Mineralys Therapeutics, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Mineralys Therapeutics, Inc. Financial Statements Index Report of Independent Registered Public Accounting Firm (PCAOB ID 42 ) F- 2 Balance Sheets as of December 31, 2025 and 2024 F- 3 Statements of Operations for the Years Ended December 31, 2025 and 2024 F- 4 Statements of Stockholders’ Equity for the Years Ended December 31, 2025 and 2024 F- 5 Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F- 6 Notes to Financial Statements F- 7 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Mineralys Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Mineralys Therapeutics, Inc. (the Company) as of December 31, 2025 and 2024, the related statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the 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 each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s 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 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 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2022. Denver, Colorado March 12, 2026 F-2 Table of Contents Mineralys Therapeutics, Inc. Balance Sheets (in thousands, except share and per share amounts) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 172,921 $ 114,091 Investments 483,714 84,096 Prepaid and other current assets 4,751 7,164 Total current assets 661,386 205,351 Property and equipment, net 38 53 Other assets 382 499 Total assets $ 661,806 $ 205,903 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 2,017 $ 479 Accrued liabilities 13,096 14,167 Total current liabilities 15,113 14,646 Commitments and contingencies (Note 4) Stockholders’ equity: Common stock, $ 0.0001 par value; 500,000,000 shares authorized as of December 31, 2025 and 2024; 81,536,557 and 49,821,915 shares issued and outstanding as of December 31, 2025 and 2024, respectively 8 5 Additional paid-in capital 1,103,854 493,770 Accumulated deficit ( 457,169 ) ( 302,518 ) Total stockholders’ equity 646,693 191,257 Total liabilities and stockholders’ equity $ 661,806 $ 205,903 The accompanying notes are an integral part of these financial statements. F-3 Table of Contents Mineralys Therapeutics, Inc. Statements of Operations (in thousands, except share and per share data) Year Ended December 31, 2025 2024 Operating expenses: Research and development $ 132,009 $ 168,581 General and administrative 38,595 23,822 Total operating expenses 170,604 192,403 Loss from operations ( 170,604 ) ( 192,403 ) Interest income, net 15,953 14,588 Other income — 5 Total other income, net 15,953 14,593 Net loss $ ( 154,651 ) $ ( 177,810 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 2.29 ) $ ( 3.66 ) Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted 67,656,355 48,539,795 The accompanying notes are an integral part of these financial statements. F-4 Table of Contents Mineralys Therapeutics, Inc. Statements of Stockholders’ Equity (in thousands, except share data) Common Stock Additional Paid-In-Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of December 31, 2023 41,133,916 $ 4 $ 365,858 $ ( 124,708 ) $ 241,154 Issuance of common stock and pre-funded warrants in a private placement offering, net of offering costs of $ 3,941 8,339,169 1 116,058 — 116,059 Issuance of common stock from stock option exercises 321,942 — 297 — 297 Issuance of common stock for cash under employee stock purchase plan 26,888 — 221 — 221 Stock-based compensation — — 11,336 — 11,336 Net loss — — — ( 177,810 ) ( 177,810 ) Balance as of December 31, 2024 49,821,915 5 493,770 ( 302,518 ) 191,257 Issuance of common stock pursuant to public offering, net of offering costs of $ 12,509 14,907,406 1 188,740 — 188,741 Issuance of common stock pursuant to public offering, net of offering costs of $ 17,932 11,274,509 2 269,566 — 269,568 Issuance of common stock pursuant to ATM Agreements, net of issuance costs of $ 473 4,066,228 — 119,425 — 119,425 Issuance of common stock from stock option exercises 1,444,277 — 12,786 — 12,786 Issuance of common stock for cash under employee stock purchase plan 22,222 — 243 — 243 Stock-based compensation — — 19,324 — 19,324 Net loss — — — ( 154,651 ) ( 154,651 ) Balance as of December 31, 2025 81,536,557 $ 8 $ 1,103,854 $ ( 457,169 ) $ 646,693 The accompanying notes are an integral part of these financial statements. F-5 Table of Contents Mineralys Therapeutics, Inc. Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 154,651 ) $ ( 177,810 ) Adjustments to reconcile net loss to net cash used in operating activities: Accretion of discount on held-to-maturity securities ( 9,879 ) ( 9,405 ) Stock-based compensation 19,324 11,336 Depreciation and amortization 59 43 Changes in operating assets and liabilities: Accrued interest receivable ( 166 ) 424 Prepaid, other current assets, and other assets 2,470 4,935 Accounts payable and accrued liabilities 427 4,163 Net cash used in operating activities ( 142,416 ) ( 166,314 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities ( 814,738 ) ( 373,445 ) Maturities of marketable securities 425,000 488,500 Purchases of property and equipment ( 15 ) ( 96 ) Net cash provided by (used in) investing activities ( 389,753 ) 114,959 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock in September 2025 public offering, net of offering costs 269,883 — Proceeds from issuance of common stock in March 2025 public offering, net of offering costs 188,880 — Proceeds from issuance of common stock pursuant to ATM Agreements, net of issuance costs 119,598 — Proceeds from stock option exercises 12,786 297 Proceeds from issuance of common stock for cash under employee stock purchase plan 243 221 Payment of shelf offering costs ( 391 ) ( 435 ) Proceeds from issuance of common stock and pre-funded warrants in a private placement offering, net of offering costs — 116,059 Net cash provided by financing activities 590,999 116,142 Net increase in cash and cash equivalents 58,830 64,787 Cash and cash equivalents - beginning 114,091 49,304 Cash and cash equivalents - ending (1) $ 172,921 $ 114,091 Supplemental Disclosure of Non-Cash Financing Activities: Offering costs included in accounts payable and accrued liabilities $ 41 $ — (1) Cash and cash equivalents as of December 31, 2025 exclude investments of $ 483.7 million. Cash, cash equivalents, and investments amounted to $ 656.6 million as of December 31, 2025. The accompanying notes are an integral part of these financial statements. F-6 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements Note 1. Nature of Business Mineralys Therapeutics, Inc. (the Company) is a biopharmaceutical company focused on developing medicines to target diseases driven by dysregulated aldosterone. The Company’s product candidate, lorundrostat, is a proprietary, orally administered, aldosterone synthase inhibitor that the Company is developing for the treatment of cardiorenal conditions affected by dysregulated aldosterone, including hypertension and related comorbidities, such as chronic kidney disease and obstructive sleep apnea. During 2025, the Company completed two pivotal clinical trials related to its primary drug candidate for hypertension and completed two Phase 2 clinical trials of lorundrostat in hypertensive patients with chronic kidney disease and obstructive sleep apnea. The Company submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) in December 2025 for lorundrostat for the treatment of hypertension in combination with other antihypertensive drugs. The FDA accepted the NDA submission and provided the Company with a Prescription Drug User Fee Act target action date of December 22, 2026. The Company was incorporated as a Delaware corporation in May 2019, and it is headquartered in Radnor, Pennsylvania. The Company’s operations to date have been limited to business planning, raising capital, in-licensing, conducting preclinical and clinical trials, and other research and development. Liquidity and Capital Resources Since its inception, the Company has not generated any revenue from product sales or other sources and has incurred significant operating losses and negative cash flows from operations. The Company’s primary uses of cash to date have been to fund research and development activities, business planning, establishing and maintaining the Company’s intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations. As of December 31, 2025, the Company had an accumulated deficit of $ 457.2 million and cash, cash equivalents, and investments of $ 656.6 million. For the year ended December 31, 2025, the Company had a net loss of $ 154.7 million and net cash used in operating activities of $ 142.4 million. Since inception, the Company has funded its operations by raising aggregate gross proceeds of approximately $ 1.1 billion from the sale of the Company’s common stock, convertible preferred stock, pre-funded warrants, and convertible notes. The Company has a limited operating history, and the sales and income potential of its business is unproven. The Company expects to continue to incur substantial losses in the foreseeable future as a result of the Company’s research and development and other activities. Additional funding will be required in the future to continue with the Company’s planned research and development and other activities. The Company expects to finance its operations through equity offerings, debt financings, and other capital sources, including potential strategic collaborations, licensing, and other similar arrangements. The Company believes that its cash, cash equivalents, and investments as of December 31, 2025 will be sufficient to allow the Company to fund operations for at least twelve months from the issuance date of these financial statements. Note 2. Summary of Significant Accounting Policies Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP), which include all adjustments necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the years presented. Any reference in these notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASUs) of the Financial Accounting Standards Board (FASB). The Company’s management performed an evaluation of its activities through the date of filing of these financial statements and concluded that there are no subsequent events requiring disclosure, other than as disclosed. F-7 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements Emerging Growth Company Status The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (JOBS Act), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The Company may take advantage of these exemptions until the last day of the fiscal year following the fifth anniversary of its initial public offering or such earlier time as the Company is no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result of this election, its financial statements may not be comparable to those of companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of its initial public offering or such earlier time that it is no longer an “emerging growth company.” Segment Information The Company operates in one operating segment for the purposes of assessing performance, making operating decisions, and allocating Company resources. The Company’s chief operating decision maker (CODM) is its chief executive officer, who considers net loss to evaluate overall expenses associated with conducting research and development activities, which includes evaluating the progress of ongoing clinical trials and the planning and execution of current and future research and development and other activities. Further, the CODM reviews and utilizes functional expenses (research and development and general and administrative) as reported in the statements of operations to manage the Company’s operations. Other segment items included in net loss are interest income, net and other income. These measures of performance, significant expenses, and other items are each reflected in the statements of operations. The accounting policies of the segment are the same as those described below. The measure of segment assets is reported on the balance sheets as total assets. All assets are held in the United States. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Estimates have been used in the following areas, among others: research and development accruals and income taxes. Cash and Cash Equivalents All highly liquid investments that have maturities of 90 days or less at the date of purchase are classified as cash equivalents. The Company’s cash and cash equivalents balances as of December 31, 2025 and 2024 include cash balances and amounts held primarily in interest-bearing money market accounts and U.S. Treasury bills. As of December 31, 2025 and 2024, the Company did no t have any restricted cash balances. The following table provides a reconciliation of cash and cash equivalents as reported in the statements of cash flows to the balance sheets (in thousands): December 31, 2025 2024 Cash $ 1,030 $ 664 Cash equivalents 171,891 113,427 Total cash and cash equivalents $ 172,921 $ 114,091 F-8 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements Concentration of Credit Risk The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash balances in several accounts with three financial institutions that, from time to time, are in excess of federally insured limits. Risks and Uncertainties The Company has not yet generated any revenue from the sale of its products and is subject to all of the risks and uncertainties that are typically faced by biopharmaceutical companies that devote substantially all of their efforts to research and development and clinical trials and do not yet have commercial products. The Company expects to continue incurring losses for the foreseeable future. Fair Value Measurements The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurement, establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1 – quoted prices in active markets for identical assets and liabilities • Level 2 – other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.) • Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities) For certain financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable, and certain accrued liabilities, the recorded amount approximates estimated fair value due to their relatively short maturity period. Refer to Note 3. “ Fair Value of Financial Instruments ” for additional details of the Company’s financial instruments. Investments The Company generally invests its excess cash in money market funds and investment-grade short- and long-term fixed-income debt securities, such as U.S. Treasury bills. Such investments are included in cash and cash equivalents and investments in the balance sheets. The Company determines the appropriate classification of securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are carried at amortized cost, adjusted for the accretion of discounts using the interest method. The Company invested in marketable securities during the years ended December 31, 2025 and 2024, and no impairment charges were recorded. For held-to-maturity investments, the Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is F-9 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements other-than-temporary. If the Company believes an impairment of a security position is other than temporary, based on available quantitative and qualitative information as of the report date, the loss will be recognized within total other income, net in the Company’s statements of operations, and a new cost basis in the investment will be established. Deferred Offering Costs The Company capitalizes certain legal, professional, accounting, and other third-party fees that are directly associated with in-process equity issuances as deferred offering costs until such equity issuances are consummated. After consummation of the equity issuance, these costs are recorded as a reduction in the capitalized amount associated with the equity issuance. Should the equity issuance be abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the statements of operations. Deferred offering costs as of December 31, 2025 and 2024 were $ 0.2 million and $ 0.4 million, respectively. Such costs are classified in other assets on the balance sheets. Research and Development Expenses Research and development costs, both internal and external, are expensed as incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided to the Company by its clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. The Company’s research and development expenses consist primarily of clinical trial expenses, consulting and employee-related costs, and costs associated with required regulatory filings, licenses, and fees. Non-refundable advance payments for goods and services that will be used in future research and development activities are capitalized and recorded as expense in the period that the Company receives the goods or when services are performed. Assets acquired (or in-licensed) that are utilized in research and development that have no alternative future use are expensed as incurred. Commitments and Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and can be reasonably estimated. The Company expects that contingencies related to regulatory approval milestones will only become probable once such regulatory outcome is achieved. Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation – Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the statements of operations based on their fair values. The Company’s stock-based awards are subject only to service-based vesting conditions. The Company measures restricted common stock awards using the difference, if any, between the purchase price per share of the award and the fair value of the Company’s common stock at the date of the grant or modification. The Company estimates the fair value of its stock option awards using the Black-Scholes option pricing model, which requires the input of assumptions, including (i) the expected stock price volatility, (ii) the calculation of the expected term of the award, (iii) the risk-free interest rate, and (iv) expected dividends. Volatility — Due to the Company’s limited operating history and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar publicly-traded companies. The Company believes that the companies in the group were most representative of the Company and had characteristics similar to its own, including stage of product development, a focus on the life sciences industry, and other economic and industry characteristics. F-10 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements Expected Term — The Company uses the simplified method to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted, and utilizes the contractual term for options granted. Risk-Free Interest Rate — The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. Expected Dividends — To date, the Company has not issued any dividends and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero. Subsequent to the closing of the Company’s initial public offering of its common stock in February 2023 (IPO), the Company determines the fair market value of its common stock using the closing price of its common stock as reported on the Nasdaq Global Select Market. Compensation expense related to awards is recognized on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. Management evaluates its award grants and modifications and will adjust the fair value if any are determined to be spring-loaded. The Company accounts for forfeitures as they occur. Defined Contribution Plan The Company sponsors a qualified defined contribution 401(k) plan for eligible employees. Employees may contribute a portion of their compensation, subject to statutory limitations. The Company provides a matching contribution of up to 4 % of eligible compensation. For the years ended December 31, 2025 and 2024, the Company recognized expense related to the defined contribution 401(k) plan of $ 0.6 million and $ 0.4 million, respectively. Net Loss Per Share The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the year. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential common stock equivalents outstanding for the year, determined using the treasury stock method. For purposes of this calculation, unvested restricted stock awards and stock options to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive. The weighted-average number of common shares used in the basic and diluted net loss per share attributable to common stockholders calculations includes the weighted-average pre-funded warrants outstanding during the period, as they are exercisable at any time for nominal cash consideration. The following table sets forth the potential common shares excluded from the calculation of net loss per share attributable to common stockholders because their inclusion would be anti-dilutive: Year Ended December 31, 2025 2024 Outstanding options 6,577,499 4,560,292 Unvested restricted stock awards 125,793 370,106 Total 6,703,292 4,930,398 Income Taxes Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (ASC 740), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial F-11 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities and for loss and credit carryforwards using enacted tax rates anticipated to be in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if, based on the weight of available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based on the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of December 31, 2025 and 2024, the Company does not have any significant uncertain tax positions. If the Company were to incur interest and penalties on uncertain tax positions, it would classify them as income tax expense. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, including public entities with a single reportable segment, primarily through enhanced disclosures about significant segment expenses. The Company adopted this standard for the Company’s fiscal year 2024 annual reporting period, and it is applicable to interim periods thereafter. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The Company adopted this new accounting standard in the year ended 2025 and applied it prospectively as disclosed in Note 8. “ Income Taxes. ” The adoption did not have an impact on the Company’s financial statements, as the amendments relate solely to expanded disclosures and do not affect the recognition, measurement, or presentation of income taxes. The Company has updated its income tax disclosures in accordance with the new requirements beginning in the period of adoption. 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 (ASU 2024-03), and in January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose additional information about specific expense categories in the notes to the financial statements on an annual and interim basis. ASU 2024-03 is effective for the Company's fiscal year 2027 and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is evaluating the impact of ASU 2024-03 on its financial statements and related disclosures. F-12 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements Note 3. Fair Value of Financial Instruments The following table presents financial instruments measured at fair value on a recurring basis based on the fair value hierarchy as of December 31, 2025 and 2024 (in thousands): December 31, 2025 2024 Level 1 Assets Cash equivalents Money market funds $ 161,943 $ 83,602 There were no transfers within the fair value hierarchy during the years presented. The following methods and assumptions were used by the Company in estimating the fair values of each class of financial instrument disclosed herein: Money Market Funds —The carrying amounts of money market funds reported as cash and cash equivalents in the balance sheets approximate their fair values due to their short-term nature. The fair values of money market funds are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. U.S. Treasury Bills—As of December 31, 2025 and 2024, the Company had short-term U.S. Treasury bills. Fair values of these securities are determined by Level 2 inputs utilizing quoted prices (unadjusted) in active markets for similar assets. The following table presents information about the Company’s investments in held-to-maturity U.S. Treasury bills as of each reported date (in thousands): As of December 31, 2025 Balance Sheet Location Original Maturities Amortized Cost Estimated Fair Value Cash and cash equivalents less than 3 months $ 9,948 $ 9,948 Investments between 3 and 12 months 483,714 483,891 Total $ 493,662 $ 493,839 As of December 31, 2024 Balance Sheet Location Original Maturities Amortized Cost Estimated Fair Value Cash and cash equivalents less than 3 months $ 29,825 $ 29,829 Investments between 3 and 12 months 84,096 84,123 Total $ 113,921 $ 113,952 Note 4. Commitments and Contingencies License Agreement with Tanabe In July 2020, the Company entered into a license agreement (the Tanabe License) with Tanabe Pharma Corporation (Tanabe)(formerly Mitsubishi Tanabe Pharma Corporation), pursuant to which Tanabe granted the Company an exclusive, worldwide, royalty-bearing, sublicensable license under Tanabe’s patent and other intellectual property rights to exploit products incorporating lorundrostat (formerly MT-4129) (Lorundrostat Products) for the prevention, treatment, diagnosis, detection, monitoring, or predisposition testing with respect to indications, diseases, and conditions in humans. Pursuant to the Tanabe License, the Company paid Tanabe a $ 1.0 million upfront fee and development milestone payments of $ 9.0 million in the aggregate. The Company F-13 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements has remaining obligations to pay Tanabe commercial milestone payments of up to $ 155.0 million in the aggregate upon first commercial sale and upon meeting certain annual sales targets, as well as additional commercial milestone payments of up to $ 10.0 million for a second indication. Additionally, the Company is obligated to pay Tanabe tiered royalties at percentages ranging from the mid-single-digits to ten percent ( 10 %) of aggregate net sales of each Lorundrostat Product on a Lorundrostat Product-by-Lorundrostat Product and country-by-country basis, until the later of (i) the expiration of the last-to-expire valid Tanabe patent claim covering a Lorundrostat Product, (ii) ten years from the first commercial sale of a Lorundrostat Product, or (iii) the expiration of regulatory exclusivity in such country. Such royalties are subject to reduction under specified conditions, including lack of patent coverage and generic competition. The Company has no remaining development milestone obligations under the Tanabe License and did not incur any development or commercial expenses pursuant to the Tanabe License during the years ended December 31, 2025 and 2024. The Company is obligated to use commercially reasonable efforts to conduct and complete the development activities and to file for regulatory approval for at least one Lorundrostat Product in a major market country and consider in good faith developing at least one Lorundrostat Product in a non-major market country. If the Company elects to sublicense its rights under the Tanabe License to a third party with respect to exploitation of lorundrostat or any Lorundrostat Product in certain countries in Asia, the Company has agreed to negotiate such a sublicense first, for a specified period of time, with Tanabe, if Tanabe notifies the Company that it would like to obtain such a sublicense. The Company also agreed not to commercialize any competing product prior to three years following the first commercial sale of the first Lorundrostat Product in any country without Tanabe’s prior consent. Unless terminated earlier, the Tanabe License will continue until the expiration of all of the Company’s royalty obligations to Tanabe. The Company may terminate the Tanabe License for any or no reason upon 90 or 180 days’ prior written notice to Tanabe, depending on whether the Lorundrostat Product has received regulatory approval. Tanabe may terminate the Tanabe License if the Company or its affiliates or sublicensees initiate a challenge to the patent rights licensed to the Company by Tanabe. In addition, either party may terminate the Tanabe License in the event of an uncured material breach by or bankruptcy of the other party, subject to certain notice and cure periods, or upon the other party’s bankruptcy or insolvency. Litigation Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the years ended December 31, 2025 and 2024, and no material legal proceedings are currently pending or threatened. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising from breach of such agreements or intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with officers of the Company and members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any material liabilities related to such obligations in its financial statements as of December 31, 2025 and 2024. F-14 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements Note 5. Accrued Liabilities Accrued liabilities consisted of the following (in thousands): December 31, 2025 2024 Compensation and benefits $ 5,540 $ 3,582 Research and development expenses 3,460 8,614 Professional fees and other 4,096 1,971 Total $ 13,096 $ 14,167 Note 6. Capital Stock As of December 31, 2025, the Company had reserved authorized shares of common stock for future issuance as follows: Common stock options outstanding 6,577,499 Shares available for grant under the 2023 Plan 1,187,422 Shares available for grant under the ESPP 1,251,719 Shares available for grant under the 2025 Inducement Plan 854,000 Pre-funded warrants issued and outstanding 549,755 Total 10,420,395 In connection with the closing of the IPO in February 2023, the Company’s board of directors approved an amendment to the Company’s amended and restated certificate of incorporation (the Restated Certificate). The Restated Certificate amended and restated the Company’s amended and restated certificate of incorporation, in its entirety to, among other things, increase the authorized number of shares of common stock to 500,000,000 shares and authorize 50,000,000 shares of undesignated preferred stock that may be issued from time to time by the Company’s board of directors in one or more series. Public Offerings On September 2, 2025, the Company entered into an underwriting agreement with BofA Securities, Inc., Evercore Group L.L.C. and Goldman Sachs & Co. LLC as representatives of the several underwriters named therein (collectively, the Underwriters), relating to the issuance and sale of 11,274,509 shares of the Company’s common stock at a price of $ 25.50 per share for net proceeds of approximately $ 269.6 million after deducting an underwriting discount of 6 % and other offering expenses. The offering was made pursuant to the Company’s registration statements on Form S-3 and Form S-3MEF (Registration Statement Nos. 333-278122 and 333-289998, respectively) previously filed with and declared effective by the SEC, and a prospectus supplement and accompanying prospectus filed with the SEC. The Company is using the net proceeds from this offering to fund clinical development of lorundrostat, including research and development and manufacturing, and pre-commercialization activities, as well as for working capital and general corporate purposes. On March 11, 2025, the Company entered into an underwriting agreement with the Underwriters, relating to the issuance and sale of 14,907,406 shares of the Company’s common stock at a price of $ 13.50 per share for net proceeds of approximately $ 188.7 million after deducting an underwriting discount of 6 % and other offering expenses. The offering was made pursuant to the Company’s shelf registration statement on Form S-3 (Registration Statement No. 333-278122) previously filed with and declared effective by the SEC (the Registration Statement), and a prospectus supplement and accompanying prospectus filed with the SEC. The Company is using the net proceeds from this offering to fund the clinical development of lorundrostat, including research and development, manufacturing, and pre-commercialization activities, as well as for working capital and general corporate purposes. F-15 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements At Market Equity Offering Sales Agreements On November 10, 2025, the Company entered into an ATM Equity Offering Sales Agreement (the New ATM Agreement) with BofA Securities, Inc., Evercore Group L.L.C., and Goldman Sachs & Co. LLC (each, a Sales Agent, and collectively, the Sales Agents), relating to the sale of shares of the Company’s common stock, having an aggregate offering price of up to $ 300.0 million from time to time to or through the Sales Agents (New ATM Shares). The New ATM Shares will be issued pursuant to the Company’s registration statement on Form S-3ASR (File No. 333-291435), effective on November 10, 2025. Sales of the New ATM Shares will be made by means of ordinary brokers’ transactions on the Nasdaq Global Select Market or as otherwise agreed by the Company and the Sales Agents. Under the terms of the New ATM Agreement, the Company may also sell the New ATM Shares from time to time to a Sales Agent as principal for its own account at a price to be agreed upon at the time of sale. Any sale of the New ATM Shares to a Sales Agent as principal would be pursuant to the terms of a separate terms agreement between the Company and such Sales Agent. On March 21, 2024, the Company entered into an ATM Equity Offering Sales Agreement (the Prior ATM Agreement, and together with the New ATM Agreement, the ATM Agreements) with BofA Securities, Inc. and Evercore Group L.L.C. (the Prior Sales Agents). Pursuant to the terms of the Prior ATM Agreement, the Company was permitted to sell from time to time through the Prior Sales Agents shares of the Company’s common stock having an aggregate offering price of up to $ 100.0 million (the Prior ATM Shares, and together with the New ATM Shares, the ATM Shares), pursuant to which the Company sold approximately $ 27.4 million of Prior ATM Shares. Effective November 9, 2025, the Prior ATM Agreement was terminated in connection with the execution of the New ATM Agreement. Beginning in April 2025 and through December 31, 2025, the Company sold an aggregate of 4,066,228 ATM Shares at a weighted-average price of $ 29.49 per share for aggregate net proceeds of approximately $ 119.4 million after deducting commissions to the Agents and other offering expenses. As of December 31, 2025, the Company had approximately $ 207.5 million of New ATM Shares remaining available for sale pursuant to the New ATM Agreement. Subsequent to December 31, 2025 and through March 12, 2026, the Company sold an aggregate of 568,320 New ATM Shares, at a weighted-average price of $ 35.66 per share, for aggregate net proceeds of approximately $ 20.2 million after deducting commissions to the Sales Agents and other related costs. Private Placement Offering On February 7, 2024, the Company entered into a securities purchase agreement (the Purchase Agreement) with the purchasers named therein (the Purchasers), for the private placement (the Private Placement) of (i) 8,339,169 shares (the Shares) of the Company’s common stock at a price of $ 13.50 per Share, and (ii) with respect to certain Purchasers, pre-funded warrants to purchase an aggregate of 549,755 shares of common stock (the Pre-Funded Warrants) in lieu of shares of common stock, at a purchase price of $ 13.499 per Pre-Funded Warrant (the shares of common stock issuable upon exercise of the Pre-Funded Warrants, the Warrant Shares) for aggregate net proceeds of approximately $ 116.1 million, after deducting offering expenses. Each Pre-Funded Warrant has an exercise price of $ 0.001 per share of common stock, is immediately exercisable on the date of issuance, and will not expire. The Company is using the net proceeds from the Private Placement to fund the research and development of lorundrostat and for working capital and general corporate purposes. The Company registered the resale of the Shares and the Warrant Shares on the Registration Statement. Pursuant to the Purchase Agreement, the Company agreed to use its reasonable best efforts to keep the Registration Statement effective until the earliest of (i) the time as all of the Shares and Warrant Shares purchased by the Purchasers pursuant to the terms of the Purchase Agreement have been sold pursuant to the Registration Statement, or (ii) such time as the Shares and Warrant Shares become eligible for resale by non-affiliates without any volume limitations or other restrictions pursuant to Rule 144 under the Securities Act of 1933, as amended, or any other rule of similar effect. F-16 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements Note 7. Stock-Based Compensation 2023 Incentive Award Plan In February 2023, the Company’s board of directors adopted and stockholders approved the 2023 Incentive Award Plan that became effective upon the closing of the IPO (the 2023 Plan), under which the Company may grant stock options, restricted stock awards (RSAs), dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash-based awards to its employees, consultants, and directors. The number of shares of the Company’s common stock initially available for issuance under awards granted pursuant to the 2023 Plan was the sum of (i) 4,650,000 shares of the Company’s common stock, plus (ii) any shares subject to outstanding awards under the 2020 Plan described and defined below as of the effective date of the 2023 Plan that become available for issuance under the 2023 Plan thereafter in accordance with its terms. The number of shares initially available for issuance will be increased on January 1 of each calendar year beginning in 2024 and ending in and including 2033, by an amount equal to the lesser of (i) 4 % of the shares of the Company’s common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as determined by the Company’s board of directors. No more than 100,000,000 shares of the Company’s common stock may be issued upon the exercise of incentive stock options under the 2023 Plan. Shares issued under the 2023 Plan may be authorized but unissued shares, shares purchased on the open market, or treasury shares. 2025 Employment Inducement Incentive Award Plan On February 10, 2025, the Company’s board of directors adopted and approved the 2025 Employment Inducement Incentive Award Plan (the 2025 Inducement Plan), which became effective on February 10, 2025. In accordance with Rule 5635(c)(4) of the Nasdaq Stock Market listing rules, equity awards under the 2025 Inducement Plan may only be made to an employee if he or she is granted such awards in connection with the commencement of his or her employment with the Company and such grant is a material inducement to his or her entering into employment with the Company. The Company initially reserved 1,000,000 shares of common stock for issuance pursuant to non-qualified stock options and restricted stock units under the 2025 Inducement Plan. 2020 Equity Incentive Plan On July 7, 2020, the board of directors adopted, and the Company’s stockholders approved, the 2020 Equity Incentive Plan. The 2020 Equity Incentive Plan, as amended and restated (the 2020 Plan), provided for the grant of incentive stock options to employees of the Company, and for the grant of non-statutory stock options, RSAs, restricted stock unit awards, and other forms of stock awards to employees, directors, and consultants of the Company. Subsequent to the closing of the IPO, no additional awards will be granted under the 2020 Plan. However, the 2020 Plan will continue to govern the terms and conditions of the outstanding awards granted under it. Shares of the Company’s common stock subject to awards granted under the 2020 Plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased, or forfeited following the effective date of the 2020 Plan will be available for issuance under the 2023 Plan in accordance with its terms. The board of directors or a designated committee of the board of directors is responsible for the administration of the 2023 Plan, the 2025 Inducement Plan, and previously the 2020 Plan, and determines the term, exercise price, and vesting terms of each award. Under the terms of existing awards, all stock option grants expire ten years from the grant date. New option grants could not have an exercise price less than 100% of the fair market value of the Company’s common stock on the grant date and generally vest over a period of four years . The Company issues new shares of common stock upon exercise of stock options or issuance of RSAs. F-17 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements As of December 31, 2025, the Company had the following balances by plan: Options Outstanding Unvested RSAs Shares Available for Grant 2023 Plan 6,120,716 — 1,187,422 2020 Plan 310,783 125,793 — 2025 Inducement Plan 146,000 — 854,000 Total 6,577,499 125,793 2,041,422 Stock Options The following is a summary of the Company’s stock option activity under its 2023 Plan and 2020 Plan: Shares Weighted-Average Exercise Price Total Intrinsic Value (in thousands) Weighted-Average Remaining Contractual Life (Years) Options outstanding as of December 31, 2024 4,560,292 $ 11.76 $ 9,756 8.6 Options granted 3,798,400 $ 15.18 Options exercised ( 1,444,277 ) $ 8.87 Options forfeited or expired ( 336,916 ) $ 11.26 Options outstanding as of December 31, 2025 6,577,499 $ 14.40 $ 146,321 8.6 Options vested and exercisable as of December 31, 2025 1,958,710 $ 12.31 $ 46,979 7.9 As of December 31, 2025, the Company had $ 48.7 million of unrecognized share-based compensation expense related to stock option awards that is expected to be recognized over a weighted-average period of approximately 1.6 years. For the years ended December 31, 2025 and 2024, the total fair value of options vested was $ 19.3 million and $ 8.9 million, respectively. The aggregate intrinsic value of options exercised for the years ended December 31, 2025 and 2024 was $ 32.3 million and $ 4.2 million, respectively. The weighted-average grant date fair value per share for options granted during the years ended December 31, 2025 and 2024 was $ 11.38 and $ 9.55 , respectively. The following table presents the weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of stock options granted during the following periods: Year Ended December 31, 2025 2024 Exercise price $ 15.18 $ 12.83 Expected term (years) 6.01 years 6.04 years Expected stock price volatility 89.1 % 87.0 % Risk-free rate of interest 4.2 % 4.2 % Expected dividend yield — % — % Restricted Stock Awards RSAs granted by the Company have varying vesting terms depending on the terms of the grant. Holders of unvested RSAs have the same rights as those of common stockholders, including voting rights and non-forfeitable dividend rights. However, ownership of unvested RSAs cannot be transferred until vested. Upon F-18 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements a participant’s termination of continuous service for any reason, any shares subject to RSAs held by the participant that have not vested as of such termination date may be forfeited to or repurchased by the Company. The following is a summary of the Company’s RSA activity under its 2023 Plan and 2020 Plan: Shares Weighted-Average Grant Date Fair Value Unvested as of December 31, 2024 370,106 $ 1.7842 Vested ( 244,313 ) $ 1.7512 Unvested as of December 31, 2025 125,793 $ 1.8483 As of December 31, 2025, the Company had $ 0.1 million of unrecognized share-based compensation expense related to RSAs that is expected to be recognized over a weighted-average period of approximately 0.3 years. For the years ended December 31, 2025 and 2024, the total fair value of RSAs vested was $ 0.4 million and $ 1.0 million, respectively. 2023 Employee Stock Purchase Plan In February 2023, the Company’s board of directors and stockholders approved the 2023 Employee Stock Purchase Plan (the ESPP), which became effective in February 2023. The ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to a specified percentage of their eligible compensation withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP. A total of 400,000 shares of the Company’s common stock was initially reserved for issuance under the ESPP. The first ESPP offering period commenced on July 1, 2023, with each new six-month offering period beginning each January 1 and July 1. ESPP purchases of common stock occur at a price equal to 85 % of the lower of (i) the closing price on the first trading day of the offering period or (ii) the closing price on the last trading day of the offering period. As of December 31, 2025, the Company had 1,251,719 shares available for issuance, and 57,839 cumulative shares had been issued under the ESPP. In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2024 and ending in and including 2033, by an amount equal to the lesser of (i) 1 % of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company’s board of directors, provided that no more than 15,000,000 shares of the Company’s common stock may be issued under the ESPP. Total stock-based compensation expense reported in the statements of operations was allocated as follows (in thousands): Year Ended December 31, 2025 2024 Research and development $ 8,636 $ 5,008 General and administrative 10,688 6,328 Total $ 19,324 $ 11,336 F-19 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements Note 8. Income Taxes There was no current or deferred income tax expense or benefit for the years ended December 31, 2025 and 2024, due to the Company’s net loss and increases in its deferred tax asset valuation allowance. The components of the Company’s deferred tax assets are as follows (in thousands): December 31, 2025 2024 Net operating loss carryforwards $ 55,102 $ 15,580 Research and development credit carryforwards 21,169 15,380 Capitalized research and development costs 39,935 44,981 Intangible assets 1,823 1,976 Other 3,219 2,012 Total deferred tax assets 121,248 79,929 Valuation allowance ( 121,248 ) ( 79,929 ) Deferred tax assets, net of valuation allowance $ — $ — The Company has established a valuation allowance against its net deferred tax assets due to the uncertainty surrounding the realization of such assets, which are dependent on future earnings, if any, the timing and amount of which are uncertain. The Company periodically evaluates the recoverability of the deferred tax assets. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. The Company’s valuation allowance increased by approximately $ 41.3 million and $ 48.4 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the Company had federal net operating loss (NOL) carryforwards of $ 244.6 million and $ 69.0 million available to reduce future taxable income, respectively. The federal NOL carryforward has no expiration as a result of the Tax Cuts and Jobs Act of 2017. As of December 31, 2025 and 2024, the Company had $ 59.5 million and $ 17.2 million, respectively, of state NOL carryforwards that begin expiring in 2041. As of December 31, 2025 and 2024, the Company had federal and state research and development tax credit carryforwards of $ 21.6 million and $ 15.6 million, respectively, to reduce future taxable income. The federal research and development tax credit carryforwards begin to expire in 2041. Research and development tax credit carryforwards associated with California carry forward indefinitely. Research and development tax credit carryforwards associated with other states begin expiring in 2039. The Internal Revenue Code (IRC) Sections 382 and 383 limit annual use of NOL and research and development credit carryforwards in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company completed an ownership change analysis pursuant to IRC Section 382 through December 31, 2025 and determined that the Company experienced ownership changes on February 16, 2021, June 1, 2022, and September 4, 2025. Since all of the Company’s federal NOLs have an indefinite carryover period, none of the federal NOLs generated prior to the ownership changes will expire prior to utilization, but will be subject to the annual limitations on future utilization. As a result of the annual limitation, approximately $ 0.2 million of federal research and development credits will expire prior to utilization due to the ownership change occurring on February 16, 2021. The remaining federal research and development credits are available to offset federal tax liability within their respective federal research and development credit carryover periods (20 years), subject to the annual limitations on future utilization. State NOLs and state research and development credits may be similarly limited. The Company’s use of federal and state NOLs and research and development credits could be further limited by ownership changes that occur subsequent to December 31, F-20 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements 2025. If eliminated, the related asset would be removed from the deferred tax asset with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate. The Company’s effective tax rate for the years ended December 31, 2025 and 2024 was 0 %. A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows (after the adoption of ASU 2023-09; amounts in thousands): Year Ended December 31, 2025 Amount Rate Statutory federal tax rate $ ( 32,497 ) 21.00 % State and local income tax, net of federal income tax effect (1) ( 339 ) 2.17 Tax credits Research and development tax credits ( 7,279 ) 5.32 Change in valuation allowance 37,466 ( 26.70 ) Nontaxable or nondeductible items Permanent differences 15 ( 0.01 ) Stock-based compensation ( 4,651 ) 3.01 Executive compensation 4,835 ( 3.12 ) Other Other 557 ( 0.45 ) Changes in unrecognized tax benefits 1,893 ( 1.22 ) Total provision for income taxes $ — — % ________ (1) State tax expense in California comprises the majority (greater than 50 percent) of the tax effect in this category. A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows (prior to the adoption of ASU 2023-09): Year Ended December 31, 2024 Statutory federal income tax rate 21.00 % State income taxes, net of federal tax benefits 1.76 Research and development credits 5.19 Permanent items and other ( 0.70 ) Change in valuation allowance ( 27.25 ) Total provision for income taxes — % The Company files income tax returns in the U.S. Federal jurisdiction and various state and local jurisdictions. As of December 31, 2025, all years remained subject to examination by tax authorities. There were no federal or state income tax payments or refunds paid or received for the tax year ended December 31, 2025. Uncertain tax positions are evaluated based on the facts and circumstances that exist at each reporting period. Subsequent changes in judgment based on new information may lead to changes in recognition, derecognition, and measurement. Adjustment may result, for example, upon resolution of an issue with the taxing authorities or expiration of a statute of limitations barring an assessment for an issue. The Company F-21 Table of Contents Mineralys Therapeutics, Inc. Notes to Financial Statements recognizes a tax benefit from an uncertain tax position when it is more-likely-than-not that it will be sustained upon examination by tax authorities. As of December 31, 2025 and 2024, the Company had $ 6.5 million and $ 4.5 million, respectively, in unrecognized tax benefits, which would not affect the effective tax rate if recognized due to the valuation allowance against deferred tax assets. The Company’s policy is to recognize interest expense and penalties related to income tax matters in income tax expense. As of December 31, 2025 and 2024, the Company had no accrued interest or penalties related to uncertain tax positions. The following table summarizes the changes to the Company’s unrecognized tax benefits for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Beginning balance $ 4,505 $ 1,076 Additions related to current year positions 2,540 2,921 Additions (reductions) related to prior year positions ( 557 ) 508 Ending balance $ 6,488 $ 4,505 On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the U.S. economy and fund a nationwide effort to curtail the effects of COVID-19. The CARES Act provides sweeping tax changes in response to the COVID-19 pandemic. Some of the more significant provisions include the removal of certain limitations on the utilization of net operating losses, an increase in the loss carryback period for certain losses to five years, and an increase in the ability to deduct interest expense. Additionally, the CARES Act amends certain provisions of the previously enacted Tax Cuts and Jobs Act of 2017. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, which enacted significant changes to U.S. tax and related laws, including the immediate expensing of domestic research and development costs, while foreign expenditures will continue to be capitalized and amortized over 15 years. The impact of the tax law changes from the OBBBA is included in the Company’s income tax provision beginning in the year ended December 31, 2025. F-22 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.