# EDGAR Filing Document

**Accession Number:** 0001611842
**File Stem:** 0001213900-25-075783
**Filing Date:** 2025-8
**Character Count:** 81315
**Document Hash:** 343673e0515a10831a6a4c16f3dbd919
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-075783.hdr.sgml**: 20250813

**ACCESSION NUMBER**: 0001213900-25-075783

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 43

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250813

**DATE AS OF CHANGE**: 20250813

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PolyPid Ltd.
- **CENTRAL INDEX KEY:** 0001611842
- **STANDARD INDUSTRIAL CLASSIFICATION:** SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** L3
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38428
- **FILM NUMBER:** 251212759

**BUSINESS ADDRESS:**
- **STREET 1:** 18 HASIVIM STREET
- **CITY:** PETACH TIKVA
- **STATE:** L3
- **ZIP:** 4959376
- **BUSINESS PHONE:** 972-74-7195700

**MAIL ADDRESS:**
- **STREET 1:** 18 HASIVIM STREET
- **CITY:** PETACH TIKVA
- **STATE:** L3
- **ZIP:** 4959376

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER**

**PURSUANT TO RULE 13a-16 OR 15d-16**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934**

**For the Month of: August 2025 (Report No. 3)**

**Commission File Number: 001-38428**

**PolyPid Ltd.**

**(Translation of registrant's name into English)**

**18 Hasivim Street**

**Petach Tikva 495376, Israel**

**(Address of principal executive office)**

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

☒ Form 20-F&nbsp;&nbsp;&nbsp;&nbsp; ☐ Form 40-F

**CONTENTS**

This Report of Foreign Private Issuer on Form 6-K consists of PolyPid Ltd.'s (the "Company"): (i) Unaudited Interim Condensed Consolidated Financial Statements as of June 30, 2025, which is attached hereto as Exhibit 99.1; and (ii) Management's Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2025, which is attached hereto as Exhibit 99.2.

The contents of this Form 6-K are incorporated by reference into the Company's registration statements on Form F-3 (File No. [333-276826](http://www.sec.gov/Archives/edgar/data/1611842/000121390024009108/ea192572-f3_polypidltd.htm), File No. [333-280658](http://www.sec.gov/Archives/edgar/data/1611842/000121390024058595/ea0208115-f3_polypidltd.htm), File No. [333-281863](http://www.sec.gov/Archives/edgar/data/1611842/000121390024074508/ea0212801-f3_polypidltd.htm), File No. [333-284376](https://www.sec.gov/Archives/edgar/data/1611842/000121390025004999/ea0227827-f3_polypid.htm) and File No. [333-289034](http://www.sec.gov/Archives/edgar/data/1611842/000121390025068692/ea0250584-f3_polypid.htm)) and Form S-8 (File No. [333-239517](http://www.sec.gov/Archives/edgar/data/1611842/000110465920077735/tm209265d11_s8.htm), File No. [333-271060](http://www.sec.gov/Archives/edgar/data/1611842/000121390023025649/ea176190-s8_polypid.htm), File No. [333-277703](http://www.sec.gov/Archives/edgar/data/1611842/000121390024020445/ea0201047-s8_polypid.htm), File No. [333-280662](http://www.sec.gov/Archives/edgar/data/1611842/000121390024058604/ea0208116-s8_polypid.htm) and File No. [333-289570](http://www.sec.gov/Archives/edgar/data/1611842/000121390025075646/ea0252816-s8_polypid.htm)) filed with the Securities and Exchange Commission to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit No.** |  |
| 99.1 | [PolyPid Ltd.'s Unaudited Interim Condensed Financial Statements as of June 30, 2025.](ea025084401ex99-1_polypid.htm) |
| 99.2 | [PolyPid Ltd.'s Management's Discussion and Analysis of Financial Condition and Results of Operation for the Six Months Ended June 30, 2025.](ea025084401ex99-2_polypid.htm) |
| 101 | The following financial information from the Registrant's Unaudited Interim Condensed Financial Statements as of June 30, 2025, formatted in XBRL (eXtensible Business Reporting Language): (i) Interim Condensed Consolidated Balance Sheets, (ii) Interim Condensed Consolidated Statements of Operations, (iii) Interim Condensed Consolidated Statements of Shareholders' Equity; (iv) Interim Condensed Consolidated Statements of Cash Flows, and (v) Notes to Interim Condensed Consolidated Financial Statements. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

**<u>SIGNATURES</u>**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **POLYPID LTD.** | **POLYPID LTD.** | **POLYPID LTD.** |
| Date: August 13, 2025 | By: | /s/ Dikla Czaczkes Akselbrad | /s/ Dikla Czaczkes Akselbrad |
|  |  | Name: | Dikla Czaczkes Akselbrad |
|  |  | Title: | Chief Executive Officer |

---

## Exhibit 99.1

?xml version='1.0' encoding='ASCII'?

**Exhibit 99.1**

**POLYPID LTD.**

**AND ITS SUBSIDIARIES**

**INTERIM CONDENSED CONSOLIDATED** 

**FINANCIAL STATEMENTS**

**AS OF JUNE 30, 2025**

**U.S. DOLLARS IN THOUSANDS**

**UNAUDITED**

**INDEX**

---

| | |
|:---|:---|
|  | **Page** |
| [**Interim Condensed Consolidated Balance Sheets**](#a_001) | **2 - 3** |
| [**Interim Condensed Consolidated Statements of Operations**](#a_002) | **4** |
| [**Interim Condensed Consolidated Statements of Shareholders' Equity**](#a_003) | **5 - 7** |
| [**Interim Condensed Consolidated Statements of Cash Flows**](#a_004) | **8 - 9** |
| [**Notes to Interim Condensed Consolidated Financial Statements**](#a_005) | **10 - 18** |

---

- - - - - - - - - - - - - - - - - - - - - - -

**POLYPID LTD. AND ITS SUBSIDIARIES**

**INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)**

**U.S. dollars in thousands**

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
| **ASSETS** |  |  |
| CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $17448 | $15641 |
| &nbsp;&nbsp;&nbsp;Restricted deposits | 182 | 168 |
| &nbsp;&nbsp;&nbsp;Short-term deposits | 12007 | - |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 351 | 764 |
| <u>Total</u> current assets | 29988 | 16573 |
| LONG-TERM ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 5339 | 6075 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | 2062 | 2295 |
| &nbsp;&nbsp;&nbsp;Other long-term assets | 298 | 277 |
| <u>Total</u> long-term assets | 7699 | 8647 |
| <u>Total assets</u> | $37687 | $25220 |

---

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Trade payables | $2572 | $2409 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 2967 | 2566 |
| &nbsp;&nbsp;&nbsp;Current maturities of long-term debt | 6548 | 6787 |
| &nbsp;&nbsp;&nbsp;Current maturities of operating lease liabilities | 1068 | 919 |
| <u>Total</u> current liabilities | 13155 | 12681 |
| LONG-TERM LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Long-term debt |  | 634 |
| &nbsp;&nbsp;&nbsp;Deferred revenues | 2548 | 2548 |
| &nbsp;&nbsp;&nbsp;Long-term operating lease liabilities | 1054 | 1277 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 454 | 396 |
| <u>Total</u> long-term liabilities | 4056 | 4855 |
| COMMITMENTS AND CONTINGENT LIABILITIES |  |  |
| SHAREHOLDERS' EQUITY: |  |  |
| &nbsp;&nbsp;&nbsp;Ordinary shares with no par value - |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized: 107,800,000 shares at June 30, 2025 and December 31, 2024; Issued and outstanding: 15,654,129 and 10,190,904 shares at June 30, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 306052 | 275015 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (285576) | (267331) |
| <u>Total</u> shareholders' equity | 20476 | 7684 |
| <u>Total</u> liabilities and shareholders' equity | $37687 | $25220 |

---

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)** 

**U.S. dollars in thousands (except share and per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| *Operating expenses:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $12332 | $9810 | $6215 | $4760 |
| &nbsp;&nbsp;&nbsp;Marketing and business development | 989 | 501 | 700 | 265 |
| &nbsp;&nbsp;&nbsp;General and administrative | 3661 | 2111 | 2488 | 1096 |
| Operating loss | 16982 | 12422 | 9403 | 6121 |
| Loss on extinguishment of debt | 512 | - | - | - |
| Financial expenses, net | 687 | 311 | 521 | 171 |
| Loss before income tax | 18181 | 12733 | 9924 | 6292 |
| Income tax expenses | 64 | 9 | 53 | 2 |
| Net loss | $18245 | $12742 | $9977 | $6294 |
| *Loss per share:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $1.48 | $2.62 | $0.78 | $1.25 |
| *Weighted-average Ordinary shares outstanding:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 12298113 | 4858158 | 12841621 | 5024871 |

---

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**INTERIM CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Three Months Ended June 30, 2025** | **Number of<br> ordinary shares** | **Additional <br> paid-in capital** |  | **Accumulated<br> deficit** | **Total<br> shareholders' <br> equity** |
| Balances as of March 31, 2025 | 10190904 | $275685 |  | $(275599) | $86 |
| Share-based compensation |  | 2205 |  | - | 2205 |
| Issuance of Ordinary shares, abeyance shares and warrants, net (1) | 4492875 | 28162 |  | - | 28162 |
| Exercise of pre-funded warrants | 970350 | - | \*) | - |  |
| Net loss | - | - |  | (9977) | (9977 |
| Balances as of June 30, 2025 | 15654129 | $306052 |  | $(285576) | $20476 |

---

(1) Net of issuance cost of $72.

---

| | |
|:---|:---|
| \*) | Amount less than $1. |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Three Months Ended June 30, 2024** | **Number of<br> ordinary shares** | **Additional<br> paid-in capital** | **Accumulated<br> deficit** | **Total<br> shareholders' <br> equity** |
| Balances as of March 31, 2024 | 4797252 | $251902 | $(244757) | $7145 |
| Share-based compensation |  | 750 | - | 750 |
| Net loss | - | - | (6294) | (6294) |
| Balances as of June 30, 2024 | 4797252 | $252652 | $(251051) | $1601 |

---

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**INTERIM CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Six Months Ended June 30, 2025** | **Number of<br> ordinary shares** | **Additional<br> paid-in capital** |  | **Accumulated<br> deficit** | **Total <br> shareholders' <br> equity** |
| Balances as of January 1, 2025 | 10190904 | $275015 |  | $(267331) | $7684 |
| Share-based compensation |  | 2875 |  | - | 2875 |
| Issuance of Ordinary shares, abeyance shares and warrants, net (1) | 4492875 | 28162 |  | - | 28162 |
| Exercise of pre-funded warrants | 970350 | - | \*) | - | - |
| Net loss | - | - |  | (18245) | (18245 |
| Balances as of June 30, 2025 | 15654129 | $306052 |  | $(285576) | $20476 |

---

(2) Net of issuance cost of $72.

---

| | |
|:---|:---|
| \*) | Amount less than $1. |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Six Months Ended June 30, 2024** | **Number of<br> ordinary shares** | **Additional <br> paid-in capital** | **Accumulated <br> deficit** | **Total <br> shareholders'<br> equity** |
| Balances as of January 1, 2024 | 1653559 | $236213 | $(238309) | $(2096) |
| Share-based compensation |  | 1440 | - | 1440 |
| Issuance of Ordinary shares, warrants and pre-funded warrants, net (3) | 3143693 | 14999 | - | 14999 |
| Net loss | - | - | (12742) | (12742) |
| Balances as of June 30, 2024 | 4797252 | $252652 | $(251051) | $1601 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(3) Net of issuance cost of $1,217.

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**INTERIM CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)** 

**U.S. dollars in thousands (except share and per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year Ended December 31, 2024** | **Number of<br> ordinary shares** | **Additional<br> paid-in capital** | **Accumulated<br> deficit** | **Total<br> shareholders' <br> equity (deficit)** |
| Balances as of January 1, 2024 | 1653559 | $236213 | $(238309) | $(2096) |
| Share-based compensation |  | 2824 | - | 2824 |
| Issuance of Ordinary shares, warrants and pre-funded warrants, net (4) | 8537345 | 35863 | - | 35863 |
| Issuance of warrants |  | 115 | - | 115 |
| Net loss | - | - | (29022) | (29022) |
| Balances as of December 31, 2024 | 10190904 | $275015 | $(267331) | $7684 |

---

(4) Net of issuance costs of $2,894.

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**

**U.S. dollars in thousands**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended <br> June 30,** | **Six Months Ended <br> June 30,** |
|  | **2025** | **2024** |
| <u>Cash flows from operating activities:</u> |  |  |
| Net loss | $(18245) | $(12742) |
| *Adjustments to reconcile net loss to net cash used in operating activities:* |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation of property and equipment | 752 | 827 |
| &nbsp;&nbsp;&nbsp;Non-cash financial expenses, net | 198 | 676 |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 512 | - |
| &nbsp;&nbsp;&nbsp;Share-based compensation expenses | 2875 | 1440 |
| *Changes in assets and liabilities:* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 416 | 188 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease right-of-use-assets | 435 | 400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (276) | (412) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade payables | 163 | 220 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 459 | 909 |
| Net cash used in operating activities | (12711) | (8494) |
| <u>Cash flows from investing activities:</u> |  |  |
| Investment in bank deposits | (12000) | (14691) |
| Proceeds from bank deposits | - | 8500 |
| Purchase of property and equipment | (16) | (19) |
| Net cash used in investing activities | (12016) | (6210) |
| <u>Cash flows from financing activities:</u> |  |  |
| Proceeds from issuance of Ordinary shares, abeyance shares, warrants and pre-funded warrants, net | 28162 | 15076 |
| Payments due to long-term debt | (1614) | (2574) |
| Net cash provided by financing activities | 26548 | 12502 |
| Increase (decrease) in cash, cash equivalents and restricted deposits | 1821 | (2202) |
| Cash, cash equivalents and restricted deposits at the beginning of the period | 15809 | 5686 |
| Cash, cash equivalents and restricted deposits at the end of the period | $17630 | $3484 |

