What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-27 · 271 added, 199 removed, 605 unchanged (44% of the section changed)

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We have audited the accompanying consolidated balance sheets of Structure Therapeutics Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred shares and shareholders' equity (deficit) and cash flows for each of the two years in the period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S.

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred shares and shareholders’ 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.

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

Critical Audit Matters

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:

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Description of the Matter

At December 31, 2024, the Company has accrued $7.0 million of clinical expenses.

As described in Note 2 to the Consolidated Financial Statements, the Company recognizes accruals for clinical expenses based on the level of services performed,

progress of the studies, including the phase or completion of events, and contracted costs with contract research organizations.

The Company records the estimated costs of clinical services provided but not yet invoiced, and adjusts the accruals based on the actual timing and the level of effort of the performance of services accordingly.

Auditing accrued clinical expenses was complex due to the analysis of extensive data in determining the expenses incurred but not invoiced.

At December 31, 2025, the Company has $15.8 million of accrued clinical expenses.

As described in Note 2 to the Consolidated Financial Statements, the Company recognizes accruals for clinical expenses based on the level of services

performed, progress of the related studies, including the phase or completion of events, and contracted costs with contract research organizations.

The Company determines the cost of clinical services provided but not yet invoiced, and adjusts accruals based on the timing and actual level of effort required to perform such services.

Auditing accrued clinical costs was complex due to the extensive data utilized by management in determining the amount of expense incurred but not invoiced.

How We Addressed the Matter in Our Audit

Our audit procedures included understanding the process and testing the accuracy and completeness of the inputs used in management’s analysis to determine expenses incurred but not invoiced and making inquiries of the Company's personnel that oversee the clinical trials.

Further, we verified the accrued expenses incurred but not invoiced to the underlying agreements and the information provided by third-party service providers.

We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s internal controls related to its accrued clinical expenses process.

For example, we tested controls over management’s review of the inputs used in determining accrued clinical expenses.

Our audit procedures included, among others, testing the accuracy and completeness of the data used to determine expenses incurred but not invoiced, and making inquiries of the Company's personnel that oversee clinical trials.

We also agreed a sample of accrued expenses incurred but not invoiced to underlying agreements and information provided by third-party service providers.

/s/ Ernst & Young LLP

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Short-term investments

Other receivable

Prepaid expenses and other current assets

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General and administrative

Other license income

Gains on sale of non-financial assets

Total operating expenses

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Weighted-average ordinary shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted

Other comprehensive gain:

Other comprehensive income:

Unrealized gain on investments, net

Total other comprehensive gain

Total other comprehensive income

Comprehensive loss

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Balance at December 31, 2024

Issuance of ordinary shares upon exercise of vested share options

Issuance of ordinary shares pursuant to employee share purchase plan

Issuance of ordinary shares upon vesting of restricted share units

Issuance of ordinary shares upon vesting of performance share units

Shares withheld for taxes

Depository issuance cost offset

Issuance of ordinary shares as part of ATM Offering, net of sales commission and offering expenses of $ 2,744

Issuance of ordinary shares upon 2025 Follow-On Offering, net of issuance costs and underwriting discounts of $ 39,873

Pre-funded warrants issued in connection with the 2025 Follow-On Offering, net of issuance costs and underwriting discounts of $ 6,158

Share-based compensation expense

Unrealized gain on investments, net

Balance at December 31, 2025

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

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Accretion of net investment discounts

Gains on sale of non-financial assets

Changes in operating assets and liabilities:

Other receivable

Prepaid expenses and other current assets

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Purchases of property and equipment

Net cash used in investing activities

Proceeds from sale of non-financial asset

Net cash provided by (used in) investing activities

Cash flows from financing activities

Proceeds from ATM Offering, net of sales commission

Proceeds from issuance of ordinary shares in 2025 Follow-On Offering, net of underwriting discounts and commissions

Proceeds from issuance of pre-funded warrants in 2025 Follow-On Offering, net of underwriting discounts and commissions

Proceeds from issuance of ordinary shares in 2024 Follow-On Offering, net of underwriting discounts and commissions

Proceeds from issuance of ordinary shares in initial public offering, net of underwriting discounts and commissions

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Proceeds from exercise of share options

Payment of taxes on restricted share units withheld for taxes

Net cash provided by financing activities

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Offering costs included in accounts payable and accrued expenses and other current liabilities

Conversion of redeemable convertible preferred shares into ordinary shares upon initial public offering

Purchases of property and equipment in accounts payable and accrued expenses and other current liabilities

Operating lease right-of-use assets obtained in exchange for new lease liabilities

Depository issuance cost offset

Purchases of property and equipment in accounts payable and accrued expenses and other current liabilities

Conversion of redeemable convertible preferred shares into ordinary shares upon initial public offering

Recognition of asset retirement obligation

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(“Gimigela”) were incorporated in the United States as wholly-owned subsidiaries of the Company.

On September 17, 2025, Gangkhar Bio Inc.

(“Gangkhar”) was incorporated in the United States as a wholly-owned subsidiary of the Company.

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

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The net proceeds from the IPO were approximately $ 166.7 million after deducting underwriting discounts and commissions and estimated offering costs.

Upon the closing of the IPO, all outstanding shares of the Company’s redeemable convertible preferred shares converted into 67,018,087 ordinary shares.

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a par value of $ 0.0001 per share, of such class or classes as may be designated by the Company’s board of directors in accordance with the Company’s amended and restated memorandum and articles of association.

Upon the closing of the IPO, all outstanding shares of the Company’s redeemable convertible preferred shares converted into 67,018,087 ordinary shares.

In connection with the completion of its IPO, the Company’s memorandum of association was amended and restated to provide for 500,000,000 authorized ordinary shares with a par value of $ 0.0001 per share and 100,000,000 authorized undesignated shares with a par value of $ 0.0001 per share, of such class or classes as may be designated by the Company’s board of directors in accordance with the Company’s amended and restated memorandum and articles of association.

Private Placement

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LLC, Morgan Stanley & Co.

LLC, Jefferies LLC and Leerink Partners LLC, as representatives of the underwriters named therein (collectively, the “Underwriters”), pursuant to which the Company proposed to issue and sell to the Underwriters an aggregate of 9,066,972 ADSs, each representing three ordinary shares of the Company, and granted the underwriters an option (the “Underwriters’ Option”) to purchase up to an aggregate of 1,360,045 additional ADSs (the “Follow-On Offering”).

LLC, Jefferies LLC and Leerink Partners LLC, as representatives of the underwriters named therein (collectively, the “2024 Underwriters”), pursuant to which the Company agreed to issue and sell to the 2024 Underwriters an aggregate of 9,066,972 ADSs and granted the 2024 Underwriters an option (the “2024 Underwriters’ Option”) to purchase up to an aggregate of 1,360,045 additional ADSs (the “2024 Follow-On Offering”).

The 2024 Follow-On Offering closed on June 7, 2024, at which time the Company issued 10,427,017 ADSs, including the issuance of 1,360,045 ADSs in connection with the full exercise of the 2024 Underwriters’ Option, at a price of $ 52.50 per ADS.

The net proceeds from the 2024 Follow-On Offering were approximately $ 512.7 million after deducting underwriting discounts and commissions and estimated offering costs.

At-the-Market Offering

In August 2025, the Company entered into a sales agreement (the “ATM Sales Agreement”) with Leerink Partners LLC and Cantor Fitzgerald & Co.

(the “ATM Sales Agents”), pursuant to which the Company may, from time to time, offer and sell ADSs through the ATM Sales Agents in any manner deemed to be an “at-the-market offering,” up to an aggregate offering price of $ 250.0 million (the “ATM Offering”).

In September 2025, the Company sold 3,040,000 ADSs under the ATM Sales Agreement, for gross proceeds of approximately $ 58.5 million.

The net proceeds to the Company after deducting sales commissions to the ATM Sales Agents were approximately $ 57.1 million, and, after further deducting offering expenses, were approximately $ 55.8 million.

As of December 31, 2025, approximately $ 191.5 million remained available for sale under the ATM Sales Agreement.

The shares were sold pursuant to the Company’s automatic shelf registration statement on Form S-3, filed with the Securities and Exchange Commission (“SEC”) on August 6, 2025 (the “Shelf Registration Statement”), and future shares may be sold pursuant to the Shelf Registration Statement or a subsequent registration statement.

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2025 Follow-On Offering

On December 9, 2025, the Company entered into an underwriting agreement with Jefferies LLC, Leerink Partners LLC, Goldman Sachs & Co.

LLC and Morgan Stanley & Co.

LLC, as representatives of the underwriters named therein (collectively, the “2025 Underwriters”), pursuant to which the Company agreed to issue and sell to the 2025 Underwriters an aggregate of 8,461,538 ADSs, and, in lieu of ADSs to certain investors, pre-funded warrants (“Pre-Funded Warrants”) to purchase ordinary shares represented by 1,538,462 ADSs.

In addition, the Company granted the 2025 Underwriters an option (the “2025 Underwriters’ Option”) to purchase up to an aggregate of 1,500,000 additional ADSs at the public offering price, less the underwriting discounts and commissions (the “2025 Follow-On Offering”).

The 2025 Follow-On Offering closed on December 11, 2025, at which time the Company issued 9,961,538 ADSs, including the issuance of 1,500,000 ADSs in connection with the full exercise of the 2025 Underwriters’ Option, at a price of $ 65.00 per ADS, and, in lieu of ADSs to certain investors, Pre-Funded Warrants to purchase ordinary shares represented by 1,538,462 ADSs, at a price to the public of $ 64.9999 per Pre-Funded Warrant, which represents the per ADS public offering price less the $ 0.0001 per share exercise price for each such Pre-Funded Warrant.

The net proceeds from the 2025 Follow-On Offering were approximately $ 701.5 million after deducting underwriting discounts and commissions and estimated offering costs.

Liquidity and Capital Resources

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In June 2024, the Company closed its 2024 Follow-On Offering, for net proceeds of approximately $ 512.7 million.

In September 2025, the Company sold 3,040,000 ADSs under the ATM Sales Agreement for net proceeds of approximately $ 55.8 million.

In December 2025, the Company closed its 2025 Follow-On Offering, for net proceeds of approximately $ 701.5 million.

As of December 31, 2025, the Company had cash, cash equivalents and short-term investments of $ 1,446.2 million.

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All intercompany accounts and transactions have been eliminated in consolidation.

The functional and reporting

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currency of the Company and its subsidiaries is the U.S.

The functional and reporting currency of the Company and its subsidiaries is the U.S.

The aggregate foreign currency transaction gain (loss) included in determining net loss was not material for the periods presented.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of expenses during the reporting periods.

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during the reporting periods.

Such estimates include lease liability, accruals for research and development activities, share-based compensation and certain other accrued liabilities.

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The Company operates and manages its business as one reportable and operating segment, which is the business of research and development of medicines that target chronic diseases with unmet medical need.

The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews consolidated financial statements and decides how to allocate resources and evaluate segment performance based on net loss reported in the consolidated statements of operations and comprehensive loss.

The Company’s Chief Executive Officer, who is the chief operating decision maker (“CODM”), reviews consolidated financial statements and decides how to allocate resources and evaluate segment performance based on net loss reported in the consolidated statements of operations and comprehensive loss.

The Company’s long-lived assets are primarily in China.

The table below is a summary of the segment net loss, including significant segment expenses (in thousands):

YEAR ENDED DECEMBER 31,

Operating expenses:

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Clinical research and development

Other research and development expenses

General and administrative

Other license income

Gains on sale of non-financial assets

Total operating expenses

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The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of

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Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing to fund operations.

proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing to fund operations.

Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical studies and regulatory approval prior to commercialization.

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The Company classifies its investments as available-for-sale and records them at fair value based upon market prices at period end.

Unrealized gains and losses that are deemed temporary in nature are recorded in accumulated other comprehensive income as a separate component of shareholders’ equity (deficit).

Unrealized gains and losses that are deemed temporary in nature are recorded in accumulated other comprehensive income as a separate component of shareholders’ equity.

Dividend and interest income are recognized when earned.

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Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive loss.

At December 31, 2024 and 2023,

At December 31, 2025 and 2024, gross unrealized losses on the Company’s available-for-sale securities were not material and, accordingly, no credit loss reserves were recognized.

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gross unrealized losses on the Company’s available-for-sale securities were not material and, accordingly, no credit loss reserves were recognized.

Fair Value of Financial Instruments

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Deferred Offering Costs

The Company capitalizes, within other non-current assets, certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financings, including its IPO, Private Placement and Follow-On Offering, until such financings are consummated.

The Company capitalizes, within other non-current assets, certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financings, including its IPO, Private Placement, 2024 Follow-On Offering, At-the-Market Offering and 2025 Follow-On Offering, until such financings are consummated.

After consummation of the equity financing, these costs are recorded as a reduction of the proceeds received as a result of the equity financing.

Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs will be immediately written off to general and administrative expenses.

Upon closing the IPO, Private Placement and Follow-On Offering, all deferred offering costs were charged against the proceeds from the IPO, Private Placement and Follow-On Offering and recorded in shareholders’ equity as a reduction of additional paid-in capital.

Upon closing the equity financing, all deferred offering costs were charged against the proceeds from the respective equity financing and recorded in shareholders’ equity as a reduction of additional paid-in capital.

As of December 31, 2025 and 2024, there were no deferred offering costs recorded on the consolidated balance sheets.

Accrued Research and Development and Clinical Expenses

The Company has entered into various agreements with contract manufacturing organizations (“CMOs”) and contract research organizations (“CROs”).

The Company’s research and development and clinical accruals are determined based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs.

The Company determines its costs through discussions with

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Accrued Research and Development Expenses

The Company has entered into various agreements with contract manufacturing organizations (“CMOs”) and contract research organizations (“CROs”).

The Company’s research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs.

The estimated costs of research and development provided, but not yet invoiced, are included in other current liabilities on the consolidated balance sheets.

If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly.

internal clinical stakeholders and outside service providers as to the progress or stage of completion of clinical studies or services and the contracted fee to be paid for such services.

