1. Description of Business

Organization

LeonaBio, Inc. (the "Company") was incorporated as M3 Biotechnology, Inc. in the state of Washington on March 31, 2011 and reincorporated in the state of Delaware on October 27, 2015. In April 2019, the Company changed its name to Athira Pharma, Inc. and in January 2026 the Company changed its name to LeonaBio, Inc. The Company currently has office and laboratory space in Bothell, Washington. The Company is a clinical-stage biopharmaceutical company dedicated to the development of novel therapeutics for high unmet medical needs, including treatment-resistant metastatic breast cancer and amyotrophic lateral sclerosis.

Liquidity, Capital Resources and Going Concern

Since the Company’s inception, it has funded its operations primarily with proceeds from the sale and issuance of common stock, convertible preferred stock, common stock warrants, prefunded common stock warrants, and convertible notes, and to a lesser extent from grant income and stock option exercises. From the Company’s inception through June 30, 2026, it has raised aggregate net cash proceeds of $489.8 million primarily from the issuance of its common stock (excluding option exercises), convertible preferred stock, common stock warrants, prefunded common stock warrants and convertible notes. In December 2025, the Company raised approximately $90 million in a Private Placement (as defined below), excluding placement agent fees and offering expenses. Refer to Note 8 to our unaudited condensed consolidated financial statements included elsewhere in this report for more information.

As of June 30, 2026, the Company had cash, cash equivalents and investments of $51.1 million. The Company’s net loss for the six months ended June 30, 2026 was $52.0 million and cash used in operations for the six months ended June 30, 2026 was $37.9 million. Since the Company’s inception, it has devoted substantially all of its resources to its research and development efforts such as small molecule compound discovery, nonclinical studies and clinical trials, as well as manufacturing activities, establishing and maintaining the Company’s intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations.

Based upon the Company’s current operating plan, it estimates that its $51.1 million of cash, cash equivalents and investments at June 30, 2026 may not be sufficient to fund its operating expenses and capital expenditure requirements through at least the next 12 months which raises substantial doubt as to our ability to continue as a going concern following the date of this Quarterly Report on Form 10-Q. Historically, the Company has incurred net losses from continuing operations and negative operating cash flows. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs; therefore, the Company expects it will need to continue to raise additional capital to accomplish its operating plan. In connection with the Private Placement, the Company issued 23,031,494 Series A Common Warrants that have an exercise price of $6.35 per share to be paid in cash (unless a resale registration statement is unavailable at the time of exercise, in which case the Series A Common Warrants will be exercisable on a cashless net exercise basis) and are exercisable at each holders option after the earlier of (1) the latest of (a) June 30, 2026, (b) the date on which the Company publicly announces the enrollment of the 500th subject or the last subject, whichever is earlier, in the ELAINE-3 trial; and (c) the date on which the FDA approves or issues a complete response letter to Eli Lilly & Co.'s marketing application, including a supplement to a new drug application, for imlunestrant in combination with abemaciclib in breast cancer, and (2) October 31, 2026 (the “Series A Common Warrant Initial Exercise Date”). The Series A Common Warrants will remain exercisable at each holders option until the 30th day following the Series A Common Warrant Initial Exercise Date (the “Series A Common Warrant Termination Date”), which Series A Common Warrant Termination Date will be no later than November 30, 2026. If exercised in full, the Series A Common Warrants would provide $146.2 million of additional capital to the Company.

Additionally, the Company has a sales agreement in place with Cantor Fitzgerald & Co. and BTIG, LLC for an “at the market” equity offering facility through which it may offer and sell shares of its common stock, however, the Company is currently unable to offer and sell shares under this facility due to its ineligibility to use a Registration Statement on Form S-3 through December 2026. The Company has not sold any securities pursuant to this ATM offering. Should it be determined to be strategically advantageous, the Company could pursue public and private offerings of its equity securities similar to those the Company has previously completed, debt financings, or other strategic transactions, which could include income from collaboration, licensing or similar arrangements with third parties, or receiving research contributions, or grants.