amount of (i) for any prepayment occurring up to and including November 21, 2024 (which represents the 24th-month anniversary of the effective date of the A&R Note Purchase Agreement), the sum of all interest that would have accrued on the principal amount of the notes prepaid or required to be prepaid from the date of such prepayment through and including the 18th-month anniversary of such prepayment date; and (b) for any prepayment occurring after November 21, 2024 (which represents the 24th-month anniversary of the effective date of the A&R Note Purchase Agreement) but prior to May 21, 2026 (which represents the 42nd-month anniversary of the effective date of the A&R Note Purchase Agreement), the sum of all interest that would have accrued on the principal amount of the notes prepaid or required to be prepaid from the date of such prepayment through and including May 21, 2026 (which represents the 42nd-month anniversary of the effective date of the A&R Note Purchase Agreement); provided, however, that in no event shall all make-whole amounts payable by the Company exceed $24,000 in the aggregate.

On May 8, 2024, the Company entered into a third amendment (the Third Amendment) to the A&R Note Purchase Agreement. The Third Amendment provided for a further waiver of the Going Concern Covenant for the Company’s quarterly and annual financial statements through the fiscal quarter ending September 30, 2025. The Going Concern Covenant will continue to apply to the Company’s financial statements for the fiscal year ending December 31, 2025 and each fiscal quarter and fiscal year thereafter. In addition, pursuant to the Third Amendment the minimum amount of cash and cash equivalents that the Company is required to maintain at all times under the A&R Note Purchase Agreement (the Liquidity Covenant) will be reduced from $30,000 to $20,000 following the date of the first quarterly payment of principal due on September 30, 2025.

As part of the Third Amendment, the Company issued an aggregate of 312,000 shares of common stock to the holders of the Pharmakon Senior Secured Notes in satisfaction of $4,680 of outstanding amendment and waiver fees owed under the A&R Note Purchase Agreement for prior amendments and waivers, which shares were calculated based on the offering price of each share of common stock sold in the registered direct offering completed on May 10, 2024. Additionally, the common stock warrants, dated November 18, 2021, issued to the holders of the Pharmakon Senior Secured Notes for the purchase of an aggregate of 166,666 shares of Company common stock (the Pharmakon Warrants) were amended to (i) reduce the exercise price of the Pharmakon Warrants from $24.00 per share to $15.00, which is the offering price of each share of common stock sold in the registered direct offering completed by the Company on May 10, 2024, and (ii) extend the expiration date of the Pharmakon Warrants from November 18, 2024 to November 18, 2026.

The Pharmakon Senior Secured Notes are secured by a pledge of substantially all of the assets of the Company and the Guarantors and the A&R Note Purchase Agreement contains affirmative and negative covenants customary for financings of this type, including limitations on the Company’s and its subsidiaries’ ability, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, repay junior indebtedness, incur a material adverse change and enter into affiliate transactions, in each case, subject to certain exceptions. In addition, the A&R Note Purchase Agreement contains financial covenants requiring the Company to maintain certain minimum trailing twelve-month consolidated XHANCE net sales and royalties, tested on a quarterly basis, and to maintain compliance with the Liquidity Covenant. As of March 31, 2025, the Company was in compliance with the covenants.

The Company believes that it is probable that it will not maintain compliance with the required trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds, as well as the Liquidity Covenant, and Going Concern Covenant for the entire one year period after the date these consolidated financial statements are issued. As a result, in accordance with FASB Accounting Standards Codification 470, the Company has classified all outstanding principal and the payment of additional fees upon maturity as a current liability in the accompanying consolidated balance sheet as of March 31, 2025 and December 31, 2024.

The Company recorded interest expense of $4,887 and $4,970 during the three months ended March 31, 2025 and 2024, respectively. Interest expense included total coupon interest and the amortization of debt issuance costs.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

The Pharmakon debt balance is comprised of the following:



	March 31, 2025		December 31, 2024
Face amount	$	130,000	$	130,000
Front end fees	(368)		(433)
Debt issuance costs	(3,727)		(4,385)
Back end fees	1,300		1,300
Debt, net	$	127,205	$	126,482

9. Commitments and Contingencies

The Company is a party to a manufacture and supply agreement pursuant to which it has agreed to make minimum purchases of finished XHANCE units of $2.4 million in both 2025 and 2026. If the Company fails to achieve the minimum purchase commitments, the Company must pay the supplier 50% of the amount of any shortfall and must reimburse the supplier for certain non-cancellable costs and expenses. The Company's minimum purchase commitments are subject to certain exceptions and reductions. The Company has made $0.9 million in purchases during the three months ended March 31, 2025 under the Supply Agreement.

The Company is party to legal proceedings that arose in connection with the Company's definitive proxy statement on Schedule 14A (the Definitive Proxy Statement) filed with SEC on April 15, 2025. On April 23, 2025, a purported individual stockholder of Optinose filed a complaint in New York state court, captioned Thompson v. OptiNose, Inc. et al., Index No. 652528/2025 (N.Y. Sup. Ct.), naming as defendants, the Company, its Chief Executive Officer, and the members of the Company's board of directors as of the date of the Merger Agreement (the “Thompson Complaint”). On April 24, 2025, an additional case was filed by a purported individual stockholder of OptiNose in New York state court, captioned Smith v. OptiNose, Inc., et al., Index No. 652552/2025 (N.Y. Sup. Ct.), naming the same defendants (the “Smith Complaint”). The Thompson and Smith Complaints are referred to as the “Merger Litigations.”

The Merger Litigations generally allege that the Definitive Proxy Statement is materially incomplete and misleading by allegedly failing to disclose certain purportedly material information. The Merger Litigations assert misrepresentation claims under New York common law. The Merger Litigations seek, among other things, an order (i) enjoining the defendants from proceeding with the proposed Merger until such time that the defendants disclose certain allegedly material information that was allegedly omitted from the Definitive Proxy Statement, (ii) rescinding the proposed Merger in the event the Merger is consummated or awarding actual and putative damages to the plaintiffs in the event that it is consummated, (iii) awarding the plaintiffs fees and expenses in connection with the Litigation Matters, including reasonable attorneys’ and experts’ fees and expenses and (iv) granting such other and further relief as the court may deem just and proper.

The Company cannot predict the outcome of each Merger Litigation, nor can the Company predict the amount of time and expense that will be required to resolve each Merger Litigation. The Company believes that the claims and allegations in the Merger Litigations are without merit and that no supplemental disclosures are required under applicable law. The Company and its directors intend to vigorously defend against each Merger Litigation. It is possible that additional similar complaints could be filed in connection with the proposed Merger. The Company cannot estimate the possible loss or range of loss from the Merger Litigations.

In addition, thirteen purported stockholders of the Company sent demand letters regarding the Definitive Proxy Statement (the Demand Letters). Based on the same core allegations as the Merger Litigations, the Demand Letters allege that the Definitive Proxy Statement contains material misstatements and omission in violation of Section 14(a), Section 20(a) and Rule 14a-9 of the Exchange Act and request that the Company disseminate corrective disclosures in an amendment or supplement to the Definitive Proxy Statement prior to the Special Meeting of the Company's stockholders to vote on the proposed Merger.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

While the Company believes that the disclosures set forth in the Definitive Proxy Statement comply fully with all applicable law and deny the allegations in the Merger Litigations and the Demand Letters, in order to moot these disclosure claims, avoid nuisance and possible expense and business delays, and provide additional information to the Company's stockholders, the Company voluntarily supplemented certain disclosures in the Definitive Proxy Statement related to the above referenced claims with the supplemental disclosures set forth in the Company's definitive additional materials filed with the SEC on May 8, 2025. Nothing in the definitive additional materials shall be deemed an admission of the legal merit, necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, the Company specifically denies all allegations in the Merger Litigations and the Demand Letters that any additional disclosure was or is required or material.

10. Employee Benefit Plans

The Company maintains a defined contribution 401(k) retirement plan. For the three months ended March 31, 2025 and 2024, $449 and $183, respectively, were recorded in expense for the Company match. The Company's contributions are made in cash.

The Company also maintains a severance benefit plan for employees that is governed by the Employee Retirement Income Security Act of 1974. The severance benefit plan provides severance benefits to eligible employees who are involuntarily terminated from their jobs for reasons other than cause, disability, or death.

11. Stockholders' Equity

As of March 31, 2025, the Company had the following warrants outstanding to purchase shares of Common Stock:

Number of warrants

Classification

Exercise Price Per Share

Expiration Date

166,666

Equity

$15.00

November 18, 2026

2,017,866

Liability

$15.00

November 23, 2027

1,580,000

Equity

$0.0015

No Expiration

On May 10, 2024, the Company completed a registered direct offering pursuant to which it issued an aggregate of 2,120,000 shares of common stock at a purchase price of $15.00 per share and, in lieu of shares of common stock to certain investors, pre-funded warrants to purchase an aggregate of 1,580,000 shares of common stock at a price of $14.9985 per pre-funded warrant, which represents the per share offering price for common stock less the $0.0015 per share exercise price for each such pre-funded warrant.

Additionally, on May 10, 2024, pursuant to the Third Amendment to the A&R Note Purchase Agreement, the 166,666 equity classified common stock warrants listed above were amended to reduce the exercise price from $24.00 per share to $15.00 per share, and to extend the expiration date from November 18, 2024 to November 18, 2026.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

12. Stock-based Compensation

The Company recorded total stock-based compensation expense related to stock options and restricted stock units awarded under the Company's 2010 Stock Incentive Plan, as amended and restated effective as of October 12, 2017 (the 2010 Plan), purchases under its 2017 Employee Stock Purchase Plan (2017 Plan) and grants of stock options and restricted stock units made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4) (the "Nasdaq Inducement Grant Exception") in the following expense categories in the accompanying consolidated statements of operations as follows:


	Three Months Ended March 31,
		2025		2024
Cost of product sales		$	14	$	17
Research and development		21		57
General and administrative		1,375		1,382
		$	1,410	$	1,456

Stock Options

The Company issues stock-based awards pursuant to the 2010 Plan and the Nasdaq Inducement Grant Exception. The Company has issued service-based, performance-based, and market-based stock options that generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Company's board of directors or committee thereof. Vesting generally occurs over a period of not greater than four years. Performance-based options may vest upon the achievement of certain milestones. As of March 31, 2025, all of the performance conditions related to performance-based stock options issued by the Company had been achieved. Market-based options may vest upon the achievement of certain market-based objectives relating to the trading price of the Company's common stock.

The following table summarizes the activity related to stock option grants to employees and non-employees for the three months ended March 31, 2025:


	Shares	Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2024	624,234	$	54.77	6.83
Granted	80,775	5.83
Exercised	—	—
Expired	(25,356)	59.62
Forfeited	(421)	20.06
Outstanding at March 31, 2025	679,232	$	48.79	7.22
Exercisable at March 31, 2025	348,369	$	78.31	5.70

During the three months ended March 31, 2025, service-based stock options to purchase 80,775 shares of common stock were granted to employees and generally vest over four years. The stock options had an estimated weighted average grant date fair value of $4.10. The grant date fair value of each service-based and performance-based option grant was estimated at the time of grant using the Black-Scholes option-pricing model. The grant date fair value of each market-based stock option grant was estimated at the time of grant using a Monte Carlo simulation.

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

The aggregate intrinsic value of stock options exercisable, other than market-based stock options, as of March 31, 2025 was $0, respectively. At March 31, 2025, the unrecognized compensation cost related to unvested stock options, other than market-based stock options, expected to vest was $3,030. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.5 years.

Included in the table above are 37,956 market-based options outstanding granted in 2022. These options generally become eligible to vest over four years, subject to the achievement of certain market-based objectives relating to the trading price of the common stock. Stock-based compensation for these awards was recognized over the derived service period of approximately 2 years. The grant date fair value of each stock option grant, as well as the derived service period for these awards, was estimated at the time of grant using a Monte Carlo simulation. During the three months ended March 31, 2025, no market-based options vested upon the achievement of certain market-based objectives relating to the trading price of the Company's common stock.

Included in the table above are 94,419 outstanding inducement options granted outside the 2010 Plan. The grants were made pursuant to the Nasdaq Inducement Grant Exception.

The Company calculated the fair value of the stock option grants using the following weighted average assumptions:


	Three Months Ended March 31,
	2025
Risk free interest rate	4.27	%
Expected term (in years)	6.1
Expected volatility	77.54	%
Annual dividend yield	0.00	%

Restricted Stock Units

The Company has issued service-based and performance-based restricted stock units (RSUs). Vesting generally occurs over a period not greater than four years. Vesting of the performance-based RSUs is subject to the achievement of certain milestones in connection with the Company's development programs or subject to the achievement of certain net revenue or profitability goals.

The following table summarizes the activity related to RSUs granted to employees for the three months ended March 31, 2025:


			Shares
Balance at December 31, 2024			695,487
Granted			235,265
Vested and settled			(55,122)
Expired/forfeited/canceled			(337)
Balance at March 31, 2025			875,293
Expected to vest at March 31, 2025			875,293

During the three months ended March 31, 2025, the Company granted 235,265 RSUs at a weighted-average grant date fair value of $5.77, which consist of service-based and performance-based RSUs, provided, that, in the event certain financial metrics are achieved any then unvested RSUs shall become fully-vested subject to the recipients continued service through such date. At March 31, 2025, the unrecognized compensation cost related to unvested service-based and performance-based RSUs expected to vest was $8,536, to be recognized over an estimated weighted-average amortization period of 2.7 years.

Included in the table above are 12,749 RSUs granted outside the 2010 Plan. The grants were made pursuant to the Nasdaq Inducement Grant Exception.

2017 Employee Stock Purchase Plan

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)

Under the 2017 Plan, shares of Common Stock may be purchased by eligible employees who elect to participate in the 2017 Plan at 85% of the lower of the fair market value of Common Stock on the first or last day of designated offering periods. During the three months ended March 31, 2025, the Company issued 14,004 shares of Common Stock to employees.

The Company calculated the fair value of each grant under the 2017 Employee Stock Purchase Plan using the following weighted average assumptions:


	Three Months Ended March 31,
	2025		2024
Risk free interest rate	4.25	%	5.00	%
Expected term (in years)	0.5		0.5
Expected volatility	87.37	%	65.06	%
Annual dividend yield	—	%	—	%

13. Segment Reporting

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources in assessing performance. The Company has one reportable segment: specialty pharmaceuticals. The specialty pharmaceuticals segment consists of the development and commercialization of products for patients treated by ENT and allergy specialists. The Company’s chief operating decision maker (CODM) is Dr. Ramy A. Mahmoud, Chief Executive Officer and Director.

The accounting policies of the specialty pharmaceuticals segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the specialty pharmaceuticals segment based on net product revenues and net loss, which are reported on the income statement as consolidated net product revenues and consolidated net loss, respectively. The measure of segment assets is reported on the balance sheet as total consolidated assets.

The Company has incurred significant losses since our inception and anticipate incurring continued losses in the future. As such, the CODM uses net product revenues projections, as well as cash forecast models in deciding how to invest into the specialty pharmaceuticals segment. Such net product revenues projections and cash forecast models are reviewed to assess the entity-wide operating results and performance. Net product revenues and net loss are used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation.

The table below summarizes the net revenue, significant expense categories, and net loss regularly reviewed by the CODM for the three months ended March 31, 2025 and 2024:

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OptiNose, Inc.

Notes to Unaudited Interim Consolidated Financial Statements

(in thousands, except share and per share data)


	Three Months Ended March 31,
	2025		2024
Total revenues	$	18,510	$	14,880


Cost of product sales	1,750		1,231
Selling & marketing expenses	13,531		13,163
General & administrative expenses	10,063		7,354
Research & development expenses	760		1,206
Other segment items (a)	14,822		5,993
Net loss	$	(22,416)	$	(14,067)





(a) Other segment items included in Segment loss includes unrealized gain or loss on fair value of warrants and derivative features , other income or expense, interest income, and interest expense.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read this section in conjunction with our unaudited interim consolidated financial statements and related notes included in Part I. Item 1 of this Form 10-Q and our audited consolidated financial statements and related notes thereto and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (SEC) on March 26, 2025, as amended by Amendment No. 1 thereto filed with the SEC on April 30, 2025. In addition to historical information, some of the information contained in this discussion and analysis includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in or implied by such forward-looking statements. Please refer to the "Cautionary Note Regarding Forward-Looking Statements" section of this Form 10-Q for additional information.

Company Overview

We are a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. Our first commercial product, XHANCE® (fluticasone propionate) nasal spray, 93 micrograms (mcg), is a therapeutic utilizing our proprietary Exhalation Delivery System™ (EDS®) that delivers a topically-acting corticosteroid for the treatment of chronic rhinosinusitis with and without nasal polyps. Chronic rhinosinusitis is a serious nasal inflammatory disease that is treated using therapies, such as intranasal steroids (INS), which have significant limitations. We believe XHANCE has a differentiated clinical profile with the potential to become part of the standard of care for this disease because it is able to deliver medication to the primary site of inflammation high and deep in the nasal passages in regions not adequately reached by conventional INS. Additionally, we believe the current practice of postoperative INS use could support XHANCE’s adoption as a maintenance therapy to improve outcomes following sinus surgery.

XHANCE was approved by the United States (US) Food and Drug Administration (FDA) in September 2017 for the treatment of nasal polyps in patients 18 years of age or older (which indication statement was subsequently changed to "chronic rhinosinusitis with nasal polyps" in patients 18 years of age or older to reflect new FDA labeling terminology and not based on new XHANCE clinical trial data). We made XHANCE widely available through commercial channels in April 2018. On March 15, 2024, the FDA approved XHANCE for the treatment of chronic rhinosinusitis without nasal polyps in patients 18 years of age and older. XHANCE is the first and only drug therapy approved by the FDA for the treatment of chronic rhinosinusitis without nasal polyps (also referred to by the medical community and payers as, "chronic sinusitis"). It is our view that the terms "chronic sinusitis" and "chronic rhinosinusitis without nasal polyps" are synonymous from a promotional and medical perspective, and therefore, use the terms interchangeably in this Form 10-Q.

We are relaunching XHANCE to focus on the comparatively larger market opportunity that we believe is created by the new indication. We plan to continue to focus our commercial efforts primarily to the ENT and allergy specialist audience while seeking partnerships to extend the commercialization of XHANCE into primary care. We realigned our 75 sales territories at the start of 2024 in order to optimize the chronic sinusitis prescribing potential within the called on specialist audience. As a result of the realignment and the new indication, approximately 40% of targets in the called on specialist audience were new to our territory managers. We completed training with our territory managers on new promotional materials during a national sales meeting the week of April 8, 2024 and deployed those to the field starting the week of April 15, 2024. In the second quarter of 2024, more than half of our territory manager sales calls were to targets who were new to our territory managers or have historically prescribed XHANCE infrequently. Successfully growing XHANCE prescribing in this audience, as well as our existing prescribing base, will be important to achieving our near and long term financial objectives.

In the first quarter of 2024 we launched a central in-take pharmacy model (commonly referred to as, a "Hub") to prepare for the growth we expect from XHANCE's new indication. In addition to offering the necessary scalability for our anticipated growth, we believe the Hub has the potential to provide improved protections for business continuity and more comprehensive and consistent patient support and prescription fulfillment services than our historical preferred pharmacy network. During the second quarter of 2024 we transitioned a significant proportion of the XHANCE business from our historical preferred pharmacy network to the Hub. Although we have experienced some initial inefficiencies as a result of transitioning to a Hub, we believe we are beginning to realize the benefits of the Hub model as we continue to optimize processes at the Hub and physician offices become familiar with working with the Hub.

In accordance with the Pediatric Research Equity Act, and as part of the FDA approvals of XHANCE for the treatment of chronic rhinosinusitis with and without nasal polyps in patients 18 years of age and older, we are required to conduct clinical trials of XHANCE for these conditions in adolescent patients. Under these post-marketing requirements, we are required to complete a study of XHANCE in adolescent patients 12 to 17 years of

age with chronic rhinosinusitis with nasal polyps by March 2026 and submit a final report to the FDA by September 2026, and complete a study of XHANCE in adolescent patients 12 to 17 years of age with chronic rhinosinusitis without nasal polyps by March 2028 and submit a final report to the FDA by October 2028. Our study of XHANCE in adolescent patients with chronic rhinosinusitis without nasal polyps is ongoing, and we expect to commence the required study of XHANCE in adolescent patients with chronic rhinosinusitis without nasal polyps in 2025.

Agreement and Plan of Merger

On March 19, 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement”) with Paratek Pharmaceuticals, Inc’ (“Paratek”) and Orca Merger Sub, Inc., a wholly owned subsidiary of Paratek (“Merger Sub”), pursuant to which Merger Sub will merge with and into OptiNose, Inc., with OptiNose, Inc. continuing as the surviving corporation and a wholly owned subsidiary of Paratek (the “Merger").

Pursuant to the Merger Agreement, upon the closing of the Merger, each share of our common stock issued and outstanding immediately prior to the closing of the Merger Agreement, will automatically be converted into the right to receive (i) $9.00 in cash, without interest and (ii) one contractual contingent value right (CVR) pursuant to the terms of a Contingent Value Right Agreement to be entered into between Paratek and a rights agent at the effective time of the Merger (the CVR Agreement). Each CVR represents the right to receive a cash payment of (i) $1.00 (without interest and subject to withholding of applicable taxes) per CVR, payable upon achievement of net sales (as defined in the CVR agreement) of XHANCE in the United States in any calendar year equal to or in excess of $150 million during the period beginning on the date of the closing of the Merger Agreement and ending on December 31, 2028, and (ii) $4.00 (without interest and subject to withholding of applicable taxes) per CVR, payable upon achievement of net sales of XHANCE in the United States in any calendar year equal to or in excess of $225 million during the period beginning the date of the closing of the Merger Agreement and ending on December 31, 2029.

A Special Meeting of our stockholders will be held on May 16, 2025 to vote on, among other things, the Merger Agreement. Subject to stockholder approval of the Merger Agreement at the Special Meeting and the satisfaction of the other closing conditions, we anticipate that the Merger will be consummated on or around May 21, 2025.

XHANCE Business Update

We track and report metrics that we believe are an important part of assessing our progress in key strategic areas including:

•XHANCE Prescriptions. Based on third-party inventory and prescription data as well as data from our Hub and PPN partners, the total estimated number of XHANCE prescriptions in the first quarter of 2025 was 71,300, which represents a 9% increase for total prescriptions when compared to estimated first quarter 2024 prescriptions of 65,500. We believe the first quarter 2025 increase in prescriptions was primarily driven by the chronic sinusitis launch.

A seasonal effect has historically been observed in both the INS and XHANCE prescription markets in which market volume generally peaks near the middle of the second quarter and declines into the early part of the third quarter of each calendar year.

Although the underlying disease that we are treating is chronic and causes symptoms year-round, we believe the variation in patient flow through the offices of relevant physician specialists, and seasonality in disease flare-ups, has an impact on the number of patients that present themselves and who are therefore available to receive a new prescription for XHANCE.

Additionally, we believe that first quarter prescription demand and average net revenue per prescription for XHANCE is adversely impacted by the annual resetting of patient healthcare insurance plan deductibles and changes in individual patients' healthcare insurance coverage, both of which often occur in January.

•XHANCE New and Refill Prescriptions. The underlying disease that we are treating is chronic and, as a result, many patients may fill multiple prescriptions per year. We monitor new prescriptions as they create the potential for future refill prescriptions. As noted above, we believe the first quarter 2025 increase in prescriptions (including both new and refill prescriptions) was driven by the chronic sinusitis launch. Based on third-party inventory and prescription data as well as data from our Hub and PPN partners, the total

estimated number of XHANCE new prescriptions in the first quarter of 2025 was 25,100, which represents a 2% increase for new prescriptions when compared to estimated first quarter 2024 new prescriptions of 24,700.

We track refill prescriptions and provide patient co-pay assistance to support refill programs that are administered by our Hub and PPN partners. Based on third-party inventory and prescription data as well as data from our Hub and PPN partners, the total estimated number of XHANCE refill prescriptions in the first quarter of 2025 was 46,200, which represents a 13% increase for refill prescriptions when compared to estimated first quarter 2024 refill prescriptions of 40,800.

•Prescribing Breadth and Depth. We track the number of physicians who prescribe XHANCE in a time period to evaluate the breadth of prescribing. Based on third-party inventory and prescription data as well as data from our Hub and PPN partners, the total estimated number of physicians who had at least one patient fill a prescription for XHANCE in the first quarter of 2025 was 8,767, which represents a 4% increase when compared to the estimated 8,451 physicians who had at least one patient fill a prescription for XHANCE in the first quarter of 2024.

We also track the number of prescriptions filled by a prescribing physician's patients in a time period to evaluate depth of prescribing. Based on third-party inventory and prescription data as well as data from our Hub and PPN partners, the total estimated number of physicians who had more than 15 XHANCE prescriptions filled by their patients in the first quarter of 2025 was 1,271, which represents a 24% increase when compared to the estimated 1,023 physicians who had more than 15 XHANCE prescriptions filled by their patients in the first quarter of 2024.

•Market Access. We believe that as of March 31, 2025, approximately 70% of insured lives were in a plan that covers XHANCE. However, payors generally impose restrictions on access to or usage of XHANCE, such as by requiring prior authorizations or "step-edits". For example, insurers may require that a physician attest that they are treating a patient for an FDA-approved indication prior to becoming eligible for coverage for XHANCE. We believe that approximately half of commercial covered lives as of March 31, 2025 are in a plan that requires a prior authorization and most of those prior authorizations request information regarding both prior use of standard-delivery nasal steroid sprays, and patient diagnosis for an indication for which XHANCE has been approved by the FDA. In some cases, patients do not meet the payors' utilization management criteria or the patient's healthcare provider may not complete the burdensome administrative process required to demonstrate or document that the patients for whom XHANCE has been prescribed meet the payors’ utilization management criteria (i.e., prior authorizations or step-edits) and, as a result, patients may not gain access to XHANCE treatment. The approval of XHANCE in March 2024 as a treatment for chronic sinusitis could make the prior authorization process easier for physicians to attest because chronic sinusitis is a more common clinical diagnosis and a diagnosis made by many types of physicians, including those who do not have routine in-office ability to perform nasal endoscopy to ascertain the presence of nasal polyps. Payors can elect to change utilization management criteria to be more or less restrictive at any time, and changes in utilization management criteria or increasing rates of enforcement of utilization management criteria in the future could have a negative effect on prescription volume.

•XHANCE Net Product Revenues per Prescription. We calculate average net product revenues per prescription, one metric that we use to gauge the profitability of XHANCE, by dividing net product revenues for the quarter by the estimated number of XHANCE prescriptions dispensed during the quarter. Average XHANCE net product revenues per prescription were $260 in the first quarter of 2025, which represents a 14% increase when compared to the $227 average XHANCE net product revenues per prescription in the first quarter of 2024. The increase in average net product revenues per prescription is the result of favorable price, business mix, and changes in channel inventory levels in the first quarter of 2025 compared to the first quarter of 2024.

Financial Operations Overview

The following discussion sets forth certain components of our consolidated statements of operations as well as factors that impact those items.

Net product revenues

Sales of XHANCE generated $18.5 million and $14.9 million in net product revenues for the three months ended March 31, 2025 and 2024, respectively. In accordance with GAAP, we determine net product revenues for XHANCE, with specific assumptions for variable consideration components including but not limited to trade discounts and allowances, co-pay assistance programs and payor rebates.

Based on available XHANCE prescription data purchased from third parties and data from our Hub and PPN partners, our average XHANCE net product revenues per prescription were $260 in the first quarter of 2025 which represents a 14% increase when compared to the $227 average XHANCE net product revenues per prescription in the first quarter of 2024. We believe the increase in average net product revenues per prescription is the result of favorable price, business mix, and changes in channel inventory levels in the first quarter of 2025 compared to the first quarter of 2024.

We calculate average net product revenues per prescription, one metric that we use to gauge the profitability of XHANCE, by dividing net product revenues for the quarter by the estimated number of XHANCE prescriptions dispensed during the quarter. As a result, average net product revenues per prescription is subject to variability. That variability is impacted by factors that do not necessarily reflect a change in the price that is paid for an individual unit of XHANCE, including but not limited to ordering patterns and inventory levels for our wholesale customers, hub and PPN partners, patient utilization rates of our co-pay assistance and other affordability programs and the proportion of patients acquiring XHANCE through an insurance benefit. There is also the potential for variability that results from changes in estimation methodology by us and the third parties that we rely upon to provide certain prescription and inventory data which may lead to revisions of historical estimates of prescription volumes and our calculated average net product revenues per prescription.

Costs of product sales

Costs of product sales includes the cost of inventory sold, which includes direct and indirect manufacturing and supply chain costs.

Research and development expense

Research and development expense consists primarily of expenses incurred to prepare for, initiate and conduct our planned clinical trials, research efforts for new products and device improvements. We expense research and development costs as incurred. These expenses include:

▪personnel expenses, including salaries, benefits and stock-based compensation expense;

▪costs of funding clinical development performed by third parties, including pursuant to agreements with contract research organizations (CROs), as well as investigative sites and consultants that conduct or support our nonclinical studies and clinical trials;

▪expenses associated with the continued development of the Exhalation Delivery System;

▪expenses related to the continued development of our product portfolio;

▪expenses incurred under agreements with contract manufacturing organizations (CMOs), including manufacturing scale-up expenses prior to regulatory approval of products for commercial sale and the cost of acquiring and manufacturing preclinical study and clinical trial materials;

▪consultant fees and expenses associated with outsourced professional, scientific and development services;

▪expenses for regulatory activities, including filing fees paid to regulatory agencies and costs incurred to compile and respond to filings with the FDA; and

▪allocated expenses for facility costs, including rent, utilities, depreciation and maintenance.

We typically use our employee, consultant and infrastructure resources across our research and development programs. Although we track certain outsourced development costs by product candidate, we do not allocate personnel costs or other internal costs to specific product candidates.

Selling, general and administrative expense

General and administrative expense consists primarily of personnel expenses, including salaries, benefits and stock-based compensation expense, for employees in executive, finance, accounting, business development, information technology, legal and human resource functions. General and administrative expense also includes corporate facility costs, including rent, utilities, depreciation and maintenance, not otherwise included in research and development expense, as well as regulatory fees and professional fees for legal, patent, accounting, financial advisory, and other consulting services.

Sales and marketing expenses include our sales team and supporting promotional materials, digital promotion, peer-to-peer education, congresses / conventions, product samples, and marketing activities such as direct-to-patient / direct-to-consumer initiatives. Additionally, sales and marketing-related expenses include fees paid to our hub and PPN partners for services unrelated to traditional distribution functions, such as patient services fees, data fees, benefit claims adjudication and program management fees.

Warrant Liability

In November 2022, we issued warrants in connection with a public offering. These warrants are required to be measured at fair value and reported as a liability in the consolidated balance sheet. We recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and are required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations for the three months ended March 31, 2025 and 2024.

Derivative Liability

In connection with entering into and subsequently amending the Note Purchase Agreement with Pharmkon Advisors, LP (the Pharmakon Senior Secured Notes), we bifurcated the embedded interest make-whole provision and accounted for the bifurcated feature as a derivative instrument. Historically, the estimated fair value of the bifurcated derivative feature was de minimis. In connection with entering into the Merger Agreement, the change in fair value of the derivative feature was estimated to be $8.8 million and is recorded in our consolidated balance sheet and statement of operations as of and for the three months ended March 31, 2025. The derivative feature will continue to be remeasured at each reporting period with changes in fair value of the Level 3 derivative liability recorded in the consolidated statements of operations.

Interest (income) expense

Interest (income) expense consists of interest earned on our cash and cash equivalents held with institutional banks and interest expense is primarily related to the Pharmakon Senior Secured Notes.

Other (income) expense

Other (income) expense consists primarily of unrealized gains and losses on our warrant liability, as well as foreign currency (income) losses due to exchange rate fluctuations on transactions denominated in a currency other than our functional currency.

Consolidated Results of Operations

Comparison of three months ended March 31, 2025 and 2024

The following table sets forth our selected consolidated statements of operations data for the periods indicated (in thousands):


	Three Months Ended March 31,
	2025		2024
Revenues:
Net product revenues	$	18,510	$	14,880

Total revenues	18,510		14,880
Costs and expenses:
Cost of product sales	1,750		1,231
Research and development	760		1,206
Selling, general and administrative	23,590		20,518
Total operating expenses	26,100		22,955
Loss from operations	(7,590)		(8,075)
Other expense:
Unrealized loss on fair value of warrants	1,800		1,300
Unrealized loss on fair value of derivative features	8,760		—
Interest expense, net	$	4,266	$	4,674
Other loss:	$	—	$	18
Total other expense	14,826		5,992
Net loss	$	(22,416)	$	(14,067)

Net product revenues

Net product revenues related to sales of XHANCE were $18.5 million and $14.9 million for the three months ended March 31, 2025 and 2024, respectively. The year-over-year increase in net product revenues is attributable primarily to an increase in units sold due to the chronic sinusitis launch as well as an increase in average net product revenues per prescription in 2025 resulting from favorable price, business mix, and changes in channel inventory levels in the first quarter of 2025 compared to the first quarter of 2024.

Cost of product sales

Cost of product sales related to XHANCE were $1.8 million and $1.2 million for the three months ended March 31, 2025 and 2024, respectively. The increase in cost of product sales is due to an increase in units sold in 2025.

Research and development expense

Research and development expense was $0.8 million and $1.2 million for the three months ended March 31, 2025 and 2024, respectively.

Selling, general and administrative expense

Selling, general and administrative expense was $23.6 million and $20.5 million for the three months ended March 31, 2025 and 2024, respectively. The $2.8 million increase was due primarily to an increase in sales and marketing costs related to our launch of XHANCE for the treatment of chronic sinusitis, as well as increased legal and financial advisory fees in 2025 related to the Merger Agreement.

Interest expense, net

Interest (income) expense, net, was $4.3 million and $4.7 million for the three months ended March 31, 2025 and 2024, respectively, which was primarily comprised of interest expense on the Pharmakon Senior Secured Notes during both periods.

Other loss

is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations for the three months ended March 31, 2025.

In connection with entering into and subsequently amending the Note Purchase Agreement with Pharmakon Advisors, LP (the Pharmakon Senior Secured Notes), we bifurcated the embedded interest make-whole provision and accounted for the bifurcated feature as a derivative instrument. Historically, the estimated fair value of the bifurcated derivative feature was de minimis. In connection with entering into the Merger Agreement, the change in fair value of the derivative feature was estimated to be $8.8 million and recorded in our consolidated balance sheet and statement of operations as of and for the three months ended March 31, 2025. The derivative feature will continue to be remeasured at each reporting period with changes in fair value of the Level 3 derivative liability recorded in the consolidated statements of operations.

Other loss includes $1.8 million and $8.8 million for the three months ended March 31, 2025 and 2024, respectively of unrealized losses on the fair value of warrants, as well as $8.8 million of unrealized losses on the fair value of the embedded interest make-whole provision derivative instrument for the three months ended March 31, 2025.

Liquidity and Capital Resources

Since inception, we have incurred significant net losses and expect to continue to incur net losses for the foreseeable future. We incurred net losses of $22.4 million and $14.1 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $764.3 million. We have funded our operations primarily through the sale and issuance of stock and debt, as well as through sales of XHANCE and licensing revenues. As of March 31, 2025, we had $72.9 million in cash and cash equivalents.

The following table shows a summary of our cash flows for the periods indicated (in thousands):


	Three Months Ended March 31,
	2025		2024
Net cash used in operating activities	(11,552)		(22,025)
Net cash used in investing activities	—		(22)
Net cash provided by financing activities	—		7

Net decrease in cash and cash equivalents	$	(11,552)	$	(22,040)

Operating activities

Cash used in operating activities decreased by $10.4 million, from $22.0 million for the three months ended March 31, 2024 to $11.6 million for the three months ended March 31, 2025. The decrease in cash used in operating activities was primarily attributable to a higher decrease in accounts payable and accrued expenses and other liabilities in the first quarter of 2024, compared to the first quarter of 2025.

Investing activities

Cash used in investing activities was comparable for the three months ended March 31, 2024 to the three months ended March 31, 2025.

Financing activities

Cash provided by financing activities was comparable for the three months ended March 31, 2024 to the three months ended March 31, 2025.

A&R Note Purchase Agreement

The principal balance of the Pharmakon Senior Secured Notes outstanding under the A&R Note Purchase Agreement was $130,000 at March 31, 2025. See Note 8 of our unaudited consolidated financial statements for a description of terms of the Pharmakon Senior Secured Notes and A&R Note Purchase Agreement, including repayment terms and applicable covenants.

Future funding requirements

We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we:

▪continue advertising and other promotional activities to support the commercialization of XHANCE;

▪continue to provide co-pay and other patient affordability programs for XHANCE;

▪continue clinical development activities for XHANCE, including studies mandated under the Pediatric Research Equity Act;

▪evaluate product candidates;

▪continue to contract to manufacture XHANCE;

▪maintain and protect our patent portfolio;

▪service our debt obligations under the Pharmakon Senior Secured Notes;

▪maintain infrastructure necessary to operate as a publicly-traded, commercial-stage company; and

▪hire additional staff and add operational, financial and information systems to execute our business plan.

Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:

▪the success of our commercialization of XHANCE for the treatment of chronic rhinosinusitis with nasal polyps and chronic sinusitis including, among other things, continued patient and physician adoption of XHANCE and our ability to maintain adequate insurance coverage and reimbursement for XHANCE;

▪our clinical development plans for XHANCE, including the outcome, timing and cost of studies mandated under the Pediatric Research Equity Act;

▪the cost of commercialization activities for XHANCE, including product manufacturing, distribution, marketing and sales;

▪net product revenues received from sales of XHANCE;

▪the level of co-pay assistance and other patient affordability programs offered for XHANCE;

▪the costs involved in preparing, filing and prosecuting patent applications and annuity fees relating to issued patents;

▪the cost of maintaining and enforcing our intellectual property rights, as well as the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us;

▪the initiation, progress, timing, costs and results of clinical trials and other research and development related to additional product candidates,

▪the extent to which we in-license, acquire or otherwise partner in development or commercialization of other products, product candidates or technologies; and

▪our ability to maintain compliance with the financial covenants (including the requirement for us to achieve certain minimum trailing twelve-month consolidated XHANCE net sales and royalties thresholds and the requirement for us to maintain at least a minimum level of cash and cash equivalents at all times), and the other provisions under the A&R Note Purchase Agreement.

