Werewolf Therapeutics, Inc. 10-Q

Item 1. Financial Statements Werewolf Therapeutics, Inc. Condensed Consolidated Balance Sheets (unaudited) (amounts in thousands, except share and per share amounts) March 31, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 46,450 $ 57,050 Prepaid expenses and other current assets 2,284 1,536 Total current assets 48,734 58,586 Property and equipment, net 4,290 4,688 Restricted cash and cash equivalents, net of current portion — 901 Operating lease right of use asset 4,998 5,216 Other assets — 5 Total assets $ 58,022 $ 69,396 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 3,569 $ 754 Accrued expenses and other current liabilities 4,515 5,407 Operating lease liability, current 1,604 1,751 Note payable, net of discount and issuance costs 28,831 28,236 Total current liabilities 38,519 36,148 Operating lease liability, net of current portion 7,216 7,684 Derivative liability 85 759 Total liabilities 45,820 44,591 Commitments and contingencies Stockholders’ equity: Preferred stock, $ 0.0001 par value, 5,000,000 shares authorized as of March 31, 2026 and December 31, 2025; no shares issued or outstanding as of March 31, 2026 and December 31, 2025 — — Common stock, $ 0.0001 par value, 200,000,000 shares authorized as of March 31, 2026 and December 31, 2025; 48,596,817 shares issued and outstanding as of March 31, 2026 and December 31, 2025 5 5 Additional paid-in capital 501,139 500,210 Accumulated deficit ( 488,942 ) ( 475,410 ) Total stockholders’ equity 12,202 24,805 Total liabilities and stockholders’ equity $ 58,022 $ 69,396 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents Werewolf Therapeutics, Inc. Condensed Consolidated Statements of Operations (unaudited) (amounts in thousands, except share and per share amounts) Three Months Ended March 31, 2026 2025 Operating expenses: Research and development $ 8,181 $ 13,120 General and administrative 5,090 4,871 Total operating expenses 13,271 17,991 Operating loss ( 13,271 ) ( 17,991 ) Other expense: Interest income 433 997 Interest expense ( 1,368 ) ( 1,263 ) Other income, net 674 168 Total other expense ( 261 ) ( 98 ) Net loss $ ( 13,532 ) $ ( 18,089 ) Net loss per common share, basic $ ( 0.28 ) $ ( 0.40 ) Net loss per common share, diluted $ ( 0.28 ) $ ( 0.40 ) Weighted-average common shares outstanding, basic 48,596,817 44,827,159 Weighted-average common shares outstanding, diluted 49,388,181 44,827,159 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents Werewolf Therapeutics, Inc. Condensed Consolidated Statements of Stockholders’ Equity (unaudited) (amounts in thousands, except share amounts) Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2025 48,596,817 $ 5 $ 500,210 $ ( 475,410 ) $ 24,805 Stock-based compensation expense — — 929 — 929 Net loss — — — ( 13,532 ) ( 13,532 ) Balance at March 31, 2026 48,596,817 $ 5 $ 501,139 $ ( 488,942 ) $ 12,202 Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2024 44,827,159 $ 5 $ 487,973 $ ( 414,588 ) $ 73,390 Stock-based compensation expense — — 2,006 — 2,006 Net loss — — — ( 18,089 ) ( 18,089 ) Balance at March 31, 2025 44,827,159 $ 5 $ 489,979 $ ( 432,677 ) $ 57,307 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents Werewolf Therapeutics, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (amounts in thousands) Three Months Ended March 31, 2026 2025 Operating activities: Net loss $ ( 13,532 ) $ ( 18,089 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 929 2,006 Depreciation expense 398 426 Non-cash interest expense 595 490 Non-cash lease expense 218 188 Change in fair value of derivative liability ( 674 ) ( 171 ) Changes in operating assets and liabilities: Prepaid expenses and other assets 161 131 Accounts payable, accrued expenses and other liabilities 1,923 ( 3,366 ) Operating lease liability ( 615 ) ( 563 ) Net cash used in operating activities ( 10,597 ) ( 18,948 ) Net decrease in cash, cash equivalents and restricted cash and cash equivalents ( 10,597 ) ( 18,948 ) Cash, cash equivalents and restricted cash and cash equivalents—beginning of period 57,951 112,215 Cash, cash equivalents and restricted cash and cash equivalents—end of period $ 47,354 $ 93,267 Reconciliation of cash, cash equivalents and restricted cash and cash equivalents to the condensed consolidated balance sheets Cash and cash equivalents $ 46,450 $ 92,042 Prepaid expenses and other current assets 904 334 Restricted cash and cash equivalents, net of current portion — 891 Total cash, cash equivalents and restricted cash and cash equivalents $ 47,354 $ 93,267 Supplemental disclosure of cash flow information: Cash paid for interest $ 773 $ 773 Supplemental disclosure of non-cash investing and financing activities: Issuance costs in accounts payable and accrued expenses $ 75 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 7 Table of Contents Werewolf Therapeutics, Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 1. Nature of Business Werewolf Therapeutics, Inc. was incorporated in the state of Delaware in October 2017. As used throughout these unaudited, condensed consolidated financial statements, the terms “Werewolf,” the “Company,” “we,” “us,” and “our” refer to the business of Werewolf Therapeutics, Inc., and its wholly owned subsidiary. 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. Our headquarters are located in Watertown, Massachusetts. Since inception, we have devoted substantially all of our efforts and financial resources to organizing and staffing the company; business planning; raising capital; developing and optimizing our platform technology; identifying potential product candidates; enhancing our intellectual property portfolio; undertaking research, preclinical studies, and clinical trials; and enabling manufacturing for our development programs. We are subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Current and future programs will require significant research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure. Even if our product development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales. 2. Strategic Review and Liquidity In February 2026, we adopted a restructuring plan to extend our capital resources (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. (“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 purchase agreement described in Note 12, and may also include, among other options, a sale of the 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. See Note 11 for further discussion of the impact of the 2026 Restructuring. We had cash and cash equivalents of $ 46.5 million at March 31, 2026. The outcome of our strategic review process will inform future development plans and the costs associated with those efforts. We expect to incur substantial operating losses and negative cash flows from operations for the foreseeable future as we continue to execute on our strategic review process. Our ability to maintain ongoing operations is dependent on our ability to obtain additional financing, as to which we can make no assurance. 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 Quarterly Report. There can be no assurance that the strategic review process will result in any agreement or transaction that will mitigate the conditions which raise substantial doubt about our ability to continue as a going concern, or at all. Our condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the ordinary course of business. Our condensed consolidated financial statements do not include any adjustments that might result from the outcome of the conditions described above. 3. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements as of March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 and 2025, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and generally accepted accounting principles in the United States of America (“GAAP”) as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”) for condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments which are necessary for a fair presentation 8 Table of Contents of our financial position and results of our operations, as of and for the periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 27, 2026 (the “2025 Annual Report”). The information presented in the condensed consolidated financial statements and related notes as of March 31, 2026, and for the three months ended March 31, 2026 and 2025, is unaudited. The December 31, 2025 condensed consolidated balance sheet included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. Interim results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2026, or any future period. The accompanying condensed consolidated financial statements include the accounts of Werewolf Therapeutics, Inc. and its wholly owned subsidiary, Werewolf Therapeutics Mass Securities, Inc. All intercompany transactions and balances have been eliminated in consolidation. Summary of Significant Accounting Policies The significant accounting policies and estimates used in the preparation of the condensed consolidated financial statements are described in our audited financial statements as of and for the year ended December 31, 2025, and the notes thereto, which are included in our 2025 Annual Report. Other than as set forth below, there have been no material changes in our significant accounting policies during the three months ended March 31, 2026. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, those related to accrued expenses and assumptions used in the valuation of stock-based compensation expense and the fair value of the derivative liability. Actual results could differ from those estimates. Recent Accounting Pronouncements In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-04) (“ASU No. 2024-03”), which requires the disclosure of additional information about specific expense categories in the notes to the consolidated financial statements at interim and annual reporting periods. The provisions of ASU No. 2024-03 are effective for annual reporting periods beginning after December 31, 2026, with early adoption permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption. Subsequent Events We have evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Other than as described in Note 12, we did not identify any subsequent events that require adjustment or disclosure in the condensed consolidated financial statements. 4. Financial Instruments and Fair Value Measurements Our assets that are required to be measured at fair value on a recurring basis consist of money market funds classified as cash and cash equivalents on our condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025. Our liabilities that are required to be measured at fair value on a recurring basis consist of a derivative liability pursuant to a loan and security agreement (the “K2HV Loan Agreement”) with K2 HealthVentures LLC (“K2HV”) (see Note 6, Term Loan ) on our condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025. The carrying amounts reflected in the condensed consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values, due to their short-term nature. 9 Table of Contents Assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 were as follows: Level 1 Level 2 Level 3 Total (in thousands) Assets: Money market funds $ 46,276 $ — $ — $ 46,276 Total assets $ 46,276 $ — $ — $ 46,276 Liabilities: Derivative liability $ — $ — $ 85 $ 85 Total liabilities $ — $ — $ 85 $ 85 Assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 were as follows: Level 1 Level 2 Level 3 Total (in thousands) Assets: Money market funds $ 56,548 $ — $ — $ 56,548 Total assets $ 56,548 $ — $ — $ 56,548 Liabilities: Derivative liability $ — $ — $ 759 $ 759 Total liabilities $ — $ — $ 759 $ 759 There were no changes in valuation techniques used during the three months ended March 31, 2026. Derivative Liability In May 2024, we entered into the K2HV Loan Agreement, as further described in Note 6, which provided up to $ 60.0 million principal in term loans. Pursuant to the terms of the K2HV Loan Agreement, the lenders thereto could 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 (the “Fixed Price Conversion”) and the lowest effective price per share of our first equity financing following the closing of the K2HV Loan Agreement (the “Variable Price Conversion”), subject to customary adjustments and 9.99 % and 19.99 % beneficial ownership limitations. The Fixed Price Conversion and Variable Price Conversion within the K2HV Loan Agreement were required to be bifurcated as a single compound embedded derivative carried at fair value, with subsequent changes in fair value recognized in the condensed consolidated statements of operations. The following table reconciles the change in fair value of the derivative liability based on Level 3 inputs: Three Months Ended March 31, 2026 2025 (in thousands) Balance at beginning of period $ 759 $ 2,829 Change in fair value ( 674 ) ( 171 ) Balance at end of period $ 85 $ 2,658 The change in fair value of the derivative liability is included in other income, net in the accompanying condensed consolidated statements of operations. We recognized gains of $ 0.7 million and $ 0.2 million related to change in fair value of the derivative liability during the three months ended March 31, 2026 and 2025, respectively. 10 Table of Contents The fair value of the derivative liability in the term loan was estimated using the Monte Carlo and the Black-Scholes models, each weighted based on the probable outcomes of various scenarios. A summary of the weighted-average significant unobservable inputs (Level 3 inputs) used in measuring the derivative liability in the term loan is as follows: March 31, 2026 December 31, 2025 Stock Price $ 0.83 $ 0.63 Volatility 99.7 % 105.0 % Risk-free rate (continuous) 3.8 % 3.5 % Expected term (in years) 2.09 0.25 Dividend yield (continuous) — % — % On May 6, 2026, we repaid all amounts owed under the K2HV Loan Agreement, as described further in Note 12. No portion of the Fixed Price Conversion or the Variable Price Conversion had been exercised prior to the repayment of the term loans. 5. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities were comprised as follows: March 31, 2026 December 31, 2025 (in thousands) Professional fees $ 1,719 $ 1,388 Contract research 1,633 2,376 Restructuring costs 443 — Accrued interest 266 266 Employee compensation and benefits 190 302 Manufacturing 50 928 Other 214 147 Total accrued expenses and other current liabilities $ 4,515 $ 5,407 6. Term Loan In May 2024, we, as borrower, entered into the K2HV Loan Agreement with K2HV (together with any other lender from time to time, the “Lenders”); 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 (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; $ 25.0 million from the first tranche commitment and $ 5.0 million from the second tranche commitment. A third tranche commitment of up to $ 10.0 million was available to be drawn at our option through June 30, 2025, subject to the achievement, as determined by the Administrative Agent in its discretion, of certain time-based, clinical and regulatory milestones and receipt of not less than $ 60.0 million in net cash proceeds from certain financing activities, with at least $ 50.0 million from a single offering of common stock. 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 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. The Lenders had the option, prior to the full repayment of the term loans, to convert up to $ 5.0 million of outstanding principal of the term loans into shares of our common stock, pursuant to the Fixed Price Conversion or the Variable Price Conversion, 11 Table of Contents 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 (“ASC 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. See Note 4 for further discussion on this derivative instrument. 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 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 their 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 the fair value of the embedded derivative of $ 4.5 million at inception of the K2HV Loan Agreement, 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 of March 31, 2026, the fair value of the term loan was estimated to be approximately $ 29.7 million. The fair value was measured using a discounted cash flow analysis, specifically the yield method, which requires the use of Level 3 inputs in the fair value hierarchy. The outstanding term loans payable consists of the following: March 31, 2026 December 31, 2025 (in thousands) Note payable $ 30,000 $ 30,000 Unamortized debt discount and issuance costs ( 1,169 ) ( 1,764 ) Net carrying amount of note payable $ 28,831 $ 28,236 The following table provides the components of interest expense related to the K2HV Loan Agreement: Three Months Ended March 31, 2026 2025 (in thousands) Interest expense based on coupon interest rate ( 10.3 %) of outstanding term loans $ 773 $ 773 Amortization of debt discount and accretion of Final Fee ( 8.94 %) 595 490 Total interest expense on effective rate ( 19.24 %) $ 1,368 $ 1,263 The following table presents the total principal payments and Final Fee that were contractually scheduled to become due during each of the years ended December 31 (in thousands): Principal Payments and Final Fee (in thousands) 2026 (remaining as of March 31, 2026) $ 9,600 2027 14,400 2028 8,085 Total principal payments and Final Fee $ 32,085 12 Table of Contents We have presented the full amount of the term loan payable, net of discount and issuance costs, as a current liability as of March 31, 2026 and December 31, 2025 given the potential that the loan may be repaid in the subsequent twelve months of each period. On May 6, 2026, we entered into a letter agreement discussed in more detail in Note 12, that resulted in the satisfaction of all obligations under the K2HV Loan Agreement. 7. Common and Preferred Stock Common Stock We are authorized to issue 200,000,000 shares of common stock. Common stockholders are entitled to dividends if and when declared by our board of directors. As of March 31, 2026, no dividends on common stock had been declared by us. On May 10, 2022, we entered into a Sales Agreement (the “Sales Agreement”) with Leerink Partners LLC (“Leerink Partners”), pursuant to which we are entitled to offer and sell shares of our common stock (the “ATM Offering”). The Sales Agreement provides that Leerink Partners will be entitled to a sales commission equal to 3.0 % of the gross sales price per share of all shares sold under the ATM Offering. 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. On May 8, 2025, we filed a new Registration Statement on Form S-3 and filed a new prospectus covering the ATM Offering (the “Prospectus”) for the offer and sale of shares of our common stock 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 (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 and 2025, we did not sell any shares of our common stock under the ATM Offering. We have reserved shares of common stock for issuance as follows: As of March 31, 2026 As of December 31, 2025 Shares reserved for exercises of outstanding stock options 8,440,233 9,954,872 Shares reserved for issuance under the 2021 Employee Stock Purchase Plan 1,046,897 560,929 Shares reserved for issuance under the 2021 Stock Incentive Plan 5,987,542 2,039,026 Shares reserved for issuance as part of the K2HV Loan Agreement conversion feature 791,364 791,364 Total shares reserved for future issuance 16,266,036 13,346,191 Preferred Stock We are authorized to issue 5,000,000 shares of undesignated preferred stock in one or more series. As of March 31, 2026, no shares of preferred stock were issued or outstanding. 8. Stock-based Compensation 2017 Stock Incentive Plan In December 2017, we adopted the 2017 Stock Incentive Plan (the “2017 Plan”), as amended and restated, pursuant to which we have outstanding stock options. No future awards may be granted under the 2017 Plan. 2021 Stock Incentive Plan In April 2021, our board of directors adopted and our stockholders approved the 2021 Stock Incentive Plan (the “2021 Plan”), which became effective immediately prior to the effectiveness of our initial public offering (the “IPO”). As a result of the adoption of the 2021 Plan, no further awards will be made under the 2017 Plan. The 2021 Plan provides for the grant of incentive stock options (“ISOs”), non-qualified stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights and other stock-based awards. Our employees, officers, directors, consultants and advisors are eligible to receive awards under the 2021 Plan. The terms of awards, including vesting requirements, are determined by our board of directors, subject to the provisions of the 2021 Plan. We initially registered 3,352,725 shares of common stock under the 2021 Plan, pursuant to a Registration Statement on Form S-8 filed with the SEC on April 30, 2021, which was comprised of (i) 2,843,116 shares of common stock reserved for issuance under the 2021 Plan, (ii) 31,884 shares of common stock originally reserved for issuance under the 2017 Plan that became available for issuance under the 2021 Plan upon the completion of the IPO, and (iii) 477,725 shares of unvested restricted stock subject to repurchase by us that may become issuable under the 2021 Plan following such repurchase. The 2021 Plan also provides that an additional number of shares will be added annually to the shares authorized for issuance under the 2021 Plan on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022 and continuing until, and including, the fiscal year ending December 31, 2031. The number of shares added each year will be equal to the lesser of (i) 5 % 13 Table of Contents of the number of shares of outstanding common stock on such date and (ii) such amount as determined by our board of directors. As of March 31, 2026, a cumulative total of 9,582,699 additional shares have been added to the total shares authorized for issuance under the 2021 Plan in accordance with these terms. 2021 Employee Stock Purchase Plan The 2021 Employee Stock Purchase Plan (“2021 ESPP”) permits eligible employees to purchase shares of our common stock at a discount and consists of consecutive six-month offering periods, each containing a single six-month purchase period. On the first day of each offering period, each employee who is enrolled in the 2021 ESPP will automatically receive an option to purchase up to a whole number of shares of our common stock. The purchase price of each of the shares purchased, in a given purchase period, will be equal to 85 % of the lesser of the closing price of a share of our common stock on (i) the first day of the offering period, or (ii) the last day of the offering period. During the three months ended March 31, 2026 and 2025, no shares of our common stock were purchased by participants of the 2021 ESPP. Stock-Based Compensation Expense Total stock-based compensation expense recognized in our condensed consolidated statements of operations was as follows: Three Months Ended March 31, 2026 2025 (in thousands) Research and development $ 503 $ 1,055 General and administrative 426 951 Total stock-based compensation $ 929 $ 2,006 As part of the severance benefits offered to former employees impacted by the 2026 Restructuring described in Note 2 (the “Former Employees”), the forfeiture conditions of outstanding stock options belonging to the Former Employees were modified such that the Former Employees will retain their rights to exercise their stock options through the original expiration dates of each respective stock option to the extent that such stock options had become vested at the time that the Former Employees’ employment with us was terminated. Absent this modification, the impacted stock options would have been forfeited by the Former Employees after a period of 90 days following the termination of their employment with us, if not exercised sooner. The expiration date for all stock options impacted by this modification will occur on the tenth anniversary of the grant date of each respective stock option. For the three months ended March 31, 2026, the stock-based compensation expense above includes $ 0.6 million of expense recognized as a one-time charge related to this modification. Stock Option Activity No stock options were granted during the three months ended March 31, 2026. The fair value of stock options granted during the three months ended March 31, 2025 was calculated on the date of grant using the following weighted-average assumptions: Risk-free interest rate 4.4 % Expected term (in years) 5.9 Expected annual dividend yield — % Expected volatility 95.3 % Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted during the three months ended March 31, 2025 was $ 1.22 per share. 14 Table of Contents The following table summarizes stock option activity during the three months ended March 31, 2026: Options Outstanding Number of Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in millions) Outstanding at December 31, 2025 9,954,872 $ 4.71 Granted — $ — Exercised — $ — Cancelled ( 1,514,639 ) $ 2.38 Outstanding at March 31, 2026 8,440,233 $ 5.13 6.66 $ — Exercisable at March 31, 2026 6,600,515 $ 5.97 6.15 $ — No stock options were exercised during the three months ended March 31, 2026 and 2025. As of March 31, 2026, we had unrecognized stock-based compensation expense related to unvested stock options of $ 2.6 million, which we expect to recognize over a weighted-average period of approximately 1.9 years. 9. Net Loss Attributable to Common Stockholders per Share For purposes of the diluted net loss attributable to common stockholders per share calculation, outstanding stock options, the conversion option derivative under the K2HV Loan Agreement, and warrants to purchase common stock are considered to be potentially dilutive securities; however, the following amounts were excluded from the weighted-average common stock outstanding in the calculation of diluted net loss attributable to common stockholders per share because their effect would be anti-dilutive: March 31, 2026 2025 Outstanding stock options 8,440,233 10,282,640 Warrants to purchase common stock — 46,487 Common stock to be issued under the 2021 ESPP 16,228 91,857 Total 8,456,461 10,420,984 As described below, the conversion option derivative under the K2HV Loan Agreement was determined to be dilutive for the three months ended March 31, 2026. For the three months ended March 31, 2025, the effect of the conversion option derivative would have been anti-dilutive. Accordingly, for the three months ended March 31, 2025, we have excluded 791,364 shares of common stock equivalents that are available to be issued in conjunction with the conversion option derivative from the calculation of diluted net loss attributable to common stockholders per share. Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the applicable period. In computing diluted net loss per share, only potential shares of common stock that are dilutive are included. We considered each issue or series of issues of potential shares of common stock separately when determining whether potential shares of common stock are dilutive or anti-dilutive. We made such determination in sequence from the most dilutive to the least dilutive and concluded that the conversion option derivative under the K2HV Loan Agreement is dilutive to net loss per share for the three months ended March 31, 2026. Pursuant to ASC Topic 260, Earnings Per Share , we applied the if-converted method to determine the effect of the conversion option derivative under the K2HV Loan Agreement on the diluted earnings per share calculations. Pursuant to such method, we adjusted the numerator for the gain recognized during the period in net loss due to the change in fair value of the conversion option derivative liability under the K2HV Loan Agreement and the interest expense recognized during the period that is attributable to the portion of the term loan that is subject to the conversion option. We also increased the denominator to include the weighted-average number of additional shares of common stock that would have been outstanding if the conversion option derivative under the K2HV Loan Agreement were converted at the beginning of the period. 15 Table of Contents Three Months Ended March 31, 2026 2025 (in thousands) Numerator Net loss $ ( 13,532 ) $ ( 18,089 ) Less: change in fair value of derivative liability ( 674 ) — Plus: interest expense on converted term loan 199 — Adjusted net loss $ ( 14,007 ) $ ( 18,089 ) Denominator Weighted-average common stock outstanding, basic 48,596,817 44,827,159 Dilutive effect of common stock issuable from assumed conversion of convertible term loan 791,364 — Weighted-average common stock outstanding, diluted 49,388,181 44,827,159 Net loss per share Basic $ ( 0.28 ) $ ( 0.40 ) Diluted $ ( 0.28 ) $ ( 0.40 ) 10. Segment Information We have one reportable segment which focuses on the discovery and development of cancer therapeutics. Our chief operating decision maker (“CODM”) manages our operations on an integrated basis for the purpose of allocating resources. When evaluating our financial performance, our CODM regularly reviews total expenses and expenses by function and makes decisions using this information based on the performance of the enterprise as a whole. Our CODM primarily evaluates the performance of the enterprise based on results that have a direct impact on our available cash and cash equivalents and accordingly places less significance on non-cash expenses such as stock-based compensation and depreciation expenses in determining how to allocate resources. Segment assets regularly reviewed by our CODM include measures of liquidity, primarily available cash and cash equivalents, and are consistent with the presentation of cash and cash equivalents reported in our condensed consolidated balance sheets. The following is a summary of our segment and consolidated net loss, including significant segment expenses: Three Months Ended March 31, 2026 2025 (in thousands) General and administrative support $ 4,572 $ 3,823 Clinical development 3,643 4,329 Research and discovery 2,155 3,319 Manufacturing 1,574 4,088 Other segment expenses (a) 1,327 2,432 Interest income 433 997 Interest expense ( 1,368 ) ( 1,263 ) Other income, net 674 168 Segment and consolidated net loss $ ( 13,532 ) $ ( 18,089 ) (a) Other segment expenses includes non-cash expenses for stock-based compensation and depreciation expenses. 11. Restructuring In February 2026, we initiated a strategic review process and the 2026 Restructuring. The 2026 Restructuring is expected to be completed by the end of 2026. We estimate that we will incur approximately $ 6.4 million in costs associated with the 2026 Restructuring, consisting of severance payments, retention bonuses, employee benefits and related taxes, stock-based compensation, and contract termination costs. Our estimate of costs we expect to incur and the expected timing of when the 2026 Restructuring will be 16 Table of Contents 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 subsequent events described in Note 12, and other events not currently contemplated that may occur as a result of, or that are associated with the 2026 Restructuring. The following table summarizes the restructuring costs incurred and the total estimated costs expected to be incurred in connection with the 2026 Restructuring: Three Months Ended March 31, 2026 Cumulative Costs to Date Total Estimated Costs (in thousands) Employee severance, benefits and related taxes $ 2,557 $ 2,557 $ 2,557 Employee retention bonuses, benefits and related taxes 783 783 2,865 Stock-based compensation 615 615 615 Contract termination costs 350 350 350 Total restructuring costs $ 4,305 $ 4,305 $ 6,387 Total restructuring costs recognized in our condensed consolidated statements of operations were as follows: Three Months Ended March 31, 2026 2025 (in thousands) Research and development $ 3,058 $ — General and administrative 1,247 — Total restructuring costs $ 4,305 $ — Accrued restructuring costs, which are included in accrued expenses and other current liabilities on our condensed consolidated balance sheets, were as follows: Three Months Ended March 31, 2026 2025 (in thousands) Balance at beginning of period $ — $ — Restructuring costs recognized during the period 4,305 — Cash payments made during the period ( 3,971 ) — Employee retention bonuses paid in advance 724 — Non-cash charges recognized during the period ( 615 ) — Balance at end of period $ 443 $ — 12. Subsequent Events Asset Purchase Agreement; Termination of Collaboration Agreement On May 6, 2026 (the “Closing”), we entered into an asset purchase agreement (the “Purchase Agreement”) with Jazz Pharmaceuticals Ireland Limited, a corporation organized under the laws of Ireland (“Jazz”). In April 2022, we entered into a global collaboration and license agreement (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 (the “Asset Sale”) its program (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. 17 Table of Contents The Purchase Agreement contains customary representations, warranties and covenants of each of us and Jazz. The Purchase Agreement further provides that, subject to certain limitations, we and Jazz will each indemnify the other for certain losses arising from such breaches of representations, warranties and covenants and liabilities allocated to such party pursuant to the terms of the Purchase Agreement. In addition, the Purchase Agreement contains a non-competition covenant pursuant to which we agreed not to exploit any IFNα or variant thereof, or any product containing any IFNα or variant thereof, for a period of eighteen ( 18 ) months after the Closing, subject to customary exceptions for change of control transactions. 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 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. Lease Termination 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. 18 Table of Contents