What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-17 compared with 2025-03-13 · 243 added, 153 removed, 981 unchanged (29% of the section changed)

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Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this annual report.

Exchange Act as of the end of the period covered by this annual report.

Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission

in its 2013 Internal Control — Integrated Framework.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its 2013 Internal Control — Integrated Framework.

Based on this assessment, our management has concluded that our internal control over financial reporting was effective as of December 31, 2025.

Other Information.

During the three months ended December 31, 2024, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non Rule 10b5-1 trading arrangement."

During the three months ended December 31, 2025, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non Rule 10b5-1 trading arrangement," except as described below:

• On October 31, 2025 , Faheem Hasnain , CEO and President , adopted a Rule 10b5-1 trading arrangement providing for the sale of up to 1,125,000 shares of our common stock.

The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c).

The duration of the trading arrangement is from March 15, 2026 until December 29, 2026 , or earlier if and when all transactions under the trading arrangement are completed.

On March 16, 2026, we commenced a workforce reduction of 77 individuals, constituting approximately 48% of our workforce, to reduce our operating expenses.

Our remaining management and employees will continue the development of seralutinib and explore potential regulatory paths forward.

This workforce reduction is expected to be substantially completed by the end of May 2026.

In connection with the workforce reduction, on March 15, 2026, Richard Aranda, M.D., resigned from his position as the Chief Medical Officer of the Company effective as of April 15, 2026.

The Company expects to execute a separation agreement with Dr.

Aranda in connection with his departure, pursuant to which he will receive the severance provided under his employment agreement, in exchange for a general release of claims.

Aranda will continue as a consultant to the Company to assist with transitional matters.

We currently estimate that we will incur charges associated with the workforce reduction of approximately $6.7 million primarily related to employee severance payments, benefits and related termination costs.

We expect the majority of related charges to be recognized in the second and third quarters of 2026.

The estimates of the charges and expenditures that we expect to incur in connection with the workforce reduction, and the timing thereof, are subject to several assumptions and the actual amounts incurred may differ materially from these estimates.

In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the workforce reduction.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Information contained in our website does not constitute a part of this report or our other filings with the SEC.

Insider Trading Policy

We have adopted a policy on insider trading and procedures that govern the purchase, sale, and/or other dispositions of our securities by our directors, officers, employees and other covered persons that are designed to promote compliance with insider trading laws, rules and regulations, and the Nasdaq listing rules, as applicable.

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Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of Gossamer Bio, Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated 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 three years in the period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.

Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Accrued research and development expenses

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We also examined a sample of subsequent payments to evaluate the completeness of the accrued research and development expenses.

Initial accounting for the Chiesi Collaboration Agreement

Description of the Matter As more fully described in Note 12 to the consolidated financial statements, the Company entered into a global collaboration agreement with Chiesi Farmaceutici S.P.A and Chiesi USA, Inc.

(collectively, “Chiesi”), which granted exclusive licenses to develop and commercialize products that contain or incorporate seralutinib for the treatment of pulmonary hypertension.

The Company determined the transaction price was equal to the up-front fee reduced by the fair value of the Equity Option and the transaction price was allocated to the performance obligations based on the relative stand-alone selling price estimated for each performance obligation.

Auditing the Company’s initial accounting for the Chiesi collaboration agreement was complex and required the Company to apply significant judgement related to the estimation of the standalone selling price of each identified performance obligation.

The estimates of the standalone selling price for the performance obligations relating to the licenses reflect management’s assumptions, which included forecasted revenues, expected development timelines, discount rates and probabilities of technical and regulatory success.

How We Addressed the Matter in Our Audit To test the standalone selling price of each identified performance obligation, our audit procedures included, among others, evaluating the projected discounted cash flow assumptions used by the Company in developing the estimates of standalone selling price of the licenses by comparing the significant assumptions described above to current industry trends using available information from other similar companies within the same industry and other relevant factors.

We involved our valuation professionals to assist in the assessment of the estimation methodology and the significant assumptions used in determining the estimated standalone selling price of these performance obligations.

We also performed a sensitivity analysis of the significant assumptions to evaluate the change in the estimated standalone selling price of these performance obligations resulting from the changes in the assumptions.

Further, we assessed the resulting impact from the sensitivity analysis on the allocation of transaction price to each performance obligation as well as revenue recognized during the period.

/s/ Ernst & Young LLP

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Total assets $ 172,249 $ 315,292

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities

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Accrued research and development expenses 21,662 10,455

Current portion of long-term debt — 11,613

Current contract liabilities 19,987 17,050

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Long-term convertible senior notes 198,508 197,523

Long-term debt — 814

Operating lease liabilities - long-term 3,460 4,398

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Commitments and contingencies (Note 11)

Stockholders' equity

Stockholders' equity (deficit)

Common stock, $ 0.0001 par value;

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Accumulated other comprehensive income (loss) ( 5,149 ) 1,189

Total stockholders' equity 29,492 62,769

Total liabilities and stockholders' equity $ 315,292 $ 311,916

Total stockholders' equity (deficit) ( 122,760 ) 29,492

Total liabilities and stockholders' equity (deficit) $ 172,249 $ 315,292

The accompanying notes are an integral part of these consolidated financial statements.

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Other income, net 9,289 14,022 15,456

Total other income (expense), net 4,284 3,942 ( 10,785 )

Loss before provision for income taxes ( 55,635 ) ( 179,817 ) ( 229,378 )

Provision for income taxes 893 — —

Total other income, net 270 4,284 3,942

Loss before provision (benefit) for income taxes ( 170,458 ) ( 55,635 ) ( 179,817 )

Provision (benefit) for income taxes ( 88 ) 893 —

Net loss $ ( 170,370 ) $ ( 56,528 ) $ ( 179,817 )

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GOSSAMER BIO, INC.

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Stockholders’ Equity (Deficit)

(in thousands, except share amounts)

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income (loss) Total

stockholders'

equity (deficit)

Shares Amount

Balance as of December 31, 2022 94,423,181 $ 10 $ 1,044,864 $ ( 1,032,223 ) $ ( 574 ) $ 12,077

Cumulative-effect adjustment from change in accounting principle (See Note 2) — — ( 53,527 ) 8,689 — ( 44,838 )

Issuance of common stock in connection with a private offering, net of offering costs of $ 10,779

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Vesting of restricted stock 55,225 — — — — —

Exercise of stock options 270,707 — 1,736 — — 1,736

Stock-based compensation — — 28,518 — — 28,518

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Net loss — — — ( 179,817 ) — ( 179,817 )

Other comprehensive loss — — — — ( 619 ) ( 619 )

Other comprehensive income — — — — 224 224

Balance as of December 31, 2023 225,409,315 $ 23 $ 1,275,136 $ ( 1,212,040 ) $ ( 350 ) $ 62,769

Issuance of common stock and warrants in connection with a private offering, net of offering costs of $ 10,779

129,869,440 13 201,310 — — 201,323

Vesting of restricted stock 55,225 — — — — —

Grant of equity option pursuant to Chiesi Collaboration Agreement — — 464 — — 464

Stock-based compensation — — 20,619 — — 20,619

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Balance as of December 31, 2024 226,604,138 $ 23 $ 1,296,848 $ ( 1,268,568 ) $ 1,189 $ 29,492

Investment in merger option through issuance of stock 2,500,000 1 7,475 — — 7,476

Exercise of warrants 1,791,823 — 3,655 — — 3,655

Exercise of stock options 1,691,213 — 1,930 — — 1,930

Stock-based compensation — — 10,555 — — 10,555

Issuance of common stock pursuant to Employee Stock Purchase Plan 1,089,883 — 840 — — 840

Issuance of common stock for restricted stock units vested 427,698 — — — — —

Grant of equity option pursuant to Chiesi Collaboration Agreement — — 464 — — 464

Net loss — — — ( 170,370 ) — ( 170,370 )

Other comprehensive income — — — — 1,539 1,539

Other comprehensive loss — — — — ( 6,338 ) ( 6,338 )

Balance as of December 31, 2025 233,677,057 $ 24 $ 1,321,303 $ ( 1,438,938 ) $ ( 5,149 ) $ ( 122,760 )

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Amortization of premium on investments, net of accretion of discounts ( 7,278 ) ( 13,062 ) ( 9,450 )

Net realized gain on investments ( 5 ) — —

Loss on disposal of property and equipment — 806 726

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Cash flows from investing activities

Research and development asset acquisitions, net of cash acquired — — ( 65 )

Purchase of marketable securities ( 227,107 ) ( 494,777 ) ( 441,670 )

Maturities of marketable securities 376,400 523,800 330,700

Sales of marketable securities 7,144 — —

Purchase of property and equipment ( 79 ) — —

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Proceeds from the exercise of stock options 1,930 — —

Proceeds from the exercise of warrants 3,655 — —

Proceeds from issuance of equity option pursuant to stock purchase agreement — 464 —

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Change in unrealized gain (loss) on marketable securities, net $ ( 90 ) $ 89 $ 191

Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities $ — $ — $ 83

The accompanying notes are an integral part of these consolidated financial statements.

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Gossamer Bio, Inc.

(including its subsidiaries, referred to as "we," "us," "our,", or the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of seralutinib for the treatment of pulmonary hypertension ("PH') including pulmonary arterial hypertension ("PAH") and PH associated with interstitial lung disease ("PH-ILD").

(including its subsidiaries, referred to as "we," "us," "our,", or the “Company”) is a clinical-stage clinical biopharmaceutical company focused on the development and commercialization of seralutinib for the treatment of pulmonary hypertension ("PH") including pulmonary arterial hypertension ("PAH") and PH associated with interstitial lung disease ("PH-ILD").

The Company was incorporated in the state of Delaware on October 25, 2015 (originally as FSG Bio, Inc.) and is based in San Diego, California.

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All intercompany balances and transactions among the consolidated entity have been eliminated in consolidation.

Liquidity and Capital Resources

Liquidity and Going Concern

The Company has incurred significant operating losses since its inception.

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From the Company’s inception through the year ended December 31, 2025, the Company has funded its operations primarily through equity financings, convertible senior notes and the Chiesi Collaboration Agreement (as defined in Note 12 below).

The Company expects to continue to incur significant operating losses for the foreseeable future and may never become profitable.

As a result, the Company will need to raise additional capital through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.

Management believes that it has sufficient working capital on hand to fund operations through at least the next 12 months from the date these consolidated financial statements were available to be issued.

There can be no assurance that the Company will be successful in acquiring additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities, in the normal course of business, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty.

If the Company is not able to obtain the required funding, through equity or debt financings, license agreements for seralutinib in domestic or foreign markets, or other means, or is unable to obtain funding on terms favorable to the Company, or there is an event of default affecting the Company’s 2027 Notes, there will be a material adverse effect on commercialization and development operations, and the Company's ability to execute its strategic development plan for future growth.

If the Company cannot successfully raise additional funding and implement its strategic development plan, the Company may be forced to make further reductions in spending, including spending in connection with our clinical development, pre-commercialization activities, extend payment terms with suppliers, suspend or curtail planned operations or cease operations entirely.

The Company has concluded that these circumstances and the uncertainties associated with the Company’s ability to obtain additional equity or debt financing on terms that are favorable to the Company, or at all, and otherwise succeed in its future operations raise substantial doubt about the Company’s ability to continue as a going concern.

Management believes that it has sufficient working capital on hand to fund operations into the first quarter of 2027.

Note 2— Summary of Significant Accounting Policies

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The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

The most significant estimates in the Company’s consolidated financial statements relate to accrued research and development expenses, stand-alone selling price of performance obligations and estimated collaboration expenses associated with the Company’s collaboration and license agreement.

These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

Actual results could differ from those estimates.

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 ("CODM") in making decisions regarding resource allocation and assessing performance.

The Company views its operations and manages its business in one operating segment.

Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker ("CODM") in making decisions regarding resource allocation and assessing performance.

The Company views its operations and manages its business as one operating segment.

identification of a single operating and reportable segment is consistent with the management approach as the CODM regularly reviews consolidated financial information for the purpose of assessing performance and allocating resources.

Segment Reporting to the consolidated financial statements.

Cash and Cash Equivalents

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Marketable Securities

The Company considers securities with original maturities of greater than 90 days to be marketable securities.

The Company considers securities with original maturities of greater than three months to be marketable securities.

The Company has the ability, if necessary, to liquidate any of its marketable securities to meet its liquidity needs in the next 12 months.

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Convertible Senior Notes

Prior to the adoption of ASU 2020-06, the Company accounted for the 2027 Notes as a liability and equity component.

The carrying amount of the liability component was calculated by measuring the fair value of similar debt instruments that do not have associated convertible features.

The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2027 Notes.

The equity component was not re-measured as long as it continued to meet the condition for equity classification.

The excess of the principal amount of the liability component over its carrying amount (“debt discount”) was amortized to interest expense over the term of the 2027 Notes.

The Company allocated the issuance costs incurred to the liability and equity components of the 2027 Notes based on their relative fair values.

Issuance costs attributable to the liability component were recorded as a reduction to the liability portion of the 2027 Notes and were amortized to interest expense over the term of the 2027 Notes.

Issuance costs attributable to the equity component, representing the conversion option, were netted with the equity component in stockholders' equity.

Effective January 1, 2022 the Company adopted ASU 2020-06.

After adoption, the Company now accounts for the 2027 Notes as a single liability measured at amortized cost.

The impact upon adoption on the Consolidated Balance Sheets was an increase of approximately $ 44.8 million in convertible senior notes, net, a write-off of $ 9.4 million in deferred income tax liabilities and a decrease of $ 53.5 million in additional paid-in capital.

In addition, upon adoption, there was an adjustment of $ 8.7 million to increase the beginning balance of accumulated deficit on the Consolidated Balance Sheets for previously recognized interest expense related to amortization of debt discount related to the carrying value of the embedded conversion feature upon issuance.

The Company accounts for the 2027 Notes as a liability measured at amortized cost.

The carrying amount was calculated by measuring the fair value of similar debt instruments that do not have associated convertible features.

The excess of the principal amount over its carrying amount (“debt discount”) is amortized to interest expense over the term of the 2027 Notes.

Issuance costs were recorded as a reduction to the principal amount of the 2027 Notes and are being amortized to interest expense over the term of the 2027 Notes.

In accordance with Accounting Standards Update (“ASU”) No.

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Operating leases are included in the balance sheet as right-of-use assets and operating lease liabilities at the present value of the lease payments calculated using the Company’s incremental borrowing rate, unless the implicit rate is readily available.

The Company applied the short-term lease recognition exemption for leases with terms at inception not greater than 12 months and elected to not separate lease and non-lease components for its long-term leases.

The Company applied the short-term lease recognition exemption for leases with

terms at inception not greater than 12 months and elected to not separate lease and non-lease components for its long-term leases.

The Company records rent expense on a straight-line basis over the term of the lease.

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In process research and development

In process research and development costs relate to a milestone payment to Pulmokine for the initiation of the Phase 3 clinical trial for seralutinib.

In process research and development costs relate to a milestone payment to Pulmokine for the initiation of the Phase 3 clinical trial for seralutinib and acquisition of the Respira Merger Option.

Costs related to filing and pursuing patent applications are expensed as incurred, as recoverability of such expenditures is uncertain.

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Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company does not recognize any deferred taxes related to the U.S.

taxes on foreign earnings as we recognize these taxes as a period cost.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740.

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For arrangements that the Company determines are collaborations, it identifies each unit of account, and then determines whether a customer relationship exists for that unit of account.

If the Company determines

a performance obligation within the collaborative arrangement to be with a customer, it applies its revenue recognition accounting policy.

If the Company determines a performance obligation within the collaborative arrangement to be with a customer, it applies its revenue recognition accounting policy.

If a portion of a distinct bundle of goods or services within the collaborative arrangement is not with a customer, the Company applies recognition and measurement based on an analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational and consistently applied accounting policy election.

To the extent the arrangement is within the scope of ASC 808, the Company assesses whether aspects of the arrangement between the Company and the collaboration partner are within the scope of other accounting literature.

To the extent the arrangement is within the scope of ASC 808, the Company assesses whether aspects of the arrangement between the Company

and the collaboration partner are within the scope of other accounting literature.

If the Company concludes that some or all aspects of the arrangement represent a transaction with a customer, the Company accounts for those aspects of the arrangement within the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC 606).

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The estimation of the stand-alone selling price(s) may include estimates regarding forecasted revenues or costs, development timelines, discount rates, and probabilities of technical and regulatory success.

The Company evaluates each distinct performance obligation to determine if it can be satisfied at a point in time or over time.

The Company evaluates each performance obligation to determine if it can be satisfied at a point in time or over time.

Any change made to estimated progress towards completion of a distinct performance obligation and, therefore, revenue recognized will be recorded as a change in estimate.

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There was no impact on our reportable segments identified and additional required disclosures have been included in Note 13, Segment Reporting.

Recent Accounting Pronouncements - Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topics 740):

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ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted.

The Company is currently evaluating the potential effect that the updated standard will have on our consolidated financial statement disclosures.

We have adopted this standard for our fiscal year ended December 31, 2025 on a retrospective basis, and the adoption did not have a material impact on our consolidated financial statements and related disclosures.

See Note 7, Income Taxes, to the consolidated financial statements.

Recent 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, as further clarified by ASU 2025-01, Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date, issued in January, 2025, which requires disaggregated disclosure of certain costs and expenses on an interim and annual basis.

2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The disclosure updates are required to be applied prospectively with the option for retrospective application.

The Company is currently evaluating the impact of adopting ASU No.

In December 2025, the FASB issued ASU No.

2025-12, Codification Improvements, to address suggestions received from stakeholders on the ASC and to make other incremental improvements to U.S.

The update represents

changes to the ASC 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.

2025-12 is effective for fiscal years beginning after December 15, 2026 and interim periods.

The Company is currently evaluating the impact of adopting ASU No.

2024-12 on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270), which provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period.

The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application.

2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years.

The Company is currently evaluating the impact of adopting ASU No.

2024-11 on its consolidated financial statements and related disclosures.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future financial position, results of operations, cash flows or disclosures.

Net Loss Per Share

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Diluted net loss per share excludes the potential impact of the Company’s common stock options, warrants for the purchase of common stock, unvested shares of restricted stock and the potential shares issuable upon conversion of the 2027 Notes because their effect would be anti-dilutive due to the Company’s net loss.

Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same because the otherwise dilutive potential common shares become anti-dilutive and are therefore excluded.

Since the Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same because the otherwise dilutive potential common shares become anti-dilutive and are therefore excluded.

The table below provides potentially dilutive securities not included in the calculation of the diluted net loss per share because to do so would be anti-dilutive (in common stock equivalent shares):

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Shares issuable upon exercise of warrants 30,675,537 32,467,360 32,467,360

Non-vested shares under restricted stock grants — 427,698 1,350,035

Nonvested shares under performance stock units 4,126,962 — —

Nonvested shares under restricted stock grants — — 427,698

Total potentially dilutive securities 94,561,352 101,639,406 68,843,073

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Accrued legal fees 84 65

Accrued in process research and development — 10,000

Accrued accounting fees 449 180

Accrued other 499 311

Accrued income tax 6 —

Total accrued expenses and other current liabilities $ 15,827 $ 15,186

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As of December 31, 2025 and 2024, the carrying amounts of the Company’s financial instruments, which include cash, prepaid and other current assets, interest receivable, accrued research and development expenses, accounts payable and accrued expenses and other current liabilities, approximate fair values because of their short-term maturities.

There was $ 0.2 million interest receivable as of December 31, 2024.

There was no significant interest receivable as of December 31, 2023.

As of December 31, 2025 and 2024, the interest receivable was $ 0.3 million and $ 0.2 million, respectively.

Interest receivable is recorded as a component of prepaid expenses and other current assets on the consolidated balance sheets.

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Realized gains and losses are calculated using the specific identification method and recorded in other income, net in the Company's consolidated statements of operations and comprehensive loss.

The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recover of their amortized cost basis.

The Company has classified these investments as available-for-sale, as the sale of such investments may be required prior to maturity to implement management strategies, and therefore has classified all investment securities as current assets.

The aggregate market value, cost basis, and gross unrealized gains and losses of available-for-sale investments by security type, classified in marketable securities as of December 31, 2025 and 2024 are as follows (in thousands except securities amounts):

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Number of securities with unrealized losses 5

As of December 31, 2024 and December 31, 2023, the Company classified $ 25.3 million and $ 25.2 million, respectively, of assets with original maturities of 90 days or less as cash and cash equivalents.

As of December 31, 2025 and 2024, the Company classified $ 22.2 million and $ 25.3 million, respectively, of assets with original maturities of three months or less as cash and cash equivalents.

At each reporting date, the Company performs an evaluation of impairment to determine if any unrealized losses are due to credit-related factors.

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Factors considered when evaluating available-for-sale investments for impairment include the severity of the impairment, changes in underlying credit ratings, the financial condition of the issuer, the probability that the scheduled cash payments will continue to be made and the Company’s intent and ability to hold the investment until recovery of the amortized cost basis.

The Company intends and has the ability to hold its investments in unrealized loss positions until their amortized cost basis has been recovered.

The Company does not intend to sell these debt securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell these debt securities before recovery of their amortized cost bases, which may be at maturity.

Based on the credit quality of the debt securities, and the Company’s estimates of future cash flows to be collected from those securities, the Company believes the unrealized losses are not credit losses.

As of December 31, 2025 and 2024, there were no material declines in the market value of the Company's available-for-sale investments due to credit-related factors.

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Credit Facility

On May 2, 2019, the Company entered into a credit, guaranty and security agreement, as amended on September 18, 2019, July 2, 2020, December 7, 2022 and February 14, 2023 (the “Credit Facility”), with MidCap Financial Trust (“MidCap”), as agent and lender, and the additional lenders party thereto from time to time (together with MidCap, the “Lenders”), pursuant to which the Lenders, agreed to make term loans available to the Company for working capital and general business purposes, in a principal amount of up to $ 150.0 million in term loan commitments, including a $ 30.0 million term loan that was funded at the closing date, with the ability to access the remaining $ 120.0 million in two additional tranches (each $ 60.0 million), subject to specified availability periods, the achievement of certain clinical development milestones, minimum cash requirements and other customary conditions.

On May 3, 2024, the Credit Facility was terminated and the Company recorded a $ 7.7 million payment of the outstanding debt balance in full and discharged, which released the Company

from the obligations under the Credit Facility, and Lenders’ security interests in the Company’s assets and property were released.

(each $ 60.0 million), subject to specified availability periods, the achievement of certain clinical development milestones, minimum cash requirements and other customary conditions.

On May 3, 2024, the Credit Facility was terminated and the Company recorded a $ 7.7 million payment of the outstanding debt balance in full and discharged, which released the Company from the obligations under the Credit Facility, and Lenders’ security interests in the Company’s assets and property were released.

Unamortized debt discount and issuance costs were written off and recorded in interest expense on the consolidated statements of operations and comprehensive loss.

Since the Credit Facility was terminated, there was no debt outstanding as of December 31, 2024.

As of December 31, 2025, the Company has no further obligations under the Credit Facility.

5.00 % Convertible Senior Notes due 2027

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As of December 31, 2025, the Company was in compliance with these covenants.

In the case of certain events of bankruptcy, insolvency or reorganization, the principal amount of the 2027 Notes together with accrued and unpaid interest, if any, thereon will automatically become and be immediately due and payable.

In the case of

certain events of bankruptcy, insolvency or reorganization, the principal amount of the 2027 Notes together with accrued and unpaid interest, if any, thereon will automatically become and be immediately due and payable.

As of December 31, 2025 and 2024, there were no events or market conditions that would allow holders to convert the 2027 Notes.

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The development activities cannot be performed without significant cost and effort by the Company.

The agreement will remain in effect from the effective date, unless terminated earlier, until, on a licensed product-by-licensed product and country-by-country basis, the later of ten years from the date of first commercial sale or when there is no longer a valid patent claim covering such licensed product or specified regulatory exclusivity for the licensed product in such country.

The Company is obligated to make future development and regulatory milestone payments of up to $ 48.0 million, which includes a payment of $ 5.0 million due upon initiation of a

Phase 3 clinical trial in a second indication, commercial milestone payments of up to $ 45.0 million, and sales milestone payments of up to $ 190.0 million.

The agreement will remain in effect from the effective date, unless terminated earlier, until, on a licensed product-by-licensed product and country-by-country basis, the later of ten

years from the date of first commercial sale or when there is no longer a valid patent claim covering such licensed product or specified regulatory exclusivity for the licensed product in such country.

The Company is obligated to make future development and regulatory milestone payments of up to $ 48.0 million, which includes a payment of $ 5.0 million due upon initiation of a Phase 3 clinical trial in a second indication, commercial milestone payments of up to $ 45.0 million, and sales milestone payments of up to $ 190.0 million.

The Company is also obligated to pay tiered royalties on sales for each licensed product, at percentages ranging from the mid-single digits to the high single-digits.

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Seralutinib $ — $ — $ 10,000

Terminated programs — — 65

Total in process research and development $ — $ 10,000 $ 65

Note 7— Income Taxes

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Pre-tax Loss $ 170,458 $ 55,635 $ 179,809

A reconciliation of income tax expense for the years ended December 31, 2024, 2023 and 2022 is as follows:

A reconciliation of income tax expense (benefit) for the years ended December 31, 2025, 2024 and 2023 is as follows:

2025 2024 2023

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Federal $ ( 94 ) $ 886 $ —

Total income tax expense $ 893 $ 8 $ 8

Total income tax expense (benefit) $ ( 88 ) $ 893 $ 8

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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The change in the valuation allowance for the year ended December 31, 2025 was an increase of $ 45.0 million.

For the Year Ended December 31,

2025 2024 2023

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As of December 31, 2025, the Company had federal and state NOL carryforwards of approximately $ 540.6 million and $ 10.2 million, respectively.

The federal NOL carryforwards can be carried forward indefinitely and be available to offset up to 80 % of future taxable income each year.

The California NOL carryforwards begin to expire in 2036.

The majority of the federal NOL carryforwards can be carried forward indefinitely and be available to offset up to 80 % of future taxable income each year.

The state NOL carryforwards begin to expire in 2036.

As of December 31, 2025, the Company also has Irish NOL carryforwards of approximately $ 143.3 million, which can be carried forward indefinitely.

In the current year, the Company removed federal and foreign NOL carryforwards of $ 141.0 million and $ 0.4 million, respectively, as a result of mergers and liquidations.

As of December 31, 2025, the Company also had orphan drug credit and federal research tax credit carryforwards of approximately $ 65.8 million and California research tax credits of $ 12.0 million.

The federal research tax credit carryforwards begin to expire in 2038, and the California research tax credit carryforward does not expire and can be carried forward indefinitely until utilized.

In the current year, the Company removed federal and California credit carryforwards of $ 9.7 million and $ 0.4 million, respectively, as a result of mergers.

A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows:

2024 2023 2022

Upon adoption of ASU 2023-09, the differences between income taxes expected at the U.S.

federal statutory income tax rate of 21% and the reported income tax (benefit) expense are summarized as follows:

Year Ended December 31, 2025

(in thousands)

Federal statutory income tax rate $ ( 35,795 ) 21.0 %

State income taxes, net of federal benefit (1)

Foreign Tax Effects

Statutory tax rate difference between Ireland and United States 4,245 ( 2.5 %)

Change in valuation allowance 1,916 ( 1.1 %)

Other Adjustments 644 ( 0.4 %)

Research and development credit, net ( 1,386 ) 0.8 %

Orphan Drug Credit, net ( 14,230 ) 8.3 %

Change in valuation allowance 41,203 ( 24.2 %)

Nontaxable or nondeductible items

Non-Deductible Interest 2,307 ( 1.4 %)

Other 1,277 ( 0.7 %)

Other Adjustments ( 274 ) 0.2 %

Effective Tax Rate $ ( 88 ) — %

(1) Income taxes in California made up the majority (greater than 50 percent) of the tax effect in this category.

The reconciliation of the federal statutory income tax rate to the Company's effective income tax rate in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:

Year Ended December 31,

Reconciliation to U.S.

Statutory Rate 2024 2023

Federal statutory income tax rate 21.00 % 21.00 %

Change in valuation allowance ( 12.38 %) ( 8.73 %)

Research and experimentation credits 3.03 % 5.69 %

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Other 1.44 % ( 0.62 %)

Provision for income taxes ( 1.60 %) — % — %

Effective Tax Rate ( 1.60 %) 0.01 %

The NOL carryforward may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experienced one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax respectively.

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The Company had an ownership change with the IPO in February of 2019 which resulted in no forfeiture of NOLs or credits.

The Company had an additional ownership change in July of 2023, which resulted in a significant limitation on the Company's utilization of its NOLs and is expected to result in forfeiture of some or all of the federal credits.

Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate.

The Company files income tax returns in the United States, California, Florida, Ireland, and Luxembourg.

The Company files income tax returns in the United States, California, Florida and Ireland.

Due to the Company’s losses incurred, the Company is subject to the income tax examination by authorities since inception.

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Included in the balance of unrecognized tax benefits at December 31, 2025 is $ 15.5 million that, if recognized, would not impact the Company’s income tax benefit or effective tax rate as long as the Company's deferred tax asset remains subject to a full valuation allowance.

The Company does not expect any significant increases or decreases to the Company's unrecognized tax benefits within the next 12 months.

Note 8— Stockholders’ Equity

The company did not make any material income tax payments for federal, state or foreign purposes.

Note 8— Stockholders’ Equity (Deficit)

Each share of common stock is entitled to one vote.

Common stock owners are entitled to dividends when funds are legally available and declared by the Company's board of directors.

Shelf Registration Statement and Stock Offering

On April 10, 2020, the Company filed a universal shelf registration statement on Form S-3, covering the offering from time to time of common stock, preferred stock, debt securities, warrants and units, which registration statement became automatically effective on April 10, 2020 (the “Shelf Registration Statement”).

On May 21, 2020, the Company completed a public offering of 9,433,963 shares of its common stock at a public offering price of $ 13.25 per share.

The net proceeds from the offering, after deducting underwriting discounts and commissions and other offering costs, were approximately $ 117.1 million.

The shares sold in the offering were registered pursuant to the Company’s Shelf Registration Statement.

Private Placement Financing

On July 15, 2022, the Company completed a private placement of 16,649,365 shares of the Company's common stock at purchase price of $ 7.21 per share.

The gross proceeds for the private placement were $ 120.1 million, before deducting offering expenses, which equaled $ 0.2 million.

On August 9, 2022, the Company filed a registration statement on Form S-3 registering the shares of common stock issued in the private placement, which registration statement became automatically effective on August 9, 2022.

purchase price of $ 1.63125 per share and accompanying warrant, or with respect to any purchaser that was an officer, director, employee or consultant of the Company $ 1.85125 , per share and accompanying warrant.

On July 24, 2023, the Company completed a private placement of 129,869,440 shares of the Company’s common stock and accompanying warrants to purchase up to 32,467,360 shares of the Company's common stock at a combined purchase price of $ 1.63125 per share and accompanying warrant, or with respect to any purchaser that was an officer, director, employee or consultant of the Company $ 1.85125 , per share and accompanying warrant.

Each warrant has an exercise price per share of $ 2.04 , was immediately exercisable on the date of issuance and will expire five years from the closing of the private placement.

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Any shares subject to repurchase by the Company are not deemed, for accounting purposes, to be outstanding until those shares vest.

As such, the Company recognizes the measurement date fair value of the restricted stock over the vesting period as compensation expense.

As such, the Company recognizes the measurement date fair value of the restricted stock over the

vesting period as compensation expense.

As of December 31, 2025, there were no shares of common stock subject to repurchase by the Company.

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The value of the Equity Option is $ 0.5 million, which is included in additional paid-in capital on the Company's consolidated balance sheets.

In November 2025, the Equity Option expired and is no longer exercisable.

Note 9— Equity Incentive Plans

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The number of shares that remained available for issuance under the 2017 Plan (as defined below) as of the effective date of the 2019 Plan were, and shares subject to outstanding awards under the 2017 Plan as of the effective date of the 2019 Plan that are subsequently canceled, forfeited or repurchased by the Company will be added to the shares reserved under the 2019 Plan.

In addition, the number of shares of common stock available for issuance under the 2019 Plan will be automatically increased on the first day of each calendar year during the ten-year term of the 2019 Plan, beginning with January 1, 2020 and ending with January 1, 2029, by an amount equal to 5 % of the outstanding number of shares of the Company’s common stock on December 31 of the preceding calendar year or such lesser amount as determined by the Company’s board of directors.

The Company’s board of directors and stockholders approved an amendment and restatement to the 2019 Plan in 2025 to, among other things, increase the aggregate number of shares of common stock authorized for issuance under the 2019 Plan by 11,350,000 shares of common stock.

with January 1, 2026 and ending with January 1, 2035, by an amount equal to 5 % of the outstanding number of shares of the Company’s common stock on December 31 of the preceding calendar year or such lesser amount as determined by the Company’s board of directors.

As of December 31, 2025, an aggregate of 8,445,734 shares of common stock were available for issuance under the 2019 Plan and 44,796,989 shares of common stock were subject to outstanding awards under the 2019 Plan.

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The participation of the executive officers of the Company in the Option Repricing was subject to their agreement to cancel a portion of their Eligible Options effective immediately (the “Cancelled Options”).

Each executive was required to agree to cancel one-third of his or her Eligible Options, on a grant-by-grant basis.

Each executive was

required to agree to cancel one-third of his or her Eligible Options, on a grant-by-grant basis.

The Cancelled Options were deducted proportionately from the vested and unvested portions of each Repriced Option grant.

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Given that the warrants are indexed to the Company's shares of common stock (and otherwise meet the requirements to be classified in equity), the Company recorded the consideration received from the issuance of the warrants as additional paid-in capital on the Company's consolidated balance sheets.

During the year ended December 31, 2025, 1,791,823 warrants were exercised.

As of December 31, 2025, there were 30,675,537 warrants outstanding.

Restricted Stock

There was no restricted stock outstanding during the year ended December 31, 2025.

The summary of the Company’s restricted stock activity during the years ended December 31, 2024 and 2023 is as follows:

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Nonvested at December 31, 2022 1,350,035 $ 10.83

Granted 572,901 11.94

Vested ( 779,900 ) 10.67

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Nonvested at December 31, 2024 — $ —

Vested ( 427,698 ) 10.92

As of December 31, 2025, there was no unrecognized stock-based compensation expense related to the unvested restricted stock awards.

Performance Stock Units

The fair value of the performance stock units ("PSUs") is determined based on the closing market price of the Company's common stock on the grant date.

Compensation expense for PSUs is recognized if and when the Company concludes that it is probable that the performance conditions will be achieved.

The Company reassesses the probability of vesting at each reporting period for awards with performance conditions and adjusts compensation expense based on its probability assessment.

All PSUs vest in full upon the earlier of (i) the approval of an NDA for seralutinib or (ii) a Change in Control (as defined in the 2019 Plan), in either case on or prior to the fourth anniversary of the grant date, and subject to the participant not experiencing a termination of service prior to the applicable vesting date.

In the event the PSUs have not vested on or prior to the fourth anniversary of the grant date due to the failure of either of the above events to occur, the PSUs will be forfeited on such date.

As of December 31, 2025, the Company determined that the achievement of the performance condition of the PSUs is not probable, and therefore no compensation expense was recorded during the year ended December 31, 2025.

There were no performance stock units outstanding during the years ended December 31, 2024 and 2023.

The summary of the Company’s performance stock units activity during the year ended December 31, 2025 is as follows:

Outstanding Weighted-

Nonvested at December 31, 2024 — $ —

Granted 4,191,337 1.70

Forfeited / cancelled ( 64,375 ) 1.25

Nonvested at December 31, 2025 4,126,962 $ 1.71

As of December 31, 2024, there was no unrecognized stock-based compensation expense related to the unvested restricted stock awards.

Stock-Based Compensation Expense

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Total stock-based compensation expense $ 10,555 $ 20,619 $ 28,518

At December 31, 2024, the total unrecognized compensation related to unvested stock option awards granted was $ 14.0 million, which the Company expects to recognize over a weighted-average period of approximately 2.6 years.

As of December 31, 2024, total unrecognized compensation expense related to the ESPP was $ 0.8 million, which the Company expects to recognize over a weighted-average period of approximately 0.8 years.

At December 31, 2025, the total unrecognized stock-based compensation expense related to the unvested stock option awards granted was $ 19.4 million, which the Company expects to recognize over a weighted-average period of approximately 2.5 years.

As of December 31, 2025, the total unrecognized stock-based compensation expense related to the unvested performance stock units granted was $ 7.1 million, which the Company expects to recognize over a weighted-average period of approximately 1.1 years.

As of December 31, 2025, the total unrecognized compensation expense related to the ESPP was $ 0.6 million, which the Company expects to recognize over a weighted-average period of approximately 0.8 years.

Note 10— Property and Equipment, Net

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2025 December 31,

Office equipment 3 - 7

Computer equipment 5 — 123

Software 3 — 52

Lab equipment 2 - 5

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Property and equipment, net $ 64 $ 10

Depreciation expense for the years ended December 31, 2024, 2023 and 2022 was approximately $ 0.8 million, $ 1.6 million and $ 1.8 million, respectively, and was recorded in general and administrative expense and research and development expense, respectively, on the consolidated statements of operations and comprehensive loss.

Depreciation expense for the years ended December 31, 2024 and 2023 was approximately $ 0.8 million and $ 1.6 million, respectively, and was recorded in general and administrative expense and research and development expense, respectively, on the consolidated statements of operations and comprehensive loss.

The depreciation expense for the year ended December 31, 2025 was immaterial .

Note 11— Commitments and Contingencies

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Total lease cost $ 1,584 $ 3,754 $ 3,166

Cash paid for amounts included in the measurement of operating lease liabilities as of December 31, 2024 and 2023 was $ 3.8 million and $ 3.3 million, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities as of December 31, 2025, 2024 and 2023 was $ 1.8 million, $ 3.8 million and $ 3.3 million, respectively.

Gross future minimum annual rental commitments as of December 31, 2025, were as follows (in thousands):

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The Company concluded that there were four distinct performance obligations under the Chiesi Collaboration Agreement:

Territory license (as defined below), the ROW Territory license (as defined below), and the research and development services of both PAH and PH-ILD clinical development.

Territory license (as defined below), the ROW Territory license (as defined below), the research and development services of PAH clinical development and the research and development services of PH-ILD clinical development.

Revenue associated with the licenses was recognized upon delivery in May 2024.

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The licenses granted to Chiesi are subject to retained rights of the Company for the worldwide development and manufacture of seralutinib and Licensed Products, commercialization of Licensed Products in the U.S.

Territory, and performance of its obligations and exercise of its rights that may be set forth in the global development plan and US commercialization plan, in each case in accordance with the Chiesi Collaboration Agreement.

The parties agreed to use commercially reasonable efforts to conduct development and commercialization activities in relation to seralutinib and Licensed Products, under the global development plan and US commercialization plan in accordance with the timelines therein.

Territory, and performance of its obligations and exercise of its rights that may be set forth in the global development plan and U.S.

commercialization plan, in each case in accordance with the Chiesi Collaboration Agreement.

commercialization plan in accordance with the timelines therein.

The Company will continue to lead global development of seralutinib in PAH and PH-ILD, and the parties will equally share the costs for the activities included in the global development plan for all Licensed Products, with the exception of the PROSERA Phase 3 study, which the Company will be solely responsible for conducting at the Company’s own cost and expense.

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Territory, the development costs incurred following regulatory approval shall continue to be shared equally.

The Company will lead potential commercialization for PAH and PH-ILD in the US, with both parties contributing 50 percent of commercial efforts, including performing 50 percent of the commercialization activities.

Chiesi will lead potential commercialization in the US Territory in any additional indications, and Chiesi will have the exclusive right to commercialize Licensed Products in the ROW Territory.

The Company will lead potential commercialization for PAH and PH-ILD in the U.S.

Territory, with both parties contributing 50 percent of commercial efforts, including performing 50 percent of the commercialization activities.

Chiesi will lead potential commercialization in the U.S.

Territory in any additional indications, and Chiesi will have the exclusive right to commercialize

Licensed Products in the ROW Territory.

Chiesi further agreed to use commercially reasonable efforts to commercialize Licensed Products in certain specified countries in the ROW Territory following receipt of regulatory approvals.

Generally, the Company will have the right to lead in manufacturing commercial supply of seralutinib and Licensed Products for the U.S.

Territory for PAH and PH-ILD,

and, subject to any existing obligations of the Company to third party manufacturers, Chiesi will have the right to lead in manufacturing commercial supply of seralutinib and Licensed Products in the ROW Territory, in each case in accordance with the Chiesi Collaboration Agreement.

Territory for PAH and PH-ILD, and, subject to any existing obligations of the Company to third party manufacturers, Chiesi will have the right to lead in manufacturing commercial supply of seralutinib and Licensed Products in the ROW Territory, in each case in accordance with the Chiesi Collaboration Agreement.

Pursuant to the Chiesi Collaboration Agreement, neither party nor its affiliates is permitted to develop or commercialize any compound or product throughout the term whose primary mechanism of action is inhibition of a tyrosine kinase for the treatment of PAH or PH-ILD in the U.S.

Territory or ROW Territory, subject to certain restrictions for the EU and UK.

Territory or ROW Territory, subject to certain restrictions for the European Union and United Kingdom.

In consideration and as reimbursement for the Company’s development costs, Chiesi agreed to pay the Company an up-front, nonrefundable payment of $ 160 million.

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Potential future royalty payments will be recorded as revenue when the associated sales occur.

Unless earlier terminated, the Chiesi Collaboration Agreement will remain in force until no Licensed Products are being developed or commercialized in the US Territory and in the ROW Territory, on a country-by-country basis, until no royalty terms are in effect for all countries.

Unless earlier terminated, the Chiesi Collaboration Agreement will remain in force until no Licensed Products are being developed or commercialized in the U.S.

Territory and in the ROW Territory, on a country-by-country basis, until no royalty terms are in effect for all countries.

Either party may terminate the Chiesi Collaboration Agreement for the other party’s material breach, subject to a specified notice and cure periods, or due to an insolvency event of the other party.

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The Company has the right to terminate by providing written notice in the event Chiesi or its affiliates or sublicensee brings a patent challenge and Chiesi does not take certain steps to withdraw from or cease supporting such challenge.

Chiesi may terminate the Chiesi Collaboration Agreement without cause upon prior written notice to the Company, subject to a notice period in which all rights to Licensed Products and Licensed Compounds will revert back to the Company.

The Company concluded that progress towards completion of the research and development services performance obligation related to the Chiesi Collaboration Agreement is best measured in an amount proportional to the collaboration expenses incurred and the total estimated collaboration expenses.

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Licenses of Intellectual Property .

The licenses to the Company’s intellectual properties, bundled with the associated know-how, represents two distinct performance obligations.

The licenses and associated know-how were transferred to Chiesi in June 2024, therefore the Company recognized the full revenue related to these distinct performance obligations in the amount of $ 90.7 million during the year ended December 31, 2024 as revenue from sale of licenses on its consolidated statements of operations and comprehensive loss.

The licenses to the Company’s intellectual property, bundled with the associated know-how, represents two distinct performance obligations.

The licenses and associated know-how were transferred to Chiesi in June 2024, therefore the Company recognized the full revenue related to

these distinct performance obligations in the amount of $ 90.7 million during the year ended December 31, 2024 as revenue from sale of licenses on its consolidated statements of operations and comprehensive loss.

Research and Development Services .

The progress towards completion of the two distinct performance obligations related to PAH and PH-ILD research and development services for the Licensed Products is measured in an amount proportional to the research and development expenses incurred and the total estimated PAH and PH-ILD research and development expenses.

The progress towards completion of two distinct performance obligations related to PAH and PH-ILD research and development services for the Licensed Products is measured in an amount proportional to the research and development expenses incurred and the total estimated PAH and PH-ILD research and development expenses.

In addition, the Company and Chiesi share equally in the costs of ongoing global seralutinib clinical development, with the exception of the PROSERA Phase 3 study, and the costs of commercialization in the US.

The Company records the revenue from performing research and development services and the cost-sharing payments due from Chiesi as revenue from contracts with collaborators on its consolidated statements of operations and comprehensive loss.

For the year ended December 31, 2024, the Company recognized $ 24.1 million for the PAH and PH-ILD research and development performance obligations and commercialization activities.

For the years ended December 31, 2025 and 2024, the Company recognized $ 42.3 million and $ 23.5 million, respectively, for the PAH and PH-ILD research and development performance obligations.

For the years ended December 31, 2025 and 2024, the Company recognized $ 6.2 million and $ 0.7 million, respectively, for the PAH and PH-ILD commercial planning activities.

Milestone Payments .

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No royalty revenue was recognized during the year ended December 31, 2025.

The following table presents a summary of the activity in the Company's contract liabilities related to the Chiesi Collaboration Agreement (recorded as contract liabilities on the balance sheet) during the year ended December 31, 2024 (in thousands):

Balance, December 31, 2023 $ —

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Balance, December 31, 2024 55,919

Revenue from PAH research and development service performance obligations satisfied during reporting period ( 9,436 )

Revenue from PH-ILD research and development service performance obligations satisfied during reporting period ( 3,311 )

Effect of exchange rate changes on contract liabilities 6,421

Balance, December 31, 2025 $ 49,593

As of December 31, 2025, the contract liability amount of $ 49.6 million represents the aggregate transaction price allocated to performance obligations that are unsatisfied under the Chiesi Collaboration Agreement.

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The payments are typically due 30 days after quarterly invoices are issued.

The following table presents our contract revenues from Chiesi Collaboration Agreement disaggregated by timing of revenue recognition and excluding royalty revenue (in thousands):

The following table presents the Company's contract revenues from the Chiesi Collaboration Agreement disaggregated by timing of revenue recognition and excluding royalty revenue (in thousands):

Year ended December 31,

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The Company views its operations and manages its business as one operating segment.

The Company's operating segment derives its revenues from its collaboration agreement with Chiesi and is wholly attributable to the United States.

The Company's operating segment derives its revenues from the Chiesi Collaboration Agreement.

The CODM assesses performance for the Company's single operating segment and decides how to allocate resources based on research and development expenses incurred, which is a component of the Company's consolidated net loss as reported on the consolidated statement of operations and comprehensive loss.

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Significant segment expenses which are regularly reported to the CODM for purposes of making decisions regarding the allocation of resources are included within the table below and are reconciled to consolidated net loss:

Years Ended December 31,

Year Ended December 31,

2025 2024 2023

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Segment net loss $ ( 170,370 ) $ ( 56,528 ) $ ( 179,817 )

(1) Other segment items include R&D expenses for other terminated programs.

(1) Other segment items include general and administrative expenses, which are provided to the CODM regularly, but are included within other segment items as they are not utilized as part of the decision making process as it relates to the allocation of resources.

Further, R&D expenses for other terminated programs are also provided to the CODM.

These costs include employee expenses, as well as allocations of consolidated overhead and stock compensation.

Further, general and administrative expenses are also provided to the CODM regularly, but are included within other segment items as they are not utilized as part of the decision making process as it relates to the allocation of resources.

Subsequent events

Other segment items also include IPR&D expense related to the acquisition of the Respira Merger Option.

Note 14 - Investments in Variable Interest Entities

The Company reviews its investments in other entities to determine whether the Company is the primary beneficiary of a variable interest entity ("VIE").

The Company would be the primary beneficiary of the VIE and would be required to consolidate the VIE, if it has the power to direct the significant activities of the entity and the obligation to absorb losses or receive benefits from the entity that may be significant to the VIE.

On September 24, 2025, the Company entered into an option agreement with Prana Bio, Inc.

(“Prana”) to acquire Prana and its wholly-owned subsidiary, Respira Therapeutics, Inc.

The Company identified Prana as a VIE but does not consolidate Prana as the Company lacks the power to direct the activities that significantly impact the economic success of Prana.

Pursuant to the agreement, the Company issued 2,500,000 shares of its common stock as consideration for the option grant and agreed to issue up to an additional 1,500,000 shares of common stock following the exercise of the option.

Concurrent with the option agreement, the Company entered into a research funding agreement with Prana whereas the Company agreed to provide up to a total of $ 7.8 million to Respira to carry out chemistry, manufacturing, and controls (“CMC”) activities related to Respira’s RT234 drug program.

The Merger Option was valued at $ 7.5 million based on the value of the 2,500,000 shares of common stock issued using the Company's share price as of September 24, 2025, which was $ 2.99 per share of common stock.

The option value was recognized as IPR&D expense in the Company's consolidated statements of operations and comprehensive loss.

The Company does not consolidate Respira as the Company lacks the power to direct the activities that significantly impact the economic success of Respira.

The Company's maximum loss exposure to Prana, prior to the exercise of the option to acquire, is limited to the Merger Option and cost reimbursements for certain research and development activities, which will be recognized as research and development expenses in the Company's consolidated statements of operations and comprehensive loss as incurred.

Note 15 - Subsequent events

The Company has evaluated all subsequent events and transactions through the filing date.

There were no material events that impacted the audited consolidated financial statements or disclosures.

On March 15, 2026, and in accordance with the terms of the 2019 Plan, the Company's board of directors (the "Board") approved a stock option repricing (the “2026 Option Repricing”) whereby the exercise price of each Eligible Option (as defined below) will be immediately reduced to the closing stock price on March 19, 2026.

For purposes of the 2026 Option Repricing, “Eligible Options” with respect to the 2026 Option Repricing are 48,725,528 outstanding stock options as of March 17, 2026 (vested or unvested) granted under the 2019 Plan and held by those eligible employees of the Company identified by the Board, including the Company’s executive officers.

Except for the reduction in the exercise prices of the Eligible Options as described above, the Eligible Options will retain their existing terms and conditions as set forth in the 2019 Plan and the applicable award agreements.

On March 16, 2026, we commenced a workforce reduction of 77 individuals, constituting approximately 48 % of our workforce, to reduce our operating expenses.

Our remaining management and employees will continue the development of seralutinib and explore potential regulatory paths forward.

This workforce reduction is expected to be substantially completed by the end of May 2026.

EXHIBIT INDEX

3 unchanged sentences

10-Q 8/8/2023 3.1

3.2 Amended and Restated Bylaws.

3.2 Amended and Restated By laws .

8-K 11/27/2023 3.1

23 unchanged sentences

10.5# Gossamer Bio, Inc.

2019 Incentive Award Plan and form of stock option grant notice and stock option agreement thereunder.

S-1/A 1/23/2019 10.5

2019 Incentive Award Plan , as amended and restated .

DEF 14A 4/29/2025 Appendix A

10.6# Gossamer Bio, Inc.

Performance Stock Unit Agreement under the 2019 Equity Incentive Plan

10-Q 11/5/2025 10.1

10.7# Gossamer Bio, Inc.

2019 Employee Stock Purchase Plan.

2 unchanged sentences

Non-Employee Director Compensation Program.

10-K 3/13/2025 10.7

10.9# Gossamer Bio, Inc.

33 unchanged sentences

Insider Trading Compliance Policy and Procedures

21.1 List of Subsidiaries of the Registrant.

23.1 Consent of Ernst & Young LLP, independent registered public accounting firm.

10-K 3/13/2025 19.1

Number Exhibit Description Incorporated by Reference Filed

Form Date Number

Number Form Date Number

21.1 List of Subsidiaries of the Registrant.

23.1 Consent of I ndependent R egistered P ublic A ccounting F irm.

31.1 Certification of Chief Executive Officer of Gossamer Bio, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.

10 unchanged sentences

101.PRE XBRL Presentation Linkbase Document X

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X

# Indicates management contract or compensatory plan.

33 unchanged sentences

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 9A. Controls and Procedures