As of March 31, 2025, we had $72.9 million in cash and cash equivalents. In the event we are able to maintain compliance with the financial covenants and the other terms of the A&R Pharmakon Note Purchase Agreement or obtain a waiver to or modification of such covenants, we believe our existing cash and cash equivalents would be sufficient to fund our operations and debt service obligations into the first quarter of 2026. However, as discussed below and elsewhere in this Form 10-Q, there is substantial doubt about our ability to maintain compliance with such financial covenants and other terms of the A&R Note Purchase Agreement and our ability to continue as a going concern.

We will likely require additional capital in the future secured through equity or debt financings, partnerships, collaborations, or other sources in order to maintain compliance with the financial covenants of the A&R Note Purchase Agreement as discussed below, to meet our debt service obligations, including repayment of the Pharmakon Senior Secured Notes, and to carry out our planned development and commercial activities. If additional capital is not obtained when required, we may need to delay or curtail our operations until additional funding is received.

Our continuation as a going concern is dependent on our ability to maintain compliance with the covenants under the A&R Note Purchase Agreement, including minimum trailing twelve-month consolidated XHANCE net sales and royalties we are required to achieve and our ability to generate sufficient cash flows from operations to meet our obligations and/or obtain additional capital through equity or debt financings, partnerships, collaborations, or other sources, as may be required. The A&R Note Purchase Agreement includes events of default, in certain cases subject to customary periods to cure, following which Pharmakon may accelerate all amounts outstanding pursuant to the Note Purchase Agreement.

Additionally, commencing on September 30, 2025, we will be required to begin making principal repayments on our debt in eight quarterly installments of $16.3 million each through maturity in June 2027. We believe that it is probable that, absent additional capital, we will not be able to maintain compliance with the minimum cash covenant under the A&R Note Purchase Agreement beginning in the first quarter of 2026, which will constitute a default under the A&R Note Purchase Agreement.

We also believe it is probable that we will not be able to maintain compliance with the trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds under the A&R Note Purchase Agreement prior to the end of 2025, which will constitute a default under the A&R Note Purchase Agreement if we are unable to obtain a modification or waiver of such minimum consolidated XHANCE net sales and royalties thresholds.

Further, the A&R Note Purchase Agreement includes a requirement that our annual and quarterly consolidated financial statements commencing with the year ending December 31, 2025, not be subject to any statement as to “going concern” (the "Going Concern Covenant"). We believe that it is unlikely that we will be able comply with the Going Concern Covenant beginning with our consolidated financial statements for the year ending December 31, 2025. Failure to comply with the Going Concern Covenant would also constitute a default under the A&R Note Purchase Agreement if we are unable to obtain a modification or waiver of this covenant.

In the event of any of the foregoing defaults, the holders of the Pharmakon Senior Secured Notes may declare an event of default under the A&R Note Purchase Agreement and may elect to accelerate the repayment of all unpaid principal, accrued interest and other amounts due, which may require us to delay or curtail our operations until additional funding is received.

Our plans to seek to mitigate these default risks include enhancing our commercial performance to accelerate growth in net revenues, seeking out partnership and collaboration opportunities to expand the market for XHANCE, and, if required, requesting a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinancing the debt. However, there can be no assurance that we will be successful in accelerating growth in net revenue, expanding the market for XHANCE, obtaining a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinancing the debt. If we are unable to accelerate growth in net revenue, expand the market for XHANCE, obtain a modification or waiver of the covenants under the A&R Note Purchase Agreement, and/or refinance the debt, we may need to delay or curtail its operations until we obtain additional capital which may not be available on a timely basis, on favorable terms, or at all, and such capital, if obtained, may not be sufficient to meet our payment obligations or enable us to continue to implement our long-term business strategy. In such an event, our business, prospects, financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. These factors raise substantial doubt about our ability to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the fair value for such assets or less than the value at which those assets are carried on our financial statements, and it is likely that investors will lose all or a part of their investment. Additionally, if we seek additional financing to fund our debt service obligations and business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide funding to us on commercially reasonable terms, if at all.

Critical accounting policies

The Critical Accounting Policies and Significant Judgments and Estimates included in our annual report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 26, 2025, have not materially changed.

Recent accounting pronouncements

See Note 3 to our unaudited interim consolidated financial statements of this Form 10-Q for a description of recent accounting pronouncements applicable to our consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.

Our Chief Executive Officer and our Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2025.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

We are party to legal proceedings that arose in connection with our definitive proxy statement on Schedule 14A (the Definitive Proxy Statement) filed with SEC on April 15, 2025. On April 23, 2025, a purported individual stockholder of Optinose filed a complaint in New York state court, captioned Thompson v. OptiNose, Inc. et al., Index No. 652528/2025 (N.Y. Sup. Ct.), naming as defendants, Optinose, its Chief Executive Officer, and the members of our board of directors as of the date of the Merger Agreement (the “Thompson Complaint”). On April 24, 2025, an additional case was filed by a purported individual stockholder of OptiNose in New York state court, captioned Smith v. OptiNose, Inc., et al., Index No. 652552/2025 (N.Y. Sup. Ct.), naming the same defendants (the “Smith Complaint”). The Thompson and Smith Complaints, and any similar subsequently filed cases involving us, our board of directors or any committee thereof and/or any of our directors or officers relating directly or indirectly to the Merger Agreement, the Merger or any related transaction, are referred to as the “Merger Litigations.”

The Merger Litigations filed to date generally allege that the Definitive Proxy Statement is materially incomplete and misleading by allegedly failing to disclose certain purportedly material information. The Merger Litigations assert misrepresentation claims under New York common law. The Merger Litigations seek, among other things, an order (i) enjoining the defendants from proceeding with the proposed Merger until such time that the defendants disclose certain allegedly material information that was allegedly omitted from the Definitive Proxy Statement, (ii) rescinding the proposed Merger in the event the Merger is consummated or awarding actual and putative damages to the plaintiffs in the event that it is consummated, (iii) awarding the plaintiffs fees and expenses in connection with the Litigation Matters, including reasonable attorneys’ and experts’ fees and expenses and (iv) granting such other and further relief as the court may deem just and proper.

We cannot predict the outcome of each Merger Litigation, nor can we predict the amount of time and expense that will be required to resolve each Merger Litigation. We believe that the claims and allegations in the Thompson and Smith Complaints are without merit and that no supplemental disclosures are required under applicable law. We and our directors intend to vigorously defend against each Merger Litigation and any subsequently filed similar actions. It is possible that additional similar complaints could be filed in connection with the proposed Merger. We cannot estimate the possible loss or range of loss from the Merger Litigations. If any additional complaints are filed, absent new or significantly different allegations, we will not necessarily disclose such additional filings.

In addition, thirteen purported stockholders of OptiNose sent demand letters regarding the Definitive Proxy Statement (the Demand Letters). Based on the same core allegations as the Merger Litigations, the Demand Letters allege that the Definitive Proxy Statement contains material misstatements and omission in violation of Section 14(a), Section 20(a) and Rule 14a-9 of the Exchange Act and request that we disseminate corrective disclosures in an amendment or supplement to the Definitive Proxy Statement prior to the Special Meeting of our stockholders to vote on the proposed Merger.

While we believe that the disclosures set forth in the Definitive Proxy Statement comply fully with all applicable law and deny the allegations in the Merger Litigations and the Demand Letters, in order to moot these disclosure claims, avoid nuisance and possible expense and business delays, and provide additional information to our stockholders, we voluntarily supplemented certain disclosures in the Definitive Proxy Statement related to the above referenced claims with the supplemental disclosures set forth in our definitive additional materials filed with the SEC on May 8, 2025. Nothing in the definitive additional materials shall be deemed an admission of the legal merit, necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, we specifically deny all allegations in the Merger Litigations and the Demand Letters that any additional disclosure was or is required or material.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed in Part I, “Item 1A, Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 26, 2025.

ITEM 5. OTHER INFORMATION

Trading Plans

On February 21, 2025, each of Ramy Mahmoud, the Company’s Chief Executive Officer and member of the board of directors, Terry Kohler, the Company's Chief Financial Officer, Michael Marino, the Company’s Chief Legal Officer, and Paul Spence, the Company's Chief Commercial Officer, received an annual equity grant consisting of stock options and restricted stock units (“RSUs”). In accordance with the applicable grant agreements relating to such RSUs, each of these executive officers entered into “sell-to-cover” arrangements that constitute “non-Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K), mandatorily requiring the pre-arranged sale of shares upon vesting to satisfy tax withholding obligations arising solely from such vesting of the RSUs and the related issuance of shares. The amount of shares to be sold to satisfy the tax withholding obligations under these arrangements is dependent on the trading price of the Company’s common stock at the time of the vesting of the RSUs. The duration of each these arrangements is until the final vesting date of the applicable RSUs or the earlier forfeiture of unvested RSUs as set forth in the grant agreement.

Except as set forth above, during the three months ended March 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (as such terms are defined under Item 408 of Regulation S-K).

ITEM 6. EXHIBITS

The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q. Where so indicated, exhibits that were previously filed are incorporated by reference. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated.

INDEX TO EXHIBITS

Exhibit
Number

Exhibit Description

2.1

Agreement and Plan of Merger, dated as of March 19, 2025, among OptiNose, Inc, Paratek Pharmaceuticals, Inc. and Orca Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to t h e Company's Current Report on Form 8-K (File No. 001-38241), as filed with the SEC on March 20, 2025.

3.1

Fourth Amended and Restated Certificate of Incorporation of OptiNose, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-38241), as filed with the SEC on October 18, 2017).

3.2

Amended and Restated Bylaws of OptiNose, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-38241), as filed with the SEC on October 18, 2017).

3.3

Certificate of Amendment of Fourth Amended and Restated Certificate of Incorporation of OptiNose, Inc. (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 10-Q (File No. 001-38241), as filed with the SEC on August 10, 2023).

3.4

Certificate of Amendment of Fourth Amended and Restated Certificate of Incorporation of OptiNose, Inc., effective December 30, 2024 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-38241), as filed with the SEC on December 30, 2024).

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15a-14(a) under the Exchange Act.

31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15a-14(a) under the Exchange Act

32.1

Certification Pursuant to 18 U.S.C. Section 1350 of principal executive officer.

32.2

Certification Pursuant to 18 U.S.C. Section 1350 of principal financial officer.

99.1

Voting Agreement, dated as of March 19, 2025, by and between Paratek Pharmaceuticals, Inc. and MVM Partners LLC. (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K (File No. 001-38241), as filed with the SEC on March 20, 2025.

99.2

Form of Director and Officer Voting Agreement (incorporated by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K (File No. 001-38241), as filed with the SEC on March 20, 2025.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

OPTINOSE, INC.

Date:

May 14, 2025

By:

/s/ TERRY KOHLER

Name:

Terry Kohler

Title:

Chief Financial Officer

(Principal Financial and Accounting Officer)

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Ramy Mahmoud, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of OptiNose, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date: May 14, 2025						/s/ Ramy Mahmoud Ramy Mahmoud Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL

OFFICER PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Terry Kohler, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of OptiNose, Inc.;

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date: May 14, 2025						/s/ Terry Kohler Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE

OFFICER PURSUANT TO 18 U.S.C

SECTION 1350, AS ADOPTED PURSUANTTO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Ramy Mahmoud, Chief Executive Officer of OptiNose, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.the Quarterly Report on Form 10-Q of the Company for the period ending March 31, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.



Date: May 14, 2025						/s/ Ramy Mahmoud Ramy Mahmoud Chief Executive Officer (Principal Executive Officer)

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL

OFFICER PURSUANT TO U.S.C SECTION

1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Terry Kohler, Chief Accounting Officer of OptiNose, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.



