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Item 7. Management’s Discussion and Analysis

2026-03-19 compared with 2025-03-20 · 91 added, 93 removed, 203 unchanged (48% of the section changed)

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The Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2025.

In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby.

In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) which are intended to be covered by the safe harbors created thereby.

See “Special Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K.

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Our mission is to both extend the functional life of transplanted organ and reduce side effect of current immunosuppressive treatments such as kidney toxicity, high blood pressure, and tremor.

Tegoprubart is being evaluated in multiple kidney transplantation studies, including a Phase 1b trial, the Phase 2 BESTOW trial, and a Phase 2 open-label extension study, all designed to assess safety, pharmacokinetics, and efficacy compared to standard-of-care immunosuppression.

Interim data suggest improved renal function and reduced immunosuppressive-related adverse events.

Tegoprubart is being evaluated in multiple kidney transplantation studies, including a Phase 1b trial and a Phase 2 open-label extension study, and was evaluated through our Phase 2 BESTOW trial, each designed to assess safety, pharmacokinetics, and efficacy compared to standard-of-care immunosuppression.

Final and interim data suggest improved renal function and reduced immunosuppressive-related adverse events.

Additionally, an investigator-initiated islet cell transplantation study has shown potential in achieving insulin independence without the use of calcineurin inhibitors, supporting further exploration in Type 1 diabetes.

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supports preclinical and clinical studies in kidney, heart, and islet cell transplantation.

Strategic Update

In January 2023, we announced our decision to prioritize resources on our kidney transplantation programs, discontinue the Company funded islet cell transplantation program and the IgAN program.

We also remain committed to further progressing ALS clinical development and are working with key stakeholders on potential next steps to do so.

However, we are unable to continue our clinical development of tegoprubart for people with ALS without additional financing.

A more complete discussion of the Phase 2 BESTOW clinical data, as well as results from the investigator-initiated islet cell transplantation study, is included in Item 1, Business in Part I of this Annual Report on Form 10-K.

We plan to seek guidance from the FDA regarding the design of a potential Phase 3 clinical trial evaluating tegoprubart in kidney transplantation and, subject to regulatory feedback and alignment, may initiate a Phase 3 trial.

Financing Activities

2022 Exchange Agreement

On January 11, 2022, we entered into an exchange agreement (the “Series X 1 Exchange Agreement”) with Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS, L.P., MSI BVF SPV, L.L.C.

(collectively, the “BVF Exchanging Stockholders”), pursuant to which the Series X 1 Exchanging Stockholders exchanged (the “Series X 1 Exchange”) 550,000 shares of our common stock for 9,899.99 shares of Series X 1 Non-Voting Convertible Preferred Stock.

For information regarding the terms of our Series X 1 Non-Voting Convertible Preferred Stock, see Note 8.

Stockholders’ Equity of the Notes to Financial Statements included in this Annual Report on Form 10-K.

2023 Securities Purchase Agreement

On April 28, 2023, we entered into a Securities Purchase Agreement (the “2023 Securities Purchase Agreement”) with certain institutional and accredited investors, pursuant to which we agreed to issue and sell to the investors in a private placement (the “2023 Private Placement”) (i) in an initial closing, (a) an aggregate of 15,151,518 shares (the “Shares”) of our common stock, $0.001 par value per share, or pre-funded warrants in lieu thereof (the “Pre-Funded Warrants”), and (b) common stock warrants exercisable into an aggregate of 15,151,518 shares of common stock (or Pre-Funded Warrants in lieu thereof) (the “Common Warrants” and, together with the Pre-Funded Warrants, the “Warrants”);

On April 28, 2023, we entered into a Securities Purchase Agreement (the “2023 Securities Purchase Agreement”) with certain institutional and accredited investors, pursuant to which we agreed to issue and sell to the investors in a private placement (the “2023 Private Placement”) (i) in an initial closing, (a) an aggregate of 15,151,518 shares (the “Shares”) of our common stock, $0.001 par value per share (“common stock”), or pre-funded warrants in lieu thereof (the “Pre-Funded Warrants”), and (b) common stock warrants exercisable into an aggregate of 15,151,518 shares of common stock (or

Pre-Funded Warrants in lieu thereof) (the “Common Warrants” and, together with the Pre-Funded Warrants, the “Warrants”);

(ii) in a second closing (the “Second Closing”), upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 20,202,024 shares of common stock (or Pre-Funded Warrants);

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The Pre-Funded Warrants and Common Warrants are subject to specified beneficial ownership limitations, which are generally set at 9.99% of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99% unless otherwise permitted.

