Contineum Therapeutics, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. CONTINEUM THERAPEUTICS, INC. INDEX TO THE FINANCIAL STATEMENTS Pages Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) F-2 Audited Financial Statements Balance Sheets F-3 Statements of Operations and Comprehensive Loss F-4 Statements of Convertible P referred Stock and Stockholders’ Equity (D eficit) F-5 Statements of Cash Flows F-6 Notes to Audited Financial Statements F-7 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Contineum Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Contineum Therapeutics, Inc. (the Company) as of December 31, 2025 and 2024, the related statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2020. San Diego, California March 5, 2026 F-2 Table of Contents CONTINEUM THERAPEUTICS, INC. BALANCE SHEETS (in thousands, except share and par value data) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 75,603 $ 21,943 Marketable securities 187,293 182,817 Prepaid expenses and other current assets 5,021 1,628 Total current assets 267,917 206,388 Property and equipment, net 830 989 Other long-term assets 256 3 Operating lease right-of-use assets 7,639 5,467 Total assets $ 276,642 $ 212,847 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 1,016 $ 1,811 Accrued expenses 6,387 6,711 Current portion of operating lease liabilities 2,341 1,452 Total current liabilities 9,744 9,974 Operating lease liabilities, net of current portion 5,909 4,807 Total liabilities 15,653 14,781 Commitments and contingencies (Note 10) Stockholders’ equity: Class A common stock, $ 0.001 par value; authorized shares— 200,000,000 at December 31, 2025 and December 31, 2024; issued and outstanding shares— 31,236,787 and 19,125,377 at December 31, 2025 and December 31, 2024, respectively 31 19 Class B common stock, $ 0.001 par value; authorized shares— 20,000,000 at December 31, 2025 and December 31, 2024; issued and outstanding shares— 6,083,338 at December 31, 2025; issued and outstanding shares— 6,729,172 at December 31, 2024 6 7 Preferred stock, $ 0.001 par value; authorized shares— 10,000,000 at December 31, 2025 and December 31, 2024; no shares issued or outstanding at December 31, 2025 or December 31, 2024 — — Additional paid-in-capital 438,072 315,371 Accumulated deficit ( 177,380 ) ( 117,402 ) Accumulated other comprehensive income 260 71 Total stockholders’ equity 260,989 198,066 Total liabilities and stockholders’ equity $ 276,642 $ 212,847 The accompanying notes are an integral part of these financial statements. F-3 Table of Contents CONTINEUM THERAPEUTICS, INC. STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share data) Years Ended December 31, 2025 2024 Operating expenses: Research and development $ 51,522 $ 38,422 General and administrative 16,537 12,472 Total operating expenses 68,059 50,894 Loss from operations ( 68,059 ) ( 50,894 ) Other income (expense): Interest income 8,246 8,905 Change in fair value of warrant liability — ( 106 ) Other expense, net ( 165 ) ( 163 ) Total other income, net 8,081 8,636 Net loss $ ( 59,978 ) $ ( 42,258 ) Other comprehensive income (loss): Unrealized gain (loss) on marketable securities 189 ( 37 ) Comprehensive loss $ ( 59,789 ) $ ( 42,295 ) Net loss per share, basic and diluted (a) $ ( 2.17 ) $ ( 2.18 ) Weighted-average shares of common shares outstanding, basic and diluted 27,700,855 19,352,859 ______________________ (a) Basic and diluted per share amounts are the same for Class A and Class B shares. The accompanying notes are an integral part of these financial statements. F-4 Table of Contents CONTINEUM THERAPEUTICS, INC. STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS ’ EQUITY (DEFICIT) (in thousands, except share data) Convertible Preferred Stock Class A and Class B Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Equity (Deficit) Shares Amount Shares Amount Balance at December 31, 2023 15,906,236 $ 192,620 2,349,554 $ 2 $ 7,098 $ 108 $ ( 75,144 ) $ ( 67,936 ) Issuance of common stock in connection with initial public offering, net of issuance costs of $ 10,912 — — 7,423,682 7 107,860 — — 107,867 Conversion of convertible preferred stock to common stock upon initial public offering ( 15,906,236 ) ( 192,620 ) 15,906,236 17 192,603 — — 192,620 Reclassification of warrant from liability to equity — — — — 216 — — 216 Shares purchased through employee stock purchase plan — — 17,996 — 385 — — 385 Exercise of stock options — — 157,081 — 405 — — 405 Stock-based compensation — — — — 6,804 6,804 Net loss — — — — — — ( 42,258 ) ( 42,258 ) Unrealized loss on marketable securities — — — — — ( 37 ) — ( 37 ) Balance at December 31, 2024 — $ — 25,854,549 $ 26 $ 315,371 $ 71 $ ( 117,402 ) $ 198,066 Issuance of common stock in follow-on public offering, net of issuance costs of $ 6,219 — — 8,097,570 8 92,968 — — 92,976 Issuance of common stock in at-the-market offering, net of issuance costs — — 3,241,110 3 19,009 — — 19,012 Exercise of stock options — — 42,653 — 219 — — 219 Shares purchased through employee stock purchase plan — — 84,243 — 467 — — 467 Stock-based compensation — — — — 10,038 — — 10,038 Net loss — — — — ( 59,978 ) ( 59,978 ) Unrealized gain on marketable securities — — — — — 189 — 189 Balance at December 31, 2025 — $ — 37,320,125 $ 37 $ 438,072 $ 260 $ ( 177,380 ) $ 260,989 The accompanying notes are an integral part of these financial statements. F-5 Table of Contents CONTINEUM THERAPEUTICS, INC. STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2025 2024 Operating activities Net loss $ ( 59,978 ) $ ( 42,258 ) Adjustments to reconcile net loss to cash used in operating activities: Depreciation and amortization 323 258 Non-cash operating lease expense 1,080 872 Stock-based compensation 10,038 6,804 Accretion of premiums/discounts on marketable securities, net ( 791 ) ( 3,940 ) Loss (gain) on sale of property and equipment 67 ( 16 ) Change in fair value of warrant liability — 106 Gain on marketable securities ( 12 ) ( 5 ) Changes in operating assets and liabilities Prepaid expenses and other current assets ( 3,396 ) 887 Other long-term assets 3 937 Accounts payable ( 869 ) 1,141 Accrued expenses ( 516 ) 2,303 Operating lease liabilities ( 1,261 ) 66 Net cash used in operating activities ( 55,312 ) ( 32,845 ) Investing activities Purchase of property and equipment ( 231 ) ( 514 ) Proceeds from sale of equipment — 20 Purchases of marketable securities ( 162,502 ) ( 226,407 ) Sales and maturities of marketable securities 159,020 157,162 Net cash used in investing activities ( 3,713 ) ( 69,739 ) Financing activities Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other offering costs — 108,211 Payments of deferred offering costs ( 256 ) — Proceeds from issuance of common stock in at-the-market offering, net of offering costs 19,012 — Proceeds from issuance of common stock in follow-on public offering, net of offering costs 93,243 — Proceeds from exercise of stock options 219 405 Proceeds from employee stock purchase plan 467 385 Net cash provided by financing activities 112,685 109,001 Net increase in cash and cash equivalents 53,660 6,417 Cash and cash equivalents at beginning of year 21,943 15,526 Cash and cash equivalents at end of year $ 75,603 $ 21,943 Supplemental disclosure of non-cash investing and financing activities Property and equipment purchases included in accounts payable $ — $ 58 Conversion of convertible preferred stock to common stock upon initial public offering $ — $ 192,620 Reclassification of warrants from liability to equity $ — $ 216 Reclassification of deferred offering costs paid in prior year to equity $ — $ 343 Right-of-use assets obtained in exchange for lease liabilities $ 3,252 $ 5,620 The accompanying notes are an integral part of these financial statements. F-6 Table of Contents NOTES TO AUDITED FINANCIAL STATEMENTS 1. Organization and Basis of Presentation Organization and Nature of Operations Contineum Therapeutics, Inc. (the “Company”), is a clinical-stage biopharmaceutical company pioneering differentiated therapies for the treatment of neuroscience, inflammation and immunology (“NI&I”) indications with significant unmet need. The Company was incorporated in the state of Delaware in 2009, and in November 2023 changed its name from Pipeline Therapeutics, Inc. to Contineum Therapeutics, Inc. Reverse Stock Split On April 1, 2024, the Company filed an amendment to its fourth amended and restated certificate of incorporation as amended and effected a 1-for-5.5972 reverse stock split of its capital stock. All share and per-share amounts presented in the financial statements and related notes have been retroactively adjusted to reflect the reverse stock split as of the beginning of the first period presented. Initial Public Offering On April 9, 2024, the Company closed its IPO, pursuant to which it issued and sold an aggregate of 6,875,000 shares of its