What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-19 compared with 2025-03-17 · 219 added, 178 removed, 643 unchanged (38% of the section changed)

42 unchanged sentences

Accounts receivable — 200

Other receivables 177 197

Receivables from related parties — 23

42 unchanged sentences

Provision for income taxes 2 2

Loss on equity method investment — 1,634

Net income (loss) $ ( 140,055 ) $ 1,687,572

13 unchanged sentences

Issuance of shares upon exercise of stock options 3,449 — 71,678 — 71,678

Issuance of common stock and pre-funded warrants in private placement, net of issuance costs 3,621 1 199,644 — 199,645

Net loss — — — ( 241,361 ) ( 241,361 )

Balance as of December 31, 2023 47,369 $ 5 $ 657,232 $ ( 613,734 ) $ 43,503

Stock-based compensation expense — — 58,518 — 58,518

Issuance of shares upon exercise of stock options 3,449 — 71,678 — 71,678

Issuance of shares upon exercise of warrants 2,746 — — — —

4 unchanged sentences

Balance as of December 31, 2024 14,476 $ 1 $ 239,715 $ ( 106,132 ) $ 133,584

Stock-based compensation expense — — 11,138 — 11,138

Issuance of warrants in connection with 2025 Loan Agreement — — 1,720 — 1,720

Issuance of shares upon exercise of stock options 102 — 1,606 — 1,606

Net loss — — — ( 140,055 ) ( 140,055 )

Balance as of December 31, 2025 14,578 $ 1 $ 254,179 $ ( 246,187 ) $ 7,993

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

12 unchanged sentences

— ( 1,998,809 )

Loss from equity method investment — 1,634

Non-cash license revenue — ( 1,634 )

Loss on disposal of fixed assets 12 3

Loss on disposal of property and equipment 12 12

Changes in operating assets and liabilities:

Accounts receivable 200 ( 185 )

Other receivables 20 566

Receivables from related parties 23 ( 23 )

4 unchanged sentences

Operating lease liability ( 1,595 ) ( 1,408 )

Deferred revenue, current portion — ( 166 )

Net cash used in operating activities ( 129,794 ) ( 194,409 )

Cash flows from investing activities

Purchase of fixed assets ( 2,597 ) ( 4,593 )

Purchase of property and equipment ( 31 ) ( 2,597 )

Proceeds from the sale of property and equipment 3 —

Net cash used in investing activities ( 28 ) ( 2,597 )

Cash flows from financing activities

Proceeds from issuance of common stock and pre-funded warrants in private placement — 200,000

Issuance costs associated with issuance of common stock and pre-funded warrants in private placement — ( 355 )

Proceeds from the issuance of debt 99,965 —

Payment of third-party fees associated with debt ( 125 ) —

Proceeds from exercise of stock options 1,606 71,678

Net cash provided by financing activities 101,446 71,678

Net increase (decrease) in cash ( 125,328 ) 4,059

Net decrease in cash

( 28,376 ) ( 125,328 )

Cash and cash equivalents at beginning of period 152,596 277,924

5 unchanged sentences

Remeasurement of operating lease liability and right-of-use asset in connection with 2024 Lease Agreement

Payable for purchase of fixed assets $ — $ 519

Fair value of warrants issued to lender in conjunction with 2025 Loan Agreement (as defined in Note 3) $ 1,720 $ —

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

43 unchanged sentences

In accordance with this guidance, the disposal of the 101 Business has been accounted for as a dividend-in-kind, with a gain recognized for the difference between the fair value and carrying value of the disposed assets.

The Company recorded a gain on the transaction of $ 2.0 billion during the year ended December 31, 2024, which consists of the following components (in thousands):

The Company recorded a gain on the transaction of $ 2.0 billion during the year ended December 31, 2024, which consisted of the following components (in thousands):

DECEMBER 31, 2024

7 unchanged sentences

From its inception and through December 31, 2025, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, pre-commercialization activities, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these consolidated financial statements are issued.

The Company believes that its existing cash and cash equivalents, including proceeds from the March 2026 Amendment (see Footnote 11), will be sufficient to fund the Company’s operations for at least 12 months from the date these consolidated financial statements are issued.

The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, strategic transactions and other similar arrangements.

If the Company does raise additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders’ rights.

The process of conducting preclinical studies and testing therapeutic candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

The Company expects to continue to incur net losses for the foreseeable future until, if ever, the Company has an approved product and can successfully commercialize it.

Until such time the Company, if ever, can generate substantial product revenue, the Company expects to finance its cash needs through equity offerings, debt financings or other capital sources, including strategic licensing and collaborations, strategic transactions, or other similar arrangements and transactions, and from time to time, the Company engages in discussions with potential acquirers regarding the disposition of one or more of its therapeutic candidates.

If the Company raises additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders’ rights.

If the Company raises capital through additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures.

To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreements, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company.

There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future.

If the Company is unable to secure adequate additional funding, it will need to reevaluate its operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of its development programs, or relinquish rights to its technology on less favorable terms than it would otherwise choose.

These actions could materially impact its business, financial condition, results of operations and prospects.

However, there can be no assurance as to the availability or terms upon which such finances or capital might be available in the future.

If the Company is unable to secure adequate additional funding, it will need to reevaluate its operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of its development programs, or relinquish rights to its intellectual property on less favorable terms than it would otherwise choose.

These actions could materially impact its business, results of operations, financial condition, and prospects.

The rules and regulations of the SEC or any other regulatory agencies may restrict the Company’s ability to conduct certain types of financing activities, or may affect the timing of and amounts it can raise by undertaking such activities.

11 unchanged sentences

The Company maintains deposits in federally insured financial institutions in excess of federally insured limits by the Federal Deposit Insurance Corporation, or the FDIC, of up to $250,000.

The Company’s cash management and investment policy limits investment instruments to investment-grade securities

with the objective to preserve capital and to maintain liquidity until the funds can be used in operations.

The Company’s cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds can be used in operations.

The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial condition of the depository institutions in which those deposits are held.

26 unchanged sentences

The Company also records an operating right-of-use asset based on the liability as adjusted for any lease incentives or prepaids.

The lease term at the commencement date is determined by considering whether renewal options and termination options are reasonably assured of exercise.

The lease term at the commencement date is determined by considering whether renewal options and termination options are reasonably certain of exercise.

After lease commencement, assumptions made by the Company at the commencement date are re-evaluated upon the occurrence of certain events, including a lease modification.

5 unchanged sentences

In addition, the Company does not recognize the right-of-use assets and liabilities for leases with lease terms of twelve months or less, instead recognizing lease payments as operating expenses on a straight-line basis over the lease term.

Investment in Phylaxis

Investment in Poplar Therapeutics

The Company uses the equity method of accounting for equity investments in companies if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the investee.

As discussed in Note 6, the Company received an equity investment in the form of a 10 % equity interest as consideration in a series of agreements with Phylaxis (as defined below), which was later increased to 15 % in the fourth quarter of 2023 following the achievement of a milestone.

This equity interest is accounted for as an equity method investment and the Company’s proportionate share of the net income or loss of Phylaxis is included as loss in equity method investment in the consolidated statement of operations.

As discussed in Note 6, the Company received an equity investment in the form of a 10 % equity interest as consideration in a series of agreements with Poplar Therapeutics, Inc, or Poplar Therapeutics, formerly Phylaxis Bioscience, LLC., which was later increased to 15 % in the fourth quarter of 2023 following the achievement of a milestone.

This equity interest is accounted for as an equity method investment and the Company’s proportionate share of the net income or loss of Poplar Therapeutics is included as loss in equity method investment in the consolidated statement of operations.

Judgment regarding the level of influence over each equity method investment includes considering key factors such as the Company’s ownership interest, representation on the board of directors, legal form of the investee (e.g.

2 unchanged sentences

Following the Company’s increase in equity interest of 5 % in the fourth quarter of 2023, the Company established an additional equity method investment and subsequently recorded its proportionate loss as loss in equity method investment in the consolidated statement of operations.

Accordingly, the Company’s investment in Phylaxis as of December 31, 2024 and December 31, 2023 is zero .

Accordingly, the Company’s investment in Poplar Therapeutics as of December 31, 2025 and December 31, 2024 is zero .

Fair Value of Financial Instruments

14 unchanged sentences

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

As of December 31, 2024 and December 31, 2023, the Company held $ 149.0 million and $ 264.4 million, respectively, of money market mutual funds or equivalents, which are classified as Level 1 in the fair value hierarchy.

During the year ended December 31, 2023, the Company’s investments in debt securities consisted of U.S.

Treasury Bills, which are classified as Level 1 in the fair value hierarchy.

Due to the short-term nature of these securities which are classified as cash equivalents, the amortized value approximated fair value and the Company did not remeasure these instruments at fair value.

As of December 31, 2024 and December 31, 2023, the Company held no investments in debt securities.

The Company’s long-term outstanding debt as of December 31, 2023 is classified as Level 2 in the fair value hierarchy.

As of December 31, 2024 and December 31, 2023, the Company had no financial instruments measured at fair value on a recurring basis.

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type are presented in the following table (in thousands):

December 31, 2025

Money market funds $ 5,870 $ — $ — $ 5,870

Total assets measured at fair value

$ 5,870 $ — $ — $ 5,870

December 31, 2024

Money market funds $ 5,093 $ — $ — $ 5,093

Total assets measured at fair value

$ 5,093 $ — $ — $ 5,093

The Company’s long-term outstanding debt is not measured at fair value on a reoccurring basis.

As of December 31, 2025 and December 31, 2024, the fair value of the Company’s long-term outstanding debt approximates fair value using Level 2 inputs.

Deferred Financing Costs and Other Debt-Related Costs

8 unchanged sentences

Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period.

Any change in the fair value of the warrants after the issuance date is recorded in other expense, net in the consolidated statements of operations as a gain or loss.

Any change in the

fair value of the warrants after the issuance date is recorded in other expense, net in the consolidated statements of operations as a gain or loss.

If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or under another applicable GAAP standard.

9 unchanged sentences

(3) payments for reimbursement of research costs;

(4) payments associated with achieving specific development, regulatory, or

commercial milestones;

(4) payments associated with achieving specific development, regulatory, or commercial milestones;

and (5) royalties based on specified percentages of net product sales, if any.

12 unchanged sentences

Costs incurred related to the Company’s purchases of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Costs incurred related to the licensing of products that have not yet received marketing approval to be marketed, or that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Costs incurred related to the licensing of products that have not yet received

marketing approval to be marketed, or that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.

Income taxes are accounted for under the asset and liability method.

5 unchanged sentences

Under Sections 382 and 383 of the Internal Revenue Code, as amended, or IRC, a corporation that undergoes an “ownership change” may be subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes otherwise available to offset future taxable income and/or tax liability.

An ownership change is defined as a cumulative change of 50 percentage points or more in the ownership

positions of certain stockholders or groups of stockholders during a rolling three-year period.

It is possible that the Company may incur ownership changes in the future.

An ownership change is defined as a cumulative change of 50 percentage points or more in the ownership positions of certain stockholders or groups of stockholders during a rolling three-year period.

The Company has not completed a formal study to determine if any ownership changes within the meaning of IRC Section 382 and 383 have occurred.

It is possible that the Company has already incurred ownership changes and may incur additional ownership changes in the future.

If an ownership change occurs, the Company’s ability to use its NOL or tax credit carryforwards may be restricted, which could require the Company to pay federal or state income taxes earlier than would be required if such limitations were not in effect.

6 unchanged sentences

For purposes of computing earnings (loss) per share only, for all periods presented in its consolidated statements of operations, the Company adjusted all outstanding shares of the Former Parent, including potentially dilutive securities, by the four -to-one distribution ratio used in the Distribution.

In periods in which the Company has net income, the Company applies the treasury stock method to determine the dilutive effect of potentially dilutive securities.

Potentially dilutive securities included in the diluted earnings per share are as follows (in thousands):

DECEMBER 31, 2024

Outstanding stock options 182

In periods in which the Company has a net loss, basic loss per share and diluted loss per share are identical since the effect of potentially dilutive common shares is anti-dilutive and therefore excluded.

Accordingly, for the year ended December 31, 2025, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Potentially dilutive securities not included in the calculation of diluted net loss per share, as weighted based on the period outstanding during the year, are as follows (in thousands):

Potentially dilutive securities not included in the calculation of diluted net loss per share are as follows (in thousands):

DECEMBER 31, 2025

1 unchanged sentence

Warrants to purchase common stock 141

In periods in which the Company has net income, the Company applies the treasury stock method to determine the dilutive effect of potentially dilutive securities.

Potentially dilutive securities included in the diluted earnings per share are as follows (in thousands):

DECEMBER 31, 2024

Outstanding stock options 182

Fair Value of Stock-Based Awards

17 unchanged sentences

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or CODM, in making decisions regarding resource allocation and assessing performance.

The Company’s CODM has been identified as the Chief Executive Officer, who reviews financial results at a consolidated level only.

The Company’s CODM has been identified as the Chief

Executive Officer, who reviews financial results at a consolidated level only.

The Company views its operations and manages its business as one operating and reportable segment as the Company has devoted substantially all of its resources to drug discovery and development activities through conducting preclinical studies and clinical trials associated with its programs, all of which aim to discover and develop biologic therapeutic candidates.

3 unchanged sentences

The segment depreciation expense, interest expense, interest income, and segment asset additions are consistent with consolidated amounts reported within the consolidated statement of cash flows given the Company's operations are aggregated within a single reportable segment.

The total segment amount of loss on equity method investment for the segment is also consistent with the consolidated amount of loss on equity method investment reported within the consolidated statement of operations and comprehensive loss.

The Company’s revenues to date under this segment have been derived from licenses with collaboration partners and grant awards, and the Company has not generated any revenue from the commercial sale of approved therapeutic products (see Note 6).

As a result, the Company has incurred operating losses since its inception and expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances its therapeutic candidates through all stages of development and clinical trials and, ultimately, seeks regulatory approval.

The CODM uses net income (loss) and the components of operating expense to assess the Company’s operating results and performance and make operating decisions regarding the allocation of resources to best support the long-term growth of the Company’s overall business.

The CODM evaluates the Company's operating results and allocates resources using net income (loss) and the components of operating expense, together with information on the progression and results of clinical trial activities, to advance the Company's therapeutic pipeline and to best support the long-term growth of the Company’s overall business.

The table below summarizes the significant segment revenue and significant segment expenses which are regularly reported to and reviewed by the CODM for the purposes of making decisions regarding the allocation of resources and are reconciled to consolidated net income (loss) for the years ended December 31, 2025 and December 31, 2024 (in thousands):

3 unchanged sentences

Personnel 35,372 72,790

Contract manufacturing 55,643 77,248

Clinical trials 35,339 47,665

Contract manufacturing 19,590 55,643

Equipment, depreciation, and facility 10,227 9,693

5 unchanged sentences

Other income (expense) ( 5,028 ) ( 2,476 )

Other segment items (1)

Other segment expenses (2)

Segment and consolidated net income (loss) $ ( 140,055 ) $ 1,687,572

$ 1,687,572 $ ( 241,361 )

(1) Other segment expenses include provision for income taxes and loss on equity method investments.

(1) Other segment items consist of the gain on transaction from the Merger, discussed above.

(2) Other segment expenses include provision for income taxes.

Recent Accounting Pronouncements

2 unchanged sentences

Adoption of New Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this standard for its 2024 annual consolidated financial statements and interim consolidated financial statements thereafter and has applied it retrospectively to all prior periods presented in the financial statements.

The adoption of this ASU did not result in a material impact on its consolidated financial statements, other than the newly required disclosures included above in Note 1.

Recently Issued but Not Yet Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

3 unchanged sentences

Early adoption is permitted.

The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and related disclosures.

We adopted ASU 2023-09 for the year ended December 31, 2025 and applied it prospectively, as disclosed in Note 8, Income Taxes.

The adoption did not have a material impact on our consolidated financial statements.

Recently Issued but Not Yet Adopted Accounting Pronouncements

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

28 unchanged sentences

Leasehold improvements 795 795

Construction in process (1)

Total property and equipment 14,854 15,093

1 unchanged sentence

Property and equipment, net $ 3,733 $ 6,200

(1) As of December 31, 2023, consists of renovations to the Company’s office space and software not yet placed in service.

Depreciation and amortization expense for each of the years ended December 31, 2025 and December 31, 2024, and consisted of the following (in thousands):

32 unchanged sentences

The Acquirer assumed the outstanding debt balance in full, consisting of the $ 200.0 million in gross principal, the $ 18.0 million final payment fee, and accrued interest of $ 2.3 million, net of debt discounts of $ 9.0 million.

The Company determined the Acquirer’s assumption and subsequent repayment of the outstanding debt constitutes an extinguishment of the debt as the Company has been legally released from being the primary obligor under the

The Company did not make any payment upon the extinguishment of the debt and did not incur any prepayment penalties.

Upon the Acquirer’s assumption of the outstanding debt, the Company recorded a gain of $ 211.3 million, the net carrying amount of the Amended 2020 Loans upon extinguishment, within the gain related to transaction with Acquirer in its consolidated statements of operations.

Interest Expense

1 unchanged sentence

During the year ended December 31, 2024, interest expense was $ 13.5 million, $ 2.1 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

2025 Loan Agreement

On January 13, 2025, the Company entered into a Loan and Security Agreement, or the 2025 Loan Agreement, with Oxford, pursuant to which it received $ 100.0 million in gross proceeds.

The 2025 Loan Agreement provides for an additional tranche of $ 50.0 million to be funded upon the Company's request and at Oxford’s sole discretion.

The outstanding term loan will mature on January 1, 2030, or the Maturity Date, and bears interest at (1) 5.61 % plus (2) the greater of (i) the 1-Month Term Secured Overnight Financing Right as published by the CME Group or (ii) 4.34 %.

The repayment schedule provides for interest-only payments through February 1, 2028, with principal payments beginning on March 1, 2028.

The interest-only period is followed by 23 months of equal payments of principal plus interest.

Upon the earliest to occur of (i) the Maturity Date, (ii) the acceleration of any term loan under the Term Loan Facility, or (iii) prepayment of any term loan under the Term Loan Facility, the Company will be required to make a final payment of 9.0 % of the total principal amount.

This final payment of $ 9.0 million will be accreted over the life of the 2025 Loan Agreement using the effective interest method.

The Company has the option to prepay the outstanding balance of the term loan in full prior to the Maturity Date, subject to a prepayment fee ranging from 2.0 % to 5.0 %, depending on the timing of the prepayment.

As of December 31, 2025, the Company’s outstanding debt balance under the 2025 Loan Agreement consisted of the following (in thousands):

DECEMBER 31, 2025

Term loan $ 109,000

debt discount ( 8,441 )

Long-term debt, including debt discount and final payment fee $ 100,559

The Company’s interest-only period will continue through February 2028, with principal payments beginning in March 2028.

Future principal payments and final fee payments will be made as follows (in thousands):

DECEMBER 31, 2025

2028 $ 43,478

Total future minimum payments 109,000

unamortized debt discount ( 8,441 )

Total debt $ 100,559

The Company’s obligations under the 2025 Loan Agreement are secured by a first priority perfected lien on, and security interest in, substantially all present and future assets of the Company, subject to certain exceptions.

The 2025 Loan Agreement includes customary events of default, including instances of a material adverse change in the Company’s operations, that may require prepayment of the outstanding term loans.

The 2025 Loan Agreement also requires the Company to maintain a minimum liquidity threshold in the amount of $ 20.0 million, tested at all times, with such liquidity threshold subject to increase to $ 50.0 million or $ 75.0 million based on certain pipeline development changes.

As of December 31, 2025, the Company is in compliance with all covenants under the 2025 Loan Agreement.

Concurrently with the debt issuance in January 2025, the Company issued to Oxford warrants to purchase shares of the Company’s common stock equal to 2.0 % of the funded amount, or $ 2.0 million, or the 2025 Oxford Warrants.

Upon issuance, the warrants were exercisable for 140,741 shares of common stock at an exercise price of $ 14.21 per share.

The 2025 Oxford Warrants are immediately exercisable, and the exercise period will expire 10 years from the date of issuance.

Upon issuance, the warrants were classified as equity and recorded at their fair value of $ 1.7 million as additional paid-in-capital and as a debt discount which will be accreted over the life of the 2025 Loan Agreement using the effective interest method.

See Note 4 for further discussion of these warrants.

Interest Expense

Interest expense is calculated using the effective interest method and is inclusive of non-cash amortization of the debt discount and accretion of the final payment at an effective interest rate of 12.9 %.

During the year ended December 31, 2025, interest expense was $ 12.2 million, $ 2.4 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

11 unchanged sentences

During the second quarter of 2024, certain Purchasers exercised 2,747,245 pre-funded warrants on a cashless basis for a net of 2,746,454 shares of the Former Parent’s common stock.

In connection with the Merger Agreement, the Former Parent entered into an Agreement Relating to the Pre-Funded Warrant to Purchase Common Stock and Securities Purchase Agreement, with each holder of the pre-funded warrants purchased in the Private Placement so that on the date of the Distribution, any remaining pre-funded warrants of the Former Parent not already exercised became exercisable for an equivalent number of shares of the Company’s common stock at an exercise price of $ 0.0001 per share, pursuant to certain beneficial ownership limitations.

The Company accounted for this amendment as a modification to the original Purchase Agreement.

In connection with the execution of the Merger Agreement, the Former Parent entered into an Agreement Relating to the Pre-Funded Warrant to Purchase Common Stock and Securities Purchase Agreement, dated as of January 22, 2024, by and between the Former Parent and each holder of the pre-funded warrants purchased in the Private Placement so that on the date of the Distribution, any remaining pre-funded warrants of the Former Parent not already exercised to purchase the Former Parent’s common stock became exercisable for an equivalent number of shares of the Company’s common stock at an exercise price of $ 0.0001 per share, pursuant to certain beneficial ownership limitations.

The Company has evaluated the amendment and accounted for this as a modification to the original Purchase Agreement.

As part of the Separation and Distribution, each holder of outstanding pre-funded warrants received (i) $ 30.00 per pre-funded warrant in cash, less the applicable exercise price per share, (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone, and (iii) one pre-funded warrant of Inhibrx for every four of the Former Parent’s pre-funded warrants held.

Following the Separation and Distribution and as of December 31, 2024, pre-funded warrants to purchase 991,849 shares of the Company’s common stock are outstanding at an exercise price of $ 0.0001 per share.

The pre-funded warrants are exercisable upon issuance pursuant to certain beneficial ownership limitations as defined in the Purchase Agreement, as amended, and will expire when exercised in full.

Warrants Issued in Connection with Amended 2020 Loan Agreement

Following the Separation and Distribution, pre-funded warrants to purchase 991,849 shares of the Company’s common stock are outstanding at an exercise price of $ 0.0001 per share.

The pre-funded warrants are exercisable upon issuance pursuant to certain beneficial ownership limitations as defined in the Purchase Agreement, as amended, and will remain outstanding until exercised in full.

Oxford Warrants

Amended 2020 Loan Agreement

In connection with the Amended 2020 Loan Agreement, the Company issued equity-classified warrants to Oxford, or the 2020 Oxford Warrants, in two tranches:

2 unchanged sentences

All outstanding warrants with an exercise price which exceeded the total consideration of $ 35.00 were canceled upon the Merger for no consideration.

Following the Separation and as of December 31, 2024, no Oxford Warrants were outstanding.

Following the Separation, no Oxford Warrants were outstanding.

2025 Loan Agreement

In connection with the 2025 Loan Agreement, the Company issued warrants to Oxford, or the 2025 Oxford Warrants.

The Company issued warrants to purchase 140,741 shares of the Company’s common stock at an exercise price of $ 14.21 per share.

The 2025 Oxford Warrants are exercisable upon issuance and will expire on January 13, 2035.

The 2025 Oxford Warrants are equity-classified and carried at the instruments’ fair value upon classification into equity, with no subsequent remeasurements.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of December 31, 2024 for the Company and December 31, 2023 for the Former Parent consisted of the following (in thousands):

Common stock reserved for future issuance as of December 31, 2025 and December 31, 2024 consisted of the following (in thousands):

AS OF DECEMBER 31,

Options to purchase common stock issued and outstanding 3,501 3,660

Shares available for future equity grants 340 533

Pre-funded warrants issued and outstanding 992 992

Shares available for future equity grants 499 340

Warrants issued and outstanding 141 —

1 unchanged sentence

EQUITY COMPENSATION PLAN

The Company’s share-based compensation plan, the Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan, or the 2017 Plan, provided for the issuance of incentive stock options, restricted and unrestricted stock awards, and other stock-based awards.

Prior to the Merger, the Company’s share-based compensation plan, the Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan, or the 2017 Plan, provided for the issuance of incentive stock options, restricted and unrestricted stock awards, and other stock-based awards.

The 2017 Plan was terminated in connection with the Merger.

Stock Option Activity

The Company recognized compensation costs related to stock-based awards, including stock options, based on the estimated fair value of the awards on the date of grant.