The Shares, the Warrants, and the shares of common stock issuable upon the exercise of the Warrants, have not been registered under the Securities Act of 1933, as amended, and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

On April 28, 2023, the initial closing occurred, and we received gross proceeds of $35.0 million, or net proceeds of approximately $33.0 million after deducting underwriting discounts and commissions and offering expenses, in exchange for 8,730,168 shares of common stock and Pre-Funded Warrants to purchase 6,421,350 shares of common stock.

The Shares, the Warrants, and the shares of common stock issuable upon the exercise of the Warrants, have not been registered under the Securities Act and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder.

On May 5, 2023, the initial closing occurred, and we received gross proceeds of $35.0 million, or net proceeds of approximately $33.0 million after deducting underwriting discounts and commissions and offering expenses, in exchange for 8,730,168 shares of common stock and Pre-Funded Warrants to purchase 6,421,350 shares of common stock.

On July 8, 2024, the Second Closing occurred, and the Company received gross proceeds of $2.1 million, or net proceeds of approximately $2.0 million after deducting underwriting discounts and commissions and offering expenses, in exchange for 909,088 shares of common stock.

On September 30, 2024, and October 1, 2024, the Third Closing occurred, and the Company received gross proceeds of $4.0 million, or net proceeds of approximately $3.8 million after deducting underwriting discounts and commissions and offering expenses, in exchange for 1,727,400 shares of common stock.

In connection with the 2023 Private Placement, the Company filed on May 18, 2023, a registration statement on Form S-3 (the “2023 Registration Statement”) with the SEC to register for resale the Shares and the shares of common stock issuable upon the exercise of the Warrants.

In connection with the 2023 Private Placement, the Company filed on May 18, 2023, a registration statement on Form S-3 (the “2023 Registration Statement”) with the Securities and Exchange Commission (“SEC”) to register for resale the Shares and the shares of common stock issuable upon the exercise of the Warrants.

The 2023 Registration Statement became effective on June 2, 2023.

2023 Conversion Agreement of Non-Voting Convertible Preferred Stock

On May 16, 2023, Cormorant Global Healthcare Master Fund LP provided us notice of its intention to convert (i) 1,782 shares of Series X Non-Voting Convertible Preferred Stock for 99,000 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X Non-Voting Convertible Preferred Stock, and (ii) 7,883.586 shares of Series X 1 Non-Voting Convertible Preferred Stock for 437,977 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X 1 Non-Voting Convertible Preferred Stock.

The conversion was completed on May 23, 2023.

For information regarding the terms of our Series X and Series X 1 Non-Voting Convertible Preferred Stock, see Note 8.

Stockholders’ Equity of the Notes to Financial Statements included in this Annual Report on Form 10-K.

Exercise of Pre-Funded Warrants from 2023 Securities Purchase Agreement

On July 10, 2023, Armistice Capital Master Fund Ltd.

On January 30, 2024, Armistice Capital Master Fund Ltd.

(the “Exercising Stockholder”) exercised Pre-Funded Warrants to purchase 600,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement.

On July 14, 2023, the Company issued 501,197 shares of common stock to the Exercising Stockholder in accordance with such exercise.

On November 2, 2023, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 653,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement.

On November 6, 2023, the Company issued 653,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

On January 30, 2024, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 600,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement.

On January 30, 2024, the Company issued 600,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

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The 2024 Pre-Funded Warrants were issued in lieu of shares of common stock and are exercisable immediately and until exercised in full.

The 2024 Pre-Funded Warrants are subject to specified beneficial ownership limitations (equal to 4.99% or 9.99% as determined by holder of each such warrant) of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99% unless otherwise permitted.

The 2024 Shares, the 2024 Pre-Funded Warrants, and the shares of common stock issuable upon the exercise of the 2024 Pre-Funded Warrants, have not been registered under the Securities Act of 1933, as amended, and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

The 2024 Pre-Funded Warrants are subject to specified beneficial ownership limitations (equal to 4.99% or

9.99% as determined by the holder of each such warrant) of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99% unless otherwise permitted.

The 2024 Shares, the 2024 Pre-Funded Warrants, and the shares of common stock issuable upon the exercise of the 2024 Pre-Funded Warrants, have not been registered under the Securities Act and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder.

The 2024 Private Placement resulted in gross proceeds to the Company of $50.0 million, or net proceeds of approximately $48.1 million after deducting offering costs.

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2024 Underwritten Offering

On October 29, 2024, we entered into an underwriting agreement with Leerink Partners, LLC, as representative of the several underwriters named therein (the “Underwriters”) in connection with the underwritten offering, issuance and sale by the Company (the “2024 Underwritten Offering”) of 18,356,173 shares of our common stock, at an offering price of $3.65 per share, and pre-funded warrants at a price of $3.649 per pre-funded warrant, which are exercisable to purchase 4,931,507 shares of our common stock at an exercise price of $0.001 per share (the “Offering Pre-Funded Warrants”).

On October 29, 2024, we entered into an underwriting agreement with Leerink Partners, LLC, as representative of the several underwriters named therein in connection with the underwritten offering, issuance and sale by the Company (the “2024 Underwritten Offering”) of 18,356,173 shares of our common stock, at an offering price of $3.65 per share, and pre-funded warrants at a price of $3.649 per pre-funded warrant, which are exercisable to purchase 4,931,507 shares of our common stock at an exercise price of $0.001 per share (the “2024 Offering Pre-Funded Warrants”).

The 2024 Underwritten Offering closed on October 30, 2024 and resulted in gross proceeds of $85 million, or net proceeds of approximately $79.5 million after deducting underwriting discounts and commissions and offering expenses.

The 2024 Underwritten Offering was made pursuant to the Shelf Registration Statement and a prospectus supplement relating to the 2024 Underwritten Offering dated October 29, 2024.

A holder of the Offering Pre-Funded Warrants (together with its affiliates) may not exercise any portion of an Offering Pre-Funded Warrant to the extent that the that, after giving effect to such exercise, the holder (together with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% (or, at the holder’s option upon issuance, 9.99%) of the number of shares of the our common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of such Offering Pre-Funded Warrants.

A holder of the 2024 Offering Pre-Funded Warrants (together with its affiliates) may not exercise any portion of a 2024 Offering Pre-Funded Warrant to the extent that the that, after giving effect to such exercise, the holder (together with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% (or, at the holder’s option upon issuance, 9.99%) of the number of shares of the our common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of such 2024 Offering Pre-Funded Warrants.

2025 Underwritten Offering

On November 12, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Leerink Partners, LLC, as representative of the several underwriters named therein (the “Underwriters”), in connection with the underwritten public offering and sale by the Company (the “2025 Underwritten Offering”) of 15,152,485 shares of the Company’s common stock at a public offering price of $1.65 per share (the “Common Stock Purchase Price”), and pre-funded warrants (the “2025 Offering Pre-Funded Warrants”) at a public offering price of $1.649 per 2025 Offering Pre-Funded Warrant, which are exercisable to purchase up to 15,151,515 shares of common stock at an exercise price of $0.001 per share.

In addition, pursuant to the Underwriting Agreement, the Company granted the Underwriters an option (the “Option”), exercisable for 30 days, to purchase up to 4,545,600 additional shares of common stock at the Common Stock Purchase Price less the underwriting discounts and commissions, which Option was exercised in full by the Underwriters.

The 2025 Underwritten Offering closed on November 13, 2025 and resulted in gross proceeds of $57.5 million or net proceeds of approximately $53.6 million after deducting the underwriting discounts and commissions and offering expenses.

The 2025 Underwritten Offering was made pursuant to the Shelf Registration Statement and a prospectus supplement relating to the 2025 Underwritten Offering dated November 12, 2025.

A holder of the 2025 Offering Pre-Funded Warrants (together with its affiliates) may not exercise any portion of a 2025 Offering Pre-Funded Warrant to the extent that, after giving effect to such exercise, the holder (together with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of the Company's common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of such 2025 Offering Pre-Funded Warrant.

A holder, A holder, upon notice to the Company, may increase or decrease such beneficial ownership limitation provision, provided that in no event shall the limitation exceed 19.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock upon exercise of the 2025 Offering Pre-Funded Warrant may increase or decrease such beneficial ownership limitation, provided that in no event shall the limitation exceed 19.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock upon exercise of the 2025 Offering Pre-Funded Warrant.

2025 Warrant Exchange Agreement

On December 30, 2025, the Company entered into an exchange agreement (the “Warrant Exchange Agreement”) with Coastlands Capital Partners LP, (“Coastlands Capital”), pursuant to which Coastlands Capital agreed to exchange 4,203,764 shares of common stock for a pre-funded warrant to purchase an aggregate of 4,203,764 shares of common stock (the “Exchange Warrant”), and the Company cancelled the 4,203,764 shares of common stock delivered in the exchange.

Coastlands Capital (together with its affiliates) may not exercise any portion of the Exchange Warrant to the extent that, after giving effect to such exercise, Coastlands Capital (together with its affiliates and any other persons acting as a group together with Coastlands Capital or any of the its affiliates) would beneficially own in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of the Exchange Warrant.

Coastlands Capital may increase or decrease such beneficial ownership limitation, provided that in no event shall the limitation exceed 19.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock upon exercise of the Exchange Warrant.

Common Stock Warrants

As of December 31, 2025, 15,151,518 warrants were exercisable into common stock (after rounding for fractional shares and subject to beneficial ownership conversion blockers).

The shares of common stock underlying the registered direct and private placement warrants are registered for offer and sale under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to our effective registration statements on Forms S-1.

Series X 1 Preferred Stock Warrants

As of December 31, 2024, 50,207.419 warrants were exercisable into Series X 1 Non-Voting Convertible Preferred Stock which are convertible into 2,789,301 shares of common stock (after rounding for fractional shares and subject to beneficial ownership conversion blockers).

For information regarding the terms of our Series X 1 Non-Voting Convertible Preferred Stock, see Note 8.

Stockholders' Equity of the Notes to Financial Statements included in this Annual Report on Form 10-K.

The shares of common stock underlying the registered direct and private placement warrants are registered for offer and sale under the Securities Act pursuant to our effective registration statements on Forms S-3.

Financial Operations Overview

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and our information technology, facilities and other related expenses, including rent, maintenance of facilities, insurance and supplies.

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds represents the initial recognition of warrant liabilities at fair value in excess of proceeds received, as well as subsequent period remeasurements of these warrant liabilities at fair value.

Change in fair value of warrant liabilities

Change in fair value of warrant liabilities represents the initial recognition of warrant liabilities at fair value in excess of proceeds received, as well as subsequent period remeasurements of these warrant liabilities at fair value.

These remeasurements reflect changes in market conditions, such as fluctuations in stock price, volatility, interest rates, and other valuation inputs that impact the fair value of the liability.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

CRITICAL ACCOUNTING ESTIMATES

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

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If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid accordingly.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in

reporting expenses that are too high or too low in any particular period.

we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting expenses that are too high or too low in any particular period.

To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses.

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The expected volatility assumption was based on historical volatilities of a group of comparable industry companies whose share prices are publicly available.

The peer group was developed based on companies in the pharmaceutical industry.

The peer group was developed based on publicly traded biotechnology and pharmaceutical companies with comparable business characteristics, clinical stages of development, and organizational scale, including employee headcount, primarily consisting of companies with Phase II or Phase III clinical programs.

The expected term of stock options represents the weighted-average period that the stock options are expected to be outstanding.

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Warrants are accounted for as either derivative liabilities or as equity instruments depending on the specific terms of the underlying agreement.

Warrants that are equity-classified instruments and recorded in additional paid-in capital at issuance are not subject to remeasurement.

The Common Warrants and the Subsequent Closing Warrants (as defined in Note 8.

Stockholder’s Equity of the Notes to Financial Statements) issued in the 2023 Private Placement are liability classified and recorded at fair value using the Black-Scholes option-pricing model at issuance, with any subsequent changes in fair value recognized in the consolidated statements of operations.

Warrants classified as derivative liabilities are initially recorded at fair value on the issuance date and are remeasured at each reporting period, with changes in fair value recognized in the consolidated statements of operations.

Warrants classified as equity instruments are recorded in additional paid-in capital at issuance and are not subject to remeasurement.

The Common Warrants are recorded at fair value using the Black-Scholes option-pricing model at issuance, with any subsequent changes in fair value recognized in the consolidated statements of operations.

To determine the fair value of the liability classified warrants, a Black-Scholes option-pricing model is used, which considers assumptions that are subjective and require significant judgment and estimation by management.

The risk-free rate assumption was based on observed yields from governmental zero-coupon bonds with an equivalent term.

The expected volatility assumption was based on a peer group of publicly traded biotechnology and pharmaceutical companies with comparable business characteristics, clinical stages of development, and organizational scale, including employee headcount, primarily consisting of companies with Phase II or Phase III clinical programs.

We periodically evaluate changes in facts and circumstances that could impact the classification of warrants.

As of December 31, 2024, the Subsequent Closing Warrants were settled or expired and only the Common Warrants remain.

In-Process Research and Development

Amounts allocated to in-process research and development (“IPR&D”) in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts.

If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and amortized over a period that best reflects the economic benefits provided by these assets.

During the period the assets are considered indefinite-lived, they will not be amortized but will be tested annually for impairment or more frequently if indicators of impairment exist.

We first assess qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative assessment.

If, after assessing qualitative factors, we determine it is not more likely than not that the fair value is less than its carrying amount, then a quantitative assessment is unnecessary.

If the quantitative assessment is deemed necessary, the excess of the carrying value over fair value will be recorded as an impairment.

The qualitative assessment focuses on the key inputs, assumptions and rationale utilized in the establishment of the carrying value and related changes since the last quantitative assessment.

Based on the results of our annual qualitative assessment, we concluded that it is not more likely than not that IPR&D was impaired for any of the periods presented.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is set forth in Note 2.

Recently Issued and Adopted Accounting Pronouncements

A description of recently issued and recently adopted accounting pronouncements that may potentially impact our financial position and results of operations is set forth in Note 2.

Summary of Significant Accounting Policies , of the Notes to Financial Statements included in this Annual Report on Form 10-K.

Market Trends and Uncertainties

The global economy, including the financial and credit markets, has recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, elevated inflation and interest rates, changes in U.S.

trade policy and uncertainty about economic stability.

Likewise, the current conflicts in Ukraine and the Middle East have created volatility in the global capital markets and global economic consequences, including disruptions of the global supply chain and energy markets.

A severe or prolonged economic downturn or continued volatility in the financial and credit markets could negatively impact our ability to obtain necessary debt or equity financing in a timely manner or on favorable terms, if at all.

The severity and duration of any such impacts cannot be predicted.

Any such failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies or cause us to delay our clinical development plans, research and development programs or commercialization efforts, out-license intellectual property rights to our product candidates or sell unsecured assets, or a combination of the above.

Any of these actions could materially harm our business.

Any of the foregoing items could materially affect our business, possibly to a significant degree.

The severity and duration of any such impacts cannot be predicted.

See Item 1A, “Risk Factors” in Part I of this Annual Report on Form 10-K for additional information

RESULTS OF OPERATIONS

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Other income, net

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Change in fair value of warrant liabilities

Loss before income taxes

Provision for income taxes

Net loss and comprehensive loss

Other comprehensive loss:

Unrealized loss on available-for-sale securities, net

Comprehensive loss

Research and Development Expenses

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Research and development expenses increased $14.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The increase was primarily due to the following:

• an increase of $15.5 million in Tegoprubart - kidney transplantation programs, primarily with external CROs, related to increased activities in our Phase 1b, Phase 2 BESTOW and Phase 2 open-label extension trials for kidney transplantation;

• a decrease of $2.9 million in Tegoprubart - other development programs, primarily with external CROs, related to our IgAN program that was completed in 2023;

• an increase of $4.4 million in manufacturing costs, primarily with contract manufacturing organizations, for the increased production of drug substance and drug product clinical trial supply;

• an increase of $1.8 million in personnel-related expenses due to an increase in headcount to support ongoing clinical development programs;

• an increase of $2.8 million in stock-based compensation expense, primarily due to the recognition of expense for the achievement of performance-based vesting criteria during the year ended December 31, 2024;

• an increase of $0.1 million in other operating expenses.

The increase was primarily attributable to:

• an increase of $8.5 million in Tegoprubart - kidney transplantation programs, primarily driven by higher external CRO costs, related to increased activities in our Phase 1b, Phase 2 BESTOW and Phase 2 open-label extension trials for kidney transplantation;

• a decrease of $0.5 million in Tegoprubart - other development programs, primarily external CRO costs, related to the close-out of activities of our terminated IgAN program in 2024;

• an increase of $2.5 million in manufacturing costs, primarily contract manufacturing organization expenses, associated with increased production of drug substance and drug product clinical trial supply;

• an increase of $3.7 million in personnel-related expenses, driven by increased headcount supporting ongoing clinical development programs.

General and Administrative Expenses

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Total general and administrative expenses

General and administrative expenses increased $5.9 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.

The increase was primarily due to the following:

• an increase of $1.5 million in professional fees and consulting fees primarily driven by increased audit and legal services;

• an increase of $0.6 million in personnel-related expenses due to increased headcount;

• an increase of $3.8 million in stock-based compensation expense, primarily due to the recognition of expense for the achievement of performance-based vesting criteria during the year ended December 31, 2024.

General and administrative expenses decreased $1.6 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The decrease was primarily attributable to:

• an increase of $0.9 million in professional and consulting fees, primarily due to increased audit and legal service costs;

• an increase of $0.1 million in personnel-related expenses driven by higher headcount;

and partially offset by;

• a decrease of $2.6 million in stock-based compensation expense, attributable to performance-based stock options granted in 2024.

Other Income, Net

The $0.3 million increase in other income, net was primarily due to an increase in interest income, driven by higher balances of our cash and cash equivalents and short-term investments during the year ended December 31, 2025 as compared to the year ended December 31, 2024.

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

For the year ended December 31, 2024, the fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds increased by $107.1 million to $30.9 million.

The change was primarily due to the reversal of $59.1 million in warrant liabilities associated with the Subsequent Closing Warrants, which were settled or expired in 2024, partially offset by increase in the fair value of Common Warrants of $27.8 million.

This is compared to $76.2 million in fair value of the Common Warrants and the Subsequent Closing Warrants for the year ended December 31, 2023.

Change in fair value of warrant liabilities

For the year ended December 31, 2025, the fair value of warrant liabilities decreased by $33.4 million.

This change was primarily driven by a decrease in the fair value of the Common Warrants, reflecting a decline in the Company’s stock price during the period.

The warrant liability declined from $44.9 million as of December 31, 2024 to $11.4 million as of December 31, 2025.

Provision for Income Taxes

The $0.4 million provision for income taxes for the year ended December 31, 2024, is the result of a change in the effective state tax rate used to remeasure deferred tax liability related to indefinite-lived assets.

The provision for income taxes for the year ended December 31, 2025 and 2024 was $35 thousand and $0.4 million, respectively.

The higher income tax expense in 2024 versus income tax expense in 2025 was the result of a larger change in the effective state tax rate used to remeasure the deferred tax liability related to indefinite-lived assets in 2024.

LIQUIDITY AND CAPITAL RESOURCES

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We currently have no credit facility or committed sources of capital.

To date, our operations have been financed primarily by net

proceeds from the sale of preferred and common stock, and the sale of warrants.

To date, our operations have been financed primarily by net proceeds from the sale of preferred and common stock, and the sale of warrants.

Additionally, in view of our expectation to incur significant losses for the foreseeable future we will be required to raise additional capital resources in the future in order to fund our operations, although the availability of, and our access to, such resources is not assured.

Based on our liquidity estimates and our current resources, we have concluded that we have sufficient cash resources to meet our anticipated cash needs through at least the next 12 months from the date of this report.

We have based this estimate on assumptions that may prove to be incorrect, and we could utilize our available resources sooner than we currently expect.

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Cash used to fund operating expenses is impacted by the timing of when we pay or prepay these expenses.

We expect our expenses to increase in connection with our ongoing activities, particularly as we expand our clinical program with tegoprubart, continue the research and development of, and seek marketing approval for, our product candidates.

We expect our expenses to increase in connection with our ongoing activities, particularly as we expand our clinical program with tegoprubart and, continue the research and development of, and seek marketing approval for, our product candidates.

In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

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Any of these actions could materially harm our business.

The issuance of shares of common stock in the 2023 Private Placement, the 2024 Private Placement and the 2024 Underwritten Offering diluted the ownership interests of our existing stockholders, and to the extent that we raise additional capital through the sale of additional equity, including through our “at the market” equity offering program, or convertible debt securities in the future, our stockholders’ ownership interests may be further diluted, and the terms of these securities may also include liquidation or other preferences that adversely affect our stockholders’ rights.

The issuance of shares of common stock in the 2023 Private Placement, the 2024 Private Placement, the 2024 Underwritten Offering and the 2025 Underwritten Offering diluted the ownership interests of our existing stockholders, and to the extent that we raise additional capital through the sale of additional equity, including through our “at the market” equity offering program, or convertible debt securities in the future, our stockholders’ ownership interests may be further diluted, and the terms of these securities may also include liquidation or other preferences that adversely affect our stockholders’ rights.

Debt financing, if available, would result in fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.

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Contracts for preclinical and clinical studies and other services generally provide for termination following a certain period after notice, and therefore we believe that our non-cancelable obligations under these agreements are not material.

We do not have any long-term manufacturing and supply agreements with our third-party contract manufacturers but enter into specific contracts on an as needed basis for individual batch production runs.

Commitments and Contingencies of the Notes to Financial Statements included in this Annual Report on Form 10-K for contract obligations due within the next year).

The following table provides a summary of our net cash flow activity for the years ended December 31, 2025 and 2024 (in thousands):

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

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Operating Activities

For the year ended December 31, 2024, operating activities used $47.3 million of cash, which primarily consisted of our net loss of $36.2 million.

Operating activities include adjustments for certain non-cash charges including $30.9 million due to a change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds, accretion of investment discounts of $2.8 million, partially offset by $13.1 million of stock-based compensation, $0.4 million of operating lease amortization, and $0.4 million of deferred tax provision.

Net operating assets and liabilities changed by $8.7 million, primarily driven by an increase in accounts payable and accrued expenses of $7.7 million and a decrease in prepaid expenses and other assets of $1.3 million.

For the year ended December 31, 2023, operating activities used $39.5 million of cash, which resulted from our net loss of $116.5 million and the changes in operating activities described below.

Operating activities include adjustments for certain non-cash charges including $76.2 million due to a change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds, $6.5 million of stock-based compensation, and $0.4 million of operating lease

amortization, partially offset by accretion of investment discounts of $1.2 million.

Net operating assets and liabilities changed by $4.9 million, primarily driven by a decrease in accounts payable and accrued expenses of $2.6 million, a decrease in operating lease liability of $0.4 million and an increase in prepaid expenses and other assets of $2.0 million.

Net cash used in operating activities was $62.3 million for the year ended December 31, 2025, reflecting a net loss of $45.6 million.

Adjustments for certain non-cash items including a $33.4 million change in fair value of warrant liabilities due to decreased stock price and $10.5 million of stock-based compensation.

The change in cash used in operating assets and liabilities was $7.7 million, primarily driven by an increase in accrued expenses as a result of kidney transplantation programs.

Net cash used in operating activities was $47.3 million for the year ended December 31, 2024, reflecting a net loss of $36.2 million.

Net operating assets and liabilities changed by $8.7 million, primarily driven by an increase in accounts payable and accrued expense as of result of kidney transplantation programs.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2024 was $70.3 million.

We purchased $156.1 million of short-term investments, which was partially offset by the maturing of $85.8 million of our short-term investments during the year.

Net cash provided by investing activities for the year ended December 31, 2025 was $10.8 million.

We purchased $161.1 million of short-term investments, which was offset by the maturing of $171.9 million of our short-term investments during the year.

Net cash used in investing activities for the year ended December 31, 2024 was $70.3 million.

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Financing Activities

Net cash provided by financing activities for the year ended December 31, 2024 consisted of the following:

Net cash provided by financing activities for the year ended December 31, 2025 was $53.8 million, which consisted of the 2025 Underwritten Offering, totaling $53.6 million in net proceeds from the sale of 19.7 million shares of common stock and 15.2 million pre-funded warrants to purchase common stock and $0.2 million from exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2024 was $133.5 million, which consisted of the following:

$79.5 million in net proceeds from the 2024 Underwritten Offering, involving the sale of 18.4 million shares of the common stock and pre-funded warrants to purchase 4.9 million shares of common stock;

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and $0.2 million from exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2023 consisted of the 2023 Private Placement, totaling $33.0 million in net proceeds from the sale of 8.7 million shares of common stock and pre-funded warrants to purchase 6.4 million shares of common stock.

Quantitative and Qualitati ve Disclosures About Market Risk.

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The Report of Independent Registered Public Accounting Firm, our consolidated financial statements and accompanying notes listed under Part IV, Item 15.

Exhibits, Financial Statement Schedules of this Annual Report on Form 10-K are set forth beginning on page F-1 immediately following the signature page hereof and incorporated by reference herein.

Exhibits and Financial Statement Schedules of this Annual Report on Form 10-K are set forth beginning on page F-1 immediately following the signature page hereof and incorporated by reference herein.

Changes in and Disagreements with Accoun tants on Accounting and Financial Disclosure.

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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-K

Item 7. Management’s Discussion and Analysis