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

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties, including those described in the section titled “Forward Looking Statements and Market Data.” Our actual results and the timing of selected events could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those set forth under the section titled “Risk factors” in this Annual Report.

Additionally, our discussion and analysis below are focused on our financial results and liquidity and capital resources for the years ended December 31, 2025 and 2024, including year-over-year comparisons of our financial performance and condition for these years. Discussion and analysis of the year ended December 31, 2023 specifically, as well as the year-over-year comparison of our financial performance and condition for the years ended December 31, 2024 and 2023, are located in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Annual Report for the year ended December 31, 2024, as filed with the SEC on March 28, 2025, which is incorporated herein by reference.

Overview

We are a late-stage clinical biopharmaceutical company focused on developing and commercializing cretostimogene grenadenorepvec (cretostimogene), an investigational oncolytic immunotherapy with a dual mechanism of action designed both to eliminate cancer cells directly by selective replication and indirectly by activating an anti-tumor immune response, as a potential backbone therapy in a broad range of patients afflicted with bladder cancer. Cretostimogene is currently in clinical development for the treatment of patients with high-risk and intermediate-risk non-muscle invasive bladder cancer (NMIBC), which potentially represents up to 150,000 addressable patients.

We are evaluating the safety and efficacy of cretostimogene as a monotherapy in BOND-003 Cohort C, our ongoing Phase 3 clinical trial in high-risk Bacillus Calmette-Guérin (BCG)-unresponsive NMIBC with carcinoma in situ (CIS), with or without Ta/T1 disease. Given the limitations of currently approved therapies, the next course of treatment for these patients with BCG-unresponsive tumors is radical cystectomy, which is the complete removal of the bladder. This surgery carries a significant social, functional and emotional burden for patients. As such, there is a significant unmet need for effective bladder-sparing treatments. We have completed enrollment for this cohort and reported potentially best-in-disease data in September 2025. This trial served as the basis for our Biologics License Application (BLA) submission for our initial indication to the U.S. Food and Drug Administration (FDA), which we initiated in the fourth quarter of 2025 and expect to complete in 2026. Cretostimogene has received both Fast Track and Breakthrough Therapy designations from the FDA for the treatment of high-risk BCG-unresponsive NMIBC with CIS with or without Ta or T1 papillary tumors. Additionally, in April 2024, we initiated BOND-003 Cohort P, an exploratory study evaluating cretostimogene monotherapy in high-risk BCG-unresponsive NMIBC with only Ta/T1 disease. Initial data from this Cohort was reported at the 2025 AUA Annual Meeting, with potentially best-in-disease data reported at the Society of Urologic Oncology (SUO) 26th Annual Meeting in December 2025. Based on internal research derived from the National Cancer Institute Surveillance, Epidemiology, and End Results Program’s (NIH SEER) database, secondary claims data analytics and management assumptions, the high-risk BCG-unresponsive NMIBC segment may represent up to 25,000 addressable patients.

We are also conducting a Phase 3 clinical trial, PIVOT-006, the first randomized registrational trial to evaluate an investigational therapy in intermediate-risk NMIBC assessing adjuvant cretostimogene following transurethral resection of the bladder tumor (TURBT), with enrollment completed in the third quarter of 2025. These patients with intermediate-risk NMIBC are encumbered by frequent tumor recurrence that requires repeat resection of the bladder tumors. Moreover, intravesical BCG is no longer recommended by guidelines for this patient population due to the continuous BCG shortage. We believe cretostimogene, if approved in intermediate-risk NMIBC, has the potential to serve as a first-in-class backbone therapy in this frontline adjuvant setting, for which there are currently no U.S. FDA approved options. Based on internal research derived from NIH SEER database, secondary claims data analytics and management assumptions, the intermediate-risk NMIBC segment may represent up to 50,000 addressable patients.

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Additionally, we have multiple ongoing Phase 2 trials designed to generate data in high-risk BCG-exposed and BCG-naïve patients. In October 2024, we initiated CORE-008 Cohort A, a Phase 2 clinical trial in high-risk NMIBC patients who are naïve to BCG treatment, including patients with CIS and with or without Ta/T1 disease and patients with only Ta/T1 disease. Initial data from this Cohort were reported at the SUO Annual Meeting in December 2025. Based on internal research derived from NIH SEER database, secondary claims data analytics and management assumptions, the high-risk BCG-naïve NMIBC segment may represent up to 25,000 addressable patients. In March 2025, we expanded CORE-008 evaluating cretostimogene as a monotherapy in the high-risk BCG-exposed population (Cohort B). In addition, in April 2025, we initiated a third Cohort (Cohort CX), evaluating cretostimogene in combination with gemcitabine in both the high-risk BCG-exposed and BCG-unresponsive population. Based on internal research derived from NIH SEER database, secondary claims data analytics and management assumptions, the high-risk BCG-exposed NMIBC segment may represent up to 50,000 addressable patients. Notably, cretostimogene’s potential for combination with other therapies was assessed in a Phase 2 CORE-001 clinical trial evaluating cretostimogene in combination with the checkpoint inhibitor (CPI) pembrolizumab in high-risk BCG-unresponsive NMIBC patients.

Since our inception in 2010, we have focused substantially all of our resources on organizing and staffing our company, business planning, raising capital, establishing and maintaining our intellectual property portfolio, conducting research, preclinical studies, and clinical trials, establishing arrangements with third parties for the manufacture of cretostimogene, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales.

We have incurred significant operating losses and negative cash flows from operations since our inception. Our net losses were $161.0 million and $88.0 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $379.0 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and, to a lesser extent, from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and operating losses in the foreseeable future, and we anticipate these losses will increase substantially as we continue our development of, seek regulatory approval for, and potentially commercialize cretostimogene and potentially seek to discover and develop additional product candidates, utilize third parties to manufacture cretostimogene, hire additional personnel, expand and protect our intellectual property, and incur additional costs associated with being a public company. If we obtain regulatory approval for cretostimogene, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing and distribution. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we do not become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and may be forced to reduce or terminate our operations.

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To date, we have primarily funded our operations with proceeds from the sale of shares of our common stock through public offerings and our redeemable convertible preferred stock, as well as through previously outstanding term debt. In January 2024, we completed our initial public offering of 23,000,000 common shares at a price of $19.00 per share, including the exercise in full by the underwriters of their option to purchase an additional 3,000,000 shares of common stock. We received net proceeds of $399.6 million, after deducting discounts, commissions and other offering expenses. In addition, as a result of our initial public offering, our convertible preferred stock converted into common stock concurrently with the initial public offering. In December 2024, we completed a follow-on offering of 8,500,000 common shares at a price of $28.00 per share, including the exercise in full by the underwriters of their option to purchase an additional 1,200,000 shares of common stock. We received net proceeds of $223.1 million, after deducting discounts, commissions and other offering expenses. On March 28, 2025, we entered into an Open Market Sale AgreementSM (Jefferies Sales Agreement) with Jefferies LLC, as agent, pursuant to which we may offer and sell, from time to time through Jefferies, shares of our common stock. On the same day, we filed a shelf registration statement on Form S-3ASR with the SEC, which contains a base prospectus, covering an unlimited amount of our common stock, preferred stock, debt securities and warrants to purchase any of such securities, and a sales agreement prospectus, which we subsequently amended on January 13, 2026, covering the offering, issuance and sale of up to a maximum aggregate offering price of $550 million of our common stock that may be issued and sold from time to time under the Jefferies Sales Agreement. Through December 31, 2025, the Company received net proceeds of $147.1 million under the Jefferies Sales Agreement, after deducting discounts and commissions and other offering expenses. Subsequent to December 31, 2025, the Company received net proceeds of $188.0 million under the Jefferies Sales Agreement, after deducting discounts and commissions.

Through December 31, 2025, we have received aggregate gross proceeds of approximately $1.1 billion from the sale of shares of our common stock from our IPO, our follow-on offering in December 2024, and our at-the-market facility, and sales of our redeemable convertible preferred stock. In addition, through December 31, 2025, we have recognized $26.9 million in license and collaboration revenue pursuant to our license and collaboration agreements. As of December 31, 2025, we had cash, cash equivalents and marketable securities of $742.2 million, which excludes $188.0 million of net cash proceeds received by the Company from the sale of 3,623,101 shares under the Jefferies Sales Agreement subsequent to December 31, 2025. Our ability to generate any product revenue and, in particular, our ability to generate product revenue sufficient to achieve profitability, will depend on the successful development and eventual commercialization of cretostimogene and any future product candidates.

In February 2025, the Company's wholly owned subsidiary, SafeGuard Healthcare, LLC (SafeGuard), established a note receivable with an initial principal amount of $25.0 million through a convertible promissory note (Note) from SP Healthcare SPV I, LLC (the SPV). The SPV used the proceeds from the Note to make an investment in Biovire for the purpose of Biovire acquiring substantially all of the assets of a contract manufacturing organization that provides clinical supply of cretostimogene to the Company. On July 20, 2025, following the conversion of the Note triggered by the cessation of services by SkyPath to the SPV and Biovire (Conversion Event), we, through our subsidiary, SafeGuard, obtained control of the SPV and Biovire. As a result of this change in control, the operations of Biovire were consolidated as of the effective date of the conversion.

We believe, based on our current operating plan, that our existing cash, cash equivalents and marketable securities, will be sufficient to fund our operations for at least the next twelve months from the date of this Annual Report. However, we have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us. In addition, we could utilize our available capital resources sooner than we expect.

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We will not generate revenue from product sales of cretostimogene or any future product candidates unless and until we successfully complete clinical development and obtain regulatory approval, which we expect will take a number of years and may never occur. As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity offerings, debt financings, or other capital sources, including current or potential future collaborations, licenses, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements or arrangements as, and when needed, we may delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, or even cease operations.

Other than Biovire, which manufactures and conducts release testing of our cretostimogene drug product, we do not own or operate, and currently have no plans to establish, any manufacturing facilities. We rely, and expect to continue to rely, on Biovire and third parties for the manufacture of cretostimogene for clinical testing, as well as for commercial manufacture if we obtain marketing approval. In addition, we rely on third parties to package, label, store, and distribute cretostimogene, and we intend to rely on third parties for our commercial products if marketing approval is obtained. We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment, and personnel while also enabling us to focus our expertise and resources on the development of cretostimogene.

License and Collaboration Agreements

Below is a summary of the key terms for certain of our license and collaboration agreements. For a more detailed description of these agreements, see the section titled “Business—License and Collaboration Agreements.”

Lepu License Agreement

In March 2019, we entered into a development and license agreement (the Lepu License Agreement) with Lepu, under which we granted an exclusive license to Lepu to develop, manufacture and commercialize cretostimogene and/or DDM to treat and/or prevent cancer in the Lepu Territory. Lepu paid to us a one-time upfront payment of $4.5 million and is obligated to make regulatory milestone payments of up to $2.5 million and commercial milestone payments of up to $57.5 million. We are entitled to receive a high single-digit royalty on net sales of cretostimogene and/or DDM sold in the Lepu Territory, subject to a specified reduction. In addition, in June 2024, the Company entered into an additional license agreement with Lepu, under which we granted Lepu a non-exclusive, non-sublicensable, non-transferable license to validate and perform certain assays in the Lepu Territory for the sole purpose of analyzing clinical samples for patients treated with cretostimogene. Under the agreement, Lepu paid us a one-time license fee of $0.4 million. During the years ended December 31, 2025 and 2024, zero and $1.0 million in license and collaboration revenue, respectively, was recorded related to the Lepu License Agreement.

Kissei License Agreement

In March 2020, and as amended September 2022, we entered into a license and collaboration agreement (the Kissei License Agreement) with Kissei, under which we granted to Kissei an exclusive license to certain intellectual property rights in Bangladesh, Bhutan, Brunei, Cambodia, India, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, Nepal, Pakistan, Palau, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam (the Kissei Territory), for Kissei to develop and commercialize, but not manufacture, cretostimogene in combination with DDM (the Licensed Product) for all uses in oncology. Kissei paid to us a one-time upfront payment of $10.0 million under the agreement. Kissei is obligated to pay development milestone payments of up to $33.0 million and commercial milestone payments of up to $67.0 million. We have also agreed to pay Kissei a royalty on net sales of Licensed Product outside the Kissei Territory and outside the Lepu Territory, including on any U.S. sales, in a low-single digit percentage, subject to certain capped reductions. We are entitled to receive a royalty on net sales of Licensed Product in the Kissei Territory in the mid-twenties percentage, subject to certain capped reductions and offset rights. We are obligated to supply and Kissei will exclusively purchase its clinical and commercial requirements of Licensed Product from us. During the years ended December 31, 2025 and 2024, we recorded $0.8 million, $0.2 million, respectively, in license and collaboration revenue related to the Kissei License Agreement.

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Components of Our Results of Operations

License and Collaboration Revenue

Through December 31, 2025, we have recognized $26.9 million in license and collaboration revenue through our license and collaboration agreements. We have not generated any revenue from the sale of our cretostimogene products, however, and do not expect to generate any revenue from the sale of our cretostimogene products in the foreseeable future, if at all. If our or our collaborators’ development efforts for cretostimogene and any future product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales, payments from existing or potential future collaboration or license agreements with third parties, or any combination thereof.

Commercial and Development Revenue

In connection with the Conversion Event, we obtained control of the SPV and its subsidiary, Biovire, a contract manufacturer specializing in the fill and finish of novel drugs and medical devices for pharmaceutical and biotech companies. Our commercial and development revenue consists of Biovire's fill and finish of novel drugs and medical devices.

Operating Costs and Expenses

Our operating costs and expenses consist of (i) cost of sales, (ii) research and development expenses and (iii) general and administrative expenses.

Cost of Sales

Cost of sales reflects the direct cost of labor and other overhead, which includes direct manufacturing, production, and packaging materials for commercial and development product sales.

Research and Development Expenses

Research and development (R&D) expenses consist primarily of external and internal costs incurred in performing clinical and preclinical development activities.

Our R&D expenses consist of:

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external costs incurred under agreements with CROs, contract manufacturers, consultants and other third parties to conduct and support our clinical trials and preclinical studies; and

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internal costs, including R&D personnel-related expenses such as salaries, stock-based compensation and benefits, as well as allocated facilities costs and dues and subscriptions.

We expense R&D costs as incurred. We currently only have one product candidate, cretostimogene. Therefore, since our inception, substantially all of our R&D costs were related to the development of cretostimogene. We track R&D expenses on an aggregate basis and not on an indication-by-indication or treatment setting-by-treatment setting basis.

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Although R&D activities are central to our business model, the successful development of cretostimogene and any future product candidates is highly uncertain. There are numerous factors associated with the successful development of any product candidate such as cretostimogene, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our clinical development programs. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect our R&D expenses will increase substantially in connection with our ongoing and planned clinical and preclinical development activities in the near term and in the future. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of cretostimogene and any future product candidates. Our future R&D expenses may vary significantly based on a wide variety of factors such as:

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the number and scope, rate of progress, expense and results of our clinical trials and preclinical studies of cretostimogene and any future product candidates we may choose to pursue, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities;

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per patient trial costs;

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the number of trials required for approval;

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the number of sites included 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 patients;

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the number of patients that participate in the trials;

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the number of doses that patients receive;

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the drop-out or discontinuation rates of patients;

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the potential additional safety monitoring requested by regulatory agencies;

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the duration of patient participation in the trials and follow-up;

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the cost and timing of manufacturing cretostimogene and any future product candidates;

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the costs, if any, of obtaining third-party drugs for use in our combination trials;

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the extent of changes in government regulation and regulatory guidance;

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the efficacy and safety profile of cretostimogene and any future product candidates;

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the timing, receipt, and terms of any approvals from applicable regulatory authorities; and

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the extent to which we establish additional collaboration, license, or other arrangements.

A change in the outcome of any of these variables with respect to the development of cretostimogene or any future product candidates could significantly change the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any product candidate.

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General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related expenses such as salaries, stock- based compensation and benefits, for our personnel in executive, legal, finance and accounting, human resources and other administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters and professional fees paid for accounting, auditing, consulting and tax services, as well as allocated facilities costs not otherwise included in R&D expenses and other costs such as insurance costs, marketing and travel expenses.

We anticipate our general and administrative expenses will increase substantially in the future as we expand our operations, including increasing our headcount to support our continued R&D activities and preparing for potential commercialization of cretostimogene. We also anticipate we will incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance, and investor and public relations expenses associated with operating as a public company.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest income related to interest earned on our invested cash equivalents and marketable securities balances. It also includes other miscellaneous items, such as expenses related to our previously outstanding term debt, interest expense, success fees and final payoff amortization, and other items not related to our core operations. We expect our interest income will increase as we invest the cash received from the net proceeds from our public offerings.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The following table summarizes our results of operations for the years ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

Revenue:

Commercial and development revenue $ 3,234 $ — $ 3,234

Operating costs and expenses

Other income (expense), net:

Other income (expense), net (152 ) 3 (155 )

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Commercial and Development Revenue

Commercial and development revenue was $3.2 million for the year ended December 31, 2025 compared to zero for the year ended December 31, 2024. As the Conversion Event occurred in July 2025, there was no corresponding commercial and development revenue in the prior year.

License and Collaboration Revenue

License and collaboration revenue was $0.8 million for the year ended December 31, 2025 compared to $1.1 million for the year ended December 31, 2024. During the years ended December 31, 2025 and 2024, we recorded $0.8 million and $0.2 million, respectively, in license and collaboration revenue related to the Kissei License Agreement, as well as zero and $1.0 million related to the Lepu License Agreement, respectively.

Research and Development Expenses

The following table summarizes our R&D expenses for the years ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

R&D expenses were $116.6 million for the year ended December 31, 2025 compared to $82.1 million for the year ended December 31, 2024. The increase of $34.5 million in R&D expenses for the year ended December 31, 2025 was primarily due to an increase of $17.5 million in external clinical trial expenses related to higher CRO fees as patient enrollment increased, as well as an increase of $13.5 million in compensation costs due to increased headcount, including a $5.7 million increase in stock-based compensation, and an increase in other research and development costs of $3.5 million.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the years ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

General and administrative expenses were $73.5 million for the year ended December 31, 2025 compared to $33.7 million for the year ended December 31, 2024. The increase of $39.8 million in general and administrative expenses for the year ended December 31, 2025 was primarily due to an increase in compensation costs of $17.9 million due to increased headcount, including a $9.5 million increase in stock-based compensation, and increased professional and consultant fees of $14.3 million, which includes a $8.5 million increase in legal fees, as well as an increase in marketing-related costs of $2.2 million and an increase in other general fees and costs of $7.6 million.

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Other Income, Net

Other income, net, for the year ended December 31, 2025 was a net income of $29.8 million compared to a net income of $26.6 million for the year ended December 31, 2024. The $3.2 million increase was driven by higher interest income earned related to cash equivalents and marketable securities balances, partially offset by $0.3 million of interest expense related to debt acquired through SPV and Biovire, with no corresponding interest expense in the prior year.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have not generated any revenue from product sales of cretostimogene and have incurred significant operating losses and negative cash flows from operations. We expect to incur significant expenses and operating losses in the foreseeable future as we advance the clinical development of cretostimogene and any future product candidates. To date, we have primarily funded our operations with proceeds from the sale of shares of our common stock through public offerings and our redeemable convertible preferred stock, as well as through previously outstanding term debt. From inception through December 31, 2025, we have received aggregate gross proceeds of $1.1 billion from the sale of shares of our common stock through our public offerings and our redeemable convertible preferred stock. In addition, through December 31, 2025, we have recognized $26.9 million in license and collaboration revenue through our license and collaboration agreements. As of December 31, 2025, we had cash, cash equivalents and marketable securities of $742.2 million.

In January 2021, we entered into a loan agreement with Silicon Valley Bank for a term loan in three tranches. As of December 31, 2025 and 2024, we repaid all outstanding principal and accrued and unpaid interest under the loan agreement and have no outstanding debt. See Note 15 to our consolidated financial statements included elsewhere in this Annual Report for additional information.

At-the-Market Offering

On March 28, 2025, we entered into the Jefferies Sales Agreement with Jefferies LLC, as agent, pursuant to which we may offer and sell, from time to time through Jefferies, shares of our common stock. On the same day, we filed a shelf registration statement on Form S-3ASR with the SEC, which contains a base prospectus, covering an unlimited amount of our common stock, preferred stock, debt securities and warrants to purchase any of such securities, and a sales agreement prospectus, which we subsequently amended on January 13, 2026, covering the offering, issuance and sale of up to a maximum aggregate offering price of $550 million of our common stock that may be issued and sold from time to time under the Jefferies Sales Agreement. During the year ended December 31, 2025, 3,859,118 shares were sold under the shelf registration statement or the Jefferies Sales Agreement, at a weighted-average price of $38.99 per share. Through December 31, 2025, the Company received net proceeds of $147.1 million, after deducting discounts and commissions and other offering expenses. Subsequent to December 31, 2025, the Company received net proceeds of $188.0 million under the Jefferies Sales Agreement, after deducting discounts and commissions.

Effects of Inflation

Inflation could affect us by increasing our cost of labor and R&D costs. We do not believe inflation has had a material effect on our business, financial condition or results of operations, or on our consolidated financial statements included elsewhere in this Annual Report.

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Future Funding Requirements

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue our development of, seek regulatory approval for, and potentially commercialize cretostimogene and potentially seek to discover and develop additional product candidates, conduct our ongoing and planned clinical trials and preclinical studies, continue our R&D activities, utilize third parties to manufacture cretostimogene, hire additional personnel, engage in potential strategic transactions, expand and protect our intellectual property, and incur additional costs associated with being a public company

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses, and prepaid expenses. The timing and amount of our funding requirements will depend on many factors, including:

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the initiation, type, number, scope, progress, expansions, results, costs and timing of clinical trials and preclinical studies of cretostimogene and any future product candidates we may choose to pursue, including the costs of modification to clinical development plans based on feedback that we may receive from regulatory authorities and any third-party products used as combination agents in our clinical trials

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the costs, timing and outcome of regulatory meetings and reviews of cretostimogene or any future product candidates, including requirements of regulatory authorities in any additional jurisdictions in which we may seek approval for cretostimogene and any future product candidates;

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the costs of obtaining, maintaining, enforcing and protecting our patents and other intellectual property and proprietary rights;

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our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal control over financial reporting;

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the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC quality and commercial personnel;

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the timing and payment of milestone, royalty or other payments we must make pursuant to our existing and potential future license or collaboration agreements with third parties;

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the costs and timing of establishing or securing sales and marketing capabilities if cretostimogene or any future product candidate is approved;

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our ability to achieve sufficient market acceptance, coverage, and adequate reimbursement from third- party payors and adequate market share and revenue for any approved products;

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our ability and strategic decision to develop future product candidates other than cretostimogene, and the timing of such development, if any;

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patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors;

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the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and

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costs associated with any products or technologies or businesses that we may in-license or acquire.

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Based upon our current operating plan, we believe that our existing cash, cash equivalents and marketable securities, will be sufficient to fund our operations for at least the next twelve months from the date of this Annual Report. However, we have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us. In addition, we could utilize our available capital resources sooner than we expect.

We have no other committed sources of capital. Until such time, if ever, we can generate substantial product revenue, we expect to finance our operations through equity offerings, debt financings, or other capital sources, including current or potential future collaborations, licenses, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. To the extent we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions, engaging in acquisition, merger or collaboration transactions, selling or licensing our assets, making capital expenditures, redeeming our stock, making certain investments or declaring dividends. If we raise additional funds through collaborations or license agreements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise product candidates that we would otherwise prefer to develop and market ourselves, or even cease operations.

Contractual Obligations and Other Commitments

Leases

We have entered into various non-cancelable operating leases for our corporate office. The leases have varying terms expiring between 2026 and 2034. See Note 7 to our consolidated financial statements included elsewhere in this Annual Report for further details.

Research and Development Costs

We are continuing to invest in our cretostimogene clinical trials and have entered into contractual obligations with each clinical trial site. Each contract shall continue until the completion of the trial at that site. Our clinical trial costs are dependent on, among other things, the size, number and length of our clinical trials.

Other Capital Requirements and Additional Royalty Obligations

We enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation typically consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation.

In addition to our obligation to make potential royalty payments under the Kissei License Agreement discussed above, we are also obligated to pay royalties and milestone payments to the initial supplier of a certain cell line we use to manufacture cretostimogene, in an amount less than 1% on the net sales of cretostimogene, worldwide. These royalty obligations last for as long as we use the certain cell line to manufacture cretostimogene. The timing of when our royalty payments will actually be made is uncertain as the payments are contingent upon future activities, including the successful development, regulatory approval and commercialization of cretostimogene.

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Cash Flows

The following table provides information regarding our cash flows for the years ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

Net cash used in operating activities $ (132,346 ) $ (78,713 )

Operating Activities

During the year ended December 31, 2025, net cash used in operating activities was $132.3 million, primarily resulting from our net loss of $161.0 million, as well as accretion of the discount on short-term investments of $1.0 million, partially offset by non-cash stock-based compensation charges of $26.7 million and net cash provided by changes in our operating assets and liabilities of $2.3 million.

During the year ended December 31, 2024, net cash provided by operating activities was $78.7 million, primarily resulting from our net loss of $88.0 million and accretion of the discount on short-term investments of $5.0 million, partially offset by non-cash stock-based compensation charges of $11.4 million and net cash provided by changes in our operating assets and liabilities of $2.9 million.

Investing Activities

During the year ended December 31, 2025, net cash used in investing activities was $245.8 million, primarily due to $1,067.9 million of purchases of marketable securities and $22.0 million, net of cash acquired, for the acquisition of SPV and Biovire through the Conversion Event, partially offset by proceeds from sales and maturities of short-term investments.

During the year ended December 31, 2024, net cash used in investing activities was $300.8 million, primarily due to $1,045.9 million of purchases of marketable securities, partially offset by proceeds from sales and maturities of short-term investments.

Financing Activities

During the year ended December 31, 2025, net cash provided by financing activities was $153.6 million, consisting of proceeds of $147.1 million from the sale of our common stock pursuant to the Jefferies Sales Agreement, net of issuance costs and stock issuance costs, and proceeds from exercise of options of $6.5 million.

During the year ended December 31, 2024, net cash provided by financing activities was $628.3 million, consisting primarily of net proceeds from the initial public offering and follow-on public offering of $403.0 million and $223.1 million, respectively, net of issuance costs and stock issuance costs, as well as proceeds from the exercise of common stock options of $2.6 million, partially offset by the long-term debt success fee payoff of $0.4 million.

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Critical Accounting Policies and Significant Judgments and Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, we believe the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

R&D Expenses and Related Prepaid and Accrued Expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our R&D expenses as of each balance sheet date. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our R&D expenses as of each balance sheet date based on facts and circumstances known to us at that time. The significant estimates in our R&D expenses include the costs incurred for services performed by our vendors in connection with services for which we have not yet been invoiced. We base our expenses related to R&D activities on our estimates of the services received and efforts expended pursuant to quotes and contracts with vendors that conduct R&D on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows.

There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the R&D expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid expense accordingly. Advance payments for goods and services that will be used in future R&D activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in any particular period. To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.

Recently Issued Accounting Standards

A description of recently issued accounting standards that may potentially impact our financial position, results of operations and cash flows is included in Note 2 to our consolidated financial statements included elsewhere in this Annual Report.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Market risk represents the risk of loss that may impact our financial condition due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of exposure due to potential changes in interest rates, foreign currency exchange rates or inflation.

Interest Rate Sensitivity

Our exposure to market risk is limited primarily to interest rate sensitivity. As of December 31, 2025, we had cash, cash equivalents and marketable securities of approximately $742.2 million, which consisted primarily of money market funds and marketable securities, comprised largely of fixed income securities (U.S. Treasury bills).

The primary objective of our investment activities is to preserve capital to fund our operations. We also seek to maximize income from our investments without assuming significant risk. We established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity. We believe that should a 10.0% change in interest rates were to have occurred on December 31, 2025, this change would not have had a material effect on the fair value of our investment portfolio as of that date. Any changes would only be realized if we sold the investments prior to maturity. Notwithstanding our efforts to manage interest rate risk, there can be no assurances that we will be adequately protected against the risks associated with interest rate sensitivity.

Foreign Currency Exchange Risk

We are not currently exposed to significant market risk related to changes in foreign currency exchange rates; however, we do contract with vendors that are located outside of the United States and may be subject to fluctuations in foreign currency rates. We may enter into additional contracts with vendors located outside of the United States in the future, which may increase our foreign currency exchange risk. We believe that should a 10.0% change in foreign currency exchange rates were to have occurred on December 31, 2025, this change would not have had a material effect on our financial statements.

Effects of inflation

Inflation generally affects us by increasing our cost of labor and preclinical and clinical development costs. We do not believe inflation had a material effect on our business, financial condition, or results of operations as of and for any period presented herein.

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Item 8. Financial Statements and Supplementary Data.

CG ONCOLOGY, INC.

INDEX TO FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 122

Notes to Consolidated Financial Statements 128

121

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of CG Oncology, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of CG Oncology, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred stock and 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 “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at 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 U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 27, 2026 expressed an unqualified opinion thereon.

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 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. 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.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Accrued Clinical Expenses

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2021.

Irvine, California

February 27, 2026

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CG Oncology, Inc.

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

December 31, December 31,

Assets

Current assets:

Accounts receivable, net 688 —

Prepaid expenses and other current assets 15,067 12,212

Operating lease right-of-use assets 3,971 221

Intangible assets, net 575 —

Liabilities and Stockholders’ Equity

Current liabilities:

Operating lease liabilities, current portion 915 186

Accrued expenses and other current liabilities 24,207 14,665

Long-term debt 3,000 —

Operating lease liabilities, net of current portion 3,106 52

Deferred tax liability 307 —

Other liabilities 1,741 —

Commitments and contingencies (Note 7)

Stockholders’ equity:

Total liabilities and stockholders' equity $ 791,592 $ 754,797

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

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CG Oncology, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

Year Ended December 31,

Revenues

Commercial and development revenue $ 3,234 $ — $ —

Operating costs and expenses

Cost of sales 4,647 — —

Other income (expense), net:

Other (expense) income, net (152 ) 3 (62 )

Deemed dividend on redeemable convertible preferred stock issuances — — (410 )

Cumulative redeemable convertible preferred stock dividends — — (18,781 )

Net loss per share, basic and diluted $ (2.08 ) $ (1.41 ) $ (15.65 )

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

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CG Oncology, Inc.

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except share amounts)

Stock-based compensation expense — — — — — — — — — — — — — — 1,528 — 1,528

Net loss — — — — — — — — — — — — — — — (48,607) (48,607)

Stock-based compensation expense — — — — — — — — — — — — — — 11,402 — 11,402

Net loss — — — — — — — — — — — — — — — (88,039) (88,039)

Issuance of common stock — — — — — — — — — — — — 675,227 — 6,456 — 6,456

Stock-based compensation expense — — — — — — — — — — — — — — 26,676 — 26,676

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

126

CG Oncology, Inc.