common stock at a public offering price of $ 16.00 per share and on April 19, 2024, the Company issued and sold 548,682 additional shares of its common stock to the underwriters of the IPO pursuant to the partial exercise of their option to purchase additional shares, resulting in net proceeds of approximately $ 107.9 million, after deducting underwriting discounts, commissions and other offering expenses. Upon the closing of the IPO, the Company’s outstanding convertible preferred stock automatically converted into Class A common stock or Class B common stock, as applicable. Converted convertible preferred stock outstanding as of the date of the IPO consisted of 15,906,236 shares that were outstanding immediately prior to the closing of the IPO. Following the closing of the IPO, no shares of convertible preferred stock were authorized or outstanding. In connection with the closing of the IPO, on April 9, 2024, the Company’s certificate of incorporation was amended and restated to (i) authorize 220,000,000 shares of common stock of which 200,000,000 are designated as Class A common stock and 20,000,000 of which are designated as Class B common stock; (ii) eliminate all references to the previously existing series of preferred stock; and (iii) authorize 10,000,000 shares of undesignated preferred stock that may be issued from time to time by the Company’s board of directors in one or more series. Liquidity and Capital Resources Since its inception, the Company has devoted substantially all its resources to research and development activities, business planning, establishing and maintaining its intellectual property portfolio, hiring personnel, raising capital to support and expand such activities and providing general and administrative support for these operations. The Company incurred a net loss of $ 60.0 million for the year ended December 31, 2025. The Company had an accumulated deficit of $ 177.4 million as of December 31, 2025. From its inception through December 31, 2025, the Company has financed its operations primarily from the sale of equity securities and convertible equity securities, and a global license and development agreement (the “J&J License Agreement”) the Company entered in February 2023 with Janssen Pharmaceutica NV, a Johnson & Johnson company. We received net proceeds of approximately $ 107.9 million in April 2024 from the Company's IPO. In May 2025, we entered into the Sales Agreement with Leerink Partners LLC (the “ATM Sales Agreement”) relating to the offer and sale of up to $ 75.0 million in shares of our Class A common stock, par value $ 0.001 per share (the “Shares”) in an “at-the-market” offering program (the “ATM Program”). During the year ended December 31, 2025, we sold 3,241,110 shares of our Class A common stock pursuant to the ATM Sales Agreement. The shares of Class A common stock were sold at a weighted average price of $ 6.04 per share, resulting in gross proceeds of $ 19.6 million. The Company raised $ 19.0 million in net proceeds after deducting sales agent commissions and offering costs of $ 0.6 million. As of December 31, 2025, the Company had $ 55.4 million of capacity remaining under the ATM Sales Agreement. In December 2025, we completed a follow-on public offering in which 8,097,570 shares of our Class A common stock, which included 750,632 shares of our Class A common stock sold pursuant to the partial exercise of the underwriters’ option to purchase additional shares, were sold at a public offering price of $ 12.25 per share resulting in aggregate gross proceeds of $ 99.2 million. We raised $ 93.0 million in net proceeds after deducting underwriting discounts, commissions, and offering expenses of $ 6.2 million. F-7 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued As of December 31, 2025, the Company had cash, cash equivalents and marketable securities of $ 262.9 million. Management believes the Company’s existing cash, cash equivalents, and marketable securities will be sufficient to support its operations for at least 12 months from the date of this Annual Report on Form 10-K. As the Company continues to pursue its business plan, it expects to finance its operations through both public and private sales of equity, debt financings or other commercial arrangements, which could include income from collaborations, strategic partnerships or marketing, distribution, licensing or other strategic arrangements with third parties. However, there can be no assurance that any additional financing or strategic transactions will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it may need to delay, reduce or eliminate its product development or future commercialization efforts, which could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows. Further, if the Company raises funds through licensing or other similar arrangements with third parties, it may be required to relinquish valuable rights to its technology, future revenue streams, research programs or drug candidates or may be required to grant licenses on terms that may not be favorable to it and/or may reduce the value of its common stock. 2. Summary of Significant Accounting Policies Basis of Presentation The Company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) . Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes. Accounting estimates and management judgments reflected in the financial statements include: the accrual of research and development expenses; the incremental borrowing rate used to recognize the right-of-use assets and lease liabilities; and stock-based compensation. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may materially differ from these estimates and assumptions. Concentration of Credit Risk Financial instruments which potentially subject the Company to significant concentration of credit risk consist of cash, cash equivalents and marketable securities. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts, and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. However, to the extent the Company holds cash deposits in amounts that exceed the FDIC insurance limitation, it may incur a loss in the event of a failure of any of the financial institutions where it maintains deposits. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Fair Value of Financial Instruments The accounting guidance defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents primarily represent funds invested in readily available money market F-8 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued accounts and short-term securities. As of December 31, 2025 and 2024, the Company had cash and cash equivalents balances deposited at major financial institutions. Marketable Securities The Company classifies all marketable debt securities as available for sale, as the sale of such securities may be required prior to maturity. These marketable securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive loss until realized. The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion, as well as interest and dividends, are included in interest income. Realized gains and losses from the sale of available for sale securities, if any, are determined on a specific identification basis and are also included in interest income. The Company’s marketable securities are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date, which reflects management’s ability and intent to use the proceeds from sales of these securities to fund its operations, as necessary. Property and Equipment, Net Property and equipment, which consist of leasehold improvements, furniture and fixtures, lab equipment, and computer equipment and software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, which ranges from two to five years . Leasehold improvements are amortized over the shorter of the estimated useful life of the asset and the remaining life of the lease for leasehold improvements at the time the asset is placed into service. Leases The Company applies Accounting Standards Codification (“ASC”) 842, Leases, which requires the Company to determine if a contract contains a lease at the inception of the contract and evaluate each lease agreement to determine whether the lease is an operating or finance lease. For leases where the Company is the lessee, right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Liabilities from operating leases are included in current portion of operating lease liabilities, and operating lease liabilities, net of current portion on the accompanying balance sheets (see Note 10 for a summary of the Company’s right-of-use-assets and lease liabilities as of December 31, 2025). The Company does not have any financing leases. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not have material short-term lease costs. Lease liabilities are measured at the present value of the remaining lease payments discounted using the discount rate for the lease established at the lease commencement date. To determine the present value, the implicit rate is used when readily determinable. For those leases where the implicit rate is not provided, the Company determines an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. ROU assets are measured at the present value of the lease payments and also include any prepaid lease payments made and any other indirect costs incurred, and reduced by any lease incentives received. Lease terms may include the impact of options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company’s operating leases are subject to additional variable charges, including common area maintenance, property taxes, property insurance and other variable costs. Variable lease costs are experienced in the period incurred. The Company has elected the practical expedient to account for the lease and non-lease components, such as common area maintenance charges, as a single lease component for the Company’s facilities leases. The Company has elected to account for lease and non-lease components separately, for the Company’s equipment leases. Revenue Recognition The Company currently has no product revenue. The Company generates revenues from the J&J License Agreement, in which the Company transferred to J&J the worldwide rights to develop, manufacture, and commercialize products containing PIPE-307. Revenue for the J&J License Agreement is recognized in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services. The steps for recognizing revenue consist of: (1) identifying the contract; (2) identifying the distinct performance obligations; (3) determining the transaction price for which the Company F-9 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued expects to be entitled in exchange for the goods and services; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when or as the performance obligations are satisfied. The Company allocates fixed and variable consideration based on relative standalone selling prices, unless an allocation exception for variable consideration is met. The allocated transaction price is recognized when (or as) each respective performance obligation is satisfied. For performance obligations that are satisfied at a point in time, the Company evaluates the indicators of control in ASC 606 to determine the point in time upon which control is transferred and therefore the performance obligation is satisfied. For performance obligations that are satisfied over time, the Company uses a measure of progress that best reflects the Company’s effort in satisfying the respective performance obligation to recognize revenue. The measure of progress is subject to estimates by management and may change over the course of the agreement. A contract modification is a change in the scope or price (or both) of a contract that is approved by the parties to the contract. A contract modification exists when the rights and obligations that are created or changed by a modification are enforceable. The Company accounts for a contract modification as a separate contract when the scope of the contract increases, and the price of the contract increases by an amount that reflects the standalone selling prices of the additional promised goods or services that are distinct. If a contract modification is not accounted for as a separate contract, the Company’s accounting of the contract modification depends on whether the remaining goods or services are distinct from those already provided on or before the date of the contract modification. If the remaining goods or services are distinct from those already provided, the Company accounts for the contract modification as a termination of the existing contract and creation of a new contract. The amount of the consideration to be allocated to the remaining performance obligations consists of the consideration promised by the customer that was included in the estimate of the transaction price for the existing contract and that had not been recognized as revenues and the consideration promised as part of the contract modification. If the remaining goods or services are not distinct from those already provided, the Company accounts for the contract modification as if it were part of the existing contract and accounts for the effect that the contract modification has on the transaction price, and on the measure of progress toward complete satisfaction of the performance obligation, as a cumulative catch-up adjustment at the date of the contract modification. Contractual Terms for Receipt of Payments The contractual terms that establish the Company’s right to collect specified amounts from its customers and that require contemporaneous evaluation and documentation under U.S. GAAP for the corresponding timing and amount of revenue recognition, are as follows: (1) Upfront License Fees: The Company allocates non-refundable license fee consideration to the distinct performance obligations identified in the contract on a relative standalone selling price basis and recognizes those amounts when or as each performance obligation is satisfied. Non-refundable license fee consideration that is allocated to a distinct license of functional intellectual property is recognized at the point in time upon which control of the license transfers to the customer and not before the customer has both access and the is able to use and benefit from the license. (2) Development Milestones: The Company utilizes the most likely amount method to estimate the amount of consideration to which it will be entitled for achievement of the development milestones as these represent variable consideration. Variable consideration is included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For those payments based on development milestones (e.g., patient dosing in a clinical trial or the achievement of statistically significant clinical results), the Company assesses the probability that the milestone will be achieved, including its ability to control the timing or likelihood of achievement, and any associated revenue constraint. Given the high degree of uncertainty around the occurrence of these events, the Company determines the milestone and other contingent amounts to be constrained until it becomes probable that a significant reversal in the amount of cumulative revenue will not occur. At each reporting period, the Company re-evaluates this associated revenue recognition constraint. Any resulting adjustments are recorded to revenue on a cumulative catch-up basis and reflected in the financial statements in the period of adjustment. (3) Regulatory Milestones: The Company utilizes the most likely amount method to estimate the consideration to which it will be entitled for achievement of the regulatory milestones as these represent variable consideration. Variable consideration is included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company recognizes regulatory milestones in the period in which it becomes F-10 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued probable that a significant reversal in the amount of cumulative revenue will not occur (the regulatory milestone is no longer constrained). Due to the inherent uncertainty of achieving regulatory approval, associated milestones are deemed constrained for revenue recognition until achievement. At each reporting period, the Company re-evaluates this associated revenue recognition constraint. Any resulting adjustments are recorded to revenue on a cumulative catch-up basis and reflected in the financial statements in the period of adjustment. (4) Royalties: Under the sales-or-usage-based royalty exception the Company recognizes revenue based on the contractual percentage of the licensee’s sale of products to its customers at the later of (i) the occurrence of the related product sales or (ii) the date upon which the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. (5) Sales Threshold Milestones: Similar to royalties, applying the sales-or-usage-based royalty exception, the Company recognizes revenue from sales threshold milestones at the later of (i) the period the licensee achieves the one-time annual product sales levels in their territories for which the Company is contractually entitled to a specified lump-sum receipt, or (ii) the date upon which the performance obligation to which some or all of the milestone has been allocated has been satisfied or partially satisfied. Impairment of Property and Equipment The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted-cash-flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. The Company did not recognize impairment losses for the years ended December 31, 2025 and 2024. Research and Development Research and development expenses consist primarily of direct and indirect costs incurred in connection with the Company’s