The Company granted options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant.

Under the 2017 Plan, the Company granted options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant.

The options were subject to four-year vesting with a one-year cliff and had a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2017 Plan for the year ended December 31, 2024 is as follows (in thousands, except for per share data):

Number of Shares Weighted Average Exercise Price

Outstanding as of December 31, 2023

6,494 $ 23.22

Exercised ( 3,449 ) $ 21.11

Forfeited ( 9 ) $ 32.03

Settled in connection with the Merger ( 2,884 ) $ 24.75

Canceled in connection with the Merger ( 152 ) $ 41.56

Outstanding as of December 31, 2024

Vested and exercisable as of December 31, 2024

The aggregate intrinsic value of stock options exercised during the years ended December 31, 2024 and December 31, 2023 was $ 65.3 million and $ 2.1 million, respectively.

Aggregate intrinsic value of stock options exercised and outstanding is calculated using the fair value of common stock on the date of exercise and as of December 31, 2024, respectively.

The total fair value of stock options vested during the years ended December 31, 2024 and December 31, 2023 was $ 42.5 million and $ 24.9 million, respectively.

The aggregate intrinsic value of stock options exercised during the year ended December 31, 2024 was $ 65.3 million.

Aggregate intrinsic value of stock options exercised is calculated using the fair value of common stock on the date of exercise.

The total fair value of stock options vested during the year ended December 31, 2024 was $ 42.5 million.

Following the Merger, there was no activity under the 2017 Plan and no stock options remained outstanding under the 2017 Plan.

Settlement of Stock Options Upon Merger

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(i) $ 30.00 per share in cash, less the applicable exercise price of their stock option and (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone.

In connection with the acceleration of the eligible stock options, the Company recognized $ 39.3 million in stock compensation expense.

In connection with the acceleration of the eligible stock options, affecting 160 grantees, the Company recognized $ 39.3 million in stock compensation expense.

All outstanding options with an exercise price which exceeded the total consideration of $ 35.00 were canceled upon the Merger for no consideration.

In connection with the cancellation of all unvested options with an exercise price above $ 35.00 , the Company recognized all remaining stock compensation expense of $ 1.8 million.

Stock-Based Compensation Expense

Stock options are valued using the Black-Scholes Merton option pricing model on the date of grant.

This option pricing model involves a number of estimates, including the expected lives of the stock options, the Company’s anticipated stock volatility, and interest rates.

Stock-based compensation expense was recognized using the straight-line method over the vesting period.

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value for the year ended December 31, 2023 were as follows.

DECEMBER 31, 2023

Risk-free interest rate 3.77 %

Expected volatility 84.31 %

Expected dividend yield — %

Expected term 6.08

Weighted average fair value $ 16.88

See Note 1 for further discussion in how the Company determines the assumptions used in the option pricing model.

Stock-based compensation expense for stock options under the 2017 Plan consisted of the following (in thousands):

YEAR ENDED DECEMBER 31,

Research and development $ 32,809 $ 16,630

General and administrative 18,725 8,216

Total stock-based compensation expense $ 51,534 $ 24,846

As of December 31, 2024, the Company had no remaining unrecognized stock-based compensation expense related to its stock options under the 2017 Plan following the termination of the plan subsequent to the Merger.

In connection with the cancellation of all unvested options with an exercise price above $ 35.00 , affecting 7 grantees, the Company recognized all remaining stock compensation expense of $ 1.8 million.

In connection with the Separation, the Company adopted the 2024 Omnibus Incentive Plan, or the 2024 Plan, which provides for the issuance of incentive stock options, restricted and unrestricted stock awards, and other stock-based awards.

As of December 31, 2025, an aggregate of 4.0 million shares of common stock were authorized for issuance under the 2024 Plan, of which 0.4 million remained available for issuance.

There was no activity under the 2024 Plan during the year ended December 31, 2023.

Stock Option Activity

The Company recognizes compensation costs related to stock-based awards, including stock options, based on the estimated fair value of the awards on the date of grant.

The Company grants options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant.

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Outstanding as of December 31, 2024

3,660 $ 15.84

Granted 378 $ 17.86

Exercised ( 102 ) $ 15.79

Forfeited ( 435 ) $ 15.86

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Vested and exercisable as of December 31, 2025

1,295 $ 15.84 8.3 $ 81,773

The aggregate intrinsic value of stock options exercised during the year ended December 31, 2025 was $ 4.7 million.

The total fair value of stock options vested during the year ended December 31, 2025 was $ 17.4 million.

No stock options were exercised or vested during the year ended December 31, 2024.

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Stock-Based Compensation Expense

The Company recognizes compensation costs related to stock-based awards, including stock options, based on the estimated fair value of the awards on the date of grant.

Stock options are valued using the Black-Scholes Merton option pricing model on the date of grant.

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Stock-based compensation expense is recognized using the straight-line method over the vesting period.

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value, for the year ended December 31, 2024 were as follows:

DECEMBER 31, 2024

The weighted-average assumptions used by the Company to estimate the fair value of stock options granted under the 2024 Plan using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value, for the years ended December 31, 2025 and December 31, 2024 were as follows:

YEAR ENDED DECEMBER 31,

Risk-free interest rate 3.91 % 4.56 %

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Weighted average fair value $ 13.32 $ 11.89

The Company did no t grant any stock options under the 2017 Plan during the years ended December 31, 2025 and December 31, 2024.

See Note 1 for further discussion in how the Company determines the assumptions used in the option pricing model.

Stock-based compensation expense for stock options under the 2024 Plan consisted of the following (in thousands):

DECEMBER 31, 2024

Stock-based compensation expense for stock options under the 2024 Plan and 2017 Plan consisted of the following (in thousands):

YEAR ENDED DECEMBER 31,

Research and development $ 6,534 $ 36,875

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As of December 31, 2025, the Company had $ 25.9 million of total unrecognized stock-based compensation expense related to its stock options under the 2024 Plan, which is expected to be recognized over a weighted-average period of 2.56 years.

As of December 31, 2025, the Company had no remaining unrecognized stock-based compensation expense related to its stock options under the 2017 Plan following the termination of the plan subsequent to the Merger.

LICENSE REVENUE

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License fee revenue

Scithera, Inc.

Regeneron Pharmaceuticals, Inc.

