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) June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 21,987 $ 57,050 Prepaid expenses and other current assets 905 1,536 Total current assets 22,892 58,586 Property and equipment, net 1,263 4,688 Restricted cash and cash equivalents — 901 Operating lease right of use asset — 5,216 Other assets — 5 Total assets $ 24,155 $ 69,396 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 1,939 $ 754 Accrued expenses and other current liabilities 5,924 5,407 Operating lease liability, current — 1,751 Note payable, net of discount and issuance costs — 28,236 Total current liabilities 7,863 36,148 Operating lease liability, net of current portion — 7,684 Derivative liability — 759 Total liabilities 7,863 44,591 Commitments and contingencies Stockholders’ equity: Preferred stock, $ 0.0001 par value, 5,000,000 shares authorized as of June 30, 2026 and December 31, 2025; no shares issued or outstanding as of June 30, 2026 and December 31, 2025 — — Common stock, $ 0.0001 par value, 200,000,000 shares authorized as of June 30, 2026 and December 31, 2025; 48,599,066 and 48,596,817 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 5 5 Additional paid-in capital 501,559 500,210 Accumulated deficit ( 485,272 ) ( 475,410 ) Total stockholders’ equity 16,292 24,805 Total liabilities and stockholders’ equity $ 24,155 $ 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: Collaboration revenue $ 21,000 $ — $ 21,000 $ — Operating expenses: Research and development 6,162 13,143 14,343 26,263 General and administrative 7,680 4,399 12,770 9,270 Total operating expenses 13,842 17,542 27,113 35,533 Operating income (loss) 7,158 ( 17,542 ) ( 6,113 ) ( 35,533 ) Other expense: Interest income 277 850 710 1,847 Interest expense ( 475 ) ( 1,301 ) ( 1,843 ) ( 2,564 ) Loss on extinguishment of note payable ( 3,354 ) — ( 3,354 ) — Other income, net 64 11 738 179 Total other expense ( 3,488 ) ( 440 ) ( 3,749 ) ( 538 ) Net income (loss) $ 3,670 $ ( 17,982 ) $ ( 9,862 ) $ ( 36,071 ) Net income (loss) per common share, basic and diluted $ 0.08 $ ( 0.40 ) $ ( 0.20 ) $ ( 0.80 ) Weighted-average common shares outstanding, basic and diluted 48,597,534 44,981,746 48,597,177 44,904,880 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 Issuance of common stock, net 2,249 — 1 — 1 Stock-based compensation expense — — 419 — 419 Net income — — — 3,670 3,670 Balance at June 30, 2026 48,599,066 $ 5 $ 501,559 $ ( 485,272 ) $ 16,292 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 Issuance of common stock from at the market offering, net of issuance costs of $ 255 421,766 — 305 — 305 Issuance of common stock, net 86,340 — 41 — 41 Stock-based compensation expense — — 1,793 — 1,793 Net loss — — — ( 17,982 ) ( 17,982 ) Balance at June 30, 2025 45,335,265 $ 5 $ 492,118 $ ( 450,659 ) $ 41,464 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) Six Months Ended June 30, 2026 2025 Operating activities: Net loss $ ( 9,862 ) $ ( 36,071 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 1,348 3,799 Depreciation expense 2,850 832 Loss on sale and disposal of property and equipment, net 159 — Non-cash interest expense 771 1,010 Non-cash lease expense 307 381 Loss on extinguishment of note payable 3,354 — Change in fair value of derivative liability ( 707 ) ( 190 ) Gain on modification of lease liability ( 1,142 ) — Changes in operating assets and liabilities: Prepaid expenses and other assets 636 ( 574 ) Accounts payable, accrued expenses and other liabilities 1,702 ( 2,348 ) Operating lease liability ( 3,384 ) ( 951 ) Net cash used in operating activities ( 3,968 ) ( 34,112 ) Investing activities: Proceeds from sale of property and equipment 416 — Net cash provided by investing activities 416 — Financing activities: Repayment of note payable and extinguishment costs ( 32,413 ) — Proceeds from at the market offering of common stock, net of issuance costs — 347 Proceeds from issuances under Employee Stock Purchase Plan 1 41 Net cash (used in) provided by financing activities ( 32,412 ) 388 Net decrease in cash, cash equivalents and restricted cash and cash equivalents ( 35,964 ) ( 33,724 ) 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 $ 21,987 $ 78,491 Reconciliation of cash, cash equivalents and restricted cash and cash equivalents to the condensed consolidated balance sheets Cash and cash equivalents $ 21,987 $ 77,596 Restricted cash and cash equivalents — 895 Total cash, cash equivalents and restricted cash and cash equivalents $ 21,987 $ 78,491 Supplemental disclosure of cash flow information: Cash paid for interest $ 1,338 $ 1,562 Supplemental disclosure of non-cash investing and financing activities: Adjustment to right of use asset in exchange for reduction in lease liability $ 4,909 $ — Issuance costs in accounts payable and accrued expenses $ — $ 126 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 4, 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 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. See Note 12 for further discussion of the impact of the 2026 Restructuring. We had cash and cash equivalents of $ 22.0 million at June 30, 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 June 30, 2026 and December 31, 2025, and for the three and six months ended June 30, 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 8 Table of Contents management, these condensed consolidated financial statements reflect all normal recurring adjustments which are necessary for a fair presentation 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 June 30, 2026, and for the three and six months ended June 30, 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 and six months ended June 30, 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 six months ended June 30, 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 13, we did not identify any subsequent events that require adjustment or disclosure in the condensed consolidated financial statements. 4. Collaboration Revenue In April 2022, we entered into an exclusive global collaboration and license agreement (the “Collaboration Agreement”) with Jazz Pharmaceuticals Ireland Limited (“Jazz”) pursuant to which we granted Jazz certain licenses to develop and commercialize products containing our Interferon alpha (“IFNα”) INDUKINE™ molecule, JZP898 (the “898 Program”), as well as products containing certain isolated recombinant polypeptides comprising IFNα that meet specified criteria (each such product, a “Licensed Product”). Under 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 had 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, including submission of an investigational new drug application (“IND”) to the U.S. Food and Drug Administration (the “FDA”). In June 2024, we executed a transfer agreement (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 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. 9 Table of Contents On May 6, 2026 (the “Closing”), we entered into an asset purchase agreement (the “Purchase Agreement”) with Jazz. Subject to the terms and conditions of the Purchase Agreement, we sold to Jazz 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 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 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. 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, 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. Concurrently with the Purchase Agreement, we also entered into a license agreement (the “New License Agreement”) with Jazz to license to them certain patents and “know-how” (the “Licensed Patents” and “Licensed Know-How,” respectively). The Licensed Patents and the Licensed Know-How are necessary in the development of the 898 Program, however are not exclusive to the 898 Program. Accounting Analysis under ASC 606 Identification of the Contracts(s) We have previously concluded that the Collaboration Agreement represents a contract with a customer within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). We have assessed the Purchase Agreement and the New License Agreement, and have concluded that they represent a single combined arrangement due to the fact that they were negotiated as a package with a single commercial objective. We have further concluded that the Purchase Agreement and the New License Agreement represent a modification to the Collaboration Agreement within the scope of ASC 606. Identification of Promises and Performance Obligations Previously, we have concluded that the license granted to Jazz under the Collaboration Agreement, and the corresponding “know-how” are not capable of being distinct from the other promises within the contract, and as such, determined that the license and the “know-how” combined with the other research and development services and supply represent a single combined performance obligation. Under the Purchase Agreement and the New License Agreement, Jazz continues to have rights to the same patents and “know-how” that were granted under the Collaboration Agreement. However, under the Purchase Agreement, we transferred ownership of certain patents and “know-how” to Jazz. At the time of the Closing, our performance obligation to Jazz had been fulfilled. Determination of Transaction Price We have assessed the Purchase Agreement and the New License Agreement, and have concluded that they represent a modification that results in an increase in the overall transaction price of the contract with Jazz. We’ve determined that the upfront consideration included in the Purchase Agreement of $ 21.0 million should be added to the overall transaction price. The Purchase Agreement also includes a $ 2.0 million contingent payment that is payable to us upon the successful partial assignment of a certain license agreement. We’ve determined that this contingent payment represents variable consideration that should not be included in the transaction price. We used the most likely amount method to estimate variable consideration and estimated that the most likely amount of the contingent payment was zero at the Closing as the success of completing the partial assignment of the license agreement is highly susceptible to factors outside of our control. The Collaboration Agreement included various development and regulatory and sales-based milestones. The payments associated with these milestones represented variable consideration that were excluded from the overall transaction price at the inception of the Collaboration Agreement. As of the Closing, we are no longer entitled to receipt of payment for any of the unpaid milestones included in the Collaboration Agreement. Accordingly, the unpaid milestone payments are no longer considered for inclusion in the overall transaction price as of the Closing. 10 Table of Contents We re-evaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and adjust the transaction price as necessary. During the period from the Closing through June 30, 2026, we did not recognize any adjustment to the transaction price associated with the contingent payment. Revenue Recognition As noted above, we have no remaining performance obligation to Jazz as of the Closing. Accordingly, we have recognized revenue of $ 21.0 million during the three and six months ended June 30, 2026 related to the increase in the overall transaction price described above. As of June 30, 2026, all consideration included in the overall transaction price has been recognized as revenue. 5. 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 June 30, 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 7, Term Loan ) on our condensed consolidated balance sheet as of December 31, 2025. We do not have any liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2026. 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. Assets measured at fair value on a recurring basis as of June 30, 2026 were as follows: Level 1 Level 2 Level 3 Total (in thousands) Assets: Money market funds $ 21,489 $ — $ — $ 21,489 Total assets $ 21,489 $ — $ — $ 21,489 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 or six months ended June 30, 2026. Derivative Liability In May 2024, we entered into the K2HV Loan Agreement, as further described in Note 7, 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. In May 2026, we repaid all amounts owed under K2HV Loan Agreement, as described in Note 7. Upon repayment of the outstanding principal of the term loan, the lenders’ ability to exercise the conversion option expired. 11 Table of Contents The following table reconciles the change in fair value of the derivative liability based on Level 3 inputs: Six Months Ended June 30, 2026 2025 (in thousands) Balance at beginning of period $ 759 $ 2,829 Change in fair value ( 707 ) ( 190 ) Extinguishment of note payable ( 52 ) — Balance at end of period $ — $ 2,639 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 nominal gains related to change in fair value of the derivative liability during the three months ended June 30, 2026 and 2025. We recognized gains of $ 0.7 million and $ 0.2 million related to change in fair value of the derivative liability during the six months ended June 30, 2026 and 2025, respectively. The fair value of the derivative liability immediately prior to repayment of the amounts owed under K2HV Loan Agreement was written off and is included in the loss on extinguishment of note payable in the accompanying condensed consolidated statement of operations in the amount of $ 0.1 million for the three and six months ended June 30, 2026. 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 as of December 31, 2025 is as follows: Stock price $ 0.63 Volatility 105.0 % Risk-free rate (continuous) 3.5 % Expected term (in years) 0.25 Dividend yield (continuous) — % 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities were comprised as follows: June 30, 2026 December 31, 2025 (in thousands) Contract research $ 3,189 $ 2,376 Professional fees 2,316 1,388 Employee compensation and benefits 211 302 Manufacturing 90 928 Restructuring costs 34 — Accrued interest — 266 Other 84 147 Total accrued expenses and other current liabilities $ 5,924 $ 5,407 7. 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 12 Table of Contents 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 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 were obligated to pay a final fee equal to 6.95 % of the aggregate amount of the term loans funded (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, 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 5 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. 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. 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. During the three and 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. The outstanding note payable consisted of the following as of December 31, 2025 (in thousands) : Note payable $ 30,000 Unamortized debt discount and issuance costs ( 1,764 ) Net carrying amount of note payable $ 28,236 13 Table of Contents The following table provides the components of interest expense related to the K2HV Loan Agreement: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Interest expense based on coupon interest rate ( 10.3 %) of outstanding term loans $ 299 $ 781 $ 1,072 $ 1,554 Amortization of debt discount and accretion of Final Fee ( 8.94 %) 176 520 771 1,010 Total interest expense on effective rate ( 19.24 %) $ 475 $ 1,301 $ 1,843 $ 2,564 We had presented the full amount of the term loan payable, net of discount and issuance costs, as a current liability as of December 31, 2025 based on our assessment that repayment of the loan was probable in the subsequent twelve months of December 31, 2025. 8. 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 June 30, 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 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. During the six months ended June 30, 2025, we sold 421,766 shares of our common stock at an average price of $ 1.33 per share for net proceeds of $ 0.3 million after deducting sales commissions and offering expenses. We have reserved shares of common stock for issuance as follows: As of June 30, 2026 As of December 31, 2025 Shares reserved for exercises of outstanding stock options 8,206,431 9,954,872 Shares reserved for issuance under the 2021 Employee Stock Purchase Plan 1,044,648 560,929 Shares reserved for issuance under the 2021 Stock Incentive Plan 6,070,054 2,039,026 Shares reserved for issuance as part of the K2HV Loan Agreement conversion feature — 791,364 Total shares reserved for future issuance 15,321,133 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 June 30, 2026, no shares of preferred stock were issued or outstanding. 9. 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. 14 Table of Contents 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 % 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 June 30, 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 six months ended June 30, 2026 and 2025, 2,249 and 39,853 shares of our common stock, respectively, 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Research and development $ 83 $ 973 $ 586 $ 2,028 General and administrative 336 820 762 1,771 Total stock-based compensation $ 419 $ 1,793 $ 1,348 $ 3,799 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 these modifications, 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 these modifications will occur on the tenth anniversary of the grant date of each respective stock option. For the three and six months ended June 30, 2026, the stock-based compensation expense above includes $ 0.1 million and $ 0.7 million, respectively, of expense recognized related to these modifications. Stock Option Activity No stock options were granted during the three or six months ended June 30, 2026. The fair value of stock options granted during the three and six months ended June 30, 2025 were calculated on the date of grant using the following weighted-average assumptions: Three Months Ended June 30, 2025 Six Months Ended June 30, 2025 Risk-free interest rate 4.0 % 4.4 % Expected term (in years) 5.8 5.9 Expected annual dividend yield — % — % Expected volatility 95.2 % 95.3 % 15 Table of Contents Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted during the three and six months ended June 30, 2025 was $ 0.82 and $ 1.17 per share, respectively. The following table summarizes stock option activity during the six months ended June 30, 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 ( 1,748,441 ) $ 2.23 Outstanding at June 30, 2026 8,206,431 $ 5.24 6.35 $ — Exercisable at June 30, 2026 6,948,699 $ 5.77 6.02 $ — No stock options were exercised during the three and six months ended June 30, 2026 and 2025. As of June 30, 2026, we had unrecognized stock-based compensation expense related to unvested stock options of $ 2.0 million, which we expect to recognize over a weighted-average period of approximately 1.7 years. 10. Net Income (Loss) Attributable to Common Stockholders per Share We reported net income for the three months ended June 30, 2026 and net losses for the six months ended June 30, 2026 and for the three and six months ended June 30, 2025. For purposes of the diluted net income (loss) attributable to common stockholders per share calculation, outstanding stock options, common stock to be issued under the 2021 ESPP, and the conversion option derivative under the K2HV Loan Agreement 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 income (loss) attributable to common stockholders per share because their effect would have been anti-dilutive: June 30, 2026 2025 Outstanding stock options 8,206,431 10,461,702 Common stock to be issued under the 2021 ESPP — 70,602 Common stock to be issued upon exercise of the K2HV Loan Agreement conversion feature — 791,364 Total 8,206,431 11,323,668 11. Segment Information We have one reportable segment which focuses on the discovery and development of cancer therapeutics. The segment derives its revenue from the Purchase Agreement with Jazz (see Note 4, Collaboration Revenue ). 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. 16 Table of Contents The following is a summary of our segment and consolidated net income (loss), including significant segment expenses: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Collaboration revenue $ 21,000 $ — $ 21,000 $ — Less: General and administrative support 6,678 3,486 11,250 7,309 Clinical development 3,047 5,710 6,690 10,039 Research and discovery 1,028 3,537 3,183 6,856 Manufacturing 218 2,610 1,792 6,698 Other segment expenses (a) 2,871 2,199 4,198 4,631 Interest income 277 850 710 1,847 Interest expense ( 475 ) ( 1,301 ) ( 1,843 ) ( 2,564 ) Loss on extinguishment of note payable ( 3,354 ) — ( 3,354 ) — Other income, net 64 11 738 179 Segment and consolidated net income (loss) $ 3,670 $ ( 17,982 ) $ ( 9,862 ) $ ( 36,071 ) (a) Other segment expenses includes non-cash expenses for stock-based compensation and depreciation expenses. 12. 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 $ 6.5 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 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 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 June 30, 2026 Six Months Ended June 30, 2026 Cumulative Costs to Date Total Estimated Costs (in thousands) Employee severance, benefits and related taxes $ 83 $ 2,640 $ 2,640 $ 2,640 Employee retention bonuses, benefits and related taxes 1,296 2,079 2,079 2,881 Stock-based compensation 50 665 665 665 Contract termination costs ( 50 ) 300 300 300 Total restructuring costs $ 1,379 $ 5,684 $ 5,684 $ 6,486 17 Table of Contents Total restructuring costs recognized in our condensed consolidated statements of operations were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Research and development $ 419 $ — $ 3,477 $ — General and administrative 960 — 2,207 — Total restructuring costs $ 1,379 $ — $ 5,684 $ — Accrued restructuring costs, which are included in accrued expenses and other current liabilities on our condensed consolidated balance sheets were as follows (in thousands): Balance as of December 31, 2025 $ — 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 as of March 31, 2026 443 Restructuring costs recognized during the period 1,379 Cash payments made during the period ( 1,229 ) Amortization of employee retention bonuses paid in the prior period ( 509 ) Non-cash charges recognized during the period ( 50 ) Balance as of June 30, 2026 $ 34 13. Lease Termination On May 7, 2026 (the “Modification Date”), 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 (the “Lease Termination Date”). Either party may elect to accelerate the Lease Termination Date by providing 30 days’ prior written notice to the other party, provided that such notice is given no earlier than July 1, 2026 (the “Termination Option”). 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 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. We have no further rent obligations to the Landlord pursuant to the Lease after the Lease Termination Date. We have assessed the Lease Termination and have concluded that it represents a modification to the Lease within the scope of ASC Topic 842, Leases (“ASC 842”). Upon the execution of the Lease Termination, we were reasonably certain that the Termination Option would be exercised, and accordingly we estimated that the lease would terminate on July 31, 2026 for purposes of measuring the modified lease liability. On the Modification Date, we measured our modified lease liability to be $ 2.5 million. We reduced our lease liability to the modified lease liability through an adjustment to our right-of-use asset as of the Modification Date. We have recognized a reduction to our operating expenses during the three and six months ended June 30, 2026 in the amount of $ 1.1 million, representing the remaining reduction in our lease liability required after our right-of-use asset was reduced to zero. The reduction to our operating expenses has been allocated between research and development and general and administrative operating expenses proportionately with how the operating lease costs have been allocated over the term of the Lease. As a result of the Lease Termination, we have determined that the estimated useful lives for the majority of our property and equipment will no longer extend beyond July 31, 2026. We have recognized additional depreciation expense during the three and six months ended June 30, 2026 as a result of the change in the estimated useful lives, and will continue to recognize higher-than-expected depreciation expense during each period until our property and equipment is fully depreciated or disposed of. On July 1, 2026, the Landlord exercised the Termination Option to terminate the Lease, effective July 31, 2026. 18 Table of Contents