What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-04 · 138 added, 248 removed, 162 unchanged (70% of the section changed)

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We are an innovative biopharmaceutical company pioneering the development of therapeutics engineered to stimulate the body’s immune system for the treatment of cancer and other immune-mediated conditions.

We are leveraging our proprietary PREDATOR platform to design conditionally activated molecules that stimulate both adaptive and innate immunity with the goal of addressing the limitations of conventional proinflammatory immune therapies.

We have leveraged our proprietary PREDATOR platform to design conditionally activated molecules that stimulate both adaptive and innate immunity with the goal of addressing the limitations of conventional proinflammatory immune therapies.

Our molecules, which we refer to as INDUKINE and INDUCER molecules, are intended to activate selectively in the tumor microenvironment, or TME.

Our most advanced product candidates, WTX-124 and WTX-330, are systemically delivered, conditionally activated Interleukin-2 and Interleukin-12, respectively, INDUKINE molecules for the treatment of multiple tumor types.

We are currently evaluating WTX-124 in a Phase 1/1b clinical trial as a monotherapy and in combination with Merck & Co., Inc.’s anti-PD-1 therapy KEYTRUDA (pembrolizumab) in patients with immunotherapy sensitive advanced or metastatic solid tumors who have failed standard of care treatment, including checkpoint inhibitor therapy.

In June 2024, we reported updated interim data from the monotherapy dose-escalation arms of the Phase 1/1b clinical trial, selected a recommended dose for expansion, initiated monotherapy dose expansion arms, and reported initial data from the combination dose escalation cohorts of the Phase 1/1b clinical trial.

All expansion arms are either actively enrolling patients or fully enrolled in the ongoing Phase 1/1b clinical trial at a recommended dose of 18 mg administered intravenously every two weeks.

During the fourth quarter of 2025, we plan to release interim data from the monotherapy and combination expansion arms and to provide feedback from the Company’s End of Phase 1 meeting with regulatory authorities.

We evaluated WTX-330 in a first-in-human Phase 1 clinical trial for the treatment of immunotherapy resistant advanced or metastatic solid tumors or lymphoma.

Phase 1 of this clinical trial was completed in the first quarter of 2025.

We reported initial data from the Phase 1 clinical trial in June 2024 and presented updated interim safety and efficacy data from the Phase 1 clinical trial at the Society for Immunotherapy of Cancer Annual Meeting in November 2024, highlighting the tolerability profile and monotherapy efficacy signals of WTX-330.

Guided by these data, we initiated a Phase 1b/2 clinical trial of WTX-330 in the first quarter of 2025 in patients with selected advanced or metastatic solid tumors and are actively enrolling.

An update on the clinical trial is expected to be released in the fourth quarter of 2025, with guidance on potential further development plans.

We continue to build our PREDATOR platform to generate a pipeline of innovative therapeutics that cover a diversity of immune stimulating mechanisms with the potential to address significant unmet medical need in therapeutic areas including new immuno-oncology, autoimmune, and inflammatory diseases.

Our PREDATOR platform consists of our protein engineering technologies and our know-how, which we use to generate INDUKINE and INDUCER molecules with multiple functional domains rationally engineered into a single protein to achieve the desired pharmaceutical profile.

Each of our lead INDUKINE and INDUCER molecules consists of four components:

an immunomodulating agent (cytokine or T cell engager), an inactivation domain, a half-life extension domain, and a proprietary protease-cleavable linker.

Our INDUKINE molecules contain cytokines that modulate the immune system within a disease-specific tissue, with full potency and functionality observed in preclinical studies.

Our INDUCER molecules contain potent T cell engager molecules that redirect T cells to tumor cells via tumor associated antigens, resulting in T cell dependent killing of tumor cells.

The inactivation domain physically blocks the immunomodulating payload in non-diseased tissues throughout the body, or the periphery, preventing the payload from being active until the inactivation domain is removed by protease cleavage in the disease-specific tissue, resulting in an active immunomodulating agent (cytokine or T cell engager).

The half-life extension domain enables high systemic and disease-specific tissue exposure for the INDUKINE or INDUCER molecule prior to its cleavage in the disease-specific tissue.

After tissue specific cleavage, the half-life extension domain is removed, and the payload is released to modulate the activity of immune cells.

We select the proprietary protease-cleavable linker to enable conditional release of the immunomodulating agent of the INDUKINE or INDUCER molecule within disease-specific tissue.

This selection is based on our extensive screening in

preclinical studies to identify protease-cleavable linkers that are efficiently cleaved by a broad array of disease-specific tissues (e.g., human tumor tissues) with minimal cleavage in non-diseased tissues.

We have previously announced additional INDUKINE preclinical development candidates available for partnering, including WTX-712, WTX-518, and WTX-921.

WTX-712 is a systemically delivered, conditionally activated Interleukin-21 (IL-21) INDUKINE molecule that is being developed to minimize the severe toxicities that have been observed with recombinant IL-21 therapy and maximize clinical benefit when administered as monotherapy or in combination with checkpoint inhibitors in refractory and/or immunologically unresponsive tumors.

In April 2024, we presented preclinical data for WTX-712 at the American Association for Cancer Research, or AACR, Annual Meeting demonstrating that WTX-712 acts through a unique mechanism that robustly activates tumor-specific T lymphocytes with an expanded therapeutic window through its selective release of wild-type IL-21 in the TME.

WTX-518 is a systemically delivered, conditionally activated Interleukin-18 (IL-18) INDUKINE molecule in development for the treatment of cancer and is designed to promote activation of immune cells in the TME, resulting in antitumor immunity.

In April 2024, we also presented preclinical data for WTX-518 at the AACR Annual Meeting demonstrating that WTX-518 exhibits remarkable tumor-selective activation, resistance to IL-18BP and robust immune activation.

WTX-921 is a systemically delivered, conditionally activated Interleukin-10 (IL-10) INDUKINE molecule for treatment of inflammatory bowel disease, or IBD, and potentially other inflammatory diseases.

We are also utilizing this PREDATOR platform know-how and expertise to develop conditionally activated immune cell engagers, such as T cell engagers.

T cell engagers are typically bispecific antibodies that redirect immune cells to cancer cells via engagement with tumor associated cell surface antigens, leading to immune cell mediated killing of the cancer cells.

We call our T cell engager molecules INDUCER molecules and have provided initial preclinical data for our proprietary INDUCER T cell engager molecules demonstrating that our PREDATOR masking technology silenced peripheral activity and prevented cytokine release.

We have nominated our first INDUCER development candidate, WTX-1011, targeting Six-Transmembrane Epithelial Antigen of the Prostate 1 (STEAP1).

STEAP1 has limited expression in normal tissues but is overexpressed in prostate tumors.

This makes it an attractive target for T cell engager therapy, but existing anti-STEAP1 T-cell engager therapies are still associated with notable toxicities in the periphery such as cytokine release.

Preclinical data has demonstrated that the masking technology in Werewolf’s WTX-1011 INDUCER molecule has successfully silenced peripheral activity and prevented cytokine release, providing an expanded therapeutic window.

In April 2022, we entered into a global collaboration and license agreement, or the Collaboration Agreement, with Jazz Pharmaceuticals Ireland Limited, or Jazz, under which Jazz acquired exclusive global development and commercialization rights related to Interferon alpha, or IFNα, INDUKINE molecule, JZP898 (formerly WTX-613), as well as products containing certain isolated recombinant polypeptides comprising IFNα that meet specified criteria (each such product, a Licensed Product).

Pursuant to the terms of the Collaboration Agreement, we were responsible for certain preclinical development activities with respect to JZP898 and other development activities specified in mutually agreed upon development plans.

Jazz generally reimbursed us for the cost of such activities.

Jazz is responsible for all other development and commercialization activities conducted to exploit the Licensed Products.

In June 2024, we executed a transfer agreement, or the Transfer Agreement, to assign our rights in a development agreement with a contract manufacturer of JZP898 to Jazz.

The execution of this Transfer Agreement was the last material performance obligation required of us under the Collaboration Agreement.

We believe that there is substantial doubt about our ability to continue as a going concern for at least twelve months from the date these condensed consolidated financial statements are issued in this Form 10-Q.

The conditions which raise substantial doubt about our ability to continue as a going concern, as well as our plan to mitigate these conditions are discussed in the section below titled “Liquidity and Capital Resources.”

The Phase 1/1b clinical trial of WTX-124 is expected to be completed in the third quarter of 2026.

Additional funding will be required to initiate any further development, which could include a registration-enabling trial.

We are currently seeking a strategic partnership for the further development of WTX-124.

The dose- and regimen-determining Part A of the Phase 1b/2 clinical trial of WTX-330 is expected to be completed in the third quarter of 2026.

Additional funding will be required to further develop WTX-330, which could include sequential administration of WTX-330 and WTX-124 that may provide a novel development path in poorly immunogenic tumors.

We are currently seeking a strategic partnership for the further development of WTX-330.

Recent Developments

Asset Purchase Agreement;

Termination of Collaboration Agreement

On May 6, 2026, or the Closing, we entered into an asset purchase agreement, or the Purchase Agreement, with Jazz Pharmaceuticals Ireland Limited, a corporation organized under the laws of Ireland, or Jazz.

In April 2022, we entered into a global collaboration and license agreement, or the Collaboration Agreement, with Jazz under which Jazz acquired exclusive global development and commercialization rights to JZP898, as well as products containing certain isolated recombinant polypeptides comprising IFNα that meet specified criteria (each such product, a Licensed Product).

Subject to the terms and conditions of the Purchase Agreement, we sold to Jazz, which we refer to as the Asset Sale, our program, or the 898 Program, for the development, manufacturing, commercialization, use and other exploitation of the Licensed Product.

Pursuant to the Purchase Agreement and related ancillary agreements, in consideration for the Transferred Assets, Jazz paid to us upfront consideration of $21.0 million, and has agreed to pay an additional $2.0 million upon the consent to the partial assignment a certain license agreement, as and to the extent such agreement relates to the conduct of the 898 Program.

Jazz also assumed certain liabilities of ours relating to the 898 Program arising after the Closing.

Effective as of the Closing, the Collaboration Agreement was terminated.

Loan Repayment

On May 6, 2026, we entered into a letter agreement providing for the repayment by us of all amounts owed under the loan and security agreement, dated May 2, 2024, or the K2HV Loan Agreement, by and among us, the lenders from time to time party hereto, or the Lenders, K2 HealthVentures LLC, or K2HV, as administrative agent for the Lenders, and ANKURA TRUST COMPANY, LLC, as collateral trustee for secured parties, or the Collateral Trustee.

On May 6, 2026, upon payment by us of approximately $31.4 million, all of our indebtedness and obligations to the Collateral Trustee and the Lenders under the Loan Agreement and any other related loan and collateral security documents was deemed paid and discharged in full.

Strategic Review

In February 2026, we adopted a restructuring plan to extend our capital resources, or the 2026 Restructuring, in connection with initiating a process to explore a full range of strategic alternatives to advance our promising platform and drug development pipeline to maximize stockholder value.

We have engaged Piper Sandler & Co., or Piper Sandler, to serve as exclusive financial advisor to assist in the strategic review process.

Measures contemplated during the strategic review process include the Asset Sale and may also include, among other options, a sale of our company, a business combination or merger, a sale of our assets, licensing or collaboration arrangements, or other strategic transactions.

There can be no assurance that the strategic review process will result in any agreement or transaction that will enhance stockholder value, or any agreement or transaction at all.

As part of the 2026 Restructuring, our board of directors approved a reduction in force, representing 64% of our workforce, to better align our resources with our pursuit of strategic alternatives.

As a result of the 2026 Restructuring, we recognized costs of $4.3 million during the three months ended March 31, 2026 consisting of severance payments, retention bonuses, employee benefits and related taxes, stock-based compensation, and contract termination costs.

We estimate that we will incur approximately $2.1 million in additional costs to complete the 2026 Restructuring, which is expected to be completed by the end of 2026.

Our estimate of costs we expect to incur and the expected timing of when the 2026 Restructuring will be completed are subject to a number of assumptions, and actual results may differ.

We may also incur additional costs, including, but not limited to, potential impairment charges and debt extinguishment costs related to the loan repayment described above, the termination of our lease agreement described below under the heading “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Contractual Obligations – Lease Agreement ”, and other events not currently contemplated that may occur as a result of, or that are associated with the 2026 Restructuring.

Financial Operations Overview

All of our revenue has been generated from the Collaboration Agreement with Jazz.

Revenue from the transaction price for the Collaboration Agreement was recognized based on a cost-to-cost input method and included upfront, milestone, and cost reimbursement payments.

The Collaboration Agreement includes multiple development and regulatory and sales-based milestones, which were excluded from the transaction price at inception of the Collaboration Agreement based on our assessment that there was a high level of uncertainty of achieving the milestones.

During the nine months ended September 30, 2025, we re-evaluated this assessment as it pertains to any milestones that continue to be excluded from the transaction price, and concluded no adjustment to the transaction price associated with variable consideration previously excluded from the transaction price should be recognized.

As of the execution of the Transfer Agreement, we no longer have any material performance obligations under the Collaboration Agreement, and all remaining deferred revenue related to the Collaboration Agreement was recognized upon execution of the Transfer Agreement.

Accordingly, we recognized no revenue related to the Collaboration Agreement during the nine months ended September 30, 2025.

In the future, our ability to generate revenue from the Collaboration Agreement will depend on successfully achieving the various development and regulatory and sales-based milestones.

We may also generate revenue from product sales or other collaboration agreements, strategic alliances and licensing arrangements.

We expect that potential future revenue, if any, will fluctuate from quarter-to-quarter and year-to-year based upon our ability to successfully meet the criteria for payment of the remaining development and regulatory milestones, and the timing and amount of other payments and product sales, to the extent any are successfully commercialized.

If we fail to complete the development of our product candidates in a timely manner or obtain regulatory approval for them, our ability to generate future revenue, and our results of operations and financial position, would be materially adversely affected.

Operating Expenses

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Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

(in thousands)

3 unchanged sentences

WTX-2022 50 —

WTX-921 31 — 71 —

WTX-518 50 68 52 251

JZP898 — 14 — 538

Pre-development candidates 661 581

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$ 3,376 $ 6,927

Research and development activities are central to our business model.

We expect that our research and development expenses will continue to be substantial for the foreseeable future as we progress our clinical trials of WTX-124 and WTX-330, continue preclinical development of WTX-712, WTX-518, WTX-921, and WTX-1011, and continue to discover and develop additional product candidates.

As a result of our entry into the Collaboration Agreement, which commenced in April 2022, our external preclinical development costs for JZP898 were generally reimbursed by Jazz until we completed all material performance obligations in June 2024.

Research and development activities have historically been central to our business model.

We expect our research and development costs will decrease in the near future as we explore strategic alternatives available to advance our platform and drug development pipeline.

The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming.

We cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete development of our current or future product candidates.

We cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete development of our current or future product candidates, if any.

The actual probability of success for our product candidates will depend on a variety of factors, including:

• the scope, rate of progress and expenses of our ongoing research activities as well as any preclinical studies and clinical trials, including our ongoing Phase 1/1b clinical trial for WTX-124 and the Phase 1b/2 clinical trial for WTX-330, as well as other research and development activities;

• the outcome of our strategic review process;

• the scope, rate of progress and expenses of our research activities as well as any preclinical studies and clinical trials, including our ongoing Phase 1/1b clinical trial for WTX-124 and the Phase 1b/2 clinical trial for WTX-330, as well as other research and development activities;

• establishing an appropriate safety profile;

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and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expect that our general and administrative expenses will fluctuate in the future based on the operating needs of our business, including the general and administrative resources needed to support our research, development and manufacturing activities.

Other (Expense) Income

At this time, we cannot reasonably estimate the nature, timing, and estimated costs associated with the efforts that will be necessary to complete our strategic review process.

Other Expense

Interest Income

Interest income consists of interest earned from cash and cash equivalents and restricted cash and cash equivalents invested in money market funds.

Interest income consists of interest earned from cash and cash equivalents invested in money market funds.

Interest Expense

Interest expense represents interest incurred from our loan agreement, or the PWB Loan Agreement, with Pacific Western Bank, or PWB, until the extinguishment of the PWB term loan in May 2024, interest incurred from our loan and security agreement, or the K2HV Loan Agreement, with K2 HealthVentures LLC, or K2HV, and non-cash interest expense related to the amortization of debt issuance costs.

Loss on Extinguishment of Debt

Loss on extinguishment of debt consists of any residual financial impact from the repayment of term loans with lenders, specifically the extinguishment of the PWB term loan in May 2024.

Interest expense represents interest incurred from our loan and security agreement, or the K2HV Loan Agreement, with K2 HealthVentures LLC, or K2HV, and non-cash interest expense related to the amortization of debt issuance costs.

Other Income, Net

Other income, net primarily consists of the unrealized gain or loss recognized on the change in the fair value of the derivative liability associated with the K2HV Loan Agreement.

Other income, net primarily consists of the unrealized gain or loss recognized on the change in fair value of the derivative liability associated with the K2HV Loan Agreement.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table summarizes our results of operations:

Three Months Ended

September 30, $ Change

March 31, $ Change

(in thousands)

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(13,271) (17,991) 4,720

Other (expense) income:

Other expense:

Interest income 433 997 (564)

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Other income, net 674 168 506

Total other (expense) income (644) 451 (1,095)

Total other expense (261) (98) (163)

$ (13,532) $ (18,089) $ 4,557

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Three Months Ended

September 30, $ Change

(in thousands)

Clinical trial costs $ 4,522 $ 2,986 $ 1,536

Personnel 3,318 3,642 (324)

Contract research organization 1,413 1,366 47

Lab consumables 808 1,081 (273)

Facility costs 770 886 (116)

Manufacturing 675 2,392 (1,717)

Other 128 175 (47)

Total research and development expenses $ 11,634 $ 12,528 $ (894)

Research and development expenses for the three months ended September 30, 2025 were $11.6 million compared to $12.5 million for the three months ended September 30, 2024.

The decrease of $0.9 million was primarily due to:

• $0.3 million of decreased personnel costs, driven primarily by the timing and valuation of stock-based awards granted to employees;

• $1.7 million of decreased manufacturing costs driven primarily by a decrease in costs associated with WTX-330, which were higher during the three months ended September 30, 2024 in preparation for our Phase 1b/2 clinical trial for WTX-330 that was initiated during the first quarter of 2025.

These decreases were partially offset by:

• $1.5 million of increased clinical trial costs, driven by costs associated with the continued enrollment in our Phase 1/1b clinical trial for WTX-124.

General and Administrative Expenses

The following table summarizes our general and administrative expenses:

Three Months Ended

September 30, $ Change

March 31, $ Change

(in thousands)

Personnel $ 3,935 $ 4,331 $ (396)

Professional services 1,078 1,281 (203)

Facility costs 327 388 (61)

Corporate insurance 266 281 (15)

Information technology costs 199 149 50

Other 184 202 (18)

Total general and administrative expenses

$ 4,092 $ 4,596 $ (504)

General and administrative expenses were $4.1 million for the three months ended September 30, 2025 compared to $4.6 million for three months ended September 30, 2024.

The decrease of $0.5 million was primarily due to:

• $0.3 million of decreased personnel costs, driven primarily by the timing and valuation of stock-based awards granted to employees;

• $0.2 million of decreased professional services fees due to decreased used of external consultants during the period.

Interest Income

Interest income was $0.7 million for the three months ended September 30, 2025 compared to $1.6 million for the three months ended September 30, 2024.

This decrease in interest income was primarily a result of lower balances in money market accounts during the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Interest Expense

Interest expense was $1.3 million for the three months ended September 30, 2025, compared to $1.2 million for the three months ended September 30, 2024.

This increase in interest expense was primarily the result of a higher effective interest rate under the K2HV Loan Agreement, compared to the effective interest rate associated with our previous term loan with PWB.

Other Income, Net

Other income, net for the three months ended September 30, 2025 and 2024 primarily consists of the gains recognized for the change in fair value of the derivative liability associated with the K2HV Loan Agreement, as well as foreign currency gains and losses related to services performed by foreign vendors during each period.

Results of Operations

Comparison of the Nine Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations:

Nine Months Ended

September 30, $ Change

(in thousands)

Collaboration revenue $ — $ 1,885 $ (1,885)

Operating expenses:

Research and development

37,897 40,707 (2,810)

General and administrative

13,362 14,424 (1,062)

Total operating expenses

51,259 55,131 (3,872)

Operating loss

(51,259) (53,246) 1,987

Other (expense) income:

Interest income 2,544 5,364 (2,820)

Interest expense (3,905) (3,389) (516)

Loss on extinguishment of debt — (553) 553

Other income, net 179 1,709 (1,530)

Total other (expense) income (1,182) 3,131 (4,313)

$ (52,441) $ (50,115) $ (2,326)

No revenue was recognized during the nine months ended September 30, 2025.

Following the execution of the Transfer Agreement with Jazz in June 2024, the only significant sources of revenue expected to be generated from the Collaboration Agreement are the remaining development and regulatory and sales-based milestones.

Based on our assessment that there continues to be a high level of uncertainty of achieving these milestones, no revenue from the remaining milestones has been recognized during the nine months ended September 30, 2025.

Comparatively, we recognized $1.9 million during the nine months ended September 30, 2024 related to the Collaboration Agreement with Jazz prior to the execution of the Transfer Agreement.

Research and Development Expenses

The following table summarizes our research and development expenses:

Nine Months Ended

September 30, $ Change

(in thousands)

Clinical trial costs 2,192 2,792 (600)

Personnel 11,399 12,407 (1,008)

Manufacturing 776 3,463 (2,687)

Facility costs 626 805 (179)

Contract research organization 408 672 (264)

Lab consumables 197 942 (745)

Facility costs 2,351 2,550 (199)

Other 47 115 (68)

Total research and development expenses $ 8,181 $ 13,120 $ (4,939)

Research and development expenses for the nine months ended September 30, 2025 were $37.9 million compared to $40.7 million for the nine months ended September 30, 2024.

Research and development expenses for the three months ended March 31, 2026 were $8.2 million compared to $13.1 million for the three months ended March 31, 2025.

The decrease of $4.9 million was primarily due to:

• $1.0 million of decreased personnel costs, driven primarily by the timing and valuation of stock-based awards granted to employees;

• $3.9 million of decreased manufacturing costs, driven by a decrease of costs associated with WTX-330 and JZP898 of $6.0 million and $0.5 million, respectively.

Costs associated with WTX-330 were higher during the nine months ended September 30, 2024 in preparation for our Phase 1b/2 clinical trial for WTX-330 that was

initiated during the first quarter of 2025, and costs associated with JZP898 were higher during the nine months ended September 30, 2024 prior to the execution of the Transfer Agreement with Jazz.

These decreases were partially offset by an increase in costs associated with WTX-124 of $3.0 million due to our manufacturing efforts to continue to support our ongoing Phase 1/1b clinical trial for WTX-124.

These decreases were partially offset by:

• $2.2 million of increased clinical trial costs, driven by costs associated with the continued enrollment in our ongoing Phase 1/1b clinical trial for WTX-124 and the initiation of our Phase 1b/2 clinical trial for WTX-330.

• $0.4 million of decreased personnel costs, driven primarily by the reduction in force that was completed in February 2026.

The immediate cost savings associated with the reduction in force were partially offset by the one-time termination benefits incurred during the three months ended March 31, 2026;

• $0.6 million of decreased clinical trial costs, driven by lower patient and site monitoring costs as we approach the completion of the Phase 1/1b clinical trial of WTX-124 and the Phase 1b/2 clinical trial of WTX-330, both of which are expected to be completed in the third quarter of 2026;

• $3.9 million of decreased costs across all other research and development activities.

This decrease was due to our decision to significantly curtail our research and development spending in order to conserve our capital resources that may be necessary in our pursuit of strategic alternatives.

General and Administrative Expenses

The following table summarizes our general and administrative expenses:

Nine Months Ended

September 30, $ Change

Three Months Ended

March 31, $ Change

(in thousands)

2 unchanged sentences

Facility costs 395 331 64

984 1,084 (100)

Corporate insurance 260 273 (13)

2 unchanged sentences

Total general and administrative expenses

General and administrative expenses were $13.4 million for the nine months ended September 30, 2025 compared to $14.4 million for the nine months ended September 30, 2024.

The decrease of $1.1 million was primarily due to:

• $0.5 million of decreased personnel costs, driven primarily by the timing and valuation of stock-based awards granted to employees;

• $0.3 million of decreased professional services fees due to decreased used of external consultants during the period.

$ 5,090 $ 4,871 $ 219

General and administrative expenses were $5.1 million for the three months ended March 31, 2026 compared to $4.9 million for three months ended March 31, 2025.

The increase of $0.2 million was primarily due to an increase of $0.5 million in professional services fees, driven by an increased reliance on external legal counsel, consultants, and advisors engaged to assist us in our strategic review process.

This increase was partially offset by a decrease of $0.2 million in other general and administrative expenses, driven by various cost reduction efforts implemented by us leading up to and in conjunction with our strategic review process.

Interest Income

Interest income was $2.5 million for the nine months ended September 30, 2025 compared to $5.4 million for the nine months ended September 30, 2024.

This decrease in interest income was primarily a result of lower balances in money market accounts during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Interest income was $0.4 million for the three months ended March 31, 2026 compared to $1.0 million for the three months ended March 31, 2025.

This decrease in interest income was primarily the result of lower balances in money market accounts during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Interest Expense

Interest expense was $3.9 million for the nine months ended September 30, 2025 compared to $3.4 million for the nine months ended September 30, 2024.

Loss on Extinguishment of Debt

The extinguishment of the PWB term loan resulted in a one-time loss of $0.6 million for the nine months ended September 30, 2024.

As no corresponding finance activity occurred for the nine months ended September 30, 2025, we did not incur any gain or loss on a debt extinguishment during the current period.

Interest expense was $1.4 million for the three months ended March 31, 2026, compared to $1.3 million for the three months ended March 31, 2025.

This increase in interest expense was due to higher non-cash interest expense related to the amortization of debt issuance costs.

Other Income, Net

Other income, net for the nine months ended September 30, 2025 and 2024 primarily consists of the gains recognized for the change in fair value of the derivative liability associated with the K2HV Loan Agreement, as well as foreign currency gains and losses related to services performed by foreign vendors during each period.

Other income, net for the three months ended March 31, 2026 and 2025 was $0.7 million and $0.2 million, respectively, and primarily consisted of the gains recognized for the change in fair value of the derivative liability associated with the K2HV Loan Agreement, as well as foreign currency gains and losses related to services performed by foreign vendors during each period.

Liquidity and Capital Resources

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and enabling manufacturing for our development programs.

Our net loss was $16.4 million and $52.4 million the three and nine months ended September 30, 2025, respectively.

As of September 30, 2025, we had an accumulated deficit of $467.0 million.

Our net loss was $13.5 million for the three months ended March 31, 2026.

As of March 31, 2026, we had cash and cash equivalents of $46.5 million and an accumulated deficit of $488.9 million.

As we have no products that are approved for sale, we have not generated any revenue from product sales to date, and we do not expect to generate any such revenue for the foreseeable future, if at all.

Instead, we have financed our operations primarily through aggregate cash proceeds from convertible promissory notes, private placements of our convertible preferred stock, our initial public offering, payments from Jazz under the Collaboration Agreement, sales of common stock through our at-the-market program, and the drawdown of our term loans.

Because our product candidates are in clinical development and the outcome of our efforts is uncertain, we cannot estimate the actual costs necessary to successfully complete the development and commercialization of our product candidates, or when we may achieve profitability, if at all.

We expect to continue to incur substantial and increasing expenses and net losses for the foreseeable future, as we continue to advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

As a result, we expect that our accumulated deficit will also increase significantly.

These conditions raise substantial doubt about our ability to continue as a going concern for at least twelve months from the date these condensed consolidated financial statements are issued in this Form 10-Q.

We will need substantial additional funding to support our continuing operations and pursue our growth strategy.

Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements.

through our at-the-market program, and the drawdown of our term loans.

We expect to incur substantial operating losses and negative cash flows from operations for the foreseeable future.

There is substantial doubt about our ability to continue as a going concern for at least twelve months from the date these condensed consolidated financial statements are issued in this Quarterly Report, and we expect continuing operations beyond the near term will require additional liquidity.

In February 2026, we initiated the 2026 Restructuring and a process to explore a full range of strategic alternatives to advance our promising platform and drug development pipeline to maximize stockholder value.

We engaged Piper Sandler to serve as exclusive financial advisor to assist in the strategic review process.

There can be no assurance that the strategic review process will result in any agreement or transaction that will enhance stockholder value, or any agreement or transaction at all.

As part of the 2026 Restructuring, our board of directors approved a reduction in force, representing 64% of our workforce, to better align our resources with our pursuit of strategic alternatives.

As a result of the 2026 Restructuring, we recognized a one-time charge of $4.3 million during the three months ended March 31, 2026 consisting of severance payments, retention bonuses, employee benefits and related taxes, stock-based compensation, and contract termination costs.

The 2026 Restructuring is expected to be completed by the end of 2026.

We may also incur additional costs, including, but not limited to, potential impairment charges and debt extinguishment costs related to the loan repayment described above under the heading “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments – Loan Repayment ”, the termination of our lease agreement described below under the heading “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Contractual Obligations – Lease Agreement ”, and other events not currently contemplated that may occur as a result of, or that are associated with the 2026 Restructuring.

While our strategic review process is underway, we expect our overall costs will decrease in the near term due to the reduction in force, the completion of our clinical trials, and other cost reduction initiatives.

The outcome of our strategic review process will inform our future development plans and the costs associated with those efforts.

If we decide to resume enrollment in our clinical trials or development of our preclinical product candidates, however, we expect that our research and development and general and administrative expenses would increase.

We will need additional capital to fund our operations, which we may raise through a combination of public or private equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements.

We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all.

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Our failure to raise capital or enter into such agreements as and when needed could have a material adverse effect on our business, results of operations and financial condition.

Term Loan Facilities

PWB Loan Agreement

In April 2022, we entered into the PWB Loan Agreement with PWB and subsequently drew down an aggregate of $40.0 million in term loans.

The term loans accrued interest on the outstanding daily balance at a floating annual rate equal to greater of (i) 0.5% above the prime rate then in effect or (ii) 4.5%.

If the prime rate changed throughout the term, the interest rate would have been adjusted effective on the date of the prime rate change.

All interest chargeable under the PWB Loan Agreement was computed on a 360-day year for the actual number of days elapsed, with interest payable monthly.

In May 2024, we repaid all amounts outstanding under the PWB Loan Agreement, using $29.5 million in net loan proceeds received under the K2HV Loan Agreement, as described below, together with $10.5 million in existing cash.

We recognized a total loss on extinguishment of debt in the amount of $0.6 million during the second quarter of 2024 primarily due to the write off of unamortized debt issuance costs.

K2HV Loan Agreement

Term Loan Facility

In May 2024, we, as borrower, entered into the K2HV Loan Agreement with K2HV (which we refer to, together with any other lender from time to time, as the Lenders);

K2HV, as administrative agent for the Lenders;

and Ankura Trust Company, LLC, as collateral trustee for the Lenders.

The K2HV Loan Agreement provides up to $60.0 million principal in term loans.

K2HV, as administrative agent for the Lenders (in such capacity, together with its successors, the Administrative Agent);

and Ankura Trust Company, LLC, as collateral trustee for the Lenders, or the Collateral Trustee.

The K2HV Loan Agreement provided up to $60.0 million principal in term loans.

We received $30.0 million in gross loan proceeds at closing;

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Our ability to draw upon the third tranche commitment expired on June 30, 2025 without being drawn upon.

A fourth tranche commitment of up to $20.0 million is available to be drawn down at our option through May 1, 2026, subject to Lender’s review of our clinical, financial and operating plan and subject to the Lender’s consent in its sole and absolute discretion.

The term loan matures on May 1, 2028, and we are obligated to make interest only payments for the first 24 months followed by interest and equal principal payments each month thereafter through the maturity date.

The term loan bears a variable interest rate equal to the greater of (i) 10.3%, and (ii) the sum of (A) the prime rate last quoted in The Wall Street Journal (or a comparable replacement rate if The Wall Street Journal ceases to quote such rate) and (B) 1.8%.

We may prepay, at our option, all, but not less than all, of the outstanding principal balance and all accrued and unpaid interest with respect to the principal balance being prepaid of the term loans, subject to a prepayment premium to which the Lenders are entitled and certain notice

requirements.

We are obligated to pay a final fee equal to 6.95% of the aggregate amount of the term loans funded, or the Final Fee, to occur upon the earliest of (i) the maturity date, (ii) the acceleration of the term loans, and (iii) the prepayment of the term loans.

The Final Fee is being accreted to interest expense using the effective interest method over the life of the debt.

Pursuant to the terms of the K2HV Loan Agreement, the lenders thereto may elect, prior to the full repayment of the term loans, to convert up to $5.0 million of the outstanding principal of the term loans into shares of our common stock at a conversion price of the lesser of $6.3182 per share, or the Fixed Price Conversion, and the lowest effective price per share of our first equity financing following the closing of the K2HV Loan Agreement, or the Variable Price Conversion, subject to customary adjustments and 9.99% and 19.99% beneficial ownership limitations.

There will be no prepayment penalty for any principal amount converted into common stock.

We determined that the Fixed Price Conversion and the Variable Price Conversion within the K2HV Loan Agreement are required to be bifurcated as an embedded derivative under ASC Topic 815 at fair value, and recorded as a discount on the debt on the date of issuance, with subsequent changes in fair value recognized in the accompanying condensed consolidated statements of operations.

A fourth tranche commitment of up to $20.0 million was available to be drawn at our option through May 1, 2026, subject to Lender’s review of our clinical, financial and operating plan and subject to the Lender’s consent in its sole and absolute discretion.

Our ability to draw upon the fourth tranche commitment expired on May 1, 2026 without being drawn upon.

The term loan was scheduled to mature on May 1, 2028, and we were obligated to make interest only payments for the first 24 months followed by interest and equal principal payments each month thereafter through the maturity date.

The term loan bore a variable interest rate equal to the greater of (i) 10.3%, and (ii) the sum of (A) the prime rate last quoted in The Wall Street Journal (or a comparable replacement rate if The Wall Street Journal ceases to quote such rate) and (B) 1.8%.

We could prepay,

at our option, all, but not less than all, of the outstanding principal balance and all accrued and unpaid interest with respect to the principal balance being prepaid of the term loans, subject to a prepayment premium to which the Lenders were entitled and certain notice requirements.

We were obligated to pay a final fee equal to 6.95% of the aggregate amount of the term loans funded, or the Final Fee, to occur upon the earliest of (i) the maturity date, (ii) the acceleration of the term loans, and (iii) the prepayment of the term loans.

The Final Fee was being accreted to interest expense using the effective interest method over the life of the debt.

Pursuant to the terms of the K2HV Loan Agreement, the lenders thereto had the option, prior to the full repayment of the term loans, to convert up to $5.0 million of the outstanding principal of the term loans into shares of our common stock at a conversion price of the lesser of $6.3182 per share, or the Fixed Price Conversion, and the lowest effective price per share of our first equity financing following the closing of the K2HV Loan Agreement, or the Variable Price Conversion, subject to customary adjustments and 9.99% and 19.99% beneficial ownership limitations.

There would have been no prepayment penalty for any principal amount converted into common stock.

We determined that the Fixed Price Conversion and the Variable Price Conversion within the K2HV Loan Agreement were required to be bifurcated as an embedded derivative under ASC Topic 815, Derivatives and Hedging , at fair value, and recorded as a discount on the debt on the date of issuance, with subsequent changes in fair value recognized in the accompanying condensed consolidated statements of operations.

As security for our obligations under the K2HV Loan Agreement, we granted the Lenders a first priority security interest on substantially all of our assets (other than intellectual property), subject to certain exceptions.

The K2HV Loan Agreement contains customary representations and warranties, events of default and affirmative and negative covenants, including covenants that limit or restrict our ability to, among other things, dispose of assets, make changes to our business, management, ownership or business locations, merge or consolidate, incur additional indebtedness, incur additional liens, pay dividends or other distributions or repurchase equity, make investments, and enter into certain transactions with affiliates, in each case subject to certain exceptions.

Upon the occurrence of an event of default, a default interest rate of an additional 5.0% per annum may be applied to the outstanding loan balances, and the Lenders may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the K2HV Loan Agreement and under applicable law.

As of September 30, 2025, we are in compliance with all covenants.

The K2HV Loan Agreement contained customary representations and warranties, events of default and affirmative and negative covenants, including covenants that limited or restricted our ability to, among other things, dispose of assets, make changes to our business, management, ownership or business locations, merge or consolidate, incur additional indebtedness, incur additional liens, pay dividends or other distributions or repurchase equity, make investments, and enter into certain transactions with affiliates, in each case subject to certain exceptions.

Upon the occurrence of an event of default, a default interest rate of an additional 5.0% per annum may have been applied to the outstanding loan balances, and the Lenders may have declared all outstanding obligations immediately due and payable and exercised all of its rights and remedies as set forth in the K2HV Loan Agreement and under applicable law.

As of March 31, 2026, we were in compliance with all covenants.

Subject to certain conditions, we granted the Lenders the right, prior to repayment of the term loans, to invest up to $5.0 million in the aggregate in future offerings of capital stock, at market terms, subject to certain exceptions and conditions.

We incurred debt issuance costs of $0.7 million in connection with the term loans, composed of the facility fee of $0.4 million and other expenses paid to the Lenders of $0.2 million and external legal fees of $0.1 million.

These debt issuance costs, together with fair value of the embedded derivative of $4.5 million, resulted in a debt discount of $5.1 million which is being amortized to interest expense over the term of the K2HV Loan Agreement using the effective interest method.

These debt issuance costs, together with fair value of the embedded derivative of $4.5 million, resulted in a debt discount of $5.1 million which was being amortized to interest expense over the term of the K2HV Loan Agreement using the effective interest method.

As described above under the heading “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments – Loan Repayment ”, on May 6, 2026, we entered into a letter agreement with K2HV and the Collateral Trustee providing for the repayment by us of all amounts owed under the K2HV Loan Agreement.

On May 6, 2026, upon payment by us of approximately $31.4 million, all of our indebtedness and obligations to the Collateral Trustee and the Lenders under the K2HV Loan Agreement and any other related loan and collateral security documents was deemed paid and discharged in full.

On May 10, 2022, we entered into a sales agreement, or the Sales Agreement, with Leerink Partners LLC, or Leerink Partners, pursuant to which, from time to time, we may offer and sell shares of our common stock, which we refer to as the ATM Offering.

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We were initially entitled to offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million in the ATM Offering, which was subsequently increased in February 2024 to $75.0 million.

During the nine months ended September 30, 2025, we sold 2,360,186 shares of our common stock at an average price of $1.71 per share for net proceeds of $3.6 million after deducting sales commissions and offering expenses.

On May 8, 2025, we filed a new Registration Statement on Form S-3 and filed a new prospectus covering the ATM Offering, or the Prospectus, with an aggregate offering price of up to $12.5 million in the ATM Offering as a result of being subject to General Instruction I.B.6 of Form S-3, or the Baby Shelf Limitation.

As of March 31, 2026, we remain subject to the Baby Shelf Limitation.

During the three months ended March 31, 2026, we did not sell any shares of our common stock under the ATM Offering.

Jazz Collaboration

As of September 30, 2025, we have received $20.0 million in payments from Jazz, excluding payments for reimbursed costs, under the terms of the Collaboration Agreement.

We are eligible to receive up to an additional $515.0 million in development and regulatory milestones, and up to $740.0 million in sales-based milestones for all Licensed Products.

There is no guarantee of when the conditions necessary to receive the milestone payments will be met, if at all.

As of March 31, 2026, we had received $20.0 million in payments from Jazz, excluding payments for reimbursed costs, under the terms of the Collaboration Agreement.

Pursuant to the Purchase Agreement, Jazz paid to us upfront consideration of $21.0 million and has agreed to pay an additional $2.0 million upon the consent to the partial assignment a certain license agreement, as and to the extent such agreement relates to the conduct of the 898 Program.

Jazz also assumed certain liabilities of ours relating to the 898 Program arising after the Closing.

Effective as of the Closing, the Collaboration Agreement was terminated, and as a result, we are no longer eligible to receive additional development and regulatory milestones or sales-based milestones for any Licensed Products.

Plan of Operation and Future Funding Requirements

As of September 30, 2025, we had cash and cash equivalents of $65.7 million.

We also had restricted cash and cash equivalents of $0.9 million as of September 30, 2025.

Based on our current operating plan, we expect that our cash and cash equivalents will be insufficient to allow us to fund our current operating plan through at least twelve months from the date these condensed consolidated financial statements are issued in this Form 10-Q.

We are currently evaluating plans to mitigate the conditions which raise substantial doubt about our ability to continue as a going concern.

We will be required to raise additional funds through an additional public equity financing, establish collaborations with or license our technology to other companies, or seek alternative means of financial support in order to continue to fund our operations in the future.

There can be no assurance, however, that additional fundraising will be successful and available on terms acceptable to us, or at all.

If we are unable to

raise capital when needed or on acceptable terms, we may be forced to delay, reduce, or eliminate certain costs related to our operations and research and development programs.

As of March 31, 2026, we had cash and cash equivalents of $46.5 million.

We also had restricted cash and cash equivalents of $0.9 million as of March 31, 2026.

Subsequent to the end of the first quarter of 2026, we entered into the Purchase Agreement with Jazz and repaid all obligations under the K2HV Loan Agreement, in each case as described above.

We plan to update cash runway guidance in the near future, however, based on our current operating plan, we expect that our cash and cash equivalents will be insufficient to allow us to fund our current operating plan through at least twelve months from the date these condensed consolidated financial statements are issued in this Quarterly Report.

As described above, we have initiated a process to explore a full range of strategic alternatives to advance our promising platform and drug development pipeline to maximize stockholder.

The outcome of our strategic review process will inform our future funding requirements, however, because of the numerous risks and uncertainties associated with the strategic review process, we are unable to estimate our current operating capital requirements.

The timing and amount of our operating expenditures will depend largely on:

• the nature, timing, and extent of our strategic review process;

• the pursuit of viable strategic alternatives, if any;

• the scope, progress, timing, costs and results of researching and developing our current product candidates or any future product candidates, including with respect to our clinical trials of WTX-124 and WTX-330 and the costs associated with attracting, hiring and retaining skilled personnel and consultants as our preclinical and clinical activities increase;

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• the timing of, and the cost involved in, obtaining marketing approval for WTX-124 and WTX-330 or any future product candidates, and our ability to obtain marketing approval and generate revenue from any potential commercial sales of such product candidates;

• the cost of building a sales force in anticipation of product commercialization and the cost of commercialization activities for WTX-124, WTX-330 or any future product candidates if we receive marketing approval, including marketing, sales and distribution costs;

• the cost of building a sales force in anticipation of product commercialization and the cost of commercialization activities for WTX-124, WTX-330, our INDUCER molecules, or any future product candidates if we receive marketing approval, including marketing, sales and distribution costs;

• the potential emergence of competing therapies and other adverse market developments;

• the amount and timing of any payments we may be required to make pursuant to our license agreement with Harpoon Therapeutics, Inc., or Harpoon, or other future license agreements or collaboration agreements;

• the amount and timing of any payments we may be required to make pursuant to our license agreement with Harpoon Therapeutics, Inc., or other future license agreements or collaboration agreements;

• our ability to establish future collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement;

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• the costs of operating as a public company.

Our cash and cash equivalents will not be sufficient to complete development of WTX-124, WTX-330 or any other product candidates.

Accordingly, we will be required to obtain further funding to achieve our business objectives.

Until such time, if ever, as we can generate substantial revenue from product sales, we expect to fund our operations and capital funding needs through equity and/or debt financing.

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The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations or our ability to incur additional indebtedness or pay dividends, among other items.

If we raise additional funds through governmental funding, collaborations, strategic partnerships and alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we raise additional funds through governmental funding,

collaborations, strategic partnerships and alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we are unable to raise capital when needed or on acceptable terms, we may be forced to delay, reduce, or eliminate certain costs related to our operations and research and development programs.

The following table provides information regarding our cash flows:

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

Net cash (used in) provided by:

Net cash used in:

Operating activities

$ (10,597) $ (18,948)

Investing activities

Financing activities

Net decrease in cash, cash equivalents and restricted cash and cash equivalents

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Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2025 was $49.3 million compared to $41.9 million for the nine months ended September 30, 2024.

The increase in cash used for operating activities of $7.3 million is driven by several factors, including a decrease in interest income recognized during the nine months ended September 30, 2025 of $2.8 million compared to the nine months ended September 30, 2024.

Additionally, as a result of the execution of the Transfer Agreement in June 2024, we recognized no collaboration revenue during the nine months ended September 30, 2025;

a decrease of $0.5 million from the collaboration revenue recognized during the nine months ended September 30, 2024, net of the change in deferred revenue for the same period.

Finally, the cash used to pay down our current operating liabilities increased by $4.3 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due to higher operating costs towards the end of 2024 and leading into the first quarter of 2025.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2024 was $0.1 million, which represents capital expenditures of property and equipment used in our operations during the period.

No such expenditures occurred during the nine months ended September 30, 2025.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2025 was $3.7 million, compared to the $10.5 million for the nine months ended September 30, 2024.

Cash provided by financing activity for the nine months ended September 30, 2025 primarily consists of net proceeds of $3.6 million from our ATM Offering.

Net proceeds from our ATM Offering were significantly higher for the nine months ended September 30, 2024 due to significantly higher transaction volume combined with a higher average price per share of our common stock sold, which resulted in $21.1 million in net proceeds from our ATM Offering during the nine months ended September 30, 2024.

These proceeds were partially offset by the repayment of all amounts outstanding under the PWB Loan Agreement, which resulted in the repayment of $10.7 million in term loans, net of proceeds and debt issuance costs from the K2HV Loan Agreement.

Net cash used in operating activities for the three months ended March 31, 2026 was $10.6 million compared to $18.9 million for the three months ended March 31, 2025.

The decrease in cash used for operating activities of $8.4 million is the result of various cost reduction efforts implemented during the three months ended March 31, 2026.

Our operating expenses, excluding non-cash expenses, have decreased $3.6 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Additionally, we recognized a decrease of $5.2 million in cash used to pay down our current liabilities during the three months ended March 31, 2026.

Finally, interest income recognized during the three months ended March 31, 2026 decreased by $0.6 million compared to the three months ended March 31, 2025.

Contractual Obligations

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Payments due upon cancellation consist only of payments for services provided or expenses incurred, including noncancelable obligations of our service providers, up to the date of cancellation.

Term Loan Facilities

See “Liquidity and Capital Resources – Sources of Liquidity – Term Loan Facilities” for descriptions of the PWB Loan Agreement and the K2HV Loan Agreement.

Term Loan Facility

See “Liquidity and Capital Resources – Sources of Liquidity – Term Loan Facility” for descriptions of the K2HV Loan Agreement and the prepayment thereof.

Lease Agreement

The lease for office and laboratory space that we entered into in June 2021 commenced in May 2022 and expires in May 2030.

Total estimated base rent payments over the remaining term of the lease are approximately $11.5 million.

The lease for office and laboratory space that we entered into in June 2021 commenced in May 2022 and was scheduled to expire in May 2030.

On May 7, 2026, we entered into an Agreement for Termination of Lease and Voluntary Surrender of Premises (the “Lease Termination”) with ARE-770/784/790 Memorial Drive, LLC (the “Landlord”), pursuant to which we and the Landlord agreed to terminate that certain lease, dated June 1, 2021, as amended, by and between us and the Landlord (the “Lease”), effective October 31, 2026 or such sooner date as a party provides notices in accordance with the Lease Termination (the “Lease Termination Date”).

Under the Lease, we leased approximately 25,778 square feet of space, consisting of the entire building located at 200 Talcott Avenue, Watertown, Massachusetts.

Pursuant to the Lease Termination, we will pay the Landlord an aggregate termination fee of $2.7 million, which shall represent full satisfaction of all remaining payments and other financial obligations due from us to the Landlord under the Lease including, without limitation, Base Rent (as defined in the Lease) for the months of May 2026 through October 2026.

We will have no further rent obligations to the Landlord pursuant to the Lease after the Lease Termination Date.

Critical Accounting Policies and Estimates

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The preparation of these condensed consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our financial statements and accompanying notes.

On an ongoing basis, we evaluate our estimates which include, but are not limited to those related to revenue recognition, accrued expenses, assumptions used in the valuation of stock-based compensation expense and the fair value of the derivative liability, and income taxes.

On an ongoing basis, we evaluate our estimates which include, but are not limited to those related to accrued expenses, assumptions used in the valuation of stock-

based compensation expense and the fair value of the derivative liability.

We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances.

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Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” in our 2025 Annual Report, which was filed with the SEC on March 27, 2026.

During the three and nine months ended September 30, 2025, there were no material changes to our critical accounting policies from those previously disclosed.

During the three months ended March 31, 2026, there were no material changes to our critical accounting policies from those previously disclosed.

Quantitative and Qualitative Disclosures about Market Risk.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis