Amendment to Annual Report (Form 10-K/A)

This Amendment No. 1 on Form 10-K/A (this "Amendment No. 1") to the Annual Report on Form 10-K of Pulmatrix, Inc. (the "Company") for the fiscal year ended December 31, 2025, originally filed with the U.S. Securities and Exchange Commission (the "SEC") on February 26, 2026 (the "Original Filing"), is being filed solely to correct a typographical error in the date of the Report of Independent Registered Public Accounting Firm included in Part II, Item 8 of the Original Filing. In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company is also including the entire text of Part II, Item 8 of the Original Filing in this Amendment No. 1. However, there have been no changes to the text of such Part II, Item 8, other than the change stated in the first sentence of this paragraph.

PULMATRIX, INC.

TABLE OF CONTENTS

		Page No.
PART II
Item 8.	Financial Statements and Supplementary Data.	1
PART IV
Item 15.	Exhibits, Financial Statement Schedules.	2
Signatures		8

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The information required by this Item 8 is included at the end of this Amendment No. 1 beginning on page F-1.

PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a)	The following documents are filed as part of this Annual Report on Form 10-K:

(1)

Consolidated Financial Statements:

Report of Independent Registered Public Accounting Firm - CBIZ CPAs P.C. (PCAOB ID: 199)	F-2
Report of Independent Registered Public Accounting Firm - Marcum LLP (PCAOB ID: 688)	F-3
Consolidated Balance Sheets as of December 31, 2025 and 2024	F-4
Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024	F-5
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2025 and 2024	F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024	F-7
Notes to Consolidated Financial Statements	F-8

(2)

Financial Statement Schedules:

None. Financial statement schedules have not been included because they are not applicable, or the information is included in the consolidated financial statements or notes thereto.

(3)

Exhibits:

See "Index to Exhibits" for a description of our exhibits.

INDEX TO EXHIBITS

Exhibit Number		Exhibit Description		Filed with this Report		Incorporated by Reference herein from Form or Schedule		Filing Date		SEC File/Reg. Number
1.1		At the Market Offering Agreement, dated May 26, 2021, by and between Pulmatrix, Inc. and H.C. Wainwright & Co., LLC				Form S-3 (Exhibit 1.2)		05/26/21		333-256502
2.1		Agreement and Plan of Merger and Reorganization, dated as of November 13, 2024, by and among Pulmatrix, Inc., PCL Merger Sub, Inc., PCL Merger Sub II, LLC and Cullgen Inc.				Form 8-K (Exhibit 2.1)		11/13/24		001-36199
2.2		Amendment No. 1 to the Agreement and Plan of Merger and Reorganization, dated as of April 7, 2025, by and among Pulmatrix, Inc., PCL Merger Sub, Inc., PCL Merger Sub II, LLC and Cullgen Inc.				Form 8-K (Exhibit 2.1)		04/10/25		001-36199
3.1		Amended and Restated Certificate of Incorporation of Pulmatrix, Inc., as amended through June 15, 2015				Form 10-Q (Exhibit 3.1)		08/14/15		001-36199
3.2		Restated Bylaws of Pulmatrix, Inc., as amended through June 15, 2015				Form 10-Q (Exhibit 3.2)		08/14/15		001-36199
3.3		Certificate of Amendment to Amended and Restated Certificate of Incorporation of Pulmatrix, Inc., dated as of June 5, 2018				Form 8-K (Exhibit 3.1)		06/07/18		001-36199
3.4		Form of Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock.				Form 8-K/A (Exhibit 3.1)		12/17/21		001-36199
3.5		Certificate of Correction to the Certificate of Designation, filed December 16, 2021				Form 8-K/A (Exhibit 3.2)		12/17/21		001-36199
3.6		Certificate of Amendment to Amended and Restated Certificate of Incorporation of Pulmatrix, Inc., dated as of February 5, 2019				Form 8-K (Exhibit 3.1)		02/06/19		001-36199
3.7		Certificate of Amendment to Amended and Restated Certificate of Incorporation of Pulmatrix, Inc., dated as of February 28, 2022				Form 10-K (Exhibit 3.7)		03/29/22		001-36199

3.8		Amendment to the Restated Bylaws of Pulmatrix Inc., dated as of April 28, 2022				Form 8-K (Exhibit 3.1)		04/29/22		001-36199
3.9		Amendment No. 2 to the Restated Bylaws of Pulmatrix, Inc., dated as of February 11, 2025				Form 8-K (Exhibit 3.1)		02/14/25		001-36199

4.1		Form of Specimen Stock Certificate				Form 8-K (Exhibit 4.1)		06/16/15		001-36199
4.2		Form of Warrant Dated July 9, 2020				Form 8-K (Exhibit 4.1)		07/09/20		001-36199
4.3		Form of Common Stock Purchase Warrant, dated December 17, 2021				Form 8-K (Exhibit 4.1)		12/15/21		001-36199
4.4		Form of Placement Agent Warrant dated December 17, 2021				Form 8-K (Exhibit 4.2)		12/15/21		001-36199
4.5		Description of Securities				Form 10-K (Exhibit 4.21)		03/29/22		001-36199
4.6		Form of Placement Agent Warrant dated February 16, 2021				Form 8-K (Exhibit 4.1)		02/16/21		001-36199
10.1*		Pulmatrix, Inc. Amended and Restated 2013 Employee, Director and Consultant Equity Incentive Plan				Form 8-K (Exhibit 10.6)		06/16/15		001-36199
10.2*		Pulmatrix, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan				Form S-8 (Exhibit 99.2)		07/20/15		333-205752
10.3*		Pulmatrix Inc. 2003 Employee, Director and Consultant Stock Plan				Form S-8 (Exhibit 99.3)		07/20/15		333-205752
10.4		License, Development and Commercialization Agreement, dated June 9, 2017, by and between Pulmatrix, Inc. and Respivert Ltd.				Form 10-Q (Exhibit 10.1)		08/04/17		001-36199
10.5		First Amendment to the Pulmatrix, Inc. Amended and Restated 2013 Employee, Director and Consultant Equity Incentive Plan, dated as of June 5, 2018				Form 8-K (Exhibit 10.1)		06/07/18		001-36199
10.6*		Amended and Restated Employment Agreement, dated June 28, 2019, by and between the Company and Teofilo Raad				Form 10-K/A (Exhibit 10.1)		06/28/19		001-36199
10.7		Development and Commercialization Agreement, dated as of April 15, 2019, by and between Cipla Technologies, LLC and Pulmatrix, Inc.				Form 10-Q (Exhibit 10.4)		08/05/19		001-36199
10.8*		Second Amendment to the Pulmatrix, Inc. Amended and Restated 2013 Employee, Director and Consultant Equity Incentive Plan, dated March 11, 2019				Form S-8 (Exhibit 99.3)		06/04/19		333-231935

10.9*		Third Amendment to the Pulmatrix, Inc. Amended and Restated 2013 Employee, Director and Consultant Equity Incentive Plan, dated as of September 6, 2019				Form 8-K (Exhibit 10.1)		09/09/19		001-36199
10.10**		License, Development and Commercialization Agreement, by and between Pulmatrix, Inc. and Johnson & Johnson Enterprise Innovation, Inc., dated as of December 26, 2019				Form 10-K (Exhibit 10.13)		03/26/20		001-36199
10.11		Securities Purchase Agreement				Form 8-K (Exhibit 10.1)		04/16/20		001-36199
10.12		Form of Letter Agreement				Form 8-K (Exhibit 10.1)		07/09/20		001-36199
10.13		Form of Securities Purchase Agreement dated December 15, 2021, by and between Pulmatrix, Inc. and the purchaser parties thereto				Form 8-K (Exhibit 10.1)		12/15/21		001-36199
10.14**		Second Amendment to Development and Commercialization Agreement, dated as of November 8, 2021, by and between Cipla Technologies, LLC and Pulmatrix, Inc.				Form 8-K (Exhibit 10.1)		11/09/21		001-36199
10.15		Form of Securities Purchase Agreement dated February 11, 2021, by and between Pulmatrix, Inc. and the purchaser parties thereto				Form 8-K (Exhibit 10.1)		02/16/21		001-36199
10.16*		Consulting Agreement, dated November 30, 2021, by and between Pulmatrix, Inc. and Danforth Advisors, LLC				Form 8-K (Exhibit 10.1)		04/14/22		001-36199
10.17***		Third Amendment to the Development and Commercialization Agreement, dated as of January 6, 2024, by and among Pulmatrix, Inc., Pulmatrix Operating Company, Inc., and Cipla Technologies LLC.				Form 8-K (Exhibit 10.1)		01/08/24		001-36199
10.18*		Letter Agreement, dated January 6, 2024, by and between Teofilo Raad and the Company				Form 8-K (Exhibit 10.2)		01/08/24		001-36199

10.19		Bill of Sale and Assignment Agreement, dated as of May 28, 2024, by and between Pulmatrix, Inc. and MannKind Corporation				Form 10-Q (Exhibit 10.4)		08/13/24		001-36199
10.20		Intellectual Property Cross License Agreement, dated as of May 28, 2024, by and between Pulmatrix, Inc. and MannKind Corporation				Form 10-Q (Exhibit 10.5)		08/13/24		001-36199

10.21		Master Services Agreement, dated as of May 28, 2024, by and between Pulmatrix, Inc. and MannKind Corporation				Form 10-Q (Exhibit 10.6)		08/13/24		001-36199
10.22*		General Release and Severance Agreement, dated as of July 19, 2024, by and between Pulmatrix, Inc. and Teofilo Raad				Form 8-K (Exhibit 10.1)		07/19/24		001-36199
10.23*		Amendment No. 3 to Consulting Agreement, dated as of July 15, 2024, by and between Pulmatrix, Inc. and Danforth Advisors, LLC				Form 8-K (Exhibit 10.2)		07/19/24		001-36199
10.24*		Letter Agreement, dated as of July 15, 2024, by and between Pulmatrix, Inc. and Peter Ludlum				Form 8-K (Exhibit 10.3)		07/19/24		001-36199
10.25		Form of Cullgen Support Agreement				Form 8-K (Exhibit 10.1)		11/13/24		001-36199
10.26		Form of Lock-Up Agreement				Form 8-K (Exhibit 10.2)		11/13/24		001-36199
10.27***		Form of Registration Rights Agreement				Form 8-K (Exhibit 10.3)		11/13/24		001-36199
16.1		Letter from Marcum LLP to the Securities and Exchange Commission dated April 8, 2025				Form 8-K (Exhibit 16.1)		04/08/25		001-36199
19.1***		Insider Trading Policy of Pulmatrix, Inc.				Form 10-K (Exhibit 19.1)		02/26/26		001-36199
21.1		List of Subsidiaries				Form 10-K (Exhibit 21.1)		03/21/25		001-36199
23.1		Consent of CBIZ CPAs P.C., independent registered public accounting firm, to the Form 10-K				Form 10-K (Exhibit 23.1)		02/26/26		001-36199
23.2		Consent of Marcum LLP, independent registered public accounting firm, to the Form 10-K				Form 10-K (Exhibit 23.2)		02/26/26		001-36199
31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X
32.1		Certification of Interim Chief Executive Officer and Interim Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		X (furnished herewith)

97.1		Compensation Recovery Policy				Form 10-K (Exhibit 97.01)		03/28/24		001-36199
101. INS		Inline XBRL Instance Document		X
101.SCH		Inline XBRL Taxonomy Extension Schema Document		X
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document		X
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document		X
101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document		X
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document		X
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	These exhibits are management contracts or compensatory plans or arrangements.
**	Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K under the Securities Act of 1933, as amended, because they are both (i) not material and (ii) the type that the registrant treats as private or confidential. A copy of the omitted portions will be furnished to the SEC upon its request.
***	Certain of the schedules (and similar attachments) to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K under the Securities Act because they do not contain information material to an investment or voting decision and that information is not otherwise disclosed in the exhibit or the disclosure document. The registrant hereby agrees to furnish a copy of all omitted schedules (or similar attachments) to the SEC upon its request.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized.

		PULMATRIX, INC.
Date: June 16, 2026		By:	/s/ Peter Ludlum
			Peter Ludlum
			Interim Chief Executive Officer and Interim Chief Financial Officer (Principal Executive, Financial and Accounting Officer)

PULMATRIX, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm - CBIZ CPAs P.C. (PCAOB ID: 199)	F-2
Report of Independent Registered Public Accounting Firm - Marcum LLP (PCAOB ID: 688)	F-3
Consolidated Balance Sheets as of December 31, 2025 and 2024	F-4
Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024	F-5
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2025 and 2024	F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024	F-7
Notes to Consolidated Financial Statements	F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

Pulmatrix, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Pulmatrix, Inc. (the "Company") as of December 31, 2025, the related consolidated statements of operations, stockholders' equity and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ CBIZ CPAs P.C.

CBIZ CPAs P.C.

We have served as the Company's auditor since 2015 (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C. effective November 1, 2024).

New York, NY

February 26, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

Pulmatrix, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Pulmatrix, Inc. (the "Company") as of December 31, 2024, the related consolidated statements of operations, stockholders' equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Marcum LLP

Marcum LLP

We have served as the Company's auditor from 2015 through April 2025.

New York, NY

March 21, 2025

PULMATRIX, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

		December 31, 2025				December 31, 2024
Assets
Current assets:
Cash and cash equivalents		$	4,088			$	9,521
Prepaid expenses and other current assets			41				399
Total current assets			4,129				9,920
Long-term restricted cash			10				10
Other long-term assets			-				13
Total assets		$	4,139			$	9,943
Liabilities and stockholders' equity
Current liabilities:
Accounts payable		$	272			$	809
Accrued expenses and other current liabilities			57				120
Total current liabilities			329				929
Warrant liability			-				67
Total liabilities			329				996
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock, $0.0001 par value - 500,000 shares authorized; 6,746 shares designated Series A convertible preferred stock; no shares issued and outstanding at December 31, 2025 and 2024			-				-
Common stock, $0.0001 par value - 200,000,000 shares authorized; 3,652,285 shares issued and outstanding at December 31, 2025 and 2024			-				-
Additional paid-in capital			306,128				306,103
Accumulated deficit			(302,318	)			(297,156	)
Total stockholders' equity			3,810				8,947
Total liabilities and stockholders' equity		$	4,139			$	9,943

The accompanying footnotes are an integral part of these consolidated financial statements.

PULMATRIX, INC.

Consolidated Statements of Operations

(in thousands, except share and per share data)

		Year Ended December 31,
		2025				2024
Revenues		$	-			$	7,806
Operating expenses:
Research and development			38				7,166
General and administrative			5,131				7,785
Loss on MannKind Transaction			-				2,618
Total operating expenses			5,169				17,569
Loss from operations			(5,169	)			(9,763	)
Other income (expense):
Interest income			144				467
Fair value adjustment of warrants			67				(67	)
Other expense, net			(204	)			(196	)
Total other income (expense), net			7				204
Net loss		$	(5,162	)		$	(9,559	)
Net loss per share attributable to common stockholders - basic and diluted		$	(1.41	)		$	(2.62	)
Weighted average common shares outstanding - basic and diluted			3,652,285				3,652,285

The accompanying footnotes are an integral part of these consolidated financial statements.

PULMATRIX, INC.

Consolidated Statements of Stockholders' Equity

(in thousands, except share data)

		Preferred Stock								Common Stock								Additional Paid-in				Accumulated				Total Stockholders'
		Shares				Amount				Shares				Amount				Capital				Deficit				Equity
Balance - January 1, 2024			-			$	-				3,652,285			$	-			$	305,592			$	(287,597	)		$	17,995
Stock-based compensation			-				-				-				-				511				-				511
Net loss			-				-				-				-				-				(9,559	)			(9,559	)
Balance - December 31, 2024			-			$	-				3,652,285			$	-			$	306,103			$	(297,156	)		$	8,947
Stock-based compensation			-				-				-				-				25				-				25
Net loss			-				-				-				-				-				(5,162	)			(5,162	)
Balance - December 31, 2025			-			$	-				3,652,285			$	-			$	306,128			$	(302,318	)		$	3,810

The accompanying footnotes are an integral part of these consolidated financial statements.

PULMATRIX, INC.

Consolidated Statements of Cash Flows

(in thousands)

		Year Ended December 31,
		2025				2024
Cash flows from operating activities:
Net loss		$	(5,162	)		$	(9,559	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			-				106
Amortization of operating lease right-of-use asset			-				329
Stock-based compensation			25				511
Loss on disposals			-				2,618
Fair value adjustment of warrants			(67	)			67
Changes in operating assets and liabilities:
Accounts receivable			-				928
Prepaid expenses and other current assets			358				343
Other long-term assets			13				163
Accounts payable			(537	)			(1,106	)
Accrued expenses and other current liabilities			(63	)			(438	)
Operating lease liability			-				(333	)
Deferred revenue			-				(4,345	)
Net cash used in operating activities			(5,433	)			(10,716	)
Cash flows from investing activities:
Purchases of property and equipment			-				(398	)
Net cash used in investing activities			-				(398	)
Net decrease in cash, cash equivalents and restricted cash			(5,433	)			(11,114	)
Cash, cash equivalents and restricted cash - beginning of period			9,531				20,645
Cash, cash equivalents and restricted cash - end of period		$	4,098			$	9,531
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:
Cash and cash equivalents		$	4,088			$	9,521
Long-term restricted cash			10				10
Total cash, cash equivalents and restricted cash		$	4,098			$	9,531
Supplemental disclosures of non-cash investing and financing information:
Reduction of operating lease right-of-use asset and lease liability upon lease modification		$	-			$	8,423

The accompanying footnotes are an integral part of these consolidated financial statements.

PULMATRIX, INC.

Notes to Consolidated Financial Statements

(in thousands, except share and per share data)

1. Nature of the Business

Pulmatrix, Inc. ("Pulmatrix" or the "Company") was incorporated in 2013 as a Delaware corporation. The Company is a biopharmaceutical company that has focused on the development of a novel inhaled therapeutic products intended to prevent and treat migraine and respiratory diseases with important unmet medical needs using its patented iSPERSE™ technology. The Company's proprietary dry powder delivery platform, iSPERSE™, is engineered to deliver small, dense particles with highly efficient dispersibility and delivery to the airways, which can be used with an array of dry powder inhaler technologies and can be formulated with a variety of drug substances.

Agreement and Plan of Merger and Reorganization

On November 13, 2024, Pulmatrix and Cullgen Inc., a Delaware corporation ("Cullgen") entered into an Agreement and Plan of Merger and Reorganization, as amended by Amendment No. 1 thereto on April 7, 2025 (the "Merger Agreement"), pursuant to which, among other matters, PCL Merger Sub, Inc., a direct wholly owned subsidiary of Pulmatrix ("Merger Sub"), will merge with and into Cullgen, with Cullgen surviving as a wholly owned subsidiary of Pulmatrix, and the surviving corporation of the merger (the "Merger").

Pursuant to the Merger Agreement, prior to the closing of the Merger (the "Closing"), Pulmatrix currently expects to declare a cash dividend to the pre-Merger Pulmatrix stockholders equal in the aggregate to Pulmatrix's reasonable, good faith approximation of the amount by which Pulmatrix's net cash (as determined pursuant to the Merger Agreement) will exceed $2.5 million, subject to certain adjustments and limitations (such excess amount, the "Cash Dividend").

Subject to the terms and conditions of the Merger Agreement, at the Closing, (a) each then-outstanding share of Cullgen common stock other than dissenting shares, will be converted into the right to receive a number of shares of Pulmatrix common stock calculated in accordance with the Merger Agreement (the "Exchange Ratio"), (b) each then-outstanding share of Cullgen preferred stock, other than dissenting shares, will be converted into the right to receive a number of shares of Pulmatrix common stock equal to the number of shares of Cullgen common stock issuable upon conversion of each share of Cullgen preferred stock multiplied by the Exchange Ratio and (c) each then-outstanding option to purchase Cullgen common stock, whether vested or unvested, will be assumed by Pulmatrix, subject to adjustment to reflect the Exchange Ratio as set forth in the Merger Agreement.

In connection with the Merger: (i) each share of Pulmatrix common stock that is issued and outstanding at the Effective Time (as defined below) of the Merger will remain issued and outstanding and such shares, subject to the proposed Pulmatrix reverse stock split, will be unaffected by the Merger; (ii) each option to acquire shares of Pulmatrix common stock outstanding but then not vested or exercisable shall be accelerated in full; (iii) each option to acquire shares of Pulmatrix common stock with an exercise price per share greater than $10.00 per share shall be cancelled for no consideration; (iv) each option to acquire shares of Pulmatrix common stock with an exercise price less than or equal to the Pulmatrix Closing Price (as defined herein) will be converted into the right to receive the number of shares underlying such Pulmatrix option, reduced as set forth in the Merger Agreement; (v) each option to acquire shares of Pulmatrix common stock with an exercise price greater than the volume weighted average closing trading price of a share of Parent Common Stock on Nasdaq for the five (5) consecutive trading days ending three (3) trading days immediately prior to the Closing Date as reported by Bloomberg L.P. (the "Pulmatrix Closing Price"), but less than $10.00 per share, will remain outstanding; and (vi) each warrant to acquire shares of Pulmatrix common stock that is outstanding and unexercised immediately prior to the Effective Time of the Merger shall survive the Closing and remain outstanding in accordance with its terms; provided that the holders of any such warrants which remain outstanding following closing may elect to require Pulmatrix to pay such holders cash in exchange for the termination of the remaining unexercised portion of such warrants if contemplated by the terms of such warrants.

Under the Exchange Ratio formula in the Merger Agreement, upon the Closing, on a pro forma basis and based upon the number of shares of Pulmatrix common stock expected to be issued in the Merger, pre-Merger Cullgen stockholders will own approximately 96.4% of the combined company and pre-Merger Pulmatrix stockholders will own approximately 3.6% of the combined company on a fully-diluted basis (excluding out-of-the-money options and warrants and any shares reserved for future grants under Pulmatrix's equity incentive plans). Under certain circumstances further described in the Merger Agreement, the ownership percentages may be adjusted upward or downward based on Pulmatrix's net cash at the Closing.

The Exchange Ratio assumes (i) a valuation for Pulmatrix of $10.5 million (comprised of $8 million in enterprise value and $2.5 million in cash) and (ii) a valuation for Cullgen of $280.0 million. The Exchange Ratio is also based on the relative capitalization of each of Pulmatrix and Cullgen, for which, for the purposes of calculating the Exchange Ratio, the shares of Pulmatrix common stock underlying Pulmatrix's in-the-money stock options outstanding immediately prior to the time of the Closing (the "Effective Time"), as adjusted to take into account the Cash Dividend will be deemed outstanding, and all shares of Cullgen common stock underlying outstanding Cullgen's stock options will be deemed outstanding, subject to certain exceptions as set forth in the Merger Agreement.

On June 16, 2025, the Company held a special meeting in lieu of the annual meeting of Pulmatrix stockholders, at which the Company's stockholders approved the Merger and related proposals. The Closing is subject to other customary closing conditions, including Nasdaq's approval of the listing of the shares of Pulmatrix common stock to be issued in connection with the Merger and approval from the China Securities Regulatory Commission ("CSRC") pursuant to the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the "Trial Measures"), No. 1 to No. 6 Supporting Guidance Rules, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and the relevant CSRC Answers to Reporter Questions on the official website of the CSRC. These regulations established a filing-based regime to regulate overseas offerings and listings by Chinese domestic companies. As of the date of this filing, Pulmatrix has not yet received approval from the CSRC to complete the Merger. As previously disclosed, on August 1, 2025, Pulmatrix and Cullgen, as provided for in the Merger Agreement, mutually agreed to extend the "End Date", a term defined in the Merger Agreement, by 60 days from August 13, 2025, to October 12, 2025. The Merger Agreement does not have a defined term and does not terminate on the "End Date". The "End Date" is simply the date at which certain termination options become available to either party.

On December 17, 2025, the Company, Cullgen and PLC Merger Sub, Inc. (collectively, the "Parties") entered into a mutual waiver agreement (the "Waiver Agreement"), pursuant to which the Parties agreed to mutually waive compliance with Section 5.4 of the Merger Agreement, which such provision imposes restrictions on each party during the Pre-Closing Period (as defined in the Merger Agreement). Except as expressly waived pursuant to the Waiver Agreement, the Merger Agreement remains in full force and effect in all respects, and no other provision of the Merger Agreement has otherwise been amended, waived, or modified.

If the Merger is completed, the business of Cullgen will continue as the business of the combined company. Concurrent with the Merger, the Company will seek to monetize its intellectual property, including iSPERSE™ and its clinical assets (the "Asset Sale").

The Company's future operations are highly dependent on the success of the Merger and there can be no assurances that the Merger will be successfully consummated. There can be no assurance that the strategic review process or any transaction relating to a specific asset, including the Merger and any Asset Sale, will result in the Company pursuing such a transaction, or that any transactions, if pursued, will be completed on terms favorable to Pulmatrix and its stockholders in the existing Pulmatrix entity or any possible entity that results from a combination of entities. If the strategic review process is unsuccessful, and if the Merger is not consummated, the Company's board of directors may decide to pursue a dissolution and liquidation in the future.

2. Summary of Significant Accounting Policies and Recent Accounting Standards

Principles of Consolidation

The consolidated financial statements represent the consolidation of the accounts of the Company and its subsidiaries in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to the U.S. GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB").

Risks, Uncertainties and Liquidity

The Company's future operations are highly dependent on the success of the Merger and there can be no assurances that the Merger will be successfully consummated. If the Merger is not consummated, the Company believes that its cash and cash equivalents as of December 31, 2025, would be adequate to fund its operating expenses for at least twelve months from the date these consolidated financial statements are issued. However, in order to continue development of its programs, the Company would need to secure substantial additional funding in the future, from one or more equity or debt financings, collaborations, or other sources. Additional funding may not be available to the Company on acceptable terms, or at all. The Company's board of directors may also decide in the future to pursue a dissolution and liquidation in lieu of continuing program development.

Should the Company continue development of its product candidates, the Company would be subject to risks and uncertainties. The ongoing research and development activities will be subject to extensive regulation by numerous governmental authorities in the United States. Prior to marketing in the United States, any drug developed by the Company must undergo rigorous preclinical and clinical testing and an extensive regulatory approval process implemented by the United States Food and Drug Administration ("FDA") under the Food, Drug and Cosmetic Act. The Company has limited experience in conducting and managing the preclinical and clinical testing necessary to obtain regulatory approval. There can be no assurance that the Company will not encounter problems in the clinical trials that will cause the Company or the FDA to delay or suspend clinical trials.

The Company's success in developing its product candidates would depend in part on its ability to obtain patents and product license rights, maintain trade secrets, and operate without infringing on the property rights of others, both in the United States and other countries. There can be no assurance that patents issued to or licensed by the Company will not be challenged, invalidated, circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to the Company.

Use of Estimates

In preparing the consolidated financial statements in conformity with U.S. GAAP, management is required 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 consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results may differ from these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions, with any changes applied prospectively.

Concentrations of Credit Risk

Cash and cash equivalents is a financial instrument that potentially subjects the Company to concentrations of credit risk. For all periods presented, substantially all of the Company's cash was deposited in accounts at a single financial institution that management believes is creditworthy, and the Company has not incurred any losses to date. The Company is exposed to credit risk in the event of default by this financial institution for amounts in excess of the Federal Deposit Insurance Corporation insured limits.

For the year ended December 31, 2025, the Company recognized no revenue. For the year ended December 31, 2024, revenue from two customers accounted for 100% of revenue recognized in the accompanying consolidated financial statements.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents are held in US banks and consist of cash deposited in operating and money market accounts.

As of December 31, 2025, $10 was deposited in a money market account as security for a credit card and presented as long-term restricted cash in the consolidated balance sheet.

During the year ended December 31, 2024, $1,421 of restricted cash collateralizing a letter of credit related to the Company's former headquarters lease in Bedford, Massachusetts, became unrestricted, providing additional cash available for operations.

Fair Value of Financial Instruments

The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. FASB ASC Topic 820, Fair Value Measurement, establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below:

Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Valuations based on quoted prices for similar assets or liabilities in markets that are not active, or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations that require inputs that reflect the Company's own assumptions that are both significant to the fair value measurement and unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

As of December 31, 2024, certain of the Company's outstanding warrants were classified as liabilities and measured at fair value in accordance with FASC ASC Topic 815, Derivatives and Hedging. The Company measures the Level 3 fair value of the warrant liability using the Black-Scholes option-pricing model with changes in fair value recognized as increases or reductions to other income (expense) in the consolidated statement of operations. These warrants expired during the year ended December 31, 2025.

As of December 31, 2025 and 2024, the Company did not hold any other financial assets or liabilities that were measured at fair value on a recurring or nonrecurring basis. During the years ended December 31, 2025 and 2024, there were no transfers between Level 1, Level 2 and Level 3.

Leases

The Company accounts for leases in accordance with FASB ASC Topic 842, Leases. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Options to renew a lease are not included in the Company's initial lease term assessment unless there is reasonable certainty that the Company will renew. The Company monitors its plans to renew its material leases on a quarterly basis.

Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items, such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company has elected to account for the lease and non-lease components as a combined lease component. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

Revenue Recognition

No revenues were recognized for the year ended December 31, 2025. The Company's principal source of revenue during the year ended December 31, 2024, was derived from a collaboration arrangement and license agreement that relate to the development and commercialization of PUR1900 under the Cipla Agreement (as defined below).

At inception, management determines whether contracts are within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers ("ASC 606") or other topics, including FASB ASC Topic 808, Collaborative Arrangements ("ASC 808"). For contracts that are within the scope of ASC 808, the Company evaluates whether the counterparty is a customer for any of the units of account (i.e., distinct goods and services) in the contract. For units of account where the counterparty is considered a customer, the Company applies ASC 606 to those unit(s) of account, including recognition, measurement, presentation, and disclosure guidance. To date, the Company has determined it is appropriate to apply ASC 606 to all contracts and units of account for contracts within the scope of ASC 808.

For contracts and units of account that are determined to be within the scope of ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which management expects to be entitled to receive in exchange for these goods and services. To achieve this core principle, management applies the following five steps (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

Identification of Performance Obligations. Performance obligations promised in a contract are identified at contract inception based on the goods and services that are both capable of being distinct and are distinct in the context of the contract. To the extent a contract includes multiple promised goods and services, management applies judgment to determine whether promised goods and services are both capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation.

Transaction Price and Milestone Payments. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. At the inception of each contract that includes research or development milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company's control or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. Management evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each reporting period, management reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjust the estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

Exclusive Licenses. If the license to the Company's intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a promise or performance obligation is distinct from the other promises, the Company considers factors such as the research, development, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the counterparty can benefit from a promise for its intended purpose without the receipt of the remaining promise, whether the value of the promise is dependent on the unsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it is separately identifiable from the remaining promise. For licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research and development and licensing agreement. Such a change could have a material impact on the amount of revenue the Company records in future periods.

Research and Development Services. The promises under the Company's arrangements may include research and development services to be performed by the Company on behalf of the counterparty. Payments or reimbursements from customers resulting from the Company's research and development efforts are recognized as the services are performed and presented on a gross basis because the Company is the principal for such efforts. The Company uses an input method, according to the ratio of costs incurred to the total costs expected to be incurred in the future to satisfy the performance obligation. In management's judgment, this input method is the best measure of the transfer of control of the performance obligation. Amounts received prior to revenue recognition are recorded as deferred revenue. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Reimbursements from and payments to the counterparty that are the result of a collaborative relationship, instead of a customer relationship, such as co-development activities, are recognized as the services are performed and presented as a reduction to research and development expense. To date, the Company has determined that all arrangements which include research and development services have been transacted with customers and recognized on a gross basis using ASC 606.

Royalties. For contracts that include sales-based royalties, including milestone payments upon first commercial sales and milestone payments based on a level of sales, which are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied.

Customer Options. If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options that are not determined to be material rights are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights, or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised.

For a complete discussion of accounting for the Company's revenue contracts, see Note 5, Significant Agreements.

Research and Development Costs

Research and development costs are expensed as incurred and include salaries, benefits, bonus, stock-based compensation, license fees, milestone payments due under license agreements, costs paid to third-party contractors to perform research, conduct clinical trials, and develop drug materials and delivery devices; and associated overhead and facilities costs. Clinical trial costs are a substantial component of research and development expenses and include costs associated with third-party contractors, clinical research organizations ("CROs") and clinical manufacturing organizations ("CMOs"). Invoicing from third-party contractors for services performed can lag several months. The Company accrues the costs of services rendered in connection with third-party contractor activities based on management's estimate of fees and costs associated with the contract that were rendered during the period and they are expensed as incurred. Research and development costs that are paid in advance of performance are capitalized as prepaid expenses and amortized over the service period as the services are provided.

Stock-based Compensation

The Company recognizes all employee stock-based compensation as a cost in the consolidated financial statements. Equity-classified awards principally related to stock options, which are measured at the grant date fair value of the award. The Company determines grant-date fair value of stock option awards using the Black-Scholes option-pricing model. For service-based vesting grants, expense is recognized over the requisite service period based on the number of options or shares expected to ultimately vest. For performance-based vesting grants, expense is recognized over the requisite period until the performance obligation is met, assuming that it is probable. No expense is recognized for performance-based grants until it is probable the vesting criteria will be satisfied.

Stock-based payments to non-employees are recognized as services are rendered, generally on a straight-line basis. The Company believes that the fair values of these awards are more reliably measurable than the fair values of the services rendered.

Common Stock Warrants

The Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any warrants that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company's control), (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement) or (iii) that contain reset provisions that do not qualify for the scope exception. The Company assesses classification of its common stock warrants and other freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company's freestanding derivatives consist of warrants to purchase common stock that were issued in connection with its (i) convertible preferred stock, (ii) private placements, (iii) term loan, (iv) consulting services and (v) underwriting and representative services.

Warrants that are determined to require equity classification are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. Warrants that are determined to require liability classification are subject to re-measurement at each balance sheet date until exercised, terminated or reclassified, and any change in fair value is recognized in the Company's consolidated statements of operations.

Basic and Diluted Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the weighted-average number common shares outstanding during the period, after taking into consideration any potentially dilutive effects from outstanding stock options or warrants.

Basic and diluted earnings (loss) per share are computed using the two-class method, which is an earnings allocation method that determines earnings (loss) per share for common shares and participating securities. The participating securities consist of outstanding warrants to purchase common stock. Undistributed earnings are allocated between common shares and participating securities as if all earnings had been distributed during the period. In periods of loss, no allocation is made to the participating securities.

Basic and diluted net loss per share are the same in periods for which the effect of potentially dilutive securities would be antidilutive.

Income Taxes

Income taxes are recorded in accordance with FASB ASC Topic 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the net deferred tax assets will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. The Company did not adopt any new accounting pronouncements during the year ended December 31, 2025, that had a material effect on its consolidated financial statements.

In December 2023, the FASB issued Accounting Standard Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). The guidance in ASU 2023-09 improves the transparency of income tax disclosures by greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The standard becomes effective for the annual period beginning on January 1, 2025, with early adoption permitted. The Company prospectively adopted ASU 2023-09 in its 2025 annual period, which resulted in additional income tax disclosures. Refer to Note 11, Income Taxes for further information.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). The guidance in ASU 2024-03 requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company's annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that adoption of ASU 2024-03 may have on its consolidated financial statements.

As of December 31, 2025, there are no other new, or existing recently issued, accounting pronouncements that are of significance, or potential significance, that impact the Company's consolidated financial statements.

3. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

		December 31, 2025				December 31, 2024
Software and hosting costs		$	4			$	19
Insurance			3				200
Other			34				180
Total prepaid expenses and other current assets		$	41			$	399

4. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

		December 31, 2025				December 31, 2024
Wages and incentives			41				38
Legal and patents			2				11
Other			14				71
Total accrued expenses and other current liabilities		$	57			$	120

5. Significant Agreements

Development and Commercialization Agreement with Cipla Technologies LLC ("Cipla")

On April 15, 2019, the Company entered into a Development and Commercialization Agreement (the "Cipla Agreement") with Cipla for the co-development and commercialization, on a worldwide exclusive basis, of PUR1900, the Company's inhaled iSPERSE^™ drug delivery system (the "Product") enabled formulation of the antifungal drug itraconazole, which is only available as an oral drug, for the treatment of all pulmonary indications, including allergic bronchopulmonary aspergillosis ("ABPA") in patients with asthma. The Company entered into an amendment to the Cipla Agreement on November 8, 2021 (the "Second Amendment") and a subsequent amendment on January 6, 2024 (the "Third Amendment"). All references to the Cipla Agreement herein refer to the Cipla Agreement, as amended.

The Company received a non-refundable upfront payment of $22.0 million (the "Upfront Payment") under the Cipla Agreement. Upon receipt of the Upfront Payment, the Company irrevocably assigned to Cipla the following assets, solely to the extent that each covers the Product in connection with any treatment, prevention, and/or diagnosis of diseases of the pulmonary system ("Pulmonary Indications"): all existing and future technologies, current and future drug master files, dossiers, third-party contracts, regulatory filings, regulatory materials and regulatory approvals, patents, and intellectual property rights, as well as any other associated rights and assets directly related to the Product, specifically in relation to Pulmonary Indications (collectively, the "Assigned Assets"), excluding most specifically the Company's iSPERSE^™ technology. A portion of the Upfront Payment was deposited by the Company into a bank account, along with an equal amount from the Company, and was dedicated to the development of the Product (the "Initial Development Funding"). The Initial Development Funding was depleted during the year ended December 31, 2021, at which point the Company and Cipla each became responsible for a portion of the development costs actually incurred as described below (the "Co-Development Phase").

Pursuant to the Second Amendment, the Company and Cipla were each responsible for 60% and 40%, respectively, of the Company's overhead costs and the time spent by the Company's employees and consultants on development of the Product ("Direct Costs"). The Company shared all other development costs with Cipla that were not Direct Costs, such as the cost of clinical research organizations, manufacturing costs and other third-party costs, on a 50/50 basis.

Pursuant to the Third Amendment, the Company and Cipla agreed that, during the period commencing on January 6, 2024 and ending July 30, 2024 (the "Wind Down Period"), the Company would complete all Phase 2b activities, assign or license all patents to Cipla and their registration with the appropriate authorities in regions other than the United States, complete a physical and demonstrable technology transfer and secure all data from the Phase 2b study for inclusion in the safety database. The Company shared costs with Cipla during the Wind Down Period in the same proportions in effect with the Second Amendment discussed above, but subject to a maximum reimbursement amount by Cipla as approved by the joint steering committee. The Company completed all Phase 2b activities by the end of the Wind Down Period.

Accounting Treatment

The Company originally concluded that because both it and Cipla are active participants in the arrangement and are exposed to the significant risks and rewards of the collaboration, the Company's collaboration with Cipla is within the scope of ASC 808. The Company concluded that Cipla is a customer since they contracted with the Company to obtain research and development services and a license to the Assigned Assets, each of which is an output of the Company's ordinary activities, in exchange for consideration. Therefore, the Company has applied the guidance in ASC 606 to account for the research and development services and a license within the contract. The Company determined that the research and development services and license to the Assigned Assets are considered highly interdependent and highly interrelated and therefore are considered a single combined performance obligation because Cipla cannot benefit from the license without the performance by the Company of the research and development services. Such research and development services are highly specialized and proprietary to the Company and therefore not available to Cipla from any other third party.

The Company initially determined the total transaction price to be $22.0 million - comprised of $12.0 million for research and development services for the Product and $10.0 million for the irrevocable license to the Assigned Assets. Any consideration related to the Co-Development Phase was not initially included in the transaction price as such amounts were subject to the variable consideration constraint. Additionally, the Company has fully constrained any transaction price that might be realized upon commercialization.

Revenue is recognized for the Cipla Agreement as the research and development services are provided using an input method, according to the ratio of costs incurred to the total costs expected to be incurred in the future to satisfy the Company's obligations. In management's judgment, this input method is the best measure of the transfer of control of the combined performance obligation. The amounts received that have not yet been recognized as revenue are recorded in deferred revenue on the Company's consolidated balance sheets, with amounts expected to be recognized in the next 12 months recorded as current.

The Company concluded that the Third Amendment is a contract modification that should be accounted for as part of the existing contract. During the years ended December 31, 2025 and 2024, the Company recognized $0 and $6.9 million, respectively, in revenue related to the research and development services and irrevocable license to the Assigned Assets in the Company's consolidated statements of operations. The revenue recognized during the year ended December 31, 2024 was primarily associated with the cumulative catch-up recorded as a result of the contract modification, that had been included in deferred revenue at the beginning of that period. As of December 31, 2025, all of the Company's performance obligations under the Cipla Agreement have been satisfied.

Agreements with MannKind Corporation ("MannKind")

On May 28, 2024, the Company executed certain agreements with MannKind and the Company's landlord (collectively, the "MannKind Transaction"), all of which closed during July 2024. The agreements with MannKind included a Bill of Sale and Assignment Agreement (the "Bill of Sale") with respect to the assignment of the Company's rental facility at 36 Crosby Drive, Bedford, Massachusetts (the "Bedford Facility") to MannKind along with the transfer of all leasehold improvements, laboratory equipment and other related personal property. In connection with the assignment of the Bedford Facility, the Company, MannKind and Cobalt Propco 2020, LLC (the "Landlord") entered into an Amendment to Lease and Consent to Assignment of Lease (the "Lease Assignment Agreement") pursuant to that certain Lease Agreement, dated as of January 7, 2022 (the "Lease Agreement"), by and between the Company and the Landlord. Pursuant to the Lease Assignment Agreement, MannKind assumed all of the Company's obligations under the Lease Agreement, including all rent and other payments.

In connection with these transactions, the Company and MannKind entered into an Intellectual Property Cross License Agreement (the "Cross License Agreement"). Pursuant to the Cross License Agreement, the Company granted to MannKind (i) an exclusive license to develop, use, manufacture, market, offer and sell iSPERSE formulations of Clofazimine, (ii) an exclusive license to develop, use, manufacture, market, offer and sell formulations of iSPERSE with one more active pharmaceutical ingredients for the treatment of nontuberculous mycobacteria lung disease in humans, (iii) an exclusive license to develop, use, manufacture, market, offer and sell iSPERSE formulations of insulin, (iv) a non-exclusive license to develop, use, manufacture, market, offer and sell formulations of iSPERSE with one more active pharmaceutical ingredients for the treatment of endocrine disease in humans, and (v) a non-exclusive license to develop, use, manufacture, market, offer and sell formulations of iSPERSE with one more active pharmaceutical ingredients for the treatment of interstitial lung diseases (including IPF, PPF and other related lung diseases) in humans (collectively, the "Out-License").

Additionally, pursuant to the Cross License Agreement, MannKind granted to the Company (i) the exclusive right to develop, use, manufacture, market, offer and sell its single-use disposable dry powder inhaler (including all modifications or improvement thereto made by or on behalf of the Company, the "Cricket Device") for the inhaled delivery of dihydroergotamine in any formulation whatsoever, including the Company's PUR3100 treatment of acute migraine and (ii) a non-exclusive license to develop, use, manufacture, market, offer and sell the Cricket Device for the inhaled delivery of one more active pharmaceutical ingredients formulated with iSPERSE for the treatment of neurological disease in humans (collectively, the "In-License").

Additionally, pursuant to the Master Services Agreement, by and between the Company and MannKind, MannKind shall provide certain development services to the Company, including but not limited to, activities to develop a dry powder formulation of the active pharmaceutical ingredient that the Company provides to MannKind for oral inhalation using iSPERSE.

To maintain continuity of iSPERSE platform knowledge, MannKind hired certain members of the Company's research and development staff in July 2024.

Accounting Treatment

The Company determined that the MannKind Transaction represents a combined agreement for accounting purposes, as the individual components have the same overall commercial objectives and the consideration under each component is dependent on the other components.

The consideration due to the Company in the MannKind Transaction consists solely of the non-cash consideration in the form of the In-License. The fair value of the non-cash consideration received should be allocated to the other components of the MannKind Transaction to determine the consideration received for the other components. The Company determined that the fair value of the In-License is immaterial given that adequate alternative inhaler devices are already available on the market (and indeed, the Company has already established use of another third-party inhalation device in their PUR3100 Phase 1 trial that performed well as a DHE delivery device as reported in a peer-reviewed publication), and considering optional purchases of Cricket Devices are at market prices. Accordingly, the consideration allocated to other components of the MannKind Transaction was immaterial.

During the year ended December 31, 2024, the Company accounted for the Lease Assignment Agreement upon execution as a lease modification that reduced the lease term to the assignment date in July 2024. Accordingly, the Company remeasured its operating lease liability as of the modification date to reflect the decrease in fixed lease payments, with the amount of the remeasurement, $8.4 million, adjusted by a corresponding reduction to the right-of-use asset.

The Company determined that its operating lease right-of-use asset and property and equipment subject to the Bill of Sale represented a disposal group. The Company recorded a full write-down of the disposal group's carrying value in the amount of $2.6 million during the year ended December 31, 2025.

Concurrent with the closing of the MannKind Transaction, the Company terminated and MannKind hired the majority of the Company's research and development employees, representing approximately two-thirds of the Company's workforce at the time. The Company agreed to provide termination benefits to these employees, which was fully paid during the year ended December 31, 2024.

6. Common Stock

In May 2021, the Company entered into an At-The-Market Sales Agreement (the "Sales Agreement") with H.C. Wainwright and Co., LLC ("HCW") to act as the Company's sales agent with respect to the issuance and sale of up to $20.0 million of the Company's shares of common stock, from time to time in an at-the-market public offering (the "ATM Offering"). Upon filing of the Annual Report, the Company continued to be subject to General Instruction I.B.6 of Form S-3, pursuant to which in no event will the Company sell its common stock in a registered primary offering using Form S-3 with a value exceeding more than one-third of its public float in any 12 calendar month period so long as its public float remains below $75,000,000. Therefore, the amount that may be able to be raised using the ATM Offering will be significantly less than $20,000,000, until such time as the Company's public float held by non-affiliates exceeds $75,000,000.

Sales of common stock under the Sales Agreement are made pursuant to an effective shelf registration statement on Form S-3, which was filed with the SEC on May 17, 2024, and subsequently declared effective on May 30, 2024 (File No. 333-279491), and a related prospectus. HCW acts as the Company's sales agent on a commercially reasonable efforts basis, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of The Nasdaq Capital Market. If expressly authorized by the Company, HCW may also sell the Company's common stock in privately negotiated transactions. There is no specific date on which the ATM Offering will end, there are no minimum sale requirements and there are no arrangements to place any of the proceeds of the ATM Offering in an escrow, trust or similar account. HCW is entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of the Company's common stock pursuant to the Sales Agreement.

During the years ended December 31, 2025, and 2024, no shares of common stock were sold under the Sales Agreement.

7. Warrants

The following table summarizes warrant activity for the year ended December 31, 2025:

		Number of Common Warrants				Weighted Average Exercise Price				Average Remaining Contractual Term (Years)				Aggregate Intrinsic Value
Outstanding January 1, 2025			934,373			$	55.01
Warrants Expired			(551,785	)			79.15
Outstanding December 31, 2025			382,588			$	20.20				0.82			$	-

The following represents a summary of the warrants outstanding at December 31, 2025, all of which are equity-classified:

Issue Date		Adjusted Exercise Price				Expiration Date		Number of Shares Underlying Warrants
December 17, 2021		$	14.99			December 15, 2026			36,538
December 17, 2021		$	13.99			December 17, 2026			281,047
February 16, 2021		$	49.99			February 11, 2026			65,003
Total									382,588

Warrants to purchase 535,830 shares of common stock with a contingent cash redemption feature expired during the year ended December 31, 2025. These warrants included terms that could have given rise to an obligation of the Company to pay cash to its warrant holders following a change in control. Following the execution of the Merger Agreement on November 13, 2024, the Company concluded this contingent cash redemption feature was no longer within its control and accordingly reclassified these warrants from equity to liability, remeasuring the fair value of these warrants at approximately $67 thousand as of December 31, 2024, recording a corresponding loss in the Company's consolidated statements of operations. Since the warrants expired during the year ended December 31, 2025, prior to a change in control occurring, the Company recorded a gain of $67 thousand in the Company's consolidated statements of operations for the year ended December 31, 2025.

Warrants to purchase 65,003 shares of common stock, with a weighted-average exercise price of $49.99, expired subsequent to December 31, 2025, but before the date these consolidated financial statements were issued.

8. Stock-based Compensation

The Company sponsored the Pulmatrix, Inc. Amended and Restated 2013 Employee, Director and Consultant Equity Incentive Plan (the "Incentive Plan"), which expired on June 10, 2025. No new awards may be made under the Incentive Plan after its expiration date. Awards issued under the Incentive Plan prior to its expiration remain outstanding in accordance with their terms.

No stock options were granted during the years ended December 31, 2025, and 2024. The following table summarizes stock option activity for the year ended December 31, 2025:

		Number of Options				Weighted- Average Exercise Price				Weighted- Average Remaining Contractual Term (Years)				Aggregate Intrinsic Value
Outstanding - January 1, 2025			34,046			$	30.55
Forfeited or expired			(188	)			2,350.64
Outstanding - December 31, 2025			33,858				17.67				5.72			$	-
Exercisable - December 31, 2025			30,961				18.95				5.60			$	-

The Company records stock-based compensation expense related to stock options based on their grant-date fair value. As of December 31, 2025, there was an immaterial amount of unrecognized stock-based compensation expense related to unvested stock options granted under the Company's Incentive Plan.

The following table presents total stock-based compensation expense for the years ended December 31, 2025, and 2024:

		Year Ended December 31,
		2025				2024
Research and development		$	-			$	149
General and administrative			25				362
Total stock-based compensation expense		$	25			$	511

9. Commitments and Contingencies

Research and Development Activities

The Company has contracted with various other organizations to conduct research and development activities, including clinical trials. The scope of the services under contracts for research and development activities may be modified and the contracts, subject to certain conditions, may generally be cancelled by the Company upon written notice. In some instances, the contracts, subject to certain conditions, may be cancelled by the third party. As of December 31, 2025, the Company had no material noncancellable commitments.

Legal Proceedings

In the ordinary course of its business, the Company may be involved in various legal proceedings involving contractual and employment relationships, patent or other intellectual property rights, and a variety of other matters. The Company is not aware of any pending legal proceedings that would reasonably be expected to have a material impact on the Company's financial position or results of operations.

10. Leases

Following the closing of the MannKind Transaction in the third quarter of 2024, in which the Company assigned its former lease to MannKind, the Company has operated as a virtual company. The Company entered into a short-term agreement to maintain a corporate address at 945 Concord Street, Framingham, Massachusetts. No lease liability or right-of-use asset has been recorded for this short-term lease, and the short-term lease cost associated with this lease is immaterial.

Previous Headquarters

On May 28, 2024, as part of the MannKind Transaction (see further discussion in Note 5, Significant Agreements), the Company and the Landlord executed the Lease Assignment Agreement to assign the Lease Agreement to MannKind in July 2024. The Company accounted for the Lease Assignment Agreement as a lease modification that reduced the lease term to the assignment date in July 2024. Accordingly, during the year ended December 31, 2024, the Company remeasured its lease liability as of the modification date to reflect the decrease in fixed lease payments, with the amount of the remeasurement, $8.4 million, adjusted by a corresponding reduction to the right-of-use asset.

Following the closing of the MannKind Transaction, $1.4 million of restricted cash was released in August 2024, which had been held in a depository account at a financial institution to collateralize a conditional stand-by letter of credit related to the Lease Agreement.

The components of lease expense for the Company for the years ended December 31, 2025, and 2024 were as follows:

		Year Ended December 31,
		2025				2024
Lease cost
Fixed lease cost		$	-			$	678
Variable lease cost			-				214
Total lease cost		$	-			$	892
Other information
Cash paid for amounts included in the measurement of lease liabilities		$	-			$	681
Weighted-average remaining lease term			-				-
Weighted-average discount rate			-				-

11. Income Taxes

The Company had no income tax expense due to operating losses incurred for the years ended December 31, 2025 and 2024.

The Company adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31, 2025. The following table presents the required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory tax amount and rate to the actual effective amount and rate for the year ended December 31, 2025:

		2025
		Amount				Percent
U.S federal statutory tax rate		$	(1,084	)			21.0	%
Changes in valuation allowances			1,018				(19.7	)%
Nontaxable or nondeductible items
Stock-based compensation			63				(1.2	)%
Other			3				(0.1	)%
Effective tax rate		$	-				-	%

The following table presents the required disclosure prior to the adoption of ASU 2023-09 and reconciles the U.S. federal statutory income tax rate to the actual effective income tax rate for the years ended December 31, 2024:

		2024
Income tax computed at federal statutory tax rate			21.0	%
State taxes, net of federal benefit			5.5	%
Research and development credits			5.8	%
Expiration of stock options			(7.7	)%
Permanent differences			(2.4	)%
Limitations on credits and net operating losses			(1.2	)%
Change in valuation allowance			(21.0	)%
Effective tax rate			-

The significant components of the Company's deferred tax assets as of December 31, 2025 and 2024 were as follows:

		2025				2024
Deferred tax assets:
Net operating loss carryforwards		$	19,311			$	16,116
Capitalized research and experimental costs			5,708				7,836
Research and development credit carryforwards			1,945				1,945
Capitalized start-up expenses			117				135
Stock-based compensation			108				183
Other			660				309
Total deferred tax assets			27,849				26,524
Valuation allowance			(27,849	)			(26,524	)
Net deferred tax assets		$	-			$	-

Subject to the limitations described below, as of December 31, 2025, the Company had federal net operating loss carryforwards of approximately $81.7 million available to reduce future taxable income, of which $3.8 million is subject to expiration between 2026 and 2037 and $77.9 million may be carried forward indefinitely. As of December 31, 2025, the Company had state net operating loss carryforwards of approximately $33.9 million, which is subject to expiration between 2030 and 2045. The Company also had research and development credits of approximately $1.9 million as of December 31, 2025 to offset future federal and state income taxes, which is subject to expiration at various times through 2044.

Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has completed several financings since its inception which it believes has resulted in changes in control as defined by Sections 382 and 383 of the Internal Revenue Code.

Management of the Company evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and determined that it is more likely than not that the Company will not recognize the benefits of the deferred tax assets. As a result, a full valuation allowance was recorded as of December 31, 2025 and 2024. The valuation allowance increased by $1.3 million during the year ended December 31, 2025, primarily due to the increase in loss carryforwards by the Company.

The One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. on July 4, 2025. OBBBA introduced significant changes to the U.S. federal corporate tax system, including retroactive relief for certain small business taxpayers, such as reinstatement of immediate expensing for domestic research and development expenditures and modifications to the business interest expense limitation. Under U.S. GAAP, the effects of changes in tax laws are recognized in the period in which the new law is enacted. Accordingly, the provisions impacting the Company have been reflected in the financial statements for the year ended December 31, 2025, and did not have a material impact as the Company has a valuation allowance against its net deferred tax assets.

The Company is currently not under examination by the Internal Revenue Service or any other jurisdictions for any tax years. The Company files income tax returns in the United States for federal and state income taxes. In the normal course of business, the Company is subject to examination by tax authorities in the United States. Since the Company is in a loss carryforward position, the Company is generally subject to U.S. federal and state income tax examinations by tax authorities for all years for which a loss carryforward is utilized. The Company's returns remain subject to federal and state audits for the years 2022 through 2025. However, carryforward attributes from prior years may still be adjusted upon examination by tax authorities if they are used in an open period.

The Company may from time to time be assessed interest or penalties by major tax jurisdictions. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company has not recorded interest or penalties on any unrecognized tax benefits since its inception.

The roll-forward of the Company's gross uncertain tax positions is as follows:

		Gross Uncertain Tax Position
Balance - January 1, 2024		$	505
Additions for current year tax positions			139
Balance - December 31, 2024			644
Additions for current year tax positions			-
Balance - December 31, 2025		$	644

The Company's total uncertain tax positions did not have any changes during the year ended December 31, 2025. None of the uncertain tax positions, if realized, would affect the Company's effective tax rate in future periods due to a valuation allowance provided against the Company's net deferred tax assets.

12. Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing net loss by the weighted-average number common shares outstanding during the period, after taking into consideration any potentially dilutive effects from outstanding stock options or warrants.

Basic and diluted net loss per share were the same for the years ended December 31, 2025, and 2024, as the effect of potentially dilutive securities would have been anti-dilutive. The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding, because such securities had an anti-dilutive impact:

		Year Ended December 31,
		2025				2024
Options to purchase common stock			33,858				34,046
Warrants to purchase common stock			382,588				934,373
Total potentially dilutive securities excluded			416,446				968,419

13. Segment Reporting

The Company operates in a single reportable segment. The accounting policies of the segment are the same as those described in the summary of significant accounting policies (Note 2). The measure of segment assets is reported on the balance sheet as total consolidated assets.

The Company's chief operating decision maker ("CODM") is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses net loss to assess financial performance of the Company and allocate resources, in addition to operating forecasts and clinical results.

The Company's single segment revenue, significant segment expenses, other segment items and net loss are each presented separately on the Company's consolidated statements of operations.

14. Subsequent Events

The Company has completed an evaluation of all subsequent events after the balance sheet date of December 31, 2025, through the date the consolidated financial statements were issued to ensure that the consolidated financial statements include appropriate disclosure of events both recognized in the consolidated financial statements as of December 31, 2025, and events which occurred subsequently but were not recognized in the consolidated financial statements. The Company has concluded that no subsequent events have occurred that require disclosure, except as disclosed within the consolidated financial statements.