Phylaxis BioScience, LLC — 1,634

Total license fee revenue $ 1,300 $ 200

License and Collaboration Agreements

Scithera License Agreement

On March 31, 2025, the Company entered into a License and Assignment Agreement, or the Scithera License Agreement, with Scithera, Inc., or Scithera, a newly formed biotechnology company that focuses on antibody-based molecules.

Pursuant to the Scithera License Agreement, the Company licensed to Scithera the right to use certain assets in the Company’s antibody library to research, develop, and commercialize antibody-based molecules to certain targets.

Additionally, the Company assigned to Scithera its agreement with NorthStar Medical Technologies, LLC for the development of radiopharmaceuticals for the treatment of cancer.

The Company also agreed to make available to Scithera certain research materials useful for identifying, generating, and developing antibodies from antibody libraries to enable Scithera’s use of the assets licensed under the Scithera License Agreement.

Contingent upon Scithera’s achievement of specified funding events, Scithera was required to pay the Company $ 1.3 million as a non-refundable payment.

In addition, Scithera may make additional future milestone payments of up to an aggregate of $ 41.25 million per target upon the achievement of certain milestone events, and potential royalty payments on net sales in the low- to mid-single digits.

As of the effective date of the agreement, the Company identified one performance obligation, which was the transfer of licenses to Scithera for the specified assets and all related materials and know-how.

During the second quarter of 2025, Scithera achieved the specified funding event and made a non-refundable payment of $ 1.3 million to the Company.

Upon notice of the achievement of such funding event, the Company re-assessed the transaction price to be $ 1.3 million, which was allocated to the single performance obligation.

All remaining consideration under the agreement is variable consideration associated with the achievement of specified development milestones, and as a result, has been fully constrained (excluded) from the transaction price until such time that the Company

concludes that it is probable that a significant reversal of previously recognized revenue will not occur.

These estimates will be reassessed at each reporting period.

During the second quarter of 2025, the Company completed its single performance obligation and recognized $ 1.3 million at the point in time upon the completion of the transfer of all licensed materials and know-how.

During the year ended December 31, 2025, the Company recognized $ 1.3 million of revenue and received a payment of $ 1.3 million under the Scithera License Agreement.

In June 2020, the Company entered into an Option and License Agreement with bluebird bio, Inc., or bluebird, pursuant to which the Company granted to bluebird exclusive worldwide rights to develop binders and cell therapy products containing single domain antibodies, or sdAbs, directed to specified targets, consisting of two initial programs and up to an additional 8 programs.

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In November 2021, this agreement was assigned to 2seventy bio, Inc., or 2seventy, in connection with bluebird’s internal restructuring and subsequent spin-out of 2seventy, and subsequently in April 2024, this agreement, or the 2020 Regeneron Agreement, was assigned to Regeneron Pharmaceuticals, Inc., or Regeneron, in connection with the divestiture of 2seventy’s oncology and autoimmune pipeline to Regeneron.

and cell therapy products developed under this agreement, which entitles the Company to additional fees upon exercise of the option.

In June 2022, 2seventy selected a third program and paid a non-refundable upfront option fee in exchange for a development license and an option in which Regeneron may acquire an exclusive license with respect to all binders and cell therapy products developed under this agreement, which entitles the Company to additional fees upon exercise of the option.

In connection with each program for which Regeneron exercises its option, Regeneron will be required to pay the Company a one-time, non-refundable, non-creditable fee in the low-single-digit millions.

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The Company recognized the $ 0.1 million of revenue related to this extension at the point in time in which the extension was granted.

The $ 0.2 million related to the option extensions is recorded as accounts receivable in the Company’s consolidated balance sheets as of December 31, 2024.

The $ 0.2 million related to the option extensions is recorded as accounts receivable in the Company’s consolidated balance sheet as of December 31, 2024 and was collected in full during the first quarter of the year ended December 31, 2025.

During the year ended December 31, 2024, the Company recognized $ 0.2 million of revenue related to this agreement.

The Company did no t recognize any revenue under this agreement during the year ended December 31, 2025.

Phylaxis Agreements

In July 2020, the Company entered into a joint venture with Phylaxis BioScience, LLC, or Phylaxis.

In connection with the joint venture, the Company entered into the following agreements:

Contribution Agreement, License Agreement, Limited Liability Company Agreement, and Master Services Agreement, or collectively the Phylaxis Agreements, pursuant to which the Company licensed certain intellectual property and know-how to Phylaxis and agreed to provide services to develop certain compounds.

The Company received $ 5.0 million in nonrefundable, upfront payments from Phylaxis under the Master Services Agreement, or the MSA.

In addition, upon closing, the Company received a 10 % equity interest in Phylaxis as consideration for the contribution of the license of the Company’s intellectual property and know-how.

Pursuant to the terms of the Phylaxis Agreements, during the fourth quarter of 2023, the Company received an additional 5 % equity interest in Phylaxis following the achievement of a milestone event.

Under the License Agreement, the Company is also entitled to specified development and commercialization milestone payments of up to an aggregate of $ 225.0 million and $ 175.0 million, respectively.

The Company is also entitled to share in a percentage of the profits of Phylaxis under the Limited Liability Company Agreement.

The Company recognized the initial transaction price of $ 5.5 million, comprised of the $ 5.0 million in upfront payments and the fair value of the 10 % equity interest of $ 0.5 million, over the period of performance of development services on the two compounds, which was completed during the third quarter of 2022.

During the fourth quarter of 2023, the Company transferred a second generation compound to Phylaxis, which was a milestone event under the agreements.

Upon transfer, the Company received an additional 5 % equity interest in Phylaxis, which has a fair value of $ 1.6 million.

The Company recognized the fair value of the 5 % equity interest as revenue and accounted for the investment under the equity method.

In order to determine the fair value of the equity interest in Phylaxis upon this milestone, the Company utilized the investee’s independent valuations based on recent financings from third party investors at fair market value.

During the year ended December 31, 2023 the Company recognized $ 1.6 million of revenue under the Phylaxis agreements.

During the year ended December 31, 2024 the Company did not recognize any revenue under the Phylaxis agreements.

RELATED PARTY TRANSACTIONS

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The Former Parent pays the Company for any such services received by the Former Parent or other Sanofi entities, as applicable, at agreed amounts as set forth in the Transition Services Agreement.

During the year ended December 31, 2024, the Company billed the Former Parent for $ 0.3 million for services performed under the Transition Services Agreement.

The Company recognized this amount as other income and has received approximately $ 0.2 million in cash as of December 31, 2024, with the remaining balance recorded as a receivable from related parties in the Company’s consolidated balance sheet.

Additionally, the Transition Services Agreement requires the Former Parent to reimburse the Company for certain severance payments made by the Company to certain Company employees whose employment was terminated as a result of the Merger.

During the year ended December 31, 2024, the Company billed the Former Parent for $ 1.0 million of severance payments to former employees, all of which has been received as of December 31, 2024.

During the second quarter of 2025, the Company substantially completed all obligations under the Transition Services Agreement.

The Company has not billed the Former Parent for any services under the Transition Services during the year ended December 31, 2025 and does not expect any future billings.

During the year ended December 31, 2024, the Company billed the Former Parent for $ 0.3 million for services performed under the Transition Services Agreement, which was recognized as other income.

The Company received approximately $ 0.2 million in cash during the year ended December 31, 2024, with the remaining balance of approximately $ 23,000 received during the year ended December 31, 2025.

Additionally, the Transition Services Agreement required the Former Parent to reimburse the Company for certain severance payments made by the Company to certain Company employees whose employment was terminated as a result of the Merger.

During the year ended December 31, 2024, the Company billed the Former Parent for $ 1.0 million of severance payments to former employees, all of which was received as of December 31, 2024.

No further activity occurred during the year ended December 31, 2025.

Pharmacovigilance Agreement

In connection with the Separation, the Company entered into a Pharmacovigilance Agreement with the Former Parent, pursuant to which the parties agreed to implement processes and procedures for sharing information as required for each party’s compliance with its regulatory and pharmacovigilance responsibilities.

The components of income tax expense (benefit) were as follows for the years ended December 31, 2024 and December 31, 2023, respectively (in thousands):

The components of the Company’s income (loss) before income taxes are as follows (in thousands):

YEAR ENDED DECEMBER 31,

Current expense:

United States

$ ( 140,053 ) $ 1,687,574

Loss provision for before income taxes

$ ( 140,053 ) $ 1,687,574

The components of income tax expense were as follows for the years ended December 31, 2025 and December 31, 2024, respectively (in thousands):

YEAR ENDED DECEMBER 31,

State $ 2 $ 2

Total current expense $ 2 $ 3

Total current $ 2 $ 2

The provision for the years ended December 31, 2025 and December 31, 2024 was related to state income taxes.

A reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to the loss from operations is summarized for the years ended December 31, 2024 and December 31, 2023 as follows (in thousands):

The Company made no material income tax payments during 2025 for Federal, state, and foreign jurisdictions.

The Company adopted ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, on January 1, 2025 on a prospective basis.

As a result, the Company's rate reconciliation for 2025 is presented in accordance with the new disclosure requirements, while the reconciliation for 2024 continues to be presented under disclosure requirements in effect for that period.

A reconciliation of the income tax expense computed at the U.S.

federal statutory income tax rate to the Company's income tax expense is as follows (in thousands) (after the adoption of ASU 2023-09):

YEAR ENDED DECEMBER 31,

Expected income tax expense (benefit) at federal statutory rate

Federal income taxes at 21%

$ ( 29,411 ) 21.0 %

State income tax expense (benefit), net of federal benefit 10,106 ( 3,568 )

State taxes, net of federal benefit (1)

Change in valuation allowance

29,552 ( 21.1 ) %

( 140 ) 0.1 %

Effective tax rate

(1) 50% or more of our state tax provision relates to the California state jurisdiction.

A reconciliation of income tax expense to the amount computed by applying the statutory federal income tax rate to the loss from operations is summarized as follows (in thousands) (prior to the adoption of ASU 2023-09):

YEAR ENDED DECEMBER 31,

Expected income tax expense at federal statutory rate $ 354,390

State income tax expense, net of federal benefit 10,106

Permanent items 6,842

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Non-taxable gain related to Transaction with Acquirer

( 410,226 ) —

336(e) election

Return to provision true-ups — ( 420 )

Valuation allowance ( 124,216 )

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A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

The components of net deferred income taxes were as follows (in thousands):

The components of net deferred tax assets and liabilities are as follows (in thousands):

AS OF DECEMBER 31,

Deferred income tax assets

Deferred tax assets

Net operating loss carryforward $ 40,276 $ 4,726

Research and development credits — 12,648

Intangibles 56 3,289

Accruals 893 1,412

Section 174 research and development capitalization

Stock compensation 2,355 809

Capitalized research and development costs 15,718 51,772

Accrued expenses 1,427 893

Operating lease liabilities 1,414 1,776

Intangibles 46 56

Property and equipment 18 —

Gross deferred tax assets 53,721 23,983

Valuation allowance ( 52,508 ) ( 21,789 )

Total deferred tax assets 2,194 658

Deferred income tax liabilities

Fixed assets ( 575 ) ( 10 )

Total deferred tax assets after valuation allowance 1,213 2,194

Deferred tax liabilities

Property and equipment — ( 575 )

Operating lease right-of-use assets ( 1,213 ) ( 1,619 )

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Based on this evaluation, as of December 31, 2025, a valuation allowance of $ 52.5 million has been recorded in order to measure only the portion of the deferred tax asset that more likely than not will be realized.

The amount of the deferred tax asset considered realizable, however, could be adjusted if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence, such as estimates of future taxable income during carryforward periods and the Company’s projections for growth.

given to subjective evidence, such as estimates of future taxable income during carryforward periods and the Company’s projections for growth.

The Company recognizes liabilities for uncertain tax positions based on a two-step process.

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Increases (decreases) related to current year tax positions

( 4,651 ) 1,054

Ending balance $ — $ —

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The Company’s policy is to recognize the interest expense and/or penalties related to income tax matters as a component of income tax expense.

The Company had no accrual for interest or penalties on its consolidated balance sheets as of December 31, 2024 or December 31, 2023, and has no t recognized interest and/or penalties in its consolidated

statements of operations for the years ended December 31, 2024 and December 31, 2023 as the unrecognized tax benefits relate to tax positions for which no cash tax liability has been reduced.

The Company had no accrual for interest or penalties on its consolidated balance sheets as of December 31, 2025 or December 31, 2024, and has no t recognized interest and/or penalties in its consolidated statements of operations for the years ended December 31, 2025 and December 31, 2024 as the unrecognized tax benefits relate to tax positions for which no cash tax liability has been reduced.

The Company is subject to income taxes in the United States and various state jurisdictions.

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federal or any state tax authority.

On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law.

The OBBBA includes significant changes to U.S.

tax and related laws.

Some of the provisions of the OBBBA affecting corporations include the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, or TCJA, modifications to the Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income international tax provisions, an increase in the limit of the deduction of interest expense to 30% of earnings before interest, taxes, depreciation, and amortization, and reinstatement of 100% bonus depreciation deduction from the TCJA for eligible property acquired after January 19, 2025.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The OBBBA’s financial reporting implications have been recognized in our income tax provision for 2025.

The incorporation of these effects resulted in no material impact on the Company’s effective tax rate.

Operating Leases

In September 2017, the Company entered into a seven-year lease agreement as its sole location in La Jolla, California, which contains an initial base rent of approximately $ 0.1 million per month with 2 % annual escalations.

In May 2019, the Company executed an amendment to its lease agreement to expand its facilities and began occupying this space in January 2020, which contains an initial base rent of approximately $ 30,000 per month with 2 % annual escalations.

Each of these leases expires in June 2025 with an option to extend the lease an additional five years , which is not included in the right-of-use asset and lease liabilities.

Payments under each of the lease agreements include base rent plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which to be determined annually.

In May 2019, the Company executed an amendment to its lease agreement to expand its facilities and began occupying this space in January 2020, which contained an initial base rent of approximately $ 30,000 per month with 2 % annual escalations.

Each of these leases expired in June 2025 with an option to extend the lease an additional five years , which was not included in the right-of-use asset and lease liabilities.

Payments under each of the lease agreements included base rent plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which to be determined annually.

In November 2024, the Company entered into a new lease agreement for its existing facilities, or the 2024 Lease Agreement, for the period following the expiration of its two existing leases through June 2028, with an option to extend the lease an additional three years , which is not included in the right-of-use asset and lease liabilities.

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During the years ended December 31, 2025 and December 31, 2024, the Company recognized operating lease expense of $ 3.9 million and $ 3.4 million, respectively.

During each of the years ended December 31, 2024 and December 31, 2023, the Company paid $ 1.7 million and $ 2.2 million for amounts included in the measurement of the operating lease liability in each period.

As of December 31, 2024 and December 31, 2023, the Company’s operating lease had a remaining term of 3.5 and 1.5 years, respectively.

During the years ended December 31, 2025 and December 31, 2024, the Company paid $ 2.3 million and $ 1.7 million for amounts included in the measurement of the operating lease liability, respectively.

As of December 31, 2025 and December 31, 2024, the Company’s operating lease had a remaining term of 2.5 years and 3.5 years, respectively.

The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease.

The Company has determined a weighted-average discount rate of 10.2 % and 8.2 % as of December 31, 2024 and December 31, 2023, respectively.

The Company has determined a weighted-average discount rate of 10.2 % as of December 31, 2025 and December 31, 2024.

Future minimum rental commitments for the Company’s operating leases reconciled to the operating lease liability are as follows (in thousands):

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Additionally, as of December 31, 2025 and December 31, 2024, Mark P.

Lappe, the Company’s Chief Executive Officer, Brendan P.

Eckelman, the Company’s Chief Scientific Officer, and Kelly D.

Lappe, the Company’s Chief Executive Officer, David Matly, the Company’s President, and Kelly D.

Deck, the Company’s Chief Financial Officer, and certain other members of management have agreements that provide for severance compensation in the event of termination or a change in control.

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Based upon this evaluation, it was determined that no additional subsequent events required recognition or disclosure in these consolidated financial statements, other than disclosures related to those outlined below.

Oxford Loan Agreement

On January 13, 2025, the Company entered into a Loan and Security Agreement, or the 2025 Loan Agreement, with Oxford.

The 2025 Loan Agreement provides for a term loan facility of an aggregate principal amount of up to $ 150.0 million, or the Term Loan Facility, $ 100.0 million of which was funded on the consummation of the transaction, with the remaining $ 50.0 million to be funded upon the Company's request and at the Oxford’s sole discretion.

The Term Loan Facility will mature on January 1, 2030, or the Maturity Date, and bears interest at (1) 5.61 % plus (2) the greater of (i) the 1-Month Term Secured Overnight Financing Right as published by the CME Group or (ii) 4.34 %.

The repayment schedule provides for interest-only payments through February 1, 2028, with principal payments beginning on March 1, 2028.

The interest-only period is followed by 23 months of equal payments of principal plus interest.

All obligations under the Oxford Loan Agreement and the other loan documents are secured by a first priority perfected lien on, and security interest in, substantially all present and future assets of the Company, subject to certain exceptions.

In connection with the initial tranche of funding under the Term Loan Facility, the Company issued warrants to Oxford, or the Term A Warrants, to purchase 140,741 shares of the Company’s common stock at an exercise price of $ 14.21 per share.

The Term A Warrants are immediately exercisable, and the exercise period will expire 10 years from the date of issuance.

First Amendment to Loan Agreement with Oxford

On March 18, 2026, the Company entered into the First Amendment to Loan and Service Agreement with Oxford, or the March 2026 Amendment.

The March 2026 Amendment provides for an additional tranche, or the Term B Loans, in an aggregate principal amount of $ 75.0 million, upsized from $ 50.0 million originally available under the 2025 Loan Agreement, prior to the March 2026 Amendment, collectively with the prior $ 100.0 million under the

2025 Loan Agreement, the Oxford Term Loans.

$75.0 million of the Term B Loans was funded on the date of the March 2026 Amendment.

All obligations under the 2025 Loan Agreement, as amended, and the other loan documents are secured by a first priority perfected lien on, and security interest in, substantially all present and future assets of the Company, subject to certain exceptions.

The 2025 Loan Agreement, as amended, includes customary events of default, including instances of a material adverse change in the Company’s operations, that may require prepayment of the outstanding term loans.

The March 2026 Amendment updated the minimum liquidity threshold covenant, tested at all times, to $ 40.0 million, not subject to future increases.

All other terms of the 2025 Loan Agreement remain outstanding.

In connection with the March 2026 Amendment tranche of funding, the Company issued warrants to Oxford to purchase 21,518 shares of the Company’s common stock at an exercise price of $ 69.71 per share.

The warrants are immediately exercisable, and the exercise period will expire 10 years from the date of issuance.

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

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data