What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-10 compared with 2026-05-13 · 457 added, 355 removed, 449 unchanged (64% of the section changed)

24 unchanged sentences

Series B non-voting convertible preferred stock, $ 0.001 par value;

251,504 shares authorized as of March 31, 2026 and December 31, 2025;

137,138 shares issued and outstanding as of March 31, 2026 and December 31, 2025

251,504 shares authorized as of June 30, 2026 and December 31, 2025;

137,138 shares issued and outstanding as of June 30, 2026 and December 31, 2025

Common stock, $ 0.001 par value;

545,000,000 shares authorized as of March 31, 2026 and December 31, 2025;

50,167,623 and 48,722,309 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

545,000,000 shares authorized as of June 30, 2026 and December 31, 2025;

61,069,887 and 48,722,309 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

8 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended

Six Months Ended

Operating expenses:

11 unchanged sentences

Weighted-average shares used in computing net loss per share attributable to Series B non-voting convertible preferred stockholders, basic and diluted

(1) Includes related party amounts of $ 3,000 and $ 2,122 for the

three months ended March 31, 2026 and 2025, respectively

(2) Includes related party amounts of $ 4 and $ 110 for the three

months ended March 31, 2026 and 2025, respectively

(1) Includes related party amounts of nil and $ 4,281 for the three months ended June 30, 2026 and June 30, 2025, respectively, and $ 3,000 and $ 6,403 for the six months ended June 30, 2026 and June 30, 2025, respectively .

(2) Includes related party amounts of nil and $ 12 for the three months ended June 30, 2026 and June 30, 2025, respectively, and $ 4 and $ 122 for the six months ended June 30, 2026 and June 30, 2025, respectively .

The accompanying notes are an integral part of

3 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Other comprehensive income (loss):

4 unchanged sentences

ORUKA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE

PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(In thousands, except share data)

Preferred Stock

Comprehensive

Other Comprehensive Income

Stockholders’

Balances as of December 31, 2025

as of December 31, 2025

$ ( 189,157 )

Issuance of common stock upon exercise of stock options and employee warrants

Issuance of common stock under the at-the-market (“ATM”) offering program, net of commissions

Issuance of common stock upon vesting of restricted stock units

Issuance of common stock upon exercise of prefunded warrants

Stock-based compensation expense

Unrealized gains (losses) on marketable securities

Balances as of March 31, 2026

of common stock upon exercise of stock options and employee warrants

of common stock under the at-the-market (“ATM”) offering program, net of commissions

of common stock upon vesting of restricted stock units

of common stock upon exercise of pre-funded warrants

compensation expense

gains (losses) on marketable securities

as of March 31, 2026

$ ( 220,977 )

of common stock under employee stock purchase plan

of common stock upon exercise of stock options and employee warrants

of common stock under the April 2026 Offering, net of offering costs

of common stock upon vesting of restricted stock units

of common stock upon exercise of pre-funded warrants

of unvested restricted stock awards

compensation expense

gains (losses) on marketable securities

as of June 30, 2026

$ ( 262,183 )

Preferred Stock

1 unchanged sentence

Stockholders’

Balances as of December 31, 2024

Stock-based compensation expense

as of December 31, 2024

compensation expense

Unrealized gains (losses) on marketable securities

Balances as of March 31, 2025

as of March 31, 2025

$ ( 104,723 )

of common stock under employee stock purchase plan

compensation expense

Unrealized gains (losses) on marketable securities

as of June 30, 2025

$ ( 129,297 )

The accompanying notes are an integral part of

23 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of common stock upon exercise of stock options and employee warrants

Proceeds from April 2026 Offering, net of offering costs

Proceeds from at-the-market offering, net of commissions

Proceeds from issuance of common stock upon exercise of stock options and employee warrants

Proceeds from issuance of common stock under employee stock purchase plan

Net cash provided by financing activities

2 unchanged sentences

Cash and cash equivalents at end of period

Supplemental disclosures of non-cash financing activities:

Amounts receivable related to exercise of stock options and employee warrants

Supplemental disclosures of non-cash activities:

Operating lease liability arising from obtaining operating right-of-use asset

The accompanying notes are an integral part of

23 unchanged sentences

pursuant to such rules and regulations.

Accordingly, these condensed consolidated financial statements should be read in conjunction with

the audited financial statements and the related notes thereto, included in the Company’s Annual Report on Form 10-K for the year

ended December 31, 2025 filed with the SEC on March 12, 2026 (the “Annual Report”).

Accordingly, these condensed consolidated financial statements should be read in conjunction

with the audited financial statements and the related notes thereto, included in the Company’s Annual Report on Form 10-K for the

year ended December 31, 2025 filed with the SEC on March 12, 2026 (the “Annual Report”).

The information as of December 31,

2025, included in the condensed consolidated balance sheets was derived from the Company’s audited financial statements.

These unaudited

interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial

statements, and in the opinion of the Company’s management, reflect all adjustments, which include only normal recurring adjustments

necessary for a fair statement of the Company’s condensed consolidated financial statements.

unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated

financial statements, and in the opinion of the Company’s management, reflect all adjustments, which include only normal recurring

adjustments necessary for a fair statement of the Company’s condensed consolidated financial statements.

The results for the three

months ended March 31, 2026 are not necessarily indicative of results that may be expected for the year ending December 31, 2026 or for

any other interim period or for any other future year.

As of March 31, 2026, the Company had cash, cash equivalents, and marketable

securities of $ 496.0 million and an accumulated deficit of $ 221.0 million.

The Company’s management expects that the existing cash,

cash equivalents, and marketable securities will be sufficient to fund the Company’s operating plans for at least twelve months

from the date these condensed consolidated financial statements were issued.

Since its inception, the Company has devoted substantially

all of its resources to advancing the development of its portfolio of programs, organizing and staffing the Company, business planning,

raising capital, and providing general and administrative support for these operations.

Current and future programs will require significant

research and development efforts, including preclinical and clinical trials, and regulatory approvals to commercialization.

time as the Company can generate significant revenue from product sales, if ever, the Company expects to finance its operating activities

through a combination of equity offerings and debt financings.

and six months ended June 30, 2026 are not necessarily indicative of results that may be expected for the year ending December 31, 2026

or for any other interim period or for any other future year.

As of June 30, 2026, the

Company had cash, cash equivalents, and marketable securities of $ 1.1 billion and an accumulated deficit of $ 262.2 million.

The Company’s

management expects that the existing cash, cash equivalents, and marketable securities will be sufficient to fund the Company’s

operating plans for at least twelve months from the date these condensed consolidated financial statements were issued.

Since its inception,

the Company has devoted substantially all of its resources to advancing the development of its portfolio of programs, organizing and staffing

the Company, business planning, raising capital, and providing general and administrative support for these operations.

Current and future

programs will require significant research and development efforts, including preclinical and clinical trials, and regulatory approvals

to commercialization.

Until such time as the Company can generate significant revenue from product sales, if ever, the Company expects

to finance its operating activities through a combination of equity offerings and debt financings.

The Company expects that

19 unchanged sentences

GAAP requires management to make estimates, assumptions, and

judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed

consolidated financial statements and the reported amounts of income and expenses during the reporting periods.

Significant estimates

and assumptions reflected within these condensed consolidated financial statements include but are not limited to research and development

expenses and related prepaid or accrued costs and the valuation of stock-based compensation awards and related expenses.

The Company bases

its estimates on known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the

condensed consolidated financial statements and the reported amounts of income and expenses during the reporting periods.

estimates and assumptions reflected within these condensed consolidated financial statements include but are not limited to research

and development expenses and related prepaid or accrued costs and the valuation of stock-based compensation awards and related expenses.

The Company bases its estimates on known trends and other market-specific or other relevant factors that it believes to be reasonable

under the circumstances.

On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts, and experience.

Actual results

could differ materially from those estimates or assumptions.

Actual results could differ materially from those estimates or assumptions.

Recently Adopted Accounting Pronouncements

There have been no recent accounting pronouncements

or changes in accounting pronouncements adopted during the three months ended March 31, 2026 that are of significance or potential significance

or changes in accounting pronouncements adopted during the six months ended June 30, 2026 that are of significance or potential significance

to the Company.

Recently Issued Accounting Pronouncements

In November 2024, the FASB

issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

In November 2024, the Financial Accounting Standards Board (FASB) issued

Accounting Standards Update (ASU) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

(Subtopic 220-40):

Disaggregation of Income Statement Expenses .

This ASU requires more detailed disclosures, on an annual and interim basis, about specified

categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented

on the face of the income statement.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within

fiscal years beginning after December 15, 2027.

This ASU requires more detailed disclosures, on an annual and interim

basis, about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense

captions presented on the face of the income statement.

This ASU is effective for fiscal years beginning after December 15, 2026, and

interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

This ASU may be applied either prospectively or retrospectively.

The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statements.

On October 3, 2025, the Company entered into a Sales Agreement with

TD Securities (USA) LLC (the “Sales Agreement”), as its sales agent, pursuant to which the Company may issue and sell, from

time to time, shares of common stock for aggregate gross proceeds of up to $ 200.0 million under an at-the-market (“ATM”) equity

offering program.

The Company is not obligated to make any sales of shares under the Sales Agreement.

During the three months ended March

31, 2026, the Company issued and sold an aggregate of 1,167,895 shares of common stock pursuant to the ATM offering program for total

net proceeds of $ 38.9 million after deducting sales agents’ commissions.

This ASU may be applied either prospectively

or retrospectively.

The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging

(Topic 815) and Revenue from Contracts with Customers (Topic 606):

Derivatives Scope Refinements and Scope Clarification for Share-Based

Noncash Consideration from a Customer in a Revenue Contract .

The ASU refines the scope of the guidance in Topic 815 by expanding the

scope exception for certain non-exchange-traded contracts with underlyings based on the operations or activities of one of the parties

to the contract and clarifies the accounting for share-based noncash consideration received from a customer under Topic 606.

effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting

Early adoption is permitted.

The amendments may be applied either prospectively or on a modified retrospective basis.

is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statements.

Fair Value Measurements

The following tables present

the Company’s fair value hierarchy for financial assets measured as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026

the Company’s fair value hierarchy for financial assets measured as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026

Cash equivalents

Money market funds

treasury securities

government agency securities

Commercial papers

13 unchanged sentences

Total cash equivalents and marketable securities

There were no transfers in

or out of Level 3 during the three months ended March 31, 2026.

There were no transfers

in or out of Level 3 during the three and six months ended June 30, 2026.

December 31, 2025

16 unchanged sentences

Total cash equivalents and marketable securities

The Level 2 assets include U.S.

treasury securities, U.S.

government agency securities, commercial paper and corporate debt securities,

and are measured based on quoted prices in active markets for similar assets, quoted prices in markets that are not active for identical

or similar assets, or other inputs that are observable or can be corroborated by observable market data.

Cash Equivalents and Marketable Securities

The following tables summarize

the cash equivalents and marketable securities, which are classified as available-for-sale as of March 31, 2026 and December 31, 2025

the cash equivalents and marketable securities, which are classified as available-for-sale as of June 30, 2026 and December 31, 2025

(in thousands):

March 31, 2026

June 30, 2026

Cash equivalents

Money market funds

treasury securities

government agency securities

Commercial papers

33 unchanged sentences

the available-for-sale securities in an unrealized loss position, aggregated by major security type and length of time in a continuous

unrealized loss position, for which an allowance for credit losses was not recorded as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026

unrealized loss position, for which an allowance for credit losses was not recorded as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026

Less than 12 months

30 unchanged sentences

Given the Company’s intent and ability to hold such securities until recovery, and the lack of significant change in credit risk

of these investments, the Company does not consider these marketable securities to be impaired as of March 31, 2026 and December 31, 2025.

As of March 31, 2026 and December 31, 2025, the Company did not record an allowance for credit losses.

of these investments, the Company does not consider these marketable securities to be impaired as of June 30, 2026 and December 31, 2025.

As of June 30, 2026 and December 31, 2025, the Company did not record an allowance for credit losses.

The following table summarizes

9 unchanged sentences

Preferred Stock and Stockholders’ Equity

In August 2024, certain investors in the Company were issued pre-funded

warrants which were exercisable for shares of the Company’s common stock at an exercise price of $ 0.01 per share.

During the three

months ended March 31, 2026, the Company issued 57,212 shares of common stock on net exercises of 57,228 pre-funded warrants out of the

pre-funded warrants previously issued in August 2024.

No pre-funded warrants were exercised during the three months ended March 31, 2025.

As of March 31, 2026 and December 31, 2025, 5,439,955 and 5,497,183 pre-funded warrants, respectively, remain issued and outstanding from

the August 2024 issuance.

In September 2024, certain investors in the Company were issued pre-funded

warrants which were exercisable for shares of the Company’s common stock at an exercise price of $ 0.001 per share.

During the three

months ended March 31, 2026 and 2025, no pre-funded warrants were exercised out of the pre-funded warrants previously issued in September

As of each of March 31, 2026 and December 31, 2025, 380,000 pre-funded warrants remain issued and outstanding from the September

In August 2024, certain investors

in the Company were issued pre-funded warrants which were exercisable for shares of the Company’s common stock at an exercise price

of $ 0.01 per share.

During the three and six months ended June 30, 2026, the Company issued 142,269 and 199,481 shares of common stock,

respectively, on net exercises of 142,291 and 199,519 pre-funded warrants, respectively.

No pre-funded warrants were exercised during

the three or six months ended June 30, 2025.

As of June 30, 2026 and December 31, 2025, 5,297,664 and 5,497,183 pre-funded warrants, respectively,

remain issued and outstanding from the August 2024 issuance.

In September 2024, certain

investors in the Company were issued pre-funded warrants which were exercisable for shares of the Company’s common stock at an exercise

price of $ 0.001 per share.

During the three and six months ended June 30, 2026, 379,993 shares of common stock were issued on net exercises

of 380,000 pre-funded warrants.

There were no pre-funded warrants exercised in the three or six months ended June 30, 2025.

30, 2026 and December 31, 2025, there were nil and 380,000 pre-funded warrants that remained issued and outstanding from the September

2024 issuance.

2 unchanged sentences

During the three

months ended March 31, 2026, no pre-funded warrants were exercised out of the pre-funded warrants previously issued in September 2025.

As of each of March 31, 2026 and December 31, 2025, 1,066,666 pre-funded warrants remain issued and outstanding from the September 2025

On issuance, the pre-funded

warrants were recorded as a component of stockholders’ equity within additional paid-in-capital and have no expiration date.

Collectively,

6,886,621 and 6,943,849 pre-funded warrants were outstanding as of March 31, 2026 and December 31, 2025, respectively.

and six months ended June 30, 2026, the Company issued 658,131 shares of common stock on net exercises of 658,142 pre-funded warrants.

As of June 30, 2026 and December 31, 2025, 408,524 and 1,066,666 pre-funded warrants, respectively, remain issued and outstanding from

the September 2025 issuance.

On issuance, the pre-funded warrants were recorded as a component of stockholders’

equity within additional paid-in-capital and have no expiration date.

Collectively, 5,706,188 and 6,943,849 pre-funded warrants were outstanding

as of June 30, 2026 and December 31, 2025, respectively.

Employee Warrants

During 2024, employee warrants

were issued at an exercise price of $ 7.80 per warrant to the employees and directors of the Company.

These warrants vest over a period

of four years .

The Company recognizes compensation cost related to warrants on a straight-line basis over the requisite service period,

which is the period in which the related services are received.

As of March 31, 2026 and December 31, 2025, 2,767,511 and 3,029,510 warrants,

respectively, were outstanding.

During 2024, employee warrants were issued at an exercise price of $ 7.80

per warrant to the employees and directors of the Company.

These warrants vest over a period of four years .

The Company recognizes compensation

cost related to warrants on a straight-line basis over the requisite service period, which is the period in which the related services

are received.

As of June 30, 2026 and December 31, 2025, 2,619,353 and 3,029,510 warrants, respectively, were outstanding.

Convertible Preferred Stock

As of March 31, 2026, Series B preferred stock

As of June 30, 2026, Series B preferred stock

consisted of the following (in thousands, except share data):

March 31, 2026

June 30, 2026

Stock Issuable

Series B preferred stock

Pursuant to the Certificate of Designation of Preferences, Rights and

Limitations of the Series B Non-Voting Convertible Preferred Stock (the “Series B Certificate of Designation”), holders of

Series B preferred stock are entitled to receive dividends on shares of Series B preferred stock equal to, on an as-if-converted-to common

stock basis, and in the same form as, dividends actually paid on shares of common stock.

Except as provided in the Series B Certificate

of Designation or as otherwise required by law, Series B preferred stock does not have voting rights.

Series B preferred stock shall rank

on parity with the Company’s common stock as to the distribution of assets upon any liquidation, dissolution, or winding-up of the

Each share of Series B preferred stock is convertible at the option of the holder, at any time, and without the payment of additional

consideration by the holder.

As of March 31, 2026, each outstanding share of Series B preferred stock was convertible into common stock

at a ratio of approximately 83.3332:1 .

Pursuant to the Certificate

of Designation of Preferences, Rights and Limitations of the Series B Non-Voting Convertible Preferred Stock (the “Series B Certificate

of Designation”), holders of Series B preferred stock are entitled to receive dividends on shares of Series B preferred stock equal

to, on an as-if-converted-to common stock basis, and in the same form as, dividends actually paid on shares of common stock.

provided in the Series B Certificate of Designation or as otherwise required by law, Series B preferred stock does not have voting rights.

Series B preferred stock shall rank on parity with the Company’s common stock as to the distribution of assets upon any liquidation,

dissolution, or winding-up of the Company.

Each share of Series B preferred stock is convertible at the option of the holder, at any

time, and without the payment of additional consideration by the holder.

As of June 30, 2026, each outstanding share of Series B preferred

stock was convertible into common stock at a ratio of approximately 83.3332:1 .

Paruka Warrant

On December 31, 2024, the Company settled its 2024 obligations under

the Paruka Warrant Obligation (defined below) by issuing Paruka Holding LLC (“Paruka”) a warrant to purchase 596,930 shares

of the Company’s common stock at an exercise price of $ 19.39 per share.

On December 12, 2025, the Company settled its 2025 obligations

under the Paruka Warrant Obligation (defined below) by issuing Paruka a warrant to purchase 375,000 shares of the Company’s common

stock at an exercise price of $ 30.18 per share.

The warrants have a term of 10 years, are fully vested, and are exercisable in part or

full at any time during the term of the warrant.

As of March 31, 2026 and December 31, 2025, the warrants issued under the Paruka Warrant

Obligation are outstanding and unexercised.

See Note 8 for additional information on the Paruka Warrant Obligation.

As of March 31, 2026, the

Certificate of Incorporation provided for 545,000,000 authorized shares of common stock.

As of March 31, 2026, 50,167,623 shares of common

stock were issued and outstanding, including 2,159,609 shares of restricted common stock awards (“RSAs”) issued and outstanding.

As of March 31, 2026 and December 31, 2025, the

On December 31, 2024, the

Company settled its 2024 obligations under the Paruka Warrant Obligation (defined below) by issuing Paruka Holding LLC (“Paruka”)

a warrant to purchase 596,930 shares of the Company’s common stock at an exercise price of $ 19.39 per share.

On December 12, 2025,

the Company settled its 2025 obligations under the Paruka Warrant Obligation (defined below) by issuing Paruka a warrant to purchase

375,000 shares of the Company’s common stock at an exercise price of $ 30.18 per share.

The warrants have a term of 10 years, are

fully vested, and are exercisable in part or full at any time during the term of the warrant.

As of June 30, 2026 and December 31, 2025,

the warrants issued under the Paruka Warrant Obligation are outstanding and unexercised.

See Note 7 for additional information on the

Paruka Warrant Obligation.

As of June 30, 2026, the Certificate of Incorporation provided for 545,000,000

authorized shares of common stock.

As of June 30, 2026, 61,069,887 shares of common stock were issued and outstanding, including 1,786,711

shares of restricted common stock awards (“RSAs”) issued and outstanding.

As of June 30, 2026 and December 31, 2025, the

Company had common stock reserved for future issuance as follows:

8 unchanged sentences

Total shares of common stock reserved

Underwritten Public Offering

In April 2026, the

Company entered into an underwriting agreement with Leerink Partners LLC, TD Securities (USA) LLC, Goldman Sachs & Co.

Stifel, Nicolaus & Company Incorporated, and Guggenheim Securities, LLC, as the representatives of the several underwriters

named therein, relating to an underwritten public offering (the “April 2026 Offering”).

The Company issued and sold

9,660,000 shares of its common stock, par value $ 0.001 , at a public offering price of $ 72.50 per share for total net proceeds of

$ 658.3 million (net of combined underwriting discounts and commissions and related issuance expenses of $ 42.0 million).

On October 3, 2025, the Company

entered into a Sales Agreement with TD Securities (USA) LLC (the “Sales Agreement”), as its sales agent, pursuant to which

the Company may issue and sell, from time to time, shares of common stock for aggregate gross proceeds of up to $ 200.0 million under an

at-the-market (“ATM”) equity offering program.

The Company is not obligated to make any sales of shares under the Sales Agreement.

During the three months ended June 30, 2026, the Company did not issue any shares of common stock pursuant to the ATM program.

the six months ended June 30, 2026, the Company issued and sold an aggregate of 1,167,895 shares of common stock pursuant to the ATM offering

program at an average price per share of $ 33.99 for total net proceeds of $ 38.9 million after deducting sales agents’ commissions.

As of June 30, 2026, and December 31, 2025, an amount of $ 160.3 million and $ 200.0 million, respectively, remained available under the

2024 Equity Incentive Plan

The 2024 Equity Incentive

Plan (“2024 Plan”) was adopted on February 6, 2024.

The 2024 Plan provided for the Company to grant stock options, restricted

stock awards, restricted stock units, and other stock-based awards to employees, officers, directors, consultants, and advisors.

incentive stock options granted under the 2024 Plan generally vest over four years, subject to the participant’s continued

service, and expire after ten years.

As of March 31, 2026 and December 31, 2025, 1,155,540 and 1,167,826 shares, respectively, were

subject to options outstanding under the 2024 Plan and will become available under the 2024 Stock Incentive Plan (defined below) to the

extent the options are forfeited or lapse unexercised.

The 2024 Equity Incentive Plan (“2024 Plan”) was adopted on

February 6, 2024.

The 2024 Plan provided for the Company to grant stock options, restricted stock awards, restricted stock units,

and other stock-based awards to employees, officers, directors, consultants, and advisors.

Equity incentive stock options granted under

the 2024 Plan generally vest over four years, subject to the participant’s continued service, and expire after ten years.

As of June 30, 2026 and December 31, 2025, 1,055,512 and 1,167,826 shares, respectively, were subject to options outstanding under the

2024 Plan and will become available under the 2024 Stock Incentive Plan (defined below) to the extent the options are forfeited or lapse

2024 Stock Incentive Plan

6 unchanged sentences

to the evergreen provision.

As of March 31, 2026, 10,667,146

shares were reserved for issuance under the 2024 Stock Plan, of which 6,129,190 shares were available for future grant and 4,537,956 shares

were subject to outstanding options and restricted stock units.

As of December 31, 2025, 7,383,349 shares were reserved for issuance under

As of June 30, 2026, 10,492,142 shares were reserved for issuance under

the 2024 Stock Plan, of which 5,910,376 shares were available for future grant and 4,581,766 shares were subject to outstanding options

and restricted stock units.

As of December 31, 2025, 7,383,349 shares were reserved for issuance under the 2024 Stock Plan, of which 4,600,217

shares were available for future grant and 2,783,132 shares were subject to outstanding options.

2024 Employee Stock Purchase Plan

The 2024 Employee Stock Purchase

Plan (the “ESPP”) became effective in August 2024.

Eligible employees may purchase shares of common stock under the ESPP at 85 %

of the lower of the fair market value of the common stock as of the first or the last day of each offering period.

Employees are limited

to contributing 15 % of the employee’s eligible compensation and may not purchase more than $ 25,000 of stock during any

calendar year.

The ESPP will terminate ten years from the first purchase date under the plan, unless terminated earlier by the

The Company issued no shares

during the three months ended March 31, 2026 and 2025, out of the ESPP.

As of each of March 31, 2026 and December 31, 2025, there were

975,922 shares of common stock available in the pool for future issuances.

For each of the three months

ended March 31, 2026 and March 31, 2025, stock-based compensation expenses related to the ESPP were less than $ 0.1 million.

The 2024 Employee Stock

Purchase Plan (the “ESPP”) became effective in August 2024.

Eligible employees may purchase shares of common stock under

the ESPP at 85 % of the lower of the fair market value of the common stock as of the first or the last day of each offering period.

Employees are limited to contributing 15 % of the employee’s eligible compensation and may not purchase more than $ 25,000 of

stock during any calendar year.

The ESPP will terminate ten years from the first purchase date under the plan, unless terminated

earlier by the Board.

The Company issued 12,889 shares during the three and six months ended

June 30, 2026 and issued 10,235 during the three and six months ended June 30, 2025, out of the ESPP.

As of June 30, 2026 and December

31, 2025, there were 963,033 and 975,922 shares of common stock available in the pool for future issuances, respectively.

For the three and six months ended June 30, 2026, stock-based compensation

expenses related to the ESPP was $ 0.1 million and $ 0.2 million, respectively.

For each of the three and six months ended June 30, 2025,

stock-based compensation expenses related to the ESPP was less than $ 0.1 million.

Stock Option Valuation

The following table summarizes

the weighted-average assumptions used in calculating the fair value of the awards for the three months ended March 31, 2026 and 2025:

the weighted-average assumptions used in calculating the fair value of the awards for the three and six months ended June 30, 2026 and

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Expected term (in years) 5.9 5.9 6.0 6.0

4 unchanged sentences

The following table summarizes

the stock option activities under the 2024 Plan and the 2024 Stock Plan for the three months ended March 31, 2026:

the stock option activities under the 2024 Plan and the 2024 Stock Plan for the six months ended June 30, 2026:

Outstanding Weighted

6 unchanged sentences

Canceled/forfeited ( 100,815 ) $ 16.59

Balance as of March 31, 2026 5,297,351 $ 18.66 9.0 $ 160,987

Vested and expected to vest, March 31, 2026 5,297,351 $ 18.66 9.0 $ 160,987

Exercisable, March 31, 2026 1,269,986 $ 12.11 8.4 $ 46,912

The weighted average grant-date

fair value per share of stock options granted during the three months ended March 31, 2026 was $ 25.68 per share.

The aggregate intrinsic value represents the difference between the

closing price of the Company’s common stock on March 31, 2026 and the exercise price of outstanding, in-the-money employee stock

Balance as of June 30, 2026 5,227,356 $ 20.64 8.8 $ 389,614

Vested and expected to vest, June 30, 2026 5,227,356 $ 20.64 8.8 $ 389,614

Exercisable, June 30, 2026 1,404,407 $ 13.18 8.3 $ 115,151

The weighted average grant-date fair value per share of stock options granted

during the six months ended June 30, 2026 was $ 28.08 per share.

The aggregate intrinsic

value represents the difference between the closing price of the Company’s common stock on June 30, 2026 and the exercise price

of outstanding, in-the-money employee stock options.

The aggregate intrinsic value

of the options exercised during the three months ended March 31, 2026 and 2025 were $ 1.4 million and nil , respectively.

of the options exercised during the three and six months ended June 30, 2026 was $ 12.0 million and $ 13.4 million, respectively.

were no options exercised in the three and six months ended June 30, 2025.

For the three months ended June

30, 2026 and June 30, 2025, stock-based compensation expenses related to stock options was $ 5.1 million and $ 2.1 million, respectively.

For the six months ended June 30, 2026 and June 30, 2025, stock-based compensation expenses related to stock options was $ 9.9 million

and $ 4.0 million, respectively.

Restricted Stock Units

The Company began issuing restricted stock units (“RSUs”)

under the 2024 Stock Plan during the quarter ended March 31, 2026.

An RSU is an agreement to issue shares of the Company’s common

stock at the time of vesting.

The Company began issuing

restricted stock units (“RSUs”) under the 2024 Stock Plan during the quarter ended March 31, 2026.

An RSU is an agreement

to issue shares of the Company’s common stock at the time of vesting.

RSUs generally vest over a four-year service period.

RSUs granted during the annual refresher awards vest

typically in equal quarterly installments over four years, subject to continued employment.

RSUs granted to a new employee cliff vest

25 % on the Company’s quarterly vesting date on or after the first anniversary of the grant date, followed by 12 equal quarterly

vesting thereafter.

Upon vesting, each RSU converts into one share of the Company’s common stock.

granted during the annual refresher awards vest typically in equal quarterly installments over four years, subject to continued employment.

RSUs granted to a new employee cliff vest 25 % on the Company’s quarterly vesting date on or after the first anniversary of the

grant date, followed by 12 equal quarterly vesting thereafter.

Upon vesting, each RSU converts into one share of the Company’s

common stock.

Stock-based compensation

4 unchanged sentences

The following table summarizes

the RSU activity for the three months ended March 31, 2026:

the RSU activity for the six months ended June 30, 2026:

Grant Date Fair Value

Unvested as of December 31, 2025

Canceled/forfeited

Unvested as of March 31, 2026

Unvested as of June 30, 2026

The fair value of RSUs that vested during the

three months ended March 31, 2026 was $ 1.0 million.

For the three months ended March 31, 2026 and

March 31, 2025, stock-based compensation expenses related to RSUs was $ 1.0 million and nil , respectively.

six months ended June 30, 2026 was $ 2.7 million.

For the three months ended

June 30, 2026 and June 30, 2025, stock-based compensation expenses related to RSUs was $ 1.0 million and nil , respectively.

months ended June 30, 2026 and June 30, 2025, stock-based compensation expenses related to RSUs was $ 2.0 million and nil , respectively.

Restricted Stock Awards

The following table summarizes

the restricted stock awards (“RSA”) activity for the three months ended March 31, 2026:

the restricted stock awards (“RSA”) activity for the six months ended June 30, 2026:

Unvested balance as of December 31, 2025

Canceled/ forfeited

Unvested balance as of March 31, 2026

Unvested balance as of June 30, 2026

The fair value of RSAs that

vested during the three months ended March 31, 2026 was $ 4.5 million.

For the three months ended

March 31, 2026 and March 31, 2025, stock-based compensation expenses related to RSAs were less than $ 0.1 million.

vested during the three and six months ended June 30, 2026 was $ 8.6 million and $ 13.1 million, respectively.

For each of the three and

six months ended June 30, 2026 and June 30, 2025, stock-based compensation expenses related to RSAs were less than $ 0.1 million.

Option Agreements and Paruka Warrant Obligation

As part of the Option Agreements

(defined in Note 10 below), the Company granted warrants to purchase a number of shares equal to 1.00 % of outstanding shares as of the

date of the grant on a fully-diluted basis, or based upon the agreed number of warrants as disclosed in the Warrant Agreement, with an

exercise price equal to the fair market value of the underlying shares on the grant date (the “Paruka Warrant Obligation”).

The grant dates for the issuance

of warrants were expected to be December 31, 2024 and December 31, 2025 as all terms of the award, including number of shares and exercise

price, will be known by all parties.

The Company determined that the 2024 and 2025 grants are two separate grants, as there would be no

obligation for the 2025 grant had the Company exercised or terminated all of the options under the Option Agreements prior to December

The service inception period for the grant precedes the grant date, with the full award being vested as of the grant date with

no post-grant date service requirement.

Accordingly, a liability related to the Paruka Warrant Obligation was recorded during the 2024

and 2025 interim periods.

The liability is adjusted to fair value at the end of each interim reporting period, with changes in fair value

recorded in the consolidated statements of operations as stock-based compensation expenses under research and development expenses.

As part of the Option

Agreements (defined in Note 9 below), the Company granted warrants to purchase a number of shares equal to 1.00 % of outstanding

shares as of the date of the grant on a fully-diluted basis, or based upon the agreed number of warrants as disclosed in the Warrant

Agreement, with an exercise price equal to the fair market value of the underlying shares on the grant date (the “Paruka

Warrant Obligation”).

The grant dates for the

issuance of warrants were expected to be December 31, 2024 and December 31, 2025 as all terms of the award, including number of shares

and exercise price, will be known by all parties.

The Company determined that the 2024 and 2025 grants are two separate grants, as there

would be no obligation for the 2025 grant had the Company exercised or terminated all of the options under the Option Agreements prior

to December 31, 2024.

The service inception period for the grant precedes the grant date, with the full award being vested as of the

grant date with no post-grant date service requirement.

Accordingly, a liability related to the Paruka Warrant Obligation was recorded

during the 2024 and 2025 interim periods.

The liability is adjusted to fair value at the end of each interim reporting period, with changes

in fair value recorded in the consolidated statements of operations as stock-based compensation expenses under research and development

The Company settled its

and 2025 obligations under the Paruka Warrant Obligation by issuing Paruka 596,930 and 375,000 warrants, respectively, to purchase common

stock at an exercise price per warrant of $ 19.39 and $ 30.18 , respectively.

For the three months ended March 31, 2026 and 2025, nil and

$ 1.4 million, respectively, was recognized as stock-based compensation expense related to the Paruka Warrant Obligation.

As of each of

March 31, 2026 and December 31, 2025, the unamortized expense related to the Paruka Warrant Obligation was nil .

2024 and 2025 obligations under the Paruka Warrant Obligation by issuing Paruka 596,930 and 375,000 warrants, respectively, to purchase

common stock at an exercise price per warrant of $ 19.39 and $ 30.18 , respectively.

For the three months ended

June 30, 2026 and 2025, nil and $ 1.7 million, respectively, was recognized as stock-based compensation expense related to the Paruka Warrant

For the six months ended June 30, 2026 and 2025, nil and $ 3.1 million, respectively, was recognized as stock-based compensation

expense related to the Paruka Warrant Obligation.

As of June 30, 2026 and as of December 31, 2025, the unamortized expense related to

the Paruka Warrant Obligation was nil .

Employee Warrants

The following table summarizes

the employee warrant activity during the three months ended March 31, 2026:

the employee warrant activity during the six months ended June 30, 2026:

Outstanding Weighted

5 unchanged sentences

Canceled/forfeited ( 126,306 ) $ 7.80

Balance as of March 31, 2026 2,767,511 $ 7.80 8.3 $ 114,160

Vested and expected to vest, March 31, 2026 2,767,511 $ 7.80 8.3 $ 114,160

Exercisable, March 31, 2026 1,265,741 $ 7.80 8.3 $ 52,212

Balance as of June 30, 2026 2,619,353 $ 7.80 8.0 $ 228,853

Vested and expected to vest, June 30, 2026 2,619,353 $ 7.80 8.0 $ 228,853

Exercisable, June 30, 2026 1,295,828 $ 7.80 8.0 $ 113,216

The aggregate intrinsic

value represents the difference between the closing price of the Company’s common stock as of March 31, 2026 and the exercise

price of outstanding, in-the-money warrants.

value represents the difference between the closing price of the Company’s common stock as of June 30, 2026 and the exercise price

of outstanding, in-the-money warrants.

The aggregate intrinsic value

of the employee warrants exercised during the three months ended March 31, 2026 and 2025 was $ 3.5 million and nil , respectively.

of the employee warrants exercised during the three and six months ended June 30, 2026 was $ 9.2 million and $ 12.7 million, respectively.

There were no employee warrants exercised in the three and six months ended June 30, 2025.

For the three months ended

June 30, 2026 and June 30, 2025, stock-based compensation expenses related to employee warrants was $ 1.1 million and $ 1.2 million, respectively.

For the six months ended June 30, 2026 and June 30, 2025, stock-based compensation expenses related to employee warrants was $ 2.2 million

and $ 2.8 million, respectively.

Stock-Based Compensation Expense

2 unchanged sentences

Three Months Ended

Six Months Ended

Research and development

General and administrative

As of March 31, 2026, total

As of June 30, 2026, total

unrecognized stock-based compensation expenses related to the unvested stock options, RSUs, RSAs, employee warrants, and ESPP was $ 88.5

3 unchanged sentences

Three Months Ended

Six Months Ended

Paruka Warrant Obligation

4 unchanged sentences

Segment Disclosures

The Company operates and

manages its business activities on a consolidated basis and operates in one reportable segment.

The Company operates as a

single reportable and operating segment.

Its Chief Executive Officer , serving as the Chief Operating Decision Maker (“CODM”),

oversees operations on an aggregated basis to allocate resources effectively.

In assessing the Company’s financial performance,

the CODM regularly reviews total operating expenses and consolidated net loss.

The Company operates

and manages its business activities on a consolidated basis and operates in one reportable segment.

Its Chief Executive Officer ,

serving as the Chief Operating Decision Maker (“CODM”), oversees operations on an aggregated basis to allocate resources

In assessing the Company’s financial performance, the CODM regularly reviews total operating expenses and

consolidated net loss.

The measure of segment assets

2 unchanged sentences

equipment, net.

As of March 31, 2026 and December 31, 2025 all long-lived assets were in the U.S.

As of June 30, 2026 and December 31, 2025 all long-lived assets were in the U.S.

The following table summarizes

1 unchanged sentence

Three Months Ended

Six Months Ended

Research and development personnel-related (excluding stock-based compensation)

11 unchanged sentences

entered into two antibody discovery and option agreements (the “Option Agreements”) with Paragon Therapeutics, Inc.

Under the terms of each agreement, Paragon identifies, evaluates, and develops antibodies directed against certain mutually

agreed therapeutic targets of interest to the Company.

The Company has initiated certain research programs with Paragon that generally

focus on discovering, generating, identifying and/or characterizing antibodies directed to a particular target (each, a “Research

Program”), including for IL-23 and IL-17A/F for ORKA-001 and ORKA-002, respectively.

Under the terms of each agreement, Paragon identified, evaluated, and developed antibodies directed against certain mutually

agreed therapeutic targets of interest to the Company, including for IL-23 and IL-17A/F for ORKA-001 and ORKA-002, respectively.

In December 2025, the Company

5 unchanged sentences

as well as a low single-digit percentage royalty for antibody products beginning on the first commercial sale.

As of March 31, 2026, the

As of June 30, 2026, the

Company has not entered into a license agreement with Paragon and Paruka related to this additional option agreement.

As part of the Option Agreements and the additional option agreement

mentioned above, on December 31, 2024, the Company settled its 2024 obligations under the Paruka Warrant Obligation by issuing Paruka

a warrant to purchase 596,930 shares of the Company’s common stock at an exercise price of $ 19.39 per share, and on December 12,

2025, the Company settled its 2025 obligations under the Paruka Warrant Obligation by issuing Paruka a warrant to purchase 375,000 shares

of the Company’s common stock at an exercise price of $ 30.18 per share.

As part of the Option Agreements

and the additional option agreement mentioned above, on December 31, 2024, the Company settled its 2024 obligations under the Paruka

Warrant Obligation by issuing Paruka a warrant to purchase 596,930 shares of the Company’s common stock at an exercise price of

$ 19.39 per share, and on December 12, 2025, the Company settled its 2025 obligations under the Paruka Warrant Obligation by issuing Paruka

a warrant to purchase 375,000 shares of the Company’s common stock at an exercise price of $ 30.18 per share.

License Agreements – Paragon Therapeutics

In September 2024, the Company

exercised its exclusive option to acquire certain rights to ORKA-001, and in December 2024, it entered into a corresponding license agreement

with Paragon (the “ORKA-001 License Agreement”), pursuant to which Paragon granted the Company a royalty-bearing, world-wide,

exclusive license to develop, manufacture, commercialize, or otherwise exploit certain antibodies and products targeting IL-23 in all

fields other than the field of inflammatory bowel disease (“ORKA-001 Field”).

In December 2024, the Company exercised its

exclusive option to acquire certain rights to ORKA-002, and in February 2025, it entered into the corresponding license agreement with

Paragon (the “ORKA-002 License Agreement” and together with the ORKA-001 License Agreement, the “License Agreements”),

pursuant to which Paragon granted the Company a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize,

or otherwise exploit certain antibodies and products targeting IL-17A/F in all fields (“ORKA-002 Field” and together with

the ORKA-001 Field, the “Fields”).

Pursuant to each of the two License Agreements, Paragon has agreed not to conduct any new

campaigns that generate anti-IL-23 monospecific antibodies or anti-IL-17A/F monospecific antibodies in the respective agreed-upon fields.

The License Agreements provide

the Company with exclusive licenses in the Fields to Paragon’s patent applications covering the related antibodies, their method

of use and their method of manufacture and Paragon has agreed not to conduct any new campaigns that generate anti-IL-23 monospecific antibodies

or anti-IL-17A/F monospecific antibodies for the ORKA-001 Field or the ORKA-002 Field, respectively, for at least five years.

the License Agreements may be terminated on 60 days’ notice to Paragon, on material breach without cure, and on a party’s

insolvency or bankruptcy to the extent permitted by law.

Pursuant to the terms of each of the License Agreements, the Company

is obligated to pay Paragon non-refundable milestone payments of up to $ 12.0 million under each respective agreement upon the achievement

of certain clinical development milestones and up to $ 10.0 million under each respective agreement upon the achievement of certain regulatory

In addition, the Company is obligated to pay Paragon a low single-digit percentage royalty for antibody products for each

of ORKA-001 and ORKA-002.

For each of the License Agreements, the royalty term ends on the later of (i) the last-to-expire licensed patent

or our patent directed to the manufacture, use or sale of a licensed antibody in the country at issue or (ii) 12 years from the date of

first sale of a Company product.

There is also a royalty step-down if there is no Paragon patent in effect during the royalty term for

each program.

Each of the License Agreements may be terminated on 60 days’ notice to Paragon, on material breach without cure, and

on a party’s insolvency or bankruptcy to the extent permitted by law.

During the quarter ended March 31, 2026, the Company incurred

and expensed a milestone of $ 3.0 million related to the dosing of the first patient in a Phase 2 trial for the ORKA-002 License Agreement.

As of March 31, 2026, the Company has incurred and expensed milestone payments of $ 7.0 million in connection with each of the ORKA-001

License Agreement and the ORKA-002 License Agreement.

As of December 31, 2025, the Company had incurred and expensed milestone payments

of $ 7.0 million and $ 4.0 million for the ORKA-001 License Agreement and the ORKA-002 License Agreement, respectively.

These costs were

recorded as research and development expenses in the accompanying condensed consolidated statements of operations.

As of March 31, 2026 and

December 31, 2025, $ 3.0 million and nil , respectively were included in related party accounts payable and other current liabilities.

September 2024, the Company exercised its exclusive option to acquire certain rights to ORKA-001, and in December 2024, it entered into

a corresponding license agreement with Paragon (the “ORKA-001 License Agreement”), pursuant to which Paragon granted the Company

a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize, or otherwise exploit certain antibodies and products

targeting IL-23 in all fields other than the field of inflammatory bowel disease (“ORKA-001 Field”).

In December 2024, the

Company exercised its exclusive option to acquire certain rights to ORKA-002, and in February 2025, it entered into the corresponding

license agreement with Paragon (the “ORKA-002 License Agreement” and together with the ORKA-001 License Agreement, the “License

Agreements”), pursuant to which Paragon granted the Company a royalty-bearing, world-wide, exclusive license to develop, manufacture,

commercialize, or otherwise exploit certain antibodies and products targeting IL-17A/F in all fields (“ORKA-002 Field” and

together with ORKA-001 Field, the “Fields”).

Pursuant to each of the two License Agreements, Paragon has agreed not to conduct

any new campaigns that generate anti-IL-23 monospecific antibodies or anti-IL-17A/F monospecific antibodies in the respective agreed-upon

Fields for five years.

Each of the License Agreements may be terminated on 60 days’ notice to Paragon, on material breach without

cure, and on a party’s insolvency or bankruptcy to the extent permitted by law.

In May 2026, the Company amended its ORKA-001 License

Agreement with Paragon, to expand the definition of ORKA-001 Field to include inflammatory bowel disease.

The amendment expands the definition

of ORKA-001 Field to encompass all therapeutic, prophylactic, palliative and diagnostic uses, subject to the restriction that the Company

will not dose a human patient in a clinical trial of ORKA-001 for inflammatory bowel disease as part of a combination until June 1, 2028

or as a monotherapy until June 1, 2030 (the “Monotherapy Dosing Restriction”).

In the event the Company or a licensee of

Paragon’s retained rights under the ORKA-001 License Agreement consummates a material transaction, including a change of control

of the Company or such licensee, then any remaining restrictions outside of the initial definition of ORKA-001 Field set forth

in the Monotherapy Dosing Restriction shall remain in effect only until June 1, 2028.

Pursuant to the terms of

each of the License Agreements, the Company is obligated to pay Paragon non-refundable milestone payments of up to $ 12.0 million under

each respective agreement upon the achievement of certain clinical development milestones and up to $ 10.0 million under each respective

agreement upon the achievement of certain regulatory milestones.

In addition, the Company is obligated to pay Paragon a low single-digit

percentage royalty for antibody products for each of ORKA-001 and ORKA-002.

For each of the License Agreements, the royalty term ends

on the later of (i) the last-to-expire licensed patent or our patent directed to the manufacture, use or sale of a licensed antibody in

the country at issue or (ii) 12 years from the date of first sale of a Company product.

There is also a royalty step-down if there is

no Paragon patent in effect during the royalty term for each program.

Each of the License Agreements may be terminated on 60 days’

notice to Paragon, on material breach without cure, and on a party’s insolvency or bankruptcy to the extent permitted by law.

the six months ended June 30, 2026, the Company incurred and expensed a milestone of $ 3.0 million related to the dosing of the first patient

in a Phase 2 trial for the ORKA-002 License Agreement.

As of June 30, 2026, the Company has incurred and expensed milestone payments of

$ 7.0 million in connection with each of the ORKA-001 License Agreement and the ORKA-002 License Agreement.

As of December 31, 2025, the

Company had incurred and expensed milestone payments of $ 7.0 million and $ 4.0 million for the ORKA-001 License Agreement and the ORKA-002

License Agreement, respectively.

These costs were recorded as research and development expenses in the accompanying condensed consolidated

statements of operations.

As of each of June 30, 2026

and December 31, 2025, the Company had no related party accounts payable and other current liabilities related to the ORKA-001 License

Agreement or the ORKA-002 License Agreement.

For the three months ended

March 31, 2026 and 2025, the Company recognized $ 3.0 million and $ 1.5 million, respectively, of expenses in connection with milestone

payable and services provided by Paragon and Paruka under the Option and License Agreements.

June 30, 2026 and 2025, the Company recognized nil and $ 4.2 million, respectively, of expenses in connection with milestone payable and

services provided by Paragon and Paruka under the Option and License Agreements.

For the six months ended June 30, 2026 and 2025, the

Company recognized $ 3.0 million and $ 5.7 million, respectively, of expenses in connection with milestone payable and services provided

by Paragon and Paruka under the Option and License Agreements.

Commitments and Contingencies

2 unchanged sentences

2024 with an initial term of 39.5 months.

In February 2025, the Company entered into an operating lease agreement in Waltham, Massachusetts,

which commenced on April 1, 2025 with an initial term of 54 months.

The Company leases office spaces under noncancelable operating lease

Lease liabilities are based on the net present value of the remaining lease payments over the remaining lease terms.

In determining

the present value of lease payments, the Company used its incremental borrowing rate when measuring operating lease liabilities as discount

rates were not implicit or readily determinable.

In June 2026, the Company amended its Menlo Park headquarters lease to extend the lease term

by 24 months and add additional leased office space.

The extension of the lease term was accounted for as a remeasurement of the operating

lease, resulting in an increase to the related operating lease right-of-use asset and lease liability of $ 0.9 million.

The additional

leased office space is expected to commence in September 2026.

In February 2025,

the Company entered into an operating lease agreement in Waltham, Massachusetts, which commenced on April 1, 2025 with an initial term

of 54 months.

The Company leases office spaces under noncancelable operating lease agreements.

Lease liabilities are based on the net

present value of the remaining lease payments over the remaining lease terms.

In determining the present value of lease payments, the

Company used its incremental borrowing rate when measuring operating lease liabilities as discount rates were not implicit or readily

determinable.

For the three months ended

March 31, 2026 and 2025, the Company recorded operating and variable lease expenses of $ 0.2 million and $ 0.1 million, respectively, in

June 30, 2026 and 2025, the Company recorded operating and variable lease expenses of $ 0.2 million and $ 0.3 million, respectively, in

general and administrative expenses in its condensed consolidated statements of operations.

For the six months ended June 30, 2026 and

2025, the Company recorded operating and variable lease expenses of $ 0.5 million and $ 0.4 million, respectively.

The following table presents

2 unchanged sentences

The following table summarizes

a maturity analysis of the Company’s net operating lease liabilities showing the aggregate lease payments as of March 31, 2026 (in

a maturity analysis of the Company’s net operating lease liabilities showing the aggregate lease payments as of June 30, 2026 (in

Year ending December 31,

5 unchanged sentences

Non-current portion of lease liability

(1) Lease payments exclude $ 0.6 million of legally binding minimum lease payments for the leases signed but not yet commenced as part of the additional leased space for the Menlo Park office.

Cell Line License Agreement

2 unchanged sentences

Under the Cell Line License Agreement, the Company received a non-exclusive, worldwide, sublicensable license to certain

of WuXi Biologics’ know-how, cell line, biological materials (the “WuXi Biologics Licensed Technology”) and media and

of WuXi Ireland’s know-how, cell line, biological materials (the “WuXi Biologics Licensed Technology”) and media and

feeds to make, have made, use, sell and import certain therapeutic products produced through the use of the cell line licensed by WuXi

Biologics under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”).

Specifically, the WuXi Biologics

Licensed Technology is used in certain manufacturing activities in support of the ORKA-001 and ORKA-002 programs.

Ireland under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”).

Specifically, the WuXi Biologics Licensed

Technology is used in certain manufacturing activities in support of the ORKA-001 and ORKA-002 programs.

In consideration for the

license, the Company agreed to pay WuXi Biologics a non-refundable license fee of $ 150,000 , which was recognized as a research and development

license, the Company agreed to pay WuXi Ireland a non-refundable license fee of $ 150,000 , which was recognized as a research and development

expense during the period from February 6, 2024 (inception) to December 31, 2024.

Additionally, to the extent that the Company manufactures

its commercial supplies of bulk drug product with a manufacturer other than WuXi Biologics or its affiliates, the Company is required

to make royalty payments to WuXi Biologics at a rate of less than one percent of net sales of WuXi Biologics Licensed Products manufactured

its commercial supplies of bulk drug product with a manufacturer other than WuXi Ireland or its affiliates, the Company is required to

make royalty payments to WuXi Ireland at a rate of less than one percent of net sales of WuXi Biologics Licensed Products manufactured

by the third-party manufacturer.

3 unchanged sentences

will continue indefinitely unless terminated (i) by the Company upon six months’ prior written notice and its payment of all undisputed

amounts due to WuXi Biologics through the effective date of termination, (ii) by WuXi Biologics for a material breach by the Company that

remains uncured for 60 days after written notice, (iii) by WuXi Biologics if the Company fails to make a payment and such failure continues

amounts due to WuXi Ireland through the effective date of termination, (ii) by WuXi Ireland for a material breach by the Company that

remains uncured for 60 days after written notice, (iii) by WuXi Ireland if the Company fails to make a payment and such failure continues

for 30 days after receiving notice of such failure, or (iv) by either party upon the other party’s bankruptcy.

Halozyme Agreement

In May 2026, the Company

and Halozyme Hypercon, Inc.

(“Halozyme”) entered into a global exclusive collaboration and license agreement (“Halozyme

License Agreement”).

Under the Halozyme License Agreement, the Company has licensed Halozyme’s Hypercon TM technology

for IL-23p19 in psoriatic disease and up to one additional target.

Hypercon TM is an innovative microparticle technology that

allows for hyperconcentration of drugs and biologics, reducing injection volume for a given dose and supporting more convenient, patient-friendly

administration.

Pursuant to the terms of the Halozyme License Agreement, the Company is obligated to pay Halozyme a non-refundable upfront

payment of $ 5.0 million, milestone payments of up to $ 21.5 million upon the achievement of certain clinical and regulatory milestones,

and up to $ 150.0 million upon the achievement of certain sales milestones, along with reimbursement of the costs to be incurred in the

development of the licensed products.

In addition, the Company is obligated to pay mid-single digit royalties on net sales of products

developed using Hypercon TM technology.

During the three and six months ended June 30, 2026, the Company paid and expensed the

non-refundable upfront payment of $ 5.0 million as research and development expenses in the accompanying condensed consolidated statements

of operations.

Legal Proceedings

2 unchanged sentences

At each reporting date, the Company evaluates whether or not a potential loss amount or a potential

range of loss is probable and reasonably estimable under the provisions of FASB ASC Topic 450, Contingencies (“ASC 450”).

The Company expenses as incurred the costs related to its legal proceedings.

range of loss is probable and reasonably estimable under the provisions of FASB ASC Topic 450, Contingencies.

The Company expenses as

incurred the costs related to its legal proceedings.

Net Loss Per Share

The following table summarizes the basic and diluted

net loss per share attributable to stockholders (in thousands, except share and per share data):

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

The following table summarizes the basic and

diluted net loss per share attributable to stockholders (in thousands, except share and per share data):

Three Months Ended June 30, 2026

Three Months Ended June 30, 2025

Loss Allocation

1 unchanged sentence

weighted-average number of shares of as-converted Series B preferred stock used in the loss allocation was 11,428,149 for the three months

ended March 31, 2026 and 2025.

For the computation of basic net loss per share

attributable to stockholders, the amount of weighted-average shares outstanding excludes all shares of unvested restricted common stock

as such shares are not considered outstanding for accounting purposes until vested.

The amount of weighted-average shares outstanding

includes the pre-funded warrants as the exercise price is negligible and these warrants are fully vested and exercisable.

The potential shares of common

stock that were excluded from the computation of diluted net loss per share attributable to stockholders for the periods presented because

including them would have had an anti-dilutive effect were as follows:

ended June 30, 2026 and 2025.

Six Months Ended June 30, 2026

Six Months Ended June 30, 2025

Loss Allocation

Series B Preferred Stock (1)

(1) The weighted-average number of shares of as-converted Series B preferred stock used in the loss allocation was 11,428,149 for the six months ended June 30, 2026 and 2025.

For the computation of basic

net loss per share attributable to stockholders, the amount of weighted-average shares outstanding excludes all shares of unvested restricted

common stock as such shares are not considered outstanding for accounting purposes until vested.

The amount of weighted-average shares

outstanding includes the pre-funded warrants as the exercise price is negligible and these warrants are fully vested and exercisable.

The potential shares of

common stock that were excluded from the computation of diluted net loss per share attributable to stockholders for the periods presented

because including them would have had an anti-dilutive effect were as follows:

Three Months Ended

Six Months Ended

Outstanding employee warrants to purchase common stock

3 unchanged sentences

Outstanding and issued warrant to Paruka

Party Transactions

Paragon and Paruka each beneficially

own less than 5% of the Company’s capital stock through their respective holdings of common stock.

Fairmount Healthcare Fund II, L.P.

(“Fairmount”) beneficially

owns more than 5% of the Company’s capital stock, currently has one representative appointed to the Board, and beneficially owns

more than 5% of Paragon.

Fairmount appointed Paragon’s board of directors and has the contractual right to approve the appointment

of any executive officers of Paragon.

Related Party Transactions

Paragon and Paruka each

beneficially own less than 5% of the Company’s capital stock through their respective holdings of common stock.

Fairmount Healthcare Fund

(“Fairmount”) beneficially owns more than 5% of the Company’s capital stock, currently has one representative

appointed to the Board, and beneficially owns more than 5% of Paragon.

Fairmount appointed Paragon’s board of directors and has

the contractual right to approve the appointment of any executive officers of Paragon.

The following is a summary

of related party accounts payable and other current liabilities (in thousands):

Paragon milestone payments for the Option Agreements

Paragon reimbursable patent expenses

On April 30, 2026, the Company announced the closing of an underwritten

public offering.

The Company issued and sold 9,660,000 shares of its common stock, par value $ 0.001 , at a public offering price of $ 72.50

per share (the “April 2026 Offering”) for gross proceeds of $ 700.4 million before any underwriting discounts and commissions

and related issuance expenses.

The Company has granted the underwriters an option for a period of 30 days expiring May 28, 2026 , to purchase

up to an additional 1,449,000 shares of its common stock at the public offering price of $ 72.50 per share, less underwriting discounts

and commissions.

As of the filing of these condensed financial statements, the option remains unexercised.

On May 1, 2026, the

Company and Halozyme Hypercon, Inc.

(“Halozyme”) entered into a global exclusive collaboration and license agreement

(“Halozyme License Agreement”).

Under the Halozyme License Agreement, the Company has licensed Halozyme’s

Hypercon TM technology for IL-23p19 in psoriatic disease and up to one additional target.

Hypercon TM is an

innovative microparticle technology that allows for hyperconcentration of drugs and biologics, reducing injection volume for a given

dose and supporting more convenient, patient-friendly administration.

Pursuant to the terms of the Halozyme License Agreement, the

Company is obligated to pay Halozyme a non-refundable upfront payment and milestone payments upon the achievement of certain

clinical, developmental and sales milestones for a total amount up to $ 176.5 million, along with reimbursement of the costs to be

incurred in the development of the licensed products.

In addition, the Company would be obligated to pay mid-single digit royalties

on net sales of products developed using Hypercon TM technology.

On July 1, 2026, at the

request of the stockholder, 42,641 shares of Series B preferred stock were converted into 3,553,410 shares of the Company’s

common stock.

After the conversion, 94,497 shares of Series B preferred stock remain outstanding and are convertible into 7,874,739

shares of Company’s common stock.

In July 2026, the Company

issued and sold an aggregate of 1,499,500 shares of Company’s common stock pursuant to the ATM offering program at an average price

per share of $ 83.35 for total net proceeds of $ 122.5 million after deducting sales agents’ commissions.

After this issuance, an

amount of $ 35.3 million remains available under the ATM offering program.

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