What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2025-11-04 · 124 added, 206 removed, 484 unchanged (41% of the section changed)

2 unchanged sentences

(in thousands, except share and per share data)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current assets:

27 unchanged sentences

Preferred stock, $ 0.0001 par value;

100,000,000 shares authorized at September 30, 2025 and December 31, 2024;

no shares issued and outstanding at September 30, 2025 and December 31, 2024

100,000,000 shares authorized at March 31, 2026 and December 31, 2025;

no shares issued and outstanding at March 31, 2026 and December 31, 2025

Common stock, $ 0.0001 par value;

1,000,000,000 shares authorized at September 30, 2025 and December 31, 2024;

143,955,400 and 121,599,488 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

1,000,000,000 shares authorized at March 31, 2026 and December 31, 2025;

144,783,813 and 144,308,383 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital 436,520 433,180

Accumulated other comprehensive income 5 27

Accumulated other comprehensive income (loss) ( 2 ) 12

Accumulated deficit ( 173,886 ) ( 166,179 )

4 unchanged sentences

(in thousands, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

License and milestone revenue $ 12,025 $ 2,021

8 unchanged sentences

Amortization of intangibles 6,028 3,228

Other operating expense (income), net ( 34 ) 146 ( 2,706 ) ( 2,324 )

Other operating income, net ( 46 ) ( 750 )

Total costs and operating expenses 22,256 22,998

2 unchanged sentences

Interest income 487 537

Other income (expense), net ( 8 ) ( 8 ) 20 ( 17 )

Total other income (expense), net 454 683 1,455 2,434

Other income, net 77 1

Total other income, net 564 538

Loss before income taxes ( 7,265 ) ( 18,306 )

Income tax benefit 1,161 2,708 1,148 7,223

Income tax (expense) benefit ( 442 ) 106

Net loss $ ( 7,707 ) $ ( 18,200 )

4 unchanged sentences

(in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net loss $ ( 7,707 ) $ ( 18,200 )

Unrealized net gain (loss) on available-for-sale securities

Unrealized net loss on available-for-sale securities

( 14 ) ( 19 )

4 unchanged sentences

Common Stock Additional

Accumulated other

comprehensive

4 unchanged sentences

Balance at January 1, 2026

144,308,383 $ 14 $ 433,180 $ 12 $ ( 166,179 ) $ 267,027

Net loss — — — — ( 7,707 ) ( 7,707 )

Share-based compensation — — 3,340 — — 3,340

Issuance of common stock under employee stock compensation plans 535,453 — 44 — — 44

Issuance of common stock under stock compensation plans

475,430 — — — — —

Unrealized net loss on available-for-sale securities

ATM facility issuance costs — — ( 71 ) — — ( 71 )

— — — ( 14 ) — ( 14 )

Balance at March 31, 2026

Net loss — — — — ( 15,875 ) ( 15,875 )

Share-based compensation — — 4,111 — — 4,111

Issuance of common stock under employee stock compensation plans 566,353 — 297 — — 297

Unrealized net loss on available-for-sale securities — — — ( 10 ) — ( 10 )

ATM facility issuance costs — — 25 — — 25

Balance at June 30, 2025 122,701,294 $ 12 $ 397,529 $ ( 2 ) $ ( 135,475 ) $ 262,064

Net loss — — — — ( 16,525 ) ( 16,525 )

Share-based compensation — — 3,963 — — 3,963

Unrealized net gain on available-for-sale securities

Issuance of common stock in private placement, net of commissions and issuance costs

144,783,813 $ 14 $ 436,520 $ ( 2 ) $ ( 173,886 ) $ 262,646

Balance at September 30, 2025 143,955,400 $ 14 $ 429,425 $ 5 $ ( 152,000 ) $ 277,444

Balance at January 1, 2025 121,599,488 $ 12 $ 388,979 $ 27 $ ( 101,400 ) $ 287,618

1 unchanged sentence

Share-based compensation — — 4,144 — — 4,144

Issuance of common stock under employee stock compensation plans, net of tax 529,321 — 141 — — 141

Issuance of common stock under stock compensation plans

535,453 — 44 — — 44

Unrealized net loss on available-for-sale securities — — — ( 19 ) — ( 19 )

ATM facility issuance costs — — ( 71 ) — — ( 71 )

Balance at March 31, 2025 122,134,941 $ 12 $ 393,096 $ 8 $ ( 119,600 ) $ 273,516

Net loss — — — — ( 13,631 ) ( 13,631 )

Share-based compensation — — 5,383 — — 5,383

Issuance of common stock under employee stock compensation plans, net of tax 767,537 — 1,044 — — 1,044

