What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-19 compared with 2025-03-25 · 202 added, 185 removed, 274 unchanged (59% of the section changed)

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You should carefully read the information under “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report.

Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “Zura,” “we,” “us,” and “our” refer to Zura Bio Limited, a Cayman Islands exempted company formerly known as JATT Acquisition Corp, and its consolidated subsidiaries.

References to JATT Acquisition Corp or “JATT” refers to us prior to the consummation of the Business Combination.

We are a clinical-stage, multi-asset immunology company dedicated to developing novel dual-pathway antibodies for a range of autoimmune and inflammatory diseases with unmet needs.

Leveraging the extensive experience of our team, we identify relevant diseases and develop our differentiated assets in those diseases.

Our strategic focus is to harness dual-pathway biology to provide broader and deeper clinical benefits to patients with autoimmune and inflammatory diseases.

We are currently developing one clinical-stage product candidate in ongoing Phase 2 trials while actively evaluating development opportunities for our pipeline of clinical-stage assets, focusing on indications with unmet needs and commercial potential.

We are currently developing tibulizumab (ZB-106), an immunoglobulin G (IgG)-single-chain variable fragment (scFv) bispecific dual-antagonist antibody engineered by the fusion of TALTZ® (ixekizumab) and tabalumab to neutralize interleukin-17A (IL-17A) and B-cell activating factor (BAFF).

These cytokines play pivotal roles in various inflammatory and autoimmune disorders.

By targeting IL-17A and BAFF, tibulizumab demonstrates potential in mitigating chronic inflammation while preserving the integrity of the immune system.

Three Phase 1/1b clinical studies have been completed for tibulizumab, including studies involving participants with rheumatoid arthritis and Sjögren’s syndrome.

In December 2024, we initiated TibuSURE, a global Phase 2 study evaluating tibulizumab in adults with systemic sclerosis (SSc).

TibuSURE is a randomized, double-blind, placebo-controlled study designed to assess the safety, tolerability, and efficacy of tibulizumab in approximately 80 participants with early diffuse cutaneous systemic sclerosis (dcSSc).

The study includes a 24-week efficacy period followed by a 28-week open-label extension (OLE).

The primary endpoint is the modified Rodnan Skin Score (mRSS).

Key efficacy endpoints include lung disease, assessed by quantitative high-resolution computed tomography (qHRCT) and forced vital capacity (FVC);

physical function, measured by the Health Assessment Questionnaire-Disability Index (HAQ-DI);

and the revised Combined Response Index in Systemic Sclerosis (rCRISS) .

Topline data are expected to be available in the fourth quarter of 2026.

In September 2024, we engaged a third-party Contract Research Organization (“CRO”) to oversee and conduct the Phase 2 clinical program evaluating tibulizumab in hidradenitis suppurativa (HS).

This study is expected to initiate in the second quarter of 2025.

Crebankitug (ZB-168) is a fully human, high affinity monoclonal antibody that binds and neutralizes the interleukin-7 receptor (IL-7R) alpha chain.

IL-7Rα sits at the nexus of two key immune pathways, IL-7 and thymic stromal lymphopoietin (TSLP), thus IL-7Rα has the potential to block activation through either of these pathways.

As a result, we believe crebankitug could be therapeutically relevant in a broad set of indications where the IL-7 or TSLP pathways may be involved.

Three Phase 1/1b clinical studies have been conducted to date.

We are actively assessing the competitive landscape and evaluating potential therapeutic indications for crebankitug.

Torudokimab (ZB-880) is a fully human, high affinity monoclonal antibody that neutralizes interleukin-33 (IL-33), preventing ST2-dependent and ST2-independent (e.g., RAGE) inflammation.

The IL-33/ST2 axis stands as a validated therapeutic target for conditions such as chronic obstructive pulmonary disease (“COPD”) and asthma.

Three Phase 1/2 clinical studies have been conducted to date.

We are continuing to monitor external Phase 2 and Phase 3 IL-33/ST2 data releases from other companies related to asthma and COPD and are actively assessing the competitive landscape and evaluating potential therapeutic indications to guide our future development efforts for torudokimab.

We are a clinical-stage biotechnology company developing novel and differentiated medicines for patients with autoimmune and inflammatory diseases, including serious and debilitating conditions with significant unmet medical need.

We were incorporated as a Cayman Islands exempted company on March 10, 2021.

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Since our inception, our operations have focused on organizing and staffing our company, business planning, raising capital and entering into collaboration agreements for conducting manufacturing, and research and development activities.

Our lead product candidates are in the clinical testing stage;

however, prior to the initiation of TibuSURE in December 2024, we have not conducted any clinical tests ourselves, nor have any been conducted during the period since our inception.

Our lead product candidate is in the clinical testing stage;

however, prior to the initiation of TibuSHIELD and TibuSURE in May 2025 and December 2024, respectively, we had not conducted any clinical trials ourselves.

We do not have any product candidates approved for sale and have not generated any revenue from product sales.

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(ii) the issuance of a promissory note, receiving net proceeds of $7.6 million in December 2022;

(iii) proceeds from the Business Combination of $56.7 million in March 2023 (iv) the April 2023 Private Placement, raising an aggregate of $80.0 million of gross proceeds from the sale of Class A Ordinary Shares and 2023 Pre-Funded Warrants (as defined below) during the year ended December 31, 2023;

(v) the April 2024 Private Placement, raising an aggregate of $112.5 million of gross proceeds from the sale of Class A Ordinary Shares and 2024 Pre-Funded Warrants (as defined below) in April 2024;

(vi) the sale of 1,500,000 Class A Ordinary Shares at a price of $3.80 per share under the ATM (as defined below) for net proceeds of $5.5 million, after placement agent commissions, in September 2024;

and (vii) the sale of 3,000,000 Class A Ordinary Shares at a price of $1.75 per share under the ATM for net proceeds of $5.1 million, after placement agent commissions, in the first quarter of 2025.

(iii) proceeds from the Business Combination of $56.7 million in March 2023 (iv) the sale of Class A Ordinary Shares and pre-funded warrants to purchase up to 3,782,000 Class A Ordinary Shares at a price of $4.249 per pre-funded warrant for an aggregate purchase price of approximately $16.1 million (the “2023 Pre-Funded Warrants”) during the year ended December 31, 2023 (the “April 2023 Private Placement”), raising an aggregate of $75.8 million of net cash proceeds;

(v) the sale of Class A Ordinary Shares and pre-funded warrants to purchase up to 16,102,348 Class A Ordinary Shares at a price of $3.107 per pre-funded warrant for an aggregate purchase price of $50.0 million (the “2024 Pre-Funded Warrants”) in April 2024 (the “April 2024 Private Placement”) raising an aggregate of $105.3 million of net cash proceeds;

(vi) the sale of 1,500,000 Class A Ordinary Shares at a price of $3.80 per share under the ATM (as defined below) for net proceeds of $5.5 million, after sales agent commissions, in September 2024;

and (vii) the sale of 3,000,000 Class A Ordinary Shares at a price of $1.75 per share under the ATM for net proceeds of $5.1 million, after sales agent commissions, in the first quarter of 2025.

Since our inception, we have incurred significant operating losses.

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On July 13, 2021, JATT completed its IPO.

On March 20, 2023 (the “Closing Date”), we consummated the previously-announced transactions contemplated by that certain Business Combination Agreement, dated June 16, 2022, as amended on September 20, 2022, November 14, 2022 and January 13, 2023 by and among Zura Bio Limited, a limited company incorporated under the laws of England and Wales (“Zura Bio UK”), JATT, JATT Merger Sub, a Cayman Islands exempted company and wholly owned subsidiary of JATT (“Merger Sub”), JATT Merger Sub 2, a Cayman Islands exempted company and wholly owned subsidiary of JATT (“Merger Sub 2”) and Zura Bio Holdings Ltd, a Cayman Islands exempted company (“Holdco”), following the approval at an extraordinary general meeting of JATT’s shareholders held on March 16, 2023.

Pursuant to the Business Combination Agreement, (a) before the closing of the Business Combination, Holdco was established as our new holding company and became a party to the Business Combination Agreement;

and (b) on the closing date, in sequential order:

(i) Merger Sub merged with and into Holdco, with Holdco continuing as the surviving company and a wholly owned subsidiary of JATT (the “Merger”);

(ii) immediately following the Merger, Holdco merged with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving company and a wholly owned subsidiary of JATT (the “Subsequent Merger”);

and (iii) JATT, as the registrant changed its name to “Zura Bio Limited”.

Subject to, and in accordance with, the terms and conditions of the Business Combination Agreement, at the Closing, (i) each JATT unit was (to the extent not previously separated) automatically separated and the holder thereof was deemed to hold one JATT Class A Ordinary Share and one-half of a JATT warrant;

(ii) in consideration for the Merger, JATT issued to holders of Holdco’s issued and outstanding shares immediately prior to the Effective Time (as defined in the Business Combination Agreement) an aggregate of 14,558,067 JATT Class A Ordinary Shares (including 499,993 JATT Class A Ordinary Shares underlying restricted share units granted to Amit Munshi, our Non-Executive Chairman) plus 1,941,933 options to acquire JATT Class A Ordinary Shares for which outstanding options to acquire Holdco Class A Ordinary Shares were exchanged on Closing;

and (iii) pursuant to the terms and conditions of JATT’s amended and restated memorandum and articles of association, all then-outstanding Class B Ordinary Shares, par value $0.0001 per share, were automatically converted into JATT Class A Ordinary Shares on a one-for-one basis.

On the Closing Date, Ewon Comfortech Co., Ltd.

(“Ewon”), an institutional accredited investor which is an indirect investor in us through its equity interest in Hana Immunotherapeutics LLC (“Hana”), purchased from JATT 2,000,000 JATT Class A Ordinary Shares and Eugene Investment & Securities Co., Ltd (“Eugene”), an unaffiliated institutional credited investor, purchased from JATT 9,950 JATT Class A Ordinary Shares (Ewon, together with Eugene, the “PIPE Investors”), for an aggregate of 2,009,950 JATT Class A Ordinary Shares (the “PIPE Shares”) at a price of $10.00 per share, for an aggregate purchase price of $20,099,500 (the “PIPE Financing”), pursuant to the subscription agreement entered into by JATT and the Ewon as of June 16, 2022, as amended on November 25, 2022 (the “Ewon PIPE Subscription Agreement”) and the subscription agreement entered into by JATT and Eugene as of March 13, 2023 (the “Eugene PIPE Subscription Agreement” and, together with the Ewon PIPE Subscription Agreement, the “PIPE Subscription Agreements”).

At the Closing of the Business Combination, Athanor Master Fund, LP and Athanor International Master Fund, LP (collectively, the “FPA Investors”), each of which is an unaffiliated institutional investor, purchased (i) an aggregate of 3,000,000 JATT Class A Ordinary Shares at $10 per share for $30,000,000;

(ii) an aggregate of 1,301,633 JATT Class A Ordinary Shares at $10 per share for $13,016,330 (the “Redemption Backstop”) as public share redemptions were greater than 90% at the time of the Business Combination (the “Excess Redemptions”);

and (iii) an additional 2,500,000 JATT Class A Ordinary Shares in consideration for the FPA Investors entering into the latest amendment, but for no additional monetary consideration, to the forward purchase agreements JATT and the FPA Investors entered into on August 5, 2021, as amended and restated on January 27, 2022 and as amended on March 8, 2023 (the “Forward Purchase Agreement”).

The Business Combination, together with the PIPE financing, the Forward Purchase Agreement, and the Redemption Backstop, generated approximately $56.7 million in proceeds.

On March 21, 2023, our Class A Ordinary Shares and public warrants began trading on the Nasdaq under the symbols “ZURA” and “ZURAW,” respectively.

On August 27, 2024, the Public Warrants (as defined below) were no longer listed on the Nasdaq in connection with the completion of the Warrant Exchange (as defined below).

On March 20, 2023 (the “Closing Date”), we consummated a series of transactions contemplated by that certain Business Combination Agreement and JATT, as the registrant, changed its name to “Zura Bio Limited”.

On March 21, 2023, our Class A Ordinary Shares began trading on the Nasdaq under the symbol “ZURA”.

Shelf Registration and ATM Program

We have filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which was declared effective September 17, 2024.

We filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which was declared effective September 17, 2024.

Pursuant to the Shelf Registration Statement, we may offer and sell ordinary shares, preference shares, debt securities, warrants and or units having an aggregate public offering price of up to $300.0 million.

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During the third quarter of 2024, we sold 1,500,000 Class A Ordinary Shares at a price of $3.80 per share under the ATM, for net proceeds of $5.5 million, after placement agent commissions.

In the first quarter of 2025, we sold 3,000,000 Class A Ordinary Shares at a price of $1.75 per share under the ATM, for net proceeds of $5.1 million, after placement agent commissions.

During the year ended December 31, 2025, we sold 3,000,000 Class A Ordinary Shares at a price of $1.75 per share under the ATM, for net proceeds of $5.1 million, after placement agent commissions.

As of the date of this filing, we have $114.0 million of Class A Ordinary Shares remaining available for sale under the Sales Agreement.

Warrant Exchange

On July 12, 2024, we commenced an exchange offer (the “Exchange Offer”) and consent solicitation (the “Consent Solicitation”) relating to our outstanding warrants that we assumed in connection with the business combination, including (i) public warrants to purchase 5,910,000 Class A Ordinary Shares (the “Public Warrants”) that were held by JATT, and (ii) private placement warrants to purchase 6,899,996 Class A Ordinary Shares (the “Private Placement Warrants”) that were held by JATT shareholders (together with the Public Warrants, the “IPO warrants”).

We offered to all holders of the IPO warrants the opportunity to receive 0.30 Class A ordinary shares in exchange for each outstanding IPO warrant tendered by the holder and exchanged pursuant to the Exchange Offer.

Concurrently with the Exchange Offer, we also solicited consents from holders of the IPO warrants to amend that certain warrant agreement, dated as of July 16, 2021, by and between us and Continental Stock Transfer & Trust Company (“CST”), as warrant agent (the “Warrant Agreement”) to permit the us to require that each IPO warrant outstanding upon the closing of the Exchange Offer be exchanged for 0.27 Class A ordinary shares, which is a ratio 10% less than the exchange ratio applicable to the Exchange Offer.

Pursuant to the terms of the Warrant Agreement, all except certain specified modifications or amendments require the vote or written consent of holders of at least a majority of the outstanding public warrants and a majority of the outstanding private placement warrants.

On August 12, 2024, we completed the Exchange Offer and Consent Solicitation and issued 3,235,184 Class A ordinary shares in exchange for 10,784,008 IPO warrants and entered into an amendment to the Warrant Agreement (the “Warrant Amendment”).

Pursuant to the Warrant Amendment, we had the right to mandatorily exchange our remaining outstanding IPO warrants for Class A ordinary shares at an exchange ratio of 0.27 Class A ordinary shares for each IPO warrant.

On August 27, 2024, we issued 547,006 Class A Ordinary Shares in exchange for the remaining 196,568 outstanding Public Warrants and 1,829,420 outstanding Private Placement Warrants.

As a result, there were no outstanding IPO warrants as of December 31, 2024.

Exchange of Class A Ordinary Shares for Pre-Funded Warrants

In April 2025, we entered into share surrender and warrant agreements with certain affiliated shareholders (the “2025 Shareholders”), pursuant to which (i) the 2025 Shareholders surrendered an aggregate of 6,500,000 Class A Ordinary Shares owned by the 2025 Shareholders, for no consideration, which were immediately cancelled and retired, upon surrender;

and (ii) we issued pre-funded warrants to purchase an aggregate of 6,500,000 Class A Ordinary Shares, with an exercise price of $0.001 per share and no expiration date (the “2025 Share Exchange Warrants).

The 2025 Share Exchange Warrants are exercisable immediately and have substantially identical terms to the pre-funded warrants issued in 2024 in connection with our April 2024 subscription agreements.

April 2024 Private Placement

On April 18, 2024, we entered into subscription agreements (the “April 2024 Investor Agreements”) with certain institutional and other accredited investors (the “Investors”), whereby we issued 18,732,301 Class A Ordinary Shares, par value $0.0001 per share and pre-funded warrants (the “2024 Pre-Funded Warrants”) to purchase up to 16,102,348 Class A Ordinary Shares.

On April 18, 2024, we entered into subscription agreements (the “April 2024 Investor Agreements”) with certain institutional and other accredited investors pursuant to which we issued 18,732,301 Class A Ordinary Shares, par value $0.0001 per share and pre-funded warrants (the “2024 Pre-Funded Warrants”) to purchase up to 16,102,348 Class A Ordinary Shares.

Each Class A Ordinary Share was sold at a price of $3.108 per Class A Ordinary Share and each 2024 Pre-Funded Warrant was sold at a price of $3.107 per 2024 Pre-Funded Warrant for an aggregate purchase price of $108.3 million.

On April 18, 2024, we also entered into subscription agreements (the “April 2024 Insider Agreements” and together with the April 2024 Investor Agreements, the “April 2024 Private Placement”) with certain of our officers, directors and affiliates (“Insiders” and together with the Investors, the “2024 Subscribers”), whereby we issued 1,357,827 Class A Ordinary Shares, par value $0.0001 per share sold a purchase price of $3.13 per Class A Ordinary Share for an aggregate purchase price of $4.2 million.

which we issued 1,357,827 Class A Ordinary Shares, par value $0.0001 per share sold a purchase price of $3.13 per Class A Ordinary Share for an aggregate purchase price of $4.2 million.

The April 2024 Private Placement closed on April 22, 2024, from which we received gross proceeds of approximately $112.5 million.

In July 2025, we issued 1,206,952 Class A Ordinary Shares in connection with the exercise of 2024 Pre-Funded Warrants.

The gross proceeds received upon exercise of such pre-funded warrants were immaterial.

April 2023 Private Placement

On April 26, 2023, we entered into its second PIPE subscription agreement (the “April 2023 Private Placement”) with certain accredited investors (the “Subscribers”), whereby we issued 15,041,530 Class A Ordinary Shares, par value $0.0001 per share and pre-funded warrants (the “2023 Pre-Funded Warrants” and, together with the 2024 Pre-Funded Warrants, the “Pre-Funded Warrants”) to purchase up to 3,782,000 Class A Ordinary Shares.

On April 26, 2023, we entered into subscription agreements with certain accredited investors pursuant to which we issued 15,041,530 Class A Ordinary Shares, par value $0.0001 per share and pre-funded warrants (the “2023 Pre-Funded Warrants” and, together with the 2024 Pre-Funded Warrants, the “Pre-Funded Warrants”) to purchase up to 3,782,000 Class A Ordinary Shares (the “April 2023 Private Placement”).

Each Class A Ordinary Share was sold at a price of $4.25 per Class A Ordinary Share and each 2023 Pre-Funded Warrant was sold at a price of $4.249 per 2023 Pre-Funded Warrant for an aggregate purchase price of $80.0 million.

We received net proceeds of approximately $75.8 million from the April 2023 Private Placement.

Concurrently with the April 2023 Private Placement, we agreed to, within six months of April 24, 2023, exercise its call option on 50% of the Z33 Series Seed Preferred Shares previously issued to Stone Peach.

We agreed to settle its call option by issuing 2,000,000 Class A Ordinary Shares.

The amended settlement terms represented an extinguishment and reissuance of the Z33 Series Seed Preferred Shares.

The $10.9 million difference between the estimated fair value of the new instrument issued and the carrying value of the Z33 Series Seed Preferred Shares was recorded as a deemed dividend to the redeemable noncontrolling interest.

We and Stone Peach subsequently renegotiated the settlement terms as discussed in the “— 2022 Lilly License” section below.

In July 2025, we issued 1,682,000 Class A Ordinary Shares in connection with the exercise of 2023 Pre-Funded Warrants.

The gross proceeds received upon exercise of such pre-funded warrants were immaterial.

2023 Lilly License

On April 26, 2023, our consolidated subsidiary ZB17 LLC (“ZB17”) entered into a license agreement (the “2023 Lilly License” and, together with the 2022 Lilly License (as defined below), the “Lilly Licenses”) with Lilly, for an exclusive license to develop, manufacture and commercialize a certain bispecific antibody relating to IL-17 and BAFF (“tibulizumab”) in exchange for an upfront payment consisting of $5.8 million as well as 1,000,000 Class A Ordinary Shares issued at a fair value of $7.84 per Class A Ordinary Share.

On April 26, 2023, our consolidated subsidiary ZB17 LLC (“ZB17”) entered into a license agreement with Lilly (the “2023 Lilly License” and, together with the 2022 Lilly License (as defined below), the “Lilly Licenses”), for an exclusive license to develop, manufacture and commercialize tibulizumab.

As consideration, we paid Lilly an upfront payment consisting of $5.8 million during 2023 and issued 1,000,000 Class A Ordinary Shares at an aggregate fair value of $7.8 million during the year ended 2023.

During certain specified periods, Lilly shall have the exclusive right to evaluate certain clinical trial results and determine whether it wishes to negotiate an agreement for the further development and commercialization of ZB-106 by Lilly.

If Lilly provides notice to the Company before the expiry of the applicable period that it wishes to seek to negotiate an agreement, the parties will have good faith negotiations regarding an agreement for further development and commercialization.

During 2024, ZB17 made an additional payment of $5.0 million to Lilly, in connection with the receipt of certain know-how, data, information and materials that Lilly is required to provide under the license agreement.

The acquisition was accounted for as an asset acquisition, as substantially all of the fair value of the assets acquired is concentrated in a group of similar identifiable IPR&D assets.

On the acquisition date, the compound licensed had not yet received regulatory approval and the in-process research and development did not have an alternative use.

The acquisition was accounted for as an asset acquisition, as substantially all of the fair value of the assets acquired is concentrated in a group of similar identifiable in‑process research and development (“IPR&D”) assets.

On the acquisition date, the molecule licensed had not yet received regulatory approval and the IPR&D did not have an alternative use.

Accordingly, we recorded the entire cost of the 2023 Lilly License as a component of research and development in the consolidated statement of operations during the year ended December 31, 2023.

As a finder’s fee for arranging the acquisition of the 2023 Lilly License, ZB17 granted Stone Peach the right, but not the obligation, to purchase 4.99% of the fully diluted equity of ZB17 for $1.0 million (the “Stone Peach Call Right”).

The Stone Peach Call Right is not exercisable until after the last patient is dosed in any single next clinical trial with tibulizumab and expires one year from the date of first indication approval for tibulizumab by the United States Food and Drug Administration (“FDA”) or the European Medicines Agency (“EMA”).

In consideration for the investment made by Stone Peach Properties, LLC (“Stone Peach”), we entered into a letter agreement with Stone Peach and ZB17, dated April 24, 2023, as amended by letter agreement dated November 21, 2023 (the “ZB17 Letter Agreement”), pursuant to which ZB17 granted Stone Peach the right, but not the obligation, to purchase 4.99% of the fully diluted equity of ZB17 for $1.0 million (the “Stone Peach Call Right”).

The Stone Peach Call Right was not exercisable until after the last patient is dosed in any single next clinical trial with tibulizumab and would expire one year from the date of first indication approval for tibulizumab by the United States Food and Drug Administration (“FDA”) or the European Medicines Agency (“EMA”).

We recognized the Stone Peach Call Right at a grant-date fair value of $1.5 million as a component of research and development in the consolidated statement of operations during the year ended December 31, 2023.

The Stone Peach Call Right represents noncontrolling interest in our consolidated subsidiary, ZB17.

As of December 31, 2024 and 2023, the noncontrolling interest balance was $1.5 million in the consolidated balance sheets.

As additional consideration, beginning on May 1, 2023, Stone Peach receives an annual payment of $0.6 million initially, and increasing by 10% annually, so long as we maintain our license for tibulizumab, to be paid on May 1 st of each year.

For the years ended December 31, 2024 and 2023, we recorded $0.7 million and $0.6 million, respectively, in research and development in the consolidated statement of operations for the annual payments.

We recorded a one-time payment of $4.5 million for additional consideration due to Stone Peach upon approval from the FDA for our Investigational New Drug (“IND”) and commencement of our clinical trial for tibulizumab in research and development in the consolidated statement of operations for the years ended December 31, 2024 and in accounts payable and accrued expenses as of December 31, 2024.

As a finder’s fee for arranging the acquisition of the 2023 Lilly License, we agreed to make a one-time milestone payment of $5.0 million to BAFFX17, Ltd (“BAFFX17”) upon the occurrence of either:

The Stone Peach Call Right represented noncontrolling interest in our consolidated subsidiary, ZB17.

As of December 31, 2024, the noncontrolling interest balance was $1.5 million in the consolidated balance sheet.

On December 29, 2025, the Company terminated the ZB17 Letter Agreement, and the noncontrolling interest was extinguished.

See “Stone Peach Settlement and Release Agreement” below.

Additionally, beginning on May 1, 2023, Stone Peach received an annual payment of $0.6 million, increasing by 10% annually, so long as we maintain our license for tibulizumab, to be paid on May 1 st of each year.

For the years ended December 31, 2025 and 2024, we recorded expenses of $0.7 million and $0.7 million, respectively, in research and development in the consolidated statement of operations for the annual payments.

On December 29, 2025, we terminated the ZB17 Letter Agreement.

See “—Stone Peach Settlement and Release Agreement” below.

A one-time payment of $4.5 million for additional consideration due to Stone Peach upon acceptance from the FDA for our Investigational New Drug (“IND”) and commencement of our clinical trial for tibulizumab was recorded in research and development expenses in the consolidated statement of operations for the year ended December 31, 2024 and was paid in June 2025.

This payment is included in accounts payable and accrued expenses in the consolidated balance sheet as of December 31, 2024.

A letter agreement, dated as of April 25, 2023, by and between BAFFX17, Ltd (“BAFFX17”) and us, and as amended by Amendment No.

1 on December 18, 2023 (the “BAFFX17 Letter Agreement”), provided that, as a finder’s fee for arranging the acquisition of the 2023 Lilly License, we would be required to make a one-time milestone payment of $5.0 million to BAFFX17 upon the occurrence of either:

(i) a change of control transaction, (ii) the closing of an issuance of equity or equity-linked securities by us of at least $100.0 million (iii) the consummation of a sale of assets resulting in net proceeds in excess of $100.0 million, or (iv) our fully diluted shares outstanding exceed 52,500,000 shares (on a split adjusted basis), as measured on April 24 th of each year.

As our fully diluted shares outstanding exceeded 52,500,000 shares prior to December 31, 2023, the $5.0 million fee was recorded in research and development in the consolidated statement of operations for the year ended December 31, 2023, and is included in accounts payable and accrued expenses in the consolidated balance sheets as of December 31, 2024 and 2023.

In addition to the consideration paid and/or earned in 2024 and 2023, we are also obligated to make payments (a) to Lilly for four (4) development milestone payments up to an aggregate of $155.0 million, and sales milestone payments up to an aggregate of $440.0 million based on respective thresholds of net sales of products developed from tibulizumab;

(b) to Lilly over a multi-year period (twelve years, or upon the later expiration of regulatory exclusivity of tibulizumab in a country) for an annual earned royalty at a marginal royalty rate in the mid-single digits to low-double digits, with increasing rates depending on net sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of years;

(c) to BAFFX17 for a fee equal to 3% of any milestone or royalty payments due to Lilly pursuant to the terms of either the 2022 Lilly License or the 2023 Lilly License;

(d) to Stone Peach for a one-time milestone payment of $25 million upon either (i) certain equity-related transactions, or (ii) the receipt of regulatory approval from the applicable regulatory authority for any new indication in the applicable jurisdiction;

and (e) to Stone Peach for a royalty of 2% of the aggregate net sales of any products developed from the Compound (collectively, the “2023 Lilly Contingent Payments”).

As our fully diluted shares outstanding exceeded 52,500,000 shares prior to December 31, 2023, the $5.0 million fee was previously accounted for in research and development expenses in the consolidated statement of operations for the year ended December 31, 2023, and is included in accounts payable and accrued expenses in the consolidated balance sheets as of December 31, 2024.

On June 30, 2025, we received an invoice on behalf of BAFFX17 requesting a $5.0 million milestone payment pursuant to the BAFFX17 Letter Agreement.

We did not make such payment, and the BAFFX17 Letter Agreement was terminated on December 29, 2025.

See “—BAFFX17 Settlement and Release Agreement” below.

In addition to the consideration paid and/or earned in 2025, 2024 and 2023, we are also obligated to make payments to Lilly (a) for four (4) development milestone payments up to an aggregate of $155.0 million, and sales milestone payments up to an aggregate of $440.0 million based on respective thresholds of net sales of products developed from tibulizumab;

and (b) over a multi-year period (twelve years, or upon the later expiration of regulatory exclusivity of tibulizumab in a country) for an annual earned royalty at a marginal royalty rate in the mid-single digits to low-double digits, with increasing royalty percentage rates depending on net sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of years (collectively, the “2023 Lilly Contingent Payments”).

As of December 31, 2025, none of the 2023 Lilly Contingent Payments are due and accordingly will not be recorded in our financial statements until they are due.

Prior to the BAFFX17 Settlement Agreement and Stone Peach Settlement Agreement described below, we were also obligated to make payments (a) to BAFFX17 for a fee equal to 3% of any milestone or royalty payments due to Lilly pursuant to the terms of either the 2022 Lilly License or the 2023 Lilly License;

(b) to Stone Peach for a one-time milestone payment of $25.0 million upon either (i) certain equity-related transactions, or (ii) the receipt of regulatory approval from the applicable regulatory authority for any new indication in the applicable jurisdiction;

and (c) to Stone Peach for a royalty of 2% of the aggregate net sales of any products developed from the compound.

See “—BAFFX17 Settlement and Release Agreement” and “—Stone Peach Settlement and Release Agreement” below.

2022 Lilly License

On December 8, 2022, our consolidated subsidiary, Z33 Bio Inc.

(“Z33”), entered into a license agreement (the “2022 Lilly License”) with Lilly pursuant to which Lilly granted Z33 an exclusive (even as to Lilly), royalty-bearing global license to develop, manufacture, and commercialize certain intellectual property owned by Lilly relating to its IL-33 compound.

(“Z33”) entered into a license agreement with Lilly (the “2022 Lilly License”) pursuant to which Lilly granted Z33 an exclusive (even as to Lilly) license to develop, manufacture, and commercialize torudokimab.

As consideration, we paid Lilly an upfront fee of $7.0 million during 2022 and issued Lilly 550,000 Class A Ordinary Shares at an aggregate fair value of $4.5 million upon the Closing Date of the Business Combination during the year ended December 31, 2023.

As a finder’s fee in connection with arranging the acquisition, Z33 issued to Stone Peach Properties, LLC (“Stone Peach”) 4,900,222 shares of Z33 Series Seed Preferred Shares, which was included in the measurement of the cost of the acquired asset.

We have the right, but not the obligation to purchase up to 50% of the Series Seed Preferred Shares issued to Stone Peach at a price per share of $2.448869 for a period of two years from the date of the agreement (the “Call Option”).

Stone Peach has the right, but not the obligation to sell up to 50% of the Series Seed Preferred Shares issued to Stone Peach to us for a price per share of $2.040724 (the “Put Option”).

A letter agreement dated December 8, 2022, as amended on November 21, 2023 (the “Z33 Letter Agreement” and, together with the ZB17 Letter Agreement, the “Stone Peach Letter Agreements”) by and between Stone Peach, us and Z33, provided that, as a finder’s fee in connection with arranging the acquisition, Z33 issued to Stone Peach 4,900,222 shares of Z33’s series seed preferred shares (the “Z33 Series Seed Preferred Shares”), which was included in the measurement of the cost of the acquired asset.

We had the right, but not the obligation, to purchase up to 50% of the Z33 Series Seed Preferred Shares issued to Stone Peach at a price per share of $2.448869 for a period of two years from the date of the agreement (the “Call Option”).

Pursuant to the Z33 Letter Agreement, Stone Peach had the right, but not the obligation to sell up to 50% of the Z33 Series Seed Preferred Shares issued to Stone Peach to us for a price per share of $2.040724 (the “Put Option”).

In April 2023, we agreed to exercise our Call Option and we amended the settlement terms to settle the Call Option by issuing 2,000,000 Class A Ordinary Shares (the “Amended Terms”).

In November 2023, the Amended Terms were voided and our rights and obligations under the Call Option reverted to those in the original agreement (the “Second Amended Terms”).

In connection with the Second Amended Terms, we also provided Stone Peach with the right, but not the obligation to sell up to 50% of the Series Seed Preferred Shares issued to Stone Peach to Zura in exchange for 2,000,000 Class A Ordinary Shares (the “Put Right”).

Stone Peach may exercise its Put Option and Put Right at any time between April 24, 2024 and April 24, 2028 under the new agreement.

In November 2023, the Amended

Terms were voided and our rights and obligations under the Call Option reverted to those in the original agreement (the “Second Amended Terms”).

In connection with the Second Amended Terms, we also provided Stone Peach with the right, but not the obligation, to sell up to 50% of the Z33 Series Seed Preferred Shares issued to Stone Peach to Zura in exchange for 2,000,000 Class A Ordinary Shares (the “Put Right”).

Stone Peach was permitted to exercise its Put Option and Put Right at any time between April 24, 2024 and April 24, 2028 under the new agreement.

Each of the Amended Terms and the Second Amended Terms were considered an extinguishment and reissuance of the Z33 Series Seed Preferred Shares, and the Z33 Series Seed Preferred Shares are remeasured to the greater of the redemption value or the initial fair value, less noncontrolling shareholder’s interest in net loss of Z33, at each subsequent reporting period.

The Z33 Series Seed Preferred Shares represent redeemable noncontrolling interest in our consolidated subsidiary, Z33.

In addition to the consideration paid in 2022 and shares issued in 2023, we are also obligated to make payments to Lilly for (a) $3.0 million upon the completion of a financing by Z33 with gross proceeds exceeding $100.0 million;

(b) 10 commercial, development and regulatory milestone payments up to an aggregate of $155.0 million and sales milestone payments up to an aggregate of $440.0 million based on respective thresholds of net sales of products developed from the licensed compound;

and (c) an annual earned royalty at a marginal royalty rate between in the mid-single to low-double digits (less than 20%), with increasing rates based on Net Sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of the year (collectively, “the “2022 Lilly Contingent Payments”).

The Z33 Series Seed Preferred Shares represented redeemable noncontrolling interest in our consolidated subsidiary, Z33.

On December 29, 2025, we terminated the Z33 Letter Agreement, and the redeemable noncontrolling interest was extinguished.

See “—Stone Peach Settlement and Release Agreement” below.

In addition to the consideration paid and transferred in 2022 and shares issued in 2023, we paid $3.0 million to Lilly in December 2025, as a financing by Z33 with gross proceeds exceeding $100.0 million did not occur by December 7, 2025.

We are also obligated to make payments to Lilly for (a) 10 commercial, development and regulatory milestone payments up to an aggregate of $155.0 million and sales milestone payments up to an aggregate of $440.0 million based on respective thresholds of net sales of products developed from the licensed molecule;

and (b) an annual earned royalty at a marginal royalty rate in the mid-single to low-double digits, with increasing royalty percentage rates based on Net Sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of the year (collectively, “the “2022 Lilly Contingent Payments”).

As of December 31, 2025, none of the 2022 Lilly Contingent Payments are due and accordingly will not be recorded in our financial statements until they are due.

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On March 22, 2022, we entered into a license agreement and a Series A-1 Subscription and Shareholder’s Agreement (collectively, the “Pfizer Agreement”) with Pfizer.

Under the Pfizer Agreement, we acquired a license for a compound initially developed by Pfizer, in exchange for $5.0 million in cash and 2,702,083 shares (as adjusted by the exchange ratio established in the Business Combination Agreement) of our Series A-1 convertible preferred shares, representing a 20% interest in us.

In accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations , the Pfizer Agreement is accounted for as an asset acquisition, as substantially all of the $7.5 million value transferred to us was allocated to in-process research and development.

Under the Pfizer Agreement, we acquired a license for crebankitug, in exchange for $5.0 million in cash and 2,702,083 shares (as adjusted by the exchange ratio established in the Business Combination Agreement) of our Series A-1 convertible preferred shares, representing a 20% interest in us.

The Pfizer Agreement was accounted for as an asset acquisition, as substantially all of the $7.5 million value transferred to us was allocated to in-process research and development.

On the acquisition date, the compound licensed had not yet received regulatory approval and the in-process research and development did not have an alternative use.

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Following the Business Combination, the anti-dilution provision is no longer in effect.

Athanor Letter Agreement

On December 29, 2025, in connection with the termination of the Stone Peach Letter Agreements, as described in Note 5 to our consolidated financial statements located in “ Item 15—Exhibits and Financial Statement Schedules—Financial Statements ,” we entered into a letter agreement with Athanor Capital, an exempted company incorporated under the laws of the Cayman Islands with limited liability (“Athanor”) (the “Athanor Agreement”), pursuant to which we issued to Athanor 8,657,402 Class A Ordinary Shares (the “Athanor Shares”).

Athanor is also entitled to piggyback registration rights pursuant to which Athanor has the right to include

Athanor Shares in certain registered offerings by us or if we propose to file a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the registration of equity securities, as set forth in the Athanor Agreement.

In addition, pursuant to the terms of the Athanor Agreement, we paid Athanor an upfront fee in an amount equal to $7.3 million and shall pay a one-time milestone payment in the amount of $25.0 million after the occurrence of the earliest of the following events:

(i) we or ZB17 undergoes a Change of Control (as defined in the Athanor Agreement), (ii) the consummation by us or ZB17 of a sale of assets resulting in net proceeds in excess of $500.0 million, or (iii) First Indication Regulatory Approval (as defined in the Athanor Agreement).

In addition, pursuant to the terms of the Athanor Agreement, we agreed to pay an amount equal to 2% of Net Sales (as defined in the Athanor Agreement) for the Product (as defined in the Athanor Agreement) to the extent such Net Sales (collectively, the “Net Sales Payments”) are the subject of a royalty payment under the 2023 Lilly License.

The Athanor Agreement contains representations, warranties and covenants by the parties in addition to the terms described above and shall remain in effect on a country-by-country basis until the expiration of the obligation to pay the Net Sales Payments.

Stone Peach Settlement and Release Agreement

In connection with the termination of the Stone Peach Letter Agreements, on December 29, 2025, we and Stone Peach, Baljit Lehal and Kanwarjeet “Shawn” Tucker (the “Stone Peach Parties”) entered into a Settlement and Release Agreement (the “Stone Peach Settlement Agreement”).

Pursuant to the Stone Peach Settlement Agreement, the Stone Peach Parties acknowledged that, as between us and any of the Stone Peach Parties, each of (i) the Stone Peach Letter Agreements, (ii) that certain Z33 Founder Issuance Agreement, dated December 8, 2022, between Z33 and Stone Peach, (iii) that certain Series Seed Preferred Stock Investment Agreement, dated December 8, 2022, between us and Stone Peach and (iv) that certain Confidentiality and Non-Circumvention Agreement dated December 13, 2022, between us and Stone Peach (such agreements, the “Stone Peach Agreements”) are terminated and therefore rendered null and void, and unenforceable in part or in whole by any of the Stone Peach Parties.

In addition, pursuant to the Stone Peach Settlement Agreement, the Stone Peach Parties provided a general release of us and our affiliates, together with our predecessors, successors, and assigns and past, present and future officers, directors, shareholders, members, partners, attorneys, agents, employees, managers, representatives, assigns and successors in interest from and against any and all claims under the Stone Peach Agreements along with any other complaints, claims, causes of action, rights or damages which the Stone Peach Parties have or may have had against us or any of our affiliates.

BAFFX17 Settlement and Release Agreement

On December 29, 2025, we and BAFFX17, Asim Mohammed and Lahmber Singh (the “BAFFX17 Parties”) entered into a Settlement and Release Agreement (the “BAFFX17 Settlement Agreement”).

Pursuant to the BAFFX17 Settlement Agreement, we and the BAFFX17 Parties agreed and acknowledged that the BAFFX17 Agreement was terminated and therefore rendered null and void and unenforceable in part or in whole by any BAFFX17 Party.

In addition, pursuant to the BAFFX17 Settlement Agreement, the BAFFX17 Parties provided a general release of us and our affiliates, together with the our predecessors, successors, and assigns and past, present and future officers, directors, shareholders, members, partners, attorneys, agents, employees, managers, representatives, assigns and successors in interest from and against any and all claims under the BAFFX17 Agreements along with any other complaints, claims, causes of action, rights or damages which the BAFFX17 Parties have or may have had against us or any of our affiliates.

Audit Subcommittee Investigation

As previously disclosed, the audit committee of our Board of Directors formed the Audit Subcommittee, comprised solely of disinterested and independent directors, to review our agreements and relationships with Stone Peach and BAFFX17, among other matters.

The Audit Subcommittee was assisted by independent legal counsel and a third-party due diligence firm.

The Audit Subcommittee’s internal review is complete, and the results are discussed below.

Through legal counsel, the Audit Subcommittee engaged in extensive fact finding, including reviewing relevant documents and communications.

Following a detailed review of this information, and based on the advice of independent legal counsel, the Audit Subcommittee determined (1) that it was in the best interests of us and its shareholders to replace the Stone Peach Agreements with the more commercially advantageous Athanor Agreement and (2) to terminate or void the agreements between us and our subsidiaries, on the one hand, and Stone Peach or BAFFX17, on the other hand.

Consistent with the determination of the Audit Subcommittee, we negotiated, with the assistance of management and legal counsel, the Athanor Agreement as well as the Stone Peach Settlement Agreement and the BAFFX17 Settlement Agreement, which terminated all outstanding agreements between the parties and, in the case of the settlement agreements, contain broad releases of claims against us, its subsidiaries and affiliates by Stone Peach, BAFFX17 and

their respective principals.

The Athanor Agreement, the Stone Peach Settlement Agreement and the BAFFX17 Settlement Agreement were approved by the Audit Subcommittee and the Board of Directors.

The internal review found no issue with our agreements and relationships with Stone Peach and BAFFX17 that had an impact on our financial results under accounting principles generally accepted in the United States of America (“U.S.

GAAP”) or on the financial statements included in our previously filed quarterly or annual reports.

Additionally, the internal review found no instances of misconduct by our current employees relating to the agreements or relationships.

The internal review also included an analysis of our internal controls over financial reporting and disclosure controls and procedures, and as part of our process of continuous improvement, we plan to implement certain additional controls and procedures, which are not expected to materially affect our existing controls and procedures.

Impact of Global Economic Trends

Macroeconomic conditions, including uncertainties associated with the changes to and by the U.S.

federal government administration, the Israel-Hamas war, the ongoing conflict between Ukraine and Russia, international tariffs, economic slowdowns, public health crises, labor shortages, recessions or market corrections, supply chain disruptions, inflation and monetary policy shifts, liquidity concerns at, and failures of, banks and other financial institutions or other disruptions in the banking system or financing markets, rising interest rates and financial and credit market fluctuations, volatility in the capital markets or other evolving macroeconomic developments, continue to have direct and indirect impacts on our business and could in the future materially impact our results of operations and financial condition.

federal government administration, the ongoing conflicts in Iran and the broader Middle East, the ongoing conflict between Ukraine and Russia, conflicts in Mexico, international trade policies (including tariffs, sanctions and trade barriers), economic slowdowns, public health crises, labor shortages, recessions or market corrections, supply chain disruptions, inflation and monetary policy shifts, liquidity concerns at, and failures of, banks and other financial institutions or other disruptions in the banking system or financing markets, rising interest rates and financial and credit market fluctuations, volatility in the capital markets or other evolving macroeconomic developments, continue to have direct and indirect impacts on our business and could in the future materially impact our results of operations and financial condition.

Recent tariffs and trade restrictions have increased costs and complexity for many businesses, which may also have an adverse impact on our business.

See “ Part I, Item 1A.

Risk Factors — International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects ” for more information.

We continue to actively monitor the impact of these macroeconomic factors on our results of operations, financial condition and cash flows.

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Research and Development Expenses

Research and development (“R&D”) expenses consist of all direct and indirect operating expenses supporting the processes and manufacturing in development, including consulting fees for clinical and manufacturing advisory services, CRO costs, costs related to manufacturing material for preclinical studies, payroll and benefits, which includes share-based compensation for research and development employees, licensing fees, and data and study acquisition costs.

Research and development (“R&D”) expenses consist of all direct and indirect operating expenses incurred to support our clinical development programs, including research activities conducted in support of such programs, manufacturing activities, consulting fees for clinical and manufacturing advisory services, contract research organization (“CRO”) costs, costs related to manufacturing materials for preclinical and clinical studies, payroll and benefits (including share-based compensation for employees supporting clinical development activities), licensing fees, and data and study acquisition costs.

Expenses are recognized as the related goods are delivered or the services are performed.

R&D expenses include the cost of in-process research and development (“IPR&D”) assets purchased in an asset acquisition transaction.

IPR&D assets are expensed provided that the acquired asset did not also include processes or activities that would constitute a “business” as defined under United States Generally Accepted Accounting Principles (“U.S.

R&D expenses include the cost of IPR&D assets purchased in an asset acquisition transaction.

IPR&D assets are expensed provided that the acquired asset did not also include processes or activities that would constitute a “business” as defined under U.S.

GAAP, the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no established alternative future use.

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Research and development expenses could include:

● employee-related expenses, including salaries, bonuses, benefits, share-based compensation and other related costs for those employees involved in research and development efforts;

● external research and development expenses incurred under agreements with CROs, investigative sites and consultants to conduct our studies;

● costs related to manufacturing material for preclinical studies and clinical trials, including fees paid to contract manufacturing organizations;

External Expenses:

● external research and development expenses incurred under agreements with CROs, investigative sites and consultants to conduct our clinical trials;

● costs related to manufacturing material for preclinical studies and clinical trials, including fees paid to CMOs;

● milestone payments under our licensing agreements;

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● facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance and equipment.

Internal Expenses:

● employee-related expenses, including salaries, bonuses, benefits, share-based compensation and other related costs for those employees involved in research and development efforts.

A significant portion of our research and development costs have been external expenses.

We utilize third-party contractors for our research and development activities.

We track these external expenses on an individual program basis within our portfolio, when they are specific to an individual program, once a clinical product candidate or program has been identified.

We use CMOs for our manufacturing activities and we do not have our own laboratory or manufacturing facilities.

Therefore, we have no material facilities expenses attributed to research and development.

We track our manufacturing activities on a portfolio basis when we have multiple programs in a portfolio, but do not track these activities on a program basis within the portfolio, as these costs are deployed across multiple programs within a portfolio.

Our internal research and development costs are primarily personnel-related costs.

We do not track internal costs on a portfolio or program specific basis because these costs are deployed across multiple programs and, as such, are not separately classified.

Research and development activities are central to our business model.

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We will need to raise substantial additional capital in the future.

Our clinical development costs are expected to increase as we commence, continue and expand our clinical trials.

Our clinical development costs are expected to increase as we commence, continue and expand our clinical trial activities.

Our future expenses may vary significantly each period based on factors such as:

● expenses incurred to conduct preclinical studies required to advance our product candidates into clinical trials;

● per patient clinical trial costs, including based on the number of doses that patients receive;

● per patient clinical trial costs, which may vary based on the number of doses that patients receive;

● the number of patients who enroll in each clinical trial;

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General and Administrative Expenses

General and administrative (“G&A”) expenses primarily consist of professional fees for legal, accounting, and consulting costs relating to corporate matters, as well as salaries and related costs for personnel in executive and administrative functions, including share-based compensation.

We anticipate that our general and administrative expenses will increase in the future as we continue to support research and development activities and incur increased costs of operating as a public company.

We anticipate that our G&A expenses will increase in the future as we continue to support research and development activities and incur increased costs of operating as a public company.

These costs include increased headcount to support expanded operations and infrastructure.

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Comparison of the Years Ended December 31, 2025 and 2024

The following table summarize our results of operations for the years ended December 31, 2024 and 2023 (in thousands):

The following table summarizes our results of operations for the periods presented (in thousands):

For the Year Ended

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Change in fair value of private placement warrants

Change in fair value of note payable

Dividend income

Other income, net

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Net loss before redeemable noncontrolling interest

Net loss attributable to redeemable noncontrolling interest

Adjustment of redeemable noncontrolling interest from redemption value to carrying value

Accretion of redeemable noncontrolling interest to redemption value

Deemed contribution from redeemable noncontrolling interest

Deemed dividend to redeemable noncontrolling interest

Adjustment of redeemable noncontrolling interest

Deemed dividend on extinguishment of noncontrolling interest and redeemable noncontrolling interest

Net loss attributable to Class A Ordinary Shareholders of Zura

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Operating Expenses

Research and Development Expenses

Research and development expenses decreased by $19.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

This was primarily due to $27.2 million related to the acquisition of an IPR&D license from Lilly during the year ended December 31, 2023, and decreases of $1.9 million related to the change in fair value of the research and development license consideration liability and $0.8 million related to share-based compensation, primarily due to award forfeitures, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This decrease was partially offset by a $4.5 million milestone payment related to the 2023 Lilly License incurred during the year ended December 31, 2024, and increases of $2.9 million in expenses related to personnel compensation for research and development functions excluding share-based compensation and $2.0 million of costs incurred for consulting services for our product candidates for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Research and development expenses (in thousands):

The following table summarizes our research and development expenses for the periods presented (in thousands):

For the Year Ended

External expenses:

Direct expenses by program:

Tibulizumab Portfolio

Tibulizumab SSc Program

Tibulizumab HS Program

Tibulizumab Combined (SSc and HS) Programs

Total Tibulizumab Portfolio

Additional product candidates (crebankitug and torudokimab)

Unallocated expenses

Internal expenses:

Personnel expenses (including share-based compensation)

Total research and development expense

* Percentage change not meaningful

Research and development expenses increased by $17.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.

This increase was primarily due to:

● a $9.4 million and $8.3 million increase in costs as we advance our Phase 2 clinical trials evaluating tibulizumab in adults with SSc and HS, respectively, driven by costs incurred for CRO fees to support the conduct of our clinical trials;

● a $3.6 million increase in compensation, including share-based compensation, driven by increased personnel in research and development functions;

● a $2.9 million increase related to our additional product candidates (crebankitug and torudokimab), driven by a one-time milestone of $3.0 million recognized in the year ended December 31, 2025;

● $0.7 million increase in unallocated non-portfolio specific research and development expenses due to our growth to support our advancement of our Phase 2 clinical trials and other product candidates.

This increase was partially offset by a $7.2 million decrease in costs for tibulizumab that was not specific to an indication, primarily driven by the derecognition of the $5.0 million obligation due to BAFF (see “ - BAFFX17 Settlement and Release Agreement ” above) in the year ended December 31, 2025, and a one-time milestone of $4.5 million recognized in the year ended December 31, 2024.

We anticipate that research and development expenses will continue to increase in the future as we conduct research and development activities.

General and administrative expenses

General and administrative expenses increased by $2.4 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The increase was primarily due to a $5.9 million non-cash share-based compensation expense charge for the modification of awards for the former CEO, an increase of $2.9 million in professional fees for legal and accounting costs, including $1.6 million related to the Warrant Exchange and $1.3 million related to our ongoing operations as a public company and an increase of $2.4 million in expenses related to compensation for personnel in executive and administrative functions including share-based compensation.

The increase was primarily due to an increase in professional fees for legal costs to support our growing organization as we advance our Phase 2 clinical trials evaluating tibulizumab in SSc and HS.

Other Expense (Income)

Interest income

Interest income increased by $5.8 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This is primarily due to an increase in our cash and cash equivalents balance during year ended December 31, 2024 as compared to the year ended December 31, 2023.

Interest income decreased by $1.7 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

This is primarily due to a decrease in our cash and cash equivalents balance during the year ended December 31, 2025 as compared to the year ended December 31, 2024.

Change in fair value of private placement warrants

Revaluation loss on the liability-classified Private Placement Warrants assumed in the Business Combination was $5.2 million during the year ended December 31, 2024 compared to a revaluation gain of $0.7 million for the year ended December 31, 2023.

Revaluation loss on the liability-classified Private Placement Warrants assumed in the Business Combination was $5.2 million during the year ended December 31, 2024.

During the year ended December 31, 2024, the Private Placement Warrants were recorded at their settlement value upon completion of the Warrant Exchange, which was the fair value of the Class A Ordinary Shares exchanged for the Private Placement Warrants.

Change in fair value of note payable

Revaluation loss on the note payable was $2.2 million for the year ended December 31, 2023, as the note was remeasured to its settlement value and settled at the closing of the Business Combination.

Dividend income

Dividend income decreased by $1.4 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

We held no dividend-generating cash equivalents during the year ended December 31, 2024.

There were no Private Placement Warrants outstanding as of December 31, 2024 and December 31, 2025.

Other income, net

Other income, net remained relatively consistent for the year ended December 31, 2024 and compared to the year ended December 31, 2023.

Net loss attributable to redeemable noncontrolling interest

Net loss attributable to redeemable noncontrolling interest was $0.2 million for the year ended December 31, 2023, representing the noncontrolling shareholder’s interest in the net loss of our consolidated subsidiary, Z33.

Z33 had an immaterial amount of net loss for the year ended December 31, 2024.

Adjustment of Redeemable Noncontrolling Interest from Redemption Value to Carrying Value

After the modification of the terms of the Z33 Series Seed Preferred Shares issued to Stone Peach (see “—2022 Lilly License” above), the Z33 Series Seed Preferred Shares are recorded at the greater of the redemption value or the initial fair value, less noncontrolling shareholder’s interest in net loss of Z33.

For the year ended December 31, 2024, the adjustment of redeemable noncontrolling interest from redemption value to carrying value of $7.0 million resulted from a decrease in the redemption value of the Z33 Series Seed Preferred Shares below its initial fair value, less the noncontrolling shareholder’s interest in net loss of Z33, as of March 31, 2024.

As of December 31, 2024, the redemption value was again below the initial fair value, less noncontrolling shareholder’s interest in net loss of Z33, resulting in no additional adjustment of redeemable noncontrolling interest and no an accretion of the redeemable noncontrolling interest when remeasuring the Z33 Series Seed Preferred Shares to its redemption value (see below).

Other income, net remained relatively consistent for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

Accretion of redeemable noncontrolling interest to redemption value

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After the modification of the terms of the Z33 Series Seed Preferred Shares issued to Stone Peach (see “— 2022 Lilly License ” above), the Z33 Series Seed Preferred Shares are recorded at the greater of the redemption value or the initial fair value, less noncontrolling shareholder’s interest in net loss of Z33.

The redeemable noncontrolling interest was remeasured prior to extinguishment on December 29, 2025 (see “—Stone Peach Settlement and Release Agreement” above).

As of December 31, 2024, the redemption value was below the initial fair value, less noncontrolling shareholder’s interest in net loss of Z33, resulting in no accretion of the redeemable noncontrolling interest when remeasuring the Z33 Series Seed Preferred Shares to its redemption value.

Deemed Contribution from Redeemable Noncontrolling Interest

Deemed contribution from the redeemable noncontrolling interest was $9.2 million for the year ended December 31, 2023, due to the modification of the terms of the Z33 Series Seed Preferred Shares issued to Stone Peach in November 2023 (see “—2022 Lilly License” above).

There were no deemed contributions from the redeemable noncontrolling interest during the year ended December 31, 2024

Deemed Dividend to Redeemable Noncontrolling Interest

Deemed dividend to the redeemable noncontrolling interest was $10.9 million for the year ended December 31, 2023, due to the modification of the terms of the Z33 Series Seed Preferred Shares issued to Stone Peach in April 2023 (see “—2022 Lilly License” above).

There were no deemed dividends to the redeemable noncontrolling interest during the year ended December 31, 2024.

Adjustment of Redeemable Noncontrolling Interest

For the year ended December 31, 2025, there was a $0.8 million adjustment to the redeemable noncontrolling interest recognized as an adjustment to net loss attributable to Class A Ordinary Shareholders of Zura as a result of the extinguishment of 50% of the redeemable noncontrolling interest upon the exercise of the Put Option in the third quarter of 2025.

Deemed dividend on extinguishment of noncontrolling interest and redeemable noncontrolling interest

Deemed dividend on extinguishment of noncontrolling interest and redeemable noncontrolling interest was $36.4 million for the year ended December 31, 2025 resulting from the Company entering into the Athanor Agreement and Stone Peach Settlement Agreement effective December 29, 2025 (see “— Athanor Agreement ” and “— Stone Peach Settlement and Release Agreement ” above).

The deemed dividend was recorded as the difference between the fair value of the new instruments issued under the Athanor Agreement and the carrying amount of our prior obligations that we were relieved of per the Stone Peach Settlement Agreement.

Liquidity and Capital Resources

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and (vii) the sale of 3,000,000 Class A Ordinary Shares at a price of $1.75 per share under the ATM for net proceeds of $5.1 million, after placement agent commissions, in the first quarter of 2025.

We have experienced operating losses and cash outflows from operations since inception and will require ongoing financing in order to continue our research and development activities.

We have experienced operating losses and cash outflows from operations since inception and will require ongoing financing in order to continue our research and development activities and business operations.

We have not earned any revenue or reached successful commercialization of our products.

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Capital Requirements

To date, we have not generated revenue from any source, including the commercial sale of approved drug products, and we do not expect to generate revenue for at least the next few years.

To date, we have not generated revenue from any source, including the commercial sales of our approved drug products, and we do not expect to generate revenue from the commercial sales of our approved drug products for at least the next few years.

If we fail to complete the development of our product candidates in a timely manner or fail to obtain their regulatory approval, our ability to generate future revenue will be adversely affected.

We do not know when, or if, we will generate any revenue from our product candidates, and we do not expect to generate revenue unless and until we obtain regulatory approval of, and commercialize, our product candidates.

We do not know when, or if, we will generate any revenue from the commercial sales of our approved drug products, and we do not expect to generate revenue from the commercial sales of our approved drug products unless and until we obtain regulatory approval of, and commercialize, our product candidates.

We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we continue the research and development, and seek marketing approval for our product candidates, as well as administrative costs associated with supporting our operations.

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We will be required to pay certain of these milestone payments prior to the time at which we are able to generate sufficient revenue, if any, from commercial sales of any of our product candidates.

We intend to fund these milestone payments using a portion of the proceeds from the Business Combination, the April 2023 Private Placement, the April 2024 Private Placement and sales under the ATM.

In addition to milestone payments, we are also required to pay Pfizer and Lilly under the Pfizer Agreement and Lilly Licenses, respectively, ongoing royalties in the mid-single digits to low double-digits (less than 20%) percentage range based upon thresholds of net sales of products.

We intend to devote most of the net proceeds from the Business Combination, the April 2023 Private Placement, the April 2024 Private Placement and sales under the ATM to the preclinical and clinical development of our product candidates, our public company compliance costs and certain milestone payments.

Based on our current business plans, we believe that our existing cash, cash equivalents and investments should be sufficient to fund our operating expenses and capital requirements through 2027.

In addition to milestone payments, we are also required to pay Pfizer and Lilly under the Pfizer Agreement and Lilly Licenses, respectively, ongoing royalties in the mid-single digits to low double-digits percentage range based upon thresholds of net sales of products.

Based on our current business plans, and after giving effect to the completion of the February 2026 public offering, we believe that our existing cash, cash equivalents and investments should be sufficient to fund our operating expenses and capital requirements through at least the end of 2028.

Our estimate as to how long we expect our existing cash and cash equivalents to be able to fund our operating expenses and capital requirements is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

Changing circumstances, some of which may be beyond our control, could result in less cash available to us or cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical drug products, we are unable to estimate the exact amount of our operating capital requirements.

Changing circumstances, some of which are beyond our control, could result in less cash available to us or cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

Because of the numerous risks and uncertainties associated with the research, development and commercialization of pharmaceutical drug products, we are unable to estimate the exact amount of our operating capital requirements.

Our future funding requirements will depend on many factors, including, but not limited to:

● the extent to which we develop, in-license or acquire other product candidates and technologies in our product candidates pipeline;

● the extent to which we develop, in-license or acquire other product candidates and technologies;

● the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development;

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● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;

● the revenue, if any, received from sales of our product candidates for which we receive marketing approval;

● the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

● the costs of operating as a public company.

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Net cash used in investing activities

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Net increase in cash and cash equivalents

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Net cash used in operating activities increased by $36.7 million to $64.8 million for the year ended December 31, 2025 from $28.1 million for the year ended December 31, 2024.

The increase is primarily due to an increase in our cash net loss of $10.2 million, comprised of our $8.2 million decrease in net loss before redeemable noncontrolling interest, as adjusted for the decrease in non-cash charges of $18.4 million for the year ended December 31, 2024.

The decrease of $18.4 in non-cash charges was due to an expense incurred in connection with the 2023 Lilly License of $27.4 million, a change in fair value of our promissory note of $2.2 million, a share-based payment expense of $2.2 million related to the anti-dilution shares issued to Pfizer, and a change in fair value of our research and development license consideration liability of $1.9 million for the year ended December 31, 2023, partially offset by an increase in share-based compensation expense of $9.3 million, of which $5.9 million related to the modification of our former CEOs awards, and an increase in the change in fair value on the Private Placement Warrants of $6.0 million for the year ended December 31, 2024.

Working capital changes increase cash used in operations by $2.8 million of cash for operating activities, resulting from higher prepaid expenses and other current assets and other assets and a decrease in cash used in paying accounts payable and accrued expenses for the year ended December 31, 2024.

The increase is primarily due to an increase in our cash net loss of $16.2 million.

Non-cash charges decreased by $14.5 million due to decreased share-based compensation expense of $4.7 million driven by a modification of our former CEO’s awards in 2024, a decrease in the change in fair value on the Private Placement Warrants of $5.2 million, and a gain on extinguishment of the BAFFX17 liability of $5.0 million.

Working capital changes increased cash used in operations by $6.7 million of cash for operating activities, resulting from an increase in cash used in paying accounts payable and accrued expenses for the year ended December 31, 2025.

Cash flows from investing activities

Cash used in investing activities for the year ended December 31, 2025 was $0.1 million, which was related to equipment purchased during the period.

Cash used in investing activities for the year ended December 31, 2024 was $5.1 million, which was related to the $5.0 million cash consideration paid to acquire the 2023 Lilly License and $0.1 million of equipment purchased during the period.

Cash used in investing activities for the year ended December 31, 2023 was $8.0 million, which was entirely related to the cash consideration paid to acquire the 2023 Lilly License.

Cash flows from financing activities

$5.5 million, after commissions, for the sale of Class A Ordinary Shares under our ATM, partially offset by transaction costs incurred in connection with the 2024 Private Placement and establishing the ATM of $7.2 million and $0.6 million, respectively.

Cash provided by financing activities for the year ended December 31, 2023 was $121.3 million, which consisted of $56.7 million of net proceeds from the issuance of shares upon the closing of the Business Combination and $59.7 million of proceeds, net of transaction costs, from the issuance of Class A Ordinary Shares in connection with the April 2023 Private Placement, and $16.1 million of proceeds from the issuance of 2023 Pre-Funded Warrants in connection with the April 2023 Private Placement, partially offset by a $10.0 million repayment of our promissory note and the payment of $1.2 million of deferred transaction costs.

Cash used in financing activities for the year ended December 31, 2025 was $2.2 million, which consisted of consideration paid for the Athanor Agreement of $7.3 million, partially offset by proceeds of $5.1 million, after commissions, for the sale of Class A Ordinary Shares under our ATM.

Cash provided by financing activities for the year ended December 31, 2024 was $109.8 million, which consisted of $62.5 million of proceeds from the issuance of Class A Ordinary Shares in connection with the April 2024 Private Placement, $50.0 million of proceeds from the issuance of 2024 Pre-Funded Warrants in connection with the April 2024 Private Placement and net proceeds of $5.5 million, after commissions, for the sale of Class A Ordinary Shares under our ATM, partially offset by transaction costs incurred in connection with the 2024 Private Placement and establishing the ATM of $7.2 million and $0.6 million, respectively.

Contractual Obligations and Other Commitments

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During October 2023, we began manufacturing drug substance with another third party.

As a result of manufacturing with another third party other than Lonza, under the terms of the Lonza License we had a license fee of $0.4 million due to Lonza in the fourth quarter of 2023 and annually thereafter.

The fees of $0.4 million have been recorded as research and development expense in each of the years ended December 31, 2024 and 2023.

We paid the 2023 fee as of December 31, 2024 and will pay the 2024 fee in the year ended December 31, 2025.

As a result of manufacturing with a third party other than Lonza, under the terms of the Lonza License we had a license fee of $0.4 million due to Lonza in the fourth quarter of 2023 and annually thereafter.

The $0.4 million Lonza License fee was recorded as research and development expense and paid in each of the years ended December 31, 2025 and 2024.

WuXi Biologics License

In July 2023, we entered into a biologics master services agreement (the “WuXi Biologics MSA”) with WuXi Biologics.

In July 2023, we entered into a biologics master services agreement (the “WuXi Biologics MSA”) with WuXi Biologics and its Affiliates (“WuXi Biologics”).

Under the WuXi Biologics MSA, we are obligated to pay WuXi Biologics a service fee and all non-cancellable obligations in the amount specified in each work order associated with the agreement for the provision of services.

The WuXi Biologics MSA terminates on the completion of services under all work orders executed by the parties, unless terminated earlier.

The term of each work order terminates upon completion of the services under such work order, unless terminated earlier.

We can terminate the WuXi Biologics MSA or any work order at any time upon 30 days’ prior written notice and immediately upon written notice if WuXi Biologics fails to obtain or maintain required material governmental licenses or approvals.

Either party may terminate a work order at any time upon three months’ prior notice with reasonable cause, provided however that if WuXi Biologics terminates a work order in such manner, no termination or cancellation fees shall be paid by us and immediately for cause upon the other party’s material breach that remains uncured for 30 days after notice of such breach.

The WuXi Biologics MSA may be terminated upon 30 days’ written notice by either party.

Each work order under the WuXi Biologics MSA terminates upon completion of the services under such work order, or earlier under certain circumstances:

(i) by us upon 3 months’ written notice for reasonable cause, (ii) by WuXi if the services cannot be reasonably performed due to technical difficulties, or (iii) immediately by either party if a material breach is uncured for 30 days.

Termination fees may apply under (i) and in the case of our material breach in (iii).

In July 2023, we entered into a cell line license agreement (the “Cell Line License Agreement”) with WuXi Biologics.

The Cell Line License Agreement provides us with a non-exclusive, worldwide, sublicensable license to certain of WuXi Biologics’s know-how, cell line, and biological materials (the “WuXi Biologics Licensed Technology”) to manufacture, have manufactured, use, sell and import certain products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”).

The Cell Line License Agreement provides us with a non-exclusive, worldwide, sublicensable license to certain of WuXi Biologics’s know-how, cell line, and biological materials to manufacture, have manufactured, use, sell and import certain products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”).

In consideration for the license, we agreed to pay WuXi Biologics a non-refundable license fee of $150,000.

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The Cell Line License Agreement will continue indefinitely unless terminated (i) by us upon three months’ prior written notice and its payment of all undisputed amounts due to WuXi Biologics through the effective date of termination, (ii) by WuXi Biologics for a material breach by us that remains uncured for 30 days after written notice, or (iii) by WuXi Biologics if we fail to make a payment and such failure continues for 30 days after receiving notice of such failure.

As of December 31, 2025, there are no payments currently due under the Cell Line License Agreement.

We have not included future milestone or royalty payments or other contractual payment obligations as the timing and amount of such obligations are unknown or uncertain and are contingent upon the initiation, continuation, and/or successful completion of future activities.

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Research and Development Expenses

As part of the process of preparing our financial statements, we are required to estimate research and development costs incurred during the period, which impacts the amount of accrued expenses and prepaid balances related to such costs as of each balance sheet date.

As part of the process of preparing our consolidated financial statements, we are required to estimate research and development costs incurred during the period, which impacts the amount of accrued expenses and prepaid balances related to such costs as of each balance sheet date.

This process involves reviewing open contracts and purchase orders, communicating with our personnel and service providers to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.

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These assumptions include:

Expected volatility —Due to our limited operating history and a lack of company-specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded.

The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the share-based awards.

The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the

equivalent period of the calculated expected term of the share-based awards.

We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own share price becomes available.

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Redeemable Noncontrolling Interest

Our consolidated subsidiary Z33 issued its Series Seed Preferred Shares to Stone Peach as a finder’s fee for the 2022 Lilly License.

As the agreement to issue the Z33 Series Seed Preferred Shares included embedded put and call features, the shares issued to Stone Peach represent redeemable noncontrolling interest that we were required to initially measure at fair value at issuance.

The agreement between Z33 and Stone Peach was amended in both April 2023 and November 2023.

Our consolidated subsidiary Z33 issued the Z33 Series Seed Preferred Shares to Stone Peach as a finder’s fee for the 2022 Lilly License pursuant to the Z33 Letter Agreement.

As the Z33 Letter Agreement to issue the Z33 Series Seed Preferred Shares included embedded put and call features, the shares issued to Stone Peach represented redeemable noncontrolling interest that we were required to initially measure at fair value at issuance.

The Z33 Letter Agreement and the Stone Peach Letter Agreements were amended in both April 2023 and November 2023.

The amendments were accounted for as extinguishments and reissuances of the Z33 Series Seed Preferred Shares which triggered us to remeasure the fair value of the Z33 Series Seed Preferred Shares at those points in time.

Subsequent to the amendments, the Series Seed Preferred Shares are remeasured at the end of each reporting period to the greater of the redemption value or the initial carrying value, decreased for the noncontrolling interest’s share of Z33’s net loss.

Subsequent to the amendments, the Series Seed Preferred Shares were remeasured at the end of each reporting period to the greater of the redemption value or the initial carrying value, decreased for the noncontrolling interest’s share of Z33’s net loss.

The fair value of the shares without the embedded features was first determined using an option pricing model which utilizes inputs which are highly subjective assumptions and generally require significant judgement.

These assumptions include expected volatility, expected term, the underlying value of Z33’s equity, a discount for lack of control, and a discount for lack of marketability.

We then valued the embedded put and call features utilizing the Black-Scholes option pricing model utilizing inputs which are highly subjective and require significant judgement, including expected volatility, expected term, and the fair value of a Z33 preferred share.

On December 29, 2025, we terminated the Z33 Letter Agreement and the respective call and put rights relating to Z33’s Series Seed Preferred Shares were extinguished.

See “— Athanor Letter Agreement ” below.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements located in “Part I – Financial Information, Item 1.

Financial Statements” in this Annual Report for a description of recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one yet, of their potential impact on our financial condition and results of operations.

See Note 2 to our consolidated financial statements located in “ Item 15—Exhibits and Financial Statement Schedules—Financial Statements ” in this Annual Report for a description of recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one yet, of their potential impact on our financial condition and results of operations.

Emerging Growth Company and Smaller Reporting Company Status

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If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company under the requirements of (ii) above, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in this Annual Report and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company under the requirements of (ii) above, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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What changed 10-K

Item 7. Management’s Discussion and Analysis