What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-09 compared with 2025-03-31 · 105 added, 102 removed, 176 unchanged (54% of the section changed)

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Company Overview

We are a clinical-stage biopharmaceutical company focused on the development of human polyclonal immunotherapeutic antibodies, or hIgG, to address immunology disorders.

We are a clinical-stage biopharmaceutical company focused on developing multi-specific, high-potency, human immunoglobulin G (hIgG) to treat and prevent immune and autoimmune disorders.

Our programs are based on mechanisms of action that have achieved proof-of-concept in clinical trials in indications with significant unmet medical needs.

We are focused on developing product candidates for disease targets where a differentiated approach has the greatest potential to be either first-in-class against novel targets or best-in-class against complex targets to treat diseases, including T1D and other autoimmune disorders.

Our internally discovered antibodies are both target-specific and polyclonal, meaning they are comprised of multiple hIgG and can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders.

Our proprietary platform, referred to as holds the potential to generate additional novel therapeutic candidates to expand our pipeline.

Our platform utilizes the human immune response to generate the optimal repertoire of hIgG for drug targets of interest.

We believe it is the only technology capable of producing disease-targeted, hIgG in large quantities without the need for human plasma donors.

We have optimized genetic engineering in the development of transchromosomic cattle, or Tc Bovine, which produce hIgG.

The Company’s lead candidate, SAB-142, targets autoimmune T1D with a disease-modifying therapeutic approach that aims to change the T1D treatment paradigm by delaying onset and potentially preventing disease progression of Stage 3 T1D patients.

Using advanced genetic engineering and antibody science, we developed a proprietary technology which holds the potential to generate additional novel therapeutic candidates utilizing the human immune response, without the need for human donors or convalescent plasma.

We believe it is the only technology capable of producing disease-targeted, hIgG in large quantities without human plasma donors.

We have optimized genetic engineering in the development of transchromosomic cattle, or Tc-Bovine, to produce hIgG.

Our engineering of our production platform drives IgG1 production across our pipeline.

In addition, this differentiated approach using polyclonal antibodies has no biosimilar pathway, which provides a significant barrier to competitive polyclonal approaches.

Recent Developments

On January 28, 2025 we announced positive topline phase 1 clinical results with the Company’s potentially disease-modifying T1D therapy SAB-142.

Based on the data, we plan to advance SAB-142 into a Phase 2b trial in 2025 to evaluate the therapeutic candidate in adult and pediatric patients with new-onset T1D.

The SAB-142 Phase 1 trial was designed as a randomized, double-blind, placebo-controlled, single-ascending dose, adaptive design clinical study among healthy volunteers and one cohort of participants with T1D.

The objectives include establishing the safety, tolerability, pharmacokinetic, immunogenicity and pharmacodynamic profile for SAB-142.

SAB-142 demonstrated a favorable safety profile with no reported serum sickness or anti-drug antibodies (ADA) across Phase 1 doses (0.03mg/kg to 2.5mg/kg), supporting chronic ambulatory dosing, while exhibiting sustained immunomodulation and a multi-target mechanism of action analogous to rabbit ATG, with correlations to C-peptide preservation.

Corporate Strategy

Our business strategy is focused on SAB-142 as a first-in-class, human, multi-target antibody treatment designed to provide superior efficacy and safety in delaying the onset or progression of T1D.

Our proprietary platform, represents the first technology of its kind to produce large-scale human high-titer and high-avidity antibodies across multiple modalities.

Leveraging our proprietary production system will help us advance a robust pipeline of differentiated hIgG-based therapies for the treatment of immune system disorders and infectious diseases.

Our hIgG have been safely demonstrated up through Phase 3 clinical trials with a patient safety database that includes over 700 patients who were safely administered our hIgG therapeutics.

We have a demonstrated regulatory pathway through each of the FDA, CBER, MHRA, and TGA.

These organizations understand our science and are familiar with the multivalent and multitarget properties of our single vial drug products.

This further streamlines our ability to develop new and novel drug products rapidly and efficiently where single target mAbs cannot replicate or duplicate our drug product attributes.

Key Factors Affecting Our Results of Operations and Future Performance

We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business.

These factors also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations.

Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in Part I, Item 1A of this Annual Report.

Our proprietary platform holds the potential to generate additional novel therapeutic candidates to expand our pipeline, utilizing the human immune response to generate the optimal repertoire of hIgG for drug targets of interest.

Our drug development production system is able to generate a diverse repertoire of specifically targeted, high-potency, hIgGs that can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders and address a wide range of serious unmet needs in human diseases.

Our Lead Product Candidate

Our wholly owned lead product candidate, SAB-142 is a potentially disease-modifying, redosable immunotherapy in clinical development for the treatment of autoimmune type 1 diabetes (T1D).

SAB-142 is a multi-specific, fully human anti-thymocyte globulin (hATG) with a mechanism of action analogous to that of rabbit ATG (rATG).

rATG has demonstrated in multiple clinical trials the ability to slow disease progression in patients with new- or recent-onset of Stage 3 T1D.

SAB-142, like rATG, directly targets multiple immune cells involved in destroying pancreatic beta cells, including modulation of “bad acting” T-lymphocytes like cytotoxic T-cells.

By stopping immune cells from attacking beta cells, this treatment has the potential to preserve insulin-producing beta cells.

The mechanism of action of SAB-142 has been clinically validated in numerous clinical trials with a rabbit anti-thymocyte globulin (rATG).

In addition, data from more than 800 human subjects have been treated with antibodies produced by our platform, including in the Phase 1 study of SAB-142, and we have seen no serum sickness rate and no incidence of neutralizing anti-drug antibodies (ADA).

We expect this finding to continue through the clinical development of SAB-142.

There is an established regulatory path for T1D indications using the SAB-142 modality.

Our regulatory pathway has also been established with the United States Food and Drug Administration (FDA), the United Kingdom Medicines and Healthcare products Regulatory Agency (MHRA), and the Therapeutic Good Administration (TGA) in Australia.

The FDA regulates polyclonal hIgG and mAbs differently, as mAbs are regulated through the Center for Drug Evaluation and Research (CDER) while pAbs are regulated by CBER.

CBER has approved over 36 immunoglobulin products from both human- and animal-derived plasma.

Further, CBER is very familiar with our production platform and pAb products.

We have navigated three SAB drug products through seven clinical trials with one product having advanced to Phase 3, building our safety database as well as positive efficacy data.

As our lead program SAB-142 advances, we intend to expand our pipeline in complementary indications through strategic utilization of our platform.

We recently received an Investigational New Drug (IND) clearance from the FDA in May 2024 and announced positive topline data from our Phase 1 clinical trial of SAB-142 in January 2025, and December 2025.

We initiated our pivotal Phase 2b clinical trial, called the SAFEGUARD study, in Q3 2025 and dosed the first patient in December 2025.

In May 2025, SAB confirmed its intent with the FDA to utilize the data from the SAFEGUARD study as supportive evidence for future regulatory approval.

Other Immunology Indications

T- and B-cells are multifunctional lymphocytes whose dysregulation was shown to have a central role in the pathogenesis of more than 80 autoimmune diseases, including T1D, systemic lupus erythematosus (SLE), rheumatoid arthritis (RA), multiple sclerosis (MS) and celiac disease.

The therapeutic success to date of lymphocyte-mediating therapies in variety of autoimmune diseases and our in vivo and in vitro pre-clinical and Phase 1 work from SAB-142 in T1D support direct progression into Phase 2 in other autoimmune indications.

Since the commencement of our operations, we have devoted substantially all of our resources to research and development activities, organizing and staffing our company, business planning, raising capital, establishing and maintaining our intellectual property portfolio, conducting preclinical studies and clinical trials, and providing general and administrative support for these operations.

Components of Results of Operations

Our revenue has historically been generated through grants from government and other (non-government) organizations.

We currently have no commercially-approved products.

Grant revenue is recognized for the period that the research and development services occur, as qualifying expenses are incurred or conditions of the grants are met.

We concluded that payments received under these grants represent conditional, nonreciprocal contributions, as described in ASC 958, Not-for-Profit Entities , and that the grants are not within the scope of ASC 606, Revenue from Contracts with Customers , as the organizations providing the grants do not meet the definition of a customer.

Expenses for grants are tracked by using a project code specific to the grant, and the employees also track hours worked by using the project code.

Government grants

Total revenue recognized from government grants was approximately $1.3 million and $2.2 million for the years ended December 31, 2024 and 2023, respectively.

We had two grants from The National Institute of Health – National Institute of Allergy and Infectious Disease (“NIH-NIAID”).

The first grant, directly from NIH-NIAID, totaled approximately $1.5 million, and the second grant through Geneva Foundation, totaling approximately $2.7 million.

Both of these grants were completed as of June 30, 2023.

No grant income was recognized for these grants for the year ended December 31, 2024 and for the year ended December 31, 2023, we recognized approximately $0.4 million in total grant income, $0.2 million from each grant, respectively.

The Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense Enabling Biotechnologies (“JPEO”) Rapid Response Contract (the “JPEO Rapid Response Contract”), initially awarded for up to $25 million and later expanded to $203.6 million, was terminated in 2022 (the “JPEO Rapid Response Contract Termination”).

A final settlement was reached with the US Department of Defense (the “DoD”) in January 2023.

Approximately $1.3 million and $1.8 million in deferred grant income was recognized for the JPEO Rapid Response Contract for the years ended December 31, 2024 and December 31, 2023, respectively.

See Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements for further information about our established revenue recognition process and Note 4, Revenue, to our consolidated financial statements for further information about revenue recognized from government grants for the years ended December 31, 2024 and 2023.

There was no revenue recognized for the year ended December 31, 2025 and approximately $1.3 million recognized from government grants for the year ended December 31, 2024.

We had various grants from the US Department of Defense that terminated in 2022.

We satisfied all obligations under these arrangements as of December 31, 2024.

Operating Expenses

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This study started in December 2023 and the terms of that agreement are subject to confidentiality and the status of the agreement is that it is current.

Pursuant to an agreement between the Company and Fortrea Holdings Inc.

Fortrea will act as the CRO overseeing our Phase 2b efficacy and safety study for SAB-142.

The study is started in December 2025.

For the years ended December 31, 2025 and 2024, we continued to incur costs to advance our progress towards commercialization of SAB-142.

We expect to continue to incur substantial research and development expenses as we conduct discovery research to enhance our platform and work on our

We expect to continue to incur substantial research and development expenses as we conduct discovery research to enhance our platform and work on our indications.

We expect to hire additional employees and continue research and development and manufacturing activities.

As a result, we expect that our research and development expenses will continue to increase in future periods and vary from period to period.

Major components within our research and development expenses are salaries and benefits (laboratory & animal care), laboratory supplies, animal care, contract manufacturing, clinical trial expense, outside laboratory services, project consulting, and facility expenses.

Major components within our research and development expenses are salaries and benefits, laboratory supplies, animal care, clinical trial expense, outside laboratory services, project consulting, and facility expense.

Research and development expenses by component for the years ended December 31, 2025 and 2024 were as follows:

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Laboratory supplies

Contract manufacturing

Clinical trial expense

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Interest income

Total other income (expense)

Loss before income taxes

Warrant issuance expense

Total other income

Income (loss) before income taxes

Net income (loss)

Comparison of the Years Ended December 31, 2025 and 2024

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Revenue decreased by $1.3 million, or 100.0%, in 2025, primarily due to the JPEO Rapid Response Contract Termination.

Included in revenues for the year ended December 31, 2024, are amounts for billable costs related to closeout activities and charges of $1.3 million for supplies, as compared to $0.1 million for labor, $0.8 million for supplies, and $1.4 million for outside research manufacturing services for the year ended December 31, 2023.

We expect to recognize no further revenue on the JPEO Rapid Response Contract Termination and do not anticipate pursuing additional funded research opportunities outside of our primary focus area in T1D.

There was no revenue recognized for the year ended December 31, 2025.

Included in revenue for the year ended December 31, 2024, are closeout activities and charges of $1.3 million due for outside services for laboratory supply disposal.

Research and development

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Total research and development expenses

Research and development expenses increased by $13.7 million, or 83.2%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to increases in outside lab services (year-over-year increase of $4.7 million, 479.4%), laboratory supplies (year-over-year increase of $0.4 million, 39.9%), an out-of-period adjustment of $0.9 million, salaries and benefits (year-over-year increase of $3.5 million, 53.4%), project consulting (year-over-year increase of $1.1 million, 288.6%), overhead costs (year-over-year increase of $0.5 million, 9.0%), clinical trial costs (year-over-year increase of $3.4 million, 415.0%), offset by contract manufacturing costs (year-over-year decrease of $0.4 million, 100.0%) and animal care (year-over-year decrease of $0.4 million, 43.2%).

We expect Research and Development expenses

to increase in future years as we advance our lead therapeutic candidate through Phase 2 clinical trials and invest in the necessary foundation to support potential commercialization.

Research and development expenses increased by $4.1 million, or 13.6%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to increases in salaries and benefits (year-over-year increase of $4.8 million, 47.8%;

clinical trial costs (year-over-year increase of $6.0 million, 143.5%;

animal care (year-over-year increase of $0.1 million, 28.6%);

offset by a decrease in outside lab services (year-over-year decrease of $4.2 million, 74.2%);

laboratory supplies (year-over-year decrease of $0.1 million, 5.8%);

project consulting (year-over-year decrease of $0.9 million, 64.5%);

and overhead costs (year-over-year decrease of $1.6 million, 64.5%).

We expect Research and Development expenses to

increase in future years as we advance our lead therapeutic candidate through Phase 2 clinical trials and invest in the necessary foundation to support potential commercialization.

General and administrative

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Total general and administrative expenses

General and administrative expenses decreased by $9.8 million, or 41.3%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to other administrative support fees relating to IT, human resources, and legal (year-over-year decrease of $1.5 million, 25.3%);

non-capitalized financing costs (year-over-year decrease of $7.5 million, 100.0%);

salaries and benefits (year-over-year decrease of $0.2 million, 2.6%);

General and administrative expenses increased by $0.6 million, or 4.4%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to other administrative support fees relating to IT, human resources, and legal (year-over-year increase of $1.1 million, 26.2%);

project consulting (year-over-year increase of $0.2 million, 23.4%);

offset by a decrease in salaries and benefits (year-over-year decrease of $0.6 million, 6.7%);

insurance costs (year-over-year decrease of $0.1 million, 8.4%).

and forgiveness of a trade payable of $0.7 million;

offset by project consulting (year-over-year increase of $0.6 million, 131.5%).

While administrative support and non-capitalized financing costs declined substantially in the year ended December 31, 2024, we anticipate that general and administrative expenses will rise as we expand our workforce and invest in the advancement of our lead therapeutic candidate in preparation for potential commercialization.

Additionally, as our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations.

Non-operating (expense) income

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Changes in fair value of warrant liabilities

Warrant issuance expense

Total non-operating income (expense)

Total non-operating income increased by $12.2 million, or (278.61)% for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This increase was primarily driven by changes in the fair value of the warrant liabilities (year-over-year increase of $10.2 million, 211.6%);

a $1.6 million increase in the Australian research and development tax credit;

and a $0.4 million increase in income from non-interest-bearing short-term investments, primarily consisting of dividend income and realized gains and losses.

The total non-operating income increased by $53.2 million, or 678.75% for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The increase was primarily driven by the change in fair value of warrant liabilities of (year-over-year increase of $57.4 million, 1,065.35%).

This amount includes a year-over-year decrease of $4.6 million in recurring change in fair value of warrant liabilities and gain of $62.0 million related to the change in fair value of warrant liabilities related to the Series B Offering.

Included in total non-operating income are warrant issuance costs associated with the Series B Offering of $4.9 million.

Other income increased by $0.7 million primarily related to an increase in dividend income of (year-over-year increase of $1.0 million, 204.5%), offset by a decrease in the Australian research and development tax credit (year-over-year decrease of $0.3 million, 13.0%).

Interest expense

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Total interest income

Interest income increased by $701 thousand, or 119.84% for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to interest earned on our investments in debt securities, and higher interest earning cash, and cash equivalent balances.

Interest income increased by $0.1 million, or 11.36% for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to interest earned on our investments in debt securities, and higher interest earning cash, and cash equivalent balances.

Future interest income will be largely dependent on our total liquid cash and investment balances, which are in turn influenced by our capital resources and future fundraising activities.

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While we intend to continue to keep operating expenses at a reduced level, there can be no assurance that our current level of operating expenses will not increase or that other uses of cash will not be necessary.

Based on our current level of operating expenses, existing resources will not be sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance.

These conditions raise substantial doubt about our ability to continue as a going concern.

We intend to seek additional capital through equity and/or debt financings, collaborative or other funding arrangements.

Based on our current level of operating expenses, existing resources will be sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance.

In the future, we may seek additional capital through equity and/or debt financings, collaborative or other funding arrangements.

Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all.

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Since our inception, we have financed our operations primarily from revenue in the form of government grants and from equity financings.

Private Placement Offerings of Equity Securities

During the year ended December 31, 2025, we completed an offering of 1,000,000 shares of newly-designated Series B preferred stock, par value $0.0001 per share, accompanied by 1,000,000 series B enrollment date warrants and 500,000 series B release date warrants.

We received approximately $175 million of initial gross proceeds from the sale of these securities.

Notes payable

8% Unsecured Convertible Note

Pursuant to the fourth amendment to our lease with Sanford Health, we agreed to a period of abated rent (the “Abated Rent”) from October 1, 2022 to September 30, 2023.

In exchange for the Abated Rent, effective as of October 1, 2022, we issued to Sanford Health an 8% unsecured, convertible promissory note (the “8% Unsecured Convertible Note”).

Pursuant to the 8% Unsecured Convertible Note, we shall pay the sum of approximately $542 thousand (the “Principal”) plus accrued and unpaid interest thereon on September 30, 2024 (the “Maturity Date”).

Simple interest shall accrue on the outstanding Principal from and after the date of the 8% Unsecured Convertible Note and shall be payable on the Maturity Date.

We repaid the Principal of $542 thousand and total accrued interest of $87 thousand during the year ended December 31, 2024.

Insurance Financing

We obtained financing for certain Director & Officer liability insurance policy premiums.

For the year ended December 31, 2024, the agreement assigns AFCO Direct as the lender a first priority lien on and security interest in the financed policies and any additional premium required in the financed policies including (a) all returned or unearned premiums, (b) all additional cash contributions or collateral amounts assessed by the insurance companies in relation to the financed policies and financed by Lender, (c) any credits generated by the financed policies, (d) dividend payments, and (e) loss payments which reduce unearned premiums.

If any circumstances exist in which premiums related to any Financed Policy could become fully earned in the event of loss, Lender shall be named a loss-payee with respect to such policy.

For the year ended December 31, 2023, we entered into a similar agreement with First Insurance Funding.

This agreement also assigned First Insurance Funding a first priority lien on the security interest in the financed policies and associated rights.

The total premiums, taxes, and fees financed under the current insurance financing agreement are approximately $516 thousand, for AFCO Direct with an annual interest rate of 7.37%.

In consideration of the premium payment by the AFCO Direct to the insurance companies or the Agent or Broker (as defined in the agreement with the lender), we unconditionally promise to pay the lender the amount financed plus interest and other charges permitted under the agreement.

At December 31, 2024, and 2023, we recognized approximately $276 thousand and $509 thousand, respectively, as an insurance financing note payable in our consolidated balance sheets.

We incurred $17 thousand and $22 thousand of interest expense related to the insurance financing note for the years ended December 31, 2024, and 2023, respectively.

Our current insurance financing agreement is being repaid through installment payments, with the final payment scheduled for September 22, 2025.

The Company entered into a premium financing agreement to fund certain Directors and Officers (“D&O”) liability insurance policy premiums.

Under the terms of the agreement, the lender was granted a first‑priority lien and security interest in the financed insurance policies and all related amounts, including (a) returned or unearned premiums, (b) additional cash contributions or collateral amounts assessed by insurers and financed by the lender, (c) credits generated by the financed policies, (d) dividend payments, and (e) loss payments that reduce unearned premiums.

In cases where premiums under any financed policy may become fully earned in the event of a loss, the lender was designated as a loss payee with respect to such policy.

For the year ended December 31, 2025, the Company did not utilize premium financing for its D&O liability insurance.

Instead, the annual policy premium was paid in full at inception in December 2025.

For the year ended December 31, 2024, the Company entered into a premium financing agreement for total premiums, taxes, and fees of approximately $516 thousand, bearing an annual interest rate of 7.37%.

The financing was repaid through monthly installments, with the final payment due September 22, 2025.

The Company incurred approximately $6 thousand and $17 thousand of interest expense related to this financing arrangement for the years ended December 31, 2025 and 2024, respectively.

During the year ended December 31, 2024, we also made payments on a prior insurance financing agreement, which had an original principal balance of $765 thousand with an annual interest rate of 7.96%.

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Please refer to Note 9, Notes Payable , in our consolidated financial statements for additional information on our debt.

Shelf Registration Statement

On December 29, 2025 we filed a Registration Statement on Form S-3 (Registration No.

333-292482) (the “Shelf Registration Statement”), declared effective on January 7, 2026 by the SEC, which includes a base prospectus that allows us to offer and sell, from time to time, in one or more offerings, common stock, preferred stock, debt securities, warrants, rights or units up to an aggregate public offering price of $300 million.

The Shelf Registration Statement is intended to preserve our flexibility to raise capital from time to time, if and when needed.

On December 29, 2025, the Company entered into a Sales Agreement (the “Agreement”) with UBS Securities LLC, relating to shares of common stock.

In accordance with the terms of the Agreement, the Company may offer and sell shares of our common stock having an aggregate offering price of up to $75 million from time to time through UBS Securities LLC, acting as the Company’s sales agent.

As of December 31, 2025, up to $75 million remains to be sold under the Agreement.

On January 26, 2024, the Company entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co.

providing for sales of up to $20 million of common stock;

no shares were sold during the year ended December 31, 2025, and effective December 17, 2025, the Company terminated the agreement with no costs or payments associated.

The following table summarizes our cash flows for the years ended December 31, 2025 and 2024:

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Operating Activities

Net cash used by operating activities increased by $9.2 million in the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to an increase in our net loss adjusted for non-cash items of $4.5 million, compounded by an increase in cash used in operating activities related to change in our operating assets and liabilities of $4.6

Year-over-year changes in cash used for operating activities were primarily driven by working capital needs to support the advancement of our Phase 1 trial.

Net cash used by operating activities increased by $10.5 million in the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to an increase in our non-cash items plus net income of $9.4 million, offset by an increase in cash used in operating activities related to change in our operating assets and liabilities of $1.4 million.

Year-over-year changes in cash used by operating activities is explained by shifts in the working capital balances as we continue to invest in the development of our lead product candidate, SAB-142.

Investing Activities

Net cash used by investing activities increased by $11.8 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to increased purchases of short-term investments following the completion of the Company’s 2023 PIPE.

Capital expenditures were minimal in 2024, as major asset purchases in prior years were primarily related to leasehold improvements at our Corporate Headquarters.

We do not anticipate a significant increase in capital asset purchases in the near term, as our investment focus remains on advancing our lead therapeutic candidate through Phase 2 clinical trials.

Net cash used by investing activities increased by $109.7 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to increased purchases of short-term investments.

Capital expenditures were minimal in 2025.

We anticipate an increase in capital asset purchases in the near term as we continue to invest in the development of our lead therapeutic candidate through Phase 2 clinical trials.

Financing Activities

Net cash provided by (used in) financing activities decreased by $67.9 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to the absence of any material equity financing activities in 2024.

Net cash provided by financing activities increased by $169.5 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to the Series B Offering.

Contractual Obligations and Commitments

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As of December 31, 2025, there were no material changes outside of the ordinary course of business to our commitments and contractual obligations.

We had $59.9 million of federal net operating loss carryforwards as of December 31, 2024.

Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.

These carryforwards may generally be utilized in any future period but may be subject to limitations based upon changes in the ownership of our shares in a prior or future period.

We have not quantified the amount of such limitations, if any.

Off-Balance Sheet Arrangements

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Research and development expenses

Expenses incurred in connection with research and development activities are expensed as incurred.

These include licensing fees to use certain technology in our research and development projects, fees paid to consultants and various entities that

perform certain research and testing on behalf of us, and expenses related to animal care, research-use equipment depreciation, salaries, benefits, and stock-based compensation granted to employees in research and development functions.

We had contracts with multiple CROs to complete studies as part of research grant agreements.

Costs incurred in connection with research and development activities are expensed as incurred.

These include licensing fees to use certain technology in our research and development projects, fees paid to consultants and various entities that perform certain research and testing on behalf of us, and expenses related to animal care, research-use equipment depreciation, salaries, benefits, and stock-based compensation granted to employees in research and development functions.

We have contracts with multiple CROs to complete studies as part of research grant agreements.

These costs include upfront, milestone and monthly expenses as well as reimbursement for pass through costs.

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FASB ASC Topic 718, Compensation – Stock Compensation , prescribes accounting and reporting standards for all share-based payment transactions in which employee and non-employee services are acquired.

We recognize compensation cost relating to stock-based payment transactions using a fair-value measurement method, which requires all stock-based payments to employees, directors, and non-employee consultants, including grants of stock options, to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards.

We recognize compensation cost relating to stock-based payment transactions using a fair-value measurement method, which requires all stock-based

payments to employees, directors, and non-employee consultants, including grants of stock options, to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards.

We determine the fair value of common stock based on the closing market price at closing on the date of the grant.

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Stock-based compensation expense is classified in the consolidated statements of operations based on the function to which the related services are provided.

We recognize stock-based compensation expense over the vesting period.

We recognize stock-based compensation expense over the requisite service period, which generally coincides with the vesting period.

Liability Classified Warrants

We account for our Public Warrants, Private Placement Warrants, and Preferred Warrants as liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity.

The initial fair value of the warrant liabilities was measured at fair value at the Closing Date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in our consolidated statements of operations.

On the Closing Date, the Company established the fair value of the Private Placement Warrants utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (the “MCS”) analysis.

We account for our Public Warrants, Private Placement Warrants, and Tranche C Warrants as liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity.

The initial fair value of the warrant liabilities was measured at fair value at the Business Combination Closing Date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in our consolidated statements of operations.

On the Business Combination Closing Date, the Company established the fair value of the Private Placement Warrants utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (the “MCS”) analysis.

Specifically, we considered an MCS to derive the implied volatility in the publicly-listed price of the Public Warrants.

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Equity Classified Warrants

We determined the Ladenburg Warrants, PIPE Warrants, PIPE Placement Agent Warrants, and Preferred PIPE Placement Agent Warrants met all necessary criteria to be accounted for as equity in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity.

We determined the Ladenburg Warrants, PIPE Warrants, PIPE Placement Agent Warrants, Preferred PIPE Placement Agent Warrants, and Preferred PIPE Series B Warrants (each as defined in Note 12, Warrants ) met all necessary criteria to be accounted for as equity in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity.

As such, they are presented within additional paid-in capital within our consolidated statements of changes in stockholders’ equity and consolidated balance sheets.

7 unchanged sentences

The Jumpstart Our Business Startups (“JOBS”) Act, enacted in April 2012, permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies.

We have and intend to continue to take advantage of all of the reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards, for an emerging growth company under Section 107 of the JOBS Act.

We have and intend to continue to take

advantage of all of the reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards, for an emerging growth company under Section 107 of the JOBS Act.

We may use these provisions until the last day of our fiscal year in which the fifth anniversary of the completion of our initial public offering occurred.

12 unchanged sentences

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 7. Management’s Discussion and Analysis