The determined costs of research and development and clinical studies provided, but not yet invoiced, are included in other current liabilities on the consolidated balance sheets.

If the actual timing of the performance of services or the level of effort varies from the original amounts, the Company will adjust the accrual accordingly.

Payments made to CMOs and CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets on the consolidated balance sheets until the services are rendered.

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The Company accounts for share-based compensation arrangements with employees and non-employees using a fair value method which requires the recognition of compensation expense for costs related to all share-based payments including share options.

The fair value method requires the Company to estimate the

The fair value method requires the Company to estimate the fair value of share options on the date of grant using an option-pricing model.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted that are expensed on a straight-line basis over the requisite service period, which is generally the vesting period.

The Company accounts for

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fair value of share-based payment awards on the date of grant using an option-pricing model.

The Company accounts for forfeitures as they occur.

forfeitures as they occur.

Option valuation models, including the Black-Scholes option-pricing model, require the input of several assumptions.

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● Expected volatility.

The Company estimated the volatility data based on a study of publicly traded industry peer companies as it did not have any trading history for its ordinary shares.

The Company estimated the volatility data based on a study of publicly traded industry peer companies as it did not have sufficient trading history for its ordinary shares.

For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies.

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A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized.

In determining the need for a valuation allowance, we consider future growth, forecasted earnings, future taxable income, the mix of

In determining the need for a valuation allowance, we consider future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which the Company operates, historical earnings, taxable income in prior years, if carryback is permitted under the law, carryforward periods and prudent and feasible tax planning strategies.

Due to cumulative losses over recent years and based on all available positive and negative

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earnings in the jurisdictions in which the Company operates, historical earnings, taxable income in prior years, if carryback is permitted under the law, carryforward periods and prudent and feasible tax planning strategies.

Due to cumulative losses over recent years and based on all available positive and negative evidence, the Company has determined that it is more likely than not that its U.S.

evidence, the Company has determined that it is more likely than not that its U.S.

and certain foreign deferred tax assets will not be realizable as of December 31, 2025.

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Net Loss Per Share Attributable to Ordinary Shareholders

Basic net loss per ordinary share is calculated by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares, including non-voting ordinary shares, outstanding during the period, without consideration of potentially dilutive securities.

Diluted net loss per share is computed by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares, including non-voting ordinary shares, and potentially dilutive securities outstanding for the period.

Basic net loss per ordinary share is calculated by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period, including the Pre-Funded Warrants, without consideration of potentially dilutive securities.

Ordinary shares into which pre-funded warrants may be exercised are considered outstanding for the purposes of computing basic net loss per share because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date (see Note 7).

Diluted net loss per ordinary share is computed by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares, including the Pre-Funded Warrants, and potentially dilutive securities outstanding for the period.

For purposes of the diluted net loss per share calculation, the unvested restricted share units, ordinary shares committed under the employee share purchase plan and share options are considered to be potentially dilutive securities.

Because the Company has reported a net loss for all periods presented, diluted net loss per ordinary share is the same as basic net loss per ordinary share for those periods.

Comprehensive Income (Loss)

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Other comprehensive income (loss) represents unrealized gains or losses on short-term investments that are reported as a component of shareholders’ equity on the consolidated balance sheets.

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Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Account Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss.

This ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Account Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures .

This ASU requires greater disaggregation of

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information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid.

This ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions.

This ASU is applicable to the Company beginning with its Annual Report on Form 10-K for the fiscal year ending December 31, 2025.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements and related disclosures.

The adoption of this ASU using a retrospective approach will only impact disclosures and did not have a material impact on the Company’s consolidated financial statements (see Note 10).

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures .

This ASU requires greater disaggregation of information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid.

This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

This ASU should be applied on a prospective basis although retrospective application is permitted.

The Company is currently evaluating the impact the adoption of this ASU will have on disclosures in its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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The Company is currently evaluating the impact the adoption of this ASU will have on disclosures in its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

This ASU clarifies and improves existing interim reporting guidance by consolidating disclosure requirements within Topic 270 and introducing a disclosure principle requiring entities to disclose events and changes occurring after the most recent annual reporting period that are expected to have a material effect on the entity’s financial condition or results of operations.

The ASU does not introduce significant changes to recognition or measurement guidance.

This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact the adoption of this ASU will have on disclosures in its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements .

This ASU addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to GAAP.

The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply.

This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years.

Entities are required to apply the amendments to ASC 260 retrospectively.

All other amendments may be applied prospectively or retrospectively.

The Company is currently evaluating the impact the adoption of this ASU will have on disclosures in its consolidated financial statements.

STRUCTURE THERAPEUTICS INC.

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Lesser of useful life or lease term

Construction in progress

Accumulated depreciation

Property and equipment, net

Depreciation expense for the years ended December 31, 2024 and December 31, 2023 was $ 1.0 million and $ 0.3 million, respectively.

Depreciation expense for the years ended December 31, 2025, 2024 and 2023 was $ 1.3 million, $ 1.0 million and $ 0.3 million, respectively.

As of December 31, 2025, the Company’s other non-current assets consist of long-term deposit and deferred tax assets.

As of December 31, 2024, the Company’s other non-current assets consist of prepaid clinical expenses.

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Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities;

Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

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Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

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Money market funds

Cash equivalents

government bonds

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Corporate debt securities

Short-term investments

Total fair value of financial assets

Money market funds

Cash equivalents

government bonds

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Corporate debt securities

Short-term investments

Total fair value of financial assets

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As of December 31, 2025, the remaining contractual maturities of $ 541.1 million of investments were within one year and $ 105.5 million of investments were after one year through two years.

The Company has classified these securities as short-term investments on its consolidated balance sheets as they are available for use in the current operations.

The unrealized losses for marketable securities related to changes in interest rates and the Company has the intent and ability to hold the underlying securities until the estimated date of recovery of its amortized cost.

No allowance for credit losses was recorded at either December 31, 2024 or 2023, and no impairment losses were recognized for the years ended December 31, 2024 and 2023.

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allowance for credit losses was recorded at either December 31, 2025 or 2024, and no impairment losses were recognized for the years ended December 31, 2025, 2024 and 2023.

Money market funds and U.S.

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Operating Leases

In June 2021, Shanghai ShouTi entered into an agreement to lease approximately 5,900 square feet of office space in Chamtime Plaza in Shanghai, China.

The lease commenced on September 16, 2021 and expired on September 15, 2023.

Shanghai ShouTi had an option to extend the lease term, however the renewal term and conditions were to be agreed upon between Shanghai ShouTi and the landlord.

For accounting purposes, the lease term did not include the option to extend the lease term as it was not reasonably certain that the lease term would be extended.

In November 2021, StructureTx US entered into an agreement to lease approximately 4,050 square feet of office spaces in South San Francisco, California.

The lease commenced on November 11, 2021, and expired on October 31, 2023.

In June 2023, Shanghai ShouTi entered into a lease agreement for approximately 22,500 square feet of office space in Shanghai, China, for its research and development operations office, which commenced in July 2023 and will expire on December 31, 2026.

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The annual base rent will initially be approximately $ 0.5 million and will increase annually by 3 %, and StructureTx US will also be responsible for the payment of additional costs and fees related to its use of the premises.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

In June 2023, Shanghai ShouTi entered into another lease agreement for approximately 8,400 square feet of laboratory space located in Shanghai, China for its research and development activities.

1 unchanged sentence

The annual base rent will be approximately $ 0.3 million based on the exchange rate upon entering into this lease agreement, and Shanghai ShouTi is also responsible for the payment of additional costs and fees related to its use of the premises.

In February 2025, StructureTx US entered into a sublease agreement for approximately 22,365 square feet of office space located in South San Francisco, California to expand its corporate headquarters.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

commenced in March 2025 and will expire on October 31, 2029.

The annual base rent will initially be approximately $ 1.0 million and will increase annually by 3 %, and StructureTx US will also be responsible for the payment of additional costs and fees related to its use of the premises.

In March 2025, Shanghai ShouTi entered into another lease agreement for approximately 5,000 square feet of office and laboratory space located in Shanghai, China for its research and development activities.

The lease commenced in June 2025 and will expire on August 9, 2028.

The maturities of operating lease liabilities as of December 31, 2025, were as follows (in thousands):

4 unchanged sentences

Operating lease liability, net of current portion

Operating lease expense was $ 2.5 million and $ 1.8 million for the years ended December 31, 2024 and 2023, respectively, including $ 0.8 million and $ 0.9 million short-term lease costs for the years ended December 31, 2024 and 2023, respectively.

Operating lease expense was $ 4.2 million, $ 2.5 million and $ 1.8 million for the years ended December 31, 2025, 2024 and 2023, respectively, including $ 1.4 million, $ 0.8 million and $ 0.9 million short-term lease costs for the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025, the weighted average remaining lease term was 2.9 years, and the weighted average discount rate used to measure the lease liabilities for such operating leases upon recognition was 7.7 %.

During the years ended December 31, 2024 and 2023, cash paid for amounts included in operating lease liabilities of $ 1.7 million and $ 0.6 million, respectively, was included in operating activities on the consolidated statements of cash flows.

During the years ended December 31, 2025, 2024 and 2023, cash paid for amounts included in operating lease liabilities of $ 2.9 million, $ 1.7 million and $ 0.6 million, respectively, was included in operating activities on the consolidated statements of cash flows.

Indemnification Agreements

4 unchanged sentences

The maximum potential number of future payments the Company could be required to make under these provisions is not determinable.

The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

The Company has also entered into indemnification agreements with its directors and officers that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by the applicable law and the amended and restated memorandum and articles of association of the Company.

1 unchanged sentence

As of December 31, 2025 and 2024, the Company did not have any material indemnification claims that were probable or reasonably possible and consequently had not recognized any related liabilities.

Legal Proceedings

The Company is subject to claims and assessments from time to time in the ordinary course of business but is not aware of any such matters, individually or in the aggregate, that will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Redeemable Convertible Preferred Shares

Under the Company’s amended and restated memorandum and articles of association, prior to the IPO, the Company’s redeemable convertible preferred shares were issuable in series.

Upon closing of the Company’s IPO, all outstanding redeemable convertible preferred shares automatically converted into 67,018,087 ordinary shares on a one -for-one basis.

There were no issued and outstanding redeemable convertible preferred shares as of December 31, 2024 and December 31, 2023.

Legal Proceedings

Ordinary Shares

As of December 31, 2025, the Company’s amended and restated memorandum and articles of association, authorizes the Company to issue 500,000,000 ordinary shares and 100,000,000 undesignated shares, all of which remain undesignated shares, all with a par value of $ 0.0001 per share.

The undesignated shares may be designated by the Company’s board of directors in accordance with the Company’s amended and restated articles of association.

In May 2023 and September 2023, the Company’s board of directors designated 7,410,518 and 2,401,920 non-voting ordinary shares, respectively, in accordance with the amended and restated articles of association.

The non-voting ordinary shares ranked on parity with the ordinary shares as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary.

The non-voting ordinary shares were entitled on an equal basis to any dividends declared on the ordinary shares on an as-converted to ordinary share basis.

Each non-voting ordinary shareholder had the right to convert each non-voting ordinary share into one ordinary share, subject to appropriate adjustment in the event of any dividend, split, reverse split, combination or other similar recapitalization with respect to the ordinary shares, at such holder’s election by providing written notice to the Company.

In May 2023, the Company entered into an Exchange Agreement with Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., and Biotechnology Value Trading Fund OS, L.P.

(collectively referred to as “BVF”), who in the aggregate held at the time of the transaction more than 5 % of the Company’s issued share capital, pursuant to which BVF delivered to the Company, a total of 7,410,518 ordinary shares of the Company, in exchange for the Company’s delivery of 7,410,518 newly designated non-voting ordinary shares, par value $ 0.0001 per share.

The exchange did not result in any change in the aggregate number of outstanding shares of the Company as the exchange was implemented on a one -for-one basis.

In September 2023, the Company entered into a share purchase agreement to issue certain shares to purchasers, including 2,401,920 newly designated non-voting ordinary shares at a purchase price of $ 12.49 per share (or the equivalent of $ 37.47 per ADS) in the Private Placement which closed on October 3, 2023.

As of December 31, 2023, all outstanding non-voting ordinary shares had been converted into 9,812,438 ordinary shares.

The undesignated shares may be designated by the Company’s board of directors in accordance with the Company’s amended and restated memorandum and articles of association.

Ordinary shareholders are entitled to dividends if and when declared by the Company’s board of directors.

As of December 31, 2025 and 2024, no dividends on ordinary shares had been declared by the board of directors.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company has the following ordinary shares reserved for future issuance (in thousands):

1 unchanged sentence

Share options available for future grant

Pre-Funded Warrants outstanding

Restricted share units outstanding

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Generally, options and restricted share awards vest over a four-year period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2023 Equity Incentive Plan

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The maximum number of ordinary shares that may be issued under the 2023 Plan as of December 31, 2025 was 33,032,833 .

In addition, t he number of ordinary shares reserved for issuance under the Company’s 2023 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2024 through

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

January 1, 2033, in an amount equal to 4 % of the total number of ordinary shares outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of ordinary shares determined by the Company’s board of directors.

In addition, t he number of ordinary shares reserved for issuance under the Company’s 2023 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2024 through January 1, 2033, in an amount equal to 4 % of the total number of ordinary shares outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of ordinary shares determined by the Company’s board of directors.

In January 2026, the number of ordinary shares available for issuance under the 2023 Plan was increased by 8,500,536 shares as a result of the automatic increase provision in the 2023 Plan.

5 unchanged sentences

Vested and expected to vest at December 31, 2025

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying share options and the fair value of the Company’s ordinary shares for share options that were in-the-money at the end of each period.

The aggregate intrinsic value of options exercised for the years ended December 31, 2024 and 2023 was $ 16.6 million and $ 3.9 million, respectively.

The total fair value of options that vested during the years ended December 31, 2024 and 2023 was $ 19.8 million and $ 5.5 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

the end of each period.

The aggregate intrinsic value of options exercised for the years ended December 31, 2025, 2024 and 2023 was $ 11.9 million, $ 16.6 million and $ 3.9 million, respectively.

The total fair value of options that vested during the years ended December 31, 2025, 2024 and 2023 was $ 24.9 million, $ 19.8 million and $ 5.5 million, respectively.

The Company estimated the fair value of share options using the Black Scholes option-pricing model.

5 unchanged sentences

Expected dividend yield

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Performance Options

In February 2023, the Company’s board of directors approved the grant of performance share options for 1,200,000 ordinary shares, which were granted under the 2023 Equity Incentive Plan.

In February 2023, the Company’s board of directors approved the grant of performance share options for 1,200,000 ordinary shares, which were granted under the 2023 Plan.

Each share option would vest over four years , subject to the achievement of certain clinical milestones as determined by the Company’s compensation committee in the first year following the grant, and subject to the employees’ continuous service through each vesting date.

11 unchanged sentences

The offering period and purchase periods are determined by the board of directors.

The Company issued 68,262 shares under the ESPP during the year ended December 31, 2024.

The Company issued 133,182 , 68,262 and 0 shares under the ESPP during the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025, 3,909,366 shares under the ESPP remain available for purchase.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Compensation expense is calculated using the fair value of the employees' purchase rights under the Black-Scholes model, which was estimated using the following weighted-average assumptions:

3 unchanged sentences

Expected dividend yield

Restricted Shares

On April 29, 2019, 5,891,064 shares of the Company’s ordinary shares which were previously issued to its founders were converted to restricted ordinary shares with a vesting term of four years with 25 % of the shares vesting after one year from the vesting commencement date of April 29, 2019 and the remainder ratably on a monthly basis over the following three years , provided that the shareholder continues to provide services to the Company as of the date of such vesting.

The transaction was accounted for as a grant of restricted shares with weighted-average per share grant-date fair value of $ 0.33 per share with the total compensation cost of $ 1.9 million, which was recognized over the four-year requisite service period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Activity with respect to restricted shares was as follows (in thousands, except per share amounts):

NUMBER OF SHARES

GRANT DATE FAIR

Unvested, December 31, 2022

Unvested, December 31, 2023

The fair value of restricted shares vested during the year ended December 31, 2023 was $ 0.1 million.

Restricted Share Units

1 unchanged sentence

Outstanding, December 31, 2024

Granted (including performance-based restricted share units)

Outstanding, December 31, 2025

In March 2024, the Company granted 381,252 restricted share units with service and performance conditions to certain employees.

The awards are divided into three equal tranches, and the vesting of each tranche is contingent on the occurrence of certain milestone events and fulfilment of service condition.

The achievement of two of the three milestones became probable as of December 31, 2024, and the Company recognized cumulative compensation cost of $ 1.7 million during the year ended December 31, 2024.

The awards are divided into three equal tranches, and the vesting of each tranche was contingent on the occurrence of certain milestone events and fulfilment of service condition.

As of December 31, 2024, the Company concluded that the two milestones were probable of achievement and therefore recognized compensation expense of $ 1.7 million during the year ended December 31, 2024.

In June 2025, the Company’s compensation committee certified the achievement of two of the three milestones, effective July 1, 2025.

Because the third milestone was not achieved, the third tranche of performance share units was forfeited, effective July 1, 2025.

As such, no share-based compensation expense has been or will be recognized for this third tranche of performance share units.

During the year ended December 31, 2025, the Company recognized compensation expense of $ 0.9 million related to these restricted share units.

Share-Based Compensation Associated with Awards to Employees and Non-Employees

7 unchanged sentences

As of December 31, 2025, the total unrecognized share-based compensation expense related to the ESPP was $ 1.2 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.1 years.

Ordinary Share Warrants

In connection with entering into a Loan and Security Agreement (the “SVB Agreement”) with Silicon Valley Bank (“SVB”) in 2020, the Company issued SVB a warrant to purchase shares of its ordinary shares at an exercise price of $ 0.48 per share (“SVB Warrant”).

The SVB Warrant was immediately exercisable for 112,279 ordinary shares of the Company and could have been exercisable for an additional number of ordinary shares equal to 44,567 ordinary shares upon draw of Tranche A under the SVB Agreement and 22,283 ordinary shares upon draw of Tranche B under the SVB Agreement.

The warrant for Tranche A shares and Tranche B shares expired on July 31, 2021 and July 31, 2022, respectively, as the Company elected to allow the Tranche A and Tranche B financings to expire unused on July 31, 2021 and July 31, 2022, respectively.

In February 2023, SVB fully exercised the SVB Warrant for 106,060 ordinary shares through a cashless exercise.

The components of loss before income taxes by U.S.

and foreign jurisdictions were as follows (in thousands):

Loss before income tax expense:

Pre-Funded Warrants

On December 11, 2025, in connection with the 2025 Follow-On Offering the Company issued 9,961,538 ADSs, including the issuance of 1,500,000 ADSs in connection with the full exercise of the 2025 Underwriters’ Option, and, in lieu of ADSs to certain investors, 1,538,462 Pre-Funded Warrants to purchase 4,615,386 ordinary shares.

The Pre-Funded Warrants were sold at a public offering price of $ 64.9999 per Pre-Funded Warrant, which represents the per ADS public offering price less the $ 0.0001 per share exercise price for each such Pre-Funded Warrant.

The Pre-Funded Warrants do not have an expiration date and are exercisable at any time.

The Pre-Funded Warrants are classified as a component of permanent equity within the Company's consolidated balance sheets as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holders to receive a fixed number of ordinary shares upon exercise.

Upon issuance, the Company recorded the Pre-Funded Warrants at the net proceeds, after deducting $ 6.2 million of underwriting discount and commissions and other offering expenses, of approximately $ 93.8 million.

The Company may receive nominal proceeds, if any, from the exercise of the Pre-Funded Warrants.

As of December 31, 2025, none of the Pre-Funded Warrants have been exercised.

License Agreement

In December 2025, the Company entered into non-exclusive license agreement (the “GNE Agreement”) with Genentech, Inc.

(“Genentech”) and F.

Hoffmann-La Roche Ltd (“Roche”, and together with Genentech, “GNE”) under which the Company granted to GNE a non-exclusive, sublicensable, royalty-bearing license, under the Company’s licensed patents, to make, use, sell, offer for sale, and import licensed products (the “License”).

The Company concluded that this type of transaction did not meet the definition of “ordinary activities” of the Company and GNE is not considered a “customer” in this transaction.

In the absence of a specific guidance, the Company applied ASC 606, Revenue from Contracts with Customers , by analogy to account for the GNE Agreement.

Under the terms of the GNE Agreement, the Company received an upfront payment of $ 100.0 million from Genentech in January 2026.

In addition, the Company is eligible to receive low single digit royalties on annual worldwide net sales of licensed products.

Unless terminated earlier, the GNE Agreement shall continue in full force and effect, on a country-by-country and licensed product-by-licensed product basis, until the expiration of the last to expire valid claim of a licensed patent.

GNE may, in its sole discretion, terminate the GNE Agreement in its entirety at any time and without cause upon 60 days’ prior written notice to the Company.

Each party may terminate the GNE Agreement in its entirety if the other party materially breaches the GNE Agreement and fails to cure within specified period.

In addition, the Company may terminate the GNE Agreement in its entirety if GNE commences a legal, administrative or other action challenging the validity, enforceability, patentability or scope of any licensed patent.

The Company determined that the License is the only promise and performance obligation in the GNE Agreement.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

To determine the consideration amount to recognize under the GNE Agreement, the Company evaluated all payments to be received during the contract.

The Company determined that at inception the transaction price was $ 100.0 million which consisted of fixed consideration of $ 100.0 million represented by the upfront payment.

The transaction price was recognized as other license income at the point in time when the License was delivered to GNE in December 2025.

As of December 31, 2025, the other receivable under the GNE Agreement was $ 100.0 million, all of which was received in January 2026.

The royalties will be recognized if and when the underlying sales occur.

Asset Purchase Agreement

In August 2025, Basecamp Bio entered into an asset purchase agreement (the “Exelixis Agreement”) with Exelixis, Inc.

related to the sale of certain early-stage non-metabolic and non-obesity assets.

The Company concluded that the sale of such assets should be accounted for under the guidance at ASC 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets , as this type of transaction did not meet the definition of “ordinary activities” of the Company and Exelixis is not considered a “customer” in this transaction.

Under the Exelixis Agreement, the Company is eligible for initial payments totaling $ 10.0 million and patent cost reimbursements, and contingent milestone payments of up to $ 90.0 million in the aggregate.

In addition, the Company is eligible to receive tiered, low single digit royalties on the net sales of approved products.

As of December 31, 2025, initial payments and patent cost reimbursements of $ 10.2 million has been received and is included in gains on sale of non-financial asset on the consolidated statements of operations and comprehensive loss.

At the inception of the Exelixis Agreement and as of December 31, 2025, it was determined that it was not more likely than not that the variable consideration related to the contingent milestone payments and royalties will be received and, therefore, such variable consideration was excluded from the total consideration.

The contingent milestone payments will be recognized if and when it becomes more likely than not that the underlying milestones will be achieved and royalties will be recognized if and when the related sales occur.

The components of income (loss) before income taxes by U.S.

and foreign jurisdictions are as follows (in thousands):

Income (loss) before income tax expense:

United States

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The provision for (benefit from) income taxes consists of the following (in thousands):

1 unchanged sentence

Deferred tax provision (benefit):

Total provision (benefit) for income taxes:

Total provision for (benefit from) income taxes:

The Company adopted ASU 2023-09 retrospectively in the year ended December 31, 2025.

The Company is domiciled in the Cayman Islands;

however, it is a resident for U.S.

federal income tax purposes.

Consequently, the Company has elected to use the U.S.

federal statutory income tax rate of 21 % as the applicable statutory rate for its effective tax rate reconciliation.

This rate is the rate of the primary jurisdiction in which the Company is subject to income tax.

A reconciliation of the U.S.

federal statutory income tax rate to its effective tax rate, pursuant to the disclosure requirements of ASU 2023-09 for the years ended December 31, 2025, 2024 and 2023, are as follows (in thousands, except percentages):

federal statutory income tax rate

state and local income taxes, net of U.S.

federal income tax effect 1

Foreign tax effects:

federal R&D tax credits

Changes in valuation allowances

Changes in unrecognized tax benefits

Nontaxable or nondeductible items:

Stock-based compensation

1 The states that contribute to the majority (greater than 50%) of the tax effect in this category include California for 2025, 2024, and 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company is domiciled in the Cayman Islands and the reconciliation of the expected tax computed at the zero tax rate for the Cayman Islands to the total provision (benefit) was as follows:

Tax computed at Cayman Island statutory rate

federal tax differential

State income tax, net of federal benefit

Changes in unrecognized tax benefits

Share-based compensation

Tax rate differential for international subsidiaries

Valuation allowance

Effective tax rate

Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the years ended December 31, 2025, 2024 and 2023, are as follows (in thousands):

Foreign - China

Income taxes paid, net of refunds

A valuation allowance has been recognized to offset the Company’s deferred tax assets, as necessary, by the amount of any tax benefits that, based on evidence, are not expected to be realized.

Significant components of the Company’s deferred tax asset or liability are shown below (in thousands):

Deferred tax assets:

Net operating loss

Research and experimentation expenses

Research credits

Capitalized research and development

Stock-based compensation and bonus accrual

Operating lease liability

Related party accrued expenses

Accrued expenses

Total deferred tax assets

Valuation allowance

Net deferred tax assets

Deferred tax liabilities:

Right-of-use assets

2 unchanged sentences

Net deferred tax assets

The Company considers the earnings of its foreign subsidiaries to be indefinitely reinvested outside of the United States.

The amount of unrecognized deferred tax liability on these undistributed earnings is not material as of December 31, 2024 where the potential income taxes or foreign withholding taxes that might arise if such earnings were distributed in the future.

The Company considers the earnings of its foreign subsidiaries to be indefinitely reinvested outside of the U.S.

The amount of unrecognized deferred tax liability on these undistributed earnings where the potential income taxes or foreign withholding taxes that might arise if such earnings were distributed in the future was not material as of December 31, 2025 where the potential U.S.

income taxes or foreign withholding taxes that might arise if such earnings were distributed in the future.

STRUCTURE THERAPEUTICS INC.

2 unchanged sentences

net deferred tax assets as of December 31, 2025, 2024 and 2023.

The valuation allowance increased by $ 16.6 million and $ 23.8 million during the years ended December 31, 2024 and 2023, respectively.

The change in valuation allowance for the year ended December 31, 2024 is primarily attributable to the capitalization of research or experimental (“R&E”) expenditures of $ 16.4 million resulting from the Tax Cuts and Jobs Act (“TCJA”).

The valuation allowance increased by $ 38.8 million, $ 16.6 million and $ 23.8 million during the years ended December 31, 2025, 2024 and 2023, respectively.

The change in valuation allowance for the year ended December 31, 2025 is primarily attributable to domestic net operating loss carryforwards primarily due to the full expensing of domestic research or experimental (“R&E”) expenditures of $ 91.7 million resulting from the One Big Beautiful Bill Act (the “OBBBA”).

The change in valuation allowance for the year ended December 31, 2024 is primarily attributable to the capitalization of R&E expenditures of $ 16.4 million resulting from the Tax Cuts and Jobs Act (“TCJA”).

The change in valuation allowance for the year ended December 31, 2023 is primarily attributable to increases in current year net operating loss (“NOL”) carryforwards of $ 10.4 million and the capitalization of R&E expenditures of $ 10.9 million.

2 unchanged sentences

federal NOLs and federal tax credit carryforwards of $ 194.5 million and $ 10.8 million, respectively.

The federal NOL will begin to expire in 2036 and the federal tax credits will begin to expire in 2039 if not utilized.

In addition, as of December 31, 2024, the Company had state NOLs and state tax credit carryforwards of approximately $ 147.8 and $ 1.3 million, respectively, as reported on the Company’s tax returns.

The federal NOLs will begin to expire in 2036 and the federal tax credits will begin to expire in 2039, if not utilized.

In addition, as of December 31, 2025, the Company had state NOLs and state tax credit carryforwards of approximately $ 275.8 and $ 2.4 million, respectively, as reported on the Company’s state income tax returns.

The state NOLs will begin to expire in 2036, if not utilized.

2 unchanged sentences

The Company may have undergone ownership changes in the past, which could result in limitations on its ability to utilize its NOLs, or future changes in its stock ownership, some of which are outside of its control, could result in an ownership change under Section 382 and similar state provisions.

Such an annual limitation could result in the expiration of the NOL and tax credit carryforwards before utilization, and it would not be material to the consolidated financial statements.

A reconciliation of the beginning and ending balance of total unrecognized tax benefits is as follows (in thousands):

Such an annual limitation could result in the expiration of the NOLs and tax credit carryforwards before utilization, and it would not be material to the consolidated financial statements.

A reconciliation of the beginning and ending balances of total unrecognized tax benefits are as follows (in thousands):

Beginning of year

2 unchanged sentences

Reductions for tax positions related to prior years

As of December 31, 2024 and 2023, the Company had gross unrecognized tax benefits of approximately $ 7.9 million and $ 0.9 million, respectively, related to research and development tax credits and state NOLs, all of which would give rise to additional deferred tax assets if recognized.

As of December 31, 2025, 2024 and 2023, the Company had gross unrecognized tax benefits of approximately $ 9.5 million, $ 7.9 million and 0.9 million, respectively, related to research and development tax credits and state NOLs, all of which would give rise to additional deferred tax assets if recognized.

This would also give rise to a corresponding increase in the valuation allowance, and would not impact the Company’s effective tax rate.

The Company did not accrue interest or penalties related to unrecognized tax benefits because the liability would be offset by existing tax attributes as of December 31, 2025, 2024 and 2023.

The potential reduction in unrecognized tax benefits during the next 12 months is not expected to be material.

The Company is subject to taxation in the United States and foreign jurisdictions.

As of December 31, 2025, the Company’s tax years 2017 to 2025 remain subject to examination in most jurisdictions.

As of December 31, 2024, the Company was not under examination by the Internal Revenue Service, any state or foreign tax jurisdiction.

Due to differing interpretations of tax laws and regulations, tax authorities may dispute the Company’s tax filing positions.

The Company evaluates its exposures associated with its tax filing positions.

As of December

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

31, 2025, the Company was not under examination by the Internal Revenue Service, or by any state or foreign tax jurisdiction.

Due to differing interpretations of tax laws and regulations, tax authorities may dispute the Company’s tax filing positions.

The Company evaluates its exposures associated with its tax filing positions.

Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share attributable to ordinary shareholders, which excludes unvested restricted shares and shares which are legally outstanding, but subject to repurchase by the Company (in thousands, except per share amounts):

Net loss attributable to ordinary shareholders

Weighted-average ordinary shares outstanding

weighted-average unvested restricted ordinary shares subject to repurchase

Weighted-average ordinary shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted

Net loss per share attributable to ordinary shareholders, basic and diluted

weighted average of ordinary shares to be issued upon exercise of Pre-Funded Warrants

Weighted average shares used to compute net loss per share, basic and diluted

Net loss per share, basic and diluted

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to ordinary shareholders for the periods presented because including them would have been antidilutive (in thousands):

2 unchanged sentences

Shares committed under ESPP

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Defined Contribution Plan

3 unchanged sentences

The Company may also make discretionary contributions to the 401(k) plan.

During the years ended December 31, 2024 and 2023, matching contributions were $ 0.6 million and $ 0.2 million, respectively.

During the years ended December 31, 2025, 2024 and 2023, matching contributions were $ 1.0 million, $ 0.6 million and $ 0.2 million, respectively.

Related Party Transactions

Ramy Farid, the President and Chief Executive Officer of Schrödinger, Inc.

(“Schrödinger”) was a member of the Company’s board of directors until June 25, 2024.

During the years ended December 31, 2024 and 2023, the Company had existing collaboration agreements to use the results provided by Schrödinger’s software

(“Schrödinger”) was a member of the Company’s board of directors until June 25, 2024, at which time Mr.

Farid ceased being a related party.

During the years ended December 31, 2024 and 2023, the Company had existing collaboration agreements to use the results provided by Schrödinger’s software platform for its research purposes.

During the years ended December 31, 2024 and 2023, the Company paid $ 3.2 million and $ 0.3 million to Schrödinger, respectively, and had a payable balance of $ 0.3 million to Schrödinger as of December 31, 2024.

Lhotse Collaboration Agreement with Schrödinger LLC

In October 2020, Lhotse Bio, Inc.

(“Lhotse”), the Company’s wholly-owned subsidiary, entered into a collaboration agreement (the “Lhotse-Schrödinger Agreement”) with Schrödinger LLC, one of the Company’s shareholders, to discover and develop novel, orally bioavailable, small molecule inhibitors of lysophosphatidic acid 1 receptor (“LPA1R”).

Under the Lhotse-Schrödinger Agreement, Schrödinger LLC was obligated to provide computational modeling and design support, including by using its technology platform to perform virtual screens, and Lhotse was obligated to provide day-to-day chemistry and biology support.

Pursuant to the Lhotse-Schrödinger Agreement, a joint steering committee comprised of representatives from both parties to oversee the research performed under the agreement.

During the term of the Lhotse-Schrödinger Agreement and for a specified period thereafter while Lhotse was engaged in active development of any compound having activity against LPA1R that was discovered or developed under the Lhotse-Schrödinger Agreement, Schrödinger LLC was obligated to work exclusively with Lhotse on the design, research, development and commercialization of compounds that inhibit LPA1R.

Lhotse solely owned the research results, work product, inventions and other intellectual property generated under the Lhotse-Schrödinger Agreement that were directed to LPA1R.

Under the Lhotse-Schrödinger Agreement, Lhotse was obligated to pay Schrödinger LLC a quarterly active program payment in the low six digits for each successive three-month period during which Schrödinger LLC continued to perform research work as agreed by the parties, and as of December 31, 2024, the Company has paid to Schrödinger LLC an aggregate of $ 0.8 million.

If Lhotse developed and commercialized a product containing a compound (a “Lhotse Collaboration Compound”), that was discovered or developed under the Lhotse-Schrödinger Agreement (a “Lhotse Collaboration Product”), Lhotse was obligated to pay Schrödinger LLC development and regulatory milestone payments of up to an aggregate of $ 17.0 million, regardless of the number of Lhotse Collaboration Products that reach such milestones.

Lhotse will also be obligated to pay Schrödinger LLC tiered royalties on a Lhotse Collaboration Product-by-Lhotse Collaboration Product basis equal to low single digit percentages on aggregate worldwide net sales of Lhotse Collaboration Products, subject to specified reductions and offsets.

Lhotse’s obligation to pay royalties to Schrödinger LLC was to expire on a Lhotse Collaboration Product-by-Lhotse Collaboration Product and country-by-country basis on the later of (i) the expiration of the last-to-expire Lhotse patent claim covering the composition of matter of the Lhotse Collaboration Compound contained in such Lhotse Collaboration Product in such country, (ii) the expiration of regulatory, pediatric, orphan drug, or data exclusivity with respect to such Lhotse Collaboration Product in such country, and (iii) ten years after the first commercial sale of such Lhotse Collaboration Product in such country (the “Lhotse Royalty Term”).

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platform for its research purposes.

During the years ended December 31, 2024 and 2023, the Company paid $ 3.2 million and $ 0.3 million to Schrödinger, respectively, and had $ 0.3 million and $ 0.5 million payable balance to Schrödinger as of December 31, 2024 and 2023, respectively.

Lhotse Collaboration Agreement with Schrödinger

In October 2020, Lhotse Bio, Inc.

(“Lhotse”), the Company’s wholly-owned subsidiary, entered into a Collaboration Agreement (the “Lhotse-Schrödinger Agreement”) with Schrödinger, which is one of the Company’s shareholders, to discover and develop novel, orally bioavailable, small molecule inhibitors of lysophosphatidic acid 1 receptor (“LPA1R”).

Under the Lhotse-Schrödinger Agreement, Schrödinger is obligated to provide computational modeling and design support, including by using its technology platform to perform virtual screens, and Lhotse is obligated to provide day-to-day chemistry and biology support.

Pursuant to the Lhotse-Schrödinger Agreement, a joint steering committee comprised of representatives from both parties oversees the research performed under the agreement.

During the term of the Lhotse-Schrödinger Agreement and for a specified period thereafter while Lhotse is engaged in active development of any compound having activity against LPA1R that is discovered or developed under the Lhotse-Schrödinger Agreement, Schrödinger is obligated to work exclusively with Lhotse on the design, research, development and commercialization of compounds that inhibit LPA1R.

Lhotse will solely own the research results, work product, inventions and other intellectual property generated under the Lhotse-Schrödinger Agreement that are directed to LPA1R.

Under the Lhotse-Schrödinger Agreement, Lhotse is obligated to pay Schrödinger a quarterly active program payment in the low six digits for each successive three-month period during which Schrödinger continues to perform research work as agreed by the parties, and as of December 31, 2024, the Company has paid to Schrödinger an aggregate of $ 0.8 million.

If Lhotse develops and commercializes a product containing a compound (a “Lhotse Collaboration Compound”), that is discovered or developed under the Lhotse-Schrödinger Agreement (a “Lhotse Collaboration Product”), Lhotse is obligated to pay Schrödinger development and regulatory milestone payments of up to an aggregate of $ 17.0 million, regardless of the number of Lhotse Collaboration Products that reach such milestones.

Lhotse will also be obligated to pay Schrödinger tiered royalties on a Lhotse Collaboration Product-by-Lhotse Collaboration Product basis equal to low single digit percentages on aggregate worldwide net sales of Lhotse Collaboration Products, subject to specified reductions and offsets.

Lhotse’s obligation to pay royalties to Schrödinger will expire on a Lhotse Collaboration Product-by-Lhotse Collaboration Product and country-by-country basis on the later of (i) the expiration of the last-to-expire Lhotse patent claim covering the composition of matter of the Lhotse Collaboration Compound contained in such Lhotse Collaboration Product in such country, (ii) the expiration of regulatory, pediatric, orphan drug, or data exclusivity with respect to such Lhotse Collaboration Product in such country, and (iii) ten years after the first commercial sale of such Lhotse Collaboration Product in such country (the “Lhotse Royalty Term”).

Unless terminated earlier, the Lhotse-Schrödinger Agreement will continue for three years , subject to extension by mutual written agreement of the parties.

Either party may terminate the Lhotse-Schrödinger Agreement for the other party’s uncured material breach, subject to certain notice and cure periods, or for the other party’s bankruptcy or insolvency.

Lhotse’s obligation to make milestone and royalty payments (subject to the Lhotse Royalty Term) to Schrödinger continues after the expiration or termination of the Lhotse-Schrödinger Agreement.

As of December 31, 2024, no milestone or royalty payments have been paid or accrued.

Unless terminated earlier, the Lhotse-Schrödinger Agreement continued for three years , subject to extension by mutual written agreement of the parties.

Either party may have terminated the Lhotse-Schrödinger Agreement for the other party’s uncured material breach, subject to certain notice and cure periods, or for the other party’s bankruptcy or insolvency.

Lhotse’s obligation to make milestone and royalty payments (subject to the Lhotse Royalty Term) to Schrödinger LLC continues after the expiration or termination of the Lhotse-Schrödinger Agreement.

As of December 31, 2025 and 2024, no milestone or royalty payments have been paid or accrued.

Aconcagua Collaboration Agreement with Schrödinger

In November 2023, Aconcagua Bio, Inc.

(“Aconcagua”), the Company’s wholly-owned subsidiary, entered into a collaboration agreement (the “Aconcagua-Schrödinger Agreement”) with Schrödinger to discover and

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develop novel, small molecule modulators of a specific target.

(“Aconcagua”), the Company’s wholly-owned subsidiary, entered into a collaboration agreement (the “Aconcagua-Schrödinger Agreement”) with Schrödinger to discover and develop novel, small molecule modulators of a specific target.

Under the Aconcagua-Schrödinger Agreement, Schrödinger is obligated to provide computational modeling and design support, including by using its technology platform to perform virtual screens, and Aconcagua is obligated to provide day-to-day chemistry and biology support.

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Aconcagua’s obligation to make milestone and royalty payments (subject to the Aconcagua Royalty Term) to Schrödinger continues after the expiration or termination of the Aconcagua-Schrödinger Agreement, unless the Aconcagua-Schrödinger Agreement is terminated under specified circumstances.

As of December 31, 2024, no milestone or royalty payments have been paid or accrued under this agreement.

Purchase of non-voting ordinary shares by BVF

In May 2023, the Company entered into an Exchange Agreement with BVF, who in the aggregate held at the time of the transaction more than 5 % of the Company’s issued share capital, pursuant to which BVF delivered to the Company, a total of 7,410,518 ordinary shares of the Company, in exchange for the Company’s delivery of 7,410,518 newly designated non-voting ordinary shares, par value $ 0.0001 per share.

The exchange did not result in any change in the aggregate number of outstanding shares of the Company as the exchange was implemented on a one -for-one basis.

On September 29, 2023, the Company entered into a share purchase agreement to issue certain shares to purchasers, including 2,401,920 newly designated non-voting ordinary shares at a purchase price of $ 12.49

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per share (or the equivalent of $ 37.47 per ADS) to BVF, for aggregate gross proceeds of approximately $ 30.0 million, in the Private Placement which closed on October 3, 2023.

As of December 31, 2023, all outstanding non-voting ordinary shares were converted into 9,812,438 ordinary shares.

As of December 31, 2024, no milestone or royalty payments had been paid or accrued under this agreement.

As of December 31, 2025, two milestones of $ 9.0 million were achieved and $ 3.0 million was paid under this agreement.

The remaining $ 6.0 million was paid in January 2026.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data