Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and with our audited financial statements and the notes thereto for the year ended December 31, 2025 included in Form 10-K filed with the Securities and Exchange Commission on March 24, 2026. This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon our current plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and beliefs. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled "Risk Factors" and elsewhere in this Quarterly Report. You should carefully read the section titled "Risk Factors" to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled "Special Note Regarding Forward-Looking Statements."

Overview

We are a clinical-stage biopharmaceutical company developing therapeutic product candidates for cardiometabolic diseases by targeting the biology of human aging. Our technology platform and differentiated human datasets enable us to identify promising targets based on insights into molecular changes that drive aging.

Our lead program, BGE-102, is a potent, structurally novel, orally available, brain-penetrant small-molecule NLRP3 inhibitor. BGE-102 has a distinct mechanism and binding site from other NLRP3 inhibitors in development with issued patents covering both composition of matter and claims for the unique binding site.

We intend to advance BGE-102 in two therapeutic areas: cardiometabolic disease and ophthalmology.

In April 2026, we reported results from the full Phase 1 Single Ascending Dose (SAD) / Multiple Ascending Dose (MAD) clinical trial of BGE-102, including a newly announced 60 mg once-daily cohort dosed for 21 days in participants with obesity and elevated inflammation, demonstrating potential best-in-class reductions in high-sensitivity C-reactive protein (hsCRP) and consistent reductions across multiple inflammatory biomarkers with a favorable tolerability profile. BGE-102 was well tolerated across all dose levels evaluated; all treatment-emergent adverse events were mild to moderate and self-limited, with no dose dependency, no serious adverse events, no discontinuations due to adverse events, and no clinically meaningful adverse changes in vital signs, ECGs, or laboratory values. In the Phase 1 SAD / MAD study, BGE-102 demonstrated rapid, profound, and sustained hsCRP reductions at both evaluated dose levels in participants with obesity and elevated baseline hsCRP. At 120 mg once daily for 14 days, BGE-102 demonstrated an 86% median reduction in hsCRP at Day 14, with 93% of participants on active treatment (13/14) achieving hsCRP levels below 2 mg/L - the threshold associated with a 25% reduction in major adverse cardiovascular events - and 71% (10/14) reaching hsCRP at or below 1 mg/L. At 60 mg once daily for 21 days, BGE-102 achieved an 86% median reduction in hsCRP at Day 21, with 87% of participants on active treatment (13/15) achieving hsCRP below 2 mg/L and 60% (9/15) reaching hsCRP at or below 1 mg/L. This level of hsCRP reduction is comparable to injectable anti-IL-6 monoclonal antibodies in clinical development for atherosclerotic cardiovascular disease (ASCVD), but achieved with once-daily oral dosing. BGE-102 also produced consistent reductions in IL-6 (up to 78% at 60 mg and 69% at 120 mg) and fibrinogen (approximately 19-23% at 60 mg and 24-30% at 120 mg), at both dose levels.

Our first therapeutic area for BGE-102 is cardiometabolic disease, with a focus on ASCVD risk reduction. Chronic systemic inflammation, as measured by hsCRP, is an independent risk factor for cardiovascular events that is not adequately addressed by current lipid-lowering and antihypertensive therapies. We plan to initiate a Phase 2 dose-ranging proof-of-concept trial evaluating BGE-102 in participants with elevated cardiovascular risk in mid-2026, with data anticipated by end of year. The trial will assess three oral once-daily dose levels with change in hsCRP as the primary endpoint. The trial is designed to support optimal dose selection for Phase 3.

Our second therapeutic area for BGE-102 is ophthalmology. Diabetic macular edema (DME) is our first proof-of-concept indication in this area. DME affects approximately 1 million patients in the United States, and current intravitreal therapies face significant unmet need due to high injection burden and a substantial refractory population - approximately 45% of patients demonstrate refractoriness to anti-vascular endothelial growth factor (VEGF) therapy. In a preclinical model of DME, oral BGE-102 demonstrated dose-dependent preservation of retinal vascular integrity, achieving near-complete protection from vascular leakage and up to 90% preservation of microvascular integrity. We plan to initiate a Phase 1b/2a proof-of-concept trial in DME in mid-2026 with results anticipated in mid-2027. The goal is to demonstrate ocular target engagement, supporting future development across inflammation-driven retinal diseases.

Beyond NLRP3 inhibition, we are also developing novel apelin receptor APJ agonists for obesity, including long-acting injectable and oral small-molecule APJ agonist programs. In preclinical obesity models, APJ agonism has demonstrated the ability to more than double the weight loss induced by a glucagon-like peptide-1 receptor (GLP-1R) agonist while also restoring healthy body composition and improving muscle function. In June 2025, we announced an option agreement with JiKang Therapeutics for a novel APJ agonist antibody, as well as the filing of a U.S. provisional patent for novel small molecule APJ agonists. We intend to file the first Investigational New Drug application (IND) for an APJ program by 2026 year end.

We are also advancing earlier stage platform-derived programs in collaboration with Eli Lilly and Company (Lilly), and have an ongoing target discovery collaboration with Novartis Pharma AG (Novartis).

Our portfolio of product candidates and ongoing collaborations are summarized in the figure below:

Since our inception in 2015, we have devoted substantially all of our efforts to organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio, acquiring or discovering product candidates, research and development activities for our product candidates, establishing arrangements with third parties for the manufacture of our product candidates and component materials, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales. Our primary uses of capital are, and we expect will continue to be, research and development services, compensation and related expenses and general overhead costs.

We have incurred significant operating losses and negative cash flows since inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of any future product candidates. Our net losses were $22.3 million and $12.9 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $355.7 million. We expect to continue to incur net operating losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will increase substantially in connection with our ongoing activities, particularly if, and as, we:

Our net losses may fluctuate significantly from period to period, depending on the timing of factors above.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for BGE-102 or a future product candidate. In addition, if we obtain regulatory approval for BGE-102 or a future product candidate and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, which could include licenses, collaborations, or other strategic partnerships. Adequate additional funds may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of such stockholders. Debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, which could adversely impact our ability to conduct our business. If we raise additional funds through licenses, collaborations, or other strategic partnerships with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research program or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. There is no assurance that we will ever be profitable or generate positive cash flow from operating activities. Our ability to raise additional funds may also be adversely impacted by potential worsening global macroeconomic, industry and market conditions in either domestic or international markets, as well as economic conditions specifically affecting industries in which we operate, including but not limited to, actual or perceived instability in the banking industry, potential uncertainty with respect to the U.S. federal debt ceiling and budget and any future government shutdowns related thereto, labor shortages, supply chain disruptions, potential recession, inflation and changing interest rates, significant trade or regulatory developments, including tariffs or shifting priorities within the U.S. Food and Drug Administration, and political instability and military hostilities in multiple geographies, such as the conflicts in Ukraine, Venezuela, Iran, tensions between China and Taiwan and the possibility of a wider Middle Eastern, European or global conflict.

Because of the numerous risks and uncertainties associated with development of product candidates, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

We oversee and manage third party Contract Development and Manufacturing Organizations (CDMOs) to support development and manufacture of our future product candidates. We expect to enter into commercial supply agreements with commercial manufacturers prior to any potential regulatory approval of any future product candidates. We believe our current manufacturers are able to supply the upcoming preclinical and clinical trials of future product candidates. Additional CDMOs may be on-boarded at later stages of clinical and commercial development for future product candidates.

As of March 31, 2026, we had $384.9 million in cash, cash equivalents, and marketable securities. Based on our current operating plan, we estimate that our existing cash, cash equivalents, and marketable securities as of the filing date of this Quarterly Report will be sufficient to fund our operations and capital expenses through 2029. However, we have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See the section titled "Liquidity and Capital Resources" included elsewhere in this Quarterly Report.

Collaboration Agreement with Novartis Pharma AG

On December 16, 2024, we entered into a collaboration agreement with Novartis to identify and validate novel therapeutic drug targets by investigating the biological mechanisms that drive diseases related to aging and mediate the beneficial effects of physical exercise (the "Novartis Agreement").

Under the terms of the Novartis Agreement, we are obligated to perform additional analyses on our longitudinal human aging cohort datasets, to expand data included in our discovery platform, and perform other activities to enable the identification and validation of novel therapeutic drug targets.

In consideration for the rights granted under the Novartis Agreement, we have received and may receive upfront payments and research funding of up to $20.0 million, and up to $530.0 million in future long-term research, development, and commercial milestones. We and Novartis each have the right to advance novel targets discovered under the Novartis Agreement and are each eligible to receive reciprocal success milestones and receive tiered royalties on net sales of licensed products.

Collaboration revenue of $2.8 million and $1.5 million was recognized under the Novartis Agreement in the three months ended March 31, 2026 and 2025. During the three months ended March 31, 2026, we recorded $2.1 million in revenue that was included in deferred revenue as of December 31, 2025 and $0.7 million in revenue related to research funding for reimbursable costs incurred during the three months ended March 31, 2026. Deferred revenue related to the Novartis Agreement amounted to $6.2 million and $5.8 million as of March 31, 2026, and December 31, 2025, respectively, all of which was included in current liabilities within the condensed consolidated balance sheets.

Components of Our Results of Operations

Revenue

We have not generated any product revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all. If our development efforts for BGE-102 or other product candidates that we may develop in the future are successful and result in marketing approval, we may generate revenue from product sales.

We have recognized, and expect to recognize, collaboration revenue in the future from the Novartis Agreement, which may include amounts related to upfront payments, milestone payments, and research and development funding.

Operating Expenses

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

Research and Development Expense

Research and development expenses account for a significant portion of our operating expenses and consist primarily of costs incurred in connection with the discovery, preclinical development, clinical development and manufacturing of our lead product candidate, BGE-102, and other potential future product candidates, and include:

Direct Costs:

Indirect Costs:

We expense research and development costs as incurred. We recognize direct development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors or our estimate of the level of service that has been performed at each reporting date. Payments for these development activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid expenses or accrued expenses.

A significant portion of our research and development costs to date have been third-party direct costs, which we disclose on an individual product candidate basis after the completion of IND-enabling activities for that product candidate. However, our indirect costs are not directly tied to any one program and are deployed across our programs. As such, we do not track these costs on a specific program basis. We utilize third party contractors for our research and development activities and CDMOs for our manufacturing activities and we do not have our own manufacturing facilities.

Research and development activities are central to our business model. We expect that our research and development expenses will continue to increase substantially for the foreseeable future as we progress BGE-102 into additional clinical trials, continue to discover and develop additional product candidates, expand our headcount and costs related to our existing and potential future intellectual property licenses. Later stages of clinical development generally have higher development costs than those in earlier stages, primarily due to the increased size and duration of later-stage clinical trials. There are numerous factors associated with the successful development and commercialization of any product candidates we may develop in the future, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development program and plans.

Our research and development expenses may vary significantly in the future based on factors, such as:

Changes in the outcome of any of these variables with respect to the development of our lead product candidate, BGE-102, or any future product candidates in preclinical and clinical development could mean a significant change in the costs and timing associated with the development of these product candidates. For example, if the FDA, European Medicines Agency or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect, or if we experience significant delays in enrollment in any clinical trials following the applicable regulatory authority's acceptance and clearance, we could be required to expend significant additional financial resources and time to complete clinical development than we currently expect. We may never obtain regulatory approval for any product candidates that we develop.

The successful development of BGE-102 or any other product candidates we may develop in the future is highly uncertain. Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development and commercialization of BGE-102, our APJ programs or any future product candidates we may develop. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of BGE-102 or any future product candidate, if approved. This is due to the numerous risks and uncertainties associated with product development.

General and Administrative Expense

General and administrative expenses consist primarily of personnel-related expenses, including salaries, bonuses, benefits, and stock-based compensation expenses for individuals in executive, finance, corporate, business development, and administrative functions. Other significant general and administrative expenses include legal fees relating to patent, intellectual property and corporate matters, and fees paid for accounting, consulting and other professional services, allocated expenses for rent, insurance and other operating costs.

We expect that our general and administrative expenses will continue to increase in the foreseeable future as our business expands to support our continued research and development activities, including any future clinical trials. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, among other expenses. We also anticipate increased expenses associated with being a public company, including costs for audit, legal, regulatory and tax-related services related to compliance with the rules and regulations of the SEC, listing standards applicable to companies listed on a national securities exchange, director and officer insurance premiums and investor relations costs. In addition, if we obtain regulatory approval for any product candidates we may develop in the future and do not enter into a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities.

Other Income, Net

Interest Expense

Interest expense consists of interest incurred on our term loan.

Interest and Other Income (Expense), Net

Interest and other income (expense), net primarily consist of interest income generated from interest bearing cash, cash equivalents, and marketable securities.

Gain (Loss) from Changes in Fair Value of Warrants

Gain (loss) on changes in fair value consists of assessed changes in fair value of warrants to purchase our common stock.

Income Taxes

Since our inception, we have not recorded any income tax benefits for the net losses we have incurred in each period or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards and tax credits will not be realized. As of December 31, 2025, we had U.S. federal and state net operating loss carryforwards of $204.1 million and $15.9 million, respectively, which expire at various dates beginning in 2035. These attributes may be subject to Section 382 limitation and we have not performed a formal assessment. As of March 31, 2026 and December 31, 2025, we have recorded a full valuation allowance against our deferred tax assets.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

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

Collaboration Revenue

Collaboration revenue for the three months ended March 31, 2026 was $2.8 million, compared to $1.5 million for the three months ended March 31, 2025. The $1.3 million increase was due to increased full-time equivalent employee (FTE) effort under the Novartis Agreement, resulting in higher revenue recognized based on progress toward satisfaction of the related performance obligation.

Research and Development Expenses

The following table summarizes our research and development expenses for each of the periods presented (in thousands, except percentages):

Research and development expenses increased by $9.3 million from $11.1 million for the three months ended March 31, 2025 to $20.4 million for the three months ended March 31, 2026. The increase in research and development expenses was primarily attributable to a $5.7 million increase in direct costs related to our BGE-102 program associated with the completion of our Phase 1 SAD / MAD clinical trial, preparation for our planned Phase 2 dose-ranging proof-of-concept trial evaluating BGE-102 in participants with elevated cardiovascular risk and planned Phase 1b/2a proof-of-concept trial in DME, each expected to initiate in 2026, and drug-product manufacturing. Additionally contributing to the increase was a $3.6 million increase in direct costs for other programs, which was

primarily related to discovery and development activities related to our novel apelin receptor APJ agonist programs, and a $0.8 million increase in allocated facility and other expenses primarily driven by an increase in non-program specific consulting fees.

These increases in research and development expense were partially offset by a $0.8 million reduction in azelaprag direct costs as development was terminated in January 2025.

General and Administrative Expenses

General and administrative expenses increased by $0.9 million from $6.8 million for the three months ended March 31, 2025 to $7.7 million for the three months ended March 31, 2026. The increase was primarily driven by a $0.6 million increase in personnel-related expenses, largely due to an increase in stock-based compensation expense associated with new option grants issued to employees, executives, board members and advisors, and a $0.4 million increase in legal fees, partially offset by a $0.1 million decrease in consulting expenses.

Other Income, Net

Other income, net decreased by approximately $0.4 million from $3.5 million for the three months ended March 31, 2025 to $3.1 million for the three months ended March 31, 2026. This decrease in other income, net was primarily attributable to a $0.4 million decrease in interest income driven by lower interest rates during the period, resulting in reduced yields on cash, cash equivalents, and marketable securities.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant losses in each period and on an aggregate basis. We have not yet commercialized any product candidates, and we do not expect to generate revenue from sales of any product candidates for the foreseeable future, if at all. As of March 31, 2026, we had $384.9 million in cash, cash equivalents, and marketable securities and we had an accumulated deficit of $355.7 million.

In May 2022, we entered into a loan and security agreement (the Loan Agreement) with SVB Innovative Credit Growth Fund IX, LP and Innovative Credit Growth Fund VIII-A, LP pursuant to which we were able to borrow up to an aggregate of $25.0 million across two potential tranches until December 31, 2023 (the Term Loan). The Loan Agreement has a floating interest rate of the higher of the Wall Street Journal Prime rate plus 4.00% or 7.5%. The amounts borrowed under the Loan Agreement matured on April 1, 2026. We made a final payment fee equal to 4.4% of the total amount borrowed upon maturity. As of March 31, 2026, we had $0.5 million outstanding under the Loan Agreement. See Note 4 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for further discussion of the Loan Agreement.

In October 2025, we filed a shelf registration statement on Form S-3 (the Shelf Registration Statement) which became effective through the operation of law in November 2025. The Shelf Registration Statement permits the offering of up to $250.0 million aggregate dollar amount of shares of our common stock or preferred stock, debt securities, warrants to purchase our common stock, preferred stock or debt securities, subscription rights to purchase our common stock, preferred stock or debt securities and/or units consisting of some or all of these securities, in one or more offerings and in any combination. In connection with the Shelf Registration Statement, we entered into a Sales Agreement (the Sales Agreement) with Leerink Partners LLC (Leerink) relating to the applicable terms of at-the-market equity offerings (the ATM Facility) pursuant to which we may, but are not obligated to, offer and sell, from time to time, shares of our common stock with an aggregate offering price up to $75.0 million through Leerink, as sales agent in the ATM Facility.

As of March 31, 2026, we have sold an aggregate of 1,400,000 shares of our common stock through our ATM Facility pursuant to the Sales Agreement. The gross proceeds from these sales were approximately $17.6 million, before deducting sales agent commission and offering costs of approximately $0.5 million, resulting in net proceeds of approximately $17.1 million.

In January 2026, we completed an underwritten public offering of our common stock, issuing 5,897,435 shares at a public offering price of $19.50 per share for net proceeds of $107.4 million, after underwriting discounts and commissions and offering costs (the January 2026 Public Offering). The January 2026 Public Offering included a 30-day option for the underwriters to purchase up to 884,615 additional shares.

In February 2026, we issued 884,615 shares of our common stock upon exercise of the underwriters' option in the January 2026 Public Offering, resulting in net proceeds of $16.2 million, net of underwriting discounts and commissions.

Cash Flows

The following table provides information regarding our cash flows for each of the periods presented (in thousands):

Cash Used in Operating Activities

Cash used in operating activities during the three months ended March 31, 2026 was $24.0 million, and was primarily due to our net loss of $22.3 million and a $6.0 million change in operating assets and liabilities. These changes were partially offset by non-cash adjustments of $4.2 million, primarily consisting of $4.3 million of stock-based compensation expense, partially offset by accretion of investment discounts.

Cash used in operating activities during the three months ended March 31, 2025 was $17.4 million, and was primarily due to our net loss of $12.9 million and a $7.5 million change in operating assets and liabilities. These changes were partially offset by non-cash adjustments of $3.1 million, of which $2.9 million related to stock-based compensation expense.

Cash Used in Investing Activities

Cash used in investing activities was $46.8 million during the three months ended March 31, 2026 and included cash outflows of $80.2 million related to the purchase of marketable securities, partially offset by $33.5 million in maturities of marketable securities.

Cash used in investing activities was $78.0 million during the three months ended March 31, 2025 and included cash outflows of $77.6 million related to the purchase of marketable securities as well as $0.4 million related to the purchase of property and equipment.

Cash Provided by (Used in) Financing Activities

Cash provided by financing activities during the three months ended March 31, 2026 was $123.7 million resulting from $123.6 million in net proceeds from an underwritten public offering of our common stock and $1.7 million in stock option exercise proceeds, partially offset by $1.5 million in principal payments on our Term Loan and $0.1 million for the payment of deferred offering costs.

Cash used in financing activities during the three months ended March 31, 2025 was $1.5 million due to principal payments on our Term Loan.

Funding Requirements

Our primary uses of capital are, and we expect will continue to be, research and development services, compensation and related expenses and general overhead costs. We expect to continue to incur significant expenses and operating losses for the foreseeable future.

Based on our current operating plan, we estimate that our existing cash, cash equivalents, and marketable securities as of the filing date of this Quarterly Report will be sufficient to fund our operations and capital expenses through 2029. However, we have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including:

A change in the outcome of any of these or other variables with respect to the development of BGE-102 or any product or development candidate we may develop in the future could significantly change the costs and timing associated with our development plans. Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, which could include licenses, collaborations, or other strategic partnerships. We currently have no credit facility or committed sources of capital. Adequate additional funds may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of such stockholders. Debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business. If we raise additional funds through licenses, collaborations, or other strategic partnerships with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research program or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. There is no assurance that we will ever be profitable or generate positive cash flow from operating activities.

Contractual Obligations and Other Commitments

Lease Obligations

We lease office and lab space at our corporate headquarters in Emeryville, California (the Emeryville Lease). The Emeryville Lease is accounted for as an operating lease and expires on February 28, 2031. Non-cancellable base rent lease obligations as of March 31, 2026 were $3.8 million, of which $0.7 million is due within the next 12 months.

Purchase and Other Obligations

We enter into contracts in the normal course of business with CROs, CDMOs and other third-party vendors for preclinical research studies and testing, clinical trials and testing and manufacturing services. Most contracts do not contain minimum purchase commitments

and are cancellable by us upon written notice. Payments due upon cancellation consist of payments for services provided or expenses incurred, including non-cancelable obligations of our service provided up to one year after the date of cancellation.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are described in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K. We have reviewed those critical accounting policies and estimates for the three months ended March 31, 2026. There have been no significant changes in our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Emerging Growth Company and Smaller Reporting Company Status

Under Section 107(b) of the JOBS Act an "emerging growth company" can delay the adoption of new or revised accounting standards until such time as those standards would apply to private companies. We have elected this exemption to delay adopting new or revised accounting standards until such time as those standards apply to private companies. Where allowable we have early adopted certain standards as described in Note 1 of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. As a result, our unaudited condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. We will continue to remain an "emerging growth company" until the earliest of the following: (i) the last day of the fiscal year following the fifth anniversary of the date of the completion of our IPO; (ii) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

We are also a "smaller reporting company," meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We will continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million.

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, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.