Unrealized net loss on available-for-sale securities — — — ( 8 ) — ( 8 )

Balance at June 30, 2024 118,156,326 $ 12 $ 366,153 $ ( 25 ) $ ( 71,959 ) $ 294,181

Net loss — — — — ( 16,373 ) ( 16,373 )

Share-based compensation — — 5,305 — — 5,305

Issuance of common stock under employee stock compensation plans, net of tax 36,243 — 106 — — 106

Issuance of common stock under ATM facility, net of commissions and issuance costs 2,029,978 — 8,435 — — 8,435

Unrealized net gain on available-for-sale securities — — — 74 — 74

Balance at September 30, 2024 120,222,547 $ 12 $ 379,999 $ 49 $ ( 88,332 ) $ 291,728

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities:

1 unchanged sentence

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 14,047 15,977

Depreciation of property and equipment

Amortization of intangible assets

Amortization of operating lease right-of-use assets 580 549

Share-based compensation 3,340 4,144

2 unchanged sentences

Change in estimated fair value of contingent liabilities ( 320 ) ( 834 )

Gain on sale of ion channel asset

Other 153 524

Changes in operating assets and liabilities, net:

10 unchanged sentences

Purchases of property and equipment ( 167 ) ( 209 )

Payment of contingent liabilities

Proceeds from sale of short-term investments — 90

Proceeds from sale of ion channel asset

Net cash provided by investing activities

Financing activities:

Payment of contingent liabilities

Net cash provided by (used in) investing activities

8,436 ( 878 )

Financing activities:

Proceeds from issuance of common stock from stock plans — 44

Taxes paid related to net share settlement of equity awards — ( 960 )

Proceeds from issuance of common stock in private placement, net of commissions

Proceeds from issuance of common stock under ATM facility, net of commissions — 8,480

Payment of transaction costs ( 126 ) ( 525 )

Net cash provided by financing activities

4 unchanged sentences

Deferred revenue recorded in accounts receivable $ 327 $ 736

Supplemental non-cash investing and financing activities:

Transaction costs recorded in accounts payable and other current liabilities

See accompanying notes to unaudited condensed consolidated financial statements.

13 unchanged sentences

GAAP as included in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The financial information for the three and nine months ended September 30, 2025 and 2024, is unaudited but includes all normal and recurring adjustments unless indicated otherwise, which the Company considered necessary for fair presentation of its condensed consolidated statements of operations and comprehensive loss.

The financial information for the three months ended March 31, 2026 and 2025, is unaudited but includes all normal and recurring adjustments unless indicated otherwise, which the Company considered necessary for fair presentation of its condensed consolidated statements of operations and comprehensive loss.

Certain prior period amounts in the condensed consolidated financial statements have been reclassified to conform to the current period presentation.

15 unchanged sentences

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC and have not materially changed during the nine months ended September 30, 2025.

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC and have not materially changed during the three months ended March 31, 2026.

The Company believes that the disclosures provided here are adequate to make the information presented not misleading when these unaudited condensed consolidated financial statements are read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K.

8 unchanged sentences

The following table provides a reconciliation of the components of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheets to the total of the amount presented in the condensed consolidated statements of cash flows:

(in thousands) September 30, 2025 December 31, 2024

(in thousands) March 31, 2026 December 31, 2025

Cash and cash equivalents $ 29,046 $ 25,524

10 unchanged sentences

Effect on the Financial Statements or Other Significant Matters

ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures The amendments in this ASU address investor requests for more transparency about income tax information through improvements to tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The ASU also includes certain other amendments to improve the effectiveness of income tax disclosures.

Effective for the Company for annual periods beginning after December 15, 2024, with early adoption permitted.

The ASU will be effective for the Company in the income tax disclosure included in its 2025 Annual Report on Form 10-K and will be applied on a prospective basis.

The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements.

ASU 2024-03, Income Statement (Topic 220) - Expense Disaggregation Disclosures

The amendments in this ASU require a public business entity to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement.

Effective for the Company for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The amendments in this ASU require a public business entity to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods.

The objective of the disclosure requirements is to provide disaggregated information about a public business entity's expenses to help investors (a) better understand the entity's performance, (b) better assess the entity's prospects for future cash flows, and (c) compare an entity's performance over time and with that of other entities.

Effective in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements and disclosures.

