What changed in this filing

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Item 1A. Risk Factors

2026-08-06 compared with 2026-05-07 · 27 added, 30 removed, 1058 unchanged (5% of the section changed)

41 unchanged sentences

We incurred a net loss of $15.3 million, $62.3 million and $27.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.

During the three months ended March 31, 2026 and 2025, we recorded a net loss of $13.7 million and net income of $15.2 million, respectively.

We had an accumulated deficit of $426.0 million as of March 31, 2026.

During the six months ended June 30, 2026 and 2025, we recorded a net loss of $31.7 million and net income of $7.2 million, respectively.

We had an accumulated deficit of $443.9 million as of June 30, 2026.

We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue our development of, seek regulatory approval for and, if approved, begin to commercialize soquelitinib, and as we develop other product candidates.

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Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, we may not be able to accurately estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of soquelitinib, ciforadenant and mupadolimab or any other product candidates.

Based on our planned expenditures and capital expenditures requirements, our cash, cash equivalents and marketable securities of $236.7 million as of March 31, 2026, we expect that our existing capital resources will be sufficient to fund our operations into the second quarter of 2028.

Based on our planned expenditures and capital expenditures requirements, our cash, cash equivalents and marketable securities of $215.2 million as of June 30, 2026, we expect that our existing capital resources will be sufficient to fund our operations into the second quarter of 2028.

As a result, we do not expect our existing capital resources to be sufficient to enable us to fund the completion of all of our ongoing and planned clinical trials and remaining development programs through commercialization.

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Any delay in obtaining, or inability to obtain, applicable regulatory approvals would prevent us or any of our existing or potential future collaborators from commercializing our product candidates.

We are conducting and plan to conduct clinical trials for soquelitinib, ciforadenant and mupadolimab, and we and Angel Pharmaceuticals may in the future conduct additional clinical trials of product candidates at sites outside the United States, and the FDA may not accept data from trials conducted in foreign locations.

We are conducting or plan to conduct clinical trials for soquelitinib, ciforadenant and mupadolimab, and we and Angel Pharmaceuticals may in the future conduct additional clinical trials of product candidates at sites outside the United States, and the FDA may not accept data from trials conducted in foreign locations.

We are conducting oncology clinical trials with soquelitinib in North America, Australia and South Korea and with ciforadenant in North America in collaboration with the Kidney Cancer Research Consortium.

In addition, Angel Pharmaceuticals has initiated clinical trials in China for soquelitinib and mupadolimab and plans to initiate a clinical trial for ciforadenant.

In addition, Angel Pharmaceuticals has initiated clinical trials in China for soquelitinib and mupadolimab.

The acceptance of study data from clinical trials conducted outside the U.S.

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● require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.

Although no third party has asserted a claim of patent infringement against us as of the date of this Annual Report on Form 10-K, others may hold proprietary rights that could prevent soquelitinib, ciforadenant and mupadolimab or our other product candidates from being marketed.

Although no third party has asserted a claim of patent infringement against us as of the date of this Quarterly Report on Form 10-Q, others may hold proprietary rights that could prevent soquelitinib, ciforadenant and mupadolimab or our other product candidates from being marketed.

Any patent-related legal action against us claiming damages and seeking to enjoin commercial activities relating to our product candidates or processes could subject us to potential liability for damages, including treble damages if we were determined to willfully infringe, and require us to obtain a license to manufacture or market soquelitinib, ciforadenant and mupadolimab or our other product candidates.

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Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

As of March 31, 2026, our executive officers, directors, holders of 5% or more of our capital stock based on publicly available filings made with the SEC and their respective affiliates beneficially owned approximately 25% of our outstanding common stock.

As of June 30, 2026, our executive officers, directors, holders of 5% or more of our capital stock based on publicly available filings made with the SEC and their respective affiliates beneficially owned approximately 26% of our outstanding common stock.

Therefore, these stockholders have the ability to influence us through their ownership position.

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Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates.

We are a smaller reporting company and the reduced reporting requirements applicable to smaller reporting companies may make our common stock less attractive to investors.

We are a smaller reporting company, which allows us to take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”), reduced disclosure obligations regarding executive compensation in our Annual Report and our periodic reports and proxy statements and providing only two years of audited financial statements in our Annual Report and our periodic reports.

We will remain a smaller reporting company so long as (a) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter is less than $250 million or (b) (1) we have less than $100 million in annual revenues during our most recently completed fiscal year and (2) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter is less than $700 million.

We cannot predict whether investors will find our common stock less attractive if we rely on certain or all of these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile and may decline.

Beginning January 1, 2027, we will no longer qualify as a smaller reporting company, which will increase our costs and demands on management, which will be further increased if and when we lose our status as a non-accelerated filer and become subject to auditor attestation requirements.

Based on the market value of our common stock held by our non-affiliates as of June 30, 2026, we will no longer be a smaller reporting company as of January 1, 2027, and thus will be subject to additional disclosure requirements beginning with our Quarterly Report on Form 10-Q for the quarter ended March 31, 2027.

Due to this upcoming transition, we will need to implement and comply with the additional standards, rules and regulations that will apply to us upon losing our smaller reporting company status.

Compliance with the additional requirements will also increase our legal, accounting and financial compliance costs.

As a smaller reporting company, we have been allowed to take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including reduced disclosure obligations regarding executive compensation in our Annual Report and our periodic reports and proxy statements and providing only two years of audited financial statements in our Annual Report and our periodic reports.

In addition, our status as a non-accelerated filer has exempted us from the auditor attestation requirements of Section 404 of the Sarbanes Oxley Act of 2002, as amended (“Sarbanes Oxley”).

If and when we are no longer a non-accelerated filer, which may occur as early as December 31, 2027, our independent registered public accounting firm would be required to attest to the effectiveness of our internal control over financial reporting beginning with our Annual Report on Form 10-K for that fiscal year.

Auditor attestation would further increase our accounting and financial compliance costs.

If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely consolidated financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common stock may decline.

Pursuant to Section 404 of Sarbanes-Oxley, if and when we no longer qualify as a smaller reporting company, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting.

Pursuant to Section 404 of Sarbanes-Oxley, if and when we become an accelerated or large accelerated filer, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting.

We will continue to be a non-accelerated filer as of December 31, 2026 and will remain a non-accelerated filer until December 31, 2027.

Thereafter, our filer status will be determined as of the end of each fiscal year based on various factors, including whether we regain status as a smaller reporting company under certain conditions and are eligible to use the requirements for a smaller reporting company as of the end of such fiscal year.

The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.

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Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows.

If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begin its Section 404 reviews, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.

If we or our auditors, as part of their Section 404(b) attestation procedures, are unable to conclude that our internal control over financial reporting is effective, including as the result of a finding of a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market

price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.

Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could significantly reduce the value of our shares to a potential acquiror or delay or prevent changes in control or

changes in our management without the consent of our board of directors.

The provisions in our charter documents include the following:

34 unchanged sentences

We face a number of threats to our networks from unauthorized access, security breaches and other system disruptions.

Despite the implementation of security measures, our information technology and other internal computer systems and those of our current and any future CROs and other

contractors, consultants and collaborators are vulnerable to damage from cyberattacks, “phishing” attacks, computer viruses and malware (e.g., ransomware), malicious code, misconfigurations, “bugs” or other vulnerabilities, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists.

Despite the implementation of security measures, our information technology and other internal computer systems and those of our current and any future CROs and other contractors, consultants and collaborators are vulnerable to damage from cyberattacks, “phishing” attacks, computer viruses and malware (e.g., ransomware), malicious code, misconfigurations, “bugs” or other vulnerabilities, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists.

Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.

41 unchanged sentences

As regulators issue further guidance on personal data export mechanisms and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines.

If we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

If we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the

geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

Further, from January 1, 2021, we had to comply with the GDPR and the United Kingdom (“UK”) GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law, the latter regime having the ability to separately fine up to the greater of £17.5 million or 4% of global turnover.

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The cost of compliance with these laws, regulations and standards is high and is likely to increase in the future.

Any failure or perceived failure by us or our collaborators, service

providers and contractors to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing processing of personal information could result in negative publicity, diversion of management time and effort and proceedings against us by governmental entities or others.

Any failure or perceived failure by us or our collaborators, service providers and contractors to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing processing of personal information could result in negative publicity, diversion of management time and effort and proceedings against us by governmental entities or others.

In many jurisdictions, enforcement actions and consequences for noncompliance are rising.

15 unchanged sentences

If not utilized, certain of our federal and state NOL carryforwards will begin to expire in various years beginning in 2035.

As of December 31, 2025, we also had $11.1 million of federal research and development tax credit, $1.5 million of federal orphan drug credit, and $5.8 million of state research and development tax credit carryforwards available to offset future income taxes.

As of December 31, 2025, we also had $11.1 million of federal research and development tax credit, $1.5 million of federal orphan drug credit, and

$5.8 million of state research and development tax credit carryforwards available to offset future income taxes.

The federal research and development tax credits will begin to expire in 2036, if not utilized.

14 unchanged sentences

If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

Use of Proceeds from Registered Securities

Not applicable

Repurchases of Shares or of Company Equity Securities

Defaults Upon Senior Securities

Mine Safety Disclosures

Not applicable

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors