BMEA US Equity☆

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described, in or implied, by these forward-looking statements.

Overview

We are a clinical-stage diabetes and obesity medicines company dedicated to developing novel small molecule therapies to treat and improve the lives of patients with metabolic diseases. A covalent small molecule drug is a synthetic compound that forms a permanent bond to its target protein and offers a number of potential advantages over conventional non-covalent drugs, including greater target selectivity, lower drug exposure, and the ability to drive a deeper, more durable response.

Our lead clinical program’s drug candidate, icovamenib, is currently being developed as an orally bioavailable, and selective, covalent inhibitor of menin in two clinical and multiple preclinical studies, investigating icovamenib’s potential in type 1 and type 2 diabetes, as well as its impact in obesity. Menin serves as a checkpoint to prevent beta cell proliferation. Thus, the data support that inhibiting menin via icovamenib has the potential to enable the proliferation, preservation, and reactivation of healthy, functional beta cells capable of producing insulin, thereby leading to long-term glycemic control in patients with type 1 and type 2 diabetes.

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In preclinical studies, the administration of icovamenib has produced a pronounced effect in preclinical models of diabetes, normalizing glucose levels during treatment and even after drug washout. In October 2025, we reported 52-week results from our Phase II COVALENT-111 trial of icovamenib in type 2 diabetes. Results from our type 1 diabetes trial (COVALENT-112) are still outstanding. As of December 31, 2025 icovamenib is now being evaluated across two ongoing Phase II clinical trials (COVALENT-211 and COVALENT-212) in type 2 diabetes.

With our strategic focus to become a diabetes and obesity medicines company, we are concluding our studies exploring icovamenib’s potential in oncology and plan to explore partnerships to further advance our oncology assets (BMF-500, a covalent inhibitor of FLT3, currently in a Phase I trial), while concentrating internal resources on metabolic disorders.

In September 2025, we announced that BMF-650, our investigational, next-generation, oral small molecule GLP-1 RA, received IND-clearance from the FDA. Initiation of our Phase I GLP-131 trial for BMF-650 in obese, otherwise healthy volunteers is ongoing, and data is anticipated in the second quarter of 2026. With its unique pharmacokinetic profile and enhanced bioavailability, we believe BMF-650 has the potential to provide a best-in-class therapeutic option for diabetes and obesity.

Since commencing operations in 2017, we have devoted substantially all of our efforts and financial resources to conducting research and development activities, including drug discovery and preclinical studies, establishing and maintaining our intellectual property portfolio, the manufacturing of clinical and research material, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations. We have not generated any revenue from product sales and, as a result, we have never been profitable and have incurred net losses since commencement of our operations.

As of December 31, 2025, we had an accumulated deficit of $449.0 million. We incurred net losses of $61.8 million and $138.4 million for the years ended December 31, 2025 and 2024, respectively. Based on our current operating plan, we believe that our existing cash and cash equivalents, and restricted cash as of December 31, 2025, without any future financing, will only be sufficient to fund our operations into the first quarter of 2027. We expect to continue to incur significant expenses and operating losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities.

We do not expect to generate revenue from product sales unless and until we obtain regulatory approval for and commercialize a product candidate, and we cannot assure you that we will ever generate significant revenue or profits. We expect that our expenses will continue to increase for the foreseeable future. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase substantially if and as we:

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conduct our ongoing preclinical studies and our two Phase II clinical trials of icovamenib in type 2 and type 1 diabetes;

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seek marketing approvals for any product candidates that successfully complete clinical trials;

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continue our research and development efforts and submit additional INDs;

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experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges;

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establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities, whether alone or with third parties, to commercialize any product candidates for which we may obtain regulatory approval, if any;

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obtain, expand, maintain, enforce and protect our intellectual property portfolio;

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hire additional clinical, regulatory and scientific personnel; and

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operate as a public company.

We will need to raise additional capital in the future to fund our operations, including to conduct and complete clinical trials for any product candidates. If sufficient funds on acceptable terms are not available when needed, we could be required to significantly reduce our operating expenses and delay, reduce the scope of, or eliminate one or more of our development programs.

We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates. All of our product candidates are novel small molecules and are manufactured in synthetic processes from available or custom synthesized starting materials. The chemistry is scalable and uses commonly available pharmaceutical equipment in the manufacturing process. We expect to continue to develop product candidates that can be produced cost-effectively at contract manufacturing facilities. In addition, we do not yet have a marketing or sales organization or commercial infrastructure. Accordingly, we will incur significant expenses to develop a marketing and sales organization and commercial infrastructure in advance of generating any product sales.

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In April 2021, we completed our initial public offering (IPO) and issued an aggregate of 9,000,000 shares of our common stock at a price of $17.00 per share. Subsequent to the close, an additional 823,532 shares were issued in connection with the partial exercise by the underwriters of their option to purchase additional shares of common stock. In addition, immediately prior to the closing of the IPO, all outstanding shares of our convertible preferred stock automatically converted into 7,064,925 shares of common stock. Proceeds from the IPO, net of underwriting discounts and commissions and offering costs were $152.8 million. On April 3, 2023, we issued and sold 5,750,000 shares of common stock, which included 750,000 shares sold pursuant to the exercise of the underwriters’ over-allotment option, at a public offering price of $30.00 per share in an underwritten public offering pursuant to a shelf registration on Form S-3. Our net proceeds from the offering were $161.8 million, after deducting underwriting discounts and commissions and offering costs of $10.7 million. During the twelve months ended December 31, 2025, we issued 2,271,122 shares of our common stock for aggregate proceeds of $4.9 million, net of commissions and offering costs from our 2022 ATM Program.

In June 2025, we issued and sold 19,450,000 shares of common stock at an offering price of $2.00 per share and, to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 550,000 shares of common stock at an offering price of $1.9999 per share, and accompanying common warrants to purchase up to 23,000,000 shares of common stock at a per share exercise price of $2.50. In July 2025, in connection with the June 2025 underwritten public offering, the underwriters partially exercised their over-allotment option to purchase an additional 1,381,262 shares of common stock at an offering price of $2.00 per share. The aggregate gross proceeds from the offering, including the proceeds from the underwriters' over-allotment option, were approximately $42.8 million, before deducting underwriting discounts and commissions and offering costs.

In October 2025, we issued and sold 11,195,121 shares of common stock at an offering price of $2.05 per share and, to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 1,000,000 shares of common stock at an offering price of $2.0499 per share and accompanying common warrants to purchase up to 14,024,389 shares of common stock at a per share exercise price of $2.50, which included the underwriters' partial exercise of their over-allotment option to purchase additional common warrants. The aggregate gross proceeds from the offering, including the proceeds from the underwriters' over-allotment option, were approximately $25.0 million, before deducting underwriting discounts and commissions and offering costs.

Components of Operating Results

Revenue

To date, we have not generated any revenue and do not expect to generate any revenue from the sale of products in the near future.

Operating Expenses

Research and Development

Our research and development expenses consist primarily of external and internal costs incurred in connection with the research and development of our research programs and product candidates.

External costs include:

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expenses incurred under agreements with third-party CMOs, CROs, research and development service providers, academic research institutions and consulting costs; and

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laboratory expenses, including supplies and services.

Internal costs include:

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personnel-related expenses, including salaries, benefits and stock-based compensation for personnel in research and product development roles; and

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facilities and other allocated expenses, including expenses for rent and facilities maintenance, and depreciation.

We expense research and development costs in the periods in which they are incurred. Non-refundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and capitalized. The capitalized amounts are then expensed as the related goods are delivered and as services are performed. We track direct costs by stage of program, clinical or preclinical. However, we do not track indirect costs on a program specific or stage of program basis because these costs are deployed across multiple programs and, as such, are not separately classified.

We expect our research and development expenses to increase substantially during the next few years as we seek to initiate and complete clinical trials, pursue regulatory approval of icovamenib and advance BMF-650 and our other programs

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through preclinical and clinical development. Predicting the timing or the final cost to complete our clinical program or validation of our manufacturing and supply processes is difficult and delays may occur because of many factors. The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. To the extent that our product candidates continue to advance into clinical trials, as well as advance into larger and later stage clinical trials, our expenses will increase substantially and may become more variable.

Our future research and development costs may vary significantly based on a wide variety of factors, such as:

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the scope, rate of progress, expense and results of our ongoing clinical trials, including our ongoing Phase II clinical trial of icovamenib in type 2 diabetes and Phase II clinical trial of icovamenib in type 1 diabetes, enrollment in our Phase I clinical trial for BMF-650, as well as any future preclinical development and clinical trials of our product candidates, and other research and development activities we may conduct;

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uncertainties in clinical trial design and the interpretation of clinical trial data;

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per participant trial costs;

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the duration, scope and number of trials required for approval;

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the number of sites included in the trials;

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the number of participants who participate in the trials;

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the countries in which the trials are conducted;

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the length of time required to enroll eligible participants;

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the drop-out or discontinuation rates of participants;

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the safety and efficacy profiles of our product candidates;

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the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and non-U.S. regulators;

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our ability to maintain a continued acceptable safety profile of our product candidates following approval, if any, of any of our product candidates;

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significant and changing government regulation and regulatory guidance;

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establishing clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully;

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the impact of any business interruptions to our operations or to those of the third parties with whom we work in light of adverse global market conditions; and

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the extent to which we establish additional strategic collaborations or other arrangements.

A change in the outcome of any of these variables with respect to the development of any or our product candidates could significantly change the costs and timing associated with the development of that product candidate. The actual probability of success for our product candidates may be affected by a variety of factors, including the safety and efficacy of our product candidates, investment in our clinical programs, manufacturing capability and competition with other products and product candidates. As a result of these variables, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates. We may never succeed in achieving regulatory approval for any of our product candidates.

General and Administrative

General and administrative expenses consist principally of personnel-related costs including payroll and stock-based compensation expense for personnel in executive, finance, human resources, business and corporate development, and other administrative functions, professional fees for legal, consulting, and accounting services, rent and other facilities costs, depreciation, and other general operating expenses not otherwise classified as research and development expenses.

We anticipate that our general and administrative expenses will increase substantially during the next few years as a result of staff expansion and additional occupancy costs, as well as costs associated with being a public company, including compliance with the rules and regulations of the SEC and those of any national securities exchange on which our securities are traded, higher legal and auditing fees, investor relations costs, higher insurance premiums and other compliance costs associated with being a public company. We also expect that our future intellectual property expenses may increase as we expand our product portfolio of product candidates due to advances in our research and development programs.

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Impairment of long-lived assets

Impairment of long-lived assets consists of a one-time impairment charge, primarily for laboratory equipment and leasehold improvements (see Note 4).

Change in fair value of common warrant liability

Change in fair value of common warrant liability consists of revaluation of the common warrants issued in connection with the June and October 2025 underwritten public offerings (see Note 5). The common warrants are re-measured at each balance sheet date.

Interest and Other Income, Net

Interest and other income, net consists primarily of interest income earned on our cash and cash equivalents.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

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

Year Ended December 31,

Operating expenses:

Impairment of long-lived assets 2,205 — 2,205

Change in fair value of common warrant liability 19,857 — 19,857

Research and Development Expenses

The following table summarizes our research and development expenses incurred during the periods indicated (in thousands):

Year Ended December 31,

External costs

Internal costs:

Research and development expenses decreased by $56.1 million during the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease of $42.7 million in external costs was primarily driven by a decrease of $28.5 million related to clinical activities due to our strategic realignment to focus on our core assets and ceasing internal development of our oncology programs, a decrease of $4.4 million in manufacturing costs, a decrease of $4.0 million related to consultants, advisors and other professional services to support our clinical studies, discovery research and overall research and development program, and a decrease of $5.8 million related to preclinical and exploratory programs. Personnel-related expenses, including stock-based compensation, decreased by $11.3 million due to a decrease in headcount. Facilities and other allocated expenses decreased by $2.1 million due to a decrease in rent and facilities-related costs.

General and Administrative Expenses

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General and administrative expenses decreased by $6.7 million during the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily driven by a decrease of $5.9 million related to personnel-related expenses, including stock-based compensation, due to a decrease in headcount. Consulting and professional expenses decreased by $0.7 million due to legal, accounting, consulting and other services. Facilities and other allocated expenses decreased by $0.1 million due to a decrease in rent and facilities-related costs.

Impairment of long-lived assets

Impairment of long-lived assets was $2.2 million for the year ended December 31, 2025 and $0 for the year ended December 31, 2024, attributable to a one-time impairment charge (see Note 4).

Change in fair value of common warrant liability

Change in fair value of common warrant liability was $19.9 million for the year ended December 31, 2025 and $0 for the year ended December 31, 2024, attributable to revaluation of the common warrants issued in connection with the June and October 2025 underwritten public offerings (see Note 5). The common warrants are re-measured at each balance sheet date.

Interest and Other Income, Net

Interest and other income, net was $1.9 million for the year ended December 31, 2025 compared to $5.6 million for the year ended December 31, 2024. The decrease of $3.7 million was primarily due to the decrease in cash and cash equivalents balance.

Comparison of the Years Ended December 31, 2024 and 2023

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

Year Ended December 31,

Operating expenses:

Research and Development Expenses

The following table summarizes our research and development expenses incurred during the periods indicated (in thousands):

Year Ended December 31,

External costs

Internal costs:

Facilities and other allocated expenses 8,104 8,680 (576 )

Research and development expenses increased by $15.5 million during the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase of $13.1 million in external costs was primarily driven by an increase of $12.0 million related to clinical activities, an increase of $5.4 million related to consultants, advisors and other professional services to support our clinical studies, discovery research and overall research and development program, and increase of $1.7 million related to preclinical activities mainly driven by timing of our exploratory programs. Manufacturing related costs decreased by $6.0 million primarily driven by timing of services performed by our contract manufacturers. Personnel-related expenses, including stock-based compensation, increased by $3.0 million due to an increase in headcount.

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General and Administrative Expenses

General and administrative expenses increased by $2.4 million during the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily due to increased personnel-related expenses, including stock-based compensation, of $1.4 million due to an increase in headcount. Consulting and professional expenses increased by $1.5 million due to legal, accounting, consulting and other services offset by a decrease in insurance expense by $0.3 million.

Interest and Other Income, Net

Interest and other income, net was $5.6 million for the year ended December 31, 2024 compared to $8.9 million for the year ended December 31, 2023. The decrease of $3.2 million was primarily due to the decrease in cash, cash equivalents, and restricted cash balance.

Liquidity and Capital Resources

Liquidity

We have funded our operations primarily through the sale and issuance of shares of our common and convertible preferred stock, pre-funded and common warrants and the issuance of unsecured promissory notes from inception through December 2020, issuance of our common stock through our IPO in April 2021, our public offerings in March 2023, June 2025 and October 2025 and through sales under our 2022 ATM Program.

On October 14, 2022, we filed the 2022 Registration Statement with the SEC relating to the registration of up to an aggregate of $350.0 million in shares of our common stock, preferred stock, debt securities, warrants and units or any combination thereof. The 2022 Registration Statement was declared effective by the SEC on October 24, 2022. In April 2023, pursuant to the 2022 Registration Statement, we sold an aggregate of 5,750,000 shares of common stock at a price of $30.00 per share in an underwritten public offering for gross proceeds of $172.5 million, resulting in net proceeds of $161.8 million after deducting underwriting discounts and commissions, and offering costs. On August 5, 2025, we filed the 2025 Registration Statement with the SEC relating to the registration of up to an aggregate of $300.0 million in shares of our common stock, preferred stock, debt securities, warrants and units or any combination thereof to replace the 2022 Registration Statement. The 2025 Registration Statement was declared effective by the SEC on August 15, 2025.

In June 2025, we completed an underwritten public offering, in which we issued and sold 19,450,000 shares of common stock at an offering price of $2.00 per share and to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 550,000 shares of common stock at an offering price of $1.9999 per share, and accompanying common warrants to purchase up to 23,000,000 shares of common stock at a per share exercise price of $2.50. Our net proceeds from the offering were approximately $37.2 million, after deducting underwriting discounts and commissions and offering costs of approximately $2.8 million. In July 2025, in connection with the June 2025 underwritten public offering, the underwriters partially exercised their over-allotment option to purchase an additional 1,381,262 shares of common stock at an offering price of $2.00 per share. The net proceeds from the offering pursuant to the over-allotment option were approximately $2.6 million, after deducting underwriting discounts and commissions and offering costs of approximately $0.2 million.

Additionally, we are party to an equity distribution agreement, dated November 25, 2022, with Piper Sandler with respect to the 2022 ATM Program, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $100.0 million (which was included in the $350.0 million originally registered under the 2022 Registration Statement and is now included in the $300.0 million originally registered under the 2025 Registration Statement) through Piper Sandler as the sales agent. Through December 31, 2025, we have received aggregate proceeds from our 2022 ATM Program of $4.9 million, net of commissions and offering costs, pursuant to the issuance of 2,271,122 shares. As of December 31, 2025, we have $94.8 million available under the 2022 ATM Program.

In October 2025, we completed an underwritten public offering in which we issued and sold 11,195,121 shares of common stock at an offering price of $2.05 per share and, to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 1,000,000 shares of common stock at an offering price of $2.0499 per share and accompanying common warrants to purchase up to 12,195,121 shares of common stock at a per share exercise price of $2.50. Our net proceeds from the offering, including the proceeds from the underwriter’s over-allotment option, were approximately $23.1 million, after deducting underwriting discounts and commissions and offering costs of approximately $1.9 million.

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As of December 31, 2025, we had cash, cash equivalents and restricted cash of $56.2 million. As of December 31, 2025, we had an accumulated deficit of $449.0 million. We have incurred substantial operating losses and have used cash in our operating activities since inception. Without any future financing, the current operating plan under the existing cash and cash equivalents, and restricted cash as of December 31, 2025, will only be sufficient to fund our operations into the first quarter of 2027. Our ability to continue as a going concern will require us to obtain additional financing to fund our operations and there can be no assurance that additional financing will be available to us or that such financing, if available, will be available on terms acceptable to us. Accordingly, there is substantial doubt about our ability to continue as a going concern.

Future Funding Requirements

We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We may seek to raise capital through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including:

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the scope, timing, progress, duration, costs and results of our clinical trials, drug discovery, preclinical development activities and laboratory testing for our product candidates;

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the number and scope of clinical programs we decide to pursue;

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the scope and costs of manufacturing development and commercial manufacturing activities;

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the extent to which we discover and develop additional product candidates;

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the cost, timing and outcome of regulatory review of our product candidates;

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the cost and timing of establishing sales and marketing capabilities, if any of our product candidates receive marketing approval;

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

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our ability to establish and maintain collaborations on favorable terms, if at all;

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licensing, or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under these agreements;

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the timing, receipt and amount of sales from our potential products;

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our need and ability to hire additional management, scientific and medical personnel;

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our need to implement additional internal systems and infrastructure, including financial and reporting systems;

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our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates;

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the costs associated with being a public company;

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the cost associated with commercializing our product candidates, if they receive regulatory approval;

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our ability to establish and maintain strategic collaborations and other similar partnerships for the development and commercialization of our product candidates; and

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the impact of any global health emergency and adverse global economic conditions on our business, which may exacerbate the magnitude of the factors discussed above.

If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.

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See the section of this Annual Report on Form 10-K titled “Risk Factors” for additional risks associated with our substantial capital requirements.

Summary Statement of Cash Flows

The following table sets forth the primary sources and uses of cash, cash equivalents and restricted cash for each of the periods presented below (in thousands):

Year Ended December 31,

Net cash (used in) provided by:

Investing activities — (362 ) (2,220 )

Net Cash Used in Operating Activities

Net cash used in operating activities was $70.4 million for the year ended December 31, 2025 and consisted of a net loss of $61.8 million offset by increase in net assets of $3.7 million and non-cash adjustments of $4.9 million. The increase in net assets consisted primarily of a decrease in prepaid expenses and other current assets of $7.8 million, a decrease in other assets of $0.6 million, a decrease in accounts payable of $9.7 million, a decrease in accrued expenses and other current liabilities of $0.3 million and a decrease in operating lease liabilities of $2.2 million. Non-cash adjustments consisted primarily of a non-cash gain on the change in fair value of warrant liability of $19.9 million, stock-based compensation expense of $9.5 million, impairment of property and equipment of $2.2 million, operating lease expense of $1.8 million and depreciation expense of $1.4 million.

Net cash used in operating activities was $119.9 million for the year ended December 31, 2024 and consisted of a net loss of $138.4 million offset by increase in net assets of $5.1 million and non-cash adjustments of $23.7 million. The increase in net assets consisted primarily of an increase in prepaid expenses and other current assets of $7.7 million, a decrease in other assets of $4.9 million, an increase in accounts payable of $6.1 million, a decrease in accrued expenses and other current liabilities of $6.9 million and a decrease in operating lease liabilities of $1.5 million. Non-cash adjustments consisted primarily of stock-based compensation expense of $19.1 million, operating lease expense of $2.8 million and depreciation expense of $1.7 million.

Net cash used in operating activities was $96.6 million for the year ended December 31, 2023. Cash used in operating activities in 2023 was mainly the result of the net loss of $117.3 million and decrease in operating lease liabilities of $2.2 million. This was offset by an increase in accounts payable and accrued liabilities of $4.4 million and stock-based compensation expense of $14.1 million.

Net Cash Used in Investing Activities

Net cash used in investing activities was $0.0 million for the year ended December 31, 2025.

Net cash used in investing activities was $0.4 million for the year ended December 31, 2024. Cash used in investing activities was mainly related to purchases of property and equipment.

Net cash used in investing activities was $2.2 million for the year ended December 31, 2023. Cash used in investing activities was mainly related to purchases of property and equipment offset by maturities of investments.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $67.9 million for the year ended December 31, 2025. Cash provided by financing activities was mainly related to net proceeds of $67.7 million from issuance of common stock and pre-funded warrants under the public offerings and the 2022 ATM Program, and $0.2 million of proceeds from purchases under the ESPP.

Net cash provided by financing activities was $1.7 million for the year ended December 31, 2024. Cash provided by financing activities was mainly related to net proceeds received from stock option exercises and purchases under the ESPP.

Net cash provided by financing activities was $163.8 million for the year ended December 31, 2023. Cash provided by financing activities was mainly related to net proceeds received from the issuance of common stock from our public offering.

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Critical Accounting Estimates

Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses consist primarily of costs of research, preclinical studies, clinical trials, and manufacturing. Personnel costs of our research and product development employees is also a major component of research and development expenses which also includes non-personnel costs such as fees payable to third parties for clinical and preclinical studies and research services, laboratory supplies, equipment maintenance, and other consulting costs.

We record accruals for estimated costs of research, preclinical studies, clinical trials, and manufacturing, which are significant components of research and development expenses. A substantial portion of our ongoing research and development activities is conducted by third-party service providers, CROs and CMOs. Our contracts with the CMOs generally include fees such as initiation fees, reservation fees, costs related to animal studies and safety tests, verification run costs, materials and reagents expenses, taxes, etc. Our contracts with CROs generally include pass-through fees such as regulatory expenses, investigator fees, travel costs and other miscellaneous costs, including shipping and printing fees. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts. We accrue the costs incurred under agreements with these third parties based on estimates of actual work completed in accordance with the respective agreements. We determine the estimated costs through discussions with internal personnel and external service providers as to the progress, or stage of completion or actual timeline (start-date and end-date) of the services and the agreed-upon fees to be paid for such services. In the event we make advance payments, the payments are recorded as a prepaid expense and recognized as the services are performed.

Warrant Liability

We account for our warrants in accordance with ASC 815, Derivatives and Hedging - Contracts in Entity's Own Equity, as either liabilities or as equity instruments depending on the specific terms of the warrant agreement. The common warrants issued in connection with the June and October 2025 underwritten public offerings (see Note 5) are classified as liabilities and are recorded at fair value. The warrants are subject to re-measurement at each settlement date and at each balance sheet date and any change in fair value is recognized in Change in fair value of common warrant liability in the statements of operations and comprehensive loss. We estimate the fair value of the warrant liability using a Black-Scholes pricing model. We are required to make assumptions and estimates in determining an appropriate expected term, risk-free interest rate, volatility factor, dividend yield, and the fair value of common stock. Any significant adjustments to the unobservable inputs would have a direct impact on the fair value of the warrant liability.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The primary objectives of our investment activities are to ensure liquidity and to preserve capital. We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. There was no material foreign currency risk for the year ended December 31, 2025. We held $56.2 million in cash, cash equivalents, and restricted cash as of December 31, 2025. Cash equivalents consisted of money market funds. Restricted cash consisted of two stand-by letter of credits issued to our landlord in connection with the laboratory leases. We held no interest-bearing liabilities as of December 31, 2025. Historical fluctuations in interest rates have not been significant for us. Due to the short-term maturities of our cash equivalents, an immediate 10% relative change in interest rates would not have a material effect on the fair market value of our cash equivalents.

Effect of Inflation

Inflation generally affects us by increasing our cost of labor and research and development costs. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience some effect in the future due to an impact on the costs to conduct research and development, labor costs we incur to attract and retain qualified personnel, and other operational costs.

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Item 8. Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) 97

Balance Sheets 98

Statements of Operations and Comprehensive Loss 99

Statements of Stockholders’ Equity (Deficit) 100

Statements of Cash Flows 101

Notes to Financial Statements 102

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Biomea Fusion, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Biomea Fusion, Inc. (the “Company”) as of December 31, 2025 and 2024, the related statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred net operating losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

San Francisco, CA

March 24, 2026

We have served as the Company's auditor since 2020.

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Biomea Fusion, Inc.

Balance Sheets

(in thousands, except share and per share data)

December 31,

Assets

Current assets:

Prepaid expenses and other current assets 2,238 10,053

Property and equipment, net 153 3,766

Other non-current assets — 619

Operating lease right-of-use assets — 6,852

Liabilities and Stockholders' Equity

Current liabilities:

Accrued expenses and other current liabilities 6,407 6,662

Operating lease liabilities, current 1,461 2,079

Operating lease liabilities, non-current 128 6,692

Warrant liability, non-current 17,791 —

Commitments and contingencies (Note 8)

Stockholders' equity:

Total liabilities and stockholders' equity $ 58,572 $ 79,938

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

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Biomea Fusion, Inc.

Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

Year Ended December 31,

Operating expenses:

Impairment of long-lived assets 2,205 — —

Change in fair value of common warrant liability 19,857 — —

Other comprehensive loss:

Unrealized gain on investments, net — — 1

Net loss per common share, basic and diluted $ (1.18 ) $ (3.83 ) $ (3.44 )

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

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Biomea Fusion, Inc.

Statements of Stockholders’ Equity (Deficit)

(in thousands, except share data)

Shares Amount Capital Gain (Loss) Deficit Equity (Deficit)

Issuance of restricted stock 180,316 — — — — —

Stock-based compensation expense — — 14,131 — — 14,131

Unrealized gain on investments, net — — — 1 — 1

Issuance of restricted stock 109,356 — — — — —

Stock-based compensation expense — — 19,094 — — 19,094

Purchases under employee stock purchase plan 141,362 — 159 — — 159

Issuance of common stock for pre-funded warrant exercises 1,549,860 — — — — —

Stock-based compensation expense — — 9,520 — — 9,520

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

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Biomea Fusion, Inc.

Statements of Cash Flows

(in thousands)

Year Ended December 31,

Cash flows from operating activities

Adjustments to reconcile net loss to net cash used in operating activities

Net amortization of premiums and accretion of discounts on investments — — 1

Change in fair value of warrant liability (19,857 ) — —

Impairment of long-lived assets 2,205 — —

Changes in operating assets and liabilities:

Prepaid expenses and other current assets 7,815 (7,738 ) 2,478

Accrued expenses and other current liabilities (255 ) (6,881 ) 1,886

Cash flows from investing activities

Purchase of property and equipment — (362 ) (3,370 )

Maturities of investments — — 1,150

Net cash (used in) provided by investing activities — (362 ) (2,220 )

Cash flows from financing activities

Non-cash financing and investing activities:

Acquisition of operating lease right-of-use assets $ — $ — $ 5,971

Reconciliation of cash, cash equivalents and restricted cash:

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

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Biomea Fusion, Inc.

Notes to Financial Statements

Note 1. Organization

Organization

Biomea Fusion, Inc., (the Company), was established in the state of Delaware in August 2017 as Biomea Fusion, LLC. In December 2020, all outstanding membership interests in Biomea Fusion, LLC were converted into equity interests in the Company. The capitalization information included in these financial statements is consistently presented as if it is that of Biomea Fusion, Inc., even during the prior period when investors held their equity interests in Biomea Fusion, LLC.

The company was founded with the goal of creating targeted treatments built through expertise in chemistry and a deep understanding of metabolic biology. The Company is a clinical-stage diabetes and obesity medicines company focused on the discovery and development of oral, small molecule drugs to treat and improve the lives of patients with diabetes, obesity and other metabolic diseases.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which assumes the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company believes that based on its current operating plan, its cash, cash equivalents and restricted cash will not enable it to fund its operating expenses and capital expenditure requirements for at least twelve months following the issuance date of the financial statements. The Company has incurred net operating losses and negative cash flows from operations since its inception and had an accumulated deficit of $449.0 million at December 31, 2025. As of December 31, 2025, the Company had cash, cash equivalents, and restricted cash of $56.2 million. The Company’s ability to continue as a going concern will require the Company to raise additional capital to fund the Company's operations through public or private equity offering, debt financings, collaborations and licensing arrangements or other sources. There can be no assurance that additional financing will be available to the Company or that such financing, if available, will be available on terms acceptable to the Company. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

The Company has historically financed its operations primarily through the sale of convertible preferred stock and common stock and the issuance of unsecured promissory notes. To date, none of the Company’s product candidates have been approved for sale, and the Company has not generated any revenue since inception. Management expects operating losses to continue and increase for the foreseeable future, as the Company continues clinical development activities for its lead product candidate and advances the preclinical and clinical development of other product candidates. The Company’s prospects are subject to risks, expenses and uncertainties frequently encountered by companies in the biotechnology industry as discussed above. There can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to clinical and preclinical accruals, manufacturing accruals, fair value of common stock, stock-based compensation, warrant liability, operating lease right-of-use (ROU) assets and liabilities and income taxes. The Company bases its estimates on its historical experience and also on assumptions that it believes are reasonable; however, actual results could significantly differ from those estimates.

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Segments

The Company operates and manages its business as one reportable and operating segment, which is the business of developing small molecule drugs to treat patients with diabetes and obesity. The Company’s interim chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for allocating resources and evaluating financial performance. All long-lived assets are maintained in, and all losses are attributable to, the United States of America.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk, consist primarily of cash, cash equivalents and restricted cash. The Company maintains bank deposits in federally insured financial institutions and these deposits may exceed federally insured limits. The Company invests in money market funds, U.S. Treasury securities, U.S. government agency securities, corporate notes, commercial paper, and asset backed securities. The Company is exposed to credit risk in the event of default by the financial institutions holding its cash and cash equivalents and issuers of investments to the extent recorded in the balance sheet. The Company’s investment policy limits investments to money market funds, certain types of debt securities issued by the U.S. Government and its agencies, corporate notes and commercial paper, and places restrictions on the credit ratings, maturities and concentration by type and issuer. The Company has not experienced any losses on its deposits of cash, cash equivalents and restricted cash.

Other Risks and Uncertainties

The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of preclinical studies, clinical trials and achievement of milestones, uncertainty of regulatory approval of the Company’s potential product candidates, uncertainty of market acceptance of the Company’s product candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals or sole source suppliers and changes in the Company's operating expenses as a result of these uncertainties and other factors, such as inflation. The Company’s product candidates require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash and cash equivalents. Cash equivalents consist of amounts invested in money market accounts and are stated at fair value. Restricted cash consists of two stand-by letters of credit issued to the Company’s landlord in connection with two of the Company’s leases.

Investments

The Company adopted Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments, on January 1, 2023. The Company’s investments have been classified as available-for-sale and carried at estimated fair values and reported in cash equivalents, short-term investments, or long-term investments. Management determines the appropriate classification of the investments at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date. Investments with contractual maturities greater than 12 months are considered long-term investments.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or whether it is more likely than not that it will be required to sell the security before the recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value and recognized in interest and other income, net in the statement of operations and comprehensive loss. If neither criteria is met, the Company evaluates whether the decline in fair value is related to credit-related factors or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. Credit-related impairment losses, limited by the amount that the fair value is less than the amortized cost basis, are recorded through an allowance for credit losses in interest and other income, net.

Any unrealized losses from declines in fair value below the amortized cost basis as a result of non-credit factors are recognized in accumulated other comprehensive loss, net of tax as a separate component of stockholders’ equity, along with unrealized gains. Realized gains and losses and declines in fair value, if any, on available-for-sale securities are included in interest and other income, net in the statement operations and comprehensive loss.

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For purposes of identifying and measuring credit-related impairments, the Company’s policy is to exclude applicable accrued interest from both the fair value and amortized cost basis of the related security. The Company has elected to write-off uncollectible accrued interest receivable balances in a timely manner, which is defined by the Company as when interest due becomes 90 days delinquent. The accrued interest write-off will be recorded by reversing interest income. Accrued interest receivable is recorded in other current assets on the balance sheets.

Property and Equipment, Net

Property and equipment are recorded at cost net of accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. The useful lives of property and equipment are as follows:

Computer equipment 3 years

Furniture and fixtures 5 years

Laboratory equipment 5 years

Leasehold improvements Shorter of remaining lease term or estimated useful life

Upon retirement or sale of the assets, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is recorded to the statements of operations. Repairs and maintenance are expensed as incurred.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. In conjunction with the Company's ongoing efforts to reduce operating costs, the Company ceased use of its laboratory facility, which triggered an impairment analysis. In connection with the impairment assessment, the Company recorded an impairment charge of $2.2 million, which is included in impairment of long-lived assets in the statements of operations and comprehensive loss for the year ended December 31, 2025 (see Note 4).

Research and Development Expenses

The Company expenses research and development costs as they are incurred. Research and development expenses consist primarily of: (i) personnel-related expenses, including salaries, benefits and stock-based compensation expense, for personnel in the Company’s research and development functions; (ii) fees paid to third parties such as contractors, consultants and contract research organizations (CROs), for animal studies and other costs related to preclinical and clinical testing; (iii) costs related to acquiring and manufacturing research and clinical trial materials, including under agreements with third parties such as contract manufacturing organizations (CMOs), and other vendors; (iv) costs related to the preparation of regulatory submissions; (v) expenses related to laboratory supplies and services; and (vi) depreciation of equipment and facilities expenses.

Accrued Research and Development Expenses

The Company records accruals for estimated costs of research, preclinical studies, clinical trials, and manufacturing development, which are significant components of research and development expenses. A substantial portion of the Company’s ongoing research and development activities is conducted by third-party service providers, CROs and CMOs. The Company’s contracts with the CROs and CMOs generally include fees such as initiation fees, reservation fees, costs related to animal studies and safety tests, verification run costs, materials and reagents expenses, investigator fees, taxes, etc. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company accrues the costs incurred under agreements with these third parties based on estimates of actual work completed in accordance with the respective agreements. The Company determines the estimated costs through discussions with internal personnel and external service providers as to the progress, or stage of completion and actual timeline (start-date and end-date) of the services and the agreed-upon fees to be paid for such services. Through December 31, 2025, there have been no material differences from the Company’s estimated accrued research and development expenses to actual expenses.

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Stock-Based Compensation

The Company accounts for stock-based compensation by measuring and recognizing compensation expense for all share-based awards made to employees, non-employees and directors based on estimated grant-date fair values. The Company uses the straight-line method to allocate compensation cost to reporting periods over the requisite service period, which is generally the vesting period, and estimates the fair value of share-based awards to employees, non-employees and directors using the Black-Scholes option-pricing model. The Company uses the “simplified” method to estimate the expected term. The Company utilizes this method as its stock options qualify as "plain-vanilla" options. The Company accounts for forfeitures as they occur. The fair value of restricted stock units is based on grant-date fair value. The fair value of each purchase under the employee stock purchase plan (ESPP) is estimated at the beginning of the offering period using the Black-Scholes option pricing model and recorded as expense over the service period using the straight-line method.

Pre-funded Warrants

The Company issued pre-funded warrants in connection with the completed underwritten public offerings. The Company accounts for the pre-funded warrants as a freestanding equity-linked financial instrument that met the criteria for equity classification in accordance with ASC 815, Derivatives and Hedging. Accordingly, the Company recorded the pre-funded warrants as a component of stockholders' equity within additional paid-in capital (see Note 5).

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive given the net loss for each period presented.

Leases

The Company determines if an arrangement is a lease at inception in accordance with Accounting Standard Codification 842, “Leases” (ASC 842). As of December 31, 2025, the Company's lease population consisted of real estate leases and the Company did not have finance leases.

Operating leases are included in operating lease right-of-use (ROU) assets, current operating lease liabilities and non-current operating lease liabilities on the Company’s balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of those lease payments. The Company determines the incremental borrowing rate based on an analysis of corporate bond yields with a credit rating similar to the Company. The determination of the Company’s incremental borrowing rate requires management judgment including the development of a synthetic credit rating and cost of debt as the Company currently does not carry any debt. The Company believes that the estimates used in determining the incremental borrowing rate are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary. The operating lease ROU assets also include adjustments for prepayments and accrued lease payments and exclude lease incentives. Lease incentives are recognized prospectively, on reimbursement, as reduction to the right-of-use asset and lease liabilities over the lease term. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company reassesses the lease term when significant events or changes in circumstances within its control occur, such as strategic shifts or facility closures, that affect whether it is reasonably certain to exercise extension or termination options. Operating lease cost is recognized on a straight-line basis over the expected lease term. Variable lease costs represent payments that are dependent on usage, a rate or index. Variable lease cost primarily relates to common area maintenance charges. Lease agreements that include lease and non-lease components are accounted for as a single lease component. The Company has elected to apply the short-term lease exception for all lease agreements with a noncancelable term of less than 12 months.

Income Taxes

The Company began providing for income taxes under the asset and liability method in December 2020 upon conversion from a limited liability company into a corporation. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax basis of assets and liabilities and net operating loss and credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse. Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely than not that some or all the tax benefits will not be realized.

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The Company accounts for uncertain tax positions in accordance with ASC No. 740 Income Taxes. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available.

The Company includes any penalties and interest expense related to income taxes as a component of income tax expense, as necessary.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The Company evaluated the potential impact of the OBBBA legislation on its financial position, results of operations, and cash flows. However, due to the Company’s valuation allowance position on its deferred tax assets, the OBBBA did not have a material impact on the Company’s effective tax rate or cash flow in the current fiscal year.

Warrant Liability

The Company accounts for its warrants in accordance with ASC 815, Derivatives and Hedging - Contracts in Entity's Own Equity, as either liabilities or as equity instruments depending on the specific terms of the warrant agreement. The common warrants issued in connection with the June and October 2025 underwritten public offerings (see Note 5) are classified as liabilities and are recorded at fair value. The warrants are subject to re-measurement at each settlement date and at each balance sheet date and any change in fair value is recognized in Change in fair value of common warrant liability in the statements of operations and comprehensive loss. The Company estimates the fair value of the warrant liability using a Black-Scholes pricing model. The Company is required to make assumptions and estimates in determining an appropriate expected term, risk-free interest rate, volatility factor, dividend yield, and the fair value of common stock. Any significant adjustments to the unobservable inputs would have a direct impact on the fair value of the warrant liability.

Recent Accounting Pronouncements - Adopted

In December, 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes - Improvements to Income Tax Disclosures (ASU 2023-09) requiring enhancements and further transparency to certain income tax disclosures. ASU 2023-09 requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid. We adopted the standard and applied the disclosure requirements on a prospective basis effective for the year ended December 31, 2025. Adoption of ASU 2023-09 did not have a material impact to the Company’s financial statements.

Recent Accounting Pronouncements - Not Yet Adopted

In November 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), which requires disaggregated information about certain income statement expense line items on an annual and interim basis. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted and can be applied prospectively or retrospectively. The Company is evaluating the impact of the adoption of this standard on the Company’s financial statements and related disclosures.

Note 3. Fair Value Measurement

The Company applies fair value accounting for all financial assets and liabilities. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

The carrying amount of cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses are generally considered to be representative of their respective fair values because of the short-term nature of these instruments.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company classifies money market funds as Level 1 within the fair value hierarchy as the fair value is based on quoted price in active markets. The Company classifies its investments in corporate debt securities, commercial paper and asset backed securities as Level 2 within the fair value hierarchy as the fair value is based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, or historical pricing trends of a security relative to its peers. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. In addition, the Company assesses the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy. The Company evaluates transfers between levels at the end of each reporting period and there were no transfers of financial instruments between the fair value measurement levels during the year ended December 31, 2025.

The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. The following tables set forth the fair value of the Company’s financial assets, which consist of cash equivalents and marketable securities measured and recognized at fair value (in thousands):

Financial assets included in cash and cash equivalents:

Liabilities:

Financial assets included in cash and cash equivalents:

The Company evaluates transfers between levels at the end of each reporting period. There were no transfers between Levels 1, 2 and 3 during the year ended December 31, 2025 and 2024. As of December 31, 2025 and December 31, 2024, there were no financial instruments classified as Level 2. There have been no realized gains or losses recognized for the periods presented. Unrealized gains and losses are included in accumulated other comprehensive loss within stockholders' equity on the balance sheet. There were no investments as of December 31, 2025 and December 31, 2024, as such, no allowance for

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credit losses has been recognized as of December 31, 2025. During the year ended December 31, 2025 and 2024, the Company did not recognize any impairment losses related to investments.

The warrant liability in the table above consisted of the fair value of the Common Warrants (see Note 5) and was based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

The following table provides a full roll forward of the aggregate fair value of the warrant liability categorized within Level 3 inputs (in thousands):

Warrant Liability

Balance at December 31, 2024 $ —

Issuance of common warrants 37,648

Change in fair value (19,857 )

Note 4. Balance Sheet Components

Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):

December 31,

Total property and equipment, gross 1,162 7,945

Less: accumulated depreciation (1,009 ) (4,179 )

Total property and equipment, net $ 153 $ 3,766

Depreciation expense was approximately $1.4 million, $1.7 million, $1.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.

During 2025, the Company ceased the use of its laboratory facility for research and development activities as part of its ongoing efforts to reduce operating costs. Following the cessation of laboratory activities, the leased facilities continued to be utilized for ongoing operating purposes. As a result, the Company evaluated the recoverability of its property and equipment previously used for research and development purposes and determined that the carrying value of certain assets was not recoverable and recorded a one-time impairment charge of $2.2 million which is included as an impairment of long-lived assets in the statements of operations and comprehensive loss for year ended December 31, 2025. The impairment charges primarily related to laboratory equipment and leasehold improvements.

The fair value of the impaired laboratory equipment and leasehold improvements was determined based on estimated net realizable value, using a market approach based on prices for similar assets. Leasehold improvements were assigned no fair value as such assets have no realizable value to a third party. As a result, the carrying value of these assets was written down to their estimated fair value, resulting in the $2.2 million impairment charge.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

December 31,

Accrued research and development materials and services $ 3,163 $ 5,947

Accrued personnel expenses 2,958 452

Accrued professional services 117 60

Total accrued expenses and other current liabilities $ 6,407 $ 6,662

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Note 5. Capital Structure

Common Stock

As of December 31, 2025 and 2024, the Company was authorized to issue 300,000,000 shares of common stock with a par value of $0.0001 per share and 10,000,000 shares of preferred stock with a par value of $0.0001 per share.

Common stockholders are entitled to dividends when and if declared by the Company’s Board of Directors and after any preferred share dividends are fully paid. The holder of each share of common stock is entitled to one vote. As of December 31, 2025 and 2024, no dividends have been declared.

The Company had reserved common stock for future issuance as follows:

December 31,

Employee stock purchase plan, available for future issuance 805,008 583,263

Restricted stock subject to future vesting 892,500 —

Public Offerings

In April 2023, pursuant to a registration statement on Form S-3, the Company issued and sold 5,750,000 shares of common stock at a public offering price of $30.00 per share in an underwritten public offering. The net proceeds to the Company from the offering were approximately $161.8 million, after deducting underwriting discounts and commissions and offering costs of approximately $11.0 million.

In June 2025, the Company completed an underwritten public offering transaction in which it issued and sold 19,450,000 shares of common stock at an offering price of $2.00 per share and, to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 550,000 shares of common stock at an offering price of $1.9999 per share and accompanying common warrants to purchase up to 23,000,000 shares of common stock at a per share exercise price of $2.50. The net proceeds to the Company from the offering were approximately $37.2 million, after deducting underwriting discounts and commissions and offering costs of approximately $2.8 million.

In July 2025, in connection with the completed underwritten public offering, the underwriters partially exercised their over-allotment option to purchase an additional 1,381,262 shares of common stock at an offering price of $2.00 per share. The net proceeds from the offering pursuant to the over-allotment option were approximately $2.6 million, after deducting underwriting discounts and commissions and offering costs of approximately $0.2 million.

In October 2025, the Company completed an underwritten public offering transaction in which it issued and sold 11,195,121 shares of common stock at an offering price of $2.05 per share and, to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 1,000,000 shares of common stock at an offering price of $2.0499 per share and accompanying common warrants to purchase up to 12,195,121 shares of common stock at a per share exercise price of $2.50. The underwriters partially exercised their overallotment option to purchase 1,829,268 shares of common stock. The net proceeds to the Company from the offering were approximately $23.1 million, after deducting underwriting discounts and commissions and offering costs of approximately $1.9 million.

The Company concluded that the common warrants do not meet the equity contract scope exception. The liability associated with the common warrants is recorded as warrant liability in the balance sheet as of December 31, 2025.

The valuation of the common warrants is adjusted to fair value (Level 3) at each subsequent balance sheet date until the common warrants are settled or expired. To this date, due primarily to fluctuations in the Company's common stock price between the issuance date and December 31, 2025, the warrant liability was revalued at $17.8 million as of December 31, 2025. The change in fair value of $19.9 million has been recorded as Change in fair value of common warrant liability.

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The Company calculated the fair value of common warrants using the Black-Scholes option pricing model with the following inputs:

June 2025 Underwritten Public Offering

June 20, December 31,

(issuance) (period end)

Common stock price $ 1.81 $ 1.24

Expected dividend yield — % — %

Expected term (years) 1.5 1.0

Risk-free interest rate 4.0 % 3.5 %

October 2025 Underwritten Public Offering

October 8, December 31,

(issuance) (period end)

Common stock price $ 1.68 $ 1.24

Expected dividend yield — % — %

Expected term (years) 3.0 2.8

Risk-free interest rate 3.6 % 3.6 %

Common Stock Warrants

As of December 31, 2025, the following warrants to purchase shares of the Company's common stock were issued and outstanding:

There were 1,550,000 pre-funded warrants exercised during the twelve months ended December 31, 2025 resulting in the Company issuing 1,549,860 shares of common stock due to net exercise of the pre-funded warrants.

ATM Offering Agreement with Piper Sandler & Co.

On November 25, 2022, the Company entered into an equity distribution agreement (the 2022 ATM Agreement) with Piper Sandler & Co. (Piper Sandler), as sales agent, with respect to an ATM offering program (the 2022 ATM Offering Program). Pursuant to the prospectus supplement relating to the Offering (as defined below), dated as of November 25, 2022 (the Prospectus Supplement), the Company may offer and sell, from time to time in its sole discretion, shares of its common stock, par value $0.0001 per share (the Common Stock), having an aggregate offering price of up to $100 million (the Shares) through Piper Sandler (the Offering).

The Offering was registered under the Securities Act of 1933, as amended (the Securities Act), pursuant to our shelf registration statement on Form S-3 (Registration Statement No. 333-267884), as previously filed with the SEC and declared effective on October 14, 2022 (the 2022 Registration Statement). The Company filed a prospectus supplement, dated November 25, 2022, with the SEC that provided for the sale of shares of common stock having an aggregate offering price of up to $100 million in connection with the 2022 ATM Offering Program.

On August 5, 2025, the Company filed a new shelf registration statement on Form S-3 (Registration Statement No. 333-267884), which was declared effective on August 15, 2025 (the 2025 Registration Statement), which replaced the previously filed 2022 Registration Statement. The 2025 Registration Statement included a prospectus, dated August 5, 2025, that provides for the sale of shares of common stock having an aggregate offering price of up to $100 million in connection with the 2022 ATM Offering Program.

The 2022 ATM Agreement contains customary representations, warranties and agreements by us, and customary

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indemnification and contribution rights and obligations of the parties. The Company agreed to pay Piper Sandler a placement fee of up to 3.0% of the aggregate gross proceeds from the sale. The Company also agreed to reimburse Piper Sandler for certain specified expenses in connection with entering into the 2022 ATM Agreement.

During the twelve months ended December 31, 2025, the Company has received aggregate proceeds from its 2022 ATM Offering Program of $4.9 million, net of commissions and offering costs, pursuant to the issuance of 2,271,122 shares of its common stock.

Note 6. Stock-Based Compensation

2020 Equity Incentive Plan

The Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”) on December 18, 2020. The 2020 Plan reserved 4,327,799 shares of common stock to grant stock-based compensation awards, including stock options and restricted stock awards, to employees and non-employees. As of April 9, 2021, the Company ceased granting awards under the 2020 Plan. However, 2020 Plan awards will remain subject to the terms of the 2020 Plan.

2021 Equity Incentive Plan

In April 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”). Options granted under the 2021 Plan expire no later than 10 years from the date of grant. The exercise price of options granted under the 2021 Plan must at least be equal to the fair market value of the Company’s common stock on the date of grant. With respect to any participant who owns more than 10% of the voting power of all classes of the Company’s outstanding stock, the term of an incentive stock option granted to such participant must not exceed five years and the exercise price must equal at least 110% of the fair market value on the grant date. Employee stock options generally vest 1/16th quarterly over four years subject to continued service to the Company.

Subject to adjustment in the case of certain capitalization events as provided in the 2021 Plan, the Company initially reserved 3,370,000 shares of the Company’s common stock for issuance pursuant to awards under the 2021 Plan. The 2021 Plan is administered by the Compensation Committee of the Company’s Board of Directors. The number of shares of the Company’s common stock available for issuance under the 2021 Plan will also include an annual increase on the first day of each fiscal year beginning in 2022 and ending in 2031, equal to the lesser of (i) 5% of the Company’s common stock outstanding at December 31 of the immediately preceding year, or (ii) such number of shares as determined by the Company’s Board of Directors. As of December 31, 2025, 2,672,434 shares of common stock remained available for issuance under the 2021 Plan. Effective January 1, 2026, the number of shares of common stock available under the 2021 Plan increased by 3,614,972 shares pursuant to the evergreen provision of the 2021 Plan.

2023 Inducement Plan

On November 17, 2023, the Company's board of directors adopted the 2023 Inducement Equity Plan (Inducement Plan) pursuant to which the Company reserved 2,000,000 shares of common stock, to be used exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The Inducement Plan provides for the grant of equity-based awards in the form of non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock unit awards, unrestricted stock awards, dividend equivalent rights or Other Stock Based Awards (as defined in the Inducement Plan). The Inducement Plan was adopted by the board of directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. As of December 31, 2025, 1,845,000 shares of common stock remained available for issuance under the Inducement Plan.

2021 Employee Stock Purchase Plan

The Company adopted a 2021 Employee Stock Purchase Plan (ESPP) in April 2021. The ESPP enables eligible employees of the Company and designated affiliates to purchase shares of common stock at a discount of 15%.Subject to adjustment in the case of certain capitalization events, a total of 306,000 common shares of the Company were available for purchase at adoption of the ESPP. Pursuant to the ESPP, the annual share increase pursuant to the evergreen provision is determined based on the lesser of (i) 1% of the Company’s common stock outstanding at December 31 of the immediately preceding year, or (ii) such number of shares as determined by the Company’s Board of Directors. As of December 31, 2025, 805,008 shares of common stock remained available for issuance under the ESPP. Effective January 1, 2026, the number of shares of common stock available under the ESPP increased by 722,994 shares pursuant to the evergreen provision of the ESPP.

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Repricing

On August 11, 2025 (the Repricing Effective Date), the Company's Board approved a repricing of certain outstanding vested and unvested stock option awards under the 2021 Plan for eligible non-executive employees and certain other service providers (the Repricing Participants). The per share exercise price of eligible stock option awards was reduced to $4.50. To receive the benefit of the repricing, Repricing Participants were required to remain an employee or service provider through the period (the Retention Period) that began on the Repricing Effective Date and ended on September 12, 2025 (the Retention Date). No other changes were made to the terms and conditions of the eligible stock option awards. The stock option repricing impacted approximately 2.6 million shares of common stock subject to stock option awards and affected 48 employees and service providers.

The repricing resulted in a total incremental stock-based compensation expense of $0.4 million, which was calculated using the Black-Scholes option pricing model, of which $0.3 million is associated with vested repriced options as of the Retention Date and was recognized on a straight-line basis over the Retention Period. The remaining $0.1 million of the incremental stock-based compensation expense is associated with unvested repriced options beyond the Retention Period and will be recognized on a straight-line basis over the remaining original vesting periods. For the twelve months ended December 31, 2025, the Company recognized $0.3 million of incremental stock-based compensation expense.

Stock-Based Compensation Expense

Total stock-based compensation expense related to the Company's equity incentive plans and ESPP was recorded in the statements of operations and allocated as follows (in thousands):

Year Ended December 31,

As of December 31, 2025, there was $10.8 million of total unrecognized compensation cost related to stock options, restricted stock units, and ESPP under the Plans. The unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of 2.8 years.

Stock Options

The following table summarizes stock option activity:

Exercised — —

The fair value of stock options was estimated using the following weighted-average assumptions:

Year Ended December 31,

Expected term in years 5.9 6.0 6.0

Risk-free interest rate 4.0 % 4.1 % 3.8 %

Dividend yield — — —

Weighted average fair value of options granted $ 1.05 $ 10.04 $ 7.57

The aggregate intrinsic value of options exercised for the years ended December 31, 2025, 2024 and 2023 was $0.0 million, $0.8 million, and $1.7 million, respectively. Intrinsic values are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock on the date of exercise.

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Employee Stock Purchase Plan

The fair value of ESPP was estimated using the following weighted-average assumptions:

Year Ended December 31,

Expected term in years 1.3 1.3 1.3

Risk-free interest rate 3.7 % 4.6 % 4.9 %

Dividend yield — — —

Restricted Stock Units

The following table summarizes the restricted stock activity:

Shares Weighted-AverageGrant Date Fair Value

Balance, December 31, 2024 — $ —

Vested — —

Note 7. Taxes

Biomea Fusion is subject to U.S. federal and state income taxes as a corporation. The Company had zero U.S. federal, state and foreign income taxes paid, net of refunds for the year ended December 31, 2025. There was zero income tax expense for the years ended December 31, 2025, 2024 and 2023.

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate after the adoption of ASU 2023-09:

Year Ended December 31,

(in thousands) Percent

Change in valuation allowance 14,578 (23.6 )%

Nontaxable and nondeductible items

Stock-based compensation 756 (1.2 )%

Change in common warrants (4,170 ) 6.8 %

Other nontaxable and nondeductible items (9 ) 0.0 %

Research and development credits (1,572 ) 2.5 %

Changes in unrecognized tax benefits 498 (0.8 )%

True up to deferred tax asset 3,053 (4.9 )%

Effective income tax rate $ — (0.0 )%

For the year ended December 31, 2025, state and local income taxes in California comprise the majority of the state and local income tax, net of federal (national) income tax effect category.

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years prior to the adoption of ASU 2023-09:

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Year Ended December 31,

Federal statutory income tax rate 21.0 % 21.0 %

State income tax rate 6.0 % 11.1 %

Tax credits 2.9 % 4.1 %

Stock-based compensation (1.0 )% (1.0 )%

Change in valuation allowance (28.8 )% (34.6 )%

Other (0.1 )% (0.6 )%

Effective income tax rate 0.0 % 0.0 %

Deferred tax assets and liabilities consist of the following (in thousands):

Year Ended December 31,

Deferred tax assets:

Property and equipment 109 —

Accrued liabilities and reserves 714 —

Operating lease liabilities 441 2,431

Total deferred tax assets — 2,039

Deferred tax liabilities:

Property and equipment — (139 )

Operating lease right-of-use assets — (1,900 )

Total deferred tax liabilities — (2,039 )

Net deferred tax assets $ — $ —

The provisions of ASC Topic 740, Accounting for Income Taxes (ASC 740), require an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. For the years ended December 31, 2025 and 2024, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was not more likely than not that the net deferred tax assets were fully realizable. Accordingly, the Company established a full valuation allowance against its deferred tax assets. The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance. The Company’s valuation allowance increased by $19.4 million during the year ended December 31, 2025, primarily because of an increase to the Company's net operating losses, credits and capitalization of research and experimental expenses. The Company’s valuation allowance increased by $42.4 million during the year ended December 31, 2024, primarily because of an increase to the Company's net operating losses, credits, stock compensation and the capitalization of research and development expenses.

At December 31, 2025, the Company had net operating loss carryforwards available to reduce future taxable income, if any, for federal and state income tax purposes of approximately $190.7 million and $378.7 million, respectively. The federal net operating loss carryforwards at December 31, 2025 can be carried forward indefinitely, subject to an annual limitation of 80% of taxable income. The state net operating loss carryforward are subject to expiration in various tax years.

At December 31, 2025, the Company also had federal and California research and development tax credit carryforwards of $14.0 million and $6.6 million, respectively, available to offset future income tax, if any. The federal credit carryforwards begins expiring in 2040, and the California credits can be carried forward indefinitely.

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Under Section 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” the corporation's ability to use its pre-change net operating loss carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income may be limited. In general, an “ownership change” will occur if there is a cumulative change in the Company's ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Therefore, certain of the Company's carryforward tax attributes may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company has performed a Section 382 study and has concluded that ownership changes have occurred. As a result, the federal and state NOL carryforwards and tax credit carryforwards may be subject to annual limitations before being applied to reduce future income tax liabilities.

Uncertain Tax Positions

The Company adopted the provisions of ASC 740, which requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any tax benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement, classification and interest and penalties related to uncertain tax positions.

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits (in thousands):

Year Ended December 31,

Increases for tax provisions related to prior year (1 ) 84 227

Decreases for tax provision related to prior year (60 ) (104 ) —

Increases for tax provisions related to current year 603 1,718 1,365

The unrecognized tax benefits, if recognized, would not affect the effective income tax rate due to the valuation allowance that currently offsets deferred tax assets. Interest and penalties were zero. The Company does not expect the unrecognized tax benefits to change significantly over the next twelve months.

The Company files federal and state income tax returns. All periods since inception are subject to examination by federal and state authorities, where applicable. There are currently no pending income tax examinations.

Note 8. Commitments and Contingencies

Operating Leases

The Company leases its headquarters with its main office in San Carlos, California.

In September 2022, the Company entered into a thirty-month sub-lease agreement for office space located at 900 Middlefield Road, 4th Floor, Redwood City, California, which commenced in January 2023 and expired in July 2025. In connection with the sub-lease expiration, the security deposit of $2.1 million was returned to the Company and recorded as part of cash and cash equivalents at December 31, 2025.

In November 2021, the Company entered into a four-year lease for additional lab space located at 1585 Industrial Road, San Carlos, California which commenced in January 2023 and expires in January 2027. Under the provisions of the agreement, upon the commencement date, the term of the lab space located at 1599 Industrial Road, San Carlos, California (1599 lease), was also extended from April 2026 to January 2027. The lease included a renewal option for an additional five years until January 2032, which had initially been included in the determination of the right-of-use asset at inception. As the term of the 1599 lease was extended, this did not result in a separate contract, accordingly, the Company re-measured the right-of-use asset and lease liability totaling to $7.8 million under one lease, discounted at 11.4%, the Company’s estimated incremental borrowing rate. In addition, the lease included a lease incentive in the form of a tenant improvement allowance of up to $1.5 million.

In November 2023, the Company submitted a claim of approximately $1.5 million against tenant improvement allowance reimbursement in connection with its operating lease for lab space located at 1585 Industrial Road, San Carlos, California which was received in January 2024. Of the total reimbursement, approximately $0.4 million constitutes a loan required to be repaid in the form of additional lease payments over the remaining original lease term at an annual interest rate of 7%. The Company has determined that impact of the remeasurement to be immaterial.

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During 2025, the Company identified a significant change in circumstances within its control related to the permanent shutdown of laboratory operations (see Note 4). The shutdown was limited to laboratory activities, and the facility continues to be used for administrative and other operational purposes. As a result of this change in circumstances, the Company reassessed whether it was reasonably certain to exercise a renewal option associated with its laboratory facility lease and concluded that it was no longer reasonably certain to exercise the option.

Accordingly, the Company reassessed the lease term and incremental borrowing rate, and re-measured the related operating lease right-of-use asset and lease liability in accordance with ASC 842. The remeasurement resulted in a reduction of the operating lease liability of $5.1 million and a corresponding reduction of the right-of-use asset of approximately $5.0 million. The lease liability was re-measured using an updated incremental borrowing rate of approximately 8.1%, determined as of the modification date based on the remaining lease term and prevailing U.S. Treasury yields adjusted for a market-based credit spread reflective of the Company’s credit risk.

The following table summarizes the lease costs and cash paid for the Company’s leases (in thousands):

December 31,

Cash paid for operating lease liabilities $ 2,903 $ 3,794 $ 2,469

Short-term lease costs 28 — —

Supplemental balance sheet information related to operating leases is as follows:

December 31,

Weighted average remaining lease term 1.1 6.0 5.6

Weighted average discount rate 7.8 % 11.4 % 10.9 %

Maturities of lease liabilities as of December 31, 2025 were as follows (in thousands):

Operating Lease

Year Ending December 31, Commitments

Total undiscounted lease payments 1,654

Less: Present value adjustments (65 )

Total operating lease liabilities $ 1,589

Operating lease liabilities, current 1,461

Operating lease liabilities, non-current 128

Total operating lease liabilities $ 1,589

Legal Proceedings

The Company, from time to time, may be party to litigation arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the years ended December 31, 2025, 2024, and 2023, and to the best of its knowledge, no material legal proceedings are currently pending or threatened.

Indemnification

The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the fair value of these agreements is not material.

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The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance.

Note 9. Net Loss Per Share

The following table sets forth the computation of the basic and diluted net loss per share (in thousands except share and per share data):

Year Ended December 31,

Numerator:

Denominator:

Net loss per share, basic and diluted $ (1.18 ) $ (3.83 ) $ (3.44 )

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all common stock equivalents outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:

December 31,

Restricted stock, issued and outstanding — — 111,920

Restricted stock subject to future vesting 892,500 — —

Common warrants to purchase common stock 37,024,389 — —

Note 10. Segment Reporting

The Company operates and manages its business as one reportable and operating segment, which is the business of developing small molecule drugs to treat patients with metabolic diseases. The Company’s interim chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for allocating resources and evaluating financial performance. All long-lived assets are maintained in, and all losses are attributable to, the United States of America.

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Below is the breakdown of the Company’s research and development and general and administrative expenses for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,

External costs

Clinical research organization expenses

Internal costs:

Year Ended December 31,

Internal costs:

Year Ended December 31,