6 unchanged sentences

Financial Instruments Measured on a Recurring Basis

The following tables provide a summary of the assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:

The following tables provide a summary of the assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025:

Fair Value Measurements as of

September 30, 2025

March 31, 2026

(in thousands) Level 1 Level 2 Level 3 Total

1 unchanged sentence

Money market funds $ 22,941 $ — $ — $ 22,941

Government securities

3,487 — — $ 3,487

Total cash equivalents $ 22,941 $ — $ — $ 22,941

2 unchanged sentences

$ 16,049 $ — $ — $ 16,049

Corporate debt securities

— 2,996 — 2,996

Commercial paper — 981 — 981

Total short-term investments $ 16,049 $ 3,977 $ — $ 20,026

9 unchanged sentences

Short-term investments:

Government and agency securities $ 30,429 $ 1,316 $ — $ 31,745

Asset-backed securities — 91 — 91

Government securities

$ 28,501 $ — $ — $ 28,501

Total short-term investments $ 28,501 $ — $ — $ 28,501

7 unchanged sentences

The Company validates the prices provided by the third-party pricing services by reviewing their pricing methods and obtaining market values from other pricing sources.

The Company did not adjust or override any fair value measurements provided by these pricing services as of December 31, 2024.

There were no level 2 available-for-sale securities as of September 30, 2025.

The Company did not adjust or override any fair value measurements provided by these pricing services as of March 31, 2026.

There were no level 2 available-for-sale securities as of December 31, 2025.

The Company has not transferred any investment securities between classification levels.

1 unchanged sentence

Contingent liabilities are measured at fair value each reporting period by using a probability weighted income approach.

A reconciliation of the Level 3 financial instruments as of September 30, 2025 and December 31, 2024 is as follows:

Changes in the fair values of contingent liabilities are recognized in “Other operating income, net” in the condensed consolidated statements of operations and in the operating section of the statements of cash flows.

Payments of contingent liabilities are disclosed in the financing section of the statements of cash flows.

A reconciliation of the Level 3 financial instruments as of March 31, 2026 and December 31, 2025 is as follows:

(in thousands) Icagen

Balance as of January 1, 2025

$ 4,106 $ 400 $ 4,506

Payments of contingent liabilities

( 75 ) ( 400 ) ( 475 )

Fair value adjustments to contingent liabilities 325

Balance as of December 31, 2025

$ 1,484 $ — $ 1,484

Payments of contingent liabilities

( 450 ) — ( 450 )

Fair value adjustments to contingent liabilities ( 320 )

Balance as of September 30, 2025

$ 1,235 $ — $ 1,235

_____________

(1) Changes in the fair values of contingent liabilities in connection with the acquisition of Icagen are recognized in “Other operating expense (income), net” in the condensed consolidated statements of operations and in the operating section of the statements of cash flows.

Payments of contingent liabilities are disclosed in the financing section of the statements of cash flows.

(2) Changes in the fair values of contingent liabilities in connection with the acquisition of Taurus are recognized in “Intangible assets, net” in the condensed consolidated balance sheets.

Payments of contingent liabilities are disclosed in the investing section of the statement of cash flows.

Balance as of March 31, 2026

Contingent liabilities are classified as Level 3 liabilities as their valuation requires substantial judgment and estimation of factors that are not currently observable in the market.

3 unchanged sentences

The Company classified short-term investments as available-for-sale securities, as the sale of such investments may be required prior to maturity to implement management strategies.

The following tables summarize short-term investments as of September 30, 2025 and December 31, 2024:

As of September 30, 2025

The following tables summarize short-term investments as of March 31, 2026 and December 31, 2025:

As of March 31, 2026

(in thousands) Amortized Cost Gains Losses Estimated

1 unchanged sentence

$ 16,050 $ — $ ( 1 ) $ 16,049

Corporate debt securities

2,997 — ( 1 ) 2,996

Commercial paper

Total short-term investments $ 20,028 $ — $ ( 2 ) $ 20,026

1 unchanged sentence

(in thousands) Amortized Cost Gains Losses Estimated

Government and agency securities $ 31,719 $ 30 $ ( 3 ) $ 31,746

Asset-backed securities 90 — — 90

Government securities

$ 28,489 $ 12 $ — $ 28,501

Total short-term investments $ 28,489 $ 12 $ — $ 28,501

The Company classified all investments with maturity dates beyond three months at the date of purchase as short-term investments in the condensed consolidated balance sheets based upon its ability and intent to use the investments to satisfy the liquidity needs of current operations.

The following table summarizes available-for-sale investments by maturity as of September 30, 2025:

The following table summarizes available-for-sale investments by maturity as of March 31, 2026:

(in thousands) Amortized Cost Estimated Fair Value

2 unchanged sentences

Total short-term investments $ 20,028 $ 20,026

The following tables summarize the Company’s available-for-sale investments’ gross unrealized losses and fair value aggregated by investment category and the length of time that individual securities have been in a continuous loss position, as of September 30, 2025 and December 31, 2024:

As of September 30, 2025

The following table summarizes the Company’s available-for-sale investments’ gross unrealized losses and fair value aggregated by investment category and the length of time that individual securities have been in a continuous loss position, as of March 31, 2026.

As of March 31, 2026

Less than 12 months More than 12 months Total

7 unchanged sentences

7 $ 12,849 $ ( 1 ) — $ — $ — 7 $ 12,849 $ ( 1 )

6 $ 9,588 $ ( 1 ) — $ — $ — 6 $ 9,588 $ ( 1 )

As of December 31, 2024

Less than 12 months More than 12 months Total

(in thousands) Count Fair

Value Unrealized

Losses Count Fair

Value Unrealized

Losses Count Fair

Value Unrealized

Government and agency securities 2 $ 2,930 $ ( 3 ) — $ — $ — 2 $ 2,930 $ ( 3 )

Corporate debt securities 4 1,981 ( 1 ) — — — 4 1,981 ( 1 )

11 $ 14,830 $ ( 2 ) — $ — $ — 11 $ 14,830 $ ( 2 )

The Company had certain available-for-sale debt securities in an unrealized loss position without an allowance for credit loss as of September 30, 2025.

The Company had certain available-for-sale debt securities in an unrealized loss position without an allowance for credit loss as of March 31, 2026.

Unrealized losses on these debt securities have not been recognized into income because (1) the issuers have high credit quality, (2) management does not intend to sell and it is likely that management will not be required to sell these securities prior to their anticipated recovery and (3) the decline in fair value is largely due to market conditions and/or changes in interest rates.

2 unchanged sentences

Accounts Receivable, Unbilled Receivables and Deferred Revenue

Unbilled receivables were $ 0.3 million and $ 2.6 million as of September 30, 2025 and December 31, 2024, respectively.

Deferred revenue as of September 30, 2025 is expected to be recognized within the next 12 months.

Deferred revenue was $ 1.6 million and $ 2.5 million as of September 30, 2025 and December 31, 2024, respectively.

During the three and nine months ended September 30, 2025, the amount recognized as revenue that was previously deferred at June 30, 2025 and December 31, 2024 was $ 0.4 million and $ 2.2 million, respectively.

During the three and nine months ended September 30, 2024, the amount recognized as revenue that was previously deferred at June 30, 2024 and December 31, 2023 was $ 1.4 million and $ 6.1 million, respectively.

Unbilled receivables were $ 3.5 million and $ 0.8 million as of March 31, 2026 and December 31, 2025, respectively.

Current deferred revenue was $ 2.9 million and $ 3.2 million as of March 31, 2026 and December 31, 2025, respectively, and long-term deferred revenue was $ 0.4 million and nil as of March 31, 2026 and December 31, 2025, respectively.

During the three months ended March 31, 2026, the amount recognized as revenue that was previously deferred at December 31, 2025 was $ 1.2 million.

During the three months ended March 31, 2025, and the amount recognized as revenue that was previously deferred at December 31, 2024 was $ 1.7 million.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following as of September 30, 2025 and December 31, 2024:

(in thousands) September 30, 2025 December 31, 2024

Prepaid expenses and other current assets consisted of the following as of March 31, 2026 and December 31, 2025:

(in thousands) March 31, 2026 December 31, 2025

Prepaid expenses

5 unchanged sentences

Property and Equipment, Net

Property and equipment, net, consisted of the following as of September 30, 2025 and December 31, 2024:

(in thousands) September 30, 2025 December 31, 2024

Property and equipment, net, consisted of the following as of March 31, 2026 and December 31, 2025:

(in thousands) March 31, 2026 December 31, 2025

Leasehold improvements $ 17,745 $ 17,745

5 unchanged sentences

Total property and equipment, net $ 9,021 $ 9,428

Depreciation expense, which is included in operating expenses, was $ 0.9 million and $ 2.7 million during the three and nine months ended September 30, 2025, respectively, and $ 1.0 million and $ 3.1 million during the three and nine months ended September 30, 2024, respectively.