discovery efforts, and the preclinical and formulation development of its drug candidates. In the future, the Company expects a substantial portion of its research and development expenses will relate to the clinical development of its drug candidates. Direct costs include contracted research development and manufacturing, consulting fees, license fees, laboratory supplies and other expenses incurred to sustain research and development programs. Indirect costs include salaries, benefits, travel, stock-based compensation charges for those individuals involved in research and development efforts, and associated overhead expenses. Research and development costs are expensed as incurred. Accrued Research and Development Expense The Company is required to estimate its expenses resulting from its obligations under contracts with vendors, consultants, and contract research organizations, in connection with conducting research and development activities. The Company reflects research and development expenses in its financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the activity as measured by the timing of various aspects of the study or related activities. The Company determines accrual estimates through review of the underlying contracts along with preparation of financial models taking into account discussions with research and other key personnel as to the progress of studies, or other services being conducted. During the course of an activity, the Company adjusts its rate of expense recognition if actual results differ from its estimate. Nonrefundable advance payments for goods and services, including fees for process development or manufacturing and distribution of clinical supplies that will be used in future research and development activities, are deferred and recognized as expense in the period that the related services are performed. Patent Costs The Company expenses all costs as incurred in connection with patent applications (including direct application fees, and the legal and consulting expenses related to making such applications) and such costs are included in general and administrative expenses in the statement of operations and comprehensive loss. F-11 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued Stock-Based Compensation Stock-based compensation represents the cost of the grant date fair value of employee, officer, director and non-employee stock option grants, recognized on a straight-line basis over the vesting period. The vesting period generally approximates the expected service period of the awards. The Company recognizes forfeitures as they occur. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. This method requires certain assumptions be used as inputs, such as the fair value of the underlying common stock, expected term of the option before exercise, expected volatility of the Company’s common stock, risk-free interest rate and expected dividend yield. Options granted have a maximum contractual term of ten years . The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted using the simplified method, which represents the arithmetic average of the original contractual term of the stock option and its weighted-average vesting term. The expected volatility of stock options is based upon the historical volatility of a number of publicly traded companies in similar stages of clinical development. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. The risk-free interest rates used are based on the U.S. Treasury yield in effect at the time of grant for zero-coupon U.S. treasury notes with maturities approximately equal to the expected term of the stock options. The Company has historically not declared or paid any dividends and does not currently expect to do so in the foreseeable future, and therefore has estimated the dividend yield to be zero . Commitments and Contingencies The Company recognizes a liability with regards to loss contingencies when it believes it is probable a liability has been incurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The Company has not recorded any such liabilities as of December 31, 2025 and 2024. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision- making group (“CODM”). The Company has identified its President and Chief Executive Officer, Carmine Stengone, as the CODM who is responsible for making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as one operating segment. The Company’s long-lived assets consist primarily of property and equipment, net, which are all held in the United States. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of December 31, 2025 and 2024, the Company maintained valuation allowances against its deferred tax assets as the Company concluded it had not met the “more likely than not” to be realized threshold. Changes in the valuation allowance, when they are recognized in the provision for income taxes, may result in a change in the estimated annual effective tax rate. F-12 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. As of and for the years ended December 31, 2025 and 2024, the Company had no accrued interest or penalties related to unrecognized tax benefits. Net Loss Per Share Basic net loss per share allocable to common stockholders is presented in conformity with the two-class method required for participating securities. All classes of outstanding preferred stock are considered participating securities as, in the event a dividend is paid on common stock, the holders of preferred stock would be entitled to receive dividends as the higher of their dividend preference or the amount they would receive if the shares were converted to common stock immediately prior to the dividend. The two-class method determines net income per share for each class of common and participating securities according to dividends declared or accumulated as well as participation rights in undistributed earnings. The two-class method requires income available to stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Under the two-class method, any net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in losses. Basic net loss is calculated by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Potentially issuable common shares are not used in computing diluted net loss per ordinary share as their effect would be anti-dilutive due to the loss recorded during the years ended December 31, 2025 and 2024, and therefore diluted net loss per share is equal to basic net loss per share. Recently Adopted Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to improve its income tax disclosure requirements. Under the guidance, entities must annually (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The Company has adopted the ASU in their financials ended December 31, 2025. Other than the respective disclosures, the ASU did not have an impact to the Company’s Financial Statements. See Note 8 - Income Taxes for further information. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). This standard requires a public entity to disaggregate certain income statement expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its financial statements. In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). This standard clarifies the applicability of interim reporting guidance under U.S. GAAP, provides a comprehensive list of interim disclosure requirements within Topic 270, and introduces a disclosure principle requiring entities to provide information about events and changes occurring after the end of the most recent annual reporting period that have a material impact on the entity. The ASU does not change the fundamental nature of interim reporting or expand or reduce existing interim disclosure requirements. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 for public business entities, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its interim financial reporting and related disclosures. In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements (“ASU 2025-12”). This standard addresses suggestions received from stakeholders regarding the ASC and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. ASU 2025-12 is effective for annual F-13 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued reporting periods beginning after December 15, 2026, and interim periods within those annual periods, with early adoption permitted. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its financial statements and related disclosures. 3. Marketable Securities The Company invests its excess cash in marketable securities, including debt securities, commercial paper, asset-backed securities, yankee debt, certificate of deposit, and U.S. Government agency securities. The following table summarizes the amortized cost and fair value of the Company’s marketable securities by major investment category (in thousands): December 31, 2025 Unrealized Maturity in Years Amortized Cost Gains Losses Fair Value U.S. Government agency securities 2 years or less $ 41,238 $ 136 $ ( 1 ) $ 41,373 Certificate of deposit Less than 1 3,009 4 — 3,013 Corporate debt securities 2 years or less 81,614 84 — 81,698 Commercial paper Less than 1 48,448 7 ( 2 ) 48,453 Yankee debt Less than 1 4,463 2 — 4,465 Asset-backed securities 3 years or less 8,261 30 — 8,291 Total $ 187,033 $ 263 $ ( 3 ) $ 187,293 December 31, 2024 Unrealized Maturity in Years Amortized Cost Gains Losses Fair Value U.S. Government agency securities 3 years or less $ 57,232 $ 57 $ ( 134 ) $ 57,155 Certificate of deposit Less than 1 8,519 6 ( 1 ) 8,524 Corporate debt securities 2 years or less 80,751 110 ( 39 ) 80,822 Commercial paper Less than 1 22,265 11 ( 1 ) 22,275 Yankee debt Less than 1 2,145 1 — 2,146 Asset-backed securities 2 years or less 11,834 61 — 11,895 Total $ 182,746 $ 246 $ ( 175 ) $ 182,817 The Company regularly reviews the securities in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, current and expected future economic conditions. The Company has no requirement or intention to sell these securities before maturity or recovery of their amortized cost basis. As of December 31, 2025 and December 31, 2024, the Company did not record an allowance for credit loss related to its investment portfolio. As of December 31, 2025, 7 out of 225 of our available-for-sale debt securities were in an aggregate gross unrealized loss position. As of December 31, 2024, 86 out of 252 of our available-for-sale debt securities were in an aggregate gross unrealized loss position. As of December 31, 2025 and 2024, all of our available-for-sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded had been in a continuous unrealized loss position for less than 12 months. F-14 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued The following tables summarize our available-for-sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by major security type (in thousands): December 31, 2025 Fair Value Unrealized Losses U.S. Government agency securities $ 1,771 $ ( 1 ) Commercial paper 25,104 ( 2 ) Total $ 26,875 $ ( 3 ) December 31, 2024 Fair Value Unrealized Losses U.S. Government agency securities $ 30,155 $ ( 134 ) Certificate of deposit 3,722 ( 1 ) Corporate debt securities 22,528 ( 39 ) Commercial paper 4,556 ( 1 ) Total $ 60,961 $ ( 175 ) 4. Fair Value Measurements The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 —Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 —Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 —Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). F-15 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued Assets and liabilities measured at fair value on a recurring basis are as follows (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2025: Assets: Cash equivalents $ 75,051 $ 75,051 $ — $ — U.S. Government agency securities 41,373 41,373 — — Certificates of deposit 3,013 — 3,013 — Corporate debt securities 81,698 — 81,698 — Commercial paper 48,453 — 48,453 — Yankee debt 4,465 — 4,465 — Asset-backed securities 8,291 — 8,291 — Total financial assets $ 262,344 $ 116,424 $ 145,920 $ — December 31, 2024: Assets: Cash equivalents $ 21,042 $ 21,042 $ — $ — U.S. Government agency securities 57,155 57,155 — — Certificates of deposits 8,524 — 8,524 — Corporate debt securities 80,822 — 80,822 — Commercial paper 22,275 — 22,275 — Yankee Debt 2,146 — 2,146 — Asset-backed securities 11,895 — 11,895 — Total financial assets $ 203,859 $ 78,197 $ 125,662 $ — The carrying amounts of the Company’s financial instruments, including cash, cash equivalents, prepaid and other current assets, accounts payable, and accrued liabilities, approximate fair value due to their short maturities. Included in cash and cash equivalents at December 31, 2025 and 2024 are money market funds with a carrying value and fair value of $ 6.5 million and $ 3.9 million, respectively, based upon a Level 1 fair value assessment. 5. Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2025 2024 Lab equipment $ 2,315 $ 2,244 Leasehold improvements 177 175 Computer equipment and software 103 124 Furniture and fixtures 198 163 Property and equipment at cost 2,793 2,706 Less: accumulated depreciation and amortization ( 1,963 ) ( 1,717 ) Total property and equipment, net $ 830 $ 989 F-16 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued The Company recognized $ 0.3 million in depreciation and amortization expense for the years ended December 31, 2025 and 2024. 6. Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, 2025 2024 Accrued compensation expenses $ 4,796 $ 3,338 Accrued research and development expenses 1,195 3,151 Accrued professional and consulting expenses 342 98 Other accrued expenses 54 124 Total accrued expenses $ 6,387 $ 6,711 7. Stockholders ’ Equity Common Stock The Company has two classes of common stock: Class A common stock and Class B common stock. Class A common stock has one vote per share and Class B common stock has no votes per share. The following table summarizes the changes in Class A common stock and Class B common stock for the year ended December 31, 2025 (in shares): Common Stock Class A Class B Balance at Balance at December 31, 2024 19,125,377 6,729,172 Exercise of stock options 42,653 — Shares purchased through employee stock purchase plan 84,243 — Issuance of common stock in at-the-market offering 3,241,110 — Conversion of Class B common stock into Class A common stock 645,834 ( 645,834 ) Issuance of common stock in follow-on public offering 8,097,570 — Balance at Balance at December 31, 2025 31,236,787 6,083,338 The following table summarizes the changes in Class A common stock and Class B common stock for the year ended December 31, 2024 (in shares): Common Stock Class A Class B Balance at December 31, 2023 2,349,554 — Exercise of stock options 157,081 — Issuance of common stock in connection with initial public offering 7,423,682 — Conversion of convertible preferred stock to common stock upon initial public offering 9,177,064 6,729,172 Shares purchased through employee stock purchase plan 17,996 — Balance at December 31, 2024 19,125,377 6,729,172 F-17 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued Class A common stock reserved for future issuance consisted of the following: December 31, 2025 2024 Common stock options granted and outstanding 5,548,320 4,045,500 Shares available for issuance under the 2024 Equity Incentive Plan 1,707,563 1,674,309 Common stock warrant 15,764 15,764 Common stock reserved under the 2024 Employee Stock Purchase Plan 436,306 262,004 Total common stock reserved for future issuance 7,707,953 5,997,577 There are no shares of Class B common stock reserved for future issuance as of December 31, 2025 and December 31, 2024 . Follow-On Public Offerings In December 2025, we completed a follow-on public offering in which 8,097,570 shares of our Class A common stock, which included 750,632 shares of our Class A common stock sold pursuant to the partial exercise of the underwriters’ option to purchase additional shares, were sold at a public offering price of $ 12.25 per share resulting in aggregate gross proceeds of $ 99.2 million. We raised $ 93.0 million in net proceeds after deducting underwriting discounts, commissions, and offering expenses of $ 6.2 million. ATM Sales Agreement In May 2025, we entered into the ATM Sales Agreement relating to the offer and sale of up to $ 75.0 million in shares of our Class A common stock, par value $ 0.001 per share in an ATM Program. During the year ended December 31, 2025, we sold 3,241,110 shares of our Class A common stock pursuant to the ATM Sales Agreement. The shares of Class A common stock were sold at a weighted average price of $ 6.04 per share, resulting in gross proceeds of $ 19.6 million. The Company raised $ 19.0 million in net proceeds after deducting sales agent commissions and offering costs of $ 0.6 million. As of December 31, 2025, the Company had $ 55.4 million of capacity remaining under the ATM Sales Agreement. Stock Options In March 2024, the Company’s board of directors and its stockholders adopted and approved the 2024 Equity Incentive Plan (the “2024 Plan”). The 2024 Plan is the successor of the Company’s 2012 Equity Incentive Plan (the “2012 Plan”). However, awards outstanding under the 2012 Plan will continue to be governed by their existing terms. The 2024 Plan allowed for the issuance of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted shares, restricted stock units, and other stock awards to the Company’s employees, members of its board of directors, and consultants. The number of shares initially reserved for issuance under the 2024 Plan was 2,700,000 . The aggregate number of shares reserved for issuance under the 2024 Plan will automatically increase on the first day of each fiscal year of the Company, commencing