Inhibrx Biosciences, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm ( BDO USA, P.C. ; San Diego, California ; PCAOB ID No. 243 ) 107 Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024 108 Consolidated Statements of Operations for the Years Ended December 31, 2025 and December 31, 2024 109 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025 and December 31, 2024 110 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and December 31, 2024 111 Notes to the Consolidated Financial Statements 112 106 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Inhibrx Biosciences, Inc. La Jolla, California Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Inhibrx Biosciences, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ BDO USA, P.C. We have served as the Company’s auditor since 2018. San Diego, California March 19, 2026 107 Inhibrx Biosciences, Inc. Consolidated Balance Sheets (In thousands, except share data and par value) AS OF DECEMBER 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 124,220 $ 152,596 Accounts receivable — 200 Other receivables 177 197 Receivables from related parties — 23 Prepaid expenses and other current assets 8,435 7,382 Total current assets 132,832 160,398 Property and equipment, net 3,733 6,200 Operating right-of-use asset 5,535 7,338 Other non-current assets 4,378 6,831 Total assets $ 146,478 $ 180,767 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 5,944 $ 9,245 Accrued expenses 25,529 29,890 Current portion of operating lease liability 2,326 1,595 Total current liabilities 33,799 40,730 Long-term debt, including final payment fee 100,559 — Non-current portion of operating lease liability 4,127 6,453 Total liabilities 138,485 47,183 Commitments and contingencies (Note 10) Stockholders’ equity: Preferred stock, $ 0.0001 par value, 15,000,000 shares authorized and no shares outstanding as of December 31, 2025 and December 31, 2024 — — Common stock, $ 0.0001 par value, 120,000,000 shares authorized as of December 31, 2025 and December 31, 2024; 14,577,609 and 14,475,904 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 1 1 Additional paid-in-capital 254,179 239,715 Accumulated deficit ( 246,187 ) ( 106,132 ) Total stockholders’ equity 7,993 133,584 Total liabilities and stockholders’ equity $ 146,478 $ 180,767 The accompanying notes are an integral part of these consolidated financial statements. 108 Inhibrx Biosciences, Inc. Consolidated Statements of Operations (In thousands, except per share data) YEAR ENDED DECEMBER 31, 2025 2024 Revenue: License fee revenue $ 1,300 $ 200 Total revenue 1,300 200 Operating expenses: Research and development 113,028 203,743 General and administrative 23,297 127,905 Total operating expenses 136,325 331,648 Loss from operations ( 135,025 ) ( 331,448 ) Other income (expense): Gain related to transaction with Acquirer — 2,021,498 Interest expense ( 12,196 ) ( 13,491 ) Interest income 7,549 10,940 Other income (expense), net ( 381 ) 75 Total other income (expense) ( 5,028 ) 2,019,022 Income (loss) before provision for income taxes ( 140,053 ) 1,687,574 Provision for income taxes 2 2 Net income (loss) $ ( 140,055 ) $ 1,687,572 Earnings (loss) per share Basic $ ( 9.04 ) $ 114.01 Diluted $ ( 9.04 ) $ 112.62 Shares used in computing earnings (loss) per share Basic 15,487 14,802 Diluted 15,487 14,984 The accompanying notes are an integral part of these consolidated financial statements. 109 Inhibrx Biosciences, Inc. Consolidated Statements of Stockholders’ Equity (In thousands) Common Stock (Shares) Common Stock (Amount) Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Equity 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 — — — — Acquisition of Former Parent’s common stock, stock options, and warrants by the Acquirer ( 53,564 ) ( 5 ) ( 563,754 ) ( 1,179,970 ) ( 1,743,729 ) Issuance of shares in Distribution 14,476 1 16,041 — 16,042 Net income — — — 1,687,572 1,687,572 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. 110 Inhibrx Biosciences, Inc. Consolidated Statements of Cash Flows (In thousands) YEAR ENDED DECEMBER 31, 2025 2024 Cash flows from operating activities Net income (loss) $ ( 140,055 ) $ 1,687,572 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 2,483 2,285 Accretion of debt discount and non-cash interest expense 2,439 2,065 Stock-based compensation expense 11,138 58,518 Non-cash lease expense 1,803 1,897 Non-cash gain on transaction with Acquirer — ( 1,998,809 ) 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 ) Prepaid expenses and other current assets 1,400 2,982 Other non-current assets — ( 3,667 ) Accounts payable ( 3,301 ) 17,903 Accrued expenses ( 4,361 ) 35,883 Operating lease liability ( 1,595 ) ( 1,408 ) Net cash used in operating activities ( 129,794 ) ( 194,409 ) Cash flows from investing activities 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 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 decrease in cash ( 28,376 ) ( 125,328 ) Cash and cash equivalents at beginning of period 152,596 277,924 Cash and cash equivalents at end of period $ 124,220 $ 152,596 Supplemental disclosure of cash flow information Cash paid for interest $ 8,900 $ 11,506 Cash paid for income taxes $ 2 $ 2 Supplemental schedule of non-cash investing and financing activities Remeasurement of operating lease liability and right-of-use asset in connection with 2024 Lease Agreement $ — $ 6,283 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. 111 Inhibrx Biosciences, Inc. Notes to Consolidated Financial Statements 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Inhibrx Biosciences, Inc., or the Company, or Inhibrx, is a clinical-stage biopharmaceutical company focused on developing a broad pipeline of novel biologic therapeutic candidates. The Company combines target biology with protein engineering, technologies, and research and development to design therapeutic candidates. The Company’s current pipeline is focused on oncology. The Company is subject to risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including, but not limited to, risks associated with preclinical studies, clinical trials and regulatory applications, 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. The Company’s therapeutic candidates currently under development will require significant additional research and development efforts, including clinical and preclinical testing and marketing approval prior to commercialization. These efforts require significant amounts of capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, related to an annual report on the Form 10-K. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and have been prepared in conformity with GAAP. All intercompany accounts and transactions have been eliminated in consolidation. Separation and Distribution In January 2024, Inhibrx, Inc., or the Former Parent, announced its intent, as approved by its board of directors, to effect the spin-off of INBRX-101, an optimized, recombinant alpha-1 antitrypsin, or AAT, augmentation therapy in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency. The Former Parent and the Company signed an Agreement and Plan of Merger, dated as of January 22, 2024, or the Merger Agreement, with Aventis Inc., a Pennsylvania corporation, or the Acquirer, and a wholly-owned subsidiary of Sanofi S.A., or Sanofi, and Art Acquisition Sub, Inc., a Delaware corporation, or the Merger Sub, and a wholly-owned subsidiary of Acquirer, along with a Separation and Distribution Agreement, dated as of January 22, 2024, by and among the Former Parent, the Company and Acquirer. The Merger Agreement provided for the acquisition by Acquirer of the Former Parent, or the Merger, to be accomplished through the merger of Merger Sub with and into the Former Parent with the Former Parent continuing as the surviving entity. On May 29, 2024, the Former Parent completed a distribution to holders of its shares of common stock of 92 % of the issued and outstanding shares of common stock of the Company, or the Distribution. On May 30, 2024, the Former Parent completed the Merger, pursuant to which (i) all assets and liabilities primarily related to INBRX-101, or the 101 Business, were transferred to the Acquirer, a wholly-owned subsidiary of Sanofi; and (ii) by way of a series of internal restructuring transactions, or the Separation, the Company acquired the assets and liabilities and corporate infrastructure associated with its ongoing programs, INBRX-106 and ozekibart (INBRX-109), and its discovery pipeline, as well as the remaining close-out obligations related to its previously terminated program, INBRX-105. Upon the closing of the Merger, the Company became a stand-alone, publicly traded company. In connection with the foregoing transactions, each Former Parent stockholder received: (i) $ 30.00 per share in cash, (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 SEC-registered, publicly listed, share of Inhibrx for every 112 four shares of the Former Parent’s common stock held. The Acquirer retained an equity interest in the Company of 8 % upon the Distribution. The Acquirer paid transaction consideration of $ 1.9 billion, including the $ 30.00 per share consideration and the assumption of the Company’s third-party debt. See Note 3 for further discussion on the extinguishment of the Company’s Amended 2020 Loans with Oxford (as defined below). In addition, the Acquirer assumed all assets and liabilities under contracts primarily related to INBRX-101 upon close of the Merger. The Acquirer also reimbursed the Company or paid on behalf of the Company $ 68.0 million in transaction costs. The Acquirer may pay an additional $ 300.0 million in consideration under the contingent value rights issued upon the achievement of a regulatory milestone. Notwithstanding the legal form of the spin-off, the Separation and Distribution is being treated as a reverse spin-off for financial accounting and reporting purposes in accordance with ASC 505-60, Spinoffs and Reverse Spinoffs because (i) a wholly-owned subsidiary of the Acquirer merged with and into the Former Parent immediately following the Distribution; (ii) no senior management of the Former Parent were retained by the Former Parent following the Distribution; and (iii) the size of the Company’s operations relative to the 101 Business. As a reverse spin-off, the Company considers Inhibrx as the accounting spinnor of the Former Parent, and the accounting successor to the Former Parent. Therefore, for periods prior to the spin-off, the Company’s financial statements are the historical financial statements of the Former Parent. For such periods, descriptions of historical business activities are presented as if the spin-off had already occurred, and the Former Parent’s activities related to such assets and liabilities had been performed by the Company. In addition, for all periods prior to the spin-off, all outstanding shares referenced in these financial statements are those shares outstanding of the Former Parent at each respective date, unless otherwise indicated as adjusted for the distribution ratio. Following the spin-off, all outstanding shares referenced are those of the Company, which, as discussed above, were issued on a four-to-one ratio of the Former Parent’s outstanding shares. The Company evaluated the sale of the 101 Business in accordance with ASC 205-20, Discontinued Operation s, and determined that the Separation does not represent a strategic shift and thus does not qualify as a discontinued operation. The Company next evaluated the sale of the 101 Business in accordance with ASC 805, Business Combinations , and determined that the 101 Business does not meet the definition of a business, given that substantially all of the fair value of the gross assets transferred is concentrated in one asset. The Company then evaluated the transaction under ASC 845, Nonmonetary Transactions , which contains guidance on the accounting for the distribution of nonmonetary assets to stockholders of an entity in a spin-off. 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 consisted of the following components (in thousands): YEAR ENDED DECEMBER 31, 2024 Merger consideration for common stock, warrants, and stock options $ 1,727,687 Book value of Amended 2020 Loans assumed by Acquirer 211,315 Book value of net assets and liabilities related to INBRX-101 assumed by Acquirer 14,496 Transaction costs paid by Acquirer 68,000 Total gain recognized $ 2,021,498 The gain related to the Merger consideration payable to shareholders of $ 1.7 billion was recorded, net of consideration allocated to the shares issued to Acquirer, through a reduction to retained earnings of $ 1.2 billion, representing the amount of retained earnings available at the closing of the Merger, with the remaining amount of $ 563.8 million recorded through additional paid-in capital. 113 Liquidity As of December 31, 2025, the Company had an accumulated deficit of $ 246.2 million and cash and cash equivalents of $ 124.2 million. 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, 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. 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. 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. Use of Estimates The preparation of these consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The Company’s most significant estimates relate to evaluation of whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, and the incremental borrowing rate estimated in relation to the Company’s operating lease. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. The Company’s actual results may differ from these estimates under different assumptions or conditions. 114 Cash and Cash Equivalents Cash and cash equivalents are comprised of cash held in financial institutions including readily available checking, overnight sweep, and money market accounts. Concentrations of Credit Risk Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. 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 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. The Company continually evaluates its accounts receivable for all outstanding third-party balances to determine the potential exposure to a concentration of credit risk. The Company’s major third-party contracting parties, some of which account for significant balances in both accounts receivable and revenue, are generally large, credit-worthy biotechnology companies and government bodies. The Company assesses the collectability of accounts receivable through a review of its current aging, as well as an analysis of its historical collection rate, general economic conditions, and credit status of these third parties. As of December 31, 2025 and December 31, 2024, all outstanding accounts receivable were deemed to be fully collectible, and therefore, no allowance for credit losses was recorded. Dividends As of December 31, 2025, the Company has never declared or paid any dividends on its common stock. Any future determination to pay dividends on the Company’s common stock will be at the discretion of the Company’s board of directors and will depend upon, among other factors, the results of operations, financial condition, capital requirements, contract restrictions, business prospects and other factors the Company’s board of directors may deem relevant. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. The Company estimates useful lives as follows: • laboratory and office equipment: three to five years ; • furniture, fixtures and other: five years ; and • computer software: three years . Amortization of leasehold improvements is provided on a straight-line basis over the shorter of their estimated useful lives or the lease term. The costs of additions and betterments are capitalized, and repairs and maintenance costs are expensed in the periods incurred. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. If such assets are considered impaired, the amount of the impairment loss recognized is measured as the amount by which the carrying value of the asset exceeds the fair value of the asset, fair value being determined based upon future cash flows or appraised values, depending on the nature of the asset. The Company recognized no impairment losses during any of the periods presented within its consolidated financial statements. Leases The Company determines whether a contract is, or contains, a lease at inception based on the unique facts and circumstances present in the contract. The Company evaluates classification of leases as either operating or finance at commencement and, as necessary, at modification. 115 At lease commencement for leases with terms greater than 12 months, the Company records a lease liability determined as the present value of future lease payments over the expected lease term. The Company calculates the present value of future lease payments using an estimated incremental borrowing rate that the Company would have to pay to borrow equivalent funds on a collateralized basis at the lease commencement date. 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 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. The Company evaluates any change to an existing lease to determine if it constitutes a separate contract or a single contract with the existing lease. For modifications treated as a single contract, the Company reassesses the lease classification, remeasures the related lease liability using an updated discount rate as of the effective date of the modification, and recognizes the amount of the remeasurement of the lease liability for the modified lease as an adjustment to the corresponding right-of-use asset under the lease modification guidance pursuant to ASC 842, Leases . If a lease continues to exist, the lease modification is determined to be a separate contract when the modification grants the lessee an additional right-of-use asset that is not included in the original lease and the lease payments increase commensurate with the standalone price for the additional right-of-use asset. When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease. The Company accounts for lease and non-lease components in its lease agreements as a single lease component in determining lease assets and liabilities. 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 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 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. limited liability corporation), participation in policy-making decisions, and material purchase and sale transactions. The investment had been reduced to zero prior to the beginning of 2021 as a result of the allocation of the Company’s share of prior losses of the investee. 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 Poplar Therapeutics as of December 31, 2025 and December 31, 2024 is zero . Fair Value of Financial Instruments The Company’s financial instruments held during the periods presented consisted principally of accounts receivable, investments in debt securities, accounts payable, accrued expense, long-term debt, and warrants. The carrying amounts of financial instruments such as accounts receivable, accounts payable, accrued expense, and investments in debt securities classified as cash equivalents approximated their related fair values due to the short-term nature of these instruments. The carrying value of the Company’s debt approximated fair value due to its interest being reflective of current market rates for debt with similar terms and conditions. The Company’s warrants are equity-classified and carried at the instruments’ fair value upon classification into equity. 116 Fair Value Measurements The Company determines the fair value measurements of applicable assets and liabilities based on a three-tier fair value hierarchy established by accounting guidance and prioritizes the inputs used in measuring fair value. These tiers include: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. 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. 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): Level 1 Level 2 Level 3 Total 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 Deferred financing costs are capitalized, recorded as an offset to the Company’s debt balances and amortized as interest expense over the term of the associated debt instrument using the effective interest method, pursuant to ASC Topic 835-30, Imputation of Interest . If the maturity of the debt is accelerated as a result of default or early debt repayment, the amortization would then be accelerated. Amounts paid related to debt financing activities are presented on the consolidated balance sheet as a direct deduction from the debt liability. Financial Instruments with Characteristics of Both Liabilities and Equity The Company accounts for issued warrants either as a liability or equity in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity , or ASC 480-10, and ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock , or ASC 815-40. Under ASC 480-10, warrants are considered a liability if they are mandatorily redeemable and they require settlement in cash, other assets, or a variable number of shares. If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the warrants should be classified as a liability or as equity. Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the 117 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. Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date. The Company’s outstanding warrants do not meet the requirements for liability classification under ASC-480-10 or ASC-815-40. Therefore, the Company’s outstanding warrants are classified as equity as of and for the years ended December 31, 2025 and December 31, 2024. Revenue Recognition The Company has historically generated revenue from its license and collaboration agreements with partners, as well as from grants from government agencies and private not-for-profit organizations. Collaborative Research, Development, and License Agreements The Company enters into collaborative agreements with partners which may include the transfer of licenses, options to license, and the performance of research and development activities. The terms associated with these agreements may include one or more of the following (1) license fees; (2) nonrefundable up-front fees; (3) payments for reimbursement of research costs; (4) payments associated with achieving specific development, regulatory, or commercial milestones; and (5) royalties based on specified percentages of net product sales, if any. Payments received from customers are included in deferred revenue, allocated between current and non-current on the consolidated balance sheet, until all revenue recognition criteria are met. Typically, license fees, non-refundable upfront fees, and funding of research activities are considered fixed, while milestone payments, including option exercise fees, are identified as variable consideration, which is constrained and excluded from the transaction price. The Company will recognize revenue for sales-based royalty if and when a subsequent sale occurs. The Company applies significant judgment when making estimates and assumptions under these agreements, including evaluating whether contractual obligations represent distinct performance obligations, including the assessment of whether options represent material rights, determining whether there are observable standalone prices and allocating transaction price to performance obligations within a contract, assessing whether any licenses are functional or symbolic, determining when performance obligations have been met, and assessing the recognition of variable consideration. The Company evaluates each performance obligation to determine if it can be satisfied and recognized as revenue at a point in time or over time. Typically, performance obligations consisting of a transfer of a license or the achievement of milestones are recognized at a point in time upon the transfer, while performance obligations consisting of research activities are recognized over time using an input method which is representative of the Company’s efforts to fulfill the performance obligation, based on costs incurred with third-parties or internal labor hours performed. Accrued Research and Development and Clinical Trial Costs Research and development costs are expensed as incurred based on estimates of the period in which services and efforts are expended, and include the cost of compensation and related expenses, as well as expenses for third parties who conduct research and development on the Company’s behalf, pursuant to development and consulting agreements in place. The Company’s preclinical studies and clinical trials are performed internally, by third party contract research organizations, or CROs, and/or clinical investigators. The Company also engages with contract development and manufacturing organizations, or CDMOs, for clinical supplies and manufacturing scale-up activities related to its therapeutic candidates. Invoicing from these third parties may be monthly based upon services performed or based upon milestones achieved. The Company accrues these expenses based upon estimates determined by reviewing cost information provided by CROs and CDMOs, other third-party vendors and internal clinical personnel, and contractual arrangements with CROs and CDMOs and the scope of work to be performed. 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 118 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 Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. 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 Company also follows the provisions of accounting for uncertainty in income taxes which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition. The utilization of unused federal and state net operating losses, or NOLs, and research tax credit carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. 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. 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. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding during the same period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive common shares outstanding during the same period. The Company excludes common stock equivalents from the calculation of diluted net earnings (loss) per share when the effect is anti-dilutive. The weighted average number of shares of common stock used in the basic and diluted net income (loss) per common stock calculations includes the weighted-average pre-funded warrants outstanding during the period as they are exercisable at any time for nominal cash consideration. During the year ended December 31, 2024, outstanding shares during the period consist both of shares of the Former Parent and of the Company. 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 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 are as follows (in thousands): 119 YEAR ENDED DECEMBER 31, 2025 Outstanding stock options 3,501 Warrants to purchase common stock 141 Total 3,642 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): YEAR ENDED DECEMBER 31, 2024 Outstanding stock options 182 Total 182 Fair Value of Stock-Based Awards The Company recognizes compensation costs related to stock options based on the estimated fair value of the awards on the date of grant. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option pricing model. The grant date fair value of the stock-based awards is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. The Company recognizes forfeitures as they occur. The Company determines the assumptions used in the option pricing model in the following manner: Risk-Free Interest Rate— For the determination of the risk-free interest rates, the Company utilizes the U.S. Treasury yield curve for instruments in effect at the time of measurement with a term commensurate with the expected term assumption. Expected Volatility— Due to the Company’s limited historical stock price volatility data indicative of the expected future volatility, the Company based its estimate of expected volatility on the estimated and expected volatilities of a guideline group of publicly traded companies. For these analyses, the Company selected companies with comparable characteristics including enterprise value, risk profiles, and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available, or until the volatility of the Company’s market-traded shares best represents its expected volatility. Expected Dividend— The expected dividend yield is assumed to be zero since the Company has never paid dividends and does not have current plans to pay any dividends on its common stock. Expected Term— The Company estimates the expected term of its stock options granted to employees and non-employee directors using the simplified method, whereby, the expected term equals the average of the vesting term and the original contractual term of the option. The Company utilizes this method since it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Other Comprehensive Income The Company has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss in all periods presented. Segment Information 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 120 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. The CODM assesses performance for the biologic therapeutic segment and decides how to allocate resources based on the consolidated net income (loss) as reported on its consolidated income statement. The accounting policies of the reportable segment are the same as those described in the summary of significant accounting policies. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. 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 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 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): YEAR ENDED DECEMBER 31, 2025 2024 Segment net income (loss) Revenue $ 1,300 $ 200 Research and development expense Personnel 35,372 72,790 Clinical trials 35,339 47,665 Contract manufacturing 19,590 55,643 Equipment, depreciation, and facility 10,227 9,693 Other research and development 12,500 17,952 General and administrative expense Merger-related — 68,061 Personnel 14,481 37,649 Other general and administrative 8,816 22,195 Other income (expense) ( 5,028 ) ( 2,476 ) Other segment items (1) — 2,021,498 Other segment expenses (2) 2 2 Segment and consolidated net income (loss) $ ( 140,055 ) $ 1,687,572 (1) Other segment items consist of the gain on transaction from the Merger, discussed above. (2) Other segment expenses include provision for income taxes. 121 Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies. The Company believes that the impact of the recently issued accounting pronouncements that are not yet effective will not have a material impact on its consolidated financial condition or results of operations upon adoption. Adoption of New Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. Two primary enhancements related to this ASU include disaggregating existing income tax disclosures relating to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. 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): Disaggregation of Income Statement Expenses , which requires additional disclosure about specific expense categories in the notes to financial statements. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and related disclosures. 2. OTHER FINANCIAL INFORMATION Prepaid Expense and Other Current Assets Prepaid expense and other current assets were comprised of the following (in thousands): AS OF DECEMBER 31, 2025 2024 Clinical trials (1) $ 4,566 $ 3,544 Clinical drug substance and product manufacturing (2) 1,880 1,998 Licenses 1,303 816 Outside research and development services (3) 448 642 Other 238 382 Prepaid expense and other current assets $ 8,435 $ 7,382 (1) Relates primarily to the Company’s prepayments to third-party CROs for management of clinical trials and prepayments for drug supply to be used in combination with the Company’s therapeutics. See “Accrued Research and Development Clinical Trial Costs” in Note 1 for further discussion of the components of research and development. (2) Relates primarily to the Company’s usage of third-party CDMOs for clinical and development efforts. See “Accrued Research and Development Clinical Trial Costs” in Note 1 for further discussion of the components of research and development. (3) Relates to the Company’s usage of third parties for other research and development efforts. See “Accrued Research and Development Clinical Trial Costs” in Note 1 for further discussion of the components of research and development. 122 Property and Equipment, Net Property and equipment, net were comprised of the following (in thousands): AS OF DECEMBER 31, 2025 2024 Machinery and equipment $ 9,519 $ 9,758 Computer software 3,984 3,984 Furniture, fixtures and other 556 556 Leasehold improvements 795 795 Total property and equipment 14,854 15,093 Less: accumulated depreciation and amortization ( 11,121 ) ( 8,893 ) Property and equipment, net $ 3,733 $ 6,200 Depreciation and amortization expense for each of the years ended December 31, 2025 and December 31, 2024, and consisted of the following (in thousands): YEAR ENDED DECEMBER 31, 2025 2024 Research and development $ 2,304 $ 1,881 General and administrative 179 404 Total depreciation and amortization expense $ 2,483 $ 2,285 Accrued Expenses Accrued expenses were comprised of the following (in thousands): AS OF DECEMBER 31, 2025 2024 Clinical trials (1) $ 10,794 $ 14,796 Compensation expense 7,450 7,726 Clinical drug substance and product manufacturing (2) 5,542 5,642 Other outside research and development (3) 111 632 Professional fees 447 629 Interest expense 857 — Other 328 465 Accrued expenses $ 25,529 $ 29,890 (1) Relates primarily to the Company’s usage of third-party CROs for management of clinical trials. See “Accrued Research and Development Clinical Trial Costs” in Note 1 for further discussion of the components of research and development. (2) Relates primarily to the Company’s usage of third-party CDMOs for clinical and development efforts. See “Accrued Research and Development Clinical Trial Costs” in Note 1 for further discussion of the components of research and development. (3) Relates to the Company’s usage of third parties for other research and development efforts. See “Accrued Research and Development Clinical Trial Costs” in Note 1 for further discussion of the components of research and development. 3. DEBT 2020 Loan Agreement In July 2020, the Company entered into a loan and security agreement, or the 2020 Loan Agreement, with Oxford Finance LLC and other lenders, or collectively, Oxford. Under the original 2020 Loan Agreement and subsequent amendments between November 2020 and October 2022, or collectively, the Amended 2020 Loan Agreement, the Company received an aggregate principal amount of $ 200.0 million over seven tranches, or Terms A-G. 123 Prior to the Separation, the outstanding term loans were to mature on January 1, 2027, or the Amended Maturity Date. Under the Amended 2020 Loan Agreement, and through the Separation, the repayment schedule provided for interest-only payments through February 1, 2025, followed by 23 months of principal and interest payments. Upon the Amended Maturity Date, a final payment of 9.0 % of the original principal amount would be due to Oxford. This final payment of $ 18.0 million was being accreted over the life of the Amended 2020 Loan Agreement using the effective interest method. The Company had the option to prepay the outstanding balance of the term loans in full prior to the Amended Maturity Date, subject to a prepayment fee ranging from 1.0 % to 3.0 %, depending upon the timing of the prepayment. In connection with the Separation, the Company’s outstanding debt was assumed by the Acquirer. Prior to the close of the Merger, the Company had $ 200.0 million in gross principal outstanding in term loans under the Amended 2020 Loan Agreement. 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 liability. 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 during the year ended December 31, 2024. Interest Expense Prior to the Separation, interest expense was calculated using the effective interest method and was inclusive of non-cash amortization of the debt discount and accretion of the final payment. 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): AS OF DECEMBER 31, 2025 Term loan $ 109,000 Less: debt discount ( 8,441 ) Long-term debt, including debt discount and final payment fee $ 100,559 124 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): AS OF DECEMBER 31, 2025 2028 $ 43,478 2029 52,174 2030 13,348 Total future minimum payments 109,000 Less: 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. 4. STOCKHOLDERS’ EQUITY Amended and Restated Certificate of Incorporation On May 29, 2024, upon effecting the Separation, the Company’s certificate of incorporation was amended and restated to authorize 120,000,000 shares of common stock and 15,000,000 shares of preferred stock, each with a par value of $ 0.0001 per share. Common Stock Following the Distribution and as of May 29, 2024, the Company had 14,475,904 shares of common stock outstanding. The Company issued one SEC-registered, publicly listed, share of Inhibrx for every four shares of the Former Parent’s common stock held, resulting in 13,316,140 shares of common stock issued to common stockholders of the Former Parent. Upon the Distribution, the Former Parent retained an equity interest in the Company of 8 %, or 1,157,926 shares. The Company issued 1,838 shares of common stock to Oxford in connection with the Oxford Warrants (as defined below) in the Distribution. 125 Securities Purchase Agreement In August 2023, the Company entered into a Securities Purchase Agreement, as amended, or the Purchase Agreement, with certain institutional and other accredited investors, or Purchasers, pursuant to which the Company sold and issued 3,621,314 shares of the Company’s common stock for $ 19.35 per share and pre-funded warrants to purchase 6,714,636 shares of the Company’s common stock in a private placement transaction, or the Private Placement. The purchase price of the pre-funded warrants was $ 19.3499 per pre-funded warrant, with an exercise price of $ 0.0001 per share. The pre-funded warrants were equity-classified and carried at the instruments’ fair value upon issuance. 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 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, 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: (i) 7,354 warrants with an exercise price of $ 17.00 and (ii) 40,000 warrants with an exercise price of $ 45.00 . As part of the Separation and Distribution, each holder of eligible outstanding warrants received (i) $ 30.00 per 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 SEC-registered, publicly listed, share of Inhibrx for every four of the Former Parent’s warrants held. 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, 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. 126 Common Stock Reserved for Future Issuance 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, 2025 2024 Options to purchase common stock issued and outstanding 3,501 3,660 Pre-funded warrants issued and outstanding 992 992 Shares available for future equity grants 499 340 Warrants issued and outstanding 141 — Total common stock reserved for future issuance 5,133 4,992 5. EQUITY COMPENSATION PLAN 2017 Plan 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 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. 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 All outstanding options with an exercise price less than or equal to the total consideration of $ 35.00 vested immediately upon the Merger and were settled for the consideration of: (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, 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 , affecting 7 grantees, the Company recognized all remaining stock compensation expense of $ 1.8 million. 2024 Plan 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. Stock Option Activity 127 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. All options granted to employees are subject to four-year vesting with a one-year cliff. All options granted to non-employee directors are subject to a one-year vesting term. All options have a contractual term of 10 years. A summary of the Company’s stock option activity under its 2024 Plan for the year ended December 31, 2025 is as follows (in thousands, except for per share data and years): Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding as of December 31, 2024 3,660 $ 15.84 Granted 378 $ 17.86 Exercised ( 102 ) $ 15.79 Forfeited ( 435 ) $ 15.86 Outstanding as of December 31, 2025 3,501 $ 16.06 8.5 $ 220,342 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. The Company expects all outstanding stock options to vest. 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. 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 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 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, 2025 2024 Risk-free interest rate 3.91 % 4.56 % Expected volatility 86.58 % 86.32 % Expected dividend yield — % — % Expected term (in years) 5.98 6.06 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. 128 Stock-based compensation expense for stock options under the 2024 Plan and 2017 Plan consisted of the following (in thousands): YEAR ENDED DECEMBER 31, 2025 2024 Research and development $ 6,534 $ 36,875 General and administrative 4,604 21,643 Total stock-based compensation expense $ 11,138 $ 58,518 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. 6. LICENSE REVENUE The following table summarizes the total revenue recorded in the Company’s consolidated statements of operations (in thousands): YEAR ENDED DECEMBER 31, 2025 2024 License fee revenue Scithera, Inc. $ 1,300 $ — Regeneron Pharmaceuticals, Inc. — 200 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 129 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. Regeneron 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. The Company retained all rights to the specific sdAbs outside of the cell therapy field. 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. 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. The Company is also entitled to receive certain developmental milestone payments of up to an aggregate of $ 51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single digits. Due to the uncertainty in the achievement of the developmental milestones and future sales, the variable consideration associated with the future milestone payments 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 re-assessed at each reporting period. In May 2024, pursuant to the option extension terms in the 2020 Regeneron Agreement, Regeneron requested to extend the option term for its third program by an additional six months in exchange for an option extension fee of $ 0.1 million. The Company recognized the $ 0.1 million of revenue related to this extension at the point in time in which the extension was granted. In November 2024, Regeneron requested a second extension of the option term for an additional six months in exchange for an option extension fee of $ 0.1 million. 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 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. 7. RELATED PARTY TRANSACTIONS From time to time, the Company will enter into an agreement with a related party in the ordinary course of its business. These agreements are ratified by the Company’s Board of Directors or a committee thereof pursuant to policy. Separation and Distribution In connection with the Separation, as discussed in Note 1, the Former Parent completed a distribution to holders of its shares of common stock of 92 % of the issued and outstanding shares of common stock of the Company, or the Distribution. The Former Parent retained an equity interest in the Company of 8 %, or 1,157,926 shares upon the Distribution. Accordingly, the Company identified the Acquirer as a related party following the Merger with the Former Parent. 130 Transition Services Agreement In connection with the Separation, the Company also entered into the Transition Services Agreement with the Former Parent under which the Company or one of its affiliates provide the Former Parent or other Sanofi entities with certain transition services for a limited time to ensure an orderly transition following the Separation. The services that the Company agreed to provide to the Former Parent or other Sanofi entities under the Transition Services Agreement include certain finance and accounting, including payroll, tax, and procurement, information technology, legal and intellectual property, clinical study support, technical operations, regulatory, quality assurance, commercial and medical affairs, and other services. 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 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. 8. INCOME TAXES The components of the Company’s income (loss) before income taxes are as follows (in thousands): YEAR ENDED DECEMBER 31, 2025 2024 United States $ ( 140,053 ) $ 1,687,574 Foreign — — 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, 2025 2024 Current: State $ 2 $ 2 Total current $ 2 $ 2 The provision for the years ended December 31, 2025 and December 31, 2024 was related to state income taxes. The Company made no material income tax payments during 2025 for Federal, state, and foreign jurisdictions. 131 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, 2025 Federal income taxes at 21% $ ( 29,411 ) 21.0 % State taxes, net of federal benefit (1) 1 — % Change in valuation allowance 29,552 ( 21.1 ) % Other ( 140 ) 0.1 % Effective tax rate $ 2 — % (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, 2024 Expected income tax expense at federal statutory rate $ 354,390 State income tax expense, net of federal benefit 10,106 Permanent items 6,842 R&D credits ( 28,602 ) Unrecognized tax benefits (FIN 48) ( 4,651 ) Elimination of deferred tax assets and liabilities upon Transaction with Acquirer 195,694 Non-taxable gain related to Transaction with Acquirer ( 410,226 ) 336(e) election 665 Valuation allowance ( 124,216 ) Income tax expense $ 2 Income taxes are accounted for under the asset and liability method. Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. 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. 132 The components of net deferred tax assets and liabilities are as follows (in thousands): AS OF DECEMBER 31, 2025 2024 Deferred tax assets Net operating loss carryforward $ 40,276 $ 4,726 Section 174 research and development capitalization 8,183 15,718 Stock compensation 2,355 809 Accrued expenses 1,427 893 Operating lease liabilities 1,414 1,776 Intangibles 46 56 Property and equipment 18 — Other 2 5 Gross deferred tax assets 53,721 23,983 Less: Valuation allowance ( 52,508 ) ( 21,789 ) 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 ) Total deferred tax liabilities ( 1,213 ) ( 2,194 ) Net deferred tax assets (liabilities) $ — $ — In connection with the Separation, the Former Parent retained all rights associated with the unused federal and state NOLs and research tax credit carryforwards as of the date of the transaction to offset its future taxable income. As of December 31, 2025, the Company had unused federal and state NOL carryforwards of approximately $ 183.1 million and $ 32.8 million, respectively. The federal NOL carryforwards may be carried forward indefinitely but are only available to offset up to 80% of pre-NOL taxable income each year. The state NOL carryforwards will begin to expire in 2034 if not utilized. The utilization of NOL carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the 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. Following the Separation, 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 may incur ownership changes in the future. If an ownership change has occurred, the Company’s ability to use its NOL 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. The Company has established a full valuation allowance against its deferred tax assets due to uncertainties that preclude it from determining that it is more likely than not that the Company will be able to generate sufficient taxable income to realize such assets. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2025. Such objective evidence limits the ability to consider other subjective evidence such as the Company’s projections for future growth. 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 133 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. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes that it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands): AS OF DECEMBER 31, 2025 2024 Beginning balance $ — $ 4,651 Increases (decreases) related to current year tax positions — ( 4,651 ) Ending balance $ — $ — As of December 31, 2025, the Company did not have any gross unrecognized tax benefits. The Company does not expect any significant increases or decreases to its unrecognized tax benefits within the next 12 months. 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, 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. Following the Separation, the Company’s tax years from 2024 and forward are subject to examination by the United States and state tax authorities. The Company has not been, nor is it currently, under examination by the U.S. 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. 9. LEASES 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 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. 134 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. This agreement did not include any additional square footage. The 2024 Lease Agreement contains initial base rent of approximately $ 0.2 million per month with 3 % annual escalations, 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 is to be determined annually. The 2024 Lease Agreement also provided for four months of base rent abatement of $ 0.2 million per month for the period of October 2024 through January 2025. The Company determined the 2024 Lease Agreement contains a lease which should be accounted for as a single modified contract with its existing lease agreements. As a result, the Company remeasured the operating lease liability, resulting in an increase to its operating lease liability and right-of-use asset of $ 6.3 million as of the lease’s commencement date, which was determined to be the effective date of the 2024 Lease Agreement. The Company utilized an estimated incremental fully collateralized borrowing rate of 10.2 % in its present value calculation as the 2024 Lease Agreement, which does not have a stated rate and did not have a readily determinable implicit rate. The estimated rate was determined using the rate of the 2025 Loan Agreement (as defined below) with Oxford entered into in January 2025. The operating right-of-use asset and operating lease liability as of December 31, 2025 and December 31, 2024 are as follows (in thousands): AS OF DECEMBER 31, 2025 2024 Operating right-of-use asset $ 5,535 $ 7,338 Operating lease liability Current $ 2,326 $ 1,595 Non-current 4,127 6,453 Total operating lease liability $ 6,453 $ 8,048 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 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 % as of December 31, 2025 and December 31, 2024. 135 Future minimum rental commitments for the Company’s operating leases reconciled to the operating lease liability are as follows (in thousands): AS OF DECEMBER 31, 2025 2026 $ 2,855 2027 2,941 2028 1,492 Total future minimum lease payments 7,288 Less: imputed interest ( 835 ) Present value of operating lease liability 6,453 Less: current portion of operating lease liability ( 2,326 ) Non-current portion of operating lease liability $ 4,127 10. COMMITMENTS AND CONTINGENCIES Litigation The Company is not party to any material legal proceedings. From time to time, it may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on the Company because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained. Indemnification In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. In some cases, the indemnification obligation will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. In addition, the Company has entered into indemnification agreements with its directors and certain officers that may require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, no demands have been made upon the Company to provide indemnification under these agreements, and thus, there are no indemnification claims that the Company is aware of that could have a material effect on the Company’s consolidated balance sheets, consolidated statements of operations, or consolidated statements of cash flows. Other Commitments Additionally, as of December 31, 2025 and December 31, 2024, Mark P. 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. 11. SUBSEQUENT EVENTS The Company evaluated subsequent events to assess the need for potential recognition or disclosure in this report. 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. 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 136 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. 137 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.