Date: May 14, 2025						/s/ Terry Kohler Terry Kohler Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2025	May 01, 2025
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2025
Document Transition Report	false
Entity File Number	001-38241
Entity Registrant Name	OPTINOSE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	42-1771610
Entity Address, Address Line One	777 Township Line Road
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Yardley
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19067
City Area Code	267
Local Phone Number	364-3500
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	OPTN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,127,381
Entity Central Index Key	0001494650
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	Q1
Amendment flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2025	Dec. 31, 2024
Current assets:
Cash and cash equivalents	$ 72,933	$ 84,485
Accounts receivable, net	23,142	26,392
Inventory	11,300	11,463
Prepaid expenses and other current assets	4,631	3,503
Total current assets	112,006	125,843
Property and equipment, net	541	605
Other assets	2,307	2,337
Total assets	114,854	128,785
Current liabilities:
Accounts payable	1,420	450
Accrued expenses and other current liabilities	30,723	35,881
Derivative liability	8,760	0
Warrant liability	6,900	0
Short term debt, net	127,205	126,482
Total current liabilities	175,008	162,813
Warrant liability	0	5,100
Other liabilities	1,212	1,232
Total liabilities	176,220	169,145
Stockholders' deficit
Common stock, $0.001 par value; 350,000,000 shares authorized;10,127,381 and 10,058,406 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively.	10	10
Additional paid-in capital	703,041	701,631
Accumulated deficit	(764,333)	(741,917)
Accumulated other comprehensive loss	(84)	(84)
Total stockholders' deficit	(61,366)	(40,360)
Total liabilities and stockholders' deficit	$ 114,854	$ 128,785

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2025	Dec. 31, 2024
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	350,000,000	350,000,000
Common stock, shares issued (in shares)	10,127,381	10,058,406
Common stock, shares outstanding (in shares)	10,127,381	10,058,406

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2025	Mar. 31, 2024
Income Statement [Abstract]
Total revenues	$ 18,510	$ 14,880
Costs and expenses:
Cost of product sales	1,750	1,231
Research and development	760	1,206
Selling, general and administrative	23,590	20,518
Total costs and expenses	26,100	22,955
Loss from operations	(7,590)	(8,075)
Other (income) expense:
Unrealized loss on fair value of warrants	1,800	1,300
Unrealized loss on fair value of derivative features	8,760	0
Interest income	(621)	(296)
Interest expense	4,887	4,970
Foreign currency loss	0	18
Net Loss	$ (22,416)	$ (14,067)
Net loss per share of common stock, basic (in dollars per share)	$ (1.92)	$ (1.87)
Net loss per share of common stock - diluted (in dollars per share)	$ (1.92)	$ (1.87)
Weighted average common shares outstanding, basic (in shares)	11,667,531	7,528,600
Weighted average common shares outstanding - diluted (in shares)	11,667,531	7,528,600
Revenue from Contract with Customer, Product and Service [Extensible Enumeration]	Net product revenues	Net product revenues

Consolidated Statements of Changes in Stockholders' Deficit - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2023	$ (86,606)	$ 7	$ 633,847	$ (720,376)	$ (84)
Beginning balance (in shares) at Dec. 31, 2023		7,493,521
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	1,456		1,456
Vesting of restricted stock units	1	$ 1
Vesting of restricted stock units (in shares)		31,901
Issuance of common stock under employee stock purchase plan (in shares)		10,714
Net loss	(14,067)			(14,067)
Ending balance at Mar. 31, 2024	(99,216)	$ 8	635,303	(734,443)	(84)
Ending balance (in shares) at Mar. 31, 2024		7,536,136
Beginning balance at Dec. 31, 2024	$ (40,360)	$ 10	701,631	(741,917)	(84)
Beginning balance (in shares) at Dec. 31, 2024	10,058,406	10,058,406
Increase (Decrease) in Stockholders' Equity
Stock compensation expense	$ 1,410		1,410
Vesting of restricted stock units (in shares)		54,971
Issuance of common stock under employee stock purchase plan (in shares)		14,004
Net loss	(22,416)			(22,416)
Ending balance at Mar. 31, 2025	$ (61,366)	$ 10	$ 703,041	$ (764,333)	$ (84)
Ending balance (in shares) at Mar. 31, 2025	10,127,381	10,127,381

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2025	Mar. 31, 2024
Operating activities:
Net loss	$ (22,416)	$ (14,067)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	64	83
Stock-based compensation	1,410	1,456
Change in fair value of warrant liability	1,800	1,300
Change in fair value of derivative liability	8,760	0
Amortization of debt discount and issuance costs	723	419
Changes in operating assets and liabilities:
Accounts receivable	3,250	5,590
Prepaid expenses and other assets	(866)	(1,048)
Inventory	163	(2,263)
Accounts payable	971	(1,973)
Accrued expenses and other liabilities	(5,411)	(11,522)
Cash used in operating activities	(11,552)	(22,025)
Investing activities:
Purchases of property and equipment	0	(22)
Cash used in investing activities	0	(22)
Financing activities:
Cash paid for financing costs	0	7
Cash provided by financing activities	0	7
Net decrease in cash and cash equivalents	(11,552)	(22,040)
Cash and cash equivalents at beginning of period	84,485	73,684
Cash and cash equivalents at end of period	72,933	51,644
Supplemental disclosure of cash flow information:
Cash paid for interest	4,163	9,218
Supplemental disclosure of noncash activities:
Recognition of right-of-use assets and lease liabilities	$ 233	$ 359

Organization and Description of Business	3 Months Ended
Organization and Description of Business	Mar. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	Organization and Description of Business OptiNose, Inc. (the Company) was incorporated in Delaware in May 2010 (inception) and has facilities in Yardley, Pennsylvania and Ewing, New Jersey. The Company's predecessor entity, OptiNose AS, was formed under the laws of Norway in September 2000. In 2010, OptiNose AS became a wholly-owned subsidiary of the Company as part of an internal reorganization. Optinose AS was liquidated in October 2023. During 2022, the Company's board of directors also approved the liquidation of Optinose UK, in order to simplify the corporate structure. Optinose UK was liquidated in July 2024. The Company is a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. The Company's first commercial product, XHANCE® (fluticasone propionate) nasal spray, 93 microgram (mcg), is a therapeutic utilizing the Company's proprietary Exhalation Delivery System™ (EDS®) that delivers a topically-acting corticosteroid for the treatment of chronic rhinosinusitis with and without nasal polyps. On March 19, 2025, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Paratek Pharmaceuticals, Inc. (Paratek) and Orca Merger Sub, Inc., a wholly owned subsidiary of Paratek (Merger Sub). Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Paratek (the Merger). Pursuant to the Merger Agreement, upon the closing of the Merger, each share of Company common stock issued and outstanding immediately prior to the closing of the Merger Agreement, will automatically be converted into the right to receive (i) $9.00 in cash, without interest and (ii) one contractual contingent value right (CVR) pursuant to the terms of a Contingent Value Right Agreement to be entered into between Paratek and a rights agent at the effective time of the Merger (the CVR Agreement). Each CVR represents the right to receive a cash payment of (i) $1.00 (without interest and subject to withholding of applicable taxes) per CVR, payable upon achievement of net sales (as defined in the CVR Agreement) of XHANCE in the United States in any calendar year equal to or in excess of $150 million during the period beginning on the date of the closing of the Merger Agreement and ending on December 31, 2028 and (ii) $4.00 (without interest and subject to withholding of applicable taxes) per CVR, payable upon achievement of net sales of XHANCE in the United States in any calendar year equal to or in excess of $225 million during the period beginning on the date of the closing of the Merger Agreement and ending on December 31, 2029. The consummation of the Merger is subject to certain customary closing conditions, including the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of the Company’s common stock. The consummation of the Merger is not subject to any financing condition. A Special Meeting of the Company's Stockholders will be held on May 16, 2025 to vote on, among other things, the Merger Agreement. Subject to stockholder approval of the Merger Agreement at the Special Meeting and the satisfaction of the other closing conditions, the Company anticipates that the Merger will be consummated on or around May 21, 2025.

Liquidity	3 Months Ended
Liquidity	Mar. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Liquidity	Liquidity Since inception, the Company's operations have focused on organization and staffing, business planning, raising capital, establishing an intellectual property portfolio, conducting preclinical studies and clinical trials, pursuing regulatory approvals and commercializing XHANCE in the US. As of March 31, 2025, the Company had cash and cash equivalents of $72,933 and a working capital deficit of $63,002. The Company is subject to a number of risks similar to other life sciences companies, including successful discovery, development and commercialization of its products and product candidates, raising additional capital, the development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company's products. The Company has incurred recurring net losses since its inception and has accumulated a deficit of $764,333 as of March 31, 2025. The Company entered into a Note Purchase Agreement (the Note Purchase Agreement) on September 12, 2019 with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of the BioPharma Credit Funds (BioPharma) which was subsequently amended on August 13, 2020, March 2, 2021, November 16, 2021, August 10, 2022, and November 9, 2022. On November 23, 2022, the Company amended and restated the Note Purchase Agreement (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were modified. The Company entered into the first amendment to the A&R Note Purchase Agreement (the First Amendment) on March 5, 2024, which waived certain covenants. The Company entered into the second amendment to the A&R Note Purchase Agreement (the Second Amendment) on March 8, 2024, which further modified the financial covenants. On May 8, 2024, the Company entered into the third amendment to the A&R Note Purchase Agreement (the Third Amendment), which provided for a further waiver to the requirement that the Company's annual and quarterly consolidated financial statements not be subject to any statement as to "going concern" through the fiscal quarter ending September 30, 2025, and modified the minimum amount of cash and cash equivalents that the Company is required to maintain at all times under the A&R Note Purchase Agreement (see Note 8). The principal balance outstanding under the A&R Note Purchase Agreement was $130,000 at March 31, 2025. The Company’s continuation as a going concern is dependent on its ability to maintain compliance with the covenants under the A&R Note Purchase Agreement, including minimum trailing twelve-month consolidated XHANCE net sales and royalties the Company is required to achieve and its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional capital through equity or debt financings, partnerships, collaborations, or other sources, as may be required. The A&R Note Purchase Agreement includes events of default, in certain cases subject to customary periods to cure, following which Pharmakon may accelerate all amounts outstanding pursuant to the Note Purchase Agreement. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Additionally, commencing on September 30, 2025, the Company will be required to begin making principal repayments on its debt in eight quarterly installments of $16.3 million each through maturity in June 2027. The Company believes that it is probable that, absent additional capital, it will not be able to maintain compliance with the minimum cash covenant under the A&R Note Purchase Agreement beginning in the first quarter of 2026. The Company believes it is probable that it will not be able to maintain compliance with the trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds under the A&R Note Purchase Agreement prior to the end of 2025, which will constitute a default under the A&R Note Purchase Agreement if the Company is unable to obtain a modification or waiver of such minimum consolidated XHANCE net sales and royalties thresholds. Further, the A&R Note Purchase Agreement includes a requirement that the Company's annual and quarterly consolidated financial statements commencing with the year ending December 31, 2025, not be subject to any statement as to “going concern” (the "Going Concern Covenant"). The Company believes that it is unlikely that it will be able comply with the Going Concern Covenant beginning with the Company's consolidated financial statements for the year ending December 31, 2025. Failure to comply with the Going Concern Covenant would also constitute a default under the A&R Note Purchase Agreement if the Company is unable to obtain a modification or waiver of this covenant. In the event of any of the foregoing defaults, the holders of the Pharmakon Senior Secured Notes may declare an event of default under the A&R Note Purchase Agreement and may elect to accelerate the repayment of all unpaid principal, accrued interest and other amounts due, which may require the Company to delay or curtail its operations until additional funding is received. The terms of the A&R Note Purchase Agreement and the Pharmakon Senior Secured Notes, including applicable covenants, are described in Note 8. Management’s plans to mitigate these risks include enhancing its commercial performance to accelerate growth in net revenues, seeking out partnership and collaboration opportunities to expand the market for XHANCE, and, if required, requesting a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinancing the debt. However, there can be no assurance that the Company will be successful in accelerating growth in net revenues, securing a partnership or collaboration, obtaining a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinancing the debt. If the Company is unable to accelerate growth in net revenues, secure a partnership or collaboration, obtain a modification or waiver of the covenants under the A&R Note Purchase Agreement, or refinance the debt, the Company may need to delay or curtail its operations. As a result of these factors, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.

Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

Reverse Stock Split

All of the share and per share amounts discussed in the accompanying consolidated financial statements have been adjusted to reflect the effect of this reverse split.

Use of estimates

Concentration of credit risk

institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions.

Customer and supplier concentration

Fair value of financial instruments

•Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations.

Net product revenues

Net loss per common share

Diluted net loss per share for these periods presented on the statement of operations do not reflect the potential common shares noted below as their effect would be antidilutive.


	March 31,
	2025	2024
Stock options	679,232	619,298
Restricted stock units	875,293	328,471
Common stock warrants	2,184,533	2,184,533
Total	3,739,058	3,132,302

Income taxes

Recent accounting pronouncements

Fair Value Measurements

3 Months Ended

Mar. 31, 2025

Fair Value Disclosures [Abstract]

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).


	March 31, 2025
	Total		Level 1		Level 2		Level 3
Liabilities
Derivative Liability - interest make-whole feature	$	8,760	$	—	$	—	$	8,760
Warrant Liability	$	6,900	$	—	$	—	$	6,900
Total Liabilities	$	15,660	$	—	$	—	$	15,660

	December 31, 2024
Liabilities
Warrant Liability	$	5,100	$	—	$	—	$	5,100
Total Liabilities	$	5,100	$	—	$	—	$	5,100

Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis

Warrant Liability

The reconciliation of the Company's liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):



	Warrant Liability		Derivative Liability - Make-Whole Feature
Balance, December 31, 2024	$	5,100	$	—
Additions	—		—
Change in fair value of liability	1,800		8,760
Balance, March 31, 2025	$	6,900	$	8,760

Assumptions Used in Determining Fair Value of Liability-Classified Warrants



	March 31, 2025			December 31, 2024
Stock price	$	9.17		$	6.68
Strike price	$	15.00		$	15.00
Expected volatility	72.5		%	70.0		%
Risk-free interest rate	3.8		%	4.2		%
Expected dividend yield	—		%	—		%
Expected life (years)	2.6			2.9
Fair value per warrant	$	3.40		$	2.53

Assumptions Used in Determining Fair Value of Derivative Liability – Interest Make-Whole Feature

Inventory

3 Months Ended

Mar. 31, 2025

Inventory Disclosure [Abstract]

Inventory

Inventory consisted of the following:


	March 31, 2025		December 31, 2024
Raw materials	$	1,160	$	1,728
Work-in-process	7,967		7,832
Finished goods	2,173		1,903
Total inventory	$	11,300	$	11,463

Inventories are stated at the lower of cost or net realizable value, as determined on a first-in, first-out, basis.

Property and Equipment

3 Months Ended

Mar. 31, 2025

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment, net, consisted of the following:


	March 31, 2025		December 31, 2024
Computer equipment and software	$	1,465	$	1,465
Furniture and fixtures	366		366
Machinery and equipment	3,150		3,150
Leasehold improvements	655		655
Construction in process	115		115
	5,751		5,751
Less: accumulated depreciation	(5,210)		(5,146)
	$	541	$	605

Depreciation expense was $64 and $83 for the three months ended March 31, 2025 and 2024, respectively.

Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 2025

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of:


	March 31, 2025		December 31, 2024
Accrued expenses:
Product revenue allowances	$	17,372	$	21,791
Selling, general and administrative expenses	7,453		5,522
Research and development expenses	392		291
Payroll expenses	3,768		5,692

Other	557		1,338
Total accrued expenses	$	29,542	$	34,634
Other current liabilities:
Lease liability	$	1,181	$	1,247
Total other current liabilities	1,181		1,247
Total accrued expenses and other current liabilities	$	30,723	$	35,881

Debt

3 Months Ended

Mar. 31, 2025

Debt Disclosure [Abstract]

Debt


Trailing Twelve-Months Ending			As Revised Pursuant to Second Amendment
March 31, 2024			$70,000
June 30, 2024			$70,000
September 30, 2024			$72,500
December 31, 2024			$75,000
March 31, 2025			$80,000
June 30, 2025			$87,500
September 30, 2025			$95,000
December 31, 2025			$102,500
March 31, 2026			$120,000
June 30, 2026			$130,000
September 30, 2026			$145,000
December 31, 2026			$150,000
March 31, 2027			$155,000
June 30, 2027			$160,000

The Pharmakon debt balance is comprised of the following:



	March 31, 2025		December 31, 2024
Face amount	$	130,000	$	130,000
Front end fees	(368)		(433)
Debt issuance costs	(3,727)		(4,385)
Back end fees	1,300		1,300
Debt, net	$	127,205	$	126,482

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company is a party to a manufacture and supply agreement pursuant to which it has agreed to make minimum purchases of finished XHANCE units of $2.4 million in both 2025 and 2026. If the Company fails to achieve the minimum purchase commitments, the Company must pay the supplier 50% of the amount of any shortfall and must reimburse the supplier for certain non-cancellable costs and expenses. The Company's minimum purchase commitments are subject to certain exceptions and reductions. The Company has made $0.9 million in purchases during the three months ended March 31, 2025 under the Supply Agreement. The Company is party to legal proceedings that arose in connection with the Company's definitive proxy statement on Schedule 14A (the Definitive Proxy Statement) filed with SEC on April 15, 2025. On April 23, 2025, a purported individual stockholder of Optinose filed a complaint in New York state court, captioned Thompson v. OptiNose, Inc. et al., Index No. 652528/2025 (N.Y. Sup. Ct.), naming as defendants, the Company, its Chief Executive Officer, and the members of the Company's board of directors as of the date of the Merger Agreement (the “Thompson Complaint”). On April 24, 2025, an additional case was filed by a purported individual stockholder of OptiNose in New York state court, captioned Smith v. OptiNose, Inc., et al., Index No. 652552/2025 (N.Y. Sup. Ct.), naming the same defendants (the “Smith Complaint”). The Thompson and Smith Complaints are referred to as the “Merger Litigations.” The Merger Litigations generally allege that the Definitive Proxy Statement is materially incomplete and misleading by allegedly failing to disclose certain purportedly material information. The Merger Litigations assert misrepresentation claims under New York common law. The Merger Litigations seek, among other things, an order (i) enjoining the defendants from proceeding with the proposed Merger until such time that the defendants disclose certain allegedly material information that was allegedly omitted from the Definitive Proxy Statement, (ii) rescinding the proposed Merger in the event the Merger is consummated or awarding actual and putative damages to the plaintiffs in the event that it is consummated, (iii) awarding the plaintiffs fees and expenses in connection with the Litigation Matters, including reasonable attorneys’ and experts’ fees and expenses and (iv) granting such other and further relief as the court may deem just and proper. The Company cannot predict the outcome of each Merger Litigation, nor can the Company predict the amount of time and expense that will be required to resolve each Merger Litigation. The Company believes that the claims and allegations in the Merger Litigations are without merit and that no supplemental disclosures are required under applicable law. The Company and its directors intend to vigorously defend against each Merger Litigation. It is possible that additional similar complaints could be filed in connection with the proposed Merger. The Company cannot estimate the possible loss or range of loss from the Merger Litigations. In addition, thirteen purported stockholders of the Company sent demand letters regarding the Definitive Proxy Statement (the Demand Letters). Based on the same core allegations as the Merger Litigations, the Demand Letters allege that the Definitive Proxy Statement contains material misstatements and omission in violation of Section 14(a), Section 20(a) and Rule 14a-9 of the Exchange Act and request that the Company disseminate corrective disclosures in an amendment or supplement to the Definitive Proxy Statement prior to the Special Meeting of the Company's stockholders to vote on the proposed Merger. While the Company believes that the disclosures set forth in the Definitive Proxy Statement comply fully with all applicable law and deny the allegations in the Merger Litigations and the Demand Letters, in order to moot these disclosure claims, avoid nuisance and possible expense and business delays, and provide additional information to the Company's stockholders, the Company voluntarily supplemented certain disclosures in the Definitive Proxy Statement related to the above referenced claims with the supplemental disclosures set forth in the Company's definitive additional materials filed with the SEC on May 8, 2025. Nothing in the definitive additional materials shall be deemed an admission of the legal merit, necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, the Company specifically denies all allegations in the Merger Litigations and the Demand Letters that any additional disclosure was or is required or material.

Employee Benefit Plans	3 Months Ended
Employee Benefit Plans	Mar. 31, 2025
Retirement Benefits [Abstract]
Employee Benefit Plans	Employee Benefit Plans The Company maintains a defined contribution 401(k) retirement plan. For the three months ended March 31, 2025 and 2024, $449 and $183, respectively, were recorded in expense for the Company match. The Company's contributions are made in cash. The Company also maintains a severance benefit plan for employees that is governed by the Employee Retirement Income Security Act of 1974. The severance benefit plan provides severance benefits to eligible employees who are involuntarily terminated from their jobs for reasons other than cause, disability, or death.

Stockholders' Equity

3 Months Ended

Mar. 31, 2025

Equity [Abstract]

Stockholders' Equity

As of March 31, 2025, the Company had the following warrants outstanding to purchase shares of Common Stock:

Number of warrants

Classification

Exercise Price Per Share

Expiration Date

166,666

Equity

$15.00

November 18, 2026

2,017,866

Liability

$15.00

November 23, 2027

1,580,000

Equity

$0.0015

No Expiration

Stock-based Compensation

3 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation


	Three Months Ended March 31,
		2025		2024
Cost of product sales		$	14	$	17
Research and development		21		57
General and administrative		1,375		1,382
		$	1,410	$	1,456

Stock Options

The following table summarizes the activity related to stock option grants to employees and non-employees for the three months ended March 31, 2025:


	Shares	Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2024	624,234	$	54.77	6.83
Granted	80,775	5.83
Exercised	—	—
Expired	(25,356)	59.62
Forfeited	(421)	20.06
Outstanding at March 31, 2025	679,232	$	48.79	7.22
Exercisable at March 31, 2025	348,369	$	78.31	5.70

Included in the table above are 94,419 outstanding inducement options granted outside the 2010 Plan. The grants were made pursuant to the Nasdaq Inducement Grant Exception.

The Company calculated the fair value of the stock option grants using the following weighted average assumptions:


	Three Months Ended March 31,
	2025
Risk free interest rate	4.27	%
Expected term (in years)	6.1
Expected volatility	77.54	%
Annual dividend yield	0.00	%

Restricted Stock Units

The following table summarizes the activity related to RSUs granted to employees for the three months ended March 31, 2025:


			Shares
Balance at December 31, 2024			695,487
Granted			235,265
Vested and settled			(55,122)
Expired/forfeited/canceled			(337)
Balance at March 31, 2025			875,293
Expected to vest at March 31, 2025			875,293

Included in the table above are 12,749 RSUs granted outside the 2010 Plan. The grants were made pursuant to the Nasdaq Inducement Grant Exception.

2017 Employee Stock Purchase Plan

The Company calculated the fair value of each grant under the 2017 Employee Stock Purchase Plan using the following weighted average assumptions:


	Three Months Ended March 31,
	2025		2024
Risk free interest rate	4.25	%	5.00	%
Expected term (in years)	0.5		0.5
Expected volatility	87.37	%	65.06	%
Annual dividend yield	—	%	—	%

Segment Reporting

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

Segment Reporting

The table below summarizes the net revenue, significant expense categories, and net loss regularly reviewed by the CODM for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024
Total revenues	$	18,510	$	14,880


Cost of product sales	1,750		1,231
Selling & marketing expenses	13,531		13,163
General & administrative expenses	10,063		7,354
Research & development expenses	760		1,206
Other segment items (a)	14,822		5,993
Net loss	$	(22,416)	$	(14,067)





(a) Other segment items included in Segment loss includes unrealized gain or loss on fair value of warrants and derivative features , other income or expense, interest income, and interest expense.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2025	Mar. 31, 2024
Pay vs Performance Disclosure
Net (loss) income	$ (22,416)	$ (14,067)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2025
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	On February 21, 2025, each of Ramy Mahmoud, the Company’s Chief Executive Officer and member of the board of directors, Terry Kohler, the Company's Chief Financial Officer, Michael Marino, the Company’s Chief Legal Officer, and Paul Spence, the Company's Chief Commercial Officer, received an annual equity grant consisting of stock options and restricted stock units (“RSUs”). In accordance with the applicable grant agreements relating to such RSUs, each of these executive officers entered into “sell-to-cover” arrangements that constitute “non-Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K), mandatorily requiring the pre-arranged sale of shares upon vesting to satisfy tax withholding obligations arising solely from such vesting of the RSUs and the related issuance of shares. The amount of shares to be sold to satisfy the tax withholding obligations under these arrangements is dependent on the trading price of the Company’s common stock at the time of the vesting of the RSUs. The duration of each these arrangements is until the final vesting date of the applicable RSUs or the earlier forfeiture of unvested RSUs as set forth in the grant agreement.
Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Terry Kohler [Member]
Trading Arrangements, by Individual
Name	Terry Kohler
Title	Company's Chief Financial Office
Non-Rule 10b5-1 Arrangement Adopted	true
Adoption Date	February 21, 2025
Ramy Mahmoud [Member]
Trading Arrangements, by Individual
Name	Ramy Mahmoud
Title	Chief Executive Officer and member of the board of directors
Non-Rule 10b5-1 Arrangement Adopted	true
Adoption Date	February 21, 2025
Michael Marino [Member]
Trading Arrangements, by Individual
Name	Michael Marino
Title	Company’s Chief Legal Officer
Non-Rule 10b5-1 Arrangement Adopted	true
Adoption Date	February 21, 2025
Paul Spence [Member]
Trading Arrangements, by Individual
Name	Paul Spence
Title	Company's Chief Commercial Officer
Non-Rule 10b5-1 Arrangement Adopted	true
Adoption Date	February 21, 2025

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Use of estimates	Use of estimates The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary.
Concentration of credit risk and Customer and supplier concentration	Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company generally invests its cash in deposits with high credit quality financial institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions. Customer and supplier concentration The Company has exposure to credit risk in accounts receivable from sales of product. XHANCE is sold to wholesale pharmaceutical distributors and preferred pharmacy network (PPN) partners, who, in turn, sell XHANCE to pharmacies, hospitals and other customers.
Fair value of financial instruments	Fair value of financial instruments The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The FASB accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of the inputs as follows: •Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 — Valuations based on observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. •Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. At March 31, 2025 and December 31, 2024, the Company's financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, certain liability classified warrants, and a derivative liability related to an interest make whole feature embedded in the Company's debt agreement. The carrying amounts reported in the Company's financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. In addition, at March 31, 2025, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. At March 31, 2025, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants and the derivative liability for the interest make whole feature. In November 2022, the Company issued warrants in connection with a public offering. Pursuant to the terms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and is required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations.
Net product revenues	Net product revenues The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The Company recognizes revenue from XHANCE sales at the point customers obtain control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company’s variable consideration include the following: Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Trade Discounts and Allowances. The Company generally provides customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized. Product Returns. Consistent with industry practice, the Company has a product returns policy that provides customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The Company estimates the amount of its product that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition to establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors. Government Rebates. The Company is subject to discount obligations under state Medicaid programs and Medicare. Reserves related to these discount obligations are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period. Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. Patient Assistance. Other programs that the Company offers include voluntary co-pay patient assistance programs intended to provide financial assistance to eligible patients with prescription drug co-payments required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. Distribution and Other Fees. The Company pays distribution and other fees to certain customers in connection with the sales of its products. The Company records distribution and other fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale.
Net loss per common share	Net loss per common share Basic net income (loss) per common share is determined by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period.
Income taxes	Income taxes In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the three months ended March 31, 2025 and 2024, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of March 31, 2025 and December 31, 2024, the Company concluded that a full valuation allowance would be necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements.
Recent accounting pronouncements	Recent accounting pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This Update also includes certain other amendments to improve the effectiveness of income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating ASU No. 2023-09 and its impact on results of operations, financial position and cash flows and related disclosures. In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. ASU No. 2024-03 requires new financial statement disclosures that disaggregate information, in a tabular format, about prescribed categories of relevant income statement captions. ASU No. 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating ASU No. 2024-03 and its impact on the Company's related disclosures.
Fair Value Measurements	Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company applies the guidance in ASC 820, Fair Value Measurements, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories: Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level I, 2 and 3 during the three months ended March 31, 2025.

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Antidilutive Shares Excluded From Computation of Net Loss Per Common Share

Diluted net loss per share for these periods presented on the statement of operations do not reflect the potential common shares noted below as their effect would be antidilutive.


	March 31,
	2025	2024
Stock options	679,232	619,298
Restricted stock units	875,293	328,471
Common stock warrants	2,184,533	2,184,533
Total	3,739,058	3,132,302

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2025

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Liabilities Measured on Recurring Basis


	March 31, 2025
	Total		Level 1		Level 2		Level 3
Liabilities
Derivative Liability - interest make-whole feature	$	8,760	$	—	$	—	$	8,760
Warrant Liability	$	6,900	$	—	$	—	$	6,900
Total Liabilities	$	15,660	$	—	$	—	$	15,660

	December 31, 2024
Liabilities
Warrant Liability	$	5,100	$	—	$	—	$	5,100
Total Liabilities	$	5,100	$	—	$	—	$	5,100

Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Inputs Reconciliation

The reconciliation of the Company's liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):



	Warrant Liability		Derivative Liability - Make-Whole Feature
Balance, December 31, 2024	$	5,100	$	—
Additions	—		—
Change in fair value of liability	1,800		8,760
Balance, March 31, 2025	$	6,900	$	8,760

Schedule of Significant Unobservable Inputs in Valuation of Warrants

The estimated fair value of the warrant liability is determined using Level 3 inputs. The inputs and values were as follows:



	March 31, 2025			December 31, 2024
Stock price	$	9.17		$	6.68
Strike price	$	15.00		$	15.00
Expected volatility	72.5		%	70.0		%
Risk-free interest rate	3.8		%	4.2		%
Expected dividend yield	—		%	—		%
Expected life (years)	2.6			2.9
Fair value per warrant	$	3.40		$	2.53

Inventory (Tables)

3 Months Ended

Mar. 31, 2025

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consisted of the following:


	March 31, 2025		December 31, 2024
Raw materials	$	1,160	$	1,728
Work-in-process	7,967		7,832
Finished goods	2,173		1,903
Total inventory	$	11,300	$	11,463

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2025

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment, net, consisted of the following:


	March 31, 2025		December 31, 2024
Computer equipment and software	$	1,465	$	1,465
Furniture and fixtures	366		366
Machinery and equipment	3,150		3,150
Leasehold improvements	655		655
Construction in process	115		115
	5,751		5,751
Less: accumulated depreciation	(5,210)		(5,146)
	$	541	$	605

Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2025

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of:


	March 31, 2025		December 31, 2024
Accrued expenses:
Product revenue allowances	$	17,372	$	21,791
Selling, general and administrative expenses	7,453		5,522
Research and development expenses	392		291
Payroll expenses	3,768		5,692

Other	557		1,338
Total accrued expenses	$	29,542	$	34,634
Other current liabilities:
Lease liability	$	1,181	$	1,247
Total other current liabilities	1,181		1,247
Total accrued expenses and other current liabilities	$	30,723	$	35,881

Debt (Tables)

3 Months Ended

Mar. 31, 2025

Debt Disclosure [Abstract]

Schedule of A&R Note Purchase Agreement and Long Term Balance


Trailing Twelve-Months Ending			As Revised Pursuant to Second Amendment
March 31, 2024			$70,000
June 30, 2024			$70,000
September 30, 2024			$72,500
December 31, 2024			$75,000
March 31, 2025			$80,000
June 30, 2025			$87,500
September 30, 2025			$95,000
December 31, 2025			$102,500
March 31, 2026			$120,000
June 30, 2026			$130,000
September 30, 2026			$145,000
December 31, 2026			$150,000
March 31, 2027			$155,000
June 30, 2027			$160,000

The Pharmakon debt balance is comprised of the following:



	March 31, 2025		December 31, 2024
Face amount	$	130,000	$	130,000
Front end fees	(368)		(433)
Debt issuance costs	(3,727)		(4,385)
Back end fees	1,300		1,300
Debt, net	$	127,205	$	126,482

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2025

Equity [Abstract]

Schedule of Warrants Outstanding

As of March 31, 2025, the Company had the following warrants outstanding to purchase shares of Common Stock:

Number of warrants

Classification

Exercise Price Per Share

Expiration Date

166,666

Equity

$15.00

November 18, 2026

2,017,866

Liability

$15.00

November 23, 2027

1,580,000

Equity

$0.0015

No Expiration

Stock-based Compensation (Tables)

3 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

Schedule of Allocated Stock-Based Compensation Expense


	Three Months Ended March 31,
		2025		2024
Cost of product sales		$	14	$	17
Research and development		21		57
General and administrative		1,375		1,382
		$	1,410	$	1,456

Schedule of Stock Option Activity

The following table summarizes the activity related to stock option grants to employees and non-employees for the three months ended March 31, 2025:


	Shares	Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2024	624,234	$	54.77	6.83
Granted	80,775	5.83
Exercised	—	—
Expired	(25,356)	59.62
Forfeited	(421)	20.06
Outstanding at March 31, 2025	679,232	$	48.79	7.22
Exercisable at March 31, 2025	348,369	$	78.31	5.70

Schedule of Fair Value Options using Black-Scholes Pricing Model

The Company calculated the fair value of the stock option grants using the following weighted average assumptions:


	Three Months Ended March 31,
	2025
Risk free interest rate	4.27	%
Expected term (in years)	6.1
Expected volatility	77.54	%
Annual dividend yield	0.00	%

The Company calculated the fair value of each grant under the 2017 Employee Stock Purchase Plan using the following weighted average assumptions:


	Three Months Ended March 31,
	2025		2024
Risk free interest rate	4.25	%	5.00	%
Expected term (in years)	0.5		0.5
Expected volatility	87.37	%	65.06	%
Annual dividend yield	—	%	—	%

Schedule of Nonvested Restricted Stock Units Activity

The following table summarizes the activity related to RSUs granted to employees for the three months ended March 31, 2025:


			Shares
Balance at December 31, 2024			695,487
Granted			235,265
Vested and settled			(55,122)
Expired/forfeited/canceled			(337)
Balance at March 31, 2025			875,293
Expected to vest at March 31, 2025			875,293

Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

The table below summarizes the net revenue, significant expense categories, and net loss regularly reviewed by the CODM for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024
Total revenues	$	18,510	$	14,880


Cost of product sales	1,750		1,231
Selling & marketing expenses	13,531		13,163
General & administrative expenses	10,063		7,354
Research & development expenses	760		1,206
Other segment items (a)	14,822		5,993
Net loss	$	(22,416)	$	(14,067)





(a) Other segment items included in Segment loss includes unrealized gain or loss on fair value of warrants and derivative features , other income or expense, interest income, and interest expense.

Organization and Description of Business (Details) - Merger Sub	Mar. 19, 2025 USD ($) $ / shares
Business Acquisition
Business combination, per share consideration (usd per share)	$ 9.00
Merger date thru 2028
Business Acquisition
Business combination, cvr (usd per share)	$ 1.00
Sales benchmark \| $	$ 150,000,000
2028-2029
Business Acquisition
Business combination, cvr (usd per share)	$ 4.00
Sales benchmark \| $	$ 225,000,000

Liquidity (Details) $ in Thousands	Nov. 23, 2022 USD ($) installment	Mar. 31, 2025 USD ($)	Dec. 31, 2024 USD ($)
Subsidiary, Sale of Stock
Cash and cash equivalents		$ 72,933	$ 84,485
Working capital deficiency		63,002
Accumulated deficit		(764,333)	$ (741,917)
Note Purchase Agreement
Subsidiary, Sale of Stock
Number of installment payments (installment) \| installment	8
Periodic scheduled payments	$ 16,300
Senior Notes
Subsidiary, Sale of Stock
Principal balance outstanding		$ 130
Senior Notes \| Note Purchase Agreement
Subsidiary, Sale of Stock
Number of installment payments (installment) \| installment	8

Basis of Presentation and Summary of Significant Accounting Policies - Reverse Stock Split (Details)	Dec. 30, 2024 $ / shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Stock spit ratio	0.0666666666666667
Share price (per share)	$ 6.20

Basis of Presentation and Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Customer Concentration Risk - Five Customers - customer	3 Months Ended
	Mar. 31, 2025	Mar. 31, 2024
Accounts Receivable
Concentration Risk
Number of customers (customer)	5	5
Concentration risk (as a percent)	86.00%	86.00%
Sales Revenue, Net
Concentration Risk
Number of customers (customer)	5	5
Concentration risk (as a percent)	73.00%	66.00%

Basis of Presentation and Summary of Significant Accounting Policies - Derivatives (Details) - USD ($) $ in Thousands	Mar. 31, 2025	Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Derivative liability	$ 8,760	$ 0

Basis of Presentation and Summary of Significant Accounting Policies - Net Income (Loss) per Common Share (Details) - $ / shares	Mar. 31, 2025	Dec. 31, 2024	May 10, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.0015

Basis of Presentation and Summary of Significant Accounting Policies - Antidilutive Shares Excluded From Computation of Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2025	Mar. 31, 2024
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities excluded from computation of net loss per common share (in shares)	3,739,058	3,132,302
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities excluded from computation of net loss per common share (in shares)	679,232	619,298
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities excluded from computation of net loss per common share (in shares)	875,293	328,471
Common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities excluded from computation of net loss per common share (in shares)	2,184,533	2,184,533

Fair Value Measurements - Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2025	Dec. 31, 2024
Liabilities
Derivative liability	$ 8,760	$ 0
Warrant Liability	6,900	5,100
Total Liabilities	15,660	5,100
Level 3
Liabilities
Derivative liability	8,760
Warrant Liability	6,900	5,100
Total Liabilities	$ 15,660	$ 5,100

Fair Value Measurements - Fair Value Liabilities Measured on Recurring Basis Using Unobservable Inputs (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2025 USD ($)
Unobservable Input Reconciliation Calculation
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Change in fair value of warrant liability
Warrant
Unobservable Input Reconciliation Calculation
Balance, December 31, 2024	$ 5,100
Additions	0
Change in fair value of liability	1,800
Balance, March 31, 2025	6,900
Derivative Liability - Make-Whole Feature
Unobservable Input Reconciliation Calculation
Balance, December 31, 2024	0
Additions	0
Change in fair value of liability	8,760
Balance, March 31, 2025	$ 8,760

Fair Value Measurements - Narrative (Details)	Mar. 31, 2025 $ / shares shares	Dec. 31, 2024	May 10, 2024	May 09, 2024	Nov. 21, 2022 $ / shares
Fair Value Measurement Inputs and Valuation Techniques
Class of warrant or right restriction, common shares maximum ownership (as a percent)	4.99%
Class of warrant or right restriction, common shares maximum ownership prior to execution (as a percent)	9.99%
Class of warrant or right restriction, common shares maximum ownership after effective waiting period (as a percent)	19.99%
Warrants Expiring November 23, 2027
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding (in shares) \| shares	2,017,866
Warrants exercise price (in dollars per share)	$ 15.00
Strike price \| Monte Carlo Simulation
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	15.00	15.00	15.00	38.55
Warrant
Fair Value Measurement Inputs and Valuation Techniques
Price per share (in dollars per share)					$ 15.00
Warrant \| Public Offering
Fair Value Measurement Inputs and Valuation Techniques
Warrants exercise price (in dollars per share)	$ 0.01

Fair Value Measurements - Valuation of Warrants (Details) - Monte Carlo Simulation	Mar. 31, 2025 $ / shares	Dec. 31, 2024 $ / shares	May 10, 2024	May 09, 2024
Fair Value Measurement Inputs and Valuation Techniques
Expected life (years)	2 years 7 months 6 days	2 years 10 months 24 days
Fair value per warrant (in dollars per share)	$ 3.40	$ 2.53
Stock price
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	9.17	6.68
Strike price
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	15.00	15.00	15.00	38.55
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0.725	0.700
Risk-free interest rate
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0.038	0.042
Expected dividend yield
Fair Value Measurement Inputs and Valuation Techniques
Warrants outstanding, measurement input	0	0

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2025	Dec. 31, 2024
Inventory Disclosure [Abstract]
Raw materials	$ 1,160	$ 1,728
Work-in-process	7,967	7,832
Finished goods	2,173	1,903
Inventory	$ 11,300	$ 11,463

Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2025	Dec. 31, 2024
Property, Plant and Equipment
Property and equipment, gross	$ 5,751	$ 5,751
Less: accumulated depreciation	(5,210)	(5,146)
Property and equipment, net	541	605
Computer equipment and software
Property, Plant and Equipment
Property and equipment, gross	1,465	1,465
Furniture and fixtures
Property, Plant and Equipment
Property and equipment, gross	366	366
Machinery and equipment
Property, Plant and Equipment
Property and equipment, gross	3,150	3,150
Leasehold improvements
Property, Plant and Equipment
Property and equipment, gross	655	655
Construction in process
Property, Plant and Equipment
Property and equipment, gross	$ 115	$ 115

Property and Equipment - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2025	Mar. 31, 2024
Property, Plant and Equipment [Abstract]
Depreciation	$ 64	$ 83

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2025	Dec. 31, 2024
Accrued expenses:
Product revenue allowances	$ 17,372	$ 21,791
Selling, general and administrative expenses	7,453	5,522
Research and development expenses	392	291
Payroll expenses	3,768	5,692
Other	557	1,338
Total accrued expenses	29,542	34,634
Other current liabilities:
Lease liability	1,181	1,247
Total other current liabilities	1,181	1,247
Total accrued expenses and other current liabilities	$ 30,723	$ 35,881

Debt - Narrative (Details)			3 Months Ended
Debt - Narrative (Details)	May 10, 2024 USD ($) $ / shares shares	Nov. 23, 2022 USD ($) installment	Mar. 31, 2025 USD ($) $ / shares shares	Mar. 31, 2024 USD ($)	May 09, 2024 $ / shares	May 08, 2024 USD ($)	May 07, 2024 USD ($)	Dec. 01, 2020 USD ($)	Feb. 13, 2020 USD ($)	Sep. 12, 2019 USD ($)
Debt Instrument
Interest expense			$ 4,887,000	$ 4,970,000
Warrants Expiring November 18, 2026
Debt Instrument
Warrants outstanding (in shares) \| shares			166,666
Warrants exercise price (in dollars per share) \| $ / shares			$ 15.00
Warrants Expiring November 15, 2024
Debt Instrument
Warrants outstanding (in shares) \| shares	166,666
Warrants Expiring November 18, 2024
Debt Instrument
Warrants exercise price (in dollars per share) \| $ / shares	$ 15.00				$ 24.00
Note Purchase Agreement
Debt Instrument
Number of installment payments (installment) \| installment		8
Note Purchase Agreement \| Senior Notes
Debt Instrument
Debt maximum borrowing capacity										$ 130,000,000
Debt face amount										$ 80,000,000
Number of installment payments (installment) \| installment		8
Variable rate (as a percent)		2.50%
Stated interest rate (as a percent)		8.50%
Increase in interest rate (as a percent)		3.00%
Effective rate (as a percent)			3.61%
Amendment fee (as a percent)		3.00%
Amendment fee payable		$ 1,300,000
Make whole premium payment		24,000,000
Debt covenant, cash and cash equivalents						$ 20,000,000	$ 30,000,000
Shares issued to settle debt (in shares) \| shares	312,000
Value of debt settled with shares	$ 4,680,000
Note Purchase Agreement \| Senior Notes \| Debt Instrument, Redemption, Period One
Debt Instrument
Amendment fee		$ 3,900,000
Debt instrument, make-whole provision, payment accrual period		18 months
Note Purchase Agreement \| Senior Notes \| Debt Instrument, Redemption, Period Three
Debt Instrument
Amendment fee		$ 2,600,000
Debt instrument, make-whole provision, payment accrual period		42 months
Note Purchase Agreement \| Senior Notes \| Debt Instrument, Redemption, Period Two
Debt Instrument
Debt instrument, make-whole provision, payment accrual period		24 months
Note Purchase Agreement - First Delayed Draw Notes \| Senior Notes
Debt Instrument
Debt face amount									$ 30,000,000
Note Purchase Agreement - Third Delayed Draw Notes \| Senior Notes
Debt Instrument
Debt face amount								$ 20,000,000

Debt - A&R Note Purchase Agreement (Details) - Senior Notes $ in Thousands	Mar. 31, 2025 USD ($)
March 31, 2024
Debt Instrument
XHANCE net product sales and royalties	$ 70,000
June 30, 2024
Debt Instrument
XHANCE net product sales and royalties	70,000
September 30, 2024
Debt Instrument
XHANCE net product sales and royalties	72,500
December 31, 2024
Debt Instrument
XHANCE net product sales and royalties	75,000
March 31, 2025
Debt Instrument
XHANCE net product sales and royalties	80,000
June 30, 2025
Debt Instrument
XHANCE net product sales and royalties	87,500
September 30, 2025
Debt Instrument
XHANCE net product sales and royalties	95,000
December 31, 2025
Debt Instrument
XHANCE net product sales and royalties	102,500
March 31, 2026
Debt Instrument
XHANCE net product sales and royalties	120,000
June 30, 2026
Debt Instrument
XHANCE net product sales and royalties	130,000
September 30, 2026
Debt Instrument
XHANCE net product sales and royalties	145,000
December 31, 2026
Debt Instrument
XHANCE net product sales and royalties	150,000
March 31, 2027
Debt Instrument
XHANCE net product sales and royalties	155,000
June 30, 2027
Debt Instrument
XHANCE net product sales and royalties	$ 160,000

Debt - Long Term Debt (Details) - Senior Notes - Note Purchase Agreement - USD ($) $ in Thousands	Mar. 31, 2025	Dec. 31, 2024
Debt Instrument
Face amount	$ 130,000	$ 130,000
Front end fees	(368)	(433)
Debt issuance costs	(3,727)	(4,385)
Back end fees	1,300	1,300
Debt, net	$ 127,205	$ 126,482

Commitments and Contingencies (Details) - Hikma $ in Millions	3 Months Ended
	Mar. 31, 2025 USD ($)
Purchase Commitment, Excluding Long-Term Commitment [Line Items]
Minimum purchases in remainder of 2025	$ 2.4
Minimum purchases in 2026	$ 2.4
Shortfall reimbursement rate (as a percent)	50.00%
Payments to purchase supplies	$ 0.9

Employee Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Thousands	Mar. 31, 2025	Mar. 31, 2024
Retirement Benefits [Abstract]
Expense related to the company match	$ 449	$ 183

Stockholders' Equity - Warrants Outstanding (Details)	Mar. 31, 2025 $ / shares shares
Warrants Expiring November 18, 2026
Class of Stock
Number of warrants (in shares) \| shares	166,666
Exercise Price Per Share (in dollars per share) \| $ / shares	$ 15.00
Warrants Expiring November 23, 2027
Class of Stock
Number of warrants (in shares) \| shares	2,017,866
Exercise Price Per Share (in dollars per share) \| $ / shares	$ 15.00
No Expiration
Class of Stock
Number of warrants (in shares) \| shares	1,580,000
Exercise Price Per Share (in dollars per share) \| $ / shares	$ 0.0015

Stockholders' Equity - Narrative (Details)	May 10, 2024 $ / shares shares	Mar. 31, 2025 $ / shares shares	Dec. 31, 2024	May 09, 2024 $ / shares
Warrants Expiring November 18, 2026
Class of Stock
Warrants outstanding (in shares) \| shares		166,666
Warrants exercise price (in dollars per share)		$ 15.00
Warrants Expiring November 15, 2024
Class of Stock
Warrants outstanding (in shares) \| shares	166,666
Warrants Expiring November 18, 2024
Class of Stock
Warrants exercise price (in dollars per share)	$ 15.00			$ 24.00
Strike price \| Monte Carlo Simulation
Class of Stock
Warrants outstanding, measurement input	15.00	15.00	15.00	38.55
Prefunded Warrants
Class of Stock
Sale of common stock, net of issuance costs (in shares) \| shares	1,580,000
Purchase price (in dollars per share)	$ 14.9985
Prefunded Warrants \| Common Stock
Class of Stock
Purchase price (in dollars per share)	$ 0.0015
Private Placement
Class of Stock
Sale of common stock, net of issuance costs (in shares) \| shares	2,120,000
Purchase price (in dollars per share)	$ 15.00

Stock-based Compensation - Allocated Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2025	Mar. 31, 2024
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	$ 1,410	$ 1,456
Cost of product sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	14	17
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	21	57
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense	$ 1,375	$ 1,382

Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2025	Mar. 31, 2024
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award
Issuance of common stock under employee stock purchase plan (in shares)	14,004	10,714
Service Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period (in years)	4 years
Granted (in shares)	80,775
Weighted average grant date fair value (per share)	$ 4.10
Share based compensation not yet recognized	$ 3,030
Intrinsic value of options outstanding	$ 0
Estimated weighted-average amortization period (in years)	2 years 6 months
Exercisable (in shares)	348,369
Market Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period (in years)	4 years
Service period (in years)	2 years
Exercisable (in shares)	37,956
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period (in years)	4 years
Unrecognized cost related to unvested RSUs expected to vest	$ 8,536
Estimated weighted-average amortization period (in years)	2 years 8 months 12 days
Granted (in shares)	235,265
Restricted shares fair value at grant date (in dollars per share)	$ 5.77
NASDAQ Inducement Grant Exception
Share-based Compensation Arrangement by Share-based Payment Award
Exercisable (in shares)	94,419
2017 Plan \| Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award
ESPP purchase price of common stock (as a percent)	85.00%
Amended and Restated 2010 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Plan options contractual life (up to) (in years)	10 years
Amended and Restated 2010 Stock Incentive Plan \| Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Granted (in shares)	12,749

Stock-based Compensation - Stock Option Activity (Details) - Service Based Stock Options - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2025	Dec. 31, 2024
Shares
Beginning balance (in shares)	624,234
Granted (in shares)	80,775
Exercised (in shares)	0
Expired (in shares)	(25,356)
Forfeited (in shares)	(421)
Ending balance (in shares)	679,232	624,234
Exercisable (in shares)	348,369
Weighted average exercise price per share
Beginning balance (in dollars per share)	$ 54.77
Granted (in dollars per share)	5.83
Exercised (in dollars per share)	0
Expired (in dollars per share)	59.62
Forfeited (in dollars per share)	20.06
Ending balance (in dollars per share)	48.79	$ 54.77
Exercisable (in dollars per share)	$ 78.31
Weighted average remaining contractual life
Options outstanding, weighted average remaining contractual life (in years)	7 years 2 months 19 days	6 years 9 months 29 days
Options exercisable, weighted average remaining contractual life (in years)	5 years 8 months 12 days

Stock-based Compensation - Black-Scholes Pricing Model Options (Details) - Employee Stock Option	3 Months Ended
	Mar. 31, 2025	Mar. 31, 2024
2017 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award
Risk free interest rate	4.25%	5.00%
Expected term (in years)	6 months	6 months
Expected volatility	87.37%	65.06%
Annual dividend yield	0.00%	0.00%
Amended and Restated 2010 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award
Risk free interest rate	4.27%
Expected term (in years)	6 years 1 month 6 days
Expected volatility	77.54%
Annual dividend yield	0.00%

Stock-based Compensation - Restricted Stock Units Activity (Details) - Restricted stock units	3 Months Ended
	Mar. 31, 2025 shares
Shares
Beginning balance (in shares)	695,487
Granted (in shares)	235,265
Vested and settled (in shares)	(55,122)
Expired/forfeited/canceled (in shares)	(337)
Ending balance (in shares)	875,293
Expected to vest at end of period (in shares)	875,293

Segment Reporting - Narrative (Details)	3 Months Ended
Segment Reporting - Narrative (Details)	Mar. 31, 2025 segment
Segment Reporting [Abstract]
Number of reportable segments	1

Segment Reporting - Summary (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2025	Mar. 31, 2024
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated
Total revenues	$ 18,510	$ 14,880
Cost of product sales	1,750	1,231
Research & development expenses	760	1,206
Net Loss	(22,416)	(14,067)
Specialty Pharmaceuticals Segment
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated
Cost of product sales	1,750	1,231
Selling & marketing expenses	13,531	13,163
General & administrative expenses	10,063	7,354
Research & development expenses	760	1,206
Other segment items	14,822	5,993
Net Loss	(22,416)	(14,067)
Net product revenues \| Specialty Pharmaceuticals Segment
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated
Total revenues	$ 18,510	$ 14,880

OptiNose (NASDAQ:OPTN)
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