What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-19 compared with 2025-02-28 · 258 added, 211 removed, 790 unchanged (37% of the section changed)

14 unchanged sentences

We have audited the accompanying consolidated balance sheets of Praxis Precision Medicines, Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S.

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

15 unchanged sentences

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Cerebrum Platform Accrued and Prepaid Research and Development Costs

Cerebrum Platform Accrued Research and Development Costs

Description of the Matter The Company’s accrued costs for research and development expenses totaled $14.3 million at December 31, 2025, including accruals related to the Company’s Cerebrum Platform research and development costs.

In addition, the Company’s prepaid expenses and other current assets were $11.8 million which included amounts that were paid in advance of services incurred pursuant to the Cerebrum Platform research and development costs.

As discussed in Note 2 to the consolidated financial statements, the Company analyzes the progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs.

Significant judgments and estimates are made in determining the accrued and prepaid balances at the end of any reporting period for the Company’s Cerebrum Platform research and development costs.

The Company is required to estimate such accruals and prepaids using judgment based on certain information, including actual costs incurred or level of effort expended, as provided by its vendors.

Payments for such activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the consolidated balance sheet within accrued or prepaid expenses and other current assets.

Auditing the Company’s accrued and prepaid research and development costs for the Cerebrum Platform costs was complex, as accounting for the costs associated with these studies or clinical trials required subjective estimates of the level of services performed and the associated costs incurred by vendors.

Furthermore, due to the duration of the Company’s Cerebrum Platform research and development costs, and the timing of information received from third parties, the actual amounts incurred are not typically known at the time the consolidated financial statements are issued.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over accrued and prepaid research and development costs for the Cerebrum Platform, including assessing management’s controls over the significant judgments and estimates regarding costs incurred or level of effort expended by vendors.

To evaluate the accrued and prepaid research and development costs for the Cerebrum Platform research and development costs, our audit procedures included, among others, testing the accuracy and completeness of the underlying data used in the estimates and evaluating the significant judgments and estimates made by management to determine the recorded accruals and prepayments.

Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period for certain Cerebrum Platform research and development costs.

The Company is required to estimate such accruals using judgment based on certain information, including actual costs incurred or level of effort expended, as provided by its vendors.

Auditing the Company’s accrued research and development costs for certain Cerebrum Platform costs was complex, as accounting for the costs associated with these studies or clinical trials required subjective estimates of the level of services performed and the associated costs incurred by vendors.

Furthermore, due to the duration of certain Cerebrum Platform research and development costs, and the timing of information received from third parties, the actual amounts incurred are not typically known at the time the consolidated financial statements are issued.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over accrued research and development costs for the Cerebrum Platform, including assessing management’s controls over the significant judgments and estimates regarding costs incurred or level of effort expended by vendors.

To evaluate the accrued research and development costs for the Cerebrum Platform, our audit procedures included, among others, testing the accuracy and completeness of the underlying data used in the estimates and evaluating the significant judgments and estimates made by management to determine the recorded accruals.

To test the significant judgments and estimates, we discussed the progress of research and development activities with the Company’s research and development personnel that oversee the research and development projects and inspected the Company’s contracts with vendors and pending change orders to assess the impact on amounts recorded.

In addition, we inspected information obtained by the Company from vendors, which included the vendors’ estimate of costs incurred to date.

We also obtained vendor confirmations, analyzed fluctuations in accruals by vendor and by trial throughout the period subject to audit, evaluated the costs incurred per trial, site and/or patient for reasonableness and tested subsequent invoices received from vendors.

We also obtained vendors direct confirmations to confirm costs incurred as of year-end and invoicing and contracts executed to date to verify that accruals are complete and accurate.

We also analyzed fluctuations in accruals by vendor and by trial throughout the period subject to audit, evaluated the costs incurred per trial for reasonableness and tested subsequent invoices received from vendors.

/s/ Ernst & Young LLP

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Operating lease liabilities 110 1,259

Current portion of deferred revenue — 1,392

Total current liabilities 59,771 37,550

1 unchanged sentence

Non-current portion of operating lease liabilities — 110

Non-current portion of deferred revenue — 1,161

Total liabilities 59,771 37,660

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Additional paid-in capital 2,017,566 1,281,522

Accumulated other comprehensive gain 654 —

Accumulated deficit ( 1,140,008 ) ( 836,740 )

Accumulated other comprehensive gain 563 654

Total stockholders’ equity 878,136 445,450

5 unchanged sentences

Year Ended December 31,

2025 2024 2023

Collaboration revenue $ — $ 8,553 $ 2,447

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Year Ended December 31,

2025 2024 2023

Net loss $ ( 303,268 ) $ ( 182,819 ) $ ( 123,277 )

17 unchanged sentences

1,165,247 2 28,090 — — 28,092

Issuance of common stock from a collaboration and license agreement 443,253 — 17,265 — — 17,265

Issuance of common stock under employee stock purchase plan 24,690 — 314 — — 314

Vesting of restricted stock units 13,293 — — — — —

3 unchanged sentences

Net loss — — — ( 123,277 ) — ( 123,277 )

Balance at March 31, 2024 13,258,047 $ 13 $ 923,141 $ ( 693,474 ) $ 3 $ 229,683

Balance at December 31, 2023 8,791,877 $ 13 $ 723,577 $ ( 653,921 ) $ — $ 69,669

Stock-based compensation expense — — 41,360 — — 41,360

1 unchanged sentence

7,651,583 1 377,636 — — 377,637

Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 3,258

1,823,652 — 119,359 — — 119,359

Issuance of common stock from exercise of pre-funded warrants 622,123 — — — — —

Issuance of common stock under employee stock purchase plan 31,381 — 544 — — 544

Issuance of common stock from a collaboration and license agreement 443,253 — 17,265 — — 17,265

Vesting of restricted stock units 19,475 — — — — —

3 unchanged sentences

Net loss — — — ( 182,819 ) — ( 182,819 )

Balance at June 30, 2024 17,755,506 $ 14 $ 1,145,308 $ ( 726,151 ) $ ( 71 ) $ 419,100

Balance at December 31, 2024 19,422,358 $ 14 $ 1,281,522 $ ( 836,740 ) $ 654 $ 445,450

Stock-based compensation expense — — 33,941 — — 33,941

Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 70

Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs of $ 36,635

3,527,072 1 567,115 — — 567,116

Issuance of common stock from exercise of stock options 4,971 — 201 — — 201

Vesting of restricted stock units 51 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 20 ) — ( 1 ) — — ( 1 )

Change in unrealized gain (loss) on marketable securities, net of tax — — — — 1,402 1,402

Net loss — — — ( 51,910 ) — ( 51,910 )

Balance at September 30, 2024 17,785,697 $ 14 $ 1,159,382 $ ( 778,061 ) $ 1,331 $ 382,666

Stock-based compensation expense — — 8,575 — — 8,575

Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 2,767

1,755,636 — 123,803 — — 123,803

Issuance of common stock from exercise of pre-funded warrants 200,349 — — — — —

Issuance of common stock under employee stock purchase plan 22,691 — 717 — — 717

Issuance of common stock from exercise of stock options 36,424 — 1,741 — — 1,741

Vesting of restricted stock units 78,281 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 24,333 ) — ( 2,089 ) — — ( 2,089 )

Change in unrealized gain (loss) on marketable securities, net of tax — — — — ( 677 ) ( 677 )

Net loss — — — ( 58,679 ) — ( 58,679 )

Balance at December 31, 2024 19,422,358 $ 14 $ 1,281,522 $ ( 836,740 ) $ 654 $ 445,450

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

PRAXIS PRECISION MEDICINES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(Amounts in thousands, except share data)

Common Stock Additional

Capital Accumulated

Deficit Accumulated Other

Comprehensive Loss Total

Stockholders’

Shares Amount

Balance at December 31, 2022 3,292,163 $ 5 $ 606,918 $ ( 530,644 ) $ ( 173 ) $ 76,106

Stock-based compensation expense — — 7,593 — — 7,593

Issuance of common stock from at-the-market public offerings net of commission costs of $ 560

560,253 1 18,095 — — 18,096

Vesting of restricted stock units 11,516 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 2,875 ) — ( 127 ) — — ( 127 )

Issuance of common stock upon exercise of stock options 213,038 — 12,557 — — 12,557

1 unchanged sentence

Net loss — — — ( 303,268 ) — ( 303,268 )

Balance at March 31, 2023 3,864,027 $ 6 $ 632,580 $ ( 568,099 ) $ ( 19 ) $ 64,468

Stock-based compensation expense — — 5,775 — — 5,775

Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs of $ 4,484

4,296,646 6 63,433 — — 63,439

Issuance of common stock from at-the-market public offerings, net of issuance costs 392,541 1 6,031 — — 6,032

Issuance of common stock under employee stock purchase plan 15,663 — 208 — — 208

Vesting of restricted stock units 720 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 249 ) — ( 4 ) — — ( 4 )

Change in unrealized gain (loss) on marketable securities, net of tax — — — — 19 19

Net loss — — — ( 34,312 ) — ( 34,312 )

Balance at June 30, 2023 8,569,348 $ 13 $ 708,023 $ ( 602,411 ) $ — $ 105,625

Stock-based compensation expense — — 5,763 — — 5,763

Vesting of restricted stock units 233 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 70 ) — ( 1 ) — — ( 1 )

Issuance of common stock upon exercise of stock options 311 — 1 — — 1

Net loss — — — ( 24,632 ) — ( 24,632 )

Balance at September 30, 2023 8,569,822 $ 13 $ 713,786 $ ( 627,043 ) $ — $ 86,756

Stock-based compensation expense — — 5,726 — — 5,726

Issuance of common stock under employee stock purchase plan 9,027 — 106 — — 106

Issuance of common stock from at-the-market public offerings, net of issuance costs of $ 123

212,453 — 3,964 — — 3,964

Vesting of restricted stock units 824 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 249 ) — ( 5 ) — — ( 5 )

Net loss — — — ( 26,878 ) — ( 26,878 )

Balance at December 31, 2025 25,195,092 $ 15 $ 2,017,566 $ ( 1,140,008 ) $ 563 $ 878,136

4 unchanged sentences

Year Ended December 31,

2025 2024 2023

Cash flows from operating activities:

6 unchanged sentences

Non-cash collaboration and license agreement expense — 2,500 —

Other non-cash adjustments ( 7 ) — —

Changes in operating assets and liabilities:

32 unchanged sentences

Praxis Precision Medicines, Inc.

(“Praxis” or the “Company”) is a clinical-stage biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for central nervous system ("CNS"), disorders characterized by neuronal excitation-inhibition imbalance.

(“Praxis” or the “Company”) is a fully integrated, leading central nervous system ("CNS") precision neuroscience biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for CNS disorders characterized by neuronal excitation-inhibition imbalance.

Normal brain function requires a delicate balance of excitation and inhibition in neuronal circuits, which, when dysregulated, can lead to abnormal function and both rare and more prevalent neurological disorders.

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The Company is subject to risks and uncertainties common to clinical-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.

Programs currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization.

These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities.

Programs currently under development may require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization.

These efforts require significant amounts of capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.

1 unchanged sentence

The Company has incurred recurring losses since its inception, including a net loss of $ 303.3 million for the year ended December 31, 2025.

In addition, as of December 31, 2024, the Company had an accumulated deficit of $ 836.7 million.

In addition, as of December 31, 2025, the Company had an accumulated deficit of $ 1.1 billion.

The Company expects to continue to generate operating losses for the foreseeable future.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company expects that its cash, cash equivalents and marketable securities as of December 31, 2024 of $ 469.5 million will be sufficient to fund its operating expenditures and capital expenditure requirements necessary to advance its research efforts and clinical trials for at least one year from the date of the issuance of these consolidated financial statements.

The future viability of the Company is dependent on its ability to raise additional capital to finance its operations.

The Company expects that its cash, cash equivalents and marketable securities as of December 31, 2025 of $ 926.1 million, together with net proceeds of $ 621.2 million from the January 2026 financing (Note 17), will be sufficient to fund its operating expenditures and capital expenditure requirements necessary to advance its program activities for at least one year from the date of issuance of these consolidated financial statements.

The future viability of the Company is dependent on its ability to achieve regulatory approvals of its new drug applications, which are subject to risk and timing uncertainty, and raising additional capital to finance its operations, if needed.

The Company's inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies.

5 unchanged sentences

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Praxis Security Corporation.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Praxis Security Corporation, Praxis Medicines International Holdings LLC and Praxis Precision Medicines India Private Limited.

All intercompany transactions have been eliminated in consolidation.

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The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents.

Cash and cash equivalents include cash held in banks and amounts held in interest-bearing insured liquid deposit funds and interest-bearing money market funds.

Cash and cash equivalents include cash held in banks, amounts held in interest-bearing insured liquid deposit funds and interest-bearing money market funds and government bonds with a maturity date of three months or less from the date of purchase.

Cash equivalents are carried at cost, which approximates their fair market value.

1 unchanged sentence

Restricted cash is classified as either current or non-current based on the terms of the underlying lease arrangement.

As of December 31, 2025 and 2024, the Company had restricted cash of $ 0.4 million and $ 0.4 million, respectively, held as letters of credit for the benefit of its current landlord.

The Company's Boston, Massachusetts sublease expires on February 28, 2026, and the related letter of credit of $ 0.4 million was classified in current assets on the consolidated balance sheet as of December 31, 2025.

The related letter of credit of $ 0.4 million was classified within other non-current assets on the consolidated balance sheet as of December 31, 2024.

The following table presents cash and cash equivalents and restricted cash as reported on the consolidated balance sheets that equal the total amounts on the consolidated statements of cash flows (in thousands):

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash and cash equivalents $ 357,329 $ 215,372

2 unchanged sentences

Marketable Securities

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company may invest its excess cash in money market funds and debt instruments of the U.S.

Treasury, financial institutions, corporations and U.S.

government agencies with strong credit ratings and an investment grade rating at or above A-1 or P-1 by two of the three nationally recognized statistical rating organizations.

government agencies with strong credit ratings and an investment grade rating at or above A- or A3 by one of the three nationally recognized statistical rating organizations.

The Company does not believe that it is exposed to more than a nominal amount of credit risk related to any marketable securities it may invest in.

5 unchanged sentences

The Company classifies marketable securities as either cash equivalents, short-term or long-term based on their stated maturity dates as it is more-likely-than-not that the Company will hold these assets through to their maturity dates.

The Company held $ 254.2 million of marketable securities as of December 31, 2024.

The Company did not hold any marketable securities as of December 31, 2023.

The Company held $ 568.8 million and $ 254.2 million of marketable securities as of December 31, 2025 and 2024, respectively.

The Company evaluates securities for impairment at the end of each reporting period.

16 unchanged sentences

The Company is also dependent on third parties who provide license rights used in the development of certain programs.

The Company could experience delays in the development of its programs if any of these license agreements are terminated, if the Company fails to meet the obligations required under its arrangements, or if the Company is unable to successfully secure new strategic alliances or licensing agreements.

Off-Balance Sheet Risk

As of December 31, 2024 and 2023, the Company had no off-balance sheet risk such as foreign exchange contracts, option contracts or other hedging arrangements.

The Company could experience delays in the development of its programs if any

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of these license agreements are terminated, if the Company fails to meet the obligations required under its arrangements, or if the Company is unable to successfully secure new strategic alliances or licensing agreements.

Off-Balance Sheet Risk

As of December 31, 2025 and 2024, the Company had no off-balance sheet risk such as foreign exchange contracts, option contracts or other hedging arrangements.

Fair Value Measurements

21 unchanged sentences

Upon disposal, retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations.

Expenditures for repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred.

Expenditures for

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred.

Impairment of Long-Lived Assets

1 unchanged sentence

Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

negative industry or economic trends and significant changes or planned changes in the use of the assets.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.

If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value.

20 unchanged sentences

ASC 808 provides guidance for the presentation and disclosure of transactions in collaborative arrangements, but it does not provide recognition or measurement guidance.

Therefore, if the Company concludes a counterparty to a transaction is not a customer or otherwise not within the scope of ASC 606, the Company considers the guidance in other accounting literature as applicable or by analogy to account for such transaction.

The classification of transactions under the Company’s arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants.

Revenue Recognition

The Company enters into collaboration agreements which are within the scope of ASC 606 under which the Company may license or provide options to license certain development or product candidates and, in certain

Therefore, if the Company concludes a counterparty

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

cases, may perform research and development services.

to a transaction is not a customer or otherwise not within the scope of ASC 606, the Company considers the guidance in other accounting literature as applicable or by analogy to account for such transaction.

Revenue Recognition

The terms of these agreements may include payment of non-refundable, upfront fees, option exercise fees, development and commercial milestone payments and royalties on net sales of licensed products.

21 unchanged sentences

This results in a percentage that is multiplied by the transaction price to determine the amount of revenue recognized each period.

If the estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue that is recognized in the current and future periods.

If the estimates or judgments change over the course of the collaboration, they may affect the timing and amount of revenue that is recognized in the current and future periods.

Upfront payments are recorded as contract liabilities within deferred revenue on the consolidated balance sheets until the Company performs its obligations under these agreements.

Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

As of December 31, 2024, the Company had an option and license agreement with UCB Biopharma SRL ("UCB"), which it entered into in December 2022.

Additionally, it had a collaboration and license agreement with Tenacia Biotechnology (Shanghai) Co., Ltd ("Tenacia"), which it entered into in January 2024.

As of December 31, 2025, the Company had a collaboration and license agreement with Tenacia Biotechnology (Shanghai) Co., Ltd ("Tenacia"), which it entered into in January 2024.

Additionally, the Company had

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

an option and license agreement with UCB Biopharma SRL ("UCB"), which it entered into in December 2022.

In December 2024, UCB exercised its option to in-license global development and commercialization rights under the terms of the Collaboration Agreement.

The Company has no further research service obligations under the terms of the Collaboration Agreement.

The accounting related to these agreements is outlined in Note 8, Collaboration and License Agreements.

1 unchanged sentence

Research and development costs are expensed as incurred.

Research and development expenses consist of costs incurred in performing research and development activities, including salaries, stock-based compensation and benefits, facilities costs, depreciation, third-party license fees and external costs of outside vendors engaged to conduct preclinical development activities and clinical trials as well as to manufacture research and development

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized.

17 unchanged sentences

The Company issues stock-based awards with service-based vesting conditions and records the expense for these awards on a straight-line basis over the vesting period.

To date, the Company has not issued any stock-based awards with performance or market-based vesting conditions.

As of December 31, 2025, the Company had not issued any stock-based awards with performance or market-based vesting conditions.

The Company accounts for forfeitures as they occur.

7 unchanged sentences

Due to the lack of Company-specific historical and implied volatility data, the Company determines the volatility for awards granted based on an analysis of reported data for a group of guideline publicly-traded companies that issued options with substantially similar terms.

For this analysis, the Company selects companies with comparable characteristics including enterprise value, risk profiles, and with historical share price information sufficient to meet the expected life of the stock-based awards.

For this analysis, the Company selects companies with comparable characteristics including enterprise value, risk profiles, and with historical share

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

price information sufficient to meet the expected life of the stock-based awards.

The Company determines expected volatility using a weighted average of the historical volatilities of the guideline group of companies.

5 unchanged sentences

Treasury yield curve in effect at the time of grant of the award for instruments with a term commensurate with the expected term assumption.

The expected dividend yield is assumed to be zero

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

as the Company has never paid dividends, and does not have current plans to pay any dividends on its common stock.

The expected dividend yield is assumed to be zero as the Company has never paid dividends, and does not have current plans to pay any dividends on its common stock.

Subsequent to the IPO, the fair value of the common stock underlying the Company's stock-based awards is the closing price of the Company's common stock on the date of grant.

18 unchanged sentences

The Company classifies warrants issued for the purchase of shares of its common stock as either equity or liability instruments based on an assessment of the specific terms and conditions of each respective contract.

Such assessment includes determining whether the warrants are freestanding financial instruments or embedded in a host instrument, whether the warrants are liabilities within the scope of ASC 480, whether the warrants meet the definition of a derivative in ASC 815 and whether the warrants meet the requirements for equity classification pursuant to the indexation and equity classification criteria in ASC 815.

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

classification pursuant to the indexation and equity classification criteria in ASC 815.

The Company determines the classification for its warrants at the time of issuance and updates its assessment, as necessary.

4 unchanged sentences

The calculation of weighted average number of common shares outstanding excludes shares of restricted common stock that are not vested but includes shares of common stock underlying pre-funded warrants.

Diluted net loss per share is computed by dividing net loss by the weighted average number of common

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

shares outstanding for the period, after giving consideration to the dilutive effect of potentially dilutive common shares.

Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period, after giving consideration to the dilutive effect of potentially dilutive common shares.

For purposes of this calculation, outstanding options to purchase shares of common stock, unvested shares of restricted common stock and potential shares issuable under the 2020 ESPP are considered potentially dilutive common shares.

The Company has generated a net loss in all periods presented so the basic and diluted net loss per share are the same, as the inclusion of the potentially dilutive securities would be anti-dilutive.

Recently Enacted Tax Legislation

The One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

on July 4, 2025.

The OBBBA legislation provides for the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, revisions to the international tax framework and the reinstatement of favorable tax treatment for certain business provisions.

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

The tax changes in the OBBBA did not have a material impact to the Company's income tax provision for the year ended December 31, 2025.

We continue to evaluate the tax and other provisions of the OBBBA and the potential effects on our financial position, results of operations and cash flows.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments included in this ASU apply to all public entities that are required to report segment information in accordance with Topic 280, including those with a single reportable segment.

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

The Company adopted ASU 2023-07 as of December 31, 2024.

The amendments were applied retroactively to all prior periods presented in the consolidated financial statements and are reflected within Note 17.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures ("ASU 2023-09").

ASU 2023-09 provides more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and incomes taxes paid information.

For public companies, the amendments are effective for annual periods beginning after December 15, 2024 and should be applied prospectively.

The Company has determined that the effects of adopting the amendments in ASU 2023-09 will only impact its disclosures and not have a material impact on its consolidated financial position and the results of its operations when such amendment is adopted.

ASU 2023-09 provides more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

For public companies, the amendments are effective for annual periods beginning after December 15, 2024 and may be applied prospectively or retrospectively.

The Company has determined that the effects of adopting the amendments in ASU 2023-09 only impact its disclosures and do not have a material impact on its consolidated financial position and the results of its operations.

The amendments were applied prospectively and are reflected within Note 13.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No.

4 unchanged sentences

The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements.

Restricted Cash

As of December 31, 2024 and 2023, the Company had restricted cash of $ 0.4 million and $ 0.4 million, respectively, held as letters of credit for the benefit of its current landlord.

The Company's Boston, Massachusetts sublease expires on January 31, 2026, and the related letter of credit of $ 0.4 million was classified within other non-current assets on the consolidated balance sheet as of December 31, 2024 and 2023.

Cash Equivalents and Marketable Securities

The following is a summary of the Company's investment portfolio as of December 31, 2024 (in thousands).

The Company did not hold any cash equivalents or marketable securities as of December 31, 2023.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"), which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40.

The ASU makes targeted improvements to ASC 350-40 to modernize the guidance for internal-use software and better reflect current software development practices.

ASU 2025-06 is effective for fiscal periods beginning after December 15,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2027 and interim periods within those fiscal years.

The amendments in this update can be applied prospective, retrospective, or a modified transition approach.

The Company does not expect the adoption of ASU 2025-06 to have a material impact on its consolidated financial statements.

Cash Equivalents and Marketable Securities

The following is a summary of the Company's investment portfolio as of December 31, 2025 and 2024 (in thousands).

As of December 31, 2025

6 unchanged sentences

Available-for-sale securities:

Corporate debt securities 198,036 282 — 198,318

Debt securities issued by U.S.

government agencies 183,739 258 — 183,997

Asset backed securities 61,282 70 — 61,352

Commercial paper 7,714 4 — 7,718

Other debt securities 117,424 — ( 50 ) 117,374

Total cash equivalents and marketable securities $ 770,494 $ 614 $ ( 51 ) $ 771,057

As of December 31, 2024

Gross Unrealized Estimated

Cost Gains Losses Fair Value

Cash equivalents:

Money market funds $ 128,652 $ — $ — $ 128,652

Debt securities issued by U.S.

government agencies 15,953 2 — 15,955

Available-for-sale securities:

Debt securities issued by U.S.

government agencies 128,215 475 — 128,690

Corporate debt securities 107,695 157 — 107,852

8 unchanged sentences

Securities are evaluated for impairment at the end of each reporting period.

The Company did not record any impairment related to its available-for-sale securities during the years ended December 31, 2024 and 2023.

The Company did not record any impairment related to its available-for-sale securities during the periods presented.

Fair Value of Financial Assets

The following table presents information about the Company's financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of December 31, 2024 (in thousands).

The Company did not hold any financial assets measured at fair value on a recurring basis as of December 31, 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025

4 unchanged sentences

Corporate debt securities — 198,318 — 198,318

Asset backed securities — 61,352 — 61,352

Commercial paper — 7,718 — 7,718

1 unchanged sentence

$ 386,295 $ 384,762 $ — $ 771,057

As of December 31, 2024

Level 1 Level 2 Level 3 Total

Money market funds $ 128,652 $ — $ — $ 128,652

Debt securities issued by US.

government agencies 144,644 — — 144,644

Corporate debt securities — 107,852 — 107,852

Commercial paper — 8,794 — 8,794

Other debt securities — 8,821 — 8,821

$ 273,296 $ 125,467 $ — $ 398,763

The Company estimates the fair value of its marketable securities classified as Level 2 by taking into consideration valuations obtained from third-party pricing sources.

2 unchanged sentences

The Company validates the prices provided by its third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property and Equipment, Net

6 unchanged sentences

Property and equipment, net $ 147 $ 230

Depreciation expense was $ 0.4 million and $ 0.4 million for the years ended December 31, 2024 and 2023, respectively.

Depreciation expense was $ 0.1 million, $ 0.4 million, and $ 0.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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Accrued Expenses

Accrued expenses consisted of the following (in thousands):

Accrued external research and development expenses $ 13,363 $ 2,957

Accrued personnel-related expenses $ 18,713 $ 9,365

Accrued external research and development expenses 14,291 13,363

Accrued other expenses 2,029 1,035

2 unchanged sentences

In May 2021, the Company entered into a sublease agreement for office space located in Boston, Massachusetts.

The sublease expires on January 31, 2026, with no option to renew or terminate early.

The sublease expires on February 28, 2026.

The base rent increases by approximately 2 % annually.

8 unchanged sentences

Total lease liabilities $ 110 $ 1,369

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes total lease costs recognized in the Company’s consolidated statements of operations (in thousands):

For the year ended December 31,

2025 2024 2023

Operating lease cost $ 1,102 $ 1,102 $ 1,102

1 unchanged sentence

Total lease costs $ 1,153 $ 1,135 $ 1,116

Variable lease costs were primarily related to operating expenses, taxes and insurance associated with the operating leases, which were assessed based on the Company’s proportionate share of such costs for the leased premises.

Variable lease costs were primarily related to operating expenses associated with the operating leases, which were assessed based on the Company’s proportionate share of such costs for the leased premises.

As these costs are generally variable in nature, they were not included in the measurement of the operating lease right-of-use asset and related lease liability.

Total lease costs are included as operating expenses in the Company’s consolidated statements of operations and comprehensive loss.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Future lease payments under non-cancelable lease agreements as of December 31, 2025 were as follows (in thousands):

1 unchanged sentence

Total future lease payments 110

interest ( 62 )

Present value of operating lease liabilities $ 110

3 unchanged sentences

Weighted average incremental borrowing rate 9.0 % 9.0 %

In September 2025, the Company entered into a license agreement with the building owner for its existing office space located in Boston, Massachusetts, which will commence on March 1, 2026 and expire on March 31, 2027.

As of December 31, 2025, the license agreement had not yet commenced and, accordingly, no right-of-use asset or lease liability or related lease payments had been recorded.

Upon commencement, the license agreement will be accounted for as an operating lease under ASC 842.

Legal Proceedings

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The Company enters into indemnification agreements and agreements containing indemnification provisions in the ordinary course of business.

Pursuant to these agreements, the Company agrees to indemnify, hold

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

harmless, and to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners, in connection with any U.S.

Pursuant to these agreements, the Company agrees to indemnify, hold harmless, and to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners, in connection with any U.S.

patent or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products.

2 unchanged sentences

The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

The Company has entered into multiple agreements with third parties under which it may be obligated to make future development, regulatory and commercial milestone payments and royalty payments on future sales of specified product candidates.

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specified product candidates.

Payments under these agreements generally become due and payable upon achievement of such milestones and sales.

3 unchanged sentences

In December 2022, the Company entered into an Option and License Agreement (“the Collaboration Agreement”) with UCB for the discovery of small molecule therapeutics as potential treatments of KCNT1-related epilepsies.

Under the terms of the Collaboration Agreement, the Company has agreed to perform general biology-related research services as part of a mutually agreed upon research plan in exchange for a $ 5.0 million upfront payment.

Under the terms of the Collaboration Agreement, the Company agreed to perform general biology-related research services as part of a mutually agreed upon research plan in exchange for a $ 5.0 million upfront payment.

In addition, the Company provided UCB an exclusive option to in-license global development and commercialization rights to any resulting KCNT1 small molecule development candidate identified as part of the research plan.

If UCB exercises its option to in-license global development and commercialization rights, the Collaboration Agreement stipulates that UCB will assume research, development, manufacturing and commercialization responsibilities and costs.

Under the terms of the Collaboration Agreement, the Company will be eligible to receive an option fee and future success-based development and commercialization milestone payments, totaling up to $ 98.5 million, in addition to tiered royalties on net sales of any resulting products from the Collaboration Agreement.

If UCB exercised its option to in-license global development and commercialization rights, the Collaboration Agreement stipulated that UCB would assume research, development, manufacturing and commercialization responsibilities and costs.

Under the terms of the Collaboration Agreement, the Company was eligible to receive an option fee and future success-based development and commercialization milestone payments, totaling up to $ 98.5 million, in addition to tiered royalties on net sales of any resulting products from the Collaboration Agreement.

The Company concluded that UCB is a customer, and as such, the arrangement falls within the scope of Topic 606.

2 unchanged sentences

The option provided to UCB was determined not to be a material right.

The Company recognizes revenue for its research services performance obligation over time using an input method over the duration of the research services.

The Company recognized revenue for its research services performance obligation over time using an input method over the duration of the research services.

In December 2024, UCB exercised its option to in-license global development and commercialization rights for a KCNT1 development candidate as part of the Collaboration Agreement.

Upon notice of the exercise, the Company recognized the $ 6.0 million option exercise fee as collaboration revenue within the consolidated statement of operations.

The Company also recognized the $ 2.6 million of remaining collaboration revenue associated with the $ 5.0 million up front payment, as the Company will have no further research service obligations under the terms of the Collaboration Agreement.

Upon notice of the exercise, the Company recognized the $ 6.0 million option exercise fee and the $ 2.6 million of remaining collaboration revenue associated with the $ 5.0 million up front payment as collaboration revenue within the December 31, 2024 consolidated statement of operations, as the Company had no further research service obligations under the terms of the Collaboration Agreement.

Accordingly, the Company did not recognize any collaboration revenue associated with this Collaboration Agreement during the year ended December 31, 2025.

During the years ended December 31, 2024 and 2023, the Company recognized $ 8.6 million and $ 2.4 million, respectively, in collaboration revenue related to the Collaboration Agreement in the consolidated statement of operations.

As of December 31, 2025, there was no deferred revenue included in the consolidated balance sheet.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Tenacia Collaboration and License Agreement

7 unchanged sentences

The per share price was based on a 20 % premium over the 30-day volume-weighted average price.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the terms of the License Agreement, the Company granted to Tenacia an exclusive license to use certain intellectual property for the development and commercialization of ulixacaltamide and products containing ulixacaltamide in China, Hong Kong, Macau and Taiwan.

4 unchanged sentences

(i) $ 10.0 million gross proceeds from the sale of common stock under the Stock Purchase Agreement and (ii) $ 4.8 million, net of tax, related to the up-front payment under the License Agreement, both of which were received in January 2024.

During the year ended December 31, 2024, the Company had not achieved any development or sales milestones or earned any royalties under the License Agreement.

During the years ended December 31, 2025 and 2024, the Company had not achieved any development or sales milestones or earned any royalties under the License Agreement.

The Company recorded the common stock sold to BCPE at its issuance date fair value of $ 38.95 per share, or $ 17.3 million in the aggregate, which exceeded the proceeds received which were calculated based on the 20 % premium over the prior 30-day volume-weighted average price.

3 unchanged sentences

For agreements where the licenses are considered separate performance obligations or represent the only performance obligation, the Company recognizes revenue at the point in time that the Company effectively grants the license, as the licenses or assignments represent functional intellectual property.

As of December 31, 2024, the Company did not have any receivables or deferred revenue related to the arrangement with Tenacia.

As of December 31, 2025 and 2024, the Company did not have any receivables or deferred revenue related to the arrangement with Tenacia.

The Company did not recognize any contract assets related to costs to obtain a contract with a customer or costs to fulfill a contract with a customer through December 31, 2025 because no qualifying costs were incurred.

During the year ended December 31, 2024, the Company did not recognize any revenue associated with the combined arrangement.

During the years ended December 31, 2025, 2024, and 2023, the Company did not recognize any revenue associated with the combined arrangement.

Common Stock and Preferred Stock

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In November 2021, the Company entered into an Open Market Sale Agreement (the "2021 Sales Agreement") with Jefferies LLC ("Jefferies"), to provide for the offering, issuance and sale of up to an aggregate amount of $ 125.0 million of common stock from time to time in at-the-market offerings for which Jefferies acted as sales agent.

The Company terminated the 2021 Sales Agreement in June 2023.

During the year ended December 31, 2023, the Company issued and sold an aggregate of 952,794 shares under the 2021 Sales Agreement for aggregate net proceeds of $ 24.1 million, after deducting commissions and offering expenses payable by the Company.

In December 2023, the Company entered into an Open Market Sale Agreement (the "2023 Sales Agreement"), with Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $ 75.0 million of common stock from time to time in at-the-market offerings.

4 unchanged sentences

In December 2024, the Company entered into an amendment to the March Sales Agreement with Jefferies to provide for the offering, issuance, and sale of up to an aggregate amount of $ 250.0 million of common stock from time to time in at-the-market offerings.

During the year ended December 31, 2025, the Company issued and sold an

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

aggregate of 1,351,689 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $ 83.3 million, after deducting commissions and offering expenses payable by the Company.

During the year ended December 31, 2024, the Company issued and sold an aggregate of 16,487 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $ 1.0 million, after deducting commissions and offering expenses payable by the Company.

The amended 2024 Sales Agreement was terminated in September 2025.

In September 2025, the Company entered into a Sales Agreement, or the 2025 Sales Agreement, with TD Securities (USA) LLC, or TD Cowen, to provide for the offering, issuance and sale of up to an aggregate of $ 250.0 million of common stock from time to time in at-the-market offerings.

During the year ended December 31, 2025, the Company issued and sold an aggregate of 403,947 shares under the 2025 Sales Agreement for aggregate net proceeds of $ 40.5 million, after deducting commissions and offering expenses payable by the Company.

As of December 31, 2025 and 2024, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value, pursuant to the Amended and Restated Certificate of Incorporation effective upon the completion of the IPO.

9 unchanged sentences

Total net proceeds generated from the offering were approximately $ 63.4 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

During the year ended December 31, 2024, all pre-funded warrants associated with this offering were exercised via a cashless exercise, resulting in 469,981 shares of common stock issued.

During the year ended December 31, 2024, all pre-funded warrants associated with the June 2023 Public Offering were exercised via a cashless exercise, resulting in 469,981 shares of common stock issued.

No cash proceeds associated with the exercise were received by the Company.

1 unchanged sentence

January 2024 Public Offering

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On January 16, 2024, the Company completed a public offering of:

6 unchanged sentences

The pre-funded warrants do not expire.

The pre-funded warrants may be settled through either physical or net share settlement.

The pre-funded warrants may be settled through

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

either physical or net share settlement.

Following the occurrence of certain fundamental transactions, the holders of the pre-funded warrants have the right to receive upon exercise of the warrants the same amount and kind of securities, cash, or property as they would have been entitled to receive if they had been holders of the common shares issuable under the warrants immediately prior to such transaction.

1 unchanged sentence

No cash proceeds associated with the exercise were received by the Company.

During the year ended December 31, 2025, 200,355 pre-funded warrants were exercised via cashless exercise, resulting in 200,349 shares of common stock issued.

No cash proceeds associated with the exercise were received by the Company.

As of December 31, 2025, a total of 704,225 pre-funded warrants associated with this offering remained outstanding.

11 unchanged sentences

As of December 31, 2025, none of the pre-funded warrants had been exercised and all remained outstanding.

The Company determined that the pre-funded warrants related to the June 2023, January 2024, and April 2024 public offerings are freestanding financial instruments because they are both legally detachable and separately exercisable from the common stock sold in the offering.

October 2025 Public Offering

On October 20, 2025, the Company completed a public offering of:

(i) an aggregate of 3,527,072 shares of its common stock at a public offering price of $ 157.00 per share, including the underwriters' full exercise of their option to purchase 501,592 additional shares of common stock, and (ii) pre-funded warrants to purchase 318,470 shares of common stock at a public offering price of $ 156.9999 per share of common stock underlying the warrants.

The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, less the $ 0.0001 per share exercise price of each underlying share.

Total net proceeds generated from the offering were approximately $ 567.1 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

The pre-funded warrants are exercisable at any time on or after the date of issuance at the option of the holder, subject to a beneficial ownership blocker that may limit exercisability.

No holder may exercise any portion of the warrants that would cause the aggregate number of shares of common stock beneficially owned by such holder, together with its affiliates, to exceed 4.99 % (or 9.99 % ) of the issued and outstanding common stock.

A holder of a pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

The pre-funded warrants do not expire.

The pre-funded warrants may be settled through either physical or net share settlement.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

shares issuable under the warrants immediately prior to such transaction.

As of December 31, 2025, none of the pre-funded warrants had been exercised and all remained outstanding.

The Company determined that the pre-funded warrants related to the January 2024, April 2024, and October 2025 public offerings are freestanding financial instruments because they are both legally detachable and separately exercisable from the common stock sold in the offering.

As such, the Company evaluated the pre-funded warrants to determine whether they represent instruments that require liability classification pursuant to the guidance in ASC 480.

3 unchanged sentences

815-40, Contracts in Entity’s Own Equity , to determine the appropriate treatment.

The Company concluded that

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the pre-funded warrants are both indexed to its own stock and meet all other conditions for equity classification.

The Company concluded that the pre-funded warrants are both indexed to its own stock and meet all other conditions for equity classification.

Accordingly, the Company has classified the pre-funded warrants as permanent equity.

2 unchanged sentences

Shares reserved for exercise of outstanding stock options 1,876,778 1,809,343

Shares reserved for exercise of pre-funded warrants related to the June 2023 Financing — 470,000

Shares reserved for exercise of pre-funded warrants related to the January 2024 Financing 704,225 904,580

Shares reserved for exercise of pre-funded warrants related to the April 2024 Financing 221,238 221,238

Shares reserved for exercise of pre-funded warrants related to the October 2025 Financing 318,470 —

Shares reserved for future awards under the 2020 Stock Option and Incentive Plan 473,358 91,343

10 unchanged sentences

In accordance with Rule 5635(c)(4), the Inducement Plan allows the Company to grant awards only to a newly hired employee who was not previously an employee or non-employee director or to an employee who is being rehired following a bona fide period of non-employment if such award is a material inducement to such employee entering into employment.

The total shares of common stock initially authorized for issuance under the Inducement Plan was 1,000,000 .

In June 2024, the shares of common stock authorized for issuance under the Inducement Plan was reduced by 870,000 shares following stockholder approval of an amendment and restatement of the 2020 Stock Option and Incentive Plan ("the 2020 Plan").

The total number of shares of common stock authorized for issuance under the Inducement Plan as of December 31, 2024 was 130,000 shares.

In January 2025, the number of shares of common stock authorized for issuance under the Inducement plan was increased by 870,000 shares.

The total number of shares of common stock authorized for issuance under the Inducement Plan as of December 31, 2025 and 2024 was 1,000,000 and 130,000 shares, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The total number of shares of common stock authorized for issuance under the 2020 Plan as of December 31, 2025 and December 31, 2024 wa s 2,941,950 sh ares and 1,970,833 shares, respectively.

3 unchanged sentences

Shares that expire, are terminated, surrendered or canceled under the 2024 Inducement, 2020 Plan and 2017 Plan without having been fully exercised will be available for future awards.

In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

common stock available for future awards.

In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for future awards.

Upon stock option exercise, the Company issues new shares and delivers them to the participant.

13 unchanged sentences

The following table summarizes the Company’s stock option activity:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Shares Weighted

14 unchanged sentences

The aggregate intrinsic value of stock options exercised is calculated as the difference between the exercise price of the underlying stock options and the estimated fair value of the Company’s common stock on the date of exercise for those stock options that had exercise prices lower than the fair value of the Company’s common stock on the exercise date.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Valuation of Stock Options

1 unchanged sentence

Year Ended December 31,

2025 2024 2023

Risk-free interest rate 4.45 % 4.01 % 3.60 %

7 unchanged sentences

Year Ended December 31,

2025 2024 2023

Research and development $ 15,286 $ 15,620 $ 8,055

1 unchanged sentence

Total stock-based compensation expense $ 33,941 $ 41,360 $ 24,857

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant Agreements

12 unchanged sentences

Additionally, the Company may pay RogCon a milestone payment of $ 3.0 million and profit share payments.

The $ 3.0 million milestone payment will become due when the first profit share payment has become due and certain contingent payments have become payable to Ionis under the Ionis Collaboration Agreement, which are subject to the Company exercising its option to obtain license rights to a development candidate, as well as other

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

contingent events.

The profit share payments will be based on a low-double-digit percentage of net profits, depending on sales volume.

9 unchanged sentences

The reimbursement of out-of-pocket costs was recognized as research and development expense as incurred.

No expenses were incurred during the year ended December 31, 2025.

Expense for the years ended December 31, 2024 and 2023 was immaterial .

2 unchanged sentences

After option exercise, the Company is responsible for clinical development and commercialization of the development candidate.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additionally, in July 2023, the Company paid a milestone payment of $ 6.9 million to Ionis, which was earned in the second quarter of 2023 upon initiation of the Company's elsunersen EMBRAVE study, and was recognized in research and development expenses in the consolidated statement of operations during the year ended December 31, 2023.

8 unchanged sentences

Year Ended December 31,

2025 2024 2023

Outstanding stock options 1,876,778 1,809,343 666,163

2 unchanged sentences

2,383,586 2,041,131 738,280

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common shares issuable upon exercise of the pre-funded warrants that were sold and remain outstanding in connection with the January 2024 and April 2024 underwritten public offerings are included in the calculation of weighted average number of common shares outstanding for the year ended December 31, 2024.

Common shares issuable upon exercise of the pre-funded warrants that were sold in connection with the January 2024, April 2024, and October 2025 underwritten public offerings are included in the calculation of weighted average number of common shares outstanding for the years ended December 31, 2025 and 2024.

Consistent with the guidance in ASC 260-10-45-13, the underlying common shares are issuable for little to no consideration and there are no vesting conditions or contingencies associated with the warrants.

2 unchanged sentences

net deferred tax assets due to the uncertainty of future taxable income.

The Company did not recognize an income tax benefit in the years ended December 31, 2024 or 2023 related to its U.S.

The Company did not recognize any income tax benefit in the years ended December 31, 2025, 2024, and 2023 related to its U.S.

operations due to the uncertainty regarding future taxable income.

1 unchanged sentence

and the Company’s effective tax rate was due primarily to the valuation allowance recorded to offset any potential tax benefit.

The income tax benefit (provision) recognized for the years ended December 31, 2024 and 2023 was not material.

The reconciliation of the U.S.

statutory income tax rate to the Company’s effective tax rate is as follows:

Income before provision for income taxes was as follows:

Year Ended December 31,

2025 2024 2023

Domestic $ ( 302,839 ) $ ( 182,743 ) $ ( 123,013 )

Foreign 42 — —

Income before income taxes $ ( 302,797 ) $ ( 182,743 ) $ ( 123,013 )

The components of provision for income taxes for all periods presented were as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31,

2025 2024 2023

State $ 471 $ 76 $ 45

Total provision $ 471 $ 76 $ 45

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S.

federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

Year Ended December 31,

Federal statutory income tax rate ( 63,587 ) 21.0 %

State and local income tax, net of federal income tax effect (1)

417 ( 0.1 ) %

Foreign tax effects

Other foreign jurisdictions ( 9 ) — %

Non-taxable or non-deductible items 7 — %

Stock-based compensation ( 3,337 ) 1.1 %

Limitation on executive compensation 5,508 ( 1.8 ) %

Tax credits ( 12,853 ) 4.2 %

Change in valuation allowance 74,260 ( 24.5 ) %

Other items 65 — %

Effective income tax rate $ 471 ( 0.2 ) %

(1) The state that makes up the majority of the effect of the state and local income tax line item is Massachusetts.

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S.

federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:

Year Ended December 31,

Federal statutory income tax rate 21.0 % 21.0 %

Federal and state research and development credits 3.9 % 3.5 %

10 unchanged sentences

Net deferred tax assets consisted of the following (in thousands):

Year Ended December 31,

Deferred tax assets:

1 unchanged sentence

Capitalized research expenditures 59,250 65,836

Research and development credits 30,582 23,451

Tax credits 44,210 30,582

Amortization 19,035 20,600

2 unchanged sentences

Leases 28 344

Deferred revenue — 692

Total gross deferred tax assets 306,629 218,587

9 unchanged sentences

As of December 31, 2025 and 2024, the Company also had state net operating loss carryforwards of approximately $ 515.6 million and $ 289.7 million, respectively, which may be available to offset future income tax liabilities and expire at various dates from 2031 through 2045.

As of December 31, 2024 and 2023, the Company had federal research and development tax credit carryforwards of approximately $ 27.3 million and $ 20.4 million, respectively, available to reduce future tax liabilities which expire at various dates from 2039 through 2044.

As of December 31, 2025 and 2024, the Company had federal research and development tax credit and orphan drug tax credit carryforwards of approximately $ 40.2 million and $ 27.3 million, respectively, available to reduce future tax liabilities which expire at various dates from 2039 through 2045.

As of December 31, 2025 and 2024, the Company had state research and development tax credit carryforwards of approximately $ 5.1 million and $ 4.1 million, respectively, available to reduce future tax liabilities which expire at various dates from 2032 through 2040.

The Company has generated research credits but has not conducted a study to document the qualified activity.

The Company has generated research and orphan drug tax credits but has not conducted a study to document the qualified activity.

This study may result in an adjustment to the Company’s research and development credit carryforwards;

however, until a study is completed, and any adjustment is known, no amounts are being presented as an uncertain tax position.

A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the research and development credit carryforwards and the valuation allowance.

A full valuation allowance has been provided against the Company’s research and development credits and, if a deferred tax asset adjustment is required, this adjustment would be offset by the valuation allowance.

Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities.

4 unchanged sentences

The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study.

If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of

If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required.

time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required.

Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization.

7 unchanged sentences

The Company’s policy is to record interest and penalties related to uncertain tax positions as part of its income tax provision.

As of December 31, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions and no such amounts have been recognized in the Company’s consolidated statement of operations for either year ended December 31, 2024 or 2023.

As of December 31, 2025 and 2024, the Company had no accrued interest or penalties related to uncertain tax positions and no such amounts have been recognized in the Company’s consolidated statement of operations for the years ended December 31, 2025, 2024, and 2023.

The statute of limitations for federal and the majority of state tax authorities is open for tax years ended December 31, 2022 through December 31, 2025.

2 unchanged sentences

federal, state and local income tax authorities for all tax years in which a loss carryforward is available.

The amounts of cash income taxes paid by the Company were as follows:

Year Ended December 31,

Related Party Transactions

1 unchanged sentence

During the years ended December 31, 2025, 2024, and 2023, the Company reimbursed RogCon for its out-of-pocket costs incurred for activities performed under the License Agreement (Note 11).

Expenses incurred during all periods presented were not material.

Employee Benefit Plan

The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code for eligible employees.

The plan covers substantially all employees who meet a minimum age requirement and allows participants to defer a portion of their annual compensation on a pre-tax basis.

The plan covers substantially all employees who meet a minimum age requirement and allows participants to defer a portion of their annual compensation.

Under the plan, the Company is not obligated to match any participant contributions.

The Company made contributions of $ 1.2 million and $ 1.0 million during the years ended December 31, 2024 and 2023, respectively .

The Company made contributions of $ 1.6 million, $ 1.2 million, and $ 1.0 million during the years ended December 31, 2025, 2024, and 2023, respectively .

Segment Information

1 unchanged sentence

The Company's operating segment discovers and develops therapies for CNS disorders.

The Company's chief operating decision maker ("CODM"), its Chief Executive Officer, manages the Company's operations on a consolidated basis for the purposes of assessing performance and allocating resources based on net loss that also is reported on the consolidated statement of operations as consolidated net loss.

The Company's chief operating decision maker ("CODM"), its Chief Executive Officer, manages the Company's operations on a consolidated basis for the purposes of assessing performance and

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

allocating resources based on net loss that also is reported on the consolidated statement of operations as consolidated net loss.

Net loss is used by the CODM to make key strategic and operational decisions.

2 unchanged sentences

The majority of the Company's long-lived assets are held in the United States.

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents selected financial information about the Company's single operating segment for the year ended December 31, 2024 (in thousands):

The following table presents selected financial information about the Company's single operating segment for the years ended December 31, 2025, 2024, and 2023 (in thousands):

2025 2024 2023

Collaboration revenue $ — $ 8,553 $ 2,447

11 unchanged sentences

29,329 23,572 18,986

Interest income 17,346 3,096

Other income, net 22,930 17,346 3,096

Consolidated net loss $ ( 303,268 ) $ ( 182,819 ) $ ( 123,277 )

4 unchanged sentences

The Company has concluded that no subsequent events have occurred that require disclosure other than those noted below.

At-the-Market Offerings

Subsequent to December 31, 2024, the Company issued and sold a total of 694,212 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $ 54.9 million after deducting commissions and offering expenses payable by the Company.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

January 2026 Public Offering

On January 7, 2026, the Company completed a public offering of 2,543,800 shares of its common stock at a public offering price of $ 260.00 per share, including the underwriters' full exercise of their option to purchase 331,800 additional shares of common stock.

Total net proceeds generated from the offering were approximately $ 621.2 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data