Consolidated Statements of Cash Flows

(In thousands)

Year Ended December 31,

Operating Activities

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

Depreciation and amortization 1,445 32 17

Amortization of loan fees — — 3

Final payment amortization and loss on debt extinguishment — — 767

Success fee amortization — — 37

Accretion of discount on short-term investments (1,014 ) (4,992 ) (2,875 )

Non-cash interest expense (income) (768 ) — —

Non-cash lease expense 34 (22 ) 12

Changes in operating assets and liabilities:

Prepaid expenses and other current assets (1,900 ) (5,762 ) (2,723 )

Accounts receivable, net (320 ) — —

Inventory (444 ) — —

Accrued expenses and other current liabilities 8,655 5,468 4,137

Other liabilities (487 ) — —

Investing Activities

Acquisition, net of cash acquired (21,967 ) — —

Purchases of property and equipment (134 ) (234 ) —

Financing Activities

Proceeds from initial public offering, net of issuance costs — 406,410 —

Payments of success fee or long-term debt — (365 ) (16,291 )

Proceeds from exercise of common stock options 6,456 2,599 2,082

Supplemental Disclosure of Cash Flow Information

Cash paid for interest $ 103 $ — $ 376

Cash paid for taxes $ 16 $ — $ —

Non-cash Investing and Financing Activities:

Conversion of stock issuance costs $ — $ 6,845 $ —

Stock issuance costs, unpaid and accrued $ 46 $ — $ 1,246

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

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CG Oncology, Inc.

Notes to Consolidated Financial Statements

1.

Description of Business and Basis of Presentation

Description of Business

CG Oncology, Inc. (the Company) is a late-stage clinical biopharmaceutical company focused on developing and commercializing its product candidate, cretostimogene grenadenorepvec, for patients with bladder cancer. The Company is at a clinical stage and does not project to generate significant revenues if and until the U.S. FDA approves its product candidate, cretostimogene, and the Company is able to commercialize this product candidate.

On January 11, 2024, the Company’s board of directors approved a 1-for-9.535 reverse stock split of its issued and outstanding common stock and stock option awards which was effected on January 16, 2024. All issued and outstanding shares of common stock, stock option awards and per share data have been adjusted in these consolidated financial statements, on a retrospective basis, to reflect the reverse stock split for all periods presented. The par value of the common stock and preferred stock was not adjusted as a result of the reverse stock split. The conversion ratios for each series of the Company's redeemable convertible preferred stock and the shares of common stock underlying outstanding stock options and other equity instruments were all proportionately adjusted, as needed.

On January 29, 2024, the Company completed the closing of its initial public offering of 23,000,000 common shares at a price of $19.00 per share, including the exercise in full by the underwriters of their option to purchase an additional 3,000,000 shares of common stock. The common shares began trading on the Nasdaq Global Market on January 25, 2024, under the symbol “CGON”. The Company received net proceeds of $399.6 million, after deducting discounts and commissions and other offering expenses. In addition, as a result of its initial public offering, the Company’s redeemable convertible preferred stock converted into common stock concurrently with the initial public offering. In December 2024, the Company completed a follow-on offering of 8,500,000 common shares at a price of $28.00 per share, including the exercise in full by the underwriters of their option to purchase an additional 1,200,000 shares of common stock. The Company received net proceeds of $223.1 million, after deducting discounts, commissions and other offering expenses.

On March 28, 2025, the Company entered into an Open Market Sale AgreementSM (Jefferies Sales Agreement) with Jefferies LLC, as agent, pursuant to which the Company may offer and sell, from time to time through Jefferies, shares of the Company's common stock. Through December 31, 2025, the Company received net proceeds of $147.1 million under the Jefferies Sales Agreement, after deducting discounts and commissions and other offering expenses.

In February 2025, SafeGuard Healthcare, LLC (Safeguard), a wholly owned subsidiary of the Company, purchased a $26.8 million convertible note, including accrued interest, from SP Healthcare SPV I, LLC (the SPV). The SPV used the proceeds from the Note to invest and acquire substantially all of the assets of Biovire, Inc. (Biovire), a contract manufacturing organization that produces cretostimogene for the Company. In July 2025, Safeguard converted the Note (the Conversion Event) and obtained control of both the SPV and Biovire. Refer to Note 17 for additional details on the Conversion Event.

Basis of Presentation

The accompanying consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).

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Liquidity

As of December 31, 2025, the Company had approximately $742.2 million of cash, cash equivalents and marketable securities and working capital of approximately $728.6 million. The revenue and income potential of the Company’s business and market are unproven. The Company has experienced net losses and negative cash flows from operations since its inception and, as of December 31, 2025, the Company had an accumulated deficit of $379.0 million. During the year ended December 31, 2025, the Company incurred a net loss of $161.0 million and negative cash flows from operations of $132.3 million. The Company will continue to incur significant costs and expenses related to its ongoing operations until it successfully develops, obtains regulatory approval and gains market acceptance of cretostimogene and achieves a level of revenues adequate to support the Company’s operations.

2.

Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures in the accompanying notes. The Company bases its estimates, assumptions and judgments on historical experience when available and on various factors that it believes to be reasonable under the circumstances as of the date of the accompanying consolidated financial statements including stock-based compensation expense, accrued research and development expenses, lease accounting, business combination valuations, and the recoverability of the Company’s net deferred tax assets and related valuation allowance. In addition, other factors may affect estimates, including the expected business and operational changes, the sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. Actual results could differ materially from the estimates and assumptions used in the preparation of the accompanying consolidated financial statements under different assumptions or conditions.

Cash, Cash Equivalents and Marketable Securities

The Company considers all highly liquid investments and instruments with original maturities of 90 days or less that can be liquidated without prior notice or penalty to be cash equivalents. Cash equivalents consisted primarily of demand deposit accounts, insurance deposits and short-term U.S. Treasury money market funds as of December 31, 2025 and 2024. Marketable securities represent fixed income securities, which consist of U.S. Treasury bills and U.S. Treasury notes, and corporate bonds with maturities greater than 90 days.

Concentration of Credit Risks

Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions in the United States. These deposits are held in checking and money market accounts and may, from time to time, exceed the federally insured amounts. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant risk in its cash and cash equivalents. The primary objectives of the Company’s investment portfolio are the preservation of capital and maintenance of liquidity.

The Company is subject to risks common to companies in the biopharmaceutical industry, including, but not limited to, risks related to the successful development and commercialization of product candidates, fluctuations in operating results and financial risks, the ability to successfully raise additional funds when needed, protection of proprietary rights and patent risks, patent litigation, compliance with government regulations, dependence on key personnel and collaboration partners, and competition from competing products in the marketplace.

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Fair Value of Financial Instruments

The Company applies fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company’s financial instruments consist principally of cash, cash equivalents, marketable securities, accounts payable and operating lease liabilities. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. A framework is used for measuring fair value utilizing a three-tier hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The three levels of the fair value hierarchy are as follows:

Level 1—Observable inputs such as unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities the Company has the ability to access;

Level 2—Inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and

Level 3—Unobservable inputs that are significant to the fair value measurement and reflect the reporting entity’s use of significant management judgment and assumptions when there is little or no market data. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation.

Financial instruments are categorized in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and considers factors specific to the investment. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. The Company reviews the fair value hierarchy classification at each reporting date. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did not have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the years presented.

Comprehensive Loss

There were no differences between net loss and comprehensive loss presented in the statements of operations for the years ended December 31, 2025, 2024 and 2023.

Business Combinations

The Company uses the acquisition method of accounting for business combinations which requires assets acquired and liabilities assumed to be recognized at their estimated fair values on the acquisition date. These valuations require the Company to make estimates and assumptions based on facts and circumstances that existed as of the acquisition date. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired and liabilities assumed. The measurement period ends once all information is obtained, but no later than one year from the acquisition date.

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Property and Equipment, Net

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recognized on a straight-line basis over the estimated useful lives of the respective asset, which is generally between three and ten years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining term of the associated lease.

The initial cost of property and equipment consists of its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the assets have been put into operation, such as repairs and maintenance, are charged to expense in the period in which the costs are incurred. Major replacements, improvements, and additions are capitalized in accordance with Company policy.

Inventory

Inventory consists of raw materials, work in process and finished goods. Inventory is stated at the lower of cost or net realizable value, determined using a weighted-average method. The Company measures costs using standard costs that approximate actual costs. Standard costs are reviewed periodically and adjusted as necessary to reflect current conditions. Any variances between standard and actual costs are recognized in cost of sales in the period incurred. The Company reviews inventory for potential impairment, including excess and obsolescence, by evaluating current inventory levels, movement, expected useful lives, and estimated future product demand. Inventory will be adjusted to its net realizable value or reduce the carrying value of inventory, when deemed necessary.

The Company has certain arrangements where their customer supplies the raw materials used in the manufacturing process. Legal title to these raw materials remain with the customer at all times. The Company does not obtain control of the materials, does not have discretion to redirect the materials for alternative use, and is not permitted to sell or pledge the materials to third parties. As the Company does not obtain control of the customer-supplied materials, these materials are not recorded as inventory on the Company’s consolidated balance sheets. The Company recognizes revenue for manufacturing services as control of the finished goods is transferred to the customer in accordance with ASC 606. The value of customer-supplied materials is excluded from both revenue and cost of sales.

Intangible Assets, Net

Intangible assets acquired in a business combination or an asset acquisition are initially recognized at their fair value on the acquisition date. Acquired definite-lived intangible assets are amortized using the straight-line method over their respective estimated useful lives. The amortization of these intangible assets is included in general and administrative expense on the consolidated statement of operations. Indefinite-lived intangible assets are tested for impairment annually and more frequently if events or circumstances indicate that it is more likely than not that the asset is impaired. To date, no such impairments have been recognized.

Goodwill

Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination and is not amortized. Goodwill is subject to impairment testing at least annually or when a triggering event occurs that could indicate a potential impairment. In the event of an impairment, the carrying value of the goodwill will be written down to the fair value and an impairment charge will be recognized. The Company has not recorded any impairments of goodwill.

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Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. The Company recognized no impairment losses for the years ended December 31, 2025, 2024 and 2023.

Stock Issuance Costs

The Company capitalizes as stock issuance costs all direct and incremental legal, professional, accounting and other third-party fees incurred in connection with equity offerings. The stock issuance costs are offset against the proceeds upon the consummation of an equity offering.

Capitalized Software

The Company capitalizes eligible software development costs associated with internal-use software. Costs incurred during the preliminary project stage, as well as costs for maintenance and training, are expensed as incurred. When placed in service, implementation costs are subsequently amortized on a straight-line basis over the expected useful life of the asset. As of December 31, 2025, $1.3 million of capitalized costs associated with cloud computing arrangements were included in Other assets in the Company's Consolidated Balance Sheets. No capitalize software costs were recognized as of December 31, 2024.

Leases

The Company determines whether an arrangement is, or contains, a lease at inception and assesses whether the lease should be classified as a finance or operating lease. As of December 31, 2025 and 2024, all of the Company’s leases are classified as operating leases. Right-of-use (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. ROU assets and lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term, which includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. ROU assets are adjusted for prepaid lease payments, lease incentives and initial direct costs incurred. The Company elects the practical expedient to exclude leases with a term of 12 months or less from its consolidated balance sheets.

Lease expense is recognized on a straight-line basis over the term of the respective lease and includes both lease and non-lease components due to the Company’s election of the practical expedient to account for these components as a single lease component. The key estimates for the Company’s leases include the incremental borrowing rate used to determine the present value of lease payments and the lease term. The Company’s leases generally do not include an implicit rate. Management determines the incremental borrowing rate based on the information available at lease commencement.

Revenue Recognition

License and Collaboration Revenue

The Company entered into development and license agreements with Lepu Biotech Co., Ltd. (Lepu) and Kissei Pharmaceutical Co., Ltd. (Kissei), collectively referred to as the License and Collaboration Agreements. See Note 8 for a description of the License and Collaboration Agreements.

132

At contract inception, the Company analyzes its collaboration arrangements to assess whether such arrangements are within the scope of ASC 808, Collaborative Arrangements (ASC 808). This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. The Company’s collaboration agreements can contain multiple units of account, and the components can be within the scope of ASC 808 or ASC 606, Revenue Recognition (ASC 606), depending on if the component is reflective of a vendor-customer relationship.

For units of account of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, either by analogy to authoritative accounting literature or by applying a reasonable and rational policy election. The Company evaluates the income statement classification for presentation of amounts due from or owed to other participants associated with multiple activities in a collaboration arrangement based on the nature of each separate activity.

For units of account accounted within scope of ASC 606, to determine the appropriate amount of revenue to be recognized for the arrangements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) identification of the performance obligations; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) each performance obligation is satisfied.

The Company’s performance obligations under the terms of these agreements include a license grant, research and development services or customer options, depending on the terms of the License and Collaboration Agreement. Payments to the Company include a non-refundable upfront payment, payments based upon the achievement of development and commercial milestones, and royalties on product sales under the License and Collaboration agreements.

Development milestones

The License and Collaboration Agreements include milestone payments that are triggered by the achievement of development milestones. These milestone payments represent variable consideration that are not initially recognized within the transaction price. Revenue from milestones will be recognized at the time the specified milestone events have been achieved.

Sales milestones and royalty payments

The License and Collaboration Agreements also include certain sales-based milestone and royalty payments upon successful commercialization of a licensed product. In accordance with ASC 606, the Company recognizes revenue from sales-based milestone and royalty payments at the later of: (i) the occurrence of the subsequent sale; or (ii) the performance obligation to which some or all of the sales-based milestone or royalty payments has been allocated or has been satisfied. The Company anticipates recognizing these milestones and royalty payments if and when subsequent sales are generated.

Commercial and development revenue

The Company recognizes revenue from the commercial and development contracts in accordance with ASC 606. Commercial and development revenue consists of revenue earned by manufacturing products supplied to customers under various supply arrangements. In these arrangements, the customer typically owns and supplies the active pharmaceutical ingredient (API) or other proprietary materials used in the manufacturing process. The contracts include the terms of the manufacturing services, which typically include manufacturing services and development activities, both of which include multiple separate performance obligations.

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The performance obligations are satisfied over time and progress is generally measured using an output method based on achieving certain manufacturing milestones upon the completion of required tasks and activities. For arrangements where the Company owns the API throughout the manufacturing process, the performance obligations are generally similar to those in the customer-owned API arrangements, but the Company measures progress using an input method based on effort expended. Both methods provide an appropriate depiction of the Company’s progress toward fulfilling its performance obligations.

The timing of revenue recognition, billings and cash collections may result in contract assets and contract liabilities. Contract assets are recorded when the Company’s right to consideration is conditioned on something other than the passage of time and are reclassified to accounts receivable when the Company’s rights become unconditional. Contract liabilities represent amounts received in advance of the Company's fulfillment of performance obligations and these liabilities convert to revenue as the Company performs its obligations under the contract.

Research and Development Expenses

Research and development (R&D) expenses consist of costs incurred for R&D of its product candidate and are recorded to operating expenses when incurred. The Company’s R&D expenses consist primarily of costs incurred in performing R&D activities, including personnel-related expenses such as salaries, stock-based compensation and benefits, as well as allocated facilities costs, dues and subscriptions and external costs of outside vendors engaged as contract research organization (CRO), contract manufacturers, consultants and other third parties to conduct and support our clinical trials and preclinical studies.

Clinical Expenses

Clinical expenses are a component of research and development expense. The Company accrues and expenses clinical trial services performed by third parties based upon actual work completed in accordance with agreements established with its service providers. The Company estimates the costs through discussions with internal personnel and external service providers as to the progress or stage of completion of services and the agreed-upon fees to be paid for such services. Payments under some of these contracts depend on clinical trial milestones. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of expenses. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual or prepaid expense accordingly.

Stock-Based Compensation

The Company periodically grants equity-based payment awards to employees, directors and non-employees and recognizes stock-based compensation expense based on the estimated fair value of the grant, which expense is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. The fair value of stock option awards is estimated using the Black-Scholes option pricing model on the date of grant. Determining the appropriate fair value model and related input assumptions requires judgment, including estimating the stock price volatility and expected term. For performance-based awards, the fair value is based on the Company's stock price at the grant date. The Company assesses the probability of the likelihood of achievement for performance-based awards and recognizes the related expense accordingly.

The Company recognizes forfeitures related to stock-based compensation awards as they occur.

The Company classifies stock-based compensation expense in the statement of operations in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified.

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Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes (ASC 740). ASC 740 requires the use of the asset and liability method of accounting for income taxes. The current or deferred tax consequences of a transaction are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable currently or in future years. Deferred tax assets and liabilities are determined based on the difference between the financial statements and tax basis of assets and liabilities and expected future tax consequences of events that have been included in the consolidated financial statements or tax returns using enacted tax rates in effect for the year in which the differences are expected to reverse. Under this method, a valuation allowance is used to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets may not be realized. Management annually evaluates the recoverability of deferred taxes and the adequacy of the valuation allowance. See Note 14 for additional information.

The Company follows the provisions of ASC 740 relative to accounting for uncertain tax positions. These provisions provide guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As applicable, the Company recognizes accrued penalties and interest related to unrecognized tax benefits in the provision for income taxes.

Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and the valuation allowance recorded against net deferred tax assets. The Company assesses the likelihood that deferred tax assets will be recovered as deductions from future taxable income. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history and reliability of forecasting.

The Company is required to file federal and state income tax returns in the U.S. The preparation of state tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company.

The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the IRS and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential revisions and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known.

The Company follows the accounting guidance on accounting for uncertainty in income taxes. The guidance prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

Classification of Redeemable Convertible Preferred Stock

Classification of the Company’s Series A-1, B, C, D, E and F redeemable convertible preferred stock is being treated as mezzanine equity and not as part of stockholders’ deficit because the holders of such shares have liquidation rights in the event of a deemed liquidation that, in certain situations, are not solely within the control of the Company and would require the redemption of the then-outstanding redeemable convertible preferred stock. In addition, all of the Company’s redeemable convertible preferred stock are redeemable with the passage of time on or after July 28, 2028, by class and if requested by a requisite majority of each class. See Note 10 for additional information, including the conversion of all redeemable convertible preferred stock as of December 31, 2025.

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The carrying values of the Series A-1, B, C, D, E and F redeemable convertible preferred stock are reported at their respective redemption values.

Net Loss Per Share Attributable to Common Stockholders

The Company determined all of its redeemable convertible preferred stock qualifies as participating securities, as defined in ASC 260, Earnings per Share (ASC 260) earnings with common stock. In accordance with ASC 260, a company is required to use the two-class method when computing net income (loss) per share when a company has securities that qualify as participating securities. The two-class method is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in the Company’s losses.

Segment and Geographic Information

Operating segments are defined as components of an enterprise (business activity from which it earns revenue and incurs expenses) about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The chief operating decision maker reviews consolidated operating results to make decisions about allocating resources and assessing performance for the entire company. The Company views its operations and manages its business as one operating segment. Substantially all of the Company’s assets are located in the United States. See Note 9 for additional information.

Recently Issued Accounting Standards

Accounting standards not listed below were assessed and determined not to be applicable or are expected to have minimal impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance includes the requirement that public business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). It also requires that all entities disclose, on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received) and requires that all entities disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. Lastly, the guidance eliminates the requirement for all entities to disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or make a statement that an estimate of the range cannot be made. The Company adopted this guidance in the current year on a prospective basis, which did not have a significