Opus Genetics Inc.

03/12/2026 | Press release | Distributed by Public on 03/12/2026 14:54

Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the "Risk Factors" section of this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.


Opus Genetics, Inc.
Form 10-K
Opus Genetics, Inc. (the "Company," "Opus," "we," "us," or "our") is a clinical-stage biopharmaceutical company developing gene therapies to restore vision and prevent blindness in patients with inherited retinal diseases ("IRDs"), and other types of therapies for additional ophthalmic disorders.
On October 22, 2024, Opus Genetics, Inc., a Delaware corporation formerly known as Ocuphire Pharma, Inc. (the "Company," "Opus," "we," "us" or "our"), acquired a private corporation then operating under the name of "Opus Genetics Inc." ("Private Opus") pursuant to the terms of an Agreement and Plan of Merger, dated as of October 22, 2024 (such agreement, the "Merger Agreement" and the transaction consummated via the Merger Agreement, the "Opus Acquisition"), by and among the Company, Private Opus, and certain merger subsidiaries party thereto. Further information about the Opus Acquisition can be found in Note 2 - Mergers, included in "Part II, Item 8 - Financial Statements and Supplementary Data" of this Annual Report.

Gene Therapy Programs
Our pipeline features a portfolio of seven adeno-associated virus ("AAV") based gene therapies that address mutations in genes that cause different forms of Leber congenital amaurosis ("LCA"), bestrophinopathy, and retinitis pigmentosa.
OPGx-LCA5
OPGx-LCA5 is designed to address a form of LCA due to biallelic mutations in the LCA5 gene, which encodes the lebercilin protein. LCA5-associated inherited retinal disease (IRD) is an early-onset severe inherited retinal dystrophy. Studies in patients with this mutation have reported evidence for the dissociation of retinal architecture and visual function in this disease, suggesting an opportunity for therapeutic intervention through gene augmentation. OPGx-LCA5 uses an adeno-associated virus 8 (AAV8) vector to precisely deliver a functional LCA5 gene to the outer retina via a single subretinal injection. The program has been granted Rare Pediatric Disease, Regenerative Medicine Advanced Therapy (RMAT),and Orphan Drug designations from the FDA.
OPGx-LCA5 is currently being evaluated in an open-label, Phase 1/2 clinical trial. To date, six late-stage participants have been treated with OPGx-LCA5, all of whom have experienced clinically meaningful improvements in vision, providing evidence of biological activity with the potential for functional restoration of vision in individuals with advanced disease.
In September 2025, we reported positive data from the six participants. The three pediatric participants treated over three months demonstrated large gains in cone-mediated vision with improvements across multiple measures of visual function. In the three adult participants, responses have been observed out to 18 months, underscoring the potential durability of the treatment response. OPGx-LCA5 has been well tolerated with no ocular serious adverse events or dose-limiting toxicities.
On November 6, 2025 the Company announced the successful completion of a Type B RMAT meeting with the FDA regarding OPGx-LCA5. The meeting provided constructive feedback from the FDA on key elements of the Company's registration strategy, including Chemistry, Manufacturing and Controls (CMC), and the pivotal trial design. The FDA acknowledged the significant unmet medical need for individuals with LCA5-related blindness and reaffirmed its commitment to regulatory flexibility for rare genetic diseases.
The Company will incorporate the FDA's feedback into its updated clinical development and CMC plans for the Phase 3 portion of the study to include enrolling as few as 8 participants in a single arm, 12-month study utilizing an adaptive design, which provides flexibility on endpoints and number of participants, reflective of LCA5 as a rare condition with an urgent medical need.

Opus Genetics, Inc.
Form 10-K
We expect the Phase 3 portion of the trial will include a run-in period prior to dosing to evaluate the natural history of each participant to serve as their own control in the study. The Company is actively identifying patients for this segment and has enrolled the first participant for ongoing disease monitoring. Following availability of validated clinical drug supply manufactured with the intended commercial processes, dosing with OPGx-LCA5 is anticipated in the second half of 2026 with topline clinical data expected approximately one year later.
In September 2025, the FDA introduced the Rare Disease Evidence Principles (RDEP) review process to facilitate the approval of drugs to treat rare diseases with very small patient populations with significant unmet medical need and with a known genetic defect that is the major driver of the pathophysiology. With a patient population of fewer than 1,000 individuals, the Company believes that its LCA5 program meets the eligibility criteria for the RDEP process and plans to submit an application.
OPGx-BEST1
OPGx-BEST1 is being developed for the treatment of IRDs associated with mutations in the BEST1 gene. BEST1 disease, or vitelliform macular dystrophy, is a rare, inherited retinal condition causing macular degeneration by mutations in the BEST1 gene, leading to progressive vision loss and, in some cases, blindness. In preclinical studies conducted in a naturally occurring canine model of BEST1 disease, OPGx-BEST1 demonstrated restoration of the retinal pigment epithelium-photoreceptor interface using AAV-mediated gene delivery, providing evidence in support of a first-in-man clinical trial.
In August 2025, we announced FDA clearance of an Investigational New Drug ("IND") application to initiate a clinical trial. An adaptive, open-label, dose-exploring Phase 1/2 trial, known as BIRD1, is currently recruiting participants to study the safety and tolerability of subretinally injected OPGx-BEST1 in participants with Best Vitelliform Macular Dystrophy (BVMD) or Autosomal-Recessive Bestrophinopathy (ARB). Initial data is expected in the mid-2026.
In November 2025, we dosed our first participant in our OPGx-BEST1 Phase 1/2 clinical trial, known as BIRD-1, in patients with BVMD or ARB. The trial is an adaptive, open-label, dose-exploring, safety and tolerability study. Treatment will be administered via a single subretinal injection in one eye of each participant with two dosing cohorts. The trial will also explore biological activity through functional and anatomical endpoints, including changes in visual function and retinal structure.
In December 2025, we announced that the Independent Data Monitoring Committee (IDMC) overseeing the trial completed its pre-specified safety review of the one-month data from the sentinel participant and recommended advancing enrollment and dosing of additional participants in the trial, without modification. To date, 2 participants have been treated in the study, representing both dominant and recessive forms of BEST disease, with three-month results from Cohort 1 expected in mid-2026.
We are planning to discuss with the FDA an adaptive Phase 1/2/3 trial design, similar to the design of the OPGx-LCA5 trial, and acceleration to a pivotal study if the majority of patients show a treatment-related fluid resolution on optical coherence tomography.
Earlier Stage Programs
We also have five programs in pre-clinical development. Three programs are currently in IND-enabling studies and received grant/partner funding to support their development: OPGx-RHO is being co-funded by the Foundation Fighting Blindness ("FFB") and the National Institutes of Health ("NIH"); OPGx-RDH12 is being co-funded by the Global RDH12 Alliance; and OPGx-MERTK is being co-funded by the Retinal Degeneration Fund ("RDF") of the FFB. Our pre-IND programs include OPGx-NMNAT1 and OPGxCNGB1.

Phentolamine Ophthalmic Solution 0.75% (PS)

Our pipeline also includes Phentolamine Ophthalmic Solution 0.75% (PS), a relatively non-selective alpha-1 and alpha-2 adrenergic antagonist designed to reduce pupil size, administered as an eye drop. It aims to work by uniquely blocking the alpha-1 receptors found on the radial iris dilator muscles, which are activated by the alpha-1 adrenergic receptors. PS is designed to reduce pupil diameter through a sympatholytic mechanism of action that avoids engaging the ciliary muscle, potentially reducing risks such as retinal tears or detachment associated with older parasympathomimetic agents. PS is targeting three different indications.


Opus Genetics, Inc.
Form 10-K
In November 2022, we entered into a license and collaboration agreement (as amended, the "Viatris License Agreement") with Viatris, Inc. ("Viatris"), pursuant to which we granted Viatris an exclusive license to develop, manufacture, import, export and commercialize PSfor treating (a) reversal of pharmacologically-induced mydriasis, (b) decreased vision under mesopic (low) light conditions after keratorefractive surgery, and (c) presbyopia; and (ii) PS and low dose pilocarpine for treating presbyopia (together, the "PS Products") worldwide except for certain countries and jurisdictions in Asia. For more information on the Viatris License Agreement, please refer to Note 11 - License and Collaboration Agreements and Other Funding Agreements included in "Part II, Item 8- Financial Statements and Supplementary Data" of this Annual Report.

RYZUMVI®(phentolamine ophthalmic solution) 0.75%:PS was approved by the FDA for the treatment of pharmacologically-induced mydriasis under the brand name RYZUMVI® in September 2023, which triggered a $10 million milestone payment under the Viatris License Agreement. RYZUMVI®was commercialized by Viatris in April 2024.

Presbyopia:In June 2025, we announced positive results from VEGA-3, our second pivotal Phase 3 trial evaluating PS for the treatment of presbyopia, an ophthalmic disorder that involves the progressive loss of ability to focus on close objects that results in blurred near vision, difficulty seeing in dim light, and eye strain. VEGA-3 met its primary endpoint, with a statistically significant 27.2% of participants treated with PS achieving a ≥15-letter improvement in binocular distance-corrected near visual acuity (DCNVA), with less than a 5-letter loss in binocular best-corrected distance visual acuity (BCDVA) at 12 hours post-dose on Day 8, compared to 11.5% of patients on placebo (p<0.0001). The trial also met key secondary efficacy endpoints, reinforcing the benefit observed. Based on positive results from both Phase 3 studies, Viatris, the Company's global commercialization partner for PS, filed a supplemental New Drug Application (sNDA) with the FDA in December 2025. In February 2026, the FDA accepted the sNDA and set a Prescription Drug User Fee Act (PDUFA) action date of October 17, 2026.
Mesopic, Low-Contrast Conditions:We are conducting our second Phase 3 trial, known as LYNX-3, to treat significant, chronic night driving impairment in keratorefractive patients with reduced mesopic vision. The program is being conducted under a Special Protocol Assessment ("SPA") and has received Fast Track Designation from the FDA. The first Phase 3 trial, LYNX-2, met its primary endpoint of a gain of three lines (or 15 letters) or more of distance vision improvement on a low contrast chart in low light conditions after 15 days of dosing. In the study, 17.3% of participants treated with PS achieved a ≥15-letter Early Treatment Diabetic Retinopathy Study (ETDRS) (≥ 3-line) improvement in Mesopic Low Contrast Distance Visual Acuity (mLCVA) at Day 15, compared to 9.2% in the placebo group (p<0.05). We are currently enrolling participants in LYNX-3, with topline results from trial expected in the first half of 2026.
APX3330

APX3330 is a selective small molecule that is designed to act on the dual-functioning Apurinic/Apyrimidinic Endonuclease 1/Redox Effector Factor-1 (APE1/Ref-1) protein, referred to as Ref-1. We completed a Phase 2 clinical study of APX3330 in diabetic retinopathy and reached FDA agreement under a SPA for a Phase 3 program. We are currently seeking a strategic partner to advance the clinical development of this diabetic retinopathy program and redirecting existing resources toward the acquired gene therapy programs.
Strategic Outlook

We intend to advance our current active pipeline and may explore opportunities to out-license from our portfolio or in-license other drug candidates. To date, our primary activities have been conducting research and development activities, performing business and financial planning, recruiting personnel and raising capital. We have one product, RYZUMVI®, approved for sale that is generating royalties based on sales by Viatris, and we do not expect to consistently generate significant revenues, other than license and collaborations revenue, unless and until the FDA or other regulatory authorities approve, and we successfully commercialize, LCA5, BEST1, other internally-developed gene therapy assets or PS for other indications. Until such time, if ever, as we can consistently generate substantial product revenue, we expect to finance our cash needs through a combination of equity, debt and alternative financings as well as through collaborations, strategic alliances and licensing arrangements.


Opus Genetics, Inc.
Form 10-K
Through December 31, 2025, we have funded our operations primarily through equity financings, the issuance of convertible notes in private placements, license fee and milestone payments in connection with the Viatris License Agreement, and non-dilutive funding from collaborative partners.

Our net loss was $49.6 million and $57.5 million for the years ended December 31, 2025 and 2024, respectively, As of December 31, 2025, we had an accumulated deficit of $188.6 million. We anticipate that our expenses will continue to increase as we:


•
continue clinical trials for LCA5, BEST1, PS and for any other product candidate in our future pipeline;


•
continue nonclinical studies for our pipeline of gene therapies;


•
develop additional product candidates that we identify, in-license or acquire;


•
seek regulatory approvals for any product candidates that successfully complete clinical trials;


•
contract to manufacture our product candidates;


•
maintain, expand and protect our intellectual property portfolio;


•
hire additional staff, including clinical, scientific, operational and financial personnel, to execute our business plan;


•
add operational, financial and management information systems and personnel to support our product development and potential future commercialization efforts;


•
continue to operate as a public company; and


•
establish on our own or with partners, a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval.

Our net loss will likely continue to fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our nonclinical studies, clinical trials, expenditures on other research and development activities (and reimbursement thereof), and from potential milestone payments received from and revenue earned under the Viatris License Agreement or any other license and collaboration agreements that we enter into.

Financial Operations Overview

License and Collaborations Revenue

License and collaborations revenue to date was derived from a one-time, non-refundable payment related to a license transfer, an additional milestone payment and reimbursement of expenses earned under the Viatris License Agreement, and to a much lesser degree, from license agreements with BioSense Global LLC ("BioSense") and Processa Pharmaceuticals, Inc. ("Processa"). We anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Viatris License Agreement, up to a cap of $50.0 million, and we may earn additional revenues from potential milestone and royalty payments from the agreements with Viatris or from other license agreements entered into the future; however, the attainment of milestones or level of sales required to earn significant royalty payments is highly uncertain for the reasons explained below. Until further notice, we will report earned RYZUMVI® royalties as a component of license and collaboration revenue listed in the consolidated statements of comprehensive loss.


Opus Genetics, Inc.
Form 10-K
To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until RYZUMVI® sales become material, or regulatory approval is obtained, and commercialization begins for LCA5, BEST1, other internally-developed assets or PS for additional indications. If we fail to complete the development of LCA5, BEST1, PS, or any other product candidate we may pursue or fail to obtain regulatory approval, our ability to generate significant revenue will be compromised.

Operating Expenses

The Company's operating expenses are classified into three categories: research and development, general and administrative, and acquired in-process research and development expenses.
.
Research and Development Expenses

To date, our research and development expenses have related primarily to the clinical stage development of our IRD programs, including LCA5 and BEST1, as well as development of PS, and APX3330. Research and development expenses consist of costs incurred in performing research and development activities, including compensation, benefits and stock-based compensation costs for research and development employees and costs for consultants, costs associated with nonclinical studies and clinical trials, regulatory activities, manufacturing activities to support clinical activities, license fees, nonlegal patent costs, fees paid to external service providers that conduct certain research and development, and an allocation of overhead expenses. We do not expect to incur meaningful research and development expenses in the future for APX3330.

Pursuant to the Viatris License Agreement, our research and development expenses related to the development of PS to date have been fully reimbursed by Viatris.

We expect that LCA5, BEST1, PS and other internally-developed assets will have higher development costs during the later stages of clinical development, as compared to costs incurred during their earlier stages of development, primarily due to the increased size and duration of the later-stage clinical trials and associated nonclinical studies. We expect our research and development expenses to increase over the next several years. However, it is difficult for us to determine with certainty the duration, costs and timing to complete our current or future preclinical programs and clinical trials of LCA5, BEST1, PS and other internally-developed assets.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation costs, for personnel in functions not directly associated with research and development activities. Other significant costs include insurance coverage for directors and officers and other property and liability exposures, legal fees relating to intellectual property and corporate matters, business development costs, professional fees for accounting and tax services, other services provided by business consultants and legal settlements.

Acquired In-Process Research and Development Expenses

We include costs to acquire or in-license product candidates as acquired in-process research and development expenses. These costs are immediately expensed provided that the payments do not also represent processes or activities that would constitute a "business" as defined under accounting standards generally accepted in the United States of America (U.S. GAAP) or provided that the product candidate has not achieved regulatory approval for marketing and, absent obtaining such approval, has no alternative future use. Royalties owed on future sales of any licensed product will be expensed in the period the related revenues are recognized. The costs associated with the Opus Acquisition were recorded as acquired in-process research and development expenses ("IPR&D").
Fair value change in warrant and other derivative liabilities

The fair value change in warrant and other derivative liabilities consists of the fair value changes associated with the March 2025 Warrants and March 2025 Private Placement Warrants, and to a much lesser extent, the Purchase Agreement, both described further below.


Opus Genetics, Inc.
Form 10-K
Financing costs

Financing costs consist of issuance costs attributed to our March 2025 Warrants and March 2025 Private Placement Warrants.

Interest Expense

Interest expense during the year ended December 31, 2025 relates to interest accretion under the RDF Agreement, described further below, which is accounted for as debt under ASC 470, Debt.

Other Income, net

Other income, net includes interest earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity investments, the gain in connection with Opus Acquisition and reimbursements in connection with grants and other sources when they occur.

Provision for Income Taxes

Provision for income taxes consists of federal and state income taxes in the United States, as well as deferred income taxes and changes in related valuation allowance reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Currently, a full valuation allowance has been provided on the net deferred tax assets as of December 31, 2025 and 2024 given the uncertainty of future taxable income and other related factors impacting the realizability or our remaining net deferred tax assets.

Results of Operations

The following table summarizes our operating results for the periods indicated (in thousands):

For the Year Ended
December 31,
2025
2024
Change
License and collaborations revenue
$
14,196
$
10,992
$
3,204
Operating expenses:
Research and development
30,812
26,851
3,961
General and administrative
21,983
18,215
3,768
Acquired in-process research and development expenses
-
28,000
(28,000
)
Total operating expenses
52,795
73,066
(20,271
)
Loss from operations
(38,599
)
(62,074
)
23,475
Fair value change in warrant and other derivative liabilities
(11,515
)
72
(11,587
)
Financing costs
(1,337
)
-
(1,337
)
Interest expense
(129
)
-
(129
)
Other income, net
1,989
4,470
(2,481
)
Loss before income taxes
(49,591
)
(57,532
)
7,941
Provision for income taxes
-
-
-
Net loss
$
(49,591
)
$
(57,532
)
$
7,941


Opus Genetics, Inc.
Form 10-K
Comparison of Years Ended December 31, 2025 and 2024

License and Collaborations Revenue

License and collaborations revenue was $14.2 million for the year ended December 31, 2025 compared to $11.0 million for the year ended December 31, 2024.

Revenue during 2025 and 2024 was derived largely from research and development services in connection with the Viatris License Agreement.

Research and Development

The following table illustrates the components of our research and development expenses for the periods presented (in thousands):



For the Year Ended
December 31,

2025
2024
Change
External costs:
IRD programs
$
11,625
$
902
$
10,723
Phentolamine Ophthalmic Solution 0.75% ("PS")
12,815
9,680
3,135
APX 3330
417
11,466
(11,049
)
Unallocated
377
414
(37
)
Total external cost
25,234
22,462
2,772
Internal costs:
Employee related expenses
5,173
4,216
957
Facilities, supplies and other
405
173
232
Total internal costs
5,578
4,389
1,189
Total research and development expenses
$
30,812
$
26,851
$
3,961

A greater percentage of research and development expense incurred has been allocated to IRD programs for the year ended December 31, 2025 as compared to the year ended December 31, 2024 as the Company continues to focus on developing the IRD gene therapy programs acquired in connection with the Opus Acquisition. Conversely, a lesser percentage of research and development expense incurred has been allocated to APX 3330 for the year ended December 31, 2025 as compared to the prior year period, as we do not expect to incur meaningful research and development expenses in the future for APX3330.

Research and development expenses for the year ended December 31, 2025 were $30.8 million compared to $26.9 million for the year ended December 31, 2024. The $4.0 million increase was primarily attributable to increased clinical research costs of $4.8 million, higher toxicology costs of $0.5 million, higher payroll related costs of $0.6 million, higher professional service costs of $0.5 million and other increased operating costs of $0.3 million on a net basis, partially offset by lower manufacturing costs of $2.4 million and lower regulatory costs of $0.4 million. Pursuant to the Viatris License Agreement, our research and development expenses related to the development of PS are fully reimbursed by Viatris. Research and development expenses included $1.0 million in stock-based compensation expense during each of the years ended December 31, 2025 and 2024.

General and Administrative

General and administrative expenses for the year ended December 31, 2025 were $22.0 million compared to $18.2 million for the year ended December 31, 2024. The $3.8 million increase was primarily attributable to public company related costs of $2.1 million, payroll related costs of $1.3 million, patent fees of $0.7 million, general legal fees of $0.3 million, professional service costs of $0.2 million, rent of $0.2 million and other operating costs of $0.8 million on a net basis, offset in part by business development activity associated with the prior year corporate strategic transaction in the amount of $1.8 million when compared to the corresponding prior year period. General and administrative expenses included $2.4 million in stock-based compensation expense during each of the years ended December 31, 2025 and 2024.


Opus Genetics, Inc.
Form 10-K
Acquired In-Process Research and Development Expenses
On October 22, 2024, the Company acquired Private Opus. Research and development projects of Private Opus which were in-process at the Opus Acquisition date were expensed as IPR&D and amounted to $28.0 million. Current accounting standards require that the fair value of IPR&D with no alternative future use be charged to expense on the acquisition date. There were no IPR&D costs in the current year period.
Fair value change in warrant and other derivative liabilities
The fair value change in warrant and other derivative liabilities was attributed to the March 2025 Warrants and March 2025 Private Placement Warrants and Purchase Agreement, described further below, was an expense of $11.5 million and a gain of $0.1 million for the years ended December 31, 2025 and 2024, respectively, attributed largely to the fluctuations in our common stock fair value and the number of potential shares of common stock issuable at the various discount tiers under the equity line financing.

Financing costs

Financing costs for the year ended December 31, 2025 of $1.3 million was comprised of issuance costs attributed to the March 2025 Warrants and March 2025 Private Placement Warrants. We did not have any financing costs during the year ended December 31, 2024.

Interest expense

During the year ended December 31, 2025, the Company recorded interest expense in connection with the RDF Agreement in the amount of $0.1 million. There was no interest expense during the comparable prior year period.

Other Income, net

During the year ended December 31, 2025, Opus had other income, net of $2.0 million related primarily to interest income in the amount of $1.3 million in connection with our cash and cash equivalents on-hand and to a lesser extent grant revenue in the amount of $0.7 million.

During the year ended December 31, 2024, Opus had other income, net of $4.5 million related primarily to the non-cash gain in connection with the Opus Acquisition of approximately $2.4 million and interest income in connection with our cash and cash equivalents on-hand of $2.0 million.

Provision for Income Taxes

We did not have any taxable income during the years ended December 31, 2025 and 2024.

Liquidity and Capital Resources

Capital Resources

As of December 31, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $45.1 million. As disclosed in Note 14 - Subsequent Events, included in "Part II, Item 8 - Financial Statements and Supplementary Data" of this Annual Report, the Company received gross proceeds of approximately $25.0 million from its February 2026 private placement which closed on February 18, 2026. We believe that our current cash on hand will be sufficient to fund our operations for at least twelve months beyond the date of this filing. As of December 31, 2025, our cash and cash equivalents were invested primarily in cash deposits and cash equivalent investments at three large financial institutions.

Historical Capital Resources

Our primary source of cash to fund our operations has been various equity offerings in the amount of $118.1 million and the issuance of convertible notes in the amount of $8.5 million, inclusive of the promissory notes exchanged for Opus convertible notes. In addition, we received a one-time non-refundable cash payment of $35.0 million during the fourth quarter of 2022, a $10.0 million milestone payment during the fourth quarter of 2023, and have received reimbursement for costs related to development since the fourth quarter of 2022 totaling $37.7 million through December 31, 2025, all in connection with the Viatris License Agreement. Lastly, we received funding of approximately $1.7 million from the RDF Agreement and various research and development grants.


Opus Genetics, Inc.
Form 10-K
November 2025 Registered Direct Offering

On November 6, 2025, we entered into a securities purchase agreement to sell securities in a registered direct offering for gross proceeds of approximately $23.0 million, before deducting offering expenses. The financing was led by Perceptive Advisors and Balyasny Asset Management, with participation by new and existing institutional investors, including Nantahala Capital. We intend to use the net proceeds to advance our OPGx-LCA5 and OPGx-BEST1 gene therapy programs, as well as for working capital and general corporate purposes.

In the offering, we sold an aggregate of 3,827,751 shares of common stock at a price of $2.09 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase up to an aggregate of 7,177,033 shares of common stock at a purchase price of $2.0899 per pre-funded warrant. Each pre-funded warrant has an exercise price of $0.0001 per share of common stock, will be immediately exercisable subject to certain conditions set forth in each pre-funded warrant, and will not expire. The offering closed on November 7, 2025.

August 2025 Private Placement

On August 25, 2025, we entered into subscription agreements pursuant to which we agreed to issue and sell in the August 2025 Private Placement to certain investors an aggregate of 3,138,338 shares of our common stock. The aggregate gross proceeds from the August 2025 Private Placement were approximately $3.5 million. The August 2025 Private Placement closed on August 25, 2025.

We intend to use the net proceeds of the August 2025 Private Placement to expedite manufacturing process development, including scale-up of clinical and commercial production and testing, to ensure sufficient supply of cGMP material for its gene therapy candidates, OPGx-LCA5 and OPGx-BEST1. No underwriting discounts or commissions were paid with respect to the August 2025 Private Placement.

The August 2025 Private Placement was led by Cam Gallagher, Chair of our board of directors (the "Board"), with an investment of $1.0 million, along with participation by Sean Ainsworth, the lead independent director of the Board, and other investors.

March 2025 Financings

On March 21, 2025, we entered into an underwriting agreement with Craig-Hallum Capital Group, LLC, as the sole underwriter. Pursuant to the underwriting agreement, we agreed to issue and sell, in an underwritten public offering, 12,219,736 shares of common stock and warrants to purchase up to 21,052,631 shares of common stock (the "March 2025 Warrants"). Each share of common stock was sold together with one March 2025 Warrant to purchase one share of common stock, at a price to the public of $0.95 per share and related March 2025 Warrant. We also issued 8,832,895 pre-funded warrants ("Pre-Funded Warrants") at a price to the public of $0.9499 per Pre-Funded Warrant.

Also on March 21, 2025, we entered into a subscription agreement (the "Subscription Agreement") with each of Dr. George Magrath, the Company's Chief Executive Officer, and Cam Gallagher, the chairman our Board. Pursuant to the Subscription Agreement, the Company agreed to issue and sell, in a private offering (the "March 2025 Private Placement"), a total of 392,157 shares of common stock to Mr. Magrath and 784,314 shares of common stock to Mr. Gallagher, as well as 392,157 warrants to purchase shares of common stock to Mr. Magrath and 784,314 warrants to purchase shares of common stock to Mr. Gallagher ("March 2025 Private Placement Warrants"). Each March 2025 Private Placement Warrant has an initial exercise price of $1.15, expires on the five-year anniversary of the original issuance date and may be called by the Company 30 days following the release of the Company's OPGx-BEST1 DUO-1001 Cohort 1 data upon achievement of a volume weighted average price of our common stock for 30 consecutive trading days of over $1.725 per share and the trading average daily volume for such 30 day period exceeds $150,000 per trading day.


Opus Genetics, Inc.
Form 10-K
The combined gross proceeds from the March 2025 Offering and the March 2025 Private Placement, which both closed on March 24, 2025, were approximately $21.5 million, before deducting underwriting discounts and commissions and offering expenses payable by us. Additionally, as of December 31, 2025, 862,684 of the March 2025 Warrants were exercised for cash in the amount of $0.8 million.

The March 2025 Offering (including the shares of common stock issuable from time to time upon exercise of the March 2025 Warrants and the Pre-Funded Warrants) was made pursuant to our Registration Statement on Form S-3 (File No. 333-276462) filed with the SEC on January 10, 2024, including the prospectus dated January 23, 2024 contained therein, as the same has been supplemented.

March 2025 Warrants

The March 2025 Warrants have an initial exercise price equal to $0.95 per share of common stock and are exercisable for five years from the date of issuance. The exercise prices and numbers of shares of common stock issuable upon exercise are subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the common stock and also upon any distributions of assets, including cash, stock or other property to our stockholders. A holder may not exercise the March 2025 Warrant if, after giving effect to such exercise, the holder (together with its affiliates) would beneficially own (as determined in accordance with the terms of the March 2025 Warrants) more than 4.99% (or, at the election of the holder, 9.99%) of the outstanding common stock immediately after giving effect to the exercise.

The March 2025 Warrants are callable by us in certain circumstances. Subject to certain exceptions, in the event that the March 2025 Warrants are outstanding, if, after the closing date, March 24, 2025 (the "Closing Date"), (i) we have announced OPGx-BEST1 DUO-1001 Cohort 1 data, (ii) the volume weighted average price of the common stock for 30 consecutive trading days ("Warrant Measurement Period"), which 30 consecutive trading day period shall not have commenced until after the initial exercise date) exceeds $1.425 (subject to adjustment), (iii) the trading average daily volume for such Warrant Measurement Period exceeds $150,000 per trading day and (iv) the March 2025 Warrant holder is not in possession of any information that constitutes or might constitute material non-public information which was provided by the Company, its subsidiaries or any of its officers, directors, employees, agents or affiliates, then the Company may, within one trading day of the end of such Warrant Measurement Period, upon notice, call for cancellation of all or any portion of the March 2025 Warrants for which a notice of exercise has not yet been delivered for consideration equal to $0.001 per March 2025 Warrant share.

In the event of a fundamental transaction, as defined in the Form of Warrant, the holders of the March 2025 Warrants will be entitled to receive upon exercise the kind and amount of securities, cash or other property that the holders would have received had they exercised immediately prior to such fundamental transaction. Additionally, as more fully described in the Form of Warrant, in the event of certain fundamental transactions, the holders of the March 2025 Warrants will be entitled to receive consideration in an amount equal to the Black Scholes Value of the remaining unexercised portion of the March 2025 Warrants on the date of consummation of such fundamental transaction.

March 2025 Private Placement Warrants

The March 2025 Private Placement Warrants have an initial exercise price equal to $1.15 per share of common stock and are exercisable for five years from the date of issuance. The March 2025 Private Placement Warrants are callable by us in certain circumstances. Subject to certain exceptions, in the event that the March 2025 Private Placement Warrants are outstanding, if, after the Closing Date, (i) the Company announced OPGx-BEST1 DUO-1001 Cohort 1 data, (ii) the volume weighted average price of the common stock for 30 consecutive trading days ("Private Placement Measurement Period"), which 30 consecutive trading day period shall not have commenced until after the initial exercise date) exceeds $1.725 (subject to adjustment), (iii) the trading average daily volume for such Private Placement Measurement Period exceeds $150,000 per trading day and (iv) the March 2025 Private Placement Warrant holder is not in possession of any information that constitutes or might constitute material non-public information which was provided by the Company, its subsidiaries or any of its officers, directors, employees, agents or affiliates, then the Company may, within one trading day of the end of such Private Placement Measurement Period, upon notice, call for cancellation of all or any portion of the March 2025 Private Placement Warrants for which a notice of exercise has not yet been delivered for consideration equal to $0.001 per March 2025 Private Placement Warrant share. Other terms under the March 2025 Private Placement Warrants are generally identical to the terms of the March 2025 Warrants discussed above.


Opus Genetics, Inc.
Form 10-K
Pre-Funded Warrants

The Pre-Funded Warrants have an exercise price of $0.0001 per share of common stock and are immediately exercisable and are exercisable at any time until exercised in full. The exercise prices and numbers of shares of common stock issuable upon exercise are subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the common stock. A holder may not exercise the Pre-Funded Warrant if, after giving effect to such exercise, the holder (together with its affiliates) would beneficially own (as determined in accordance with the terms of the Pre-Funded Warrants) more than 4.99% (or, at the election of the holder, 9.99%) of the outstanding common stock immediately after giving effect to the exercise. In the event of a fundamental transaction, as defined in the Form of Pre-Funded Warrant, the holders of the Pre-Funded Warrants will be entitled to receive upon exercise of the Pre-Funded Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Pre-Funded Warrants immediately prior to such fundamental transaction.

Lincoln Park Purchase Agreement

On August 10, 2023, we entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC ("Lincoln Park") for an equity line financing (the "Purchase Agreement"). The Purchase Agreement provided that, subject to the terms and conditions set forth therein, we had the sole right, but not the obligation, to direct Lincoln Park to purchase up to $50 million of shares of the Company's common stock from time to time over the 30-month term of the Purchase Agreement. A total of 1,946,792 shares of common stock were sold under the Purchase Agreement for gross proceeds through the termination of the Purchase Agreement in the amount of $5.2 million.

On April 2, 2025, the Company delivered written notice to Lincoln Park of its election to terminate the Purchase Agreement, effective as of April 3, 2025.

At-The-Market Program

Since 2021, the Company has maintained at-the-market equity offering programs (collectively, the "ATM Programs") pursuant to sales agreements with JonesTrading Institutional Services LLC ("JonesTrading") and, more recently, Leerink Partners LLC ("Leerink"). Under the ATM Programs, shares of our common stock may be offered and sold from time to time at prevailing market prices. References in this Annual Report on 10-K to proceeds from "the ATM" or "ATM offerings" refer collectively to sales of our common stock under one or more of the ATM Programs.

On March 11, 2021, we entered into a sales agreement with JonesTrading under which we may offer and sell, from time to time at our sole discretion, to or through JonesTrading, acting as agent and/or principal, shares of our common stock having an aggregate offering price of up to $40.0 million.

On January 13, 2025, the Company entered into a new sales agreement by and between the Company and Leerink under which we may offer and sell, from time to time at our sole discretion, to or through Leerink, acting as agent and/or principal, shares of our common stock having an aggregate offering price of up to $40.0 million. Upon entry into the new sales agreement, the Company terminated its prior ATM program pursuant to the Capital on DemandTMSales Agreement dated March 11, 2021, by and between the Company and JonesTrading.

As of December 31, 2025, we had sold an aggregate of 9,573,250 shares of common stock under the ATM Programs since their inception, resulting in gross proceeds of $28.7 million and total issuance costs of $1.4 million.


Opus Genetics, Inc.
Form 10-K
Registered Direct Offering

On June 4, 2021, we entered into a placement agency agreement with A.G.P./Alliance Global Partners ("AGP"). Pursuant to the terms of the placement agency agreement, AGP on June 8, 2021, sold an aggregate of 3,076,923 shares of our common stock and warrants to purchase 1,538,461 shares of our common stock ("RDO Warrants") at an offering price of $4.875 per share and 0.50 RDO Warrants, for gross proceeds of $15.0 million, before deducting AGP's fees and related offering expenses in the amount of $1.1 million. The purchase agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties and termination provisions.

The RDO Warrants have an exercise price of $6.09 per share, are exercisable from the initial issuance date of June 8, 2021, and will expire five years following the initial issuance date. Subject to limited exceptions, a holder of a RDO Warrant will not have the right to exercise any portion of its RDO Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of a holder prior to the date of issuance, 9.99%) of the number of shares of common stock outstanding immediately after giving effect to such exercise; provided, however, that upon prior notice to us, the holder may increase or decrease the beneficial ownership limitation, provided further that in no event shall the beneficial ownership limitation exceed 9.99%. As of December 31, 2025, 1,538,461 RDO Warrants were outstanding. The offering of the securities was made pursuant to our effective shelf registration statement on Form S-3.

Pre-Rexahn Merger Financing

Securities Purchase Agreement

On June 17, 2020, the Company, Rexahn and certain investors entered into a Securities Purchase Agreement, which was amended and restated in its entirety on June 29, 2020 (as amended and restated, the "Securities Purchase Agreement"). Pursuant to the Securities Purchase Agreement, the investors invested a total of $21.15 million in cash, including $0.3 million invested by directors of the Company, and one director of Rexahn, upon closing of the Rexahn Merger (the "Pre-Merger Financing"). The Pre-Merger Financing also included the issuance of Series A Warrants and Series B Warrants discussed further below.

Waiver Agreements

Effective February 3, 2021, each investor that invested in the Pre-Merger Financing (each, a "Holder") entered into a Waiver Agreement with the Company (collectively, the "Waiver Agreements"). Pursuant to the Waiver Agreements, the Holders and the Company agreed to waive certain rights, finalize the exercise price and number of Series A Warrants and Series B Warrants, eliminate certain financing restrictions, extend the term of certain leak-out agreements, and, in the case of certain Holders, grant certain registration rights for the shares underlying the warrants.

The Waiver Agreements provide for the permanent waiver of the full ratchet anti-dilution provisions, contained in the Series A Warrants (as certain of the anti-dilution provisions had previously caused liability accounting treatment for the Series A Warrants). Upon the effective date of the Waiver Agreement, the Series A Warrants were reclassified to equity.

Pursuant to the Waiver Agreements, the number of shares underlying all of the Series B Warrants was fixed at 1,708,335 in the aggregate with respect to all Holders and all of the Series B Warrants were fully exercised for a nominal exercise price of $0.0001 per share of common stock.

Series A Warrants

The Series A Warrants were issued on November 19, 2020 at an initial exercise price of $4.4795 per share, were immediately exercisable upon issuance and had a term of five years from the date of issuance. The Series A Warrants were exercisable for 5,665,838 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein). On November 19, 2025, the 5,665,838 Series A Warrants expired and as of December 31, 2025 they are no longer outstanding.


Opus Genetics, Inc.
Form 10-K
Company Convertible Notes

From May 2018 through March 2020, we issued the Company Convertible Notes for aggregate gross proceeds of $8.5 million, inclusive of the promissory notes exchanged for Company Convertible Notes. The final closing of the Company Convertible Notes occurred on March 10, 2020. The Company Convertible Notes had an interest rate of 8% per annum. On November 4, 2020, all of the Company's outstanding notes were converted into 977,128 shares of the Company's common stock in connection with the completion of the Rexahn Merger.

Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):

For the Year Ended
December 31,
2025
2024
Net cash used in operating activities
$
(35,253
)
$
(25,576
)
Net cash provided by investing activities
-
1,210
Net cash provided by financing activities
50,023
4,186
Net increase (decrease) in cash and cash equivalents
$
14,770
$
(20,180
)

Cash Flow from Operating Activities

For the year ended December 31, 2025, cash used by operating activities of $35.3 million was attributable to a net loss of $49.6 million, adjusted by a reclassification to financing activities related to the March 2025 financings and by non-cash net operating income of approximately $16.5 million in the aggregate, and attributed to a net change cash use of approximately $2.2 million in Opus's net operating assets and liabilities. The non-cash expenses consisted principally of a fair value change in warrant and other derivative liabilities of $11.5 million, stock-based compensation of $3.4 million, non-cash interest expense of $0.1 million, depreciation of $0.1 million, and other non-cash items of $0.1 million. The reclassification to financing activities for issuance costs attributed to our liability classified warrants issued in March 2025 was $1.3 million. The change in operating assets and liabilities was primarily attributable to a decrease in our accrued expenses and by an increase in our prepaid expenses and other current assets, offset in part by an increase in our accounts payable and by decreases in both our accounts receivable and contract assets. All of the changes were attributed to fluctuations in Opus's operating expenses and collections under the normal course of business.

For the year ended December 31, 2024, cash used by operating activities of $25.6 million was attributable to net loss of $57.5 million, partially offset by approximately $28.9 million in non-cash operating expenses and offset by a net cash source of approximately $3.1 million resulting from the change in Opus's operating assets and liabilities. The non-cash expenses consisted principally of stock-based compensation of $3.4 million, non-cash IPR&D of $28.0 million in connection with the Opus Acquisition, offset by both a gain on the Opus Acquisition of $2.4 million and by a fair value gain attributed to the derivative liability of $0.1 million. The change in operating assets and liabilities was primarily attributable to an increase in accounts payable and accrued expenses, and by a decrease in prepaid expenses of $6.5 million in the aggregate, offset in part an increase in our accounts receivable and contract asset associated with the Viatris License Agreement of approximately $3.4 million associated with the fluctuations of Opus's operations.

Cash Flow from Investing Activities

There were no investing activities during the year ended December 31, 2025.

During the year ended December 31, 2024, net cash provided by investing activities was $1.2 million. Investing activities during the period consisted of cash acquired in the amount of $1.2 million in connection with the Opus Acquisition.

Opus Genetics, Inc.
Form 10-K
Cash Flow from Financing Activities

Net cash provided by financing activities during the year ended December 31, 2025 was $50.0 million, which consisted principally of proceeds received from the November 2025 Registered Direct Offering in the amount of $23.0 million, March 2025 Offering and March 2025 Private Placement in the amount of $21.5 million, August 2025 Private Placement in the amount of $3.5 million, and from gross proceeds received from the Leerink ATM in the amount of $2.3 million. The financings were offset by issuance costs of $2.3 million in the aggregate. Lastly, we received funding of $1.0 million in connection with the RDF Agreement and from the proceeds of warrant and stock option exercises in the amount of $1.2 million, offset in part of by the repurchase of common stock for employee withholding taxes in the amount of $0.2 million.

Net cash provided by financing activities during the year ended December 31, 2024 was $4.2 million that consisted principally of proceeds received from the Purchase Agreement and ATM, net of issuance costs, in the amount of $4.3 million, offset in part of by the repurchase of common stock for employee withholding taxes of $0.1 million.

Liquidity and Capital Resource Requirements

As of December 31, 2025, we had cash and cash equivalents of $45.1 million. Our primary source of cash to fund our operations has been various equity offerings in the amount of $118.1 million and the issuance of convertible notes in the amount of $8.5 million, inclusive of the promissory notes exchanged for Opus convertible notes. In addition, we received a one-time non-refundable cash payment of $35.0 million during the fourth quarter of 2022, a $10.0 million milestone payment during the fourth quarter of 2023, and have received reimbursement for costs related to development since the fourth quarter of 2022 totaling $37.7 million through December 31, 2025, all in connection with the Viatris License Agreement. Lastly, we received funding of approximately $1.7 million from the RDF Agreement and various research and development grants.

To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until RYZUMVI® sales become material, or regulatory approval is obtained and commercialization begins for LCA5, BEST1, other internally-developed assets or PS for additional indications. If we fail to complete the development of LCA5, BEST1, other internally-developed assets, PS or any other product candidate we may pursue in the future in a timely manner or fail to obtain regulatory approval for any of such product candidates, our ability to generate significant revenue would be compromised.

Through the ATM program with Leerink, we may offer and sell, from time to time at our sole discretion, to or through Leerink, acting as agent and/or principal, shares of our common stock having an aggregate offering price of up to $40 million. As of December 31, 2025, we had sold an aggregate of 9,573,250 shares of common stock under the ATM Programs since their inception, resulting in gross proceeds of $28.7 million and total issuance costs of $1.4 million.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation, warrants or other preferences that adversely affect your rights as a common stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through future collaborations, strategic alliances or licensing arrangements with pharmaceutical partners, we may have to relinquish valuable rights to our technologies, future revenue streams or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or through collaborations, strategic alliances or licensing arrangements when needed, we may be required to delay, limit, reduce or terminate our product development, future commercialization efforts, or grant rights to develop and market our product candidates that we would otherwise prefer to develop and market ourselves.

Future Capital Requirements

Pursuant to the Viatris License Agreement, our budgeted research and development expenses related to the development of PS are fully reimbursed by Viatris. The development of LCA5, BEST1 and other internally-developed assets is subject to numerous uncertainties, and we have based these estimates on assumptions that may prove to be substantially different than what we currently anticipate and could result in cash resources being used sooner than what we currently expect. Additionally, the process of advancing early-stage product candidates and testing product candidates in clinical trials is costly, and the timing of progress in these clinical trials is uncertain. Our ability to successfully transition to profitability will be dependent upon achieving a level of product sales adequate to support our cost structure. We cannot give any assurance that we will ever be profitable or generate positive cash flow from operating activities.


Opus Genetics, Inc.
Form 10-K
Contractual Obligations and Commitments

Facility and Equipment Leases

On January 1, 2025, the Company relocated its headquarters to Durham, North Carolina. On July 1, 2025, the Company extended the lease for its headquarters in Durham, North Carolina for three months through September 30, 2025, and the lease is currently on a month-to-month basis as of the issuance of this Annual Report.

The Company also leases additional laboratory space in Durham, North Carolina on a month-to-month basis.

Upon the Opus Acquisition, the Company assumed a number of equipment leases which expired in July 2025 and are now on a month-to-month basis.

Letter Agreement and Strategic Partnership-FFB

Under the 2025 Letter Agreement, we are required to make the remaining $0.3 million payment installment on or before January 31, 2027 upon receipt of semi-annual reports from the FFB outlining the progress being made in the Study, including visit completion status and publication plans. For more information on the terms of the 2025 Letter Agreement and related payments thereunder, see Note 5 - Related Party Transactions in "Part II, Item 8 - Financial Statementsand Supplementary Data" of this Annual Report.

RDF Agreement

On June 13, 2025, we entered into the RDF Agreement with the RDF, whose sole member is FFB, a significant stockholder of the Company, relating to our program to develop gene therapies to treat patients impacted by retinitis pigmentosa caused by pathogenic variants in the MERTK gene.

Under the RDF Agreement, we will pay a milestone payment equal to the total amounts funded by RDF under the RDF Agreement upon the achievement of a regulatory milestone. We will also make tiered royalty payments to RDF in low-to-mid single percentages until RDF has received aggregate royalty payments equal to 300% of the amounts funded by RDF under the Agreement. In the event of a change of control of the Company or a sale or exclusive license of the MERTK Program, RDF will have the option to require us to buy out RDF's interest under the Agreement for an amount equal to 100% of the funds disbursed to us under the Agreement. For more information on the terms and related obligations under the RDF Agreement, see Note 5 - Related Party Transactions in "Part II, Item 8 - Financial Statementsand Supplementary Data" of this Annual Report.

As of the date of this Report, we determined that none of the future obligations under the agreement were probable.

Apexian Sublicense Agreement

On January 21, 2020, we entered into the Apexian Sublicense Agreement, pursuant to which we obtained exclusive worldwide patent and other intellectual property rights that constitute a Ref-1 Inhibitor program relating to therapeutic applications to treat disorders related to ophthalmic and diabetes mellitus conditions.

In connection with the Apexian Sublicense Agreement, we issued 843,751 shares of our common stock to Apexian and certain of Apexian's affiliates.


Opus Genetics, Inc.
Form 10-K
We agreed to make one-time milestone payments under the Apexian Sublicense Agreement for each of the first ophthalmic indication and the first diabetes mellitus indication. These milestone payments include (i) payments for specified developmental and regulatory milestones totaling up to $11 million in the aggregate and (ii) payments for specified sales milestones of up to $20 million in the aggregate, each of which net sales milestone payments is payable once, upon the first achievement of such milestone.

Additionally, we also agreed to make royalty payments equal to a single-digit percentage of our net sales of products covered by the patents under the Apexian Sublicense Agreement. None of the milestone or royalty payments were triggered or deemed probable as of the date of this Report.

Other Commitments

In the course of normal operations, we enter into cancelable purchase commitments from time to time with our suppliers for various key research, clinical and manufacturing services. The purchase commitments covered by these arrangements are subject to change based on our research and development efforts.

Other Funding Requirements

As noted above, certain of our cash requirements relate to the funding of our ongoing research and development of our gene therapy product candidates, inclusive of any potential milestone and royalty obligations under our intellectual property licenses. See "Part I, Item 1- Business- Pipeline- Sales and Marketing-Manufacturing- Apexian Sublicense Agreement- Review and Approval of Drugs and Biologics in the United States" in this Annual Report for a discussion of design, development, pre-clinical and clinical activities that we may conduct in the future, including expected cash expenditures required for some of those activities, to the extent we are able to estimate such costs.

Our other cash requirements within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current liabilities. Our other cash requirements greater than twelve months from various contractual obligations and commitments may include operating leases and contractual agreements with third-party service providers for clinical research, product development, manufacturing, commercialization, supplies, payroll, equipment maintenance, and audits for periods into calendar year 2026. Refer to Note 3 - Commitments and Contingencies included in "Part II, Item 8 - Financial Statements and Supplementary Data" of this Annual Report for further detail of our lease obligation and license agreements with regard to the timing of expected future payments.

We expect to satisfy our short-term and long-term obligations through cash on hand, from future equity and debt financings, and from reimbursement payments, potential milestone and royalty payments under the Viatris License Agreement and any future collaborations and license agreements, until we generate an adequate level of revenue from commercial sales to cover expenses, if ever.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP. These accounting principles require us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements as well as the reported amounts of revenue and expense during the periods presented. We believe that the estimates and judgments upon which we rely are reasonably based upon information available to us at the time that we make these estimates and judgments. To the extent that there are material differences between these estimates and actual results, our financial results will be affected. The accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.

Our significant accounting policies are discussed in Note 1 - Company Description and Summary of Significant Accounting Policies, included in "Part II, Item 8 - Financial Statements and Supplementary Data" of this Annual Report. We believe that the following accounting policies and estimates are the most critical to aid in fully understanding and evaluating our reported financial results. These estimates require our most difficult, subjective, or complex judgments because they relate to matters that are inherently uncertain. We have reviewed these critical accounting policies and estimates and related disclosures with the Audit Committee of our Board of Directors. We have not made any material changes to date, nor do we believe there is a reasonable likelihood of a material future change to the accounting methodologies for the areas described below.


Opus Genetics, Inc.
Form 10-K
License and Collaborations Revenue

We account for license and collaborations revenue in accordance with the provisions of the Financial Accounting Standards Board Accounting Standards Codification 606, Revenue from Contracts with Customers. The guidance provides a unified model to determine how revenue is recognized. We have entered into license and collaboration agreements which have revenue recognition implications. We recognize license and collaborations revenue by first allocating the transaction price of a contract to each performance obligation under the contract based on its stand-alone price. The stand-alone price of each performance obligation is based on its fair value utilizing a discounted cash flow approach, taking into consideration assumptions, including projected worldwide net profit for each of the respective programs based on probability assessments, projections based on internal forecasts, industry data, and information from other guideline companies within the same industry and other relevant factors. We do not expect to have in the future significant variable consideration adjustments related to our existing license and collaborations revenue recognized. For discussion about the determination of license and collaborations revenue, see Note 10 - License and Collaboration Revenue and Other Funding Agreements included in "Part II, Item 8 - Financial Statements and Supplementary Data" of this Annual Report.

Warrant Liabilities

The Company issued warrants to purchase equity securities in connection with the March 2025 financings that are recorded under the warrant liabilities line item in the accompanying consolidated balance sheets. The Company accounts for these warrants as a liability at fair value when the valuation inputs are not fixed and determinable. Additionally, issuance costs associated with the warrant liability were expensed as incurred and reflected as financing costs in the accompanying consolidated statements of comprehensive loss. The Company adjusts the liability for changes in fair value until the earlier of the exercise or expiration of the warrants. Any future change in fair value of the warrant liabilities, when outstanding, is recognized in the consolidated statements of comprehensive loss under the fair value change in warrant and other derivative liabilities line item. See Note 7 - Financings included in "Part II, Item 8 - Financial Statements and Supplementary Data" of this Annual Report

Income Tax Assets and Liabilities

A full valuation allowance has been provided on our net deferred tax assets given the uncertainty of future taxable income and other related factors impacting the realizability of our remaining net deferred tax assets. For additional information, see Note 12 - Income Taxes included in "Part II, Item 8 - Financial Statements and Supplementary Data" of this Annual Report.

Acquired In-Process Research and Development
In association with the Opus Acquisition, we acquired in-process research and development ("IPR&D") that was recorded at fair value under the Multi-Period Excess Earnings Method ("MPEEM") model. Under the MPEEM model, the fair value of IPR&D was calculated based on estimated future cash flows which requires judgement with respect to the assumptions of revenue growth rate, projected EBITDA margin and the selection of an appropriate discount rate. The assumptions surrounding revenue growth rate and projected EBITDA margin factor the future development and commercialization of the associated IRD therapies based upon industry data and external market research. The estimated fair value of the IPR&D is sensitive to changes in these projections and assumptions; therefore, in some instances, changes in these assumptions could materially impact the fair value. These IPR&D costs are immediately expensed provided that the payments do not also represent processes or activities that would constitute a "business" as defined under U.S. GAAP or provided that the product candidate has not achieved regulatory approval for marketing, and absent obtaining such approval, has no alternative future use. Royalties owed on future sales of any licensed product will be expensed in the period the related revenues are recognized. See Note 2 - Mergers included in "Part II, Item 8 - Financial Statements and Supplementary Data" of this Annual Report.


Opus Genetics, Inc.
Form 10-K
Recent Accounting Pronouncements

From time to time the FASB, or other standard-setting bodies, issue new accounting pronouncements. Where applicable, we adopt these new standards according to the specified effective dates. Unless otherwise disclosed in the notes to the consolidated financial statements appearing in this Annual Report, we believe that the impact of any recently issued standard(s) that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. See Note 1 - Company Description and Summary of Significant Accounting Policies included in "Part II, Item 8 - Financial Statements and Supplementary Data" of this Annual Report for a more in-depth discussion of recently issued accounting standard(s).

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