What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-31 compared with 2026-05-07 · 186 added, 71 removed, 229 unchanged (53% of the section changed)

10 unchanged sentences

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.

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

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

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

6 unchanged sentences

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.

Pursuant to the Purchase Agreement and related ancillary agreements, in consideration for all material assets, properties, rights and interests used or held for use in the conduct of the 898 Program, Jazz paid us upfront consideration of $21.0 million, and has agreed to pay an additional $2.0 million contingent upon the consent to the partial assignment of 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.

During the six months ended June 30, 2026, we recognized revenue of $21.0 million due to the change in the overall transaction price of the Collaboration Agreement as a result of entering into the Purchase Agreement.

In the future, our ability to generate revenue from the Purchase Agreement will depend on successfully completing the conditions necessary to receive payment of the $2.0 million contingent payment.

There can be assurances of the timing of when we will receive the $2.0 million contingent payment, or at all.

Previously, we were eligible to receive up to $515.0 million in development and regulatory milestones, and up to $740.0 million in sales-based milestones for all Licensed Products upon meeting certain conditions under the Collaboration Agreement.

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

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.

On May 6, 2026, upon payment by us of $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.

During the six months ended June 30, 2026, we recognized a loss on the extinguishment of debt in the amount of $3.4 million, primarily due to the write off of unamortized debt issuance costs and the unaccreted balance of the final fee payable under the K2HV Loan Agreement.

Strategic Review

3 unchanged sentences

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.

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

In May 2026, an additional reduction in force occurred, representing 36% of our workforce at that time.

As a result of the 2026 Restructuring, we recognized costs of $5.7 million during the six months ended June 30, 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 $0.8 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.

We may also incur additional costs, including, but not limited to, potential impairment charges not currently contemplated that may occur as a result of, or that are associated with the 2026 Restructuring.

Financial Operations Overview

Historically, all our revenue has been generated from the Collaboration Agreement with Jazz.

In June 2024, we satisfied the last material performance obligation required of us under the Collaboration Agreement.

Accordingly, we did not recognize revenue related to the Collaboration Agreement during the six months ended June 30, 2025.

In May 2026, we entered into the Purchase Agreement with Jazz.

We recognized $21.0 million in revenue during the six months ended June 30, 2026 related to the Purchase Agreement.

In the future, our ability to generate revenue from the Purchase Agreement will depend on successfully completing the conditions necessary to receive payment of the $2.0 million contingent payment.

There can be assurances of the timing of when we will receive the $2.0 million contingent payment, or at all.

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

Operating Expenses

13 unchanged sentences

Three Months Ended

Six Months Ended

2026 2025 2026 2025

(in thousands)

3 unchanged sentences

WTX-2022 — — 50 —

WTX-712 — 17 6 104

WTX-921 — 31 — 40

WTX-518 — 1 — 2

Pre-development candidates 1,064 1,063 1,725 1,644

7 unchanged sentences

• 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;

• the scope, rate of progress and expenses of our research activities as well as any preclinical studies and clinical trials, including our 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;

21 unchanged sentences

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.

Loss on Extinguishment of Note Payable

Loss on extinguishment of note payable represents the residual financial impact of notes payable to lenders, specifically the extinguishment of the K2HV Loan Agreement in May 2026.

Other Income, Net

1 unchanged sentence

Results of Operations

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

Comparison of the Three Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations:

Three Months Ended

March 31, $ Change

June 30, $ Change

(in thousands)

Collaboration revenue $ 21,000 $ — $ 21,000

Operating expenses:

5 unchanged sentences

13,842 17,542 (3,700)

Operating loss

Operating income (loss)

7,158 (17,542) 24,700

2 unchanged sentences

Interest expense (475) (1,301) 826

Loss on extinguishment of note payable (3,354) — (3,354)

Other income, net 64 11 53

Total other expense (3,488) (440) (3,048)

Net income (loss)

$ 3,670 $ (17,982) $ 21,652

During the three months ended June 30, 2026, we recognized $21.0 million in revenue related to the Purchase Agreement with Jazz.

No revenue was recognized during the three months ended June 30, 2025.

Research and Development Expenses

1 unchanged sentence

Three Months Ended

March 31, $ Change

June 30, $ Change

(in thousands)

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

Clinical trial costs $ 2,613 $ 4,201 $ (1,588)

Manufacturing 776 3,463 (2,687)

Facility costs 1,102 776 326

Contract research organization 1,087 1,190 (103)

Personnel 1,026 3,750 (2,724)

Manufacturing 81 2,052 (1,971)

Lab consumables 81 1,045 (964)

1 unchanged sentence

Total research and development expenses $ 6,162 $ 13,143 $ (6,981)

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.

Research and development expenses for the three months ended June 30, 2026 were $6.2 million compared to $13.1 million for the three months ended June 30, 2025.

The decrease of $7.0 million was primarily due to:

• $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.

• $1.6 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 fourth quarter of 2026;

• $2.7 million of decreased personnel costs, driven primarily by cost savings recognized during the three months ended June 30, 2026 as result of the reductions in force that were completed in February and May 2026;

• a net decrease of $2.7 million 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.

Decreases of $3.0 million across the remaining research and development activities were partially offset by an increase in facility and other costs of $0.4 million due to higher depreciation expense recognized during the three months ended June 30, 2026 as a result of a change in the estimated useful lives of our property and equipment, as well as net losses recognized on the sale and disposal of property and equipment during the period.

General and Administrative Expenses

1 unchanged sentence

Three Months Ended

March 31, $ Change

June 30, $ Change

(in thousands)

Personnel $ 2,548 $ 2,650 $ (102)

Professional services $ 4,844 $ 1,325 $ 3,519

Personnel 1,840 2,095 (255)

Facility costs 492 326 166

4 unchanged sentences

$ 7,680 $ 4,399 $ 3,281

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.

General and administrative expenses were $7.7 million for the three months ended June 30, 2026 compared to $4.4 million for three months ended June 30, 2025.

The increase of $3.3 million was primarily due to:

• $3.5 million of increased professional services fees, driven by an increased reliance on external legal counsel, consultants, and advisors engaged to assist us in our strategic review process;

• $0.2 million of increased facility costs due to higher depreciation expense recognized during the three months ended June 30, 2026 as a result of a change in the estimated useful lives of our property and equipment.

These increases were partially offset by a decrease of $0.3 million in personnel costs, driven primarily by cost savings recognized during the three months ended June 30, 2026 as result of the reductions in force that were completed in February and May 2026.

Interest Income

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 income was $0.3 million for the three months ended June 30, 2026 compared to $0.9 million for the three months ended June 30, 2025.

This decrease in interest income was primarily the result of lower balances in money market accounts during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Interest Expense

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.

Interest expense was $0.5 million for the three months ended June 30, 2026, compared to $1.3 million for the three months ended June 30, 2025.

This decrease in interest expense was due to the extinguishment of the K2HV Loan Agreement in May 2026.

Loss on Extinguishment of Note Payable

The extinguishment of the K2HV Loan Agreement in May 2026 resulted in a one-time loss of $3.4 million for the three months ended June 30, 2026.

No similar activity occurred during the three months ended June 30, 2025.

Other Income, Net

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.

Other income, net for the three months ended June 30, 2026 and 2025 primarily consists of the gains recognized for the change in fair value of the derivative liability associated with the K2HV Loan Agreement during each period.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations:

Six Months Ended

June 30, $ Change

(in thousands)

Collaboration revenue $ 21,000 $ — $ 21,000

Operating expenses:

Research and development

14,343 26,263 (11,920)

General and administrative

12,770 9,270 3,500

Total operating expenses

27,113 35,533 (8,420)

Operating loss

(6,113) (35,533) 29,420

Other expense:

Interest income 710 1,847 (1,137)

Interest expense (1,843) (2,564) 721

Loss on extinguishment of note payable (3,354) — (3,354)

Other income, net 738 179 559

Total other expense (3,749) (538) (3,211)

Net loss $ (9,862) $ (36,071) $ 26,209

During the six months ended June 30, 2026, we recognized $21.0 million in revenue related to the Purchase Agreement with Jazz.

No revenue was recognized during the six months ended June 30, 2025.

Research and Development Expenses

The following table summarizes our research and development expenses:

Six Months Ended

June 30, $ Change

(in thousands)

Personnel $ 4,961 $ 8,081 $ (3,120)

Clinical trial costs 4,805 6,993 (2,188)

Facility costs 1,728 1,581 147

Contract research organization 1,495 1,862 (367)

Manufacturing 857 5,515 (4,658)

Lab consumables 278 1,987 (1,709)

Other 219 244 (25)

Total research and development expenses $ 14,343 $ 26,263 $ (11,920)

Research and development expenses for the six months ended June 30, 2026 were $14.3 million compared to $26.3 million for the six months ended June 30, 2025.

The decrease of $11.9 million was primarily due to:

• $3.1 million of decreased personnel costs, driven primarily by cost savings recognized during the six months ended June 30, 2026 as result of the reductions in force that were completed in February and May 2026;

• $2.2 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 fourth quarter of 2026;

• a net decrease of $6.6 million across all other research and development activities.

Decreases of $6.8 million across the remaining research and development activities were partially offset by an increase in facility costs of $0.1 million due to

higher depreciation expense recognized during the six months ended June 30, 2026 as a result of a change in the estimated useful lives of our property and equipment.

General and Administrative Expenses

The following table summarizes our general and administrative expenses:

Six Months Ended

June 30, $ Change

(in thousands)

Professional services $ 6,470 $ 2,462 $ 4,008

Personnel 4,388 4,745 (357)

Facility costs 887 657 230

Corporate insurance 520 537 (17)

Information technology costs 326 367 (41)

Other 179 502 (323)

Total general and administrative expenses $ 12,770 $ 9,270 $ 3,500

General and administrative expenses were $12.8 million for the six months ended June 30, 2026 compared to $9.3 million for the six months ended June 30, 2025.

The increase of $3.5 million was primarily due to:

• $4.0 million of increased professional services fees, driven by an increased reliance on external legal counsel, consultants, and advisors engaged to assist us in our strategic review process;

• $0.2 million of increased facility costs due to higher depreciation expense recognized during the six months ended June 30, 2026 as a result of a change in the estimated useful lives of our property and equipment.

These increases were partially offset by:

• $0.4 million of decreased personnel costs, driven primarily by cost savings recognized during the six months ended June 30, 2026 as result of the reductions in force that were completed in February and May 2026;

• $0.4 million of decreased costs across all other general and administrative activities as the result of cost savings initiatives implemented during the period leading up and during six months ended June 30, 2026.

Interest Income

Interest income was $0.7 million for the six months ended June 30, 2026 compared to $1.8 million for the six months ended June 30, 2025.

This decrease in interest income was primarily a result of lower balances in money market accounts during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Interest Expense

Interest expense was $1.8 million for the six months ended June 30, 2026 compared to $2.6 million for the six months ended June 30, 2025.

This decrease in interest expense was due to the extinguishment of the K2HV Loan Agreement in May 2026.

Loss on Extinguishment of Note Payable

The extinguishment of the K2HV Loan Agreement in May 2026 resulted in a one-time loss of $3.4 million for the six months ended June 30, 2026.

No similar activity occurred during the six months ended June 30, 2025.

Other Income, Net

Other income, net for the six months ended June 30, 2026 and 2025 primarily consists of the gains recognized for the change in fair value of the derivative liability associated with the K2HV Loan Agreement during each period.

Liquidity and Capital Resources

8 unchanged sentences

and enabling manufacturing for our development programs.

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.

Our net loss was $9.9 million for the six months ended June 30, 2026.

As of June 30, 2026, we had cash and cash equivalents of $22.0 million and an accumulated deficit of $485.3 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.

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

5 unchanged sentences

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.

In May 2026, an additional reduction in force occurred, representing 36% of our workforce at that time.

As a result of the 2026 Restructuring, we have recognized restructuring costs of $5.7 million during the six months ended June 30, 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.

16 unchanged sentences

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 was scheduled to mature on May 1, 2028, and we were obligated to make interest only payments for the first 24 months followed by equal interest and 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 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.

6 unchanged sentences

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.

1 unchanged sentence

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 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 $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.

2 unchanged sentences

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.

As of June 30, 2026, we remain subject to the Baby Shelf Limitation.

During the six months ended June 30, 2026, we did not sell any shares of our common stock under the ATM Offering.

Jazz Collaboration

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.

As of June 30, 2026, we had received $41.0 million in payments from Jazz, excluding payments for reimbursed costs, under the terms of the Collaboration Agreement and the Purchase Agreement.

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

There can be assurances of the timing of when we will receive the $2.0 million contingent payment, or at all.

Plan of Operation and Future Funding Requirements

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 of June 30, 2026, we had cash and cash equivalents of $22.0 million.

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.

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.

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.

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 value.

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.

19 unchanged sentences

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:

Three Months Ended

Six Months Ended

(in thousands)

Net cash used in:

Net cash (used in) provided by:

Operating activities

$ (3,968) $ (34,112)

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 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.

Net cash used in operating activities for the six months ended June 30, 2026 was $4.0 million compared to $34.1 million for the six months ended June 30, 2025.

The decrease in cash used for operating activities of $30.1 million is the result of receipt of a $21.0 million payment from Jazz related to the Purchase Agreement in May 2026, combined with various cost reduction initiatives implemented during the six months ended June 30, 2026.

Our operating expenses, excluding non-cash expenses, have decreased $6.9 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Similarly, our cash used to pay down our current liabilities, net of prepayments, has decreased $5.3 million due to our lower operating costs.

During the six months ended June 30, 2026, we incurred higher lease payments of $2.4 million compared to the six months ended June 30, 2025 due to the termination of our lease in May 2026.

Finally, interest income recognized during the six months ended June 30, 2026 decreased by $1.1 million compared to the six months ended June 30, 2025.

Investing Activities

Net cash provided by investing activities for the six months ended June 30, 2026 was $0.4 million, which represents proceeds from the sale of property and equipment during the period.

No investing activities occurred during the six months ended June 30, 2025.

Financing Activities

Net cash used for financing activities for the six months ended June 30, 2026 was $32.4 million, which represents the repayment of amounts owed under the K2HV Loan Agreement during the period, plus payment of fees incurred for extinguishment of the note payable.

Net cash provided by financing activities for the six months ended June 30, 2025 was $0.4 million, and primarily consisted of net proceeds of $0.3 million from our ATM Offering.

Contractual Obligations

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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.

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

Lease Agreement

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”).

(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.

Pursuant to the Lease Termination, we paid the Landlord an aggregate termination fee of $2.7 million, which represented 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.

On July 1, 2026, the Landlord exercised its option to accelerate the Lease Termination Date to July 31, 2026, and we have no further rent obligations under the Lease after that 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 accrued expenses, assumptions used in the valuation of stock-

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

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

During the three and six months ended June 30, 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