Opus Genetics Inc.

11/12/2025 | Press release | Distributed by Public on 11/12/2025 06:24

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

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and notes included in Part I "Financial Information", Item I "Financial Statements" of this Quarterly Report on Form 10-Q (the "Report") and the audited financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Forward-Looking Statements

Certain statements contained in this Report are not statements of historical fact and are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance. Such statements include, but are not limited to, statements concerning our strategic business plans, the applications of our product candidates, ongoing discussions with the U.S. Federal Drug Administration (the "FDA") regarding various of our drug products, and continued drug development and commercialization under our agreement with Viatris, Inc. ("Viatris"). In some cases, you can identify forward-looking statements by the following words: "anticipate," "believe," "could," "continue," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," "project," "should," "will," "would" or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements.

These forward-looking statements reflect our management's beliefs and views with respect to future events, are based on estimates and assumptions as of the date of this Report and are subject to risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in these forward-looking statements, including, without limitation:

•
Our clinical data related to gene therapies for the treatment of inherited retinal diseases ("IRDs") is preliminary and related to a relatively small group of patients, and, as a result, data that initially appears promising may be revised, updated, or invalidated at a later data readout and/or may ultimately not be capable of duplication in additional patients;

•
Failure to successfully integrate our businesses following our acquisition of former Opus Genetics Inc. (the "Opus Acquisition") could have a material adverse effect on our business, financial condition and results of operations;

•
The Opus Acquisition significantly expanded our product pipeline and business operations and shifted our business strategies, which may not improve the value of our common stock;

•
Our gene therapy product candidates are based on a novel technology that is difficult to develop and manufacture, which may result in delays and difficulties in obtaining regulatory approval;

•
Our planned clinical trials may face substantial delays, result in failure, or provide inconclusive or adverse results that may not satisfy FDA requirements to further develop our therapeutic products;

•
Delays or difficulties associated with patient enrollment in clinical trials may affect our ability to conduct and complete those clinical trials and obtain necessary regulatory approvals;

•
Changes in regulatory requirements could result in increased costs or delays in development timelines;

•
We depend heavily on the success of our product pipeline; if we fail to find strategic partners or fail to adequately develop or commercialize our pipeline products, our business will be materially harmed;

•
Others may discover, develop, or commercialize products similar to those in our pipeline before or more successfully than we do or develop generic variants of our products even while our product patents remain active, thereby reducing our market share and potential revenue from product sales;

•
We do not currently have any sales or marketing infrastructure in place and we have limited drug research and discovery resources;
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Opus Genetics, Inc.
Form 10-Q

•
The future commercial success of our products could significantly depend upon several uncertain factors, including third-party reimbursement practices and the existence of competitors with similar products;

•
Product liability lawsuits against us or our suppliers or manufacturers could cause us to incur substantial liabilities and could limit commercialization of any product candidate that we may develop;

•
Failure to comply with health and safety laws and regulations could lead to material fines;

•
We have not generated significant revenue from sales of any products and expect to incur losses for the foreseeable future;

•
Our future viability is difficult to assess due to our short operating history and our future need for substantial additional capital, access to which could be limited by any adverse developments that affect the financial services markets;

•
Raising additional capital may cause our stockholders to be diluted, among other adverse effects;

•
We operate in a highly regulated industry and face many challenges adapting to sudden changes in legislative reform or the regulatory environment, which affects our pipeline stability and could impair our ability to compete in international markets;

•
We may not receive regulatory approval to market our developed product candidates within or outside of the U.S.;

•
With respect to any of our product candidates that receive marketing approval, we may be subject to substantial penalties if we fail to comply with applicable regulatory requirements;

•
Our potential relationships with healthcare providers and third-party payors will be subject to certain healthcare laws and regulations, which could expose us to extensive potential liabilities;

•
We rely on third parties for material aspects of our business, such as conducting our nonclinical and clinical trials and supplying and manufacturing bulk drug substances, which exposes us to certain risks;

•
We may be unsuccessful in entering into or maintaining licensing arrangements (such as the Viatris License Agreement (as defined below)) or establishing strategic alliances on favorable terms, which could harm our business;

•
Our current focus on the cash-pay utilization for future sales of RYZUMVI may limit our ability to increase sales or achieve profitability with this product;

•
Inadequate patent protection for our product candidates may result in our competitors developing similar or identical products or technology, which would adversely affect our ability to successfully commercialize;

•
We may be unable to obtain full protection for our intellectual property rights under U.S. or foreign laws;

•
We may become involved in lawsuits for a variety of reasons associated with our intellectual property rights, including alleged infringement suits initiated by third parties;

•
We are dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy;

•
As we grow, we may not be able to operate internationally or adequately develop and expand our sales, marketing, distribution, and other corporate functions, which could disrupt our operations;

•
The market price of our common stock is expected to be volatile;

•
Our common stock may be subject to delisting from the Nasdaq Capital Market ("Nasdaq") and delisting could adversely affect our ability to access capital markets;

•
Factors out of our control related to our securities, such as securities litigation or actions of activist stockholders, could adversely affect our business and stock price and cause us to incur significant expenses;
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Opus Genetics, Inc.
Form 10-Q

•
Instability and operational disruptions at government agencies, such as the FDA, may adversely impact our development and commercialization plans by causing delays and requiring the use of additional, unforeseen resources to obtain regulatory approval for trials and products in our pipeline; and


•
Impact from current or proposed tariffs on imported goods we purchase.

We discuss many of these risks in greater detail under Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 and below under the heading "Risk Factors," and in subsequent reports filed with or furnished to the Securities and Exchange Commission (the "SEC"). Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Any forward-looking statement made by us in this Report speaks only as of the date hereof or as of the date specified herein. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable laws or regulations.

Overview
Opus Genetics, Inc. (the "Company," "Opus," "we," "us," or "our") is a clinical-stage biopharmaceutical company developing gene therapies for the treatment of IRDs and small molecule therapies for other 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. As consideration for the Opus Acquisition, the Company issued 5,237,063 shares of its common stock and 14,145.374 shares of Series A preferred stock, each of which is convertible into 1,000 shares of common stock.
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 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 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.
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Opus Genetics, Inc.
Form 10-Q
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.
The Company expects 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 provide greater speed and predictability in the review of therapies intended to treat rare diseases with very small patient populations with significant unmet medical need and that are driven by 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 first quarter of 2026.
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.

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 I, Item 1- Financial Statements and Supplementary Data of this Report.

RYZUMVI®(phentolamine ophthalmic solution) 0.75%:PS was approved by the FDA for the treatment for 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. We intend to file a Supplemental New Drug Application ("sNDA") for the treatment of presbyopia with PS in the fourth quarter of 2025.
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Opus Genetics, Inc.
Form 10-Q
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 results expected in 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.
Recent Developments

November 2025 Registered Direct Offering

On November 5, 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 "November 2025 Registered Direct Offering"). The offering closed on November 7, 2025. See Historical Capital Resourcessection below for further detail.

August 2025 Private Placement

On August 25, 2025, we entered into subscription agreements pursuant to which we agreed to issue and sell in a private placement (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 $3.5 million. The August 2025 Private Placement closed on August 25, 2025. See Historical Capital Resourcessection below for further detail.

Global RDH12 Alliance Agreement

On July 22, 2025, the Company, together with its wholly owned subsidiary, OpusTX, LLC (collectively, "Opus"), entered into a funding and license agreement (the "RDH12 Agreement") with Eyes on the Future ("EOTF"), and RDH12 Fund for Sight (the "Fund," and together with EOTF, the "Funding Parties"), relating to Opus' program to develop gene therapies that treat patients with inherited retinal degeneration associated with mutations in the RDH12 gene (the "RDH12 Program"). The RDH12 Agreement provides for funding by the Funding Parties of up to $1.6 million to support the development of the RDH12 Program. For more information on the terms of the RDH12 Agreement, see Note 11 - License and Collaboration Revenue and Other Funding Agreements in Part I, Item 1 - Financial Statementsand Supplementary Data of this Report.

RDF Agreement

On June 13, 2025, we entered into a funding agreement (the "RDF Agreement") with the RDF, whose sole member is the 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 Mer proto-oncogene tyrosine kinase (MERTK) gene (the "MERTK Program"). The RDF Agreement provides for nondilutive funding by RDF of up to $2.0 million to support the development of the MERTK Program, $1.0 million of which was disbursed to us in June 2025 and up to $1.0 million of which may be disbursed to us upon achievement of a specified development milestone subject to RDF's receipt of eligible funds. For more information on the terms and related obligations under the RDF Agreement, see Note 6 - Related Party Transactions in Part I, Item 1 - Financial Statementsand Supplementary Data of this Report.

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Opus Genetics, Inc.
Form 10-Q
Letter Agreement and Strategic Partnership-FFB

On May 27, 2025 a binding letter of agreement ("2025 Letter Agreement") between the Company and FFB was executed that superseded and canceled the previous binding letter agreement between the parties, executed on August 22, 2022.

Under the 2025 Letter Agreement, we will collaborate with FFB and the Jaeb Center for Health Research on portions of a study involving individuals with retinal dystrophies associated with mutations in the RDH12 or BEST1 genes. For more information on the terms of the 2025 Letter Agreement and related payments thereunder, see Note 6 - Related Party Transactions in Part I, Item 1 - Financial Statementsand Supplementary Data of this Report.

Regenerative Medicine Advanced Therapy (RMAT) designation to OPGx-LCA5

On May 6, 2025, we announced that the FDA has granted RMAT designation to OPGx-LCA5, our investigational gene therapy for the treatment of LCA due to genetic variations in the LCA5 gene. The RMAT designation for OPGx-LCA5 is based on early clinical evidence from our ongoing Phase 1/2 open-label, which is evaluating the safety and potential efficacy of OPGx-LCA5 in patients with severe vision loss due to confirmed mutations in the LCA5 gene. The RMAT designation program offers the potential for expedited development and review of regenerative medicine therapies that demonstrate the potential to address serious or life-threatening diseases based on preliminary clinical evidence. The designation provides sponsors with early interactions with the FDA, guidance on efficient development and manufacturing, and the opportunity to discuss surrogate endpoints to support accelerated approval.

Conversion of Series A preferred stock to Common Stock

During the 2025 Annual Meeting, our stockholders voted to approve the conversion of each share of Series A preferred stock into 1,000 shares of common stock. Subsequently, on May 5, 2025, all shares of Series A preferred stock were converted into 14,145,374 shares of common stock.

March 2025 Offering and Private Placement

On March 21, 2025, we entered into an underwriting agreement with Craig-Hallum Capital Group, LLC, as the sole underwriter (the "March 2025 Offering"). Under the March 2025 Offering and the March 2025 Private Placement (as defined below), we agreed to issue and sell common stock and warrants to purchase up to 13,396,207 shares of common stock, 8,832,895 pre-funded warrants to purchase common stock and 22,239,102 warrants to purchase common stock. The aggregate proceeds received from the March 2025 Offering and March 2025 Private Placement was 21.5 million. See Historical Capital Resourcessection below for further detail.

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 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.

Through September 30, 2025, we have funded our operations primarily through equity financings, the issuance of convertible notes in private placements, and license fee and milestone payments in connection with the Viatris License Agreement.

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Opus Genetics, Inc.
Form 10-Q
Our net loss was $17.5 million and $33.1 million for the three and nine months ended September 30, 2025, respectively, as compared to a net loss of $7.5 million and $22.4 million for the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $172.1 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 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 condensed consolidated statements of comprehensive loss.

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 two categories: general and administrative and research and development.

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Opus Genetics, Inc.
Form 10-Q
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.

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, 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, and we announced plans to seek a partner for the program to advance development.

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 nonclinical programs and clinical trials of LCA5, BEST1, PS and other internally-developed assets.

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 are described further, below.

Financing costs

Financing costs consist of issuance costs attributed to our March 2025 Warrants and March 2025 Private Placement Warrants described below. There were no issuance costs attributed to the equity line financing with Lincoln Park during the periods presented.

Interest Expense

Interest expenses consists of interest cost during the period ended September 30, 2025 incurred under the RDF Agreement, which is accounted for as debt under ASC 470, Debt. ASC 470

Other Income, net

Other income, net includes interest earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity investments, reimbursements in connection with grants and other sources when they occur. In addition, this line item includes payments made by the Company in connection with the Contingent Value Rights Agreement (the "CVR Agreement") discussed further below with former shareholders of Rexahn.

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Opus Genetics, Inc.
Form 10-Q
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 September 30, 2025 and December 31, 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

Comparison of Three Months Ended September 30, 2025 and 2024

The following table summarizes Opus's operating results for the periods indicated (in thousands):

For the Three Months Ended
September 30,
2025
2024
Change
License and collaborations revenue
$
3,079
$
3,867
$
(788
)
Operating expenses:
General and administrative
4,981
2,894
2,087
Research and development
6,409
8,982
(2,573
)
Total operating expenses
11,390
11,876
(486
)
Loss from operations
(8,311
)
(8,009
)
(302
)
Fair value change in warrant and other derivative liabilities
(9,525
)
-
(9,525
)
Interest expense
(68
)
-
(68
)
Other income, net
450
483
(33
)
Loss before income taxes
(17,454
)
(7,526
)
(9,928
)
Provision for income taxes
-
-
-
Net loss
$
(17,454
)
$
(7,526
)
$
(9,928
)

License and Collaborations Revenue

License and collaborations revenue was $3.1 million and $3.9 million for the three months ended September 30, 2025 and 2024, respectively. Revenue during both quarterly periods was derived from the Viatris License Agreement, largely for the reimbursement of research and development services. To a much lesser extent, revenue includes an earned royalty payment from the sales of RYZUMVI, indicated for the treatment of pharmacologically-induced mydriasis produced by adrenergic agonists (e.g., phenylephrine) or parasympatholytic (e.g., tropicamide) agents by our commercial partner. The $0.8 million decrease in license and collaborations revenue during the current three month period ended September 30, 2025 compared to the corresponding prior year period was due to a decrease in PS research and development services.

General and Administrative

General and administrative expenses for the three months ended September 30, 2025 were $5.0 million compared to $2.9 million for the three months ended September 30, 2024. The increase of $2.1 million was primarily attributable to public company related costs of $0.4 million, general legal costs of $0.5 million, patent costs of $0.1 million, payroll related costs of $0.6 million, professional service fees of $0.2 million and other operating expenses of $0.3 million on a net basis when compared to the corresponding prior year period. General and administrative expenses included $0.6 million and $0.5 million in stock-based compensation expense during the three months ended September 30, 2025 and 2024, respectively.
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Opus Genetics, Inc.
Form 10-Q
Research and Development
The following table illustrates the components of our research and development expenses for the periods presented (in thousands):

For the Three Months Ended
September 30,
2025
2024
Change
External costs:
IRD programs
$
2,575
$
-
$
2,575
Phentolamine Ophthalmic Solution 0.75% ("PS")
2,421
3,561
(1,140
)
APX 3330
203
4,272
(4,069
)
Unallocated
102
90
12
Total external cost
5,301
7,923
(2,622
)
Internal costs:
Employee related expenses
1,016
993
23
Facilities, supplies and other
92
66
26
Total internal costs
1,108
1,059
49
Total research and development expenses
$
6,409
$
8,982
$
(2,573
)

A greater percentage of research and development expense incurred has been allocated to IRD programs for the three months ended September 30, 2025 as compared to the three months ended September 30, 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 three months ended September 30, 2025 as compared to the three months ended September 30, 2024, as we do not expect to incur meaningful research and development expenses in the future for APX3330, and we are currently seeking a strategic partner to advance the clinical development of this program.
Research and development expenses for the three months ended September 30, 2025 were $6.4 million compared to $9.0 million for the three months ended September 30, 2024. The $2.6 million decrease was primarily attributable to lower APX 3330 expense of $4.1 million, including lower manufacturing costs of $1.9 million, lower toxicology costs of $1.5 million, and lower regulatory costs of $0.2 million; and by lower PS expense of $1.1 million, driven by lower clinical research costs of $0.8 million. These decreases are partially offset by increased IRD program expense of $2.6 million, including higher toxicology costs of $1.4 million and higher IRD clinical research costs of $0.8 million when compared to the corresponding prior year period. Pursuant to the Viatris License Agreement, our research and development expenses related to the development of the PS Products have been fully reimbursed by Viatris to date. Research and development expenses included $0.2 million in stock-based compensation expense during each of the three months ended September 30, 2025 and 2024.
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, as described further below, and was $9.5 million for the three months ended September 30, 2025. The fair value changes are attributed to the fluctuations in our common stock fair value and underlying changes in volatility, expected term and interest rates.
Interest expense

During the three months ended September 30, 2025, Opus had 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 three months ended September 30, 2025, Opus had other income, net of $0.4 million which primarily consisted of interest income in the amount of $0.3 million in connection with our cash and cash equivalents on-hand and to a lesser extent grant revenue in the amount of $0.1 million.

During the three months ended September 30, 2024, Opus had other income, net of $0.5 million related primarily to interest income in connection with our cash and cash equivalents on-hand.

Index
Opus Genetics, Inc.
Form 10-Q
Comparison of Nine Months Ended September 30, 2025 and 2024

The following table summarizes Opus's operating results for the periods indicated (in thousands):

For the Nine Months Ended
September 30,
2025
2024
Change
License and collaborations revenue
$
10,331
$
6,690
$
3,641
Operating expenses:
General and administrative
17,093
10,918
6,175
Research and development
20,384
19,817
567
Total operating expenses
37,477
30,735
6,742
Loss from operations
(27,146
)
(24,045
)
(3,101
)
Fair value change in warrant and other derivative liabilities
(5,803
)
-
(5,803
)
Financing costs
(1,337
)
-
(1,337
)
Interest expense
(68
)
-
(68
)
Other income, net
1,286
1,648
(362
)
Loss before income taxes
(33,068
)
(22,397
)
(10,671
)
Provision for income taxes
-
-
-
Net loss
$
(33,068
)
$
(22,397
)
$
(10,671
)

License and Collaborations Revenue

License and collaborations revenue was $10.3 million and $6.7 million for the nine months ended September 30, 2025 and 2024, respectively. Revenue during the nine month periods was derived primarily from the reimbursement of research and development services under the Viatris License Agreement. The $3.6 million increase in license and collaborations revenue during the current nine month period ended September 30, 2025 when compared to the corresponding prior year period was due to an increase in PS research and development services.

General and Administrative

General and administrative expenses for the nine months ended September 30, 2025 were $17.1 million compared to $10.9 million for the nine months ended September 30, 2024. The increase of $6.2 million was primarily attributable to public company related costs of $2.0 million, legal fees of $1.7 million, patent fees of $0.7 million, professional service costs of $0.5 million, payroll related costs of $0.9 million and business development activity and other operating costs on a net basis of $0.4 million when compared to the corresponding prior year period. General and administrative expenses totaled $1.8 million and $1.9 million in stock-based compensation expense during the nine months ended September 30, 2025 and 2024, respectively.

Research and Development

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

For the Nine Months Ended
September 30,
2025
2024
Change
External costs:
IRD programs
$
6,624
$
-
$
6,624
Phentolamine Ophthalmic Solution 0.75% ("PS")
8,914
5,678
3,236
APX3330
325
10,959
(10,634
)
Unallocated
340
238
102
Total external cost
16,203
16,875
(672
)
Internal costs:
Employee related expenses
3,880
2,776
1,104
Facilities, supplies and other
301
166
135
Total internal costs
4,181
2,942
1,239
Total research and development expenses
$
20,384
$
19,817
$
567

Index
Opus Genetics, Inc.
Form 10-Q
A greater percentage of research and development expense incurred has been allocated to IRD programs for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 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 nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, as we do not expect to incur meaningful research and development expenses in the future for APX3330, and we are currently seeking a strategic partner to advance the clinical development of this program.

Research and development expenses for the nine months ended September 30, 2025 were $20.4 million compared to $19.8 million for the nine months ended September 30, 2024. The $0.6 million increase was primarily attributable to increased IRD program expense of $6.6 million, including higher toxicology costs of $4.2 million, higher IRD clinical research costs of $1.7 million, and higher CMC costs of $0.4 million; higher PS expense of $3.2 million, driven by clinical research costs related to the PS Vega-3 and PS Lynx-2 trials; and higher research and development employee related compensation expense of $1.1 million. These increases are partially offset by decreased APX3330 expense of $10.6 million, including lower manufacturing costs of $4.6 million, lower toxicology costs of $3.6 million, lower clinical costs of $1.5 million, and lower regulatory costs of $0.8 million when compared to the corresponding prior year period. 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 also included $0.8 million and $0.7 million in stock-based compensation expense during the nine months ended September 30, 2025 and 2024, respectively.

Fair value change in warrant and other derivative liabilities

The fair value change in warrant and other derivative liabilities was attributed largely to the March 2025 Warrants and March 2025 Private Placement Warrants, as described further below. The fair value change in the March 2025 Warrants and March 2025 Private Placement Warrants was $5.8 million for the nine months ended September 30, 2025. The fair value changes are attributed to the fluctuations in our common stock fair value and underlying changes in volatility, expected term and interest rates. During the comparable prior year period, the fair value change in our other derivative liabilities was de minimis.

Financing costs

Financing costs for the nine months ended September 30, 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 nine months ended September 30, 2024.

Interest expense

During the nine months ended September 30, 2025, Opus had 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 nine months ended September 30, 2025, Opus had other income, net of $1.3 million which primarily consisted of interest income in the amount of $1.0 million in connection with our cash and cash equivalents on-hand and to a lesser extent grant revenue in the amount of $0.3 million.

During the nine months ended September 30, 2024, Opus had other income, net of $1.6 million related primarily to interest income in connection with our cash and cash equivalents on-hand.

Index
Opus Genetics, Inc.
Form 10-Q
Liquidity and Capital Resources

Capital Resources

As of September 30, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $30.8 million. We believe that our cash on hand as of September 30, 2025 will be sufficient to fund our operations for at least twelve months beyond the date of this filing. As of September 30, 2025, our cash and cash equivalents were invested primarily in cash deposits and cash equivalent investments at four large financial institutions.

Historical Capital Resources

Our primary source of cash to fund our operations has been various equity offerings in the amount of $94.9 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 2023, 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, all in connection with the Viatris License Agreement. Lastly, we received funding in the amount of $1.3 million from the RDF Agreement and various research and development grants.

November 2025 Registered Direct Offering

On November 5, 2025, we entered into a securities purchase agreement to sell securities in the November 2025 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 LCA5 and BEST-1 gene therapy programs, as well as for working capital and general corporate purposes.

In the November 2025 Registered Direct 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 agreed to issue 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, weentered 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.

Index
Opus Genetics, Inc.
Form 10-Q
The combined gross proceeds from the March 2025 Offering and the March 2025 Private Placement, which closed on March 24, 2025, were approximately $21.5 million, before deducting underwriting discounts and commissions and offering expenses payable by us.

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 announces 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. All other terms under the March 2025 Private Placement Warrants are identical to the terms of the March 2025 Warrants discussed above.

Index
Opus Genetics, Inc.
Form 10-Q
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.

At-The-Market Program

On January 13, 2025, the Company filed a prospectus supplement with the SEC in connection with the establishment of an at-the-market equity offering program (the "ATM program") for the offer and sale, from time to time, of shares of its common stock, having an aggregate offering price of up to $40.0 million. On the same date, the Company also entered into a sales agreement (the "Sales Agreement") with Leerink Partners LLC ("Leerink"), pursuant to which the Company may offer and sell shares of its common stock through or to Leerink, acting as sales agent, under the ATM program. In connection with theentry into the Sales Agreement, the Company terminated its prior ATM program established under the Capital on DemandTM Sales Agreement, dated March 11, 2021, between the Company and JonesTrading Institutional Services LLC.

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 upon the initial issuance date of June 8, 2021, and will expire five years following the initial exercise 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 September 30, 2024, 1,538,461 RDO Warrants were still 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.

Index
Opus Genetics, Inc.
Form 10-Q
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.

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 have a term of five years from the date of issuance. The Series A Warrants are exercisable for 5,665,838 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein). As of September 30, 2025, 5,665,838 Series A Warrants were still outstanding.

At issuance, the Series A Warrants contained certain provisions that could have resulted in a downward adjustment of the initial exercise price and an upward adjustment in the number of shares underlying the warrants if the Company were to have issued or sold, or made an agreement to issue or sell, any shares of common stock for a price lower than the exercise price then in effect. Pursuant to the terms of the Waiver Agreements, these provisions are no longer in effect.

Cash Flows

The following table summarizes Opus's cash flows for the periods indicated (in thousands):

For the Nine Months Ended
September 30,
2025
2024
Net cash used in operating activities
$
(25,420
)
$
(18,138
)
Net cash provided by (used in) investing activities
-
-
Net cash provided by financing activities
25,914
4,269
Net increase (decrease) in cash and cash equivalents
$
494
$
(13,869
)

Cash Flow from Operating Activities

For the nine months ended September 30, 2025, cash used in operating activities of $25.4 million was attributable to a net loss of $33.1 million, adjusted by a reclassification to financing activities related to the March 2025 financings and by non-cash net operating income of approximately $9.9 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 benefit of $5.8 million, stock-based compensation of $2.6 million, non-cash interest expense of $0.1 million, and depreciation of less than $0.1 million. The reclassification to financing activities for issuance costs attributed to our liability classified warrants was $1.3 million. The change in operating assets and liabilities was primarily attributable to a net decrease in our accounts payable and accrued expenses and by an increase in our prepaid expenses and other current assets, offset in part by a decrease in our accounts receivable, contract assets. All of the changes were attributed to fluctuations in Opus's operating expenses and collections under the normal course of business.
Index
Opus Genetics, Inc.
Form 10-Q
For the nine months ended September 30, 2024, cash used in operating activities of $18.1 million was attributable to a net loss of $22.4 million, partially offset by $2.6 million in non-cash operating expenses and a net change cash source of $1.7 million in the Company's net operating assets and liabilities. The non-cash expenses consisted principally of stock-based compensation of $2.6 million. The change in operating assets and liabilities was primarily attributable to increases in our accrued expenses and to decreases in our prepaid expenses, all associated with the Company's operating expenses under the normal course of business. Our net sources of cash during the period were partially offset by a net increase in the Company's accounts receivable attributed to the timing of payments from Viatris and to a net decrease in our accounts payable due to the timing of payments under the normal course of business.
Cash Flow from Investing Activities

There were no sources or uses from investing activities during the periods presented.

Cash Flow from Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2025 was $25.9 million that consisted principally of gross proceeds received from the March 2025 Offering and March 2025 Private Placement of $21.5 million in the aggregate, August 2025 Private Placement in the amount of $3.5 million and from the ATM in the amount of $2.1 million. Both financings were offset by issuance costs of $2.2 million in the aggregate. Lastly, we received funding of $1.0 million in connection with the RDF Agreement.
Net cash provided by financing activities during the nine months ended September 30, 2024 was $4.3 million, consisting of net proceeds received from both the 2021 ATM and the equity line financing in the aggregate of $4.3 million.

Liquidity and Capital Resource Requirements

As of September 30, 2025 we had cash and cash equivalents of $30.8 million. License and collaborations revenue inception to date was derived from a one-time non-refundable payment of $35 million, a milestone payment of $10 million, reimbursement and expected reimbursement of expenses and royalties earned under the Viatris License Agreement and, to a much lesser degree, from license agreements with BioSense and Processa in connection with the Rexahn RX-3117 drug compound, and other reimbursement from grants. We anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Viatris License Agreement and we may earn additional revenues from future potential milestone and royalty payments from the agreement with Viatris, or from other license agreements entered into in the future; however, the attainment of milestones or level of sales required to earn royalty payments is highly uncertain for the reasons explained below.

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 September 30, 2025, the Company had sold an aggregate of 9,479,494 shares of common stock under the ATM programs since their inception, resulting in gross proceeds of $28.5 million and total issuance costs of $1.4 million.

Index
Opus Genetics, Inc.
Form 10-Q
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.

Contractual Obligations and Commitments

Our contractual obligations in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025, have not materially changed since we filed that report, except as discussed below.

Facility Lease

On January 1, 2025, the Company relocated its headquarters to Durham, North Carolina. On July 1st, 2025, the Company amended the lease for its headquarters in Durham, North Carolina for three months through September 30, 2025, and the lease is currently in place on a month-to-month basis.

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 6 - Related Party Transactions in Part I, Item 1 - Financial Statementsand Supplementary Data" of this 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.

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Opus Genetics, Inc.
Form 10-Q
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 6 - Related Party Transactions in "Part I, Item 1 - Financial Statementsand Supplementary Data" of this Report.

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

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 our Annual Report on Form 10-K for the year ended December 31, 2024 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 4 - Commitments and Contingencies included in Part 1, Item 1 - "Financial Statements" of this 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 financial statements are prepared in accordance with U.S. generally accepted accounting principles (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 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 I, Item 1 - Financial Statementsand Supplementary Data" of this 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. 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.

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Opus Genetics, Inc.
Form 10-Q
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 11 - License and Collaboration Revenue and Other Funding Agreementsincluded in Part 1, Item 1 - "Financial Statements" of this 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 13 - Income Taxes included in "Part II, Item 8 - Financial Statements and Supplementary Data" in our Annual Report filed on Form 10-K for the year ended December 31, 2024, and see Note 13 - Income Taxes included in "Part 1, Item 1 - Financial Statements" of this Report.

Recent Accounting Pronouncements

Refer to Note 1- "Company Description and Summary of Significant Accounting Policies" to our condensed consolidated financial statements included in "Part 1, Item 1 - Financial Statements" in this Report for a discussion of recently issued accounting pronouncements.

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