Sionna Therapeutics, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements for the Years Ended December 31, 2025 and 2024: Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 2 Consolidated Balance Sheets F- 3 Consolidated Statements of Operations and Comprehensive Loss F- 4 Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity ( Deficit ) F- 5 Consolidated Statements of Cash Flows F- 6 Notes to Consolidated Financial Statements F- 7 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Sionna Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Sionna Therapeutics, Inc., and subsidiary (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Boston, Massachusetts March 2, 2026 We have served as the Company’s auditor since 2021. F-2 Table of Contents SIONNA THERAPEUTICS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) Year Ended December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 58,451 $ 37,788 Marketable securities, current 177,431 109,750 Prepaid expenses and other current assets 5,537 3,455 Total current assets 241,419 150,993 Property and equipment, net 2,225 2,466 Marketable securities, noncurrent 74,420 20,505 Restricted cash 963 962 Operating lease right-of-use asset 6,926 7,832 Other assets — 2,994 Total assets $ 325,953 $ 185,752 Liabilities, convertible preferred stock and stockholders’ equity (deficit) Current liabilities: Accounts payable $ 769 $ 1,186 Accrued expenses 9,668 8,162 Operating lease liability, current 1,269 1,072 Other current liabilities 6 — Total current liabilities 11,712 10,420 Operating lease liability, noncurrent 7,408 8,677 Total liabilities 19,120 19,097 Commitments and contingencies (Note 8) Series Seed convertible preferred stock, $ 0.001 par value, no shares and 3,963,963 shares authorized, issued and outstanding as of December 31, 2025 and December 31, 2024, respectively — 13,014 Series A convertible preferred stock, $ 0.001 par value, no shares and 5,704,161 shares authorized, issued and outstanding as of December 31, 2025 and December 31, 2024, respectively — 25,235 Series B convertible preferred stock, $ 0.001 par value, no shares and 11,370,621 shares authorized, issued and outstanding as of December 31, 2025 and December 31, 2024, respectively — 110,791 Series C convertible preferred stock, $ 0.001 par value, no shares and 18,628,970 shares authorized, issued and outstanding as of December 31, 2025 and December 31, 2024, respectively — 181,328 Total convertible preferred stock — 330,368 Stockholders’ equity (deficit): Preferred stock, $ 0.001 par value, 10,000,000 and no shares authorized as of December 31, 2025 and December 31, 2024, respectively; no shares issued or outstanding as of December 31, 2025 and December 31, 2024 — — Common stock, $ 0.001 par value, 500,000,000 and 55,200,000 shares authorized as of December 31, 2025 and December 31, 2024, respectively; 44,723,585 and 4,798,721 shares issued, 44,723,585 and 4,722,763 shares outstanding as of December 31, 2025 and December 31, 2024, respectively 45 5 Additional paid-in capital 562,602 17,000 Accumulated other comprehensive income 540 368 Accumulated deficit ( 256,354 ) ( 181,086 ) Total stockholders’ equity (deficit) 306,833 ( 163,713 ) Total liabilities, convertible preferred stock and stockholders’ equity (deficit) $ 325,953 $ 185,752 The accompanying notes are an integral part of these consolidated financial statements. F-3 Table of Contents SIONNA THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share data) Year Ended December 31, 2025 2024 Operating expenses: Research and development $ 60,263 $ 57,288 General and administrative 28,719 13,268 Total operating expenses 88,982 70,556 Loss from operations ( 88,982 ) ( 70,556 ) Other income: Interest income 13,295 8,170 Other income 419 698 Total other income 13,714 8,868 Net loss $ ( 75,268 ) $ ( 61,688 ) Net loss per share, basic and diluted $ ( 1.88 ) $ ( 15.99 ) Weighted-average common shares outstanding, basic and diluted 39,962,163 3,858,859 Comprehensive loss: Net loss $ ( 75,268 ) $ ( 61,688 ) Unrealized gain on marketable securities 172 368 Total other comprehensive gain 172 368 Comprehensive loss $ ( 75,096 ) $ ( 61,320 ) The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of Contents SIONNA THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands, except share amounts) Series Seed Series A Series B Series C Additional Paid-In Capital Accumulated Other Comprehensive Gain Accumulated Deficit Total Stockholders’ Equity (Deficit) Preferred Stock Preferred Stock Preferred Stock Preferred Stock Common Stock Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Balance at December 31, 2023 3,963,963 $ 13,014 5,704,161 $ 25,235 11,370,621 $ 110,791 — $ — 3,050,863 $ 2 $ 4,515 $ — $ ( 119,398 ) $ ( 114,881 ) Issuance of Series C Preferred Stock, net of issuance costs of $ 528 — — — — — — 18,628,970 181,328 — — — — — — Issuance of common stock from IPR&D acquisition — — — — — — — — 1,414,445 2 8,637 — — 8,639 Exercise of common stock options — — — — — — — — 71,264 1 140 — — 141 Vesting of restricted common stock awards — — — — — — — — 186,191 — — — — — Stock-based compensation expense — — — — — — — — — — 3,708 — — 3,708 Unrealized gain on marketable debt securities — — — — — — — — — — — 368 — 368 Net loss — — — — — — — — — — — — ( 61,688 ) ( 61,688 ) Balance at December 31, 2024 3,963,963 $ 13,014 5,704,161 $ 25,235 11,370,621 $ 110,791 18,628,970 181,328 4,722,763 $ 5 $ 17,000 $ 368 $ ( 181,086 ) $ ( 163,713 ) Conversion of convertible preferred stock to common stock upon closing of initial public offering ( 3,963,963 ) ( 13,014 ) ( 5,704,161 ) ( 25,235 ) ( 11,370,621 ) ( 110,791 ) ( 18,628,970 ) ( 181,328 ) 27,149,206 27 330,340 — — 330,367 Issuance of common stock from initial public offering, net of issuance costs of $ 4,265 — — — — — — — — 12,176,467 12 199,558 — — 199,570 Exercise of common stock options — — — — — — — — 599,191 1 3,638 — — 3,639 Vesting of restricted common stock awards — — — — — — — — 75,958 — — — — — Stock-based compensation expense — — — — — — — — — — 12,066 — — 12,066 Unrealized gain on marketable debt securities — — — — — — — — — — — 172 — 172 Net loss — — — — — — — — — — — — ( 75,268 ) ( 75,268 ) Balance at December 31, 2025 — $ — — $ — — $ — — $ — 44,723,585 $ 45 $ 562,602 $ 540 $ ( 256,354 ) $ 306,833 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents SIONNA THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 75,268 ) $ ( 61,688 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 12,066 3,708 Non-cash operating lease expense 1,962 1,962 Amortization of discount on marketable securities ( 3,052 ) ( 3,001 ) Non-cash expense related to IPR&D acquisition — 8,639 Depreciation expense 647 668 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 2,082 ) ( 2,760 ) Accounts payable ( 417 ) 467 Accrued expenses and other current liabilities 1,975 1,080 Operating lease liability ( 2,128 ) ( 1,897 ) Other assets — 35 Net cash used in operating activities ( 66,297 ) ( 52,787 ) Cash flows from investing activities: Purchases of property and equipment ( 377 ) ( 27 ) Purchases of marketable securities ( 325,025 ) ( 182,841 ) Maturities of marketable securities 206,653 55,955 Net cash used in investing activities ( 118,749 ) ( 126,913 ) Cash flows from financing activities: Proceeds from initial public offering, net of underwriter discounts, commissions and offering costs paid during the period 202,071 — Proceeds from issuance of Series C convertible preferred stock, net of issuance costs — 181,328 Payment of deferred offering costs — ( 2,502 ) Exercise of common stock options 3,639 141 Net cash provided by financing activities 205,710 178,967 Net increase (decrease) in cash, cash equivalents and restricted cash 20,664 ( 733 ) Cash, cash equivalents and restricted cash at beginning of period 38,750 39,483 Cash, cash equivalents and restricted cash at end of period $ 59,414 $ 38,750 Supplemental disclosure of non-cash investing and financing activities: Conversion of convertible preferred stock into common stock upon closing of initial public offering $ 330,368 $ — Offering costs transferred to additional paid in capital 4,265 — Deferred offering costs in accrued expenses — 492 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 58,451 $ 37,788 Restricted cash 963 962 Total cash, cash equivalents, and restricted cash $ 59,414 $ 38,750 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents SIONNA THERAPEUTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of the Business Organization Sionna Therapeutics, Inc. (the “Company”), formerly known as Sling Therapeutics, Inc., was incorporated in Delaware in August 2019 and is headquartered in Waltham, Massachusetts. The Company is a clinical-stage biopharmaceutical company on a mission to revolutionize the current treatment paradigm for cystic fibrosis (“CF”) patients by developing novel medicines that normalize the function of the cystic fibrosis transmembrane conductance regulator (“CFTR”) protein to deliver clinically meaningful benefit to CF patients. Risks and Uncertainties The Company is subject to a number of risks common to other companies in the biotechnology industry, including but not limited to, development by competitors of new technological innovations, risks of failure of preclinical studies and clinical trials, risks related to development and manufacturing of product candidates, obtaining regulatory approval for product candidates, competition from substitute products, the need to successfully commercialize and gain market acceptance of its product candidates, protection of proprietary technology, dependence on key personnel, the ability to attract and retain qualified employees, reliance on third party organizations, compliance with government regulations, and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive clinical testing and regulatory approval, prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance-reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Initial Public Offering In February 2025, the Company completed its initial public offering ("IPO"), in which the Company sold an aggregate of 10,588,233 shares of its common stock at a public offering price of $ 18.00 per share and sold an additional 1,588,234 shares of its common stock to the underwriters of the IPO pursuant to the full exercise of their option to purchase additional shares, resulting in aggregate net proceeds of approximately $ 199.6 million, after deducting underwriter discounts, commissions and other offering expenses. Immediately prior to the closing of the IPO, the Company's outstanding redeemable convertible preferred stock automatically converted into 27,149,206 shares of common stock. Following the closing of the IPO, no shares of redeemable convertible preferred stock were outstanding. In connection with the closing of the IPO, the Company's certificate of incorporation was amended and restated to authorize 500,000,000 shares of common stock, par value $ 0.001 per share, and 10,000,000 shares of preferred stock, par value $ 0.001 per share. Liquidity and Going Concern The Company has incurred annual net operating losses and has generated negative operating cash flows in every year since inception. As of December 31, 2025, the Company had an accumulated deficit of $ 256.4 million. The Company expects its operating losses to continue into the foreseeable future as it continues to pursue its research and development efforts. The Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The Company believes that its existing cash, cash equivalents, and marketable securities of $ 310.3 million as of December 31, 2025 will be sufficient to allow the Company to fund operations beyond twelve months from the date of issuance of these consolidated financial statements. F-7 Table of Contents 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as found in the Accounting Standards Codification (“ASC”) of the Financial Accounting Standards Board (“FASB”). The accompanying consolidated financial statements include the accounts of Sionna Therapeutics, Inc., and its wholly owned subsidiary, Sionna Therapeutics Securities Corporation. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities and expenses and the related disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected within the consolidated financial statements include, but are not limited to, research and development expenses and accruals and the valuation of the Company’s common shares in connection with the accounting for stock-based awards. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances and facts. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of ninety days or less at the time of purchase to be cash equivalents. Cash and cash equivalents typically include cash held in deposit accounts and money market funds. Cash accounts with any type of restriction are classified as restricted cash. As of December 31, 2025 and 2024, the Company had restricted cash of $ 1.0 million held to secure a letter of credit associated with the Company’s leased corporate headquarters. The restricted funds are maintained in a money market account. The Company classified this amount as restricted cash in the accompanying consolidated balance sheets based on the release date of the restrictions. Marketable Securities The Company classifies marketable securities with a remaining maturity greater than three months at the time of purchase and less than one year from the balance sheet date as current. Marketable securities are classified as long-term assets on the consolidated balance sheets if the maturity exceeds one year, and the Company does not intend to utilize the marketable securities to fund current operations. The Company classifies all of its investments as available-for-sale securities. Accordingly, these investments are recorded at fair value. Realized gains and losses and amortization of discounts and premiums are included in interest income, which is a component of other income. Unrealized gains and losses on available-for-sale securities are included in accumulated other comprehensive gain as a component of stockholders’ equity (deficit) until realized. Interest receivables earned on marketable securities are recorded as a component of prepaid expenses and other current assets. F-8 Table of Contents At each balance sheet date, the Company assesses available-for-sale debt securities in an unrealized loss position to determine whether the unrealized loss or any potential credit losses should be recognized. The Company evaluates whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. The Company also evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the severity of the impairment, any changes in interest rates, changes to the underlying credit ratings and forecasted recovery, among other factors. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in other income. There have been no impairment or credit losses recognized during any of the periods presented. Concentration of Credit Risk and Off-Balance Sheet Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash, cash equivalents and marketable securities. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. The Company believes that it is not exposed to significant credit risk as its deposits are held at financial institutions that management believes to be of high credit quality and the Company has not experienced any losses on these deposits. The Company regularly invests excess cash with major financial institutions in money market funds, U.S. Treasury securities and government agency securities, corporate bonds, and commercial paper, all of which can be readily purchased and sold using established markets. The Company believes that the market risk arising from its holdings of these financial instruments is mitigated based on the fact that many of these securities are either government-backed or of high credit rating. Fair Value of Financial Instruments Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: Level 1 —Quoted market prices in active markets for identical assets or liabilities. Level 2 —Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3 —Unobservable inputs for the asset or liability (i.e., supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of the fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. The Company does not currently have recurring fair value measurements classified within Level 3. The carrying values of prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. F-9 Table of Contents Property and Equipment, net Property and equipment is stated at cost net of accumulated depreciation. Costs of major additions and betterments are capitalized. Maintenance and repairs to an asset that do not improve or extend its life are expensed in the period incurred. Depreciation expense is recognized using the straight-line method over the estimated useful life of each asset as follows: Estimated Useful Life (in years) Lab equipment 5 Furniture & fixtures 5 Hardware & software 3 Leasehold improvements Shorter of useful life or remaining lease term When an item is sold or retired, the costs and related accumulated depreciation are eliminated, and the resulting gain or loss, if any, is credited or charged to the consolidated statement of operations and comprehensive loss. Property and equipment held for disposal are carried at fair value less costs to sell. Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment and right-of-use assets. The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may be impaired. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use or disposition of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their fair values. The Company has not recognized any impairment charges during the years ended December 31, 2025 and 2024. Leases At the inception of an arrangement the Company determines whether the arrangement contains a lease. Operating leases are included in operating lease right-of-use lease asset (“ROU asset”), operating lease liability, current, and operating lease liability, noncurrent, on the Company’s consolidated balance sheets. Assets subject to finance leases are included in property and equipment, and the related lease obligation is included in other current liabilities and other long-term liabilities on the Company’s consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. As of December 31, 2025 and 2024, the Company did not have any finance leases. The Company has elected the short-term lease recognition exemption for short-term leases, which allows the Company not to recognize lease liabilities and ROU assets on the consolidated balance sheets for leases with an original term of twelve months or less. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities and their corresponding ROU assets are initially recognized based on the present value of lease payments over the expected remaining lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. Certain adjustments to the ROU asset may be required for items such as incentives received from the lessor. The interest rate implicit in lease contracts is typically not readily determinable. Therefore, the Company utilizes its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the fixed rate at which the Company could borrow, on a collateralized basis, the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Leases generally provide for payments of non-lease components, such as common area maintenance, real estate taxes and other costs associated with the leased property. The Company accounts for non-lease components together with lease components. Variable lease payments, such as periodic adjustments for inflation, reimbursement of real estate taxes, and variable common area maintenance are expensed as incurred as variable lease costs and are not recorded on the consolidated balance sheets. F-10 Table of Contents Sublease income is recognized on a straight-line basis over the term of the sublease agreement and is recorded within Other Income on the consolidated statements of operations and comprehensive loss. Research and Development Expenses and Accruals Research and development costs include (i) employee-related expenses, including salaries, benefits, and stock-based compensation expense; (ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations (“CRO”) agreements, contract development and manufacturing organizations (“CDMOs”), consultants and scientific advisors; (iii) costs associated with preclinical and clinical activities and (iv) lab supplies, lab expenses and an allocation of rent, depreciation, and infrastructure. The Company recognizes research and development costs in the periods in which they are incurred because these activities have no alternative future use. Typically, external expenses are recognized based on an evaluation of the progress to completion of specific tasks using information obtained from (i) internal personnel regarding the services that have been performed on the Company's behalf and estimating the associated cost incurred for those services or (ii) information provided to the Company by their service providers as of each reporting date . Advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses, which are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered, or the services rendered. Significant judgments and estimates are made in determinin g accrued or prepaid expense balances at the end of any reporting period. Asset Acquisitions and Acquired In-Process Research and Development Expense The Company accounts for acquisitions of assets or a group of assets that do not meet the definition of a business as asset acquisitions based on the cost to acquire the asset or group of assets, which include certain transaction costs. In an asset acquisition, the cost to acquire is allocated to the identifiable assets acquired and liabilities assumed based on their relative fair values as of the acquisition date. No goodwill is recorded in an asset acquisition. Assets that are acquired in an asset acquisition for use in research and development activities that have an alternative future use are capitalized as in process research and development (“IPR&D”). Acquired IPR&D that has no alternative future use as of the acquisition date is recognized as research and development expense as of the acquisition date. The costs to acquire IPR&D are presented as operating activities in the consolidated statements of cash flows in the period acquired. The Company will recognize additional research and development expenses in the future if and when the Company becomes obligated to make contingent milestone or royalty payments which are governed by the terms of the agreements by which it acquired the IPR&D assets. Developmental and regulatory milestone payments will be recorded when the milestone is achieved, and commercial milestones, such as sales-based milestone payments, and royalties will be recorded when the underlying sale(s) occur. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications such as direct application fees, and legal and consulting expenses are expensed as incurred due to the uncertainty about the recovery of the expenditure. Patent-related costs are classified as general and administrative expenses within the Company’s consolidated statements of operations and comprehensive loss. Deferred Offering Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are direct and incremental costs associated with in-process equity financings as deferred offering costs until such financing is consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds generated as a result of the offering within additional paid-in capital. In the event that the equity financing is abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the condensed consolidated statements of operations and comprehensive loss. F-11 Table of Contents Convertible Preferred Stock Prior to the completion of the Company's IPO, the Company had outstanding convertible preferred stock, which was classified as temporary equity in the consolidated balance sheets. Upon the completion of the IPO, all outstanding shares of convertible preferred stock automatically converted into shares of common stock, and the carrying value of the convertible preferred stock was reclassified to stockholder's equity. As of December 31, 2025 , no shares of convertible preferred stock were outstanding. Fair Value of Common Stock Prior to the completion of the Company's IPO, the Company determined the estimated fair value of common stock based on a number of objective and subjective factors, including, but not limited to, external market conditions affecting the biotechnology industry sector, the prices at which the Company sold shares of convertible preferred stock and the superior rights and preferences of securities senior to the Company’s common stock at the time, and the likelihood and potential timing of achieving a liquidity event, such as an initial public offering, in light of prevailing market conditions. The Company utilized valuation methodologies to estimate the fair value of common stock that were in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation , including the option pricing method and the probability-weighted expected return method. These methodologies required the use of significant management judgment and assumptions. Since completion of the IPO, the fair value of the Company's common stock has been determined based on the closing market price of the Company's common stock on the date of equity grant. Stock-Based Compensation The Company measures all stock options and other stock-based awards granted to employees, non-employees, and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. The Company’s stock-based payments include stock options and grants of restricted common stock awards. Generally, the Company issues stock-based awards with only service-based vesting conditions. The Company’s policy is to account for forfeitures when they occur. Stock-based compensation expense is classified in the accompanying consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipients service payments are classified. Restricted common stock awards are subject to repurchase rights until such awards meet all vesting conditions. Accordingly, the Company recorded the proceeds from the issuance of restricted common stock awards as a liability in the consolidated balance sheets. The restricted common stock liability was reclassified into stockholders’ equity as the restricted common stock vested. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Due to the lack of Company-specific historical and implied volatility information, the Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until it has adequate historical data regarding the volatility of its own traded stock price. The Company uses the simplified method as prescribed by the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107, Share-Based Payment , to estimate the expected term for options granted to employees and non-employees as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero because the Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future. Income Taxes The Company’s provision for income taxes, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management's best assessment of estimated future taxes to be paid. F-12 Table of Contents Significant judgments and estimates based on interpretations of existing tax laws or regulations in the United States are required in determining our provision for income taxes. Changes in tax laws, statutory tax rates, and estimates of our future taxable income could impact the deferred tax assets and liabilities provided for in the consolidated financial statements and would require an adjustment to the provision for income taxes. The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, which are considered appropriate as well as the related net interest and penalties. Net Loss Per Share Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of common shares outstanding during the period, and if dilutive, the weighted-average number of potential common shares outstanding. Potentially dilutive securities consist of stock options, restricted stock awards, and other common stock equivalents. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share is the same as basic net loss per share, as the inclusion of potentially dilutive common shares would be antidilutive. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholder’s equity (deficit) that result from transactions and events other than those with stockholders. The Company’s unrealized gains and losses on marketable securities represent the only component of other comprehensive gain that are excluded from the reported net loss and that are presented in the consolidated statements of operations and comprehensive loss. Segment Information The Company is managed as one operating segment, and thus reports as a single reportable segment. This operating segment is focused on the research and development of cystic fibrosis therapies. Management assessed the financial information routinely reviewed by the Company's Chief Operating Decision Maker ("CODM"), its President and Chief Executive Officer, to monitor the Company's operating performance and support decision making regarding allocation of resources to its operations, and determined that performance is continuously monitored at the consolidated level. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. The measure used by the CODM in assessing F-13 Table of Contents performance and deciding how to allocate resources is based on consolidated net loss, as reported on the consolidated statement of operations and comprehensive loss. The CODM uses consolidated net loss, as reported in the consolidated statement of operations, to assess performance and allocate resources by evaluating operating results against expectations. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 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 were effective for annual periods beginning after December 15, 2024. The Company adopted the amendments retrospectively for the year-ended December 31, 2025. The adoption did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires entities to disclose additional information about specific expense categories in the notes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. ASU 2024-03 may be applied retrospectively or prospectively. The Company is currently evaluating the effect of this update on its consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU 2025-07, Derivatives Scope Refinement , ("ASU 2025-07"). ASU 2025-07 creates a scope exception within ASC 815 for certain contracts with underlyings tied to a party's operations or activities (such as regulatory approval, clinical, or earnings milestones), which may cause some arrangements that previously met the derivative definition to no longer be accounted for as derivatives. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods. Early adoption is permitted. Entities may adopt prospectively for new or modified contracts after the adoption date, or modified retrospectively for contracts outstanding at adoption with a cumulative-effect adjustment to opening retained earnings. The Company expects to adopt prospectively and does not expect a material impact, though this guidance may affect the accounting for future milestone-linked arrangements executed after adoption . F-14 Table of Contents 3. Marketable Securities The following table summarizes the amortized cost and estimated fair value of the Company’s current and noncurrent marketable securities (in thousands): December 31, 2025 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Marketable securities, current: U.S. Treasury securities $ 135,801 $ 263 $ — $ 136,064 Commercial paper 24,391 10 ( 5 ) 24,396 Corporate debt 11,813 3 ( 1 ) 11,815 Government agency securities 5,145 11 — 5,156 Total marketable securities, current 177,150 287 ( 6 ) 177,431 Marketable securities, noncurrent: U.S. Treasury securities 55,793 208 — 56,001 Government agency securities 18,368 51 — 18,419 Total marketable securities, noncurrent 74,161 259 — 74,420 Total marketable securities $ 251,311 $ 546 $ ( 6 ) $ 251,851 December 31, 2024 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Marketable securities, current: U.S. Treasury securities $ 55,154 $ 176 $ — $ 55,330 Government agency securities 31,198 62 ( 1 ) 31,259 Corporate debt 17,205 22 — 17,227 Commercial paper 5,931 3 — 5,934 Total marketable securities, current 109,488 263 ( 1 ) 109,750 Marketable securities, noncurrent: U.S. Treasury securities 15,266 83 — 15,349 Government agency securities 5,133 23 — 5,156 Total marketable securities, noncurrent 20,399 106 — 20,505 Total marketable securities $ 129,887 $ 369 $ ( 1 ) $ 130,255 The Company has determined that there were no material changes in the credit risk, therefore the Company has not recognized any allowance for credit losses on its debt securities. As of December 31, 2025, the Company holds marketable securities with an aggregate fair value of $ 74.4 million that had remaining maturities between one and two years. All other securities had a contractual maturity of less than a year. There were no realized gains or losses during the years ended December 31, 2025, or 2024. F-15 Table of Contents 4. Fair Value Measurements The following table presents information about the Company’s financial instruments that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the inputs the Company utilized to determine such fair value (in thousands): December 31, 2025 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 51,962 $ 51,962 $ — $ — Commercial paper 5,988 — 5,988 — Marketable securities: U.S. Treasury securities 192,065 192,065 — — Commercial paper 24,396 — 24,396 — Government agency securities 23,575 — 23,575 — Corporate debt 11,815 — 11,815 — Total financial assets $ 309,801 $ 244,027 $ 65,774 $ — December 31, 2024 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 37,288 $ 37,288 $ — $ — Marketable securities: U.S. Treasury securities 70,679 70,679 — — Government agency securities 36,415 — 36,415 — Corporate debt 17,227 — 17,227 — Commercial paper 5,934 — 5,934 — Total financial assets $ 167,543 $ 107,967 $ 59,576 $ — During the year ended December 31, 2025, there were no transfers or reclassifications between fair value measurement levels of assets or liabilities. The carrying values of prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. 5. Property and Equipment, net Property and equipment, net consisted of the following (in thousands): December 31, 2025 2024 Leasehold improvements $ 1,920 $ 1,854 Laboratory equipment 1,575 1,461 Furniture & fixtures 852 722 Total property and equipment 4,347 4,037 Less: accumulated depreciation ( 2,122 ) ( 1,571 ) Property and equipment, net $ 2,225 $ 2,466 Depreciation expense was $ 0.6 million and $ 0.7 million for the years ended December 31, 2025 and 2024, respectively. F-16 Table of Contents 6. Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, 2025 2024 Accrued compensation and benefits $ 4,740 $ 2,972 Accrued research and development 4,305 3,961 Accrued professional fees 522 737 Accrued other 101 — Accrued deferred offering costs — 492 Total accrued expenses $ 9,668 $ 8,162 7. Leases Operating Leases Summary Waltham, Massachusetts In May 2022, the Company entered into a noncancelable facility lease agreement to lease 24,051 square feet of office and laboratory space in Waltham, Massachusetts (“Waltham Lease”), which became the Company headquarters in January 2023 following the completion of construction of the prebuilt office and lab space, and when the Company received full access and control over the leased space. At commencement of the lease the right-of-use asset was $ 9.5 million, which was reduced by $ 0.4 million of lease incentives, offset by $ 0.2 million of lease prepayments, and the lease liability was $ 9.7 million. The original term for the Waltham Lease is for the period from January 2023 through November 2030, and the Company has the option to extend the Waltham Lease for an additional five-year term at market-based rates. The renewal option is not reasonably certain to occur, and as such, it was not considered in the measurement of the right-of-use asset and lease liability. The Waltham Lease has escalating base rent payments, which commenced in September 2023 and continue through the expiration of the lease. The Company received eight months of free rent and five additional months of 50 % rent abatement. The Company is responsible for other fixed and variable payments including operating expenses and property taxes. Sublease Agreement In June 2023, the Company entered into a sublease agreement to sublet 6,399 square feet of its office and laboratory space under the Waltham Lease (the “Sublease”). The Company was not relieved of its obligation to the lessor for the head lease as a result of its entry into the Sublease. The Sublease is classified as an operating lease and commenced in July 2023 and expired in August 2025. Sublease income was recognized on a straight-line basis. For the years ended December 31, 2025 and 2024, the Company recognized $ 0.4 million and $ 0.7 million, respectively, of sublease income within other income on the consolidated statements of operations and comprehensive loss. Operating Lease Tables The following table presents inputs used in the calculation of the Company’s right of use asset and lease liabilities at the end of each reporting period: December 31, 2025 2024 Weighted-average remaining lease term (years) 4.9 5.9 Weighted-average discount rate 11.0 % 11.0 % Cash paid for amounts included in the measurement of operating lease liabilities (in thousands) $ 2,128 $ 1,897 F-17 Table of Contents The components of lease costs were as follows (in thousands): December 31, 2025 2024 Operating lease costs $ 1,962 $ 1,962 Variable lease costs 627 513 Total lease cost $ 2,589 $ 2,475 Lease commitments Future minimum lease payments were as follows (in thousands): Year ended December 31, Amount 2026 $ 2,190 2027 2,253 2028 2,319 2029 2,386 2030 2,246 Total future minimum lease payments 11,394 Less imputed interest ( 2,717 ) Present value of operating lease liability $ 8,677 8. Commitments and Contingencies Legal Proceedings The Company was not subject to any material legal proceedings during the years ended December 31, 2025 and 2024, and the Company is not aware of any material legal proceedings that are currently pending or threatened. Other Contracts The Company is party to various contracts with CROs and CDMOs in the ordinary course of business. These agreements generally provide for termination at any time upon a certain amount of prior notice. Payments upon termination, if any, are based on the timing of the termination and the terms of the agreement. Indemnification Agreements In the ordinary course of business the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including arising out of the relationship between such parties and the Company. In addition, the Company has entered into indemnification agreements with members of its board of directors and senior management that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date the Company has not incurred any material costs as a result of such indemnifications nor experienced any losses related to them. As of December 31, 2025 and 2024, the Company was not aware of any claims under indemnification arrangements and it has not accrued any liabilities related to such obligations. 9. License Agreements Sanofi License Agreement In December 2019, the Company entered into a license agreement, which has been subsequently amended (as amended, the “Sanofi License Agreement”), with Sanofi SA (f/k/a Genzyme) (“Sanofi”), pursuant F-18 Table of Contents to which the Company has been granted an exclusive, sub-licensable, royalty-bearing, worldwide license to develop and commercialize products using the licensed compounds and know-how for CFTR correctors. As initial consideration for the license, the Company paid a non-refundable, upfront payment of $ 1.5 million, as well as a reimbursement of $ 0.3 million for Sanofi’s research and development expenses, which was previously recorded as research and development expense because the acquired license represented in-process research and development with no alternative future use. In addition, the Company is required to pay Sanofi a total of up to $ 40.0 million upon achievement of certain late-stage developmental and commercial milestones. As of December 31, 2025, no milestones have been achieved. The Company is also required to pay royalties to Sanofi in the low single-digit percentage range based on net sales of licensed products, subject to customary reductions and offsets. Such royalty payments shall be reduced for products covered by derived patents. CFF Payment Agreement In December 2019, the Company entered into a payment agreement (the “CFF Payment Agreement”) with the Cystic Fibrosis Foundation (“CFF”), pursuant to which the Company agreed to provide CFF with compensation in exchange for the grant of, or forbearance from exercising, certain of CFF’s rights existing under the license agreement by and between CFF (through an assignment by Cystic Fibrosis Foundation Therapeutics, Inc.) and Genzyme Corporation, an affiliate of Sanofi (the “CFFT-Genzyme Agreement”). Under the CFF Payment Agreement, the Company is obligated to compensate CFF in connection with the Company’s development and commercialization of licensed products under the Sanofi License Agreement. As initial consideration for CFF’s grant of, and forbearance from exercising, its rights under the CFFT-Genzyme Agreement, the Company paid an upfront fee of $ 0.2 million and issued CFF shares of preferred stock, valued at $ 1.0 million which were previously recorded as research and development expenses. In addition, the Company agreed to pay CFF a sub-teen double-digit percentage of any amounts paid by it to Sanofi under the Sanofi License Agreement, other than milestone, royalty or reimbursement payments. In addition, the Company is required to pay CFF a total of up to $ 40.0 million upon achievement of certain late-stage developmental and commercial milestones. In conjunction with the execution of the agreements with Sanofi and CFF in December 2019, a side letter was executed between the Company and Sanofi, which clarifies the relationship between the Company, Sanofi and CFF, under which the Company is obligated to pay Sanofi 20 % of the milestones it would have been obligated to pay CFF, net of the milestone amounts it is obligated to pay under the Sanofi License Agreement. As of December 31, 2025, no milestones have been achieved. The Company is also required to pay revenue-shares of royalty payments to CFF in the low single-digit percentage range based on net sales of licensed products subject to customary reductions and offsets. Such milestone and royalty payments shall be reduced for products covered by derived patents. AbbVie Agreement In July 2024, the Company entered into a license agreement (the “AbbVie License Agreement”) with AbbVie Global Enterprises Ltd. (“AbbVie”), pursuant to which the Company has been granted an exclusive worldwide, royalty-bearing, sublicensable license to research, develop and commercialize certain CFTR compounds. The licensed rights are directed, among other things, to three clinical-stage CFTR modulator assets. The license granted under the AbbVie License Agreement are subject to certain preexisting rights held by AbbVie and Galapagos NV (“Galapagos”). In particular, certain of the licensed patents and other intellectual property rights were developed by or on behalf of Galapagos and are sublicensed to the Company subject to the terms of the second amended and restated collaboration agreement between Galapagos and AbbVie in October 2018 (the “Galapagos License Agreement”), as amended by a side letter between Galapagos and AbbVie in July 2024. As initial consideration for the license, the Company paid a non-refundable, upfront payment of $ 5.0 million and issued shares of its common stock with a fair value of $ 8.6 million to AbbVie . The Company determined that the AbbVie License Agreement represented an asset acquisition as it did not meet the definition of the business. The Company previously recorded the total initial consideration of $ 13.6 million as research and development expense, because the acquired license represented in-process research and development F-19 Table of Contents with no alternative future use. In addition, the Company is required to pay AbbVie a total of up to $ 360.0 million upon achievement of certain development and commercial milestones, consisting of up to $ 70.0 million in late-stage development milestones and up to $ 290.0 million in commercial milestones. The Company is also required to pay royalties to AbbVie in the low to mid single-digit percentage range based on net sales of licensed products, subject to customary reductions and offsets. In addition, the Company is required to pay AbbVie up to $ 130.0 million in commercial and sales-based milestone payments, mid to high single-digit royalties on the licensed products, or other payments due to Galapagos pursuant to the Galapagos License Agreement, to the extent such payments are triggered by the Company’s use of the licensed rights owned by Galapagos under the AbbVie License Agreement. As of December 31, 2025, none of such milestones under the AbbVie License Agreement and Galapagos License Agreement have been achieved. 10. Convertible Preferred Stock Series Seed In December 2019, the Company issued and sold 2,762,762 shares of Series Seed convertible preferred stock, par value $ 0.001 per share (“Series Seed Preferred Stock”) to certain investors at a purchase price of $ 3.33 per share, for gross proceeds of $ 8.2 million (the “Series Seed Financing”) . As disclosed in Note 9, the Company issued Series Seed Preferred Stock to CFF in connection with the CFF Payment Agreement. One investor was also issued 684,415 shares of common stock in connection with the initial Series Seed Financing closing. The proceeds from that investor were allocated between the Series Seed Preferred Stock and common stock on a relative fair value basis. There were no material issuance costs incurred related to this financing. In June 2020, the Company issued an additional 1,201,202 shares of Series Seed Preferred Stock to an additional investor at $ 3.33 per share for gross proceeds of $ 4.0 million. The Company incurred $ 38,887 of issuance costs in connection with this issuance. Series A In September 2020, the Company issued and sold 5,704,161 shares of Series A convertible preferred stock, par value $ 0.001 per share (“Series A Preferred Stock”), at a purchase price of $ 4.43 per share, for gross proceeds of $ 25.3 million (the “Series A Financing”). The Company incurred $ 0.1 million of issuance costs in connection with the Series A Financing. Series B In February 2022, the Company issued and sold 11,370,621 shares of Series B convertible preferred stock, par value $ 0.001 per share (“Series B Preferred Stock”), at a purchase price of $ 9.76 per share, for gross proceeds of $ 111.0 million (the “Series B Financing”). The Company incurred $ 0.2 million of issuance costs in connection with the Series B Financing. Series C In March 2024, the Company issued and sold 18,628,970 shares of Series C convertible preferred stock, par value $ 0.001 per share (“Series C Preferred Stock”) at a purchase price of $ 9.76 per share, for gross proceeds of $ 181.9 million (the “Series C Financing”). The Company incurred $ 0.5 million of issuance costs in connection with the Series C Financing. Upon issuance of the Series Seed, Series A, Series B, and Series C convertible preferred stock (collectively, the “Preferred Stock”), the Company evaluated the embedded conversion and liquidation features and determined that separate accounting was not required. Upon completion of the Company’s IPO, all outstanding shares of convertible preferred stock automatically converted into shares of common stock. As of December 31, 2025, no shares of convertible preferred stock were outstanding. F-20 Table of Contents The Board of Directors of the Company (the “Board”) is authorized to issue up to 10,000,000 shares of preferred stock and may fix the price, rights, preferences, privileges, and restrictions of the preferred stock without any further vote or action by our stockholders. The Board may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. As of December 31, 2025, the Company had no shares of preferred stock issued or outstanding and preferred stock is classified within stockholders’ equity. 11. Common Stock & Equity Incentive Plans Common Stock Rights The holders of the Company’s common stock are entitled to one vote per share on all matters submitted to a vote of stockholders, subject to applicable law. The holders of common stock are also entitled to receive dividends, if any, as may be declared by the Company’s board of directors, and to share ratably in the Company’s assets legally available for distribution upon liquidation, dissolution, or winding up of the Company. Equity Incentive Plans 2020 Stock Option and Grant Plan The Company’s 2020 Stock Option and Grant Plan, as amended (the “2020 Plan”), previously provided for the Company to sell or issue common stock or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the Board and consultants of the Company. The 2020 Plan was administered by the Board. As of December 31, 2025, no shares of common stock remained available for future grants under the 2020 Plan. Outstanding stock options and restricted common stock awards granted under the 2020 Plan generally vest over four years and expire ten years after the date of grant, and certain awards provide for accelerated vesting upon a change in control. 2025 Stock Option and Grant Plan In January 2025, the Board of Directors and the Company’s stockholders adopted and approved the 2025 Equity Incentive Plan (the “2025 Plan”), which became effective on February 5, 2025, immediately prior to the effectiveness of the Company’s registration statement on Form S-1 for its IPO. The 2025 Plan initially reserved 5,060,000 shares of common stock for issuance and includes an evergreen provision pursuant to which the number of shares reserved for issuance may be automatically increased on an annual basis. Beginning in 2026, the number of shares reserved under the 2025 Plan shall automatically increase annually on January 1 by up to 4 % of the total number of shares of common stock outstanding, unless the Board of Directors determines otherwise. The shares reserved for issuance under the 2020 Stock Option and Grant Plan ceased to be available for issuance upon the effectiveness of the 2025 Plan. Any shares subject to outstanding awards under the 2020 Plan that subsequently expire, are forfeited, cancelled, repurchased, or withheld will become available for issuance under the 2025 Plan. As of December 31, 2025, 2,393,345 shares of common stock remained available for future grants under the 2025 Plan. Outstanding stock options and restricted common stock awards granted under the 2025 Plan generally vest over four years and expire ten years after the date of grant, and certain awards provide for accelerated vesting upon a change in control. 2025 Employee Stock Purchase Plan In January 2025, the Board of Directors and the Company’s stockholders adopted and approved the 2025 Employee Stock Purchase Plan (the “2025 ESPP”), which became effective on February 5, 2025, immediately prior to the effectiveness of the Company’s registration statement on Form S-1 for its IPO. The 2025 ESPP initially reserved 390,127 shares of common stock for issuance and includes an evergreen provision pursuant to which the number of shares reserved for issuance may be automatically increased on an annual basis. Beginning in 2026, the number of shares reserved under the 2025 Plan shall automatically F-21 Table of Contents increase annually on January 1 by up to 1 % of the total number of shares of common stock outstanding, unless the Board of Directors determines otherwise, but not to exceed 780,254 shares. As of December 31, 2025, no offering periods had commenced under the 2025 ESPP. Shares Reserved for Issuance The number of shares of common stock reserved for issuance under the Company's equity incentive plans is as follow: Year Ended December 31, 2025 2024 Convertible preferred stock — 27,149,206 Options to purchase common stock 5,767,799 3,700,335 Remaining shares reserved for future issuance 2,393,345 1,035,891 Unvested restricted common stock — 75,958 Total 8,161,144 31,961,390 12. Stock-Based Compensation Restricted Common Stock A summary of the Company’s restricted common stock activity during the year ended December 31, 2025, is presented below: Number of Restricted Shares Weighted-Average Per-Share Grant-Date Fair Value Unvested at December 31, 2024 75,958 $ 0.78 Vested ( 75,958 ) $ 0.78 Unvested at December 31, 2025 — $ — The Company did not issue shares of restricted common stock to founders and officers during the years ended December 31, 2025 or 2024. For the years ended December 31, 2025 and 2024, the liability related to the payments received for shares of unvested restricted common stock was de minimis. The aggregate fair value of restricted common stock awards that vested during the years ended December 31, 2025 and 2024, was $ 1.0 million and $ 1.3 million, respectively. The final vesting conditions for the restricted common stock awards were met in June 2025. Stock Option Valuation The weighted-average assumptions used to determine the fair values of stock options granted to employees and directors during the years ended December 31, 2025 and 2024, are presented as follows: Year Ended December 31, 2025 2024 Expected term (in years) 6.2 6.0 Volatility 82.4 % 83.9 % Interest rate 4.2 % 4.2 % Dividend yield — — F-22 Table of Contents Stock Option Activity The following table summarizes the Company’s common stock option activity for the year ended December 31, 2025: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in years) (in thousands) Outstanding at December 31, 2024 3,700,335 $ 5.87 8.3 $ 16,522 Granted 2,725,160 19.03 Exercised ( 599,191 ) 6.07 Cancelled or forfeited ( 58,505 ) 10.97 Outstanding at December 31, 2025 5,767,799 $ 12.01 8.3 $ 168,007 Exercisable at December 31, 2025 2,189,013 $ 7.58 7.3 $ 73,457 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the estimated fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The weighted-average grant date fair value of options granted during the years ended December 31, 2025 and 2024, was $ 13.94 and $ 4.61 , respectively. The total intrinsic value of options exercised in the years ended December 31, 2025 and 2024, was $ 14.7 million and $ 0.4 million, respectively. Stock-Based Compensation Expense During the years ended December 31, 2025 and 2024, the Company recorded stock-based compensation in the accompanying consolidated statements of operations and comprehensive loss as follows (in thousands): Year Ended December 31, 2025 2024 Research and development expense $ 4,116 $ 1,500 General and administrative expense 7,950 2,208 Total $ 12,066 $ 3,708 As of December 31, 2025, there was $ 35.3 million of unrecognized stock-based compensation expense for common stock option awards that are expected to be recognized over a weighted-average period of 2.6 years. The stock-based compensation expense for restricted common stock awards was de minimis and fully recognized as of June 30, 2025, when the final vesting conditions were met. 13. Income Taxes The Company’s loss is attributable to domestic activity, and the Company does not have foreign operations. The Company had no current or deferred federal or state income tax expense due to operating losses incurred for the years ended December 31, 2025 and 2024, and the full valuation allowance recorded on net deferred tax assets. F-23 Table of Contents A reconciliation of income tax expense (benefit) from continuing operations to the amount computed by applying the statutory federal income tax rate to the net loss from continuing operations is summarized as follows (in thousands): Year Ended December 31, 2025 2024 Tax expense (benefit) at the U.S. statutory rate $ ( 15,806 ) 21.0 % $ ( 12,954 ) 21.0 % State income taxes, net of federal income tax effect (1) — — % — — % Effects of changes in tax laws or rates enacted in the current period — — % — — % Tax credits Research and development tax credits ( 1,969 ) 2.6 % ( 1,452 ) 2.4 % Nontaxable or nondeductible Items Stock-based compensation ( 1,371 ) 1.8 % 304 ( 0.5 %) Limitations on executive compensation 1,068 ( 1.4 %) — — % Other permanent differences ( 54 ) 0.1 % 25 — % Other adjustments ( 43 ) 0.1 % — — % Change in valuation allowance 18,175 ( 24.2 %) 14,077 ( 22.9 %) Effective tax rate $ — 0.0 % $ — 0.0 % (1) State taxes in Massachusetts make up the majority of the tax effect in this category. The components of the Company’s deferred tax assets and liabilities are comprised of the following (in thousands): Year Ended December 31, 2025 2024 Net operating loss carryforward $ 40,906 $ 18,075 Tax credits 6,848 4,056 Fixed assets 64 36 Stock-based compensation 2,268 885 Capitalized research costs 20,330 23,229 Accrued expenses 1,256 524 Intangibles 4,098 4,362 Lease liability 2,327 2,582 Other temporary differences 23 21 Total deferred tax assets $ 78,120 $ 53,770 Less valuation allowance ( 76,144 ) ( 51,606 ) Net deferred tax asset $ 1,976 $ 2,164 Right of use assets $ ( 1,857 ) $ ( 2,083 ) Other deferred tax liabilities ( 119 ) ( 81 ) Total deferred tax liabilities $ ( 1,976 ) $ ( 2,164 ) Net deferred tax asset (liability) $ — $ — As of December 31, 2025 and 2024, the Company had federal net operating loss carryforwards of approximately $ 148.0 million and $ 65.6 million, respectively, which may be available to offset future income tax liabilities. The 2017 Tax Cuts and Jobs Act (“TCJA”) will generally allow losses incurred after 2017 to be carried over indefinitely but will generally limit the net operating loss deduction to the lesser of the net operating loss carryover or 80% of a corporation’s taxable income (subject to Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”)). Also, there is no carry back for losses incurred after 2017. All net operating loss carryforwards were generated after 2017. F-24 Table of Contents In addition, the Company has state net operating loss carryforwards of $ 155.4 million and $ 68.2 million as of December 31, 2025 and 2024, respectively, which will expire at various dates through 2045. As of December 31, 2025 and 2024, the Company had federal research and development tax credit (“Federal R&D Tax Credit”) carryforwards of $ 4.7 million and $ 2.7 million, respectively, available to reduce future tax liabilities, which will expire at various dates through 2045. As of December 31, 2025 and 2024, the Company had state research and development credit (“State R&D Tax Credit”) carryforwards of approximately $ 2.7 million and $ 1.7 million, respectively, available to reduce future tax liabilities, which will expire at various dates through 2040. The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which are comprised primarily of net operating loss carryforwards, the capitalization of research and experimental expenditures, and tax credits. Management has considered the Company’s history of cumulative net losses in the United States, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely than not that the Company will not realize the benefits of its U.S. federal and state deferred tax assets. Accordingly, a full valuation allowance of $ 76.1 million and $ 51.6 million has been established against these net deferred tax assets as of December 31, 2025 and 2024, respectively. The Company reevaluates the positive and negative evidence at each reporting period. The Company’s valuation allowance increased during 2025 by approximately $ 24.5 million, primarily due to the increase in net operating loss and tax credit carryforwards. Under the provision 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. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative change in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Section 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership change may further affect the limitation in future years. The Company has not yet completed a change in control analysis, as defined under Section 382 and 383 of the Internal Revenue Code, through December 31, 2025, and the Company has not determined whether the future utilization of net operating loss carryforwards may be materially limited based on past financings. In addition, the Company may complete future financings that could result in a change in control in the future which may limit the amount of tax attributes available to offset future tax liabilities. The Company accounts for income taxes by evaluating a probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company did no t have any unrecognized tax benefits as of December 31, 2025 or 2024, respectively. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025 and 2024, the Company’s balance of interest and penalties was zero . The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In a normal course of business, the Company is subject to examination by U.S. federal and states. The Company’s tax years are still open since inception. To the extent that the Company has tax attribute carryforwards, the tax year in which the attributes were generated may still be adjusted upon examination by the U.S. Internal Revenue Services or state tax authorities to the extent utilized in a future period. The Company is not currently under examination by any tax authorities. F-25 Table of Contents 14. Segment Information The following table presents segment net loss, including significant expense categories (in thousands): Year Ended December 31, 2025 2024 Research and development expenses: External research and development expenses (1) $ 43,535 $ 31,873 Fees paid to licensors (2) 23 5,525 Personnel-related expenses, excluding stock-based compensation 10,553 7,628 Facility and information technology allocated expenses 1,826 1,838 General and administrative expenses: Personnel-related expenses, excluding stock-based compensation 10,947 5,634 General corporate and facility expenses (3) 8,401 4,222 Other segment items (4) ( 17 ) 4,968 Net loss $ 75,268 $ 61,688 (1) External research and development expenses consist primarily of costs paid to third-parties including CROs, CDMOs, consultants, advisors and lab-related vendors. (2) Fees paid to licensors consists primarily of upfront and annual licensing fees paid pursuant to the Company's license agreements. (3) General corporate and facility expenses consists primarily of professional services fees for legal, finance, human resources, medical affairs in addition to information technology expenses and rent expense, net of sublease income. (4) Other segment items consists primarily of interest income, partially offset by taxes and non-cash expenses, such as stock-based compensation, depreciation, the fair value of equity issued pursuant to the AbbVie License Agreement (Note 9) recognized in 2024, and amortization of discounts and premiums on marketable securities. 15. Net Loss Per Share The Company excluded the following shares from the computation of diluted net loss per share attributable to common stockholders as of December 31, 2025 and 2024, because including them would have had an anti-dilutive effect: Year Ended December 31, 2025 2024 Convertible preferred stock — 27,149,206 Options to purchase common stock 5,767,799 3,700,335 Unvested restricted common stock — 75,958 Total 5,767,799 30,925,499 16. Employee Benefit Plan The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers all employees and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the Board. For the year ended December 31, 2025 the Company contributed $ 0.2 million to the plan, no contributions were made for year ended December 31, 2024. F-26 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None.