Business Description

1. Organization, Restructuring, Going Concern and Basis of Presentation Lyra Therapeutics, Inc. (the “Company”) has historically been a clinical-stage biotechnology company focused on the development and commercialization of therapies for the localized treatment of patients with chronic rhinosinusitis, or CRS. The Company’s proprietary technology is designed to consistently deliver medicines directly to the affected tissue for sustained periods with a single administration. The Company was incorporated as a Delaware corporation on November 21, 2005 and is located in Watertown, Massachusetts. On July 16, 2018, the Company formerly changed its name from 480 Biomedical, Inc. to Lyra Therapeutics, Inc. In January 2026, the Company announced the suspension of further development of LYR-210 for the treatment of CRS. The Company also announced a workforce reduction impacting 25 employees and other cost-saving actions to preserve capital. The Company's Chief Executive Officer, President and Chair of the Board, and Chief Financial Officer and Treasurer, are each being retained as consultants to support the Company’s pursuit of strategic alternatives. The Company continues to evaluate potential strategic options to maximize shareholder value. There can be no assurance that the evaluation of strategic options will result in any transaction, or that any transaction, if pursued, will be completed on attractive terms, if at all. The Company has not set a timetable for the completion of this strategic review. On January 12, 2026, the Company announced that it was ceasing operations and beginning preparations for a wind-down of the Company while continuing to evaluate strategic alternatives. Subsequent to year-end, the Company also undertook additional actions to reduce its operating footprint and preserve liquidity, including efforts to negotiate the termination, buy-out, surrender or other resolution of certain lease obligations. These developments did not result in recognized adjustments to the Company's December 31, 2025 financial statements, but they represent material known events and uncertainties that are reasonably likely to affect its future liquidity, cash requirements and results of operations, including through potential future impairment charges and cash settlement obligations. On March 17, 2026 Nasdaq delisted the Company from The Nasdaq Capital Market. This occurred after the Company ceased its appeal efforts with respect to Nasdaq’s delisting determination, which culminated in a letter from the Nasdaq Hearings Advisor at The Nasdaq Stock Market LLC on March 13, 2026 confirming that the Company had withdrawn its appeal. Trading in the Company's common stock was suspended at the open of trading on March 17, 2026. In connection with the suspension of trading, Nasdaq has indicated that it will file a Form 25 Notification of Delisting with the U.S. Securities and Exchange Commission after all internal procedural periods have run. The Company is subject to risks common to companies in the therapeutics and pharmaceutical industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, reliance on third party manufacturers, ability to transition from pilot-scale manufacturing to large-scale production of products and the need to obtain adequate additional financing to fund the development of its product candidates. Restructuring On May 16, 2024, the Company reported that topline results from the Company’s Phase 3 ENLIGHTEN 1 trial evaluating LYR-210 in CRS. ENLIGHTEN 1 did not meet its primary endpoint of demonstrating statistically significant improvement compared to sham control in 3CS at 24 weeks. In connection with the ENLIGHTEN 1 trial failing to meet its primary endpoint, on May 16, 2024, the Board of Directors of the Company (the “Board of Directors”) approved a reduction in the Company’s workforce impacting 87 employees, which occurred during May and June 2024.…