Depreciation expense, which is included in operating expenses, was $ 0.6 million during the three months ended March 31, 2026, respectively, and $ 1.0 million during the three months ended March 31, 2025, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of September 30, 2025 and December 31, 2024:

(in thousands) September 30, 2025 December 31, 2024

Accrued expenses and other current liabilities consisted of the following as of March 31, 2026 and December 31, 2025:

(in thousands) March 31, 2026 December 31, 2025

Compensation $ 3,219 $ 5,788

4 unchanged sentences

Goodwill and Intangible Assets, Net

Goodwill and intangible assets, net consisted of the following as of September 30, 2025 and December 31, 2024:

(in thousands) September 30, 2025 December 31, 2024

Goodwill and intangible assets, net consisted of the following as of March 31, 2026 and December 31, 2025:

(in thousands) March 31, 2026 December 31, 2025

Goodwill $ 83,979 $ 83,979

6 unchanged sentences

Total goodwill and other identifiable intangible assets, net $ 203,100 $ 209,128

There were no changes in the carrying amount of goodwill during the three and nine months ended September 30, 2025 and 2024.

There were no changes in the carrying amount of goodwill during the three months ended March 31, 2026 and 2025.

Intangible Assets

Amortization of finite-lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of up to 20 years and is reflected within “Amortization of intangibles” in the condensed consolidated statements of operations.

Amortization expense of $ 3.2 million and $ 9.7 million was recognized during the three and nine months ended September 30, 2025 respectively.

Amortization expense of $ 3.4 million and $ 11.3 million was recognized during the three and nine months ended September 30, 2024, respectively.

For each of the three and nine months ended September 30, 2025, there was no impairment of finite-lived intangible assets.

During the nine months ended September 30, 2024, the Company determined that certain of its finite-lived intangible assets related to the acquisition of Ab Initio in July 2019 were fully impaired, and recorded a $ 1.2 million write-off of the net carrying value, which is recorded as “Amortization of intangibles” in the condensed consolidated statements of operations.

Amortization expense of $ 6.0 million and $ 3.2 million was recognized during the three months ended March 31, 2026 and 2025 respectively.

During the three months ended March 31, 2026, the Company identified a triggering event over its customer relationship intangible asset within the legacy small molecule ion channel asset group.

The triggering event resulted from the discontinuation of certain legacy small molecule ion channel programs, which resulted in the Company having no expected future cash flows from the customer relationship.

The Company did not control the timing or outcome of the decision to discontinue the legacy small molecule programs.

As a result of this triggering event, the Company performed an impairment assessment under ASC 360 and recorded an impairment charge of $ 2.9 million during the first quarter of 2026 which fully impaired the customer relationship intangible asset.

The impairment charge was recorded as “Amortization of intangibles” in the condensed consolidated statements of operations.

For the three months ended March 31, 2025, there was no impairment of finite-lived intangible assets.

The remaining weighted-average useful life of finite-lived intangible assets is 10.0 years.

At September 30, 2025, future amortization expense on intangible assets is estimated to be as follows (in thousands):

Remaining three months ended December 31, 2025

At March 31, 2026, future amortization expense on intangible assets is estimated to be as follows (in thousands):

Remaining nine months ending December 31, 2026

Thereafter 61,309

Total future amortization expense $ 119,121

Gain on Sale of Ion Channel Asset

On May 7, 2025, the Company entered into an Asset Purchase and Assignment Agreement (the “Asset Purchase Agreement”) with Angelini Pharma S.p.A.

(“Angelini”).

Under the Asset Purchase Agreement, the Company sold, transferred, assigned and conveyed to Angelini, and Angelini purchased, acquired and accepted from the Company, all of the Company’s rights, title and interest in and to the transferred assets, which include among other things the intellectual property and related know-how (collectively, the “Purchased Assets”) generated in connection with the license agreement, dated December 4, 2018, as amended on June 30, 2021, October 21, 2022, and December 22, 2023, by and between F.

Hoffmann-La Roche Ltd (“Roche”) and the Company’s subsidiary Icagen, which allowed the Company to receive potential development and commercial milestones and royalties on net sales of any approved products.

The sale qualified as a sale of a non-financial asset and the carrying value of the Purchased Assets as of May 7, 2025 was zero.

Cash proceeds from the sale of $ 3.0 million were recorded to other operating income, net during the nine months ended September 30, 2025, and included as a part of income from operations in accordance with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets.

Commitments and Contingencies

3 unchanged sentences

The below tables provide supplemental cash flow and other information related to operating leases (in thousands, except for lease term and discount rate):

Nine Months Ended September 30,

Three Months Ended March 31,

Cash paid for amounts included in the measurement of lease liabilities:

$ 2,820 $ 2,563

Right-of-use assets obtained in exchange for lease obligations:

As of September 30,

As of March 31,

Weighted average remaining lease term (in years) 5.7 6.6

2 unchanged sentences

These variable lease costs include amounts relating to common area maintenance and are expensed when the obligation for those payments is incurred and are recognized as operating expenses in the condensed consolidated statements of operations.

The following table summarizes the components of operating lease expense for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, Nine Months Ended September 30,

The following table summarizes the components of operating lease expense for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

(in thousands) 2026 2025

2 unchanged sentences

Total lease costs 1,111 1,049

Future minimum lease commitments are as follows as of September 30, 2025 (in thousands):

Future minimum lease commitments are as follows as of March 31, 2026 (in thousands):

Operating Leases

Remaining three months ended December 31, 2025

Remaining nine months ending December 31, 2026

Thereafter 4,756

11 unchanged sentences

The total amount of authorized capital stock consists of 1,000,000,000 shares of common stock and 100,000,000 shares of preferred stock.

As of September 30, 2025, no shares of preferred stock were issued or outstanding.

As of March 31, 2026, no shares of preferred stock were issued or outstanding.

Holders of the Company’s common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders, including the election of directors, and do not have cumulative voting rights.

Subject to preferences that may be applicable to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared by the board of directors out of legally available funds.

Subject to preferences that may be

applicable to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared by the board of directors out of legally available funds.

In the event of the Company’s liquidation, dissolution or winding up, the holders of common stock will be entitled to share ratably in the assets legally available for distribution to stockholders after the payment of or provision for all of the Company's debts and other liabilities, subject to the prior rights of any preferred stock then outstanding.

12 unchanged sentences

Prior to vesting, holders of Earnout Shares are entitled to exercise the voting rights carried by such shares and receive any dividends or other distributions in respect of such shares.

As of September 30, 2025, 14,999,243 Earnout Shares were issued and outstanding.

As of March 31, 2026, 14,999,243 Earnout Shares were issued and outstanding.

Pursuant to the Sponsor Insider Letter Agreement executed concurrently with the Merger Agreement, by and among APAC, Avista Acquisition LP II (the “Sponsor”), Legacy OmniAb and certain insiders of APAC, 1,293,299 shares of OmniAb common stock held by the Sponsor became subject to the same price-based vesting conditions as the Earnout Shares (the “Sponsor Earnout Shares”).

The Sponsor Earnout Shares are accounted for as equity-classified equity instruments and recorded in additional paid-in capital as part of the Business Combination.

As of September 30, 2025, 1,293,299 Sponsor Earnout Shares were issued and outstanding.

As of March 31, 2026, 1,293,299 Sponsor Earnout Shares were issued and outstanding.

The Earnout Shares and Sponsor Earnout Shares will be automatically forfeited for no consideration if an applicable triggering event has not occurred from the Closing Date to and including the fifth anniversary of the Closing Date.

23 unchanged sentences

Under the 2022 Plan, the Company may grant cash and equity incentive awards to eligible employees, directors and consultants.

As of September 30, 2025, the aggregate number of shares of our common stock that may be issued under the 2022 Plan is 36,444,156 shares.

As of March 31, 2026, the aggregate number of shares of our common stock that may be issued under the 2022 Plan is 44,350,069 shares.

In addition, the number of shares of our common stock available for issuance under the 2022 Plan will be annually increased on January 1 of each calendar year beginning in 2023 and ending in 2032 by an amount equal to the lesser of (i) a number equal to 5 % of the fully-diluted shares on the final day of the immediately preceding calendar year or (ii) such smaller number of shares as is determined by the Company's board of directors.

4 unchanged sentences

2022 OmniAb Service Provider Assumed Award Plan (collectively, the “OmniAb Prior Plans”), which govern the OmniAb equity awards issued upon adjustment of outstanding Ligand equity awards in connection with Ligand’s distribution of Legacy OmniAb common stock to Ligand stockholders.

All awards under the OmniAb Prior Plans that were outstanding as of the closing of the Business Combination continued to be governed by the terms, conditions and procedures set forth in the OmniAb Prior Plans and any applicable award agreements, as those terms may be equitably adjusted in connection with the Business Combination.

equitably adjusted in connection with the Business Combination.

The Company assumed the OmniAb Prior Plans in connection with the closing of the Business Combination, and each of the awards thereunder.

5 unchanged sentences

The Company is not obligated to sell, and the Sales Agent is not obligated to buy or sell, any shares of common stock under the Sales Agreement.

During the year ended December 31, 2024, 2,771,192 shares of common stock in the ATM offering were issued for net proceeds of $ 11.4 million, after deducting commissions.

No shares of common stock in the ATM offering were issued during the nine months ended September 30, 2025.

No shares of common stock in the ATM offering were issued during the three months ended March 31, 2026.

PIPE Offering

6 unchanged sentences

The Company recognized share-based compensation expense by function as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2026 2025

3 unchanged sentences

The Company recognized share-based compensation expense by award type as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2026 2025

2 unchanged sentences

Employee share purchase plan 141 178

Performance restricted stock units — 154 — 460

Total share-based compensation expense $ 3,340 $ 4,144

6 unchanged sentences

Due to the Company’s limited trading history for its common stock, the Company lacks sufficient historical data to support its expected stock price volatility.

As such, the Company utilized a weighted approach by blending its own limited historical data with the volatilities of publicly traded biotechnology peers.

As such, the Company utilized a weighted approach by

blending its own limited historical data with the volatilities of publicly traded biotechnology peers.

The Company will continue to apply this approach until it has enough historical data to solely support its expected volatility.

8 unchanged sentences

The fair value of each option issued was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2025 2024

Three Months Ended March 31,

Risk-free interest rate 3.8 % 4.4 %

2 unchanged sentences

Dividend yield — % — %

_____________

(1) There were no options granted during the three months ended September 30, 2025.

The following table summarizes stock option activity under the Company’s equity award plans:

7 unchanged sentences

Cancelled/Expired ( 842,730 ) $ 6.47

Outstanding at September 30, 2025

Outstanding at March 31, 2026

23,149,144 $ 4.63 7.8 $ 18

Exercisable at September 30, 2025

Exercisable at March 31, 2026

11,344,475 $ 6.53 6.6 $ 3

_____________

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for in the money options as of September 30, 2025.

As of September 30, 2025, unrecognized share-based compensation expense related to OmniAb options was $ 17.7 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.19 years.

As of September 30, 2025, unrecognized share-based compensation expense related to Ligand options was negligible.

The aggregate intrinsic value of OmniAb options exercised by OmniAb service providers during the nine months ended September 30, 2025 was negligible.

Cash received from OmniAb options exercised by OmniAb service providers during the nine months ended September 30, 2025 was negligible.

There were no OmniAb options exercised by Ligand employees during the nine months ended September 30, 2025.

As of March 31, 2026, unrecognized share-based compensation expense related to OmniAb options was $ 17.5 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.38 years.

There were no OmniAb options exercised by OmniAb service providers during the three months ended March 31, 2026.

There were no OmniAb options exercised by Ligand service providers during the three months ended March 31, 2026.

Restricted Stock Units

2 unchanged sentences

The fair value of RSUs is determined by the closing market price on the grant date.

The following table summarizes RSU activity during the nine months ended September 30, 2025 under the Company’s equity awards plans:

The following table summarizes RSU activity during the three months ended March 31, 2026 under the Company’s equity awards plans:

Shares Weighted-Average Grant Date Fair Value

4 unchanged sentences

Forfeited — $ —

Unvested balance at September 30, 2025

1,930,320 $ 3.89

As of September 30, 2025, unrecognized stock-based compensation expense related to OmniAb RSUs was $ 5.0 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.31 years.

The aggregate intrinsic value of OmniAb RSUs vested for OmniAb service providers during the nine months ended September 30, 2025 was $ 2.0 million.

Performance Restricted Stock Units

Performance restricted stock units (“PRSUs”) generally represent the right to receive a certain number of shares of common stock based on the achievement of certain corporate performance or market goals and continued employment during the vesting period.

The Company’s PRSUs contain a market condition dependent upon the Company’s relative and absolute total stockholder return over a three-year period, with a payout range of 0 % to 200 % of the target shares granted.

Share-based compensation expense for these PRSUs is measured using the Monte-Carlo valuation model and is not adjusted for the achievement, or lack thereof, of the market conditions.

During the nine months ended September 30, 2025, the PRSUs were achieved at a 158 % achievement level.

The following table summarizes the PRSU activity during the nine months ended September 30, 2025, under the Company’s equity awards plans:

Shares Weighted-Average Grant Date Fair Value

Unvested balance at January 1, 2025

Unvested balance at March 31, 2026

2,186,277 $ 2.75

Granted — $ —

Vested ( 149,882 ) $ 16.11

Change in units based on performance achievement 55,133 $ 16.11

Forfeited — $ —

Unvested balance at September 30, 2025

As of September 30, 2025, there is no unrecognized share-based compensation expense related to the PRSUs.

As of March 31, 2026, unrecognized share-based compensation expense related to OmniAb RSUs was $ 4.8 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.47 years.

The aggregate intrinsic value of OmniAb RSUs vested for OmniAb service providers during the three months ended March 31, 2026 was $ 0.8 million.

Employee Stock Purchase Plan

2 unchanged sentences

The purchase price for shares of common stock purchased under the ESPP is equal to 85 % of the lesser of the fair market value of the Company’s common stock on (i) the first trading day of the applicable offering period or (ii) the last trading day of each six month purchase period in the applicable offering period.

As of September 30, 2025, the aggregate number of shares of the Company’s common stock that may be issued pursuant to rights granted under the ESPP equals 3,768,385 shares of the Company’s common stock.

As of March 31, 2026, the aggregate number of shares of the Company’s common stock that may be issued pursuant to rights granted under the ESPP equals 5,087,532 shares of the Company’s common stock.

In addition, on the first day of each calendar year beginning on January 1, 2023 and ending on (and including) January 1, 2032, the number of shares available for issuance under the ESPP will be increased by a number of shares equal to the lesser of (i) 1 % of the fully diluted shares 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.

As of September 30, 2025, there was $ 0.6 million of unrecognized share-based compensation expense associated with the ESPP, which is expected to be recognized over a remaining weighted-average period of 1.13 years.

During the nine months ended September 30, 2025, there were 274,625 shares issued pursuant to the ESPP.

As of March 31, 2026, there was $ 0.3 million of unrecognized share-based compensation expense associated with the ESPP, which is expected to be recognized over a remaining weighted-average period of 0.86 years.

During the three months ended March 31, 2026, there were no shares issued pursuant to the ESPP.

The Company’s effective tax rate may vary from the U.S.

federal statutory tax rate due to the valuation allowance placed on deferred tax assets, change in the mix of earnings in various state jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses, stock award activities and other permanent differences between income before income taxes and taxable income.

The Company’s effective tax rate for the three and nine months ended September 30, 2025 was 6.6 % and 2.2 %, respectively.

The variance from the U.S.

federal statutory tax rate of 21.0% for each of the three and nine months ended September 30, 2025 was primarily due to the valuation allowance established on federal and state attributes and the tax impact of stock award activities that was partially offset with the benefit related to research and development tax credits.

The Company’s effective tax rate for each of the three and nine months ended September 30, 2024 was 14.2 % and 12.9 %, respectively.

The Company’s effective tax rate for the three months ended March 31, 2026 and 2025 was ( 6.1 )% and 0.6 %, respectively.

The variance from the U.S.

federal statutory tax rate of 21.0% for each of the three and nine months ended September 30, 2024 was primarily due to the valuation allowance established on federal and state attributes and the tax impact of stock award activities that was partially offset with the benefit related to research and development tax credits.

The Company considered the realizability of the deferred tax assets and recorded a valuation allowance as necessary for the amount of deferred tax assets which are not more likely than not to be realized as of September 30, 2025.

federal statutory tax rate of 21.0% for each of the three months ended March 31, 2026 and 2025 was primarily due to the valuation allowance established on federal and state attributes and the tax impact of stock award activities that was partially offset with the benefit related to research and development tax credits.

Net Loss Per Share

4 unchanged sentences

The Earnout Shares are excluded from the calculation of basic and diluted weighted-average number of common shares outstanding until vested.

The following table outlines the basic and diluted net loss per share for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, Nine Months Ended September 30,

The following table outlines the basic and diluted net loss per share for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

(in thousands, except per share data) 2026 2025

3 unchanged sentences

The following table outlines common share equivalents which were excluded from the computation of diluted net loss per share, as the effect of their inclusion would be anti-dilutive or the share equivalents were contingently issuable as of each period presented:

September 30,

Options to purchase common stock issued and outstanding (1)

19 unchanged sentences

These expenses consist of (1) personnel related expenses, including salaries, benefits and share-based compensation, (2) external expenses, including third-party costs for goods and services such as lab supplies and contract research, and (3) facility and other overhead expenses, including depreciation and occupancy costs.

The following table outlines information about segment revenues, significant segment expenses, and segment net loss for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30, Nine Months Ended September 30,

The following table outlines information about segment revenues, significant segment expenses, and segment net loss for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

(in thousands) 2026 2025

3 unchanged sentences

Personnel related expenses

5,552 6,756 17,918 $ 21,470

External expenses

2,733 4,205 9,705 13,492

Facility and other overhead expenses

2,094 2,357 6,222 6,842

Total research and development expenses

10,379 13,318 33,845 41,804

General and administrative expenses

3 unchanged sentences

Total general and administrative expenses

6,777 7,079 22,376 23,381

Amortization of intangibles

3,228 3,393 9,684 11,348

Other operating expense (income), net ( 34 ) 146 ( 2,706 ) ( 2,324 )

Other operating income, net ( 46 ) ( 750 )

Total costs and operating expenses 22,256 22,998

Total other income, net

454 683 1,455 2,434

Income tax benefit

1,161 2,708 1,148 7,223

Income tax (expense) benefit

$ ( 7,707 ) $ ( 18,200 )

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements