What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-16 compared with 2025-03-11 · 444 added, 400 removed, 535 unchanged (61% of the section changed)

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generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, expects to continue to incur operating losses and negative operating cash flows for the foreseeable future, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.

Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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Operating lease right-of-use assets, net

Restricted cash

Long-term investments

Other non-current assets

Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable (includes $ 560 and $ 21 owed to related parties, respectively)

Accrued expenses (includes $ 260 and $ 404 owed to related parties, respectively)

Accounts payable

Accrued expenses

Operating lease liabilities, current

Total current liabilities

Operating lease liabilities, non-current

Convertible notes, at fair value

Long-term liabilities:

Royalty obligation

Operating lease liabilities, less current portion

Total long-term liabilities

Total liabilities

Commitments and contingencies (Note 13)

Convertible preferred stock:

Series Seed convertible preferred stock, par value $ 0.0001 per share;

0 and 1,785,714 shares authorized, issued and outstanding as of December 31, 2024 and 2023 , respectively.

Series A convertible preferred stock, par value $ 0.0001 per share;

0 and 17,589,380 shares authorized, issued and outstanding as of December 31, 2024 and 2023 , respectively.

Series B convertible preferred stock, par value $ 0.0001 per share;

0 and 81,242,587 shares authorized, issued and outstanding as of December 31, 2024 and 2023 , respectively.

Stockholders’ equity (deficit):

Stockholders’ equity:

Preferred stock, par value $ 0.0001 per share;

25,000,000 and no shares authorized as of December 31, 2024 and 2023, respectively;

no shares issued and outstanding as of December 31, 2024 and 2023.

25,000,000 shares authorized and no shares issued and outstanding as of December 31, 2025 and December 31, 2024

Common stock, par value $ 0.0001 per share;

175,000,000 shares authorized as of December 31, 2024 and 2023;

41,793,412 and 1,576,854 shares issued and outstanding as of December 31, 2024 and 2023, respectively.

175,000,000 shares authorized at December 31, 2025 and December 31, 2024, respectively;

54,485,518 and 41,793,412 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Accumulated deficit

Total stockholders’ equity (deficit)

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

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Operating expenses:

Research and development (includes $ 3,524 and $ 3,041 from related parties, respectively)

General and administrative (includes $ 0 and $ 8 from related parties, respectively)

Research and development

General and administrative

Acquired in-process research and development

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Loss from operations

Other income, net:

Other income (expense), net:

Fair value adjustments to convertible notes

Interest expense on royalty obligation

Interest income

Other income, net

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Loss before income taxes

Income tax provision

Net loss to common stockholders

Net loss per share attributable to common stockholders - basic and diluted

Income tax (benefit) provision

Net loss per share - basic and diluted

Weighted-average common stock outstanding - basic and diluted

Comprehensive loss:

Net loss to common stockholders

Other comprehensive income:

Unrealized gain on marketable securities, net tax

Other comprehensive income (loss):

Unrealized gain on investments

Foreign currency translation adjustment

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(in thousands, except share data)

Convertible Preferred Stock

Additional Paid-in

Additional Paid-in Capital

Accumulated Other Comprehensive

Total Stockholders'

Income (Loss)

Balance as of December 31, 2022

Issuance of Series B convertible preferred stock as payment of Xencor milestone, net of issuance costs of $ 0

Exercises of common stock options

Stock-based compensation expense

Foreign currency translation adjustment

Accumulated Deficit

Total Stockholders'

Equity (Deficit)

Balance as of December 31, 2023

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Balance as of December 31, 2024

Exercises of common stock options

Purchases of common stock under the Employee Stock Purchase Plan

Issuance of common stock from PIPE offering, net of placement agent fees and other offering costs

Equity consideration related to InnoCare License Agreement

Issuance of common stock from ATM offering, net of commissions and other offering costs

Stock-based compensation expense

Unrealized gain on investments

Foreign currency translation adjustment

Balance as of December 31, 2025

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

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(in thousands)

Years Ended December 31,

Cash flows from operating activities:

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Depreciation expense

Net amortization of premiums and accretion of discounts on short-term investments

Loss on disposal of property and equipment

Net amortization of premiums and accretion of discounts on investments

Non-cash interest expense on royalty obligation

Stock-based compensation expense

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Cash flows from investing activities:

Purchase of property and equipment

Purchase of short-term investments

Proceeds from sale and maturities of short-term investments

Purchases of property and equipment

Purchases of investments

Proceeds from sales and maturities of investments

Product candidate license acquisitions

Net cash used in investing activities

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Proceeds from issuance of Series C convertible preferred stock, net of issuance costs

Proceeds from initial public offering, net of underwriting discount and commissions

Payment of initial public offering costs

Proceeds from sale of convertible notes

Payments of placement agent fees and other offering costs for PIPE and ATM offerings

Proceeds from royalty obligation

Proceeds from exercise of stock options

Proceeds from issuance of common stock under employee stock purchase plan

Proceeds from issuance of common stock under PIPE offering

Proceeds from issuance of common stock under ATM offering, net of commissions

Proceeds from initial public offering, net of underwriting discount and commissions

Net cash provided by financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Supplemental disclosure of non-cash investing and financing activities:

Fair value of BMS Note recognized as Series C Convertible preferred stock upon conversion

Conversion of convertible preferred stock to common stock upon closing of initial public offering

Right-of-use assets obtained under operating lease arrangements

Deferred offering costs in accrued expenses

Equity consideration for InnoCare license, at fair value

Conversion of convertible preferred stock to common stock upon closing of initial public offering

Conversion of BMS Note into Series C convertible preferred stock

Deferred offering costs in accounts payable and accrued expenses

Reconciliation of cash, cash equivalents and restricted cash:

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(“Zenas” or the “Company”) was incorporated in November 2019 as Zenas BioPharma (Cayman) Limited, an exempted company incorporated in the Cayman Islands with limited liability and commenced operations in 2020.

On August 2, 2023, the Company (then known as Zenas BioPharma (Cayman) Limited (“Zenas Cayman”)) de-registered from the Cayman Islands and registered by way of continuation in the State of Delaware (the “Redomicile”).

On August 2, 2023, the Company (then known as Zenas BioPharma (Cayman) Limited) de-registered from the Cayman Islands and registered by way of continuation in the State of Delaware.

Zenas is a clinical stage global biopharmaceutical company committed to being a leader in the development and commercialization of transformative immunology-based therapies for patients in need.

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The Company is headquartered in Waltham, Massachusetts and operates in one segment, which is the business of acquiring and developing immune-based therapies for potential commercialization.

The Company’s consolidated financial statements include the accounts of its wholly owned subsidiaries which include Zenas BioPharma (HK) Limited (“Zenas HK”), Zenas BioPharma (USA) LLC (“Zenas US”), Shanghai Zenas Biotechnology Co.

Limited (“Zenas China”), Zenas BioPharma Securities Corp., and Zenas BioPharma GmbH.

Limited, Zenas BioPharma Securities Corp., Zenas BioPharma GmbH, and Zenas BioPharma B.V.

Liquidity and Capital Resources

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The Company is subject to risks and uncertainties common to clinical stage companies in the biopharmaceutical industry, including, but not limited to, completing preclinical studies and clinical trials, obtaining regulatory approval for product candidates, market acceptance of products, development by competitors of new technological innovations, dependence on key personnel, the ability to attract and retain qualified employees, reliance on third-party organizations, protection of proprietary technology, compliance with government regulations, and the ability to raise additional capital to fund operations.

The Company’s revenues to date have been generated from payments received under the Company’s license and collaboration agreement with Bristol-Myers Squibb Company (“BMS”) and novation agreement with Tenacia Biotechnology (“Tenacia”) (see Note 7, License and Collaboration Revenue ).

The Company’s capital to date has been generated from payments received under the Company’s license and collaboration agreement with Bristol-Myers Squibb Company (“BMS”), novation agreement with Tenacia Biotechnology (Hong Kong) Co., Limited (“Tenacia”), license agreement with Zai Lab (Hong Kong) Limited (“Zai”) and a royalty purchase agreement with Royalty Pharma Investments (“Royalty Pharma”) (please see Note 7, License and Collaboration Revenue and Note 9, Royalty Obligation, to these consolidated financial statements).

The Company has not generated any revenue from product sales since inception, and its product candidates currently under development will require significant additional research and development efforts, including extensive clinical testing and regulatory approval prior to commercialization.

On September 16, 2024, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 15,220,588 shares of its common stock, including 1,985,294 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 17.00 per share, for aggregate gross proceeds of $ 258.7 million.

In September 2024, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 15,220,588 shares of its common stock, including 1,985,294 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 17.00 per share, for aggregate gross proceeds of $ 258.7 million.

The Company received $ 234.3 million in net proceeds after deducting underwriting discounts, commissions and other offering expenses.

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Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the reverse stock split and the adjustment of the preferred stock conversion ratios.

In October 2025, the Company entered into a sales agreement with Jefferies LLC (“Jefferies”) under which the Company may, from time to time, issue and sell shares of our common stock having aggregate sales proceeds of up to $ 200.0 million, in a series of one or more at-the-market equity offerings (“2025 ATM Program”).

The Company’s common stock will be

sold at prevailing market prices at the time of the sale;

and as a result, prices may vary.

In 2025, the Company sold 828,195 shares of common stock pursuant to the 2025 ATM program, for net proceeds of $ 28.5 million after deducting commissions and other offering costs.

Since January 1, 2026, the Company completed the sales of 2,827,723 shares of common stock under the 2025 ATM Program, for additional information, see Note 18, Subsequent Events to these consolidated financial statements.

In October 2025, the Company entered into a securities purchase agreement, for a private placement in public equity (“PIPE”) (the “PIPE Purchase Agreement”) related to the PIPE offering, pursuant to which the Company sold 6,311,030 shares of common stock to certain institutional, accredited investors and certain directors and officers of the Company.

The aggregate net proceeds received by the Company were $ 111.8 million, after deducting placement agent fees and other offering costs.

The Company has incurred operating losses and negative cash flows since its inception, including net losses of $ 377.7 million and $ 157.0 million in the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2024 and 2023, the Company had an accumulated deficit of $ 387.4 million and $ 230.4 million, respectively.

As of December 31, 2025, the Company had an accumulated deficit of $ 765.1 million.

Management expects operating losses and negative operating cash flows to continue for the foreseeable future.

The Company expects that its existing cash, cash equivalents and short-term investments of $ 350.8 million as of December 31, 2024 will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date this Form 10-K is filed.

The Company will need additional financing to support its continuing operations and to pursue its growth strategy.

Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through a combination of private or public equity financings, debt financings or other capital sources, including collaborations with other companies or other strategic transactions and licensing agreements.

The Company may be unable to raise additional funds or enter into such other agreements when needed on favorable terms or at all.

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

The Company expects that its existing cash, cash equivalents, and investments of $ 360.5 million as of December 31, 2025, together with $ 71.5 million of net proceeds received during the first quarter of 2026 from sales under the ATM Program and the $ 75.0 million of proceeds available from the first tranche under the Company’s debt arrangement with Pharmakon (see Note 18, Subsequent Events, to these consolidated financial statements), will be sufficient to fund its operating and capital expenditure requirements for approximately twelve months following the filing of these financial statements.

The Company’s forecast of future cash requirements is subject to significant uncertainties, including, among other factors, the timing and progression of the Phase 3 clinical trials for orelabrutinib, the continued development of obexelimab, and preparations for its potential commercial launch.

These uncertainties could require the Company to utilize additional cash resources, or to use existing resources sooner than currently anticipated.

As a result of these uncertainties and their potential impact on the Company’s projected funding requirements, management concluded there is substantial doubt about the Company’s ability to continue as a going concern for at least twelve months following the filing date of these financial statements.

The Company expects to finance future operations through private or public equity financings, debt financings, or other capital resources.

However, there can be no assurance that such financing will be available when needed, on acceptable terms, or at all.

Failure to obtain additional capital as required could have a material adverse effect on the Company’s financial condition and its ability to execute its business strategy.

The Company will need to generate significant revenue to achieve profitability, and it may never do so.

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Summary of Significant Accounting Policies

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Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been or omitted pursuant to such rules and regulations.

Use of Estimates

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Actual results may differ from those estimates or assumptions.

Significant estimates in these consolidated financial statements include estimates made in connection with accrued research and development expenses, stock-based compensation and pre-initial public offering (“IPO”) valuations of common stock, and convertible debt.

Cash, Cash Equivalents

Significant estimates in these consolidated financial statements include estimates made in connection with accrued research and development expenses, stock-based compensation, pre-IPO valuations of common stock, and the liability related to the sale of future royalties including the estimation of future payments and the related non-cash interest expense.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original or remaining maturity from the date of purchase of three months or less to be cash equivalents.

Cash equivalents may include money market funds, corporate debt securities, U.S government agency notes and overnight deposits.

Short-Term Investments

The Company classifies all investments with a remaining maturity when purchased of greater than three months as “available-for-sale”.

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Restricted Cash

Restricted cash consists of cash held as collateral for a letter of credit the Company issued as a security deposit for its lease of office space in Waltham, MA, which terminated in January 2025.

Restricted cash consists of cash held as collateral for a letter of credit the Company issued as a security deposit for its lease of office space in Waltham, MA, which was terminated in January 2025.

Amounts are reported as non-current unless restrictions are expected to be released in the next 12 months.

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If the Company terminates its plan for an equity financing, any costs deferred will be expensed immediately.

Upon closing the IPO in September 2024, the related deferred offering costs were recorded against the IPO proceeds.

No deferred offering costs were recorded as of December 31, 2024.

As of December 31, 2025, the Company had $ 0.7 million in deferred offering costs which were included in other assets.

No deferred offering costs were recorded as of December 31, 2024.

Segment Reporting

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were immaterial.

For additional information on our segment reporting, see Note 17, Segment Information to these consolidated financial statements.

For additional information, see Note 17, Segment Information to these consolidated financial statements.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and short-term investments.

The Company attempts to minimize the risks related to cash, cash equivalents and short- investments by investing in a broad range of financial instruments, as defined by the Company’s investment policy.

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and investments.

The Company attempts to minimize the risks related to cash, cash equivalents and investments by investing in a broad range of financial instruments, as defined by the Company’s investment policy.

The Company has established guidelines related to the quality of the institutions, financial instruments and allowable investments.

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The Company is dependent on third-party manufacturers to supply products for research and development activities in its programs, including preclinical and clinical studies and testing.

In particular, the Company relies on a single manufacturer and expects to continue to rely on a single or small number of manufacturers to supply it with its requirements for the drug product related to these programs.

While the drug substances used in product candidates are manufactured by more than one supplier, the Company relies on a single third-party manufacturer to manufacture and supply it with its requirements for the drug product related to its programs.

These programs could be adversely affected by a significant interruption in the supply of drug substance and drug product.

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Translation adjustments of these subsidiaries are included in other (income) expense, net in our consolidated statements of income.

Realized and unrealized foreign currency transaction losses were $ 0.2 million and $ 0.1 million for each of the years ended December 31, 2024 and 2023, respectively.

Realized and unrealized foreign currency transaction gains were $ 0.3 million and transaction losses were $ 0.2 million for the years ended December 31, 2025 and 2024, respectively.

Fair Value Measurements

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A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The majority of our financial assets have been classified as Level 1.

Our financial assets (which typically include cash equivalents and marketable equity securities) have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or option pricing valuation models.

The majority of the Company’s financial assets have been classified as Level 1.

Our financial assets (which typically include cash equivalents and marketable debt securities) have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or option pricing valuation models.

The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value.

These observation market inputs included reportable tables, benchmark yields, broker quotes, bids, offers, current spot rates and other industry and economic events.

These observable market inputs may include reportable tables, benchmark yields, broker quotes, bids, offers, current spot rates and other industry and economic events.

For additional information, see Note 3, Fair Value Measurements to these consolidated financial statements.

Impairment of Long-Lived Assets

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Depreciation is recorded using the straight-line method over the estimated useful lives of the assets ( three to seven years ).

Assets under capital leases are amortized over the shorter of their useful

lives or lease terms using the straight-line method.

Leasehold improvements are amortized over the shorter of their useful lives or lease terms using the straight-line method.

Major replacements and improvements are capitalized, while general repairs and maintenance are expensed as incurred.

Royalty Obligation

When the Company maintains significant continuing involvement in generating the underlying cash flows, royalty financings are recognized as obligations.

Payments received are recorded as the principal amount of the obligation on the consolidated balance sheet as long-term liabilities.

The carrying amount of the obligation is accreted to reflect the total expected royalty and related payments, using the effective interest method.

As royalties and other related payments are made, the outstanding royalty obligation will be reduced over the estimated term of the arrangement.

The royalty obligation, effective interest rate, and corresponding interest expense are determined based on the Company’s estimate of future anticipated royalty payments under the arrangement.

These estimates are reassessed at the end of each reporting period according to the Company’s latest projections.

Should these estimated cash flows change as a result of this review, the Company will recalculate the effective interest rate and adjust the accretion of interest on the royalty obligation prospectively.

Any additional funding received will also be treated as an obligation, with a prospective adjustment to the effective interest rate applied upon receipt of such funds.

For additional information, see Note 9, Royalty Obligation to these consolidated financial statements.

License and Collaboration Revenue

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At contract inception, the Company analyzes its collaboration and license arrangements to assess whether such arrangements are within the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”).

This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement.

This assessment is

performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement.

For collaboration arrangements within the scope of ASC 808 that contain multiple units of account, the Company first determines which units of the collaboration are deemed to be within the scope of ASC 808 and which units of the collaboration are more reflective of a vendor-customer relationship and therefore within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

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At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payment and the likelihood that the payments will be received.

The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which

method best predicts the amount expected to be received.

The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which method best predicts the amount expected to be received.

The amount of variable consideration that is included in the transaction price may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

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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 CRO agreements and consultants;

(ii) external research and development expenses incurred under arrangements with third parties, such as contract research organization (“CROs”) agreements and consultants;

(iii) costs associated with preclinical activities and (iv) lab supplies, lab expenses and an allocation of rent, depreciation, and infrastructure.

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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”).

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 acquired IPR&D expense as of the acquisition date.

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Contingent consideration in the form of milestone payments related to IPR&D with no alternative future use are charged to expense when the related milestone is achieved and becomes payable.

For the year ended December 31, 2024, the Company did not recognize any acquired IPR&D expense.

For the year ended December 31, 2023, the Company recognized $ 10.0 million of IPR&D expense, in connection with the consideration due under the 2021 Xencor Agreement.

For additional information on our asset acquisitions and acquired in-process research and development, please see Note 8, License and Option Agreements, to these consolidated financial statements.

When milestone payments are in the form of equity consideration, the Company evaluates whether the payment should be treated as a liability or

meets the definition of a derivative.

When liability or derivative treatment is not required, such milestone payments are recorded at fair value as a component of equity and not remeasured.

For additional information, see Note 8, License Agreements, to these consolidated financial statements.

Comprehensive Loss

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The Company expenses variable payments included in a lease arrangement as such expenses are incurred.

For additional information on our leases, please see Note 6, Leases , to these consolidated financial statements.

For additional information, see Note 6, Leases , to these consolidated financial statements.

The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes , which provides for deferred taxes using an asset and liability approach.

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There are no unrecognized tax benefits included in the Company’s consolidated balance sheets as of December 31, 2025 and 2024.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.

The Company’s policy is to recognize interest and penalties related to income tax

matters in income tax expense.

The Company has not recognized interest or penalties related to uncertain tax positions in its consolidated statements of operations and comprehensive loss since inception.

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Stock-based compensation is recognized as expense for each stock-based award based on its estimated fair value on the date of grant.

The Company’s share-based payments include stock options and grants of restricted common stock.

The Company’s share-based payments include stock options, grants of restricted common stock and restricted stock units (“RSUs”).

The value of the award is recognized as expense on a straight-line basis over the requisite service period, and expense is adjusted for pre-vesting forfeitures in the period in which the forfeitures 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.

The Company estimates the fair value of each restricted stock award (“RSA’s”) at its grant date based on the estimated fair value of the Company’s common stock on that date as determined by the Board.

The Company estimates the fair value of each RSUs at its grant date based on the estimated fair value of the Company’s common stock on that date as determined by the Board.

The Company estimates the fair value of stock option awards on the grant date using a Black-Scholes option pricing model.

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Prior to the Company’s IPO, the fair value of the Company’s common stock on the date of grant was determined by the Board, taking into consideration its most recently available third-party valuations of common stock as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the grant date.

For additional information on our share-based compensation, please see Note 11, Stock-Based Compensation , to these consolidated financial statements.

Convertible Preferred Stock

The Company classified its convertible preferred stock as temporary equity (between liabilities and stockholders’ equity (deficit)) in the accompanying consolidated balance sheet because it could have become redeemable due to certain change in control clauses that were outside of the Company’s control.

The convertible preferred stock was not redeemable, except in the event of a deemed liquidation event.

As the occurrence of a deemed liquidation event was not currently probable at December 31, 2023, the carrying values of the convertible preferred stock were not being accreted to their redemption values.

Upon the completion of the Company’s IPO on September 16, 2024, all outstanding shares of the Company’s convertible preferred stock converted into shares of the Company’s common stock.

For additional information on our convertible preferred stock, please see Note 9, Convertible Preferred Stock , to these consolidated financial statements.

For additional information, see Note 11, Stock-Based Compensation , to these consolidated financial statements.

Net Loss Per Share

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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 shares of common stock.

Net loss per share attributable to common stockholders is calculated using the two- class method, which is an earnings allocation formula that determines net loss per share for the holders of the Company’s common shares and participating securities.

The Company’s convertible preferred stock contained participation rights in any dividend paid by the Company and is deemed to be a participating security.

Net loss per share is calculated using the two- class method, which is an earnings allocation formula that determines net loss per share for the holders of the Company’s common shares and participating securities.

The Company’s convertible preferred stock contained participation rights in any dividend paid by the Company and was deemed to be a participating security.

Net loss attributable to common stockholders and participating preferred shares are allocated to each share on an as-converted basis as if all of the earnings for the period had been distributed.

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Diluted net loss per share is computed using the more dilutive of (a) the two-class method or (b) the if- converted method.

The Company allocates earnings first to preferred stockholders based on dividend rights and then to common and preferred stockholders based on ownership interests.

The weighted-average number of common shares included in the computation of diluted net loss per share gives effect to all potentially dilutive common equivalent shares, including outstanding stock options and preferred stock.

Common stock equivalent shares are excluded from the computation of diluted net loss per share if their effect is antidilutive.

In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common shares are not assumed to have been issued if their effect is antidilutive.

The Company reported a net loss attributable to common stockholders for the years ended December 31, 2024 and 2023.

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 since dilutive common shares are not assumed to have been issued if their effect is antidilutive.

The Company reported a net loss for the years ended December 31, 2025 and 2024.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that we adopt as of the specified effective date.

Unless otherwise discussed, we do not believe that the adoption of recently issued standards have or may have a material impact on our consolidated statements or disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures (“ASU 2023-07”) , which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis.

All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024.

This standard became effective for the Company for the annual reporting period ended December 31, 2024, using the retrospective method.

The adoption of this standard resulted in additional disclosure of the significant expenses reviewed by the Company’s CODM.

The adoption did not have a material impact on the consolidated financial position or results of operations.

See Note 17, Segment Information , for our updated segment presentation.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”) , which requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for the Company beginning in fiscal year 2025, with early adoption permitted.

ASU 2023-09 may be applied retrospectively or prospectively to the financial statements.

The Company is currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures.

ASU 2023-09 is effective for the Company beginning in fiscal year 2025.

standard became effective for the Company for the annual reporting period ended December 31, 2025, and was adopted using the prospective method.

The adoption of this standard resulted in additional disclosure of the rate reconciliation.

The adoption did not have a material impact on the consolidated financial position or results of operations.

See Note 13, Income Taxes , to these consolidated financial statements, for our updated income tax presentation.

In November 2024, the FASB issued 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 annual periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

ASU 2024-03 may be applied retrospectively or

prospectively to the financial statements.

ASU 2024-03 is effective annual for periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

ASU 2024-03 may be applied retrospectively or prospectively to the financial statements.

The Company is currently evaluating the impact of ASU 2024-03 on the consolidated financial statements and related disclosures.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that we adopt as of the specified effective date.

Unless otherwise discussed, we do not believe that the adoption of recently issued standards have or may have a material impact on our consolidated financial statements or disclosures.

Fair Value Measurements

The following tables present information about the Company’s assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value (in thousands):

The following table presents information about the Company’s assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value (in thousands):

As of December 31, 2025

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Money market funds

Short-term investments:

Commercial paper

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Government securities

Long-term investments:

Corporate debt securities

Government securities

As of December 31, 2024

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Significant Other Observable Inputs

Total liabilities

There have been no material impairments of our assets measured and carried at fair value during the year ended December 31, 2024.

Money market funds

Short-term investments:

Commercial paper

Corporate debt securities

Government securities

There have been no material impairments of our assets measured and carried at fair value during the years ended December 31, 2025 and 2024.

In addition, there have been no changes in valuation techniques as of December 31, 2025 and 2024.

The fair value of Level 1 instruments classified as money market funds and government securities are valued using quoted market prices in active markets.

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There were no transfers between levels during the years ended December 31, 2025 and 2024.

The short-term investments are classified as available-for-sales securities.

As of December 31, 2024, the remaining contractual maturities of the available-for-sales securities were within one year, the balance in the Company’s accumulated other comprehensive income was comprised solely of activity related to the Company’s available-for-sale securities.

There were no realized gains or losses recognized on the sale or maturity of available-for-sale securities during the year ended December 31, 2024.

The short and long-term investments are classified as available-for-sale securities.

As of December 31, 2025, the remaining contractual maturities of the available-for-sale securities were 1 to 15 months, and the balance in the Company’s accumulated other comprehensive income was comprised solely of activity related to the Company’s available-for-sale securities.

There were no realized gains or losses recognized on the sale or maturity of available-for-sale securities during the years ended December 31, 2025 and 2024.

As a result, the Company did not reclassify any amounts out of accumulated other comprehensive income for the same period.

The Company has a limited number of available-for-sale securities in insignificant loss

positions as of December 31, 2024, which the Company does not intend to sell and has concluded will not be required to sell before recovery of the amortized cost for the investment maturity.

The Company had a limited number of available-for-sale securities in insignificant loss positions as of December 31, 2025, which the Company does not intend to sell and has concluded will not be required to sell before recovery of amortized cost for the investment maturity.

The following table summarizes the available-for-sale securities (in thousands):

December 31, 2024

As of December 31, 2025

Amortized Cost

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Gross Unrealized Losses

Short-term investments:

Commercial paper

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Government securities

As of December 31, 2024

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Commercial paper

Corporate debt securities

Government securities

Certain short-term debt securities with original maturities of less than 90 days are included in cash and cash equivalents on the consolidated balance sheets and are not included in the table above.

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

Convertible Notes

In August 2023, the Company entered into a $ 20.0 million convertible promissory note agreement with BMS (the “BMS Note”) in connection with its strategic license and collaboration agreement with BMS (the “BMS Agreement”) (see Note 7, License and Collaboration Revenue ).

In the event that the Company issued and sold its convertible preferred stock to accredited investors with total gross proceeds equal to at least $ 70.0 million (a “BMS Qualified Financing”), the outstanding principal and accrued interest of the BMS Note were automatically convertible into equity securities sold in the BMS Qualified Financing at the conversion price equal (i) to the outstanding principal and accrued interest under the BMS Note divided by (ii) the lowest cash price paid per equity security.

The Company elected the fair value option to account for the BMS Note.

Changes in fair value at every reporting date are recorded as a component of the other income (expense), net.

The BMS Note was classified as a liability on the Company’s consolidated balance sheet as of December 31, 2023 and was initially recorded at fair value.

The Company subsequently remeasured the fair value of the BMS Note at each applicable reporting period.

On May 3, 2024, the Company issued and sold Series C convertible preferred stock (“Series C Preferred Stock”), which was deemed to be a BMS Qualified Financing, as described above, and resulted in the outstanding BMS Note plus accrued interest being automatically converted into 12,284,686 shares of Series C Preferred Stock (see Note 9, Convertible Preferred Stock ).

Immediately prior to settlement, the BMS Note was remeasured to fair value utilizing fair value of the shares of Series C Preferred Stock for which the BMS Note converted into.

The BMS Note settling in shares of Series C Preferred Stock represents the redemption of stock-settled debt and was therefore accounted for as an extinguishment.

Upon extinguishment, no gain or loss was recognized.

The Company recorded a $ 0.8 million change in fair value of the BMS Note as component of other income (expense), net for the year ended December 31, 2024.

The following tables presents changes to the Company’s liabilities with significant unobservable inputs (Level 3 liabilities) during the years ended December 31, 2024 and 2023 (in thousands):

Convertible notes

Convertible Note:

Balance as of December 31, 2022

Issuance of BMS Note

Change in fair value of BMS Note

Balance as of December 31, 2023

Change in fair value of BMS Note

Issuance of Series C Preferred Stock in exchange for BMS Note

Balance as of December 31, 2024

Other assets consisted of the following (in thousands):

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T he Company has various leases for office space, which are accounted for as operating leases and generally have terms of less than two years in length, some of which have the option to renew.

The Company recognizes monthly operating lease expense on a straight-line basis over the term of the lease as general and administrative expenses in the consolidated statements of operations and comprehensive loss.

The Company recognizes monthly operating lease expense on a straight-line basis over the term of the lease as general and administrative expenses in

the consolidated statements of operations and comprehensive loss.

Variable lease expense relates primarily to office lease common area maintenance, insurance, and property taxes, is expensed as incurred, and is excluded from the

calculation of the lease liabilities and right-of-use assets.

For each of the years ended December 31, 2024 and 2023, the Company incurred variable lease expense of $ 0.1 million, respectively.

For the years ended December 31, 2025 and 2024, the Company incurred variable lease expense of $ 0.3 million and $ 0.1 million, respectively.

Supplemental balance sheet information related to operating lease assets and liabilities was as follows (in thousands):

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Weighted average discount rate used to measure lease liabilities

For each of the years ended December 31, 2024 and 2023, the total lease cost for operating leases (recorded in general and administrative expenses in the Company’s consolidated statements of operations and comprehensive loss) was $ 0.9 million, respectively.

For the years ended December 31, 2025 and 2024, the Company recorded $ 1.0 million and $ 0.9 million in operating lease expense (recorded in general and administrative expenses in the Company’s consolidated statements of operations and comprehensive loss), respectively.

The minimum lease payments under the Company’s operating leases are expected to be as follows:

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Total operating lease liabilities

During the year ended December 31, 2024, the amount of right-of-use assets obtained under new operating lease arrangements was $ 1.1 million.

There were no right-of-use assets obtained under new operating lease arrangements during the year ended December 31, 2023.

Cash paid for lease liabilities was $ 0.9 million for the years ended December 31, 2024 and 2023, respectively.

During the years ended December 31, 2025 and 2024, the amount of right-of-use assets obtained under new operating lease arrangements was $ 1.5 million and $ 1.1 million, respectively.

For years ended December 31, 2025 and 2024, the Company made $ 1.0 million and $ 0.9 million in lease payments, respectively.

License and Collaboration Revenue

License and Collaboration Agreement with Bristol-Myers Squibb

In August 2023, the Company entered into a license and collaboration agreement with Bristol-Myers Squibb (the “BMS Agreement”), under which the Company granted BMS an exclusive license to (i) develop, manufacture (subject to the Company’s rights to be the exclusive manufacturer for BMS for a certain period of time), commercialize or otherwise exploit obexelimab and any biological product (irrespective of presentations, formulations or dosages) containing obexelimab but not any of the Company’s other proprietary active ingredient (the “BMS Product”) into Japan, South Korea, Taiwan, Singapore, Hong Kong and Australia (collectively, the “BMS Territory”) and (ii) develop and manufacture obexelimab and the BMS Product outside the BMS Territory provided that obexelimab and the BMS Product are solely used in the BMS Territory.

In August 2023, the Company entered into a license and collaboration agreement (the “BMS Agreement”) with BMS, under which the Company granted BMS an exclusive license to (i) develop, manufacture (subject to the Company’s rights to be the exclusive manufacturer for BMS for a certain period of time), commercialize or otherwise exploit obexelimab and any biological product (irrespective of presentations, formulations or dosages) containing obexelimab but not any of the Company’s other proprietary active ingredient (the “BMS Product”) into Japan, South Korea, Taiwan, Singapore, Hong Kong and Australia (collectively, the “BMS Territory”) and (ii) develop and manufacture obexelimab and the BMS Product outside the BMS Territory provided that obexelimab and the BMS Product are solely used in the BMS Territory.

Pursuant to the BMS Agreement, BMS paid the Company a one-time non-refundable upfront cash payment of $ 50.0 million.

The Company is entitled to receive further separate development and regulatory milestone payments from BMS up to approximately $ 79.5 million.

The Company is entitled to receive further separate development, regulatory milestone payments from BMS of up to approximately $ 79.5 million.

The Company is also entitled to receive one-time sales milestone payments up to $ 70.0 million upon BMS achieving certain net sales milestones in a given year in the BMS Territory.

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BMS will fund their pro rata share of the total global study costs up to a specified percentage of the patients enrolled in the study from the BMS Territory.

Should the percentage of patients from the BMS Territory fall below the specified percentage, BMS’s funding would proportionately decrease.

BMS is responsible for the development and commercialization of obexelimab within the BMS Territory, including the performance of any local studies within its jurisdiction that it chooses to perform, while the Company retains responsibility for the development and commercialization for the remainder of the world.

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The Company determined that the BMS Agreement contained two material components:

(i) the license granted to BMS to develop, manufacture and commercialize obexelimab within the BMS Territory, and related activities in the BMS Territory, including manufacturing and (ii) the global development of obexelimab, which at execution, solely relates to the ongoing Phase 3 trial for IgG4-RD.

The Company used criteria specified in ASC 606 to determine whether the components of the BMS Agreement are performance obligations to a customer and concluded that BMS is the Company’s customer for the license and related activities in the BMS Territory under ASC 606.

The Company used criteria specified in ASC 606 to determine whether the components of the BMS Agreement are performance obligations to a customer and concluded that BMS is the Company’s

customer for the license and related activities in the BMS Territory under ASC 606.

The global development activities under the agreement do not represent a transaction with a customer and reimbursement payments received by the Company for global development activities are accounted for as a reduction of the related research and development expenses.

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The other potential consideration, which includes development, regulatory, and sales milestone payments that the Company is eligible to receive were excluded from the transaction price, as all milestones were not deemed probable of achievement and were therefore fully constrained.

The Company issued the BMS Note in connection with the BMS Agreement, and the BMS Note was recorded at fair value separate from the transaction price of the BMS Agreement (see Note 3, Fair Value Measurements ).

transaction price would be recognized as revenue when it becomes probable that inclusion would not lead to a significant revenue reversal.

The Company issued the BMS Note in connection with the BMS Agreement, and the BMS Note was recorded at fair value separate from the transaction price of the BMS Agreement.

In May 2024, the BMS Note was settled through the issuance of convertible preferred stock, which was converted to common stock in September 2024.

The Company reevaluates the transaction price at the end of each reporting period as uncertain events are resolved or other changes in circumstances occur, and if necessary, the Company adjusts its estimate of the transaction price, and any addition to the transaction price would be recognized as revenue when it becomes probable that inclusion would not lead to a significant revenue reversal.

The Company evaluated the license under ASC 606 and concluded that the license is a functional intellectual property license.

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The Company satisfied the performance obligation through delivery of the license and initial technology transfer and therefore recognized the upfront payment of $ 50.0 million as revenue during year ended December 31, 2023.

The Company did not recognize revenue under this arrangement in the year ended December 31, 2024, as no milestones were achieved or deemed probable of achievement, and as such, all remaining milestones remained fully constrained and excluded from the transaction price.

The Company did no t recognize revenue under this arrangement during the years ended December 31, 2025 or 2024, as no milestones were achieved or deemed probable of achievement, and as such, all remaining milestones remained fully constrained and excluded from the transaction price.

Tenacia Biotechnology Co.

Novation Agreement

In October 2024, the Company entered into a novation agreement with Tenacia Biotechnology (Hong Kong) Co., Limited (“Tenacia”), under which the Company transferred its rights and obligations under the agreements with Dianthus to Tenacia (the “Tenacia Agreement”).

Pursuant to the Tenacia Agreement, the Company, transferred all the ZB005 inventory, analytical methods and manufacturing records generated, under the Dianthus Option Agreement and the License Agreement (collectively the “Dianthus Agreements”), see Note 8, License and Options Agreements, for additional information, to Tenacia, for the exclusive right to research, develop, manufacture and commercialize products within greater China.

In October 2024, the Company entered into a novation agreement with Tenacia, under which the Company transferred its rights and obligations under the agreements with Dianthus to Tenacia (the “Tenacia Agreement”).

Pursuant to the Tenacia Agreement, the Company, transferred all the ZB005 inventory, analytical methods and manufacturing records generated, under the Dianthus Option Agreement and the License Agreement (collectively the “Dianthus Agreements”), to Tenacia, for the exclusive right to research, develop, manufacture and commercialize products within China, Hong King, Macau and Taiwan (“greater China”).

As a result of the Tenacia Agreement, the Company has no further obligations to Dianthus pursuant to the Dianthus Agreement.

Pursuant to the Tenacia Agreement, Tenacia paid the Company a one-time non-refundable upfront cash payment of $ 5.0 million.

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As of December 31, 2025, no milestones were achieved or deemed probable of achievement.

License and Option Agreements

License Agreement with Zai Lab (Hong Kong) Limited

In January 2025, the Company entered into a license agreement (the “Zai License Agreement”), with Zai, under which the Company granted Zai an exclusive sublicense to develop, manufacture and commercialize ZB001 and related programs in greater China.

Under the Zai License Agreement, Zai will be responsible for conducting all research and development activities, manufacturing, regulatory and commercialization in greater China.

Pursuant to the Zai License Agreement, Zai paid the Company a one-time non-refundable upfront cash payment of $ 10.0 million.

The Company is entitled to receive further development, regulatory and sales milestones from Zai up to approximately $ 117.0 million if certain milestones are successfully achieved, with passthrough obligations of $ 21.0 million due to Viridian.

The Company is also eligible to receive tiered royalties on net sales in greater China, ranging from the low to mid-single digits, net of passthrough obligations due to Viridian.

The Company evaluated the terms of the Zai License Agreement and determined it is within the scope of ASC 606.

The Company identified the following promises in the Zai License Agreement that were evaluated under the scope of ASC 606:

(i) transfer of the license for ZB001, (ii) licensed technology transfer (iii) licensed material transfer and (iv) continued licensed technology transfer.

The Company also evaluated whether certain options outlined in the Zai License Agreement represented material rights that would give rise to a performance obligation and concluded that none of the options

conveyed a material right to Zai or were immaterial and, therefore, are not considered separate performance obligations within the Zai License Agreement.

The Company assessed the above promises and determined that the license for ZB001 and technology transfer are a combined distinct performance obligation within the scope of ASC 606.

The licensed material transfer and the continued technology know-how transfer services are promises that are separately identifiable and considered to be distinct.

The Company determined the transfer of the licensed materials and continued technology know-how transfer services were immaterial in the context of the contract based on the minimal resources required to fulfill the obligations and the estimated standalone selling price of the licensed materials.

Therefore, the sublicense and technology transfer represent a single performance obligation at contract inception.

The Company concluded that the transaction price of $ 10.0 million was allocated to the combined performance obligation, which was recognized upon delivery prior to March 31, 2025.

The Company used the most likely amount method to estimate variable consideration and estimated that the most likely amount for each potential developmental and regulatory variable consideration milestone payment under the agreement is zero, as achievement of those milestones is uncertain and susceptible to factors outside the Company’s control.

Accordingly, all such milestone payments were excluded from the transaction price.

Management will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, will adjust the transaction price as necessary.

Sales and royalty based milestones structured on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the transaction price relates.

The Company will recognize such milestone and royalty revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

As of December 31, 2025, no milestones were achieved or deemed probable of achievement.

License Agreements

License Agreements with Xencor, Inc.

2020 Xencor Agreement

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(“Xencor”), to obtain (i) an exclusive, royalty-bearing, sublicensable worldwide license under certain patent rights controlled by Xencor and (ii) a non-exclusive payment bearing license under certain know-how controlled by Xencor to research, develop, manufacture, market and sell three antibody product candidates, including ZB002.

The 2020 Xencor Agreement became effective in November 2020, upon the Company’s issuance of 5,041,542 shares of its Series A Preferred Stock, which had a fair value of $ 16.1 million to Xencor as initial consideration.

The Company concluded that as no processes or other activities that would constitute a business were acquired, and the acquired assets did not have an alternative future use, the upfront consideration was expensed to acquired IPR&D during the year ended December 31, 2020.

The Company is required to pay Xencor tiered royalties on annual net sales of successfully commercialized products utilizing the licensed assets.

The royalty percentage rates vary by geographic areas as defined in the 2020 Xencor Agreement and range from the mid-single digits to the mid-teens.

The Company is also obligated to reimburse Xencor for third-party costs incurred by Xencor for certain patent filings, prosecution and maintenance as further specified in the 2020 Xencor Agreement.

During the year ended December 31, 2024 no costs were incurred related to the 2020 Xencor Agreement.

During the year ended December 31, 2023, the Company incurred immaterial costs related to the 2020 Xencor Agreement.

The 2020 Xencor Agreement became effective in November 2020, upon the Company’s issuance of 5,041,542 shares of its Series A Preferred Stock.

The Company is required to pay Xencor tiered royalties on annual net sales of successfully commercialized products, including ZB002 and ZB004.

The royalty percentage rates vary by geographic areas as defined in the 2020 Xencor Agreement and range from the mid-single digits to mid-teens.

The Company is also obligated to reimburse Xencor for third-party costs incurred for certain patent filings, prosecution and maintenance as further specified in the 2020 Xencor Agreement.

During the years ended December 31, 2025 and 2024, the Company did not incur any such reimbursable costs.

2021 Xencor Agreement

In May 2021, the Company entered into a license agreement (the “2021 Xencor Agreement”) with Xencor to obtain an (i) exclusive, royalty-bearing, sublicensable worldwide license under certain patent rights controlled by Xencor and (ii) a non-exclusive payment bearing license under certain know-how controlled by Xencor to research, develop, manufacture, market and sell obexelimab.

The 2021 Xencor Agreement became effective in November 2021, upon the execution of an amendment to the 2021 Xencor Agreement and the Company’s concurrent issuance of a warrant to Xencor (the “Xencor Warrant”) as initial consideration, which entitled Xencor to receive a number of the Company’s convertible preferred stock in the Company’s next “qualified financing”.

The Company concluded that as no processes or other activities that would constitute a business were acquired, and the acquired assets did not have an alternative future use, the upfront consideration of $ 20.7 million was expensed to acquired IPR&D during the year ended December 31, 2021.

The Company is obligated to make specified development, regulatory and commercial milestone payments of up to $ 10.0 million at Xencor’s option either in cash or fully-paid newly issued shares.

The Company is obligated to make regulatory milestone payments up to $ 75.0 million.

The Company is also obligated to make one-time sales milestone payments up to $ 385.0 million upon achieving milestone events of net sales in a given calendar year in the territory equal to certain threshold amounts.

In addition, the Company is required to pay Xencor tiered royalties on annual net sales of successfully commercialized products utilizing obexelimab, with the royalty rates varying based on regions and ranging from the mid-single digits to the mid-teens.

In April 2023, the Company incurred a $ 10.0 million development milestone pursuant to the 2021 Xencor Agreement, which Xencor elected to receive in the form of the Company’s Series B Preferred Stock.

See Note 9, Convertible Preferred Stock, for details .

The milestone was recorded as acquired IPR&D expense in the Company’s consolidated statements of operations and comprehensive loss.

The Company did not record any expenses related to reimbursable patent-related costs during the year ended December 31, 2024.

The Company recorded an immaterial amount to general and administrative expenses in the consolidated statements of operations and comprehensive loss

during each of the year ended December 31, 2023, relating to reimbursable patent-related costs owed to Xencor.

During the year ended December 31, 2024 no milestone expense was incurred.

Dianthus Therapeutics Inc.

In September 2020, the Company entered into an agreement (the “Dianthus Option Agreement”) with Dianthus Therapeutics Inc.

(“Dianthus”), a therapeutic antibody company.

Under the terms of the Dianthus Option Agreement, the Company obtained an exclusive option to negotiate and enter into exclusive license agreements with Dianthus for the rights to research, develop, manufacture, market and sell products related to either or both of two antibody product candidates based on Dianthus’ proprietary technology in China, Hong Kong, Macau and Taiwan (the “Zenas Territories”).

Dianthus retains all rights to develop and commercialize the product candidate subjects of the two options outside of the Zenas Territories.

Upon execution of the Dianthus Option Agreement, the Company issued 18,063 shares of its common stock to Dianthus as initial consideration, which was recorded to acquired IPR&D expense during the year ended December 31, 2020.

Under the Dianthus Option Agreement, Dianthus will notify the Company when it has identified each of two antibody product candidates, and the Company will then have sixty ( 60 ) days to notify Dianthus if the Company intends to exercise each of the options.

In September 2021, Dianthus notified the Company that it had identified the first lead antibody product candidate pursuant to the Dianthus Option Agreement, ZB005 (also known as DNTH103).

In October 2021, the Company notified Dianthus of its intention to exercise its option to ZB005 pursuant to the Dianthus Option Agreement.

This notification resulted in a $ 1.0 million milestone obligation to Dianthus, which was expensed in 2021 upon exercise and subsequently paid during the year ended December 31, 2022.

The Company and Dianthus executed a license agreement for ZB005 in June 2022 (the “Dianthus License Agreement”).

The Company is also required to reimburse Dianthus for a specified percentage of certain third-party costs which Dianthus incurs in its initial discovery and development activities related to each of the two options.

To date, the Company has only exercised its option with respect to the ZB005 program, and as a result, it has only reimbursed Dianthus with respect to costs associated with the ZB005 program.

During the years ended December 31, 2024 and 2023, the Company incurred $ 5.1 million and $ 3.0 million of reimbursable expenses, respectively, which are recorded within research and development expenses in the consolidated statements of operations and comprehensive loss.

Of these amounts, $ 0.5 million and an immaterial amount were recorded in accounts payable, and $ 0.3 million and $ 0.4 million were recorded in accrued expenses on the Company’s consolidated balance sheets as of December 31, 2024 and 2023, respectively.

The binding key terms included in the Dianthus License Agreement, and that would be included in a future license agreement if the Company exercises its option with respect to a second research program, also include the Company’s obligation to make specified development milestone payments to Dianthus, one time only, regardless of the number of assets the Company in-licenses from Dianthus with respect to such research program.

The milestone obligations for each research program would total up to $ 11.0 million, based on achievement of each of the specified milestone events.

If the Company successfully commercializes a product(s) under a license agreement, the Company will be obligated to make tiered royalty payments, on a product-by-product basis, to Dianthus on annual net sales of such products.

Royalties will be calculated as specified percentages of annual net sales, ranging from the mid-single digits to the low-double digits, with each specified tiered level of annual net sales having a specified percentage.

In October 2024, the Company entered into the Tenacia Agreement.

Pursuant to the Tenacia Agreement, the Company transferred its rights, and obligations under the Dianthus Option Agreement and the Dianthus License Agreement to Tenacia.

As a result, Zenas has no further obligations to Dianthus under the Dianthus Option Agreement and the Dianthus License Agreement.

For additional information on our Tenacia Agreement, please see Note 7, License and Collaboration Revenue , to these consolidated financial statements.

Viridian Therapeutics, Inc.

In October 2020, the Company entered into a license agreement with Viridian Therapeutics, Inc.

(“Viridian”), to obtain an exclusive, royalty-bearing, sublicensable license to research, develop, manufacture, market and sell certain antibody product candidates based on Viridian’s proprietary technology (the “Viridian Agreement”).

The Company’s license rights are limited to non-oncology indications and to the Zenas Territories.

Viridian retains its rights to develop and commercialize such product candidates outside of the Zenas Territories.

Upon execution of the Viridian Agreement, the Company issued 38,707 shares of its common stock to Viridian as initial consideration which was recorded as acquired in-process research and development expense in its consolidated statements of operations and comprehensive loss for the year ended December 31, 2020.

The Company is obligated to make development milestone payments to Viridian, totaling up to $ 12.0 million, based on achievement of each of the specified milestone events.

The Company is also required to pay Viridian tiered royalties on annual net sales of successfully commercialized products utilizing the licensed technology.

The royalty percentage rates range from the mid-single digits to the low-double digits.

During the year ended December 31, 2024 and 2023, the Company did not incur or pay any milestones to Viridian.

During the year ended December 31, 2021, the Company and Viridian entered into two letter agreements to authorize initiation of certain manufacturing and development activities related to the licensed product candidate, ZB001 (also known as VRDN-001).

In each of the letter agreements the Company requested, and Viridian agreed, to engage a third-party contract manufacturer (the “CMO”) to initiate certain work with respect to activities pursuant to one or more statements of work under existing agreements between Viridian and the two CMOs.

In May 2022, the Company entered into a manufacturing development and supply agreement with Viridian.

The Company pays Viridian for all amounts the CMOs invoice to Viridian for the specified activities.

The first letter agreement subsequently was amended three times to add further activities and costs to those detailed in the original letter agreement.

During the years ended December 31, 2024 and 2023, the Company recognized an immaterial amount of expenses, respectively, which were recorded in research and development expenses in the consolidated statements of operations.

As of December 31, 2024, and 2023, immaterial amounts were recorded in accounts payable and accrued expenses.

Viridian has agreed to reimburse the Company for certain services it performs on Viridian’s behalf, with reimbursements being recorded as a reduction in research and development expenses.

During the year ended December 31, 2024, the Company recorded $ 1.7 million in reimbursable expenses.

During the year ended December 31, 2023, the Company had no reimbursable expenses.

As of December 31, 2024, Viridian had not notified the Company of any additional antibody product candidate.

Convertible Preferred Stock

In September 2020, the Company issued and sold 1,785,714 shares of Series Seed convertible preferred stock (“Series Seed Preferred Stock”) in a private financing transaction, at a purchase price of $ 0.56 per share, for total net cash proceeds of $ 1.0 million.

In November 2020, the Company issued 5,041,542 shares of Series A convertible preferred stock (“Series A Preferred Stock”) to Xencor as initial consideration for the 2020 Xencor Agreement.

Also in November 2020, the Company issued and sold 12,547,838 shares of Series A Preferred Stock in a private financing transaction, at a purchase price of $ 3.1878 per share, for total net cash proceeds of $ 39.9 million.

In November 2022, the Company issued and sold 25,139,732 shares of Series B Preferred Stock in a private financing transaction, at a purchase price of $ 2.38666 per share, for total net cash proceeds of $ 59.4 million.

Concurrent with the issuance and sale of the Series B Preferred Stock, which was deemed to be a qualified financing as defined in the convertible note agreement from notes issued to several investors in 2021, and resulted in the principal plus accrued interest being automatically converted into Series B Preferred Stock, the outstanding convertible notes from 2021 were exchanged for 37,471,107 shares of Series B Preferred Stock.

At the same time, the Xencor Warrant, which was issued as initial consideration for the 2021 Xencor Agreement, was deemed exercised for 14,441,793 shares of Series B Preferred Stock.

In April 2023, the Company incurred a $ 10.0 million development milestone pursuant to the 2021 Xencor Agreement.

Xencor elected to receive payment in the form of the Company’s Series B Preferred Stock and the Company issued 4,189,955 shares of Series B Preferred Stock as payment for the development milestone in June 2023 (see Note 8, License and Option Agreement to these consolidated financial statements).

In May 2024, the Company issued and sold 103,990,553 shares of Series C convertible preferred stock (“Series C Preferred Stock”) in a private financing transaction, at a purchase price of $ 1.72131 per share, for total net cash proceeds of $ 178.4 million.

Concurrent with the issuance and sale of the Series C Preferred Stock, which was deemed to be a BMS Qualified Financing as defined above in Note 3, Fair Value Measurements, the principal plus accrued interest of the BMS Note was automatically converted into 12,284,686 shares of Series C Preferred Stock, thereby making the total Series C issuance equal to 116,275,239 shares.

Upon the issuance of the Series Seed, Series A, Series B, and Series C Preferred Stock, the Company assessed the embedded conversion and liquidation features of the shares and determined that such features did not require the Company to separately account for these features.

In September 2024, the Company completed its IPO, in which the Company issued and sold 15,220,588 shares of its common stock, including 1,985,294 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $ 17.00 per share, for aggregate gross proceeds of $ 258.7 million.

The Company received approximately $ 234.3 million in net proceeds, after deducting underwriting discounts and commissions and other offering costs.

In connection with the IPO, all outstanding shares of Preferred Stock converted into an aggregate of 24,978,715 shares of common stock and no convertible preferred stock was outstanding as of December 31, 2024.

Preferred Stock consisted of the following as of December 31, 2023 (in thousands, except share amounts):

December 31, 2023

Preferred Stock

Issuable Upon

Carrying Value

Liquidation Value

Series Seed Preferred Stock

Series A Preferred Stock

Series B Preferred Stock

The holders of preferred stock had the following rights, preferences and privileges prior to conversion into common stock upon the closing of the IPO:

The holder of each share of Preferred Stock was entitled to one vote for each share of common stock into which it would convert and to vote with the common stock on all matters.

Each share of convertible preferred stock was automatically converted into a share of common stock, upon affirmative vote of majority of the holders of each series or upon the closing of an initial public offering of the Company’s common stock which resulted in a specified minimum amount of gross cash proceeds.

The conversion ratio was initially one share of common stock for each share of convertible preferred stock and was adjustable in the event of a split or reverse split of the Company’s common stock, an issuance or declaration of dividends to holders of the Company’s common stock, a reorganization or merger transaction, or certain issuances of shares of common stock which were dilutive to holders of the Company’s preferred stock.

Holders of preferred stock had the right to one vote for each share of the Company’s common stock which were dilutive to holders of the Company’s preferred stock.

Holders of preferred stock had the right to one vote for each share of the Company’s common stock into which such holder’s shares of preferred stock could then convert.

Holders of Series C Preferred Stock were entitled to receive dividends, only when, as and if declared by the Board, at the annual rate of 6 % of the Series C Preferred Stock issue price, payable in preference to and satisfied before any dividend or distribution on any other class or series of the Company’s shares (except for certain exempted distributions).

If any assets or funds remain after dividends had been distributed to holders of Series C Preferred Stock, holders of Series B Preferred Stock would have been entitled to receive dividends, only when, as and if declared by the Board, at the annual rate of 6 % of the Series B issue price, payable in preference to and satisfied before any dividend or distribution on any other class or series of the Company’s shares (except for certain exempted distributions).

If any assets or funds remain after dividends had been distributed to holders of Series B Preferred Stock, holders of Series A Preferred Stock would had been entitled to receive dividends, only when, as and if declared by the Board, at the annual rate of 6 % of the Series A issue price, payable in preference to and satisfied before any dividend or distribution on any other class or series of the Company’s shares (except for certain exempted distributions).

If any assets or funds remain after dividends had been distributed to holders of Series A Preferred Stock, holders of Series Seed Preferred Stock would have been entitled to receive dividends, only when, as and if declared by the Board, at the annual rate of 6 % of the Series Seed issue price, payable in preference to and satisfied before any dividend or distribution on any other class or series of the Company’s shares (except for certain exempted distributions).

The right to receive dividends on shares of all series of preferred stock was not cumulative, and no such right accrued to holders of such shares.

There were no dividends declared or paid as of December 31, 2024 and 2023.

Liquidation Preference

In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company or a deemed liquidation event, holders of Series C Preferred Stock prior and in preference to any distribution to holders of Series B Preferred Stock, Series A Preferred Stock, Series Seed Preferred Stock and common shares, would have been entitled to be paid the issue price they originally paid to acquire their shares, plus any declared but unpaid dividends.

After full payment to holders of Series C Preferred Stock, holders of Series B Preferred Stock prior and in preference to any distribution to holders of Series A Preferred Stock, Series Seed Preferred Stock and common shares, would have been entitled to be paid the issue price they originally paid to acquire their shares, plus any declared and unpaid dividends.

After full payment to holders of Series B Preferred Stock and Series A Preferred Stock, holders of Series Seed Preferred Stock prior and in preference to any distribution to holders of common shares, would have been entitled to be paid the issue price they originally paid to acquire their shares, plus any declared and unpaid dividends.

After full payment to holders of Series C Preferred Stock, Series B Preferred Stock, Series A Preferred Stock, holders of Series Seed Preferred Stock prior and in preference to any distribution to holders of common shares, would have been entitled to be paid the issue price they originally paid to acquire their shares, plus any declared and unpaid dividends.

Any remaining amounts after payment to holders of preferred stock, would have been paid to holders of common shares.

A deemed liquidation event was defined as any consolidation, amalgamation, scheme of arrangement or merger of the Company (and any of its subsidiaries) or other reorganization resulting in loss of more than 50% voting power;

the sale, transfer, lease or other disposition of all or substantially all of the Company’s assets;

or the exclusive licensing of all or substantially all of the Company’s intellectual property.

The Preferred Stock did not have redemption rights, except for the contingent redemption upon the occurrence of a Liquidation Event.

In August 2023, all outstanding shares of ordinary stock of Zenas Cayman automatically converted into shares of common stock of the Company upon the Redomicile and incorporation of the Company in the State of Delaware as Zenas BioPharma, Inc.

In May 2024, the Company amended and restated its certificate of incorporation, whereby the Company increased the shares of common stock it was authorized to issue to 294,784,925 shares.

Upon consummation of the IPO,

the Company restated its certificate of incorporation, and as of December 31, 2024, the Company was authorized to issue 175,000,000 shares of $ 0.0001 par value common stock.

In May 2021, the Company entered into a license agreement with Xencor (the “2021 Xencor Agreement”), under which the Company obtained an (i) exclusive, royalty-bearing, sublicensable worldwide license under certain patent rights controlled by Xencor and (ii) a non-exclusive payment bearing license under certain know-how controlled by Xencor to research, develop, manufacture, market and sell obexelimab.

The 2021 Xencor Agreement became effective in November 2021, upon the execution of an amendment to the 2021 Xencor Agreement.

In 2023, the Company incurred a $ 10.0 million development milestone, which was recorded as acquired IPR&D expense in the consolidated statements of operations and comprehensive loss.

The Company is obligated to make regulatory milestone payments up to $ 75.0 million and one-time sales milestone payments up to $ 385.0 million upon achieving milestone events of net sales in a given calendar year in the territory equal to certain threshold amounts.

In addition, the Company is required to pay Xencor tiered royalties on annual net sales of successfully commercialized products utilizing obexelimab, with the royalty percentages varying based on regions and ranging from the mid-single digits to the mid-teens.

During the year ended December 31, 2025 and 2024, the Company did not incur any expense related to milestones or any expenses related to reimbursable patent-related costs.

License Agreement with Viridian Therapeutics, Inc.

In October 2020, the Company entered into a license agreement (“the Viridian Agreement”) with Viridian Therapeutics, Inc (“Viridian”)., to obtain an exclusive, royalty-bearing, sublicensable license to research, develop, manufacture, market and sell certain antibody product candidates based on Viridian’s proprietary technology.

The Company’s license rights are limited to non-oncology indications and are limited to China, Hong Kong, Macau and Taiwan (“Zenas Territories”).

The Viridian Agreement, as amended, obligates the Company to make a development and sales milestone payments to Viridian, totaling $ 21.0 million, based on achievement of certain specified development and sales milestones, as well as royalties on net sales.

In January 2025, the Company entered the Zai License Agreement under which the Company granted Zai an exclusive sublicense to develop, manufacture and commercialize ZB001 and related programs in greater China.

In connection with the Zai License Agreement, the Company assigned the Viridian Supply Agreement to Zai.

For additional information on the Zai License Agreement, please see License Agreement with Zai Lab (Hong Kong) Limited in Note 7, License and Collaboration Revenue to these consolidated financial statements.

During the years ended December 31, 2025 and 2024, the Company recognized an immaterial amount of expenses, related to Viridian contract manufacturing organization (“CMO”) costs.

Viridian has agreed to reimburse the Company for certain services the Company performs on Viridian’s behalf, with reimbursements being recorded as a reduction in research and development expenses.

During the years ended December 31, 2025 and 2024, the Company recorded $ 0.2 million and $ 1.7 million in reimbursable expenses, respectively.

During the year ended December 31, 2025 and 2024, the Company did no t incur any expenses related to milestones.

License Agreement with InnoCare Pharma Inc.

In October 2025, the Company entered into a License Agreement (the “InnoCare License Agreement”) with InnoCare Pharma Inc.

(“InnoCare”).

Under the InnoCare License Agreement, InnoCare granted the Company exclusive rights to develop, manufacture, and commercialize:

i) orelabrutinib, in the multiple sclerosis (“MS”) field worldwide, and in all non-oncology indications outside Greater China and Brunei, Burma, Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam (“Southeast Asia”), ii) ZB021 (an IL-17AA/AF inhibitor) in all fields of use worldwide, excluding Greater China and Southeast Asia and iii) ZB022 (a TYK2 inhibitor) in all fields of use worldwide.

The Company also obtained certain non-exclusive rights to perform development and manufacturing activities in Greater China and Southeast Asia to support each program in its respective licensed territories.

Pursuant to the InnoCare License Agreement, the Company made one-time non-refundable upfront cash payments totaling $ 35.0 million and issued 5,000,000 shares of common stock to InnoCare (“InnoCare Shares”) in exchange for these rights.

The Company is also required to make an additional one-time non-refundable cash payment of $ 25.0 million and issue an additional 2,000,000 shares of common stock to InnoCare upon the occurrence of Zenas’ Phase 3 clinical trial for orelabrutinib in any indication other than primary progressive MS, or by March 31, 2026, upon the occurrence of certain specified events, whichever comes first (the “Near-term Milestone”) .

In addition, the Company has agreed to make one-time, potential near-term milestone payments of $ 20.0 million each, upon the achievement of certain regulatory milestones for ZB021 and ZB022 (the “Regulatory Milestones”).

The Company is further obligated to pay future regulatory and commercial milestones of up to $ 723.0 million related to orelabrutinib, and future development, regulatory, and commercial milestones of up to $ 656.0 million, inclusive of the two $ 20.0 million Regulatory Milestones specified above, for each preclinical compound if certain milestones are successfully achieved.

In addition, the Company is obligated to pay royalties on net sales at rates ranging from high-single digits to high-teens for orelabrutinib, and mid-single digits to mid-teens for the preclinical compounds.

The Company simultaneously entered into a Subscription Agreement and a Registration Rights Agreement with InnoCare related to the shares of common stock issued and to be issued.

The Subscription Agreement provides for transfer restrictions on the InnoCare Shares and other customary representations, warranties and covenants that were made solely for the benefit of the parties to the Subscription Agreement.

The Registration Rights Agreement requires us to, among other things, prepare and file a registration statement to register the InnoCare Shares.

The Company evaluated the transaction and concluded that the acquired license rights did not constitute a business, as no substantive processes or other activities were acquired.

As the acquired assets do not have alternative future use, the consideration paid was expensed as acquired IPR&D at the execution date of the arrangement.

The consideration for the license rights, which consisted of the upfront cash payment of $ 35.0 million, the issuance of 5,000,000 shares of common stock upon execution of the agreement, and the 2,000,000 shares of common stock issuable upon achievement of the Near-term Milestone.

The Near-term Milestone shares met the equity classification criteria and were measured at fair value as of the agreement execution date, reflecting the probability of achieving the milestone and applicable share restrictions, excluding those related to the holder.

As a result, total IPR&D expense of $ 171.7 million was recorded in the consolidated statement of operations and comprehensive loss.

The remaining milestones are payable solely in cash and will be recognized upon achievement;

no such milestones had been achieved as of December 31, 2025.

Under the InnoCare License Agreement, the Company was obligated to reimburse InnoCare for certain clinical trial startup costs and Investigational New Drug (“IND”) enabling activities which were incurred prior to and after the effective date of the agreement.

As of December 31, 2025, the Company incurred $ 3.1 million of expense, of which $ 2.2 million was paid related to the reimbursable costs to InnoCare related to the acquired programs.

Royalty Obligation

In September 2025, the Company and Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) entered into the Revenue Participation Right Purchase and Sale Agreement (the “Royalty Purchase Agreement”).

Pursuant to the Royalty Purchase Agreement, the Company received a $ 75.0 million upfront payment in exchange for which Royalty Pharma purchased the right to receive, for each calendar quarter, (i) 5.5 % of net sales of obexelimab products sold by the Company and its affiliates worldwide, (ii) 5.5 % of net sales of obexelimab products sold by licensees of Zenas and its affiliates in the U.S., the United Kingdom and the European Union, (iii) 25 % of royalty income payable to Zenas or any of its affiliates on sales of obexelimab products in countries other than the U.S., the United Kingdom, and in the European Union by its licensees pursuant to out-licenses less royalty payments payable by Zenas to Xencor Inc.

and (iv) 25 % of non-royalty income attributable to obexelimab products payable to Zenas or any of its affiliates by its licensees (other than certain milestone payments payable by Bristol-Myers Squibb) pursuant to out-licenses and allocated to countries other than the U.S., the United Kingdom and in the European Union.

The Royalty Purchase Agreement provides for an additional $ 225.0 million of payments to be paid to the Company by Royalty Pharma upon the occurrence of certain triggering events which includes (1) $ 75.0 million payable upon the achievement of certain milestones with respect to Zenas’ INDIGO Phase 3 Trial, noting the Company is not currently eligible for this milestone, (2) $ 75.0 million payable following receipt of marketing approval for obexelimab from the U.S.

Food and Drug Administration (the “FDA”) for the treatment of IgG4-Related Disease on or before a specified date and (3) $ 75.0 million payable following receipt of marketing approval for obexelimab from the FDA for the treatment of systemic lupus erythematosus on or before a specified date.

The Company accounted for the Royalty Purchase Agreement as a debt financing, primarily because it has significant continuing involvement in generating the future revenue on which the royalty payments are based.

The $ 75.0 million upfront payment received was recorded as a liability, net of issuance costs of $ 3.7 million.

The effective interest rate was determined based on the Company’s projections of future payments to Royalty Pharma.

The Company will evaluate the

estimated timing and amount of future royalty payments each reporting period and will revise the effective interest rate prospectively if those estimates change materially.

The fair value of the liability approximates the carrying value and was determined based on the current estimate of the timing and amount of expected future royalty payments expected to be paid over the estimated term of the Royalty Purchase Agreement, which are subject to significant estimation uncertainty and are based on various assumptions made by the Company.

These assumption inputs are determined to be Level 3 inputs in the fair value hierarchy as they involve significant unobservable inputs and judgment.

The following table shows the activity for the royalty obligation during the year ended December 31, 2025 (in thousands):

Proceeds from royalty obligation

Issuance costs

Interest expense related to royalty obligation

Royalty obligation as of December 31, 2025

Effective interest rate

The Company is authorized to issue 175,000,000 shares of common stock $ 0.0001 par value.

The voting, dividend and liquidation rights of the holders of the Company’s common stock were subject to and qualified by the rights, powers and preference of the holders of any preferred stock then issued and outstanding.

The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders (and written actions in lieu of meetings), and there are not any cumulative voting rights.

The number of authorized shares of common stock may be increased or decreased by the affirmative vote of the holders of shares of capital stock of the Company;

however, the issuance of common stock may be subject to the vote of the holders of one or more series of convertible preferred stock.

The Company had reserved the following shares of common stock for the potential conversion of outstanding convertible preferred stock and exercise of stock options:

Conversion of outstanding shares of convertible preferred stock

In October 2025, the Company entered into a sales agreement with Jefferies under which the Company could, from time to time, issue and sell shares of its common stock having aggregate sales proceeds of up to $ 200.0 million, under the 2025 ATM Program.

Jefferies is not required to sell any specific share amounts but acts as the Company’s sales agent, using commercially reasonable efforts consistent with its normal trading and sales practices.

Sales sold pursuant to the sales agreement will be sold pursuant to a shelf registration statement on Form S-3-ASR (Registration No.

333-290777), which became automatically effective upon filing on October 8, 2025.

The Company’s common stock will be sold at prevailing market prices at the time of the sale;

and as a result, prices may vary.

As of December 31, 2025, the Company sold 828,195 shares of common stock under the 2025 ATM Program, with net proceeds of approximately $ 28.5 million, after deducting commissions and other offering costs.

In October 2025, the Company entered into the PIPE Purchase Agreement related to the PIPE offering, pursuant to which the Company sold (i) 6,262,112 shares of common stock to certain institutional and accredited investors at a price of $ 19.00 per share and (ii) 48,918 shares of common stock to certain directors and officers of the Company at a price of $ 20.85 per share.

Sales sold pursuant to the PIPE Purchase Agreement were sold pursuant to a shelf registration statement on Form S-3-ASR (Registration No.

333-290999), which became automatically effective upon filing on October 21, 2025.

As of December 31, 2025, the Company received, net proceeds of $ 111.8 million from the PIPE offering, after deducting placement agent fees and other offering costs.

The Company had reserved the following shares of common stock for the potential conversion of outstanding stock options:

Options to purchase common stock

Remaining shares reserved for future issuance

Employee stock purchase plan

Stock-Based Compensation

On August 21, 2020, the Company’s sole director and member approved the Zenas BioPharma (Cayman) Limited 2020 Equity Incentive Plan (the “2020 Plan”).

Upon effectiveness of the 2024 Plan (as defined below), the Company ceased granting additional awards under the 2020 Plan.

The 2020 Plan allowed the Company to grant stock options, restricted stock awards (“RSAs”), restricted stock units, and other stock-based awards to employees, officers, directors and consultants of the Company and its subsidiaries.

Since inception of the 2020 Plan, the Company has granted RSAs and stock options which generally vest over four years , with 25 % of the total shares granted vesting on the anniversary of the vesting commencement date and the remaining 75 % vesting in equal monthly installments over the subsequent thirty-six (36) months.

The 2020 Plan was subsequently amended by the Board and provided for the issuance of 2,560,401 shares of common stock as of December 31, 2023, of which 60,792 shares of common stock remained available for future grant under the 2020 Plan.

Upon effectiveness of the 2024 Plan (as defined below), the remaining available shares for future grant were transferred to the 2024 Plan.

On September 3, 2024, the Board adopted the 2024 Equity Incentive Plan (the “2024 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO.

The 2024 Plan provides for the award of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, unrestricted stock, restricted stock units and other stock-based awards.

Upon the effectiveness of the 2024 Plan, the number of shares of common stock initially reserved for issuance was 4,775,477 shares of common stock which is equal to 12 % of the number of shares of common stock issued and outstanding immediately following the consummation of the Company’s IPO.

The number of shares reserved and available for issuance under the 2024 Plan will automatically increase each January 1, beginning on January 1, 2025 through January 1, 2034, by the number of shares equal to the lesser of (a) five percent of the aggregate number of shares of common stock outstanding as of such date, and (b) a number of shares as may be determined by the Board on or prior to such date.

As of December 31, 2024, there were 359,399 shares available for issuance under the 2024 Plan.

In August 2020, the Company’s sole director adopted the 2020 Equity Incentive Plan (the “2020 Plan”).

Upon the effectiveness of the 2024 Plan (as defined below), the Company ceased granting additional awards under the 2020 Plan and the remaining available shares for future grant were transferred to the 2024 Plan.

The 2020 Plan allowed the Company to grant stock options, restricted stock awards, RSUs and other stock-based awards to employees, officers, directors and consultants of the Company and subsidiaries.

As of December 31, 2025, 3,217,355 shares of stock options were outstanding under the 2020 Plan.

In September 2024, the Board adopted the 2024 Equity Incentive Plan (the “2024 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO.

The 2024 Plan provides for the award of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, unrestricted stock, RSUs and other stock-based awards.

The number of shares reserved and available for issuance under the 2024 Plan will automatically increase each January 1, beginning on January 1, 2025 through January 1, 2034, by the number of shares equal to the lesser of (i) five percent of the aggregate number of shares of common stock outstanding as of such date, and (ii) a number of shares as may be determined by the Board on or prior to such date.

As of December 31, 2025, 431,863 shares of common stock were available for issuance under the 2024 Plan.

On January 1, 2026, the shares available for issuance under the 2024 Plan was increased to 3,156,138 .

Restricted Stock Awards

The following table presents a summary of the Company’s RSA activity and related information:

Average Grant-Date

Unvested as of December 31, 2023

Unvested as of December 31, 2024

There were no RSAs granted during the year ended December 31, 2024.

As of December 31, 2024, there was no compensation cost related to unvested RSAs as all were fully vested.

2026 Inducement Plan

In December 2025, the Company’s board of directors adopted the 2026 Inducement Plan (the “2026 Inducement Plan”), which became effective December 10, 2025.

The 2026 Inducement Plan provides for the award of non-qualified stock options and other awards under the 2026 Inducement Plan to persons not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering the employment of the Company.

The grants constitute “employment inducement grants” in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules and are issued outside of the 2024 Plan.

The inducement grants include non-statutory stock options to purchase shares of the Company’s common stock and RSUs.

The inducement grants have terms and conditions consistent with those set forth under the 2024 Plan and vest under the same respective vesting schedules as stock option awards and RSUs granted under the 2024 Plan.

The Company’s initially reserved 1,000,000 shares of common stock for the issuance of awards under the 2026 Inducement Plan.

As of December 31, 2025, 1,000,000 shares of common stock were available for issuance under the 2026 Inducement Plan.

Stock Options

2 unchanged sentences

Compensation expense related to awards to employees with performance based vesting conditions is recognized based on the grant date fair value once the achievement of the performance condition is probable.

From time to time, the Company grants equity awards to newly hired employees as an inducement to enter into employment with the Company.

The grants constitute "employment inducement grants" in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules and are issued outside of the 2024 or 2026 Plans.

The inducement grants include non-statutory stock options to purchase shares of the Company's common stock and RSUs.

The inducement grants are granted under individual inducement agreements and have terms and conditions consistent with those set forth under the 2024 Plan and vest under the same respective vesting schedules as stock option awards and RSU awards granted under the 2024 Plan.

The inducement grants are included in the stock option award tables below.

As of December 31, 2025, the Company granted 1,062,000 non-statutory stock options as inducement grants.

No inducement grants were awarded during the year ended December 31, 2024.

The table below presents the weighted-average assumptions used in estimating the fair values of stock options granted during the years ended December 31, 2025 and 2024:

3 unchanged sentences

Expected dividend yield

The weighted-average grant date fair value of options granted during the years ended December 31, 2025 and 2024, was $ 10.30 and $ 11.38 per share, respectively.

The fair value is being expensed over the associated service period of the award on a straight-line basis based on the grant date fair value or once the achievement of the performance condition is probable.

The following table presents a summary of the Company’s stock option activity and related information:

Weighted-Average

Number of Shares

Weighted - Average Exercise Price

Contractual Term (in years)

Value (in thousands)

Weighted-Average Remaining Contractual Term (in years)

Aggregate Intrinsic Value

(in thousands)

Outstanding - December 31, 2024

4 unchanged sentences

The aggregate intrinsic value of the stock options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those stock options that had an exercise price lower than the fair value of the Company’s common stock as of the measurement date of December 31, 2025.

There were 38,427 options exercised for the year ended December 31, 2024, resulting in total proceeds of $ 0.3 million and 27,579 options exercised for the year ended December 31, 2023, resulting in total proceeds of $ 0.1 million.

The weighted-average grant date fair value of options granted during the years ended December 31, 2024 and 2023, was $ 11.38 and $ 8.11 per share, respectively.

As of December 31, 2024, unrecognized compensation was $ 74.4 million, which is expected to be recognized over a weighted average period of 3.6 years.

The total fair value of options vested during the years ended December 31, 2024 and 2023 was $ 4.6 million and $ 2.6 million, respectively.

The Company recognized stock-based compensation expense related to the issuance of equity awards to employees in the consolidated statement of operations as follows (in thousands):

There were 510,113 options

exercised for the year ended December 31, 2025, resulting in total proceeds of $ 4.1 million and 38,427 options exercised for the year ended December 31, 2024, resulting in total proceeds of $ 0.3 million.

Restricted Stock Units

The Company granted to certain employees RSUs that are subject to time-based vesting conditions, that vest equally over four years , assuming continued employment.

RSUs with time-based vesting conditions are valued on the grant date using the grant date market value price of the underlying shares of the Company’s common stock.

The Company did not grant any RSU’s in 2024.

The following table summarizes the Company’s RSU activity:

Number of Shares

Weighted - Average Grant Date Fair Value

Unvested as of December 31, 2024

Unvested as of December 31, 2025

No RSUs vested during the year ended December 31, 2025.

As of December 31, 2025, unrecognized stock-based compensation expense was $ 83.7 million, which is expected to be recognized over a weighted average period of 2.8 years.

The total fair value of equity awards vested during the years ended December 31, 2025 and 2024 was $ 27.1 million and $ 4.6 million, respectively.

The Company recognized stock-based compensation expense related to the issuance of equity awards to employees, directors and consultants in the consolidated statement of operations as follows (in thousands):

Years Ended December 31,

Research and development

2 unchanged sentences

Employee Stock Purchase Plan

On September 3, 2024, the Board adopted the 2024 Employee Stock Purchase Plan (the “ESPP”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO.

The Company initially reserved 397,956 shares for issuance under the ESPP.

The number of shares of common stock available under the ESPP will automatically increase on January 1 st of each year, beginning on January 1, 2025 through January 2034, by the number of shares equal to the lesser of (a) one percent of the aggregate number of shares of common stock outstanding as of such date, and (b) a number of shares as may be determined by the Board on or prior to such date, up to a maximum of 1,000,000 shares in the aggregate per year.

On January 1, 2025, the shares of common stock reserved for issuance under the ESPP was increased to 815,890 .

As of December 31, 2024, no shares of common stock have been issued and no stock-based compensation has been recognized related to the ESPP.

In September 2024, the Board adopted the 2024 Employee Stock Purchase Plan (the “ESPP”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO.

The number of shares of common stock available under the ESPP will automatically increase on January 1st of each year, beginning on January 1, 2025 through January 1, 2034, by the number of shares equal to the lesser of (i) one percent of the aggregate number of shares of common stock outstanding as of such date, and (ii) a number of shares as may be determined by the Board on or prior to such date, up to a maximum of 1,000,000 shares in the aggregate per year.

During the year ended December 31, 2025, there were 42,768 shares issued under the ESPP.

As of December 31, 2025, a total of 773,122 shares were available for future issuance under the ESPP.

On January 1, 2026, the shares of common stock reserved for issuance under the ESPP was 1,317,977 .

Net Loss Per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):

Net loss attributable to common stockholders

Weighted-average common stock outstanding - basic and diluted

Net loss per share attributable to common stockholders - basic and diluted

The Company’s potentially dilutive securities, which include convertible preferred stock, restricted stock and stock options, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

Therefore, the weighted-average number of common shares outstanding used to calculate both

basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following shares from the computation of diluted net loss per share attributable to common stockholders as of December 31, 2024 and 2023 because including them would have had an anti-dilutive effect:

Convertible preferred stock

Unvested restricted stock

The Company’s potentially dilutive securities, which include stock options, RSUs and the 2,000,000 shares of common stock to be issued to InnoCare , have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same.

The Company excluded the

following shares from the computation of diluted net loss per share as of December 31, 2025 and 2024 because including them would have had an anti-dilutive effect:

Options to purchase common stock

The BMS Note was also outstanding as of December 31, 2023, which could have obligated the Company to issue preferred shares or common shares upon the occurrence of various future events at prices and in amounts that are not determinable until the occurrence of those future events.

Because necessary conditions for the conversion of the BMS Note had not been satisfied as of December 31, 2023, the Company has excluded the BMS Note from the table above and the calculation of diluted net loss per share.

As of December 31, 2024 the BMS Note is no longer outstanding.

The following table presents the components of loss before the provision for (benefit from) income taxes during the years ended December 31, 2024 and 2023 (in thousands):

Loss before taxes on income

The components of the income tax provision for the years ended December 31, 2024 and 2023 are as follows (in thousands):

Current income tax provision:

Total current income tax provision

Deferred income tax provision:

Unvested restricted stock units

Common stock to be issued to InnoCare

The Company adopted ASU 2023-009, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures on a prospective basis for the year ended December 31, 2025.

The following table presents income (loss) from ccontinuing operations before income taxes during the years ended December 31, 2025 and 2024 (in thousands):

Income (loss) from continuing operations

The significant components of income tax expense (benefit) attributable to income from continuing operations for the years ended December 31, 2025 and 2024 are as follows (in thousands):

Current tax (benefit) provision

Total current income tax (benefit) provision

Deferred tax expense (exclusive of effects of other components listed below)

Federal, state and foreign

Total deferred income tax provision

Total income tax provision

A reconciliation of the income tax expense computed using the federal statutory income tax rate to the Company’s effective income tax rate is as follows:

Total deferred tax expense

Total income tax (benefit) provision

Income tax expense (benefit) attributable to income (loss) from continuing operations for the year ended December 31, 2025 differed from the amounts computed by applying the statutory U.S.

Federal income tax rate of 21 percent to pretax income (loss) from continuing operations as a result of the following (in thousands):

December 31, 2025

Federal statutory income tax (benefit) at 21 %

Domestic federal

Changes in valuation allowance

Nontaxable or nondeductible items

Cross-border tax laws

Other reconciling items

Domestic state income taxes, net of federal effect

Foreign tax effects:

Other foreign jurisdictions

Below is the tabular rate reconciliation previously disclosed for the year ended December 31, 2024:

December 31, 2024

Percentage of income before income taxes

Federal statutory income tax rate

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Effective income tax rate

The Company’s change in effective tax rate for the year ended December 31, 2024 compared to the year ended December 31, 2023 decreased primarily due to a change in income earned in the U.S.

The following table presents the components of the Company’s deferred tax assets and liabilities (in thousands):

The following table presents the cash paid for income taxes, net of refunds recevied, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 (in thousands):

December 31, 2025

state and local

Massachusetts

* The amount of income taxes paid during the year does not meet the five percent disaggregation threshold.

The only state or local juridiction that contributes to the majority, greater than 50%, of the tax effect of the state and local income tax category, is Massachusetts.

The following table presents the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferrred tax liabilities at December 31, 2025 and 2024 (in thousands):

Deferred tax assets:

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Research and development tax credits

Milestone payments

Stock-based compensation

Royalty obligation

Milestone payments

Total deferred tax assets

Valuation allowance

Deferred tax assets, net of valuation allowance

Deferred tax liabilities:

Amortization and other

Prepaids and other

Total deferred tax liabilities

Net deferred tax asset before valuation allowance

Valuation allowance

Net deferred tax asset

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After consideration of all the evidence, both positive and negative, the Company has recorded full valuation allowances against its domestic and foreign deferred tax assets as of December 31, 2025, because management has determined that it is more likely than not that these assets will not be realized.

The valuation allowance increased by $ 50.5 million from December 31, 2023 to December 31, 2024, primarily due to additional net operating losses related to the U.S.

entities as well as the capitalization of research and development expenses under Internal Revenue Code Section 174 (“Section 174”) at the U.S.

Beginning on or after January 1, 2022, Section 174 of the U.S.

internal revenue code was amended as part of the Tax Cuts and Jobs Act of 2017 (the “TCJA”) to no longer permit an immediate deduction for research and development expenditures in the tax year that such costs are incurred.

Rather, the research and development expenses must be capitalized and amortized over five years for research performed in the U.S.

and fifteen years for research performed outside the U.S.

As a result of this provision, the Company capitalized applicable costs resulting in a deferred tax asset of $ 39.7 million as of December 31, 2024.

The valuation allowance increased by $ 113.6 million to $ 203.9 million as of December 31, 2025, primarily due to additional net operating losses related to the U.S.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing several significant U.S.

income tax provisions that impact the Company.

Of these provisions, companies are no longer required to capitalize domestic research and development expenditures.

However, foreign expenditures of this nature must continue to be capitalized and amortized over a fifteen year period.

Due to the operations of the Company, the Company does not anticipate electing to accelerate the deduction for the previously capitalized domestic research and development expenditures.

The Company will continue to monitor the impact of OBBBA and anticipated guidance from the U.S.

Department of Treasury.

The balance of previously capitalized applicable costs associated with research and development expenditures was $ 30.6 million as of December 31, 2025.

As of December 31, 2025, the Company had approximately $ 211.2 million and $ 210.4 million of U.S.

federal and state net operating loss (“NOL”) carryforwards, respectively.

As of December 31, 2023, the Company had approximately $ 2.3 million of U.S.

federal NOL carryforwards.

The Company had no state NOL carryforwards as of December 31, 2023.

The Company utilized previous net operating loss carryforwards to offset the taxable income in prior years.

As of December 31, 2024, the Company had approximately $ 75.5 million and $ 65.0 million of U.S.

federal and state NOL carryforwards.

The federal NOL carryforwards do not expire, but they may be limited in their usage to an annual deduction equal to 80 % of annual taxable income.

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The federal and state NOL carryforwards are fully offset by valuation allowances.

As of December 31, 2024, the Company had $ 13.3 million and $ 1.2 million in federal and state general business or research and development tax credit carryforwards.

As of December 31, 2023, the Company had $ 5.9 million and $ 0.8 million in federal and state general business or research and development tax credit carryforwards.

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

The federal and state research credit carryforwards expire in 20 years and 15 years , respectively, starting in 2036.

The federal and state tax credit carryforwards are fully offset by valuation allowances.

As of December 31, 2025 and 2024, the Company had $ 43.7 million and $ 54.2 million of foreign NOL carryforwards, respectively.

Foreign NOL carryforwards of $ 47.8 million will carryforward indefinitely, with the remaining expiring between 2026 and 2028.

The foreign NOL carryforwards are fully offset by valuation allowances.

The China NOL carryforwards expire at various dates beginning in 2026 through 2028 for tax purposes, while the Hong Kong NOLs may be carried forward indefinitely for tax purposes.

The Company files income tax returns in the U.S., as well as various state and foreign jurisdictions.

1 unchanged sentence

All tax years generally remain open in each jurisdiction.

As of December 31, 2025, the Company had $ 24.1 million and $ 2.1 million in federal and state general business or research and development tax credit carryforwards.

As of December 31, 2024, the Company had $ 13.3 million and $ 1.2 million in

federal and state general business or research and development tax credit carryforwards.

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

The federal and state research credit carryforwards expire in 20 years and 15 years , respectively, starting in 2036.

The federal and state tax credit carryforwards are fully offset by valuation allowances.

There have been no unrecognized tax benefits since the Company’s inception.

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The Company has entered into arrangements for leases of office space;

see Note 6, Leases, for details.

License and Option Agreements

for additional information see Note 6, Leases to these consolidated financial statements.

License Agreements

The Company entered into licenses agreement under which it is obligated to make fixed and contingent payments;

see Note 8, License and Option Agreements , for details.

for additional information see Note 8, License Agreements to these consolidated financial statements.

Royalty Obligation

The Company entered into a royalty purchase agreement under which it is obligated to make contingent payments related to future net sales and royalty income of obexelimab;

for additional information see Note 9, Royalty Obligation to these consolidated financial statements.

Other Contracts

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Under such agreements, the Company is contractually obligated to make certain minimum payments to the vendors, with the exact amounts in the event of termination to be based on the timing of the termination and the exact terms of the agreement.

As of December 31, 2025, our total non-cancellable clinical manufacturing contract payment obligations are $ 17.7 million of which the full obligation is payable within 12 months.

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, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties.

In addition, the Company has entered into indemnification agreements with members of its board of directors and certain officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or services as directors.

In addition, the Company has entered into indemnification agreements with members of its board of directors and certain officers that will

require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or services as directors.

The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited.

7 unchanged sentences

Eligible employees are permitted to contribute to the 401(k) Plan within statutory and 401(k) Plan limits.

Since inception of the 401(k) Plan and through the year ended December 31, 2024, the Company has made a one-time contribution of $ 0.1 million to the 401(k) Plan.

As of January 1, 2025, the Company matches participant contributions pursuant to the terms of the 401(k) Plan, which contributions are limited to a percentage of the participant’s compensation contributed to the plan.

For the year ended December 31, 2025, the Company made $ 1.0 million matching contributions to the 401(k) Plan.

For the year ended December 31, 2024, the Company made a one-time contribution of $ 0.1 million to the 401(k) Plan.

Related Party Transactions

The Company has obtained exclusive, worldwide licenses from Xencor to research, develop, manufacture, market and sell three antibody product candidates pursuant to two license agreements.

The Company has concluded that Xencor is a related party, because as initial consideration for the 2020 Xencor Agreement, the Company issued 5,041,542 shares of its Series A Preferred Stock to Xencor during the year ended December 31, 2020.

In April 2023, Xencor elected to receive payment for a development milestone in the form of the Company’s Series B Preferred Stock and the Company issued 4,189,955 shares of Series B Preferred Stock as payment for the development milestone in June 2023.

As of December 31, 2024, Xencor held 7.4 % of shares of the Company’s outstanding common stock.

The Company did no t incur any costs related to reimbursable patent-related costs as of December 31, 2024.

The Company has concluded that Xencor is a related party, due to the issuance of convertible preferred stock in December 2020 and April 2023.

In connection with the completion of the IPO, in September 2024, all outstanding shares of preferred stock converted into shares of common stock.

As of December 31, 2025, Xencor held less than 10 % of shares of the Company’s outstanding common stock.

Viridian Therapeutics, Inc.

2 unchanged sentences

As initial consideration for this license, the Company issued 38,707 shares of its common stock to Viridian during the year ended December 31, 2020.

As of December 31, 2024, Viridian held less than 0.1 % of shares of the Company’s outstanding common stock.

Dianthus Therapeutics, Inc

The Company obtained an exclusive option to negotiate and enter into exclusive license agreements with Dianthus for the rights (in the Zenas Territories only) to either or both of two antibody product candidates.

In June 2022, the Company and Dianthus entered into the Dianthus License Agreement.

The Company has concluded that Dianthus is a related party because the Company’s Chair of the Board is a member of the board of directors of Dianthus.

As initial consideration for this license, the Company issued 18,063 shares of its common stock to Dianthus during the year ended December 31, 2020.

In October 2024, the Dianthus Option Agreement and Dianthus License Agreement and all of their related rights and obligations were transferred to Tenacia.

As of December 31, 2024, Dianthus held less than 0.1 % of shares of the Company’s outstanding common stock.

For additional information on our license arrangements, please see Note 8, License and Option Agreements , to these consolidated financial statements.

As of December 31, 2025, Viridian held 0.1 % of shares of the Company’s outstanding common stock.

Zai Lab (Hong Kong) Limited

The Company has granted a sublicense to Zai to develop, manufacture and commercialize ZB001 and related programs in greater China.

The Company has concluded that Zai is a related party, as the Company’s CEO and Chairman is a member of Zai’s board of directors.

InnoCare Pharma Inc.

The Company has obtained the exclusive rights from InnoCare to develop, manufacture and commercialize three product candidates pursuant to the InnoCare License Agreement.

Though InnoCare does not hold any direct controlling interest in the Company, the Company has concluded that InnoCare is a related party, due to the 5,000,000 shares of common stock issued and the 2,000,000 shares of common stock to be issued pursuant to the InnoCare License Agreement.

As of December 31, 2025, InnoCare held less than 10 % of shares of the Company’s outstanding common stock.

For additional information on these arrangements, please see Note 7, License and Collaboration Revenue and Note 8, License Agreements to these consolidated financial statements.

Segment Information

The Company manages its operations on a consolidated basis as a single reportable segment focused on the research and development of precision immunology-based therapies.

The accounting policies of the single reportable segment are

identical to those described in Note 2, Summary of Significant Accounting Policies .

When evaluating the Company’s financial performance, the CODM regularly reviews consolidated net loss, total expense and direct expenses by program and compared to budget.

The CODM allocates resources based on the Company’s available cash resources, forecasted expenditures on a consolidated basis, as well as an assessment of the probability of success of its research and development activities on a program basis.

Segment asset information regularly provided to the CODM is consistent with that reported on the consolidated balance sheets with particular emphasis on the Company’s available liquidity, including its cash, cash equivalents and marketable securities balances.

Revenue is primarily attributed to individual countries based on the location of the license, as of December 31, 2024 and 2023, revenue was attributed to our China and U.S.

entity, respectively.

The Company manages its operations on a consolidated basis as a single reportable segment focused on the research, development and commercialization of transformative immunology-based therapies.

The accounting policies of the single reportable segment are identical to those described in Note 2, Summary of Significant Accounting Policies .

When evaluating the Company’s financial performance, the Company’s CODM, its Chief Executive Officer regularly reviews consolidated net loss, total expense and direct expenses by program and compared to budget.

The CODM allocates resources based on the Company’s available cash resources, and forecasted expenditures on a consolidated basis, as well as an assessment of the probability of success of its research and development activities on a program basis.

Revenue is attributed to the applicable subsidiaries based on the ownership of the license that was sold.

During the years ended December 31, 2025 and 2024, $ 10.0 million and $ 5.0 million was recognized as revenue, respectively, and was attributed to Zenas HK.

The following table presents certain financial data for the Company’s reportable segments for the years ended December 31, 2025 and 2024 (in thousands):

Direct research and development expenses:

Other programs (ZB002 & ZB004)

Orelabrutinib

Other programs (ZB002, ZB004, ZB021 & ZB022)

Partnered regional programs (ZB001 & ZB005)

1 unchanged sentence

General and administrative 3

Acquired in-process research and development 4

Stock-based compensation

1 unchanged sentence

Segment net loss

1 Direct research and development expenses primarily consist of direct costs incurred to specific programs research and development activities, including costs to conduct clinical trials and to manufacture clinical drug supply.

1 Direct research and development expenses primarily consist of direct costs incurred to specific program research and development activities, including costs to conduct clinical trials and to manufacture clinical drug supply.

2 Unallocated research and development expenses primarily consist of indirect costs incurred in support of overall research and development activities and non-specific programs, including activities that benefit multiple programs, such as personnel costs for employees involved in research and development activities, excluding stock-based compensation, as well as contract services not allocated to specific programs.

3 General and administrative expenses primarily consist of all other personnel costs, excluding stock-based compensation, professional fees, depreciation expense, as well as facilities expenses.

4 Other segment items consist of acquired in-process research and development, fair value adjustments to convertible notes, other income, net and income tax provision.

Other income, net consists of interest income and realized and unrealized gains and losses on foreign currency transactions.

3 General and administrative expenses primarily consist of professional fees, depreciation expense, facilities expenses as well as all other personnel costs, excluding stock-based compensation

4 Acquired in-process research and development expenses consist of an upfront payment and the respective fair values of equity consideration pursuant to the InnoCare License Agreement, for additional information see Note 8, License Agreements , to these consolidated financial statements

5 Other segment items consist of other income (expense), net and income tax provision (benefit).

Other income (expense), net consists of interest income, interest expense related to the royalty obligation and realized and unrealized gains and losses on foreign currency transactions.

Subsequent Events

Zai License Agreement

On January 24, 2025, the Company entered into a license agreement (the “Zai License Agreement”) with Zai Lab (Hong Kong) Limited (“Zai”), under which the Company granted Zai an exclusive sublicense to develop and commercialize ZB001 and related programs in greater China.

As partial consideration for the Zai License Agreement, the Company received an upfront fee of $ 10.0 million from Zai.

In addition, the Company is eligible to receive up to $ 96.0 million upon the achievement of certain future development and commercial milestones and royalty percentage rates from the low to mid-single digits, net of pass-through obligations due to Viridian.

Since January 1, 2026, the Company completed the sales of 2,827,723 shares of common stock under the 2025 ATM Program, with an average gross sales price of $ 26.07 per share, resulting in proceeds of $ 71.5 million, net of commissions.

As of the issuance date of these financial statements, $ 96.8 million remained available under the 2025 ATM Program.

Senior Secured Term Loan

On March 14, 2026, the Company entered into a five-year senior secured term loan (the “Loan Agreement”) with Credit PLC (the “Collateral Agent”), BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon Advisors, LP (“Pharmakon”).

The Loan Agreement provides a term loan facility of up to an aggregate principal amount of $ 250.0 million, subject to the achievement of certain development and commercial milestones.

The term loan consists of five tranches including the initial tranche of $ 75.0 million drawn upon the execution of the Loan Agreement, and up to an additional $ 175.0 million available as future tranches.

The Term Loan bears interest at a rate of the 3-month secured overnight financing rate (subject to a 3.25 % floor) plus 5.75 % payable quarterly in arrears;

provided that the Company may elect for 100 % of the interest for the first 24 months following the first tranche funding date to be paid-in-kind without an increase in the interest rate.

The Company is required pay a funding fee equal to 1.00 % or 2.00 % depending on the tranche being drawn.

The Company may elect to prepay the Term Loans in whole or, subject to certain conditions, in part prior to maturity with such prepayments being subject to certain prepayment, make-whole and exit fees.

The Term Loans are subject to certain mandatory prepayments, including a repayment in full of all term loans in four equal payments commencing on September 30, 2028 to the extent certain conditions are not met on or prior to June 30, 2028.

The Loan Agreement contains customary affirmative and restrictive covenants and representations and warranties.

The Company is bound by certain affirmative covenants setting forth actions that are required during the term of the Loan Agreement, including a minimum liquidity covenant of $ 50.0 million prior to FDA approval of obexelimab.

The Company’s obligations under the Loan Agreement are secured by substantially all of its assets, including its intellectual property.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data