---

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**

**U.S. dollars in thousands**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended <br> June 30,** | **Six Months Ended <br> June 30,** |
|  | **2025** | **2024** |
| **<u>Non-cash activities:</u>** |  |  |
| Issuance costs | $- | $77 |
| Right-of-use asset recognized with corresponding lease liability | $202 | $1482 |
| **<u>Supplemental disclosures of cash flows:</u>** |  |  |
| Interest paid | $397 | $471 |
| **<u>Supplemental disclosures of cash flow information:</u>** |  |  |
| Cash and cash equivalents | $17448 | $3076 |
| Restricted deposits | 182 | 163 |
| Restricted deposits included in other long-term assets | - | 245 |
| Cash, cash equivalents and restricted deposits at the end of the period | $17630 | $3484 |

---

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

NOTE 1:- GENERAL

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. PolyPid Ltd. (the "Company") was incorporated under
the laws of Israel and commenced operations on February 28, 2008. The Company is a late-stage biopharmaceutical company focused
on developing targeted, locally administered, and prolonged-release therapeutics using its proprietary PLEX (Polymer-Lipid Encapsulation
matriX) technology. The Company's product candidates are designed to address unmet medical needs by delivering active pharmaceutical
ingredients, locally at predetermined release rates and durations over extended periods ranging from days to several months. The Company
is initially focused on the development of its lead product candidate, D- PLEX<sub>100</sub>, which incorporates an antibiotic for the
prevention of surgical site infections ("SSIs") in bone and soft tissue. Through June 30, 2025, the Company has been primarily
engaged in research and development.

The Company's wholly owned subsidiaries include a subsidiary in the United States (the "US Subsidiary") and a subsidiary in Romania. The US Subsidiary's operation focuses on marketing and business development of the Company's operation in the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Company's activities since inception have consisted of performing research and development activities.
Successful completion of the Company's development programs and, ultimately, the attainment of profitable operations is dependent
on future events, including, among other things, its ability to secure financing; obtain marketing approval from regulatory authorities;
access potential markets; build a sustainable customer base; attract, retain and motivate qualified personnel; and develop strategic alliances.
The Company's operations are funded by its shareholders and research and development grants and the Company intends to seek further
private or public financing as well as make applications for further research and development grants for continuing its operations. Although
management believes that the Company will be able to successfully fund its operations, there can be no assurance that the Company will
be able to do so or that the Company will ever operate profitably.

In June 2025, the Company announced positive top-line results from the Surgical site Hospital acquired Infection prEvention with Local D-PLEX<sub>100</sub> ("SHIELD") II Phase 3 trial. D-PLEX<sub>100</sub> successfully met the primary efficacy endpoint, with statistically significant results (p<0.005) in 798 patients with large abdominal surgery incisions. The trial successfully met all key secondary efficacy endpoints, including a 58% reduction in the rate of surgical site infections in patients treated with D-PLEX<sub>100</sub> arm versus standard of care arm (p<0.005).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The Company expects to continue to incur substantial losses
over the next several years during its clinical development phase. To fully execute its business plan, the Company will need to complete
Phase 3 clinical studies and certain development activities as well as manufacture the required clinical and commercial production batches
in the pilot manufacturing plant. Further, the Company's product candidates will require regulatory approval prior to commercialization,
and the Company will need to establish sales, marketing and logistic infrastructures. These activities may span many years and require
substantial expenditures to complete and may ultimately be unsuccessful. Any delays in completing these activities could adversely impact
the Company.

As of June 30, 2025, the Company's cash, cash equivalents and short-term deposits amounted to a total of $29,455. During the six-month period ended June 30, 2025, the Company incurred a loss of $18,245 and had negative cash flows from operating activities of $12,711. In addition, the Company had an accumulated deficit of $285,576 as of June 30, 2025.

Management plans to seek additional equity financing through private and public offerings or strategic partnerships and, in the longer term, by generating revenues from product sales.

The Company's future operations are highly dependent on a combination of factors, including (i) completion of all required clinical studies; (ii) the success of its research and development activities; (iii) manufacture of all required clinical and commercial production batches; (iv) marketing approval by the relevant regulatory authorities; and (v) market acceptance of the Company's product candidates.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

NOTE 1:- GENERAL (CONT.)

There can be no assurance that the Company will succeed in achieving the clinical, scientific and commercial milestones as detailed above.

Based on the abovementioned, as of the approval date of these interim consolidated financial statements, the Company has not raised the necessary funding in order to continue its activity for a period of at least one year. Therefore, these factors raise a substantial doubt about the Company's ability to continue as a going concern. The interim condensed consolidated financial statements do not include any adjustments to the carrying amounts and classifications of assets and liabilities that might result should the Company be unable to continue as a going concern, and such adjustments could be material.

---

| | |
|:---|:---|
| **NOTE** 2:- | **SIGNIFICANT ACCOUNTING POLICIES** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Basis of presentation and summary of significant accounting policies:

The accompanying interim condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States and are consistent in all material respects with those applied in the Company's Annual Report on Form 20-F for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 26, 2025.

The preparation of interim condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and judgments that affect the amounts reported in the interim condensed consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions, but are not limited to, the fair value of financial assets and liabilities, the useful lives of property and equipment and the determination of the fair value of the Company's share-based compensation. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates.

The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company's Annual Report on Form 20-F for the year ended December 31, 2024 (the "2024 Consolidated Financial Statements"). Interim results are not necessarily indicative of the results for a full year.

There have been no material changes in the Company's significant accounting policies as compared to the significant accounting policies described in the Company's Annual Report on Form 20-F for the year ended December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Basic and diluted loss per share:

The Company's basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted-average number of shares of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted loss per share is the same as basic loss per share in periods when the effects of potentially dilutive shares of ordinary shares are anti-dilutive.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Fair value of financial instruments :

Under U.S. GAAP, fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the following three categories:

---

| | |
|:---|:---|
| Level 1 - | Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets and liabilities. |
| Level 2 - | Include other inputs that are directly or indirectly observable in the marketplace. |
| Level 3 - | Unobservable inputs which are supported by little or no market activity. |

---

The carrying amounts of cash and cash equivalents, restricted deposits, short-term deposits, long-term debt, other current assets, trade payables, accrued expenses and other current and non-current liabilities approximate their fair value due to the short-term maturity of such instruments.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instruments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Recently adopted accounting pronouncements:

As an "Emerging Growth Company", the Jumpstart Our Business Startups Act ("JOBS Act") allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to its business or that no material effect is expected on the condensed consolidated financial statements as a result of their future adoption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Recently issued accounting pronouncements, not yet adopted:

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company for fiscal years beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

NOTE 3:- LINE OF CREDIT ARRANGEMENT

Further to the discussion in Note 7 in the 2024 Consolidated Financial Statements regarding the secured line of credit agreement (the "Credit Line") signed on April 5, 2022, with Kreos Capital VI (Expert Fund) LP ("Kreos"), the Company entered into an amendment to the Credit Line on January 6, 2025 (the "Third Amendment"). Pursuant to the Third Amendment, 60% of the principal and interest repayments which were originally scheduled to be paid until the end of June 2025, were delayed and were repaid in July 2025. The Company paid a restructuring fee to Kreos of $160 in and the end of loan payment shall be increased from 5% to 7%.

Kreos has the right to receive a potential claw-back payment on account of the then outstanding principal amount (the "Claw-Back"). This Claw-Back mechanism will be triggered by additional incoming funds from future collaboration and partnership agreements or additional funding. On January 8, 2025, the Company repaid $724 due to the Claw-Back. The Claw-Back to be paid will not exceed $4,500, out of which $2,628 was already paid as of June 30, 2025. On July 1, 2025, the Company repaid an additional $1,335 due to the Claw-Back.

The Company evaluated the Third Amendment under ASC 470-50, "*Debt - modification and extinguishment*", and concluded that the change in the debt instrument was accounted for as an extinguishment of debt due to the terms of the new debt and the original debt being substantially different. At the date of extinguishment, the Company derecognized the carrying amount of old debt of $7,421, and recorded the new debt at the fair value of $7,933, resulting in $512 loss.

During the three- and six-month periods ended on June 30, 2025, the Company recognized interest expenses in the amount of $319 and $626, respectively, and during the three- and six-month periods ended June 30, 2024, the Company recognized interest expenses in the amount of $383 and $756, respectively.

NOTE 4:- COMMITMENTS AND CONTINGENT LIABILITIES

In connection with its research and development programs, through June 30, 2025, the Company received participation payments from the Israel Innovation Authority of the Ministry of Economy in Israel ("IIA") in the aggregate amount of $4,888. In return for IIA's participation, the Company is committed to pay royalties at a rate of 3% of sales of the developed products, up to 100% of the amount of grants received plus interest at Secured Overnight Financing Rate.

For the three- and six- month periods ended June 30, 2025, no new participation payments were received.

Through June 30, 2025, no royalties have been paid or accrued.

NOTE 5:- SHAREHOLDERS' EQUITY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Ordinary share capital (with no par value) is composed as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Authorized** | **Issued and outstanding** | **Authorized** | **Issued and outstanding** |
|  | **Number of shares** | **Number of shares** | **Number of shares** | **Number of shares** |
| Ordinary shares | 107800000 | 15654129 | 107800000 | 10190904 |

---

**POLYPID LTD. AND ITS SUBSIDIARIES**

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

NOTE 5:- SHAREHOLDERS' EQUITY (CONT.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Controlled Equity Offering Sales Agreement (the "Sales Agreement"):

In November 2024, the Company entered into a Sales Agreement, with Oppenheimer & Co. Inc. (the "Agent").

Pursuant to the Sales Agreement, the Company may offer and sell, from time to time, its Ordinary shares, through the Agent in an at the market offering ("ATM"), as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, for an aggregate offering price of up to $8,250.

During the six months ended June 30, 2025, the Company sold 419,680 Ordinary shares under the ATM for a total amount of $1,472, net of issuance cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Financing rounds:

On January 4, 2024, the Company entered into a definitive securities purchase agreement for a private placement financing, led by leading U.S. life sciences-focused investors and certain existing investors. Under the securities purchase agreement, the investors purchased 3,143,693 of the Company's Ordinary shares at a purchase price of $4.81 per share, pre-funded warrants to purchase up to 227,619 Ordinary shares at an exercise price of $0.0001 per share and warrants to purchase up to 3,371,312 Ordinary shares at an exercise price of $5.50 per share. The warrants expire upon the earlier of two years from the date of issuance and 10 trading days following the Company's announcement of the positive recommendation by Data Safety Monitoring Board (the "DSMB") regarding the Company's unblinded interim analysis in its SHIELD II Phase 3 trial of D-PLEX<sub>100</sub> resulting in the stopping of the trial due to positive efficacy. The proceeds to the Company amounted to $14,999, net of issuance cost. Exercise of the warrants in full would result in an additional $18,542 in proceeds to the Company. The closing of the offering occurred on January 9, 2024.

On May 20, 2025, the 227,619 pre-funded warrants were exercised to 227,619 Ordinary shares.

In accordance with ASC 480 and ASC 815, the pre-funded warrants and the warrants were qualified for equity accounting. The fair value for each warrant to purchase an ordinary share is $4.52.

*The Black-Scholes option pricing model assumptions used to value the warrants at the grant date are presented in the following table:*

---

| | |
|:---|:---|
| Dividend yield (%) | 0 |
| Expected volatility (%) | 117.40-134.00 |
| Risk-free interest rate (%) | 4.36-5.08 |
| Expected term (in years) | 0.68-2.00 |

---

On August 1, 2024, the Company entered into a definitive securities purchase agreement for a private placement financing. Under the securities purchase agreement, the investors purchased 2,006,226 of the Company's Ordinary shares at a purchase price of $3.61 per share, pre-funded warrants to purchase up to 229,231 Ordinary shares at an exercise price of $0.0001 per share and warrants to purchase up to 1,676,588 Ordinary shares at an exercise price of $3.61 per share. The warrants expire upon the earlier of two years from the date of issuance and 10 trading days following the Company's announcement of the recommendation by the DSMB regarding the Company's unblinded interim analysis in its SHIELD II Phase 3 trial of D- PLEX<sub>100</sub> resulting in either the stopping of the trial due to positive efficacy, or continuation to planned patient recruitment (up to 630 subjects). The closing of the offering occurred on August 6, 2024. The proceeds to the Company amounted to approximately $7,536, net of issuance costs of $532. Exercise of the warrants in full would result in an additional $6,052 in proceeds to the Company.

In June 2025 the 229,231 pre-funded warrants were exercised to 229,230 Ordinary shares.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

NOTE 5:- SHAREHOLDERS' EQUITY (CONT.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Financing rounds: (Cont.)

On December 26, 2024, the Company entered into a definitive securities purchase agreement for a private placement financing. Under the securities purchase agreement, the investors purchased 3,386,962 of the Company's Ordinary shares, at a purchase price of $3.22 per share, pre-funded warrants to purchase up to 1,106,868 Ordinary shares at an exercise price of $0.0001 per share and warrants to purchase up to 6,740,745 Ordinary shares at an exercise price of $4.00 per share. The warrants expire upon the earlier of nine months from the date of issuance and 10 trading days following the Company's announcement of the top-line results in the Company's SHIELD II Phase 3 trial of D-PLEX<sub>100</sub>. The closing of the offering occurred on December 26, 2024. The offering resulted in proceeds to the Company of $13,325, net of issuance costs of $1,146. Exercise of the warrants in full would result in an additional $26,963 in proceeds to the Company. On June 16, 2025, 5,436,393 warrants were exercised as part of the Inducement Letter as defined below and on June 23, 2025, 10 trading days following the Company's announcement of the top-line results in the Company's SHIELD II Phase 3 trial of D-PLEX<sub>100 </sub>the remaining 1,304,352 warrants expired.

On June 9, 2025, 513,517 pre-funded warrants were exercised to 513,501 Ordinary shares. As of June 30, 2025, 593,351 pre-funded warrants are outstanding.

On June 16, 2025, the Company entered into an inducement offer letter agreement (the "Inducement Letter") with certain holders (each, a "Holder") of (i) 2,190,121 warrants to purchase up to 2,190,121 of the Company's Ordinary shares issued on January 9, 2024 at an original exercise price of $5.50 per Ordinary share (the "January 2024 Warrants") and (ii) 5,436,393 warrants to purchase up to 5,436,393 Ordinary shares issued on December 26, 2024, at an original exercise price of $4.00 per Ordinary share (the "December 2024 Warrants" and together with the January 2024 Warrants, the "Existing Warrants"). Pursuant to the Inducement Letter, each Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 7,626,514 Ordinary shares, at an exercise price of $3.50 per Ordinary share, in consideration of the Company's agreement to issue new warrants (the "New Warrants") to purchase up to 7,626,514 Ordinary shares (the "New Warrant Shares"), at a reduced exercise price of $4.50 per Ordinary share. The Company received an aggregate net proceed of $26,690 from the exercise of the Existing Warrants by the Holders after deducting offering expenses payable by the Company. Of the 7,626,514 ordinary shares underlying the Existing Warrants, 3,553,319 shares issuable to certain holders were held in abeyance as of June 30, 2025, due to beneficial ownership restrictions in the Existing Warrants.

The terms of the Inducement Letter were accounted for as a modification of the Existing Warrants under ASC 815-40. Because both the Existing Warrants and the New Warrants qualified for equity classification before and after the transaction, and since the purpose of the modification was to induce immediate cash exercise of the Existing Warrants and raise equity capital, the Company recognized the modification as an equity issuance. Accordingly, the impact of the modification, totaling $2,317, was recorded as an equity issuance cost. The New Warrants are exercisable for a period of two years from the date of issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Share option plan:

The Company's board of directors authorizes option grants through its 2012 Share Option Plan to officers, directors, advisors, management and other key employees. The options granted generally have a four-year vesting period and expire ten years after the date of grant. Options granted under the Company's option plan that are canceled or forfeited before expiration become available for future grant.

The Company uses the straight-line recognition method for awards subject to graded vesting based only on a service condition and the accelerated method for awards that are subject to performance or condition.

**POLYPID LTD. AND ITS SUBSIDIARIES**

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

NOTE 5:- SHAREHOLDERS' EQUITY (CONT.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Share option plan: (Cont.)

On May 6, 2024, the Company's board of directors approved to increase the Company's options pool by an additional 2,000,000 options from 312,403 to 2,312,403.

On May 12, 2025, the Company's board of directors approved to increase the Company's options pool by an additional 1,200,000 options from 2,312,403 to 3,512,403.

As of June 30, 2025, 620,636 of the Company's options were available for future grants.

*The Black-Scholes option pricing model assumptions used to value the employee share options at the grant dates are presented in the following table for the six-month period ended June 30, 2025:*

---

| | |
|:---|:---|
| Dividend yield (%) | 0 |
| Expected volatility (%) | 102.97-104.83 |
| Risk-free interest rate (%) | 3.9-4.14 |
| Expected term (in years) | 5.8-6.1 |

---

*<u>Milestone-based options</u>*

On May 6, 2024, the board of directors granted a total of 280,000 milestone-based options to the Company's officers. The milestone condition was set as either the interim analysis outcome of early stopping of the Company's SHIELD II Phase 3 trial of D-PLEX<sub>100</sub> for efficacy or top-line results (primary endpoint) with overall alpha level of up to (and including) 5%. The average exercise price is $4.64.

On July 2, 2024, the Company's shareholders approved a grant of 198,000 options and 132,600 milestone-based options to the Company's Chief Executive Officer. The exercise price for both grants was set at $4.64.

On May 12, 2025, the Company's board of directors granted a total of 188,800 milestone-based options to the Company's officers. The milestone condition was set as top-line results (primary endpoint) with overall alpha level of up to (and including) 5%. The average exercise price is $2.67.

On June 25, 2025, the Company's shareholders approved a grant of 120,000 options and 80,000 milestone-based options to the Company's Chief Executive Officer. The exercise price for both grants was set at $2.67.

On June 9, 2025, the Company announced positive results in the Company's SHIELD II Phase 3 trial of D-PLEX<sub>100</sub>, and as a result the milestone condition was met. Accordingly, the Company recognized $1,486 of share-based compensation using the accelerated method.

*The Black-Scholes option pricing model assumptions used to value the employee milestone-based options at the grant dates are presented in the following table for the six-month period ended June 30, 2025:*

---

| | |
|:---|:---|
| Dividend yield (%) | 0 |
| Expected volatility (%) | 98.88-104.83 |
| Risk-free interest rate (%) | 3.83-4.43 |
| Expected term (in years) | 5.3-5.7 |

---

**POLYPID LTD. AND ITS SUBSIDIARIES**

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

NOTE 5:- SHAREHOLDERS' EQUITY (CONT.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Share option plan: (Cont.)

*A summary of the status of options to employees and non-employees, including directors, under the Company's 2012 Share Option Plan as of and for the six-month period ended June 30, 2025, and changes during the period then ended are presented below (unaudited):*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number <br> of options** | **Weighted <br> average <br> exercise <br> price** | **Aggregate<br> intrinsic<br> value** | **Weighted <br> average <br> remaining contractual<br> life (years)** |
| Outstanding at beginning of period | 1814551 | $6.65 | $- | 9.14 |
| Granted | 1091740 | $2.67 |  |  |
| Forfeited | (17098) | $5.87 |  |  |
| Expired | (3000) | $4.64 |  |  |
| **Outstanding at end of period** | **2886193** | $8.88 | $**942** | 9.13 |
| **Exercisable options** | **581607** | $29.56 | $**47** | 8.38 |
| **Vested and expected to vest** | **2886193** | $8.88 | $**942** | **9.13** |

---

*The total share-based compensation expense recognized by the Company's departments:*

 

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** |
|  | **2025** | **2024** |
| Research and development | $1080 | $849 |
| Marketing and business development | 410 | 144 |
| General and administrative | 1385 | 447 |
|  | $2875 | $1440 |

---

As of June 30, 2025, there were unrecognized compensation costs of $6,908, which are expected to be recognized over a weighted average period of approximately 2.69 years.

 

**POLYPID LTD. AND ITS SUBSIDIARIES**

 

**NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except share and per share data)**

 

NOTE 5:- SHAREHOLDERS' EQUITY (CONT.)

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Warrants and pre-funded warrants:

As of June 30, 2025, all warrants are exercisable into Ordinary shares, in which the outstanding issued warrants as of June 30, 2025, were as follows (unaudited):

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Grant date** | **Warrants<br> outstanding <br> as of<br> June 30, <br> 2025** | **Average <br> Exercise <br> price<br> per share ($)** | **Warrants<br> exercisable<br> as of<br> June 30, <br> 2025** | **Exercisable<br> through** |
| April 2022 | 5193 | $12.60 | 5193 | April 2029 |
| July 2022 | 1298 | $12.60 | 1298 | April 2029 |
| January 2024 | 1181191 | $5.50 | 1181191 | January 2026 \*) |
| August 2024 | 1676588 | $3.61 | 1676588 | August 2026 \*) |
| August 2024 | 40000 | $3.61 | 40000 | August 2031 |
| December 2024 | 593351 | $0.0001 | 593351 | No maturity date \*) |
| June 2025 | 7626514 | $4.50 | 7626514 | June 2027 \*) |
|  | 11124135 |  | 11124135 |  |

---

See Note 5c for warrants that were exercised during the six-month period ended June 30, 2025.

\*) See Note 5c.

NOTE 6:- BASIC AND DILUTED LOSS PER SHARE

The potential Ordinary shares that were excluded from the computation of diluted loss per share attributable to ordinary shareholders for the periods presented because including them would have been anti-dilutive are as follows:

 

---

| | | |
|:---|:---|:---|
|  | **Three and Six Months Ended <br> June 30,** | **Three and Six Months Ended <br> June 30,** |
|  | **2025** | **2024** |
| Ordinary share options | 581607 | 73501 |
| Warrants | 10530784 | 3606019 |
|  | 11112391 | 3679520 |

---

NOTE 7:- SUBSEQUENT EVENTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Further to the disclosure in Note 5b, during July 2025, the Company sold 243,072 Ordinary shares under
the ATM for a total amount of $861, net of issuance cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. This legislation includes
changes to U.S. federal tax law, which may be subject to further clarification and the issuance of interpretive guidance.

The Company is assessing the legislation and its effect on the consolidated financial statements.

-----------------------------

## Exhibit 99.2

**Exhibit 99.2**

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF<br> FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**As of June 30, 2025, and for the Six Months then Ended**

**Cautionary Statement Regarding Forward-Looking Statements** 

Certain information included herein may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Forward-looking statements are often characterized by the use of forward-looking terminology such as "may," "will," "expect," "anticipate," "estimate," "continue," "believe," "should," "intend," "project" or other similar words, but are not the only way these statements are identified.

These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion and use of our products, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.

Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.

Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:

● our ability to successfully receive approvals from the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or other applicable regulatory bodies, including approval to conduct clinical trials, the scope of those trials and the prospects for regulatory approval of, or other regulatory action with respect to our product candidates, including the regulatory pathway to be designated to our product candidates;

● our ability to raise capital through the issuance of securities;

● our expected submissions of a New Drug Application;

● our ability to advance the development of our product candidates, including the anticipated starting and ending dates of our anticipated clinical trials;

● our assessment of the potential of our product candidates to treat certain indications;

● our dependence on enrollment of patients in our clinical trials to continue development of our product candidates;

● the regulatory environment and changes in the health policies and regimes in the countries in which we operate, including the impact of any changes in regulation and legislation that could affect the pharmaceutical industry;

● our ability to commercialize our existing product candidates and future sales of our existing product candidates or any other future potential product candidates;

● our ability to meet our expectations regarding the commercial supply of our product candidates;

● the overall global economic environment;

● the impact of competition and new technologies;

● general market, political and economic conditions in the countries in which we operate;

● projected capital expenditures and liquidity;

● changes in our strategy; and

● litigation.

The foregoing list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting our company, reference is made to our Annual Report on Form 20-F for the year ended December 31, 2024, or our Annual Report, which was filed with the Securities and Exchange Commission, or the SEC, on February 26, 2025, and the other risk factors discussed from time to time by our company in reports filed or furnished to the SEC.

Except as otherwise required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Unless otherwise indicated, all references to "Company," "we," "our" and "PolyPid" refer to PolyPid Ltd., its wholly owned subsidiaries, PolyPid Inc., a Delaware corporation, and PolyPid Pharma SRL, a company organized and existing under the laws of Romania. References to "U.S. dollars" and "$" are to currency of the United States of America, and references to "shekel," "Israeli shekel" and "NIS" are to New Israeli Shekels. References to "Ordinary Shares" are to our Ordinary Shares, no par value. We report our financial statements in accordance with generally accepted accounting principles in the United States.

**Operating Results**

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included in our Annual Report, as well as our unaudited condensed consolidated financial statements and the related notes thereto for the six months ended June 30, 2025, included elsewhere in this Report on Form 6-K. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties.* 

**Overview**

Since our inception in 2008, we have incurred significant operating losses. Our operating losses for the six months ended June 30, 2024 and 2025 were $12,422 thousand and $16,982 thousand, respectively. As of June 30, 2025, we had an accumulated deficit of $285,576 thousand. We expect to continue to incur significant expenses and operating losses for the foreseeable future, and our losses may fluctuate significantly from year to year. We anticipate we will continue to incur expenses in connection with our ongoing activities, as we:

● continue clinical development of D-PLEX <sub>100</sub> ;

● file New Drug Applications, or NDAs, seeking regulatory approval for D-PLEX <sub>100</sub> pursuant to the FDA's Section 505(b)(2) regulatory pathway in the United States and the hybrid application pathway in the European Union;

● continue to invest in the preclinical research and development of OncoPLEX and any other future product candidates;

● continue to invest in our manufacturing facility and complete commercial process validation for the facility;

● support the marketing, sale and distribution of D-PLEX <sub>100</sub> if it receives regulatory approval;

● hire employees to prepare for and launch any approved product;

● hire additional research and development and general and administrative personnel to support our operations;

● maintain, expand and protect our intellectual property portfolio; and

● incur additional costs associated with operating as a public company.

We do not have any product candidates approved for sale and have not generated any revenue from product sales.

**Results of Operations**

***Comparison of the Six months Ended June 30, 2024 and 2025***

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2025:

---

| | | |
|:---|:---|:---|
|  | **Six months Ended<br> June 30,** | **Six months Ended<br> June 30,** |
|  | **2024** | **2025** |
|  | **(in thousands)** | **(in thousands)** |
| Research and development | $9810 | $12332 |
| Marketing and business development | 501 | 989 |
| General and administrative | 2111 | 3661 |
| Operating loss | 12422 | 16982 |
| Loss on extinguishment of debt |  | 512 |
| Financial expenses, net | 311 | 687 |
| Loss before income tax | $12733 | $18181 |
| Income tax expense | 9 | 64 |
| Net loss | $12742 | $18245 |

---

*Research and Development*

Research and development increased by $2.5 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This increase was primarily related to an increase of $1.1 million in costs related to the completed SHIELD II phase 3 trial, an increase of $0.9 million in personnel costs and non-cash share-based compensation, and an increase of $0.5 million in research and development costs related to D-PLEX<sub>100</sub>.

*Marketing and business development* 

Marketing and business development increased by $0.5 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This increase was primarily related to an increase of $0.4 million in personnel costs and non-cash share-based compensation, and an increase of $0.1 million in business development activities.

*General and Administrative* 

General and administrative increased by $1.6 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This increase was primarily related to an increase of $1.4 million in personnel costs and non-cash share-based compensation, and an increase of $0.3 million in professional services costs, offset by a decrease of $0.1 million in directors' and officers' insurance premiums.

*Loss on extinguishment of debt*

Loss on extinguishment of debt increased by $0.5 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This increase was related to the January 2025 amendment to the Company's loan with Kreos Capital VI (Expert Fund) LP, or Kreos.

 

*Financial Expenses, Net* 

Financial expense, net increased by $0.4 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This increase was primarily related to an increase of $0.4 million in exchange currency expenses and a decrease of $0.1 in income from interest income from bank deposits, offset by a decrease of $0.1 million in interest expenses related to the loan with Kreos.

*Net loss* 

Net loss increased by $5.5 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This increase was primarily related to the increase in research and development of $2.5 million, an increase in general and administrative of $1.6 million, an increase of $0.5 in marketing and business development costs, an increase of $0.5 million in loss on extinguishment of debt, and an increase in financial expense, net of $0.4 million.

**Qualitative and Quantitative Disclosures about Market Risk** 

***Foreign Currency Exchange Risk***

We operate primarily in Israel, and approximately 37% of our expenses are denominated in NIS. We are therefore exposed to market risk, which represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. We are subject to fluctuations in foreign currency rates in connection with these arrangements. Changes of 5% and 10% in the U.S. dollar/NIS exchange rate would have increased/decreased operating expenses by approximately 1.1% and 2.2%, respectively, during the six months ended June 30, 2025.

We currently partially hedge our foreign currency exchange rate risk to decrease the risk of financial exposure from fluctuations in the exchange rates of our principal operating currencies. These measures, however, may not adequately protect us from the material adverse effects of such fluctuations.

***Interest Rate Risk***

At present, our investments consist primarily of cash and cash equivalents and short-term deposits. We may invest in investment-grade marketable securities with maturities of up to three years, including commercial paper, money market funds, and government/non-government debt securities. The primary objective of our investment activities is to preserve principal while maximizing the income that we receive from our investments without significantly increasing risk and loss. Our investments may be exposed to market risk due to fluctuation in interest rates, which may affect our interest income and the fair market value of our investments, if any.

***Inflation-Related Risks***

Inflation generally affects us by increasing our NIS-denominated expenses, including salaries and benefits, as well as facility rental costs and payment to local suppliers. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the six months ended June 30, 2025, but we continue to monitor these closely.

**JOBS Act Transition Period** 

Section 107 of the Jumpstart Our Business Startups Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies, which may make comparison of our financials to those of other public companies more difficult.

**Liquidity and Capital Resources**

***Sources of Liquidity***

Since our inception, we have not generated any revenue and have incurred operating losses and negative cash flows from our operations.

On April 5, 2022, we entered into a loan agreement, or the Loan Agreement, for up to $15 million with Kreos. The Loan Agreement is comprised of three tranches in the amount of $10.0 million, $2.5 million, and $2.5 million, respectively. Drawdown of the first tranche was available upon the execution of the Loan Agreement. The second tranche of $2.5 million was available after we met the second tranche milestone in May 2022. The third and final tranche of $2.5 million will not be drawn since the third tranche milestone has not been met.

The first tranche in the amount of $10 million was drawn on April 26, 2022. The issuance costs due to the Loan Agreement amounted to $0.2 million and the second tranche in the amount of $2.5 million was drawn on July 19, 2022.

The Loan Agreement provides for interest-only repayments of the first tranche until December 31, 2022, followed by 36 equal monthly repayments of principal and interest. For the second tranche, the Loan Agreement provides for repayments of interest only until August 31, 2023, followed by 33 equal monthly repayments of principal and interest. The senior secured loan initially had interest at a rate of 9.25%. The loan is prepayable in full, at any time at our option. The loan is secured by our owned equipment, intellectual property and all shares we hold in PolyPid Inc. and PolyPid Pharma SRL, and we paid a customary fee to Kreos for the establishment of the loan. Additionally, PolyPid Inc. entered into a guaranty agreement with Kreos, all as security for monies borrowed by us under the Loan Agreement. On March 29, 2023, we entered into an amendment to the Loan Agreement. Pursuant to this amendment, 70% of the remaining principal and interest repayments will be delayed and repaid on a monthly equal basis from August 2024 to May 2026. The amended secured loan had interest at a rate of 10.00%, and a restructuring fee to Kreos consisting of 1.00% on close of the amendment and an incremental 3.00% at maturity. In return for this additional deferral of repayment, Kreos has the right to receive a potential claw back payment on account of the then outstanding principal amount. This claw back mechanism will be triggered by additional incoming funds from future partnership agreement or additional financing. If triggered, the minimum claw back to be paid was $1.5 million but will not exceed $3 million. The Loan Agreement contains customary affirmative and restrictive covenants and representations and warranties.

As part of the Loan Agreement, we issued to Kreos a 7-year warrant to purchase 6,491 of our Ordinary Shares with an exercise price of $154.05 per share. Pursuant to the March 2023 amendment, the outstanding warrants Kreos received were repriced to have an exercise price of $12.60 per share. The expiration date for each warrant issued will be seven years from the issuance date.

On August 1, 2024, we entered into a second amendment to the Loan Agreement. Pursuant to this second amendment, 60% of the remaining principal and interest repayments under the Loan Agreement will be delayed and repaid on a monthly equal basis from April 1, 2025. The amended secured loan now bears interest at a rate of 12.00%. We paid Kreos an additional $125,000 as a restructuring fee. The claw back to be paid will not exceed $4.5 million, out of which $4.0 million was already paid. As part of the second amendment, we issued to Kreos a warrant to purchase 40,000 Ordinary Shares of the Company at an exercise price of $3.61 per share. Following the execution of the second amendment, Kreos holds warrants to purchase a total of 46,491 Ordinary Shares of the Company, as follows: (i) 6,491 shares at an exercise price of $12.60 per share and (ii) 40,000 shares at an exercise price of $3.61 per share. The expiration date for each warrant issued is seven years from the respective issuance date. On January 6, 2025, we entered into a third amendment to the Loan Agreement. Pursuant to this third amendment, 60% of the principal and interest repayments which are originally scheduled to be paid until the end of June 2025, were delayed and paid in July 2025. We paid a restructuring fee to Kreos of $160,000 and the end of loan payment was increased from 5% to 7%.

In January 2024, we entered into a definitive securities purchase agreement for a private placement financing, pursuant to which we sold 3,143,693 Ordinary Shares at a purchase price of $4.81 per share, 227,619 pre-funded warrants at a purchase price of $4.81 per warrant with an exercise price of $0.0001 per share and warrants to purchase up to 3,371,312 Ordinary Shares at an exercise price of $5.50 per share. The pre-funded warrants do not expire and the warrants expire upon the earlier of two years from the date of issuance and 10 trading days following our announcement of the positive recommendation by the Data Safety Monitoring Board, or the DSMB, regarding our unblinded interim analysis in our SHIELD II Phase 3 trial of D-PLEX<sub>100</sub> resulting in the stopping of the trial due to positive efficacy. The offering resulted in gross proceeds of $16.2 million.

In August 2024, we entered into a definitive securities purchase agreement, pursuant to which we sold 2,006,226 of our Ordinary Shares, at a purchase price of $3.61 per share, 229,231 pre-funded warrants with an exercise price of $0.0001 per share at a purchase price of $3.61 per warrant and warrants to purchase up to 1,676,588 Ordinary Shares at an exercise price of $3.61 per share. The pre-funded warrants do not expire and the warrants expire upon the earlier of two years from the date of issuance and 10 trading days following our announcement of the recommendation by the DSMB regarding our unblinded interim analysis in its SHIELD II Phase 3 trial of D-PLEX<sub>100</sub> resulting in either the stopping of the trial due to positive efficacy, or continuation to planned patient recruitment (up to 630 subjects). The offering resulted in gross proceeds of $8.1 million.

In November 2024, we entered into a Sales Agreement, or the New Sales Agreement, with Oppenheimer & Co. Inc., or the Sales Agent, pursuant to which we may offer and sell, from time to time, through the Sales Agent, up to $8,250,000 of our Ordinary Shares. During the six months ended June, 2025, we sold 419,680 Ordinary Shares under the New Sales Agreement for a total amount of $1.5 million, net of issuance costs.

In December 2024, we entered into a definitive securities purchase agreement, pursuant to which we sold 3,386,962 of our Ordinary Shares, at a purchase price of $3.22 per share, 1,106,868 pre-funded warrants with an exercise price of $0.0001 per share at a purchase price of $3.22 per share and warrants to purchase up to 6,740,745 Ordinary Shares at an exercise price of $4.00 per share. The pre-funded warrants do not expire and the warrants expire upon the earlier of nine months from the date of issuance and 10 trading days following our announcement of the top-line results in our SHIELD II Phase 3 trial of D-PLEX<sub>100</sub>. The offering resulted in gross proceeds of $14.5 million. On June 16, 2025, 5,436,393 warrants were exercised as part of the Inducement Letter, as defined below, and on June 23, 2025, 10 trading days following the Company's announcement of the top-line results in the Company's SHIELD II Phase 3 trial of D-PLEX<sub>100 </sub>the remaining 1,304,352 warrants expired.

On June 16, 2025, we entered into an inducement offer letter agreement, or the Inducement Letter, with certain holders, each, a Holder. These Holders held (i) 2,190,121 warrants to purchase up to 2,190,121 of the Company's Ordinary Shares issued in January 2024 at an exercise price of $5.50 per Ordinary Share, or the January 2024 Warrants, and (ii) 5,436,393 warrants to purchase up to 5,436,393 Ordinary Shares issued in December 2024, at an exercise price of $4.00 per Ordinary Share, or the December 2024 Warrants, and together with the January 2024 Warrants, the Existing Warrants.

Pursuant to the Inducement Letter, each Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 7,626,514 Ordinary Shares, at a reduced exercise price of $3.50 per Ordinary Share, in consideration of the Company's agreement to issue new warrants, or the New Warrants, to purchase up to 7,626,514 Ordinary Shares at an exercise price of $4.50 per Ordinary Share. The Company received aggregate gross proceeds of approximately $26.7 million from the exercise of the Existing Warrants by the Holders. The Company expects to use the net proceeds from these transactions for an NDA submission with respect to D-PLEX<sub>100</sub>, launch preparations, working capital and general corporate purposes.

As of June 30, 2025, we had $29.5 million in cash and cash equivalents and short-term deposits.

***Cash Flows***

The following table provides information regarding our cash flows for the periods indicated:

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| | | |
|:---|:---|:---|
|  | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** |
|  | **2024** | **2025** |
|  | **(in thousands)** | **(in thousands)** |
| Net cash used in operating activities | $(8494) | $(12711) |
| Net cash used in investing activities | (6210) | (12016) |
| Net cash provided by financing activities | 12502 | 26548 |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $(2202) | $1821 |

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*Operating Activities* 

Net cash used in operating activities related primarily to our net losses adjusted for non-cash charges and measurements and changes in components of working capital. Adjustments to net loss for non-cash items mainly included depreciation, remeasurement of pre-funded warrants and share-based compensation.

Net cash used in operating activities was $12,711 thousand for the six months ended June 30, 2025, as compared to $8,494 thousand for the six months ended June 30, 2024. This increase was primarily related to the completed SHIELD II Phase 3 clinical trials in abdominal colorectal surgery with large incisions.

*Investing Activities* 

Net cash used in investing activities related primarily to the purchase and release of short-term deposits and the acquisition of laboratory equipment, office equipment and furniture and leasehold improvements.

Net cash used in investing activities was $12,016 thousand for the six months ended June 30, 2025, as compared to net cash used in investing activities of $6,210 thousand for the six months ended June 30, 2024. This change in net cash used in investing activities primarily related to change in short-term deposits, net.

*Financing Activities* 

Net cash provided by financing activities was $26,548 thousand for the six months ended June 30, 2025, as compared to $12,502 thousand for the six months ended June 30, 2024. The increase in net cash provided by financing activities is primarily related to the net proceeds from June 2025 warrant exercise inducement transaction, offset by the repayments of the loan provided by Kreos.

***Current Outlook***

To date, we have not generated any revenues from commercial sale of our product candidates, and we do not expect to generate revenue for at least the next few years. We expect to continue to incur expenses in connection with our ongoing activities, particularly as we continue to seek marketing approval and conduct future clinical trials for our product candidates, and as we continue the research and development of our other existing and future product candidates. In addition, if we obtain marketing approval for any product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of potential collaborators. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

We expect that our existing cash and cash equivalents and short-term deposits will enable us to fund our operating expenses and capital expenditure requirements well into 2026. We anticipate that we will need to raise additional capital in order to complete our clinical and regulatory program for D-PLEX<sub>100</sub> towards potential NDA submission, as well as continue to invest in the research and development of OncoPLEX and any other future product candidates. If we are unable to raise additional capital when desired, our business, operating results, and financial condition would be adversely affected, and there is substantial doubt about our ability to continue as a going concern. We had a shareholders' equity of $20,476 thousand as of June 30, 2025, and negative operating cash flows in recent years. We expect to continue incurring losses and negative cash flows from operations until our products reach commercial profitability. Our plans to reduce the going concern risk include the continued commercialization of our products, maintaining cost efficiency and raising capital through the sale of additional equity securities, debt or capital inflows from strategic partnerships.

Our future capital requirements will depend on many factors, including:

● the costs, timing and outcome of regulatory review of D-PLEX <sub>100</sub> and any future product candidates;

● the costs and timing of establishing and validating manufacturing processes and facilities for development and commercialization of D-PLEX <sub>100</sub> and any future product candidates, if approved, including our manufacturing facility;

● the number and development requirements of any future product candidates that we may pursue;

● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;

● the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval, which may be affected by market conditions, including obtaining coverage and adequate reimbursement of our product candidates from third-party payors, including government programs and managed care organizations, and competition;

● our ability to establish and maintain collaborations with biopharmaceutical companies on favorable terms, if at all;

● the scope, progress, results and costs of our future clinical trials;

● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; and

● the extent to which we acquire or in-license other product candidates and technologies.

Identifying potential product candidates and conducting clinical trials and preclinical studies is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product candidates that we do not expect to be commercially available for few years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, grants, collaborations, strategic alliances and licensing arrangements. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

**Research and development, patents and licenses, etc.**

A comprehensive discussion of our research and development, patents and licenses, etc., is included in "Item 5. Operating and Financial Review and Prospects - Management's Discussion and Analysis of Financial Condition and Results of Operations" section in our Annual Report.

**Trend Information**

To date, we have not generated any revenue from product sales and do not expect to generate any revenue from product sales for at least the next few years. From inception through June 30, 2025, we incurred $186.8 million in research and development expenses, net to advance the development of our clinical-stage product candidates, as well as other preclinical research and development programs. We expect to continue to incur expenses in connection with our ongoing activities, particularly as we continue to conduct clinical trials and seek marketing approval for our product candidates, and as we continue the research and development of our other existing and future product candidates. In addition, if we obtain marketing approval for any product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of potential collaborators. For a description of additional factors that may affect our future performance, please see "Item 5. Operating and Financial Review and Prospects— B. Liquidity and Capital Resources— Current Outlook."

**Critical Accounting Estimates**

The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, obligations, income and expenses during the reporting periods. In addition to our accounting estimate used in line of credit discussed below, for a comprehensive discussion of our critical accounting estimates please see "Item 5. Operating and Financial Review and Prospects - Management's Discussion and Analysis of Financial Condition and Results of Operations – E. Critical Accounting Estimates" section in our Annual Report.