in 2025 and ending in (and including) 2034, by a number equal to the lesser of (a) 5 % of the aggregate shares of Class A common stock and Class B common stock issued and outstanding as of the last day of the prior fiscal year, or (b) a number of shares of Class A common stock determined by the Company’s board of directors. As of December 31, 2025, there were 1,707,563 shares of the Company’s Class A common stock available for issuance under the 2024 Plan. Under the 2024 Plan, the exercise price for options granted under the 2024 Plan may not be less than 100 % of the fair market value of the Class A common stock on the grant date. Optionees will be permitted to pay the exercise price in cash or, with the consent of the compensation committee (i) with shares of common stock that the optionee already owns, (ii) by an immediate sale of shares through a broker approved by the Company, (iii) by instructing the Company to withhold a number of shares otherwise deliverable upon exercise having an aggregate fair market value that does not exceed the exercise price, or (iv) by other methods permitted by applicable law. The Company’s board of directors (or a committee thereof to which the Company’s board of directors has delegated authority) may amend or terminate the 2024 Plan at any time. If the Company’s board of directors amends the F-18 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued 2024 Plan, it does not need stockholder approval of the amendment unless required by applicable law, regulation or rules. The 2024 Plan will terminate automatically ten years after the date when the Company’s board of directors adopted the 2024 Plan. In April 2025, the Company granted inducement awards outside of the 2024 Plan to the Company’s Chief Medical Officer and Head of Development in the form of an option to purchase 286,000 shares of the Company’s Class A common stock with an exercise price per share equal to $ 4.50 . The option awards were granted as an inducement material to his commencement of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). These inducement awards are included in stock-based compensation and the following tables. Stock option activity is as follows: Options Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Balance at December 31, 2024 4,045,500 $ 9.91 7.52 $ 21,470 Options granted 1,600,542 8.07 — Options exercised ( 42,653 ) 5.13 — Options cancelled and forfeited ( 49,007 ) 5.16 — Options expired ( 6,062 ) 9.90 — Balance at December 31, 2025 5,548,320 $ 9.46 7.28 $ 18,235 Options vested and expected to vest as of December 31, 2025 5,548,320 $ 9.46 7.28 $ 18,235 Options exercisable as of December 31, 2025 3,026,507 $ 7.90 6.04 $ 13,872 The aggregate intrinsic value of options exercised during the years ended December 31, 2025 and 2024 was $ 0.3 million and $ 2.1 million, respectively, determined as of the date of exercise. Options exercisable include options which are not vested but are available to be early exercised. As of December 31, 2025, there were no options available to be early exercised. As of December 31, 2024, of the 2,114,772 options exercisable, 35,794 options were available to be early exercised. The Company estimated the fair value of stock options using the Black-Scholes valuation model. The Company accounts for any forfeitures of options when they occur. Previously recognized compensation expense for an award is reversed in the period that the award is forfeited. The fair value of stock options expected to vest was estimated using the following weighted-average assumptions: Years Ended December 31, 2025 2024 Assumptions: Expected term (in years) 5.95 6.03 Expected volatility 93.88 % 110.40 % Risk free interest rate 4.25 % 4.41 % Dividend yield — — The weighted-average grant-date fair value per share of stock options granted during the years ended December 31, 2025 and 2024 was $ 6.28 and $ 13.66 per share, respectively. Stock-based compensation Stock-based compensation has been reported in the statements of operations and comprehensive loss as follows (in thousands): F-19 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued Years Ended December 31, 2025 2024 Research and development $ 4,438 $ 2,846 General and administrative 5,600 3,958 Total $ 10,038 $ 6,804 As of December 31, 2025,there was approximately $ 20.5 million of total unrecognized stock-based compensation related to stock-based compensation arrangements, which is expected to be recognized over a weighted-average period of approximately 2.4 years. As of December 31, 2024, there was approximately $ 20.7 million of total unrecognized stock-based compensation related to nonvested stock-based compensation arrangements, which was expected to be recognized over a weighted-average period of approximately 2.9 years. Employee Stock Purchase Plan In March 2024, the Company's board of directors and its stockholders adopted and approved the 2024 Employee Stock Purchase Plan (the “2024 ESPP”). The 2024 ESPP became effective as of April 9, 2024. The purpose of the 2024 ESPP is to provide eligible employees with an opportunity to increase their interest in the success of the Company by purchasing shares of Class A common stock from the Company on favorable terms and to pay for such purchases through payroll deductions or other approved contributions. The new payroll deduction rate may be any whole percentage of the participant’s compensation, but not less than 1 % nor more than 15 %. The number of shares initially reserved for issuance under the 2024 ESPP was 280,000 . As of December 31, 2025, there were 436,306 shares of the Company’s common stock reserved and available for issuance under the 2024 ESPP. The number of shares reserved for issuance under the 2024 ESPP will automatically increase on the first day of each fiscal year of the Company, commencing in 2025 and ending in (and including) 2044, by a number equal to the lesser of (i) 280,000 shares, (ii) 1 % of the aggregate shares of Class A common stock and Class B common stock issued and outstanding on the last day of the prior fiscal year, or (iii) a number of shares determined by the Company's board of directors. The number of shares reserved under the 2024 ESPP will automatically be adjusted in the event of a stock split, stock dividend or a reverse stock split (including an adjustment to the per-purchase period share limit). During the year ended December 31, 2025, there were 84,243 shares purchased under the 2024 ESPP and the Company recorded expense of $ 0.2 million. F-20 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued 8. Income Taxes For financial reporting purposes, income before income taxes includes the following components (in thousands) for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 United States $ ( 60,143 ) $ ( 42,258 ) Foreign — — Income/(loss) before income taxes $ ( 60,143 ) $ ( 42,258 ) The following is a reconciliation of the federal statutory income tax rate and the Company’s effective income tax rate for the years ended December 31, 2025 and 2024 is as follows (in thousands): Years Ended December 31, 2025 Federal statutory income tax rate $ ( 12,630 ) 21.0 % State income taxes, net of federal benefit (1) 1 — % Foreign tax effects — — % Tax credits Other ( 1,096 ) 1.8 % Change in valuation allowance 11,940 ( 19.9 ) % Changes in unrecognized tax benefits — — % Nontaxable or nondeductible items 162m Limitation 655 ( 1.1 ) % Other 422 ( 0.7 ) % Other Other 708 ( 1.2 ) % Total $ — — % (1) In 2025, state taxes in California made up the majority (greater than 50 percent) of the tax effect in this category. Years Ended December 31, 2024 Expected tax benefit at statutory rate $ ( 8,885 ) 21.0 % State income tax, net of federal benefit 1 — % Permanent differences 1,018 ( 2.4 ) % Research credits ( 2,149 ) 5.1 % Change in valuation allowance 10,015 ( 23.7 ) % $ — — % F-21 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 are as follows: Years Ended December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 33,123 $ 14,478 Research and development credit carryforwards 9,091 6,618 Capitalized research and development 2,762 12,699 Lease liabilities 1,733 1,314 Stock-based compensation 2,181 1,121 Other, net 808 608 Total deferred tax assets 49,698 36,838 Valuation allowance ( 47,960 ) ( 35,548 ) Deferred tax assets, net of valuation allowance 1,738 1,290 Deferred tax liabilities: Property and equipment ( 134 ) ( 142 ) Right-of-use assets ( 1,604 ) ( 1,148 ) Total deferred tax liabilities ( 1,738 ) ( 1,290 ) Net deferred tax assets/(liabilities) $ — $ — The Company has established a valuation allowance against its net deferred tax assets due to the uncertainty surrounding the realization of such assets. The Company periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred tax assets will be realizable, the valuation allowance will be reduced. The Company has recorded a full valuation allowance of $ 48.0 million and $ 35.5 million as of December 31, 2025 and 2024, respectively, as it does not believe it is more likely than not that certain deferred tax assets will be realized primarily due to the generation of pre-tax book losses, no ability to carryback losses, the lack of feasible tax-planning strategies, the limited existing taxable temporary differences, and the subjective nature of forecasting future taxable income into the future. At December 31, 2025, the Company had federal and California tax loss carry forwards of approximately $ 135.5 million and $ 81.4 million, respectively. Out of the total federal net operating losses, approximately $ 135.5 million were generated after December 31, 2017, and therefore do not expire. Net operating losses generated after December 31, 2017, are subject to a limitation of 80% of taxable income in accordance with the Tax Cuts and Jobs Act of 2017. The remaining federal and state net operating loss carry forwards begin to expire in 2037 and 2036, respectively, if unused. At December 31, 2025, the Company had federal and state research and development tax credit carryforwards of approximately $ 8.1 and $ 4.0 million, respectively. The Company has not performed a formal research and development credit study with respect to these credits. The federal credits will begin to expire in 2032, if unused, and the state credits carry forward indefinitely. Pursuant to the IRC, as amended, specifically IRC §382 and IRC §383, the Company’s ability to use net operating loss and R&D tax credit carry forwards (“tax attribute carry forwards”) to offset future taxable income is limited if the Company experiences a cumulative change in ownership of more than 50% within a three-year testing period. The Company has completed an ownership change analysis pursuant to IRC Section 382 and identified that ownership changes occurred in July 2012, April 2018, March 2019 and February 2021. The Company’s deferred tax assets related to the tax attributes impacted have been adjusted through December 31, 2021 based on such analysis. As a result of limitations arising from the prior ownership changes, $ 0.5 million of federal and $ 3.7 million of California net operating loss carry-forwards were removed from the inventory of deferred tax assets. In addition, $ 0.2 million of federal R&D tax credits were removed as of December 31, 2022. If further ownership changes within the meaning of IRC Section 382 are identified as having occurred, the amount of remaining tax attribute carry-forwards available to offset future taxable income and income tax expense in future years may be significantly restricted or eliminated. Further, the Company’s deferred tax assets F-22 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued associated with such tax attributes could be significantly reduced upon realization of an ownership change within the meaning of IRC §382 . The following table summarizes the reconciliation of the unrecognized tax benefits activity during the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Unrecognized tax benefits—beginning $ 3,094 $ 2,574 Gross increases—tax positions in current period 470 525 Decreases related to prior year positions — ( 5 ) Unrecognized tax benefits—ending $ 3,564 $ 3,094 The unrecognized tax benefit amounts are reflected in the determination of the Company’s deferred tax assets. If recognized, none of these amounts would affect the Company’s effective tax rate, since it would be offset by an equal corresponding adjustment in the deferred tax asset valuation allowance. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on the Company’s balance sheets as of December 31, 2025 and 2024 and has not recognized interest and/or penalties in the statement of operations and comprehensive loss for the years ended December 31, 2025 and 2024. The Company is not currently under examination in for Federal or state jurisdictions. All of the Company’s tax years remain effectively open in all jurisdictions to examination due to net operating loss carryforwards. The following table lists the components of the payments for income taxes (in thousands): Years Ended December 31, 2025 2024 Federal $ — $ — State 1 1 Foreign — — Total net (refunds) payments $ 1 $ 1 9. License Agreement In February 2023, the Company entered into the J&J License Agreement, pursuant to which the Company granted J&J an exclusive, worldwide license to develop, manufacture and commercialize PIPE-307 in all indications. The J&J License Agreement allowed the Company to elect, at its sole discretion and cost, to conduct a Phase 2 trial of PIPE-307 for patients with multiple sclerosis which the Company completed during the year ended December 31, 2025. With the completion of this trial, J&J may, at its sole discretion, further develop PIPE-307 for patients with multiple sclerosis. Additionally, upon J&J deciding to conduct a first Phase 3 clinical trial for a product using PIPE-307, the J&J License Agreement allows the Company the option to co-fund a portion of all Phase 3 and subsequent development costs for PIPE-307, with such costs capped annually. If the Company opts to fund such development costs, then the royalties the Company is eligible to receive will increase. Pursuant to the terms of the J&J License Agreement, the Company received an upfront, non-refundable and non-creditable payment of $ 50.0 million upon transferring the license and know-how, existing inventory and manufacturing technology. The Company is also eligible to receive approximately $ 1.0 billion in non-refundable, non-creditable milestone payments. Additionally, the Company is eligible to receive tiered royalties in the low-double digit to high-teen percent range on net sales of products containing PIPE-307. The Company concluded that J&J represented a customer and applied relevant guidance from ASC 606 to evaluate the appropriate accounting for the J&J License Agreement. The Company evaluated the J&J License Agreement and concluded that it had promises to transfer a license of functional intellectual property, know-how, existing inventory and manufacturing technology (each of which was determined to be a distinct performance obligation). Control of the promised F-23 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued goods was transferred to J&J in the second quarter of 2023, and the $ 50.0 million upfront payment was recognized in May 2023 upon satisfaction of the performance obligations. The remaining consideration consists of future contingent milestone-based payments and sales-based royalties. In August 2023, the Company elected to conduct a Phase 2 trial using PIPE-307 for patients with multiple sclerosis, which was considered a contract modification under the accounting guidance that added promised goods or services that are distinct at a price that is below the standalone selling price. Therefore, the Company accounted for the modification as a termination of the existing contract and creation of a new contract. Accordingly, the amount of consideration to be allocated to the remaining performance obligations consists of future contingent milestone-based payments and sales-based royalties, all of which were constrained. The only remaining performance obligation is the promise to conduct the Phase 2 trial, as the other performance obligations had been satisfied prior to the modification date. Accordingly, the variable consideration allocated to the Phase 2 trial will be recognized as the study is completed using a cost-based measure of progress and when the amounts are no longer probable of a significant reversal. As of December 31, 2025, the Company had completed the Phase 2 trial, and subsequently there were no remaining unsatisfied performance obligations from the J&J License Agreement. All variable consideration remained fully constrained as of December 31, 2025. 10. Commitments and Contingencies Operating Lease In October 2023, the Company executed a noncancelable operating lease for new premises to be used for office, research and development and laboratory purposes (“General Atomics Court Lease”), with the same landlord as the Science Center Drive Lease. The General Atomics Court Lease commenced for accounting purposes in October 2024 when the Company took control of the premises. The General Atomics Court Lease has a five-year term with an option to extend for another three-year period subject to certain conditions, which the Company is not reasonably certain to exercise and therefore was not considered in determining the ROU assets and lease liabilities balance. As a result of the new lease, the Company received rent abatement from January to October 2024 on the Science Center Drive Lease. This resulted in a modification of the Science Center Drive Lease and a remeasurement of the existing lease liability and the associated right-of-use asset in October 2023. As a result, $ 0.6 million from the payments of the new lease were allocated to the Science Center Drive Lease, based on a relative standalone selling price analysis. The Company’s operating lease ROU asset and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. Upon commencement of the new lease, in October 2024, the Company recorded an ROU asset and lease liability of approximately $ 5.6 million. This includes the $ 0.6 million allocation, which led to a corresponding decrease in the ROU asset value for the new lease. The lease agreement includes variable payments which are not included in the measurement of the ROU assets and lease liability. In August 2025, the Company signed an amendment to the General Atomics Court Lease for additional space ("General Atomics Court Lease Expansion"). The General Atomics Court Lease Expansion commenced for accounting purposes in October 2025. The General Atomics Court Lease Expansion expires in December 2027 with an option to extend through October 2029, which the Company is not reasonably certain to exercise and therefore was not considered in determining the ROU assets and lease liabilities balance. Upon commencement of the General Atomics Court Lease Expansion, the Company recorded an additional ROU asset and lease liability of approximately $ 1.4 million. In November 2025, the Company leased certain equipment used in connection with its on-going Phase 2 clinical trial of PIPE-791 for the treatment of IPF. The leases are accounted for as operating leases and have lease terms expiring in 2028. The Company recorded an ROU asset and lease liability of approximately $ 1.9 million. F-24 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued Below is a summary of the Company’s operating lease right-of-use assets and lease liabilities as of December 31, 2025 and 2024 (in thousands, except for years and %): Years Ended December 31, 2025 2024 Operating lease right-of-use assets $ 7,639 $ 5,467 Operating lease liability obligations, current $ 2,341 $ 1,452 Operating lease liability obligations, less current portion 5,909 4,807 Total lease liability obligations $ 8,250 $ 6,259 Weighted-average remaining lease term 3.4 4.4 Weighted-average discount rate 8.9 % 9.0 % During the years ended December 31, 2025 and 2024, the Company recognized $ 1.7 million and $ 1.1 million, respectively, in operating lease expenses, which are included in operating expenses in the Company's statements of operations and comprehensive loss. Supplemental cash flow information related to operating leases as follows (in thousands): Years Ended December 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities $ 1,987 $ 126 Future minimum lease payments for the Company’s operating lease liabilities as of December 31, 2025 were as follows (in thousands): 2026 $ 2,401 2027 3,517 2028 2,000 2029 1,556 Total minimum lease payments 9,474 Less: Amount representing interest 1,224 Total lease liability obligations 8,250 Less: Current portion of operating lease liabilities 2,341 Operating lease liabilities, net of current portion $ 5,909 Litigation From time to time, the Company may become involved in various legal proceedings and claims that arise in the ordinary course of our business activities. As of December 31, 2025 and 2024, the Company was not a party to any material legal proceedings. Other Commitments The Company has various manufacturing, clinical, research and other contracts with vendors in the conduct of the normal course of its business. Such contracts are generally terminable with advanced written notice and payment for any products or services received by the Company through the effective time of termination and any non-cancelable and non-refundable obligations incurred by the vendor at the effective time of the termination. In the case of terminating a clinical trial agreement at a particular site, the Company would also be obligated to provide continued support for appropriate medical procedures at that site until completion or termination. F-25 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued 11. Net Loss Per Share For the year ended December 31, 2025, net loss is attributable equally to each share of Class A common stock and Class B common stock and is determined based on the weighted-average number of the respective class of common stock outstanding. Weighted-average common shares include shares of the Company's Class A common stock and Class B common stock. The basic and diluted net loss per share amounts are the same for Class A common stock and Class B common stock. The Company’s potentially dilutive securities, which include common stock options and a common stock warrant have been excluded from the computation of diluted net loss per share for the years ended December 31, 2025 and 2024, as the effect would reduce the net loss per share. Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The following potentially dilutive securities have been excluded from the diluted per share calculation for the periods presented as they would be anti-dilutive: December 31, 2025 2024 Common stock options 5,548,320 4,045,500 Common stock warrant 15,764 15,764 Total potentially dilutive securities 5,564,084 4,061,264 12. Segment Reporting The Company operates in one reportable segment, pioneering differentiated therapies for the treatment of NI&I indications with significant unmet need. Our CODM is our President and Chief Executive Officer, Carmine Stengone. The CODM uses operating expenses, as reported on our statements of operations and comprehensive loss. The CODM makes decisions on resource allocation, assesses performance of the business, and monitors budget versus actual results of the Company as a whole using operating expenses. Net loss is also a measure that is considered in monitoring budget versus actual results. The CODM does not review assets in evaluating the results of the Company, and therefore, such information is not presented. Significant segment expenses within net loss include research and development related to PIPE-791, PIPE-307, CTX-343, discovery programs and unallocated internal costs, general and administrative and interest income. F-26 Table of Contents Contineum Therapeutics, Inc. Notes to Audited Financial Statements — Continued The following table provides the operating financial results of our single reportable segment (in thousands): Years Ended December 31, 2025 2024 Significant segment expenses Research and development PIPE-791 $ 22,656 $ 11,257 PIPE-307 7,567 11,249 CTX-343 3,156 2,460 Discovery programs 5,339 4,789 Unallocated internal costs (1) 12,804 8,667 General and administrative 16,537 12,472 Total operating expenses 68,059 50,894 Loss from operations ( 68,059 ) ( 50,894 ) Interest income 8,246 8,905 Other segment items (2) ( 165 ) ( 269 ) Net loss $ ( 59,978 ) $ ( 42,258 ) ______________________ (1) Unallocated internal research and development costs include employee-related expenses that cannot be directly attributable to a specific research project, stock-based compensation for employees engaged in research and development functions, facilities, depreciation and other related expenses. (2) Other segment items primarily include change in fair value of warrant liability and other expense, net. 13. Employee Benefit Plan In January 2018, the Company adopted a defined contribution retirement savings plan under Section 401(k) of the IRC. This plan covers all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company’s contributions to the plan may be made at the discretion of the Company’s board of directors. Total contributions by the Company during the years ended December 31, 2025 and 2024 were $ 0.4 million and $ 0.3 million, respectively. 14. Subsequent Events In January 2026, the Company’s board of directors adopted and approved the 2026 Employment Inducement Equity Incentive Plan (the “2026 Inducement Plan”). The terms of the 2026 Inducement Plan are substantially similar to the terms of the Company’s 2024 Equity Incentive Plan with the exception that incentive stock options may not be issued under the Inducement Plan and awards under the Inducement Plan may only be issued to eligible recipients under the applicable Nasdaq rules. The 2026 Inducement Plan was adopted by the board of directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. Under the 2026 Inducement Plan, the Company may grant non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock or cash-based awards to an employee in connection with his or her commencement of employment with the Company. The number of shares initially reserved for issuance under the 2026 Inducement Plan was 750,000 . Options granted were pursuant to Nasdaq Listing Rule 5635(c)(4) and are subject to service-based vesting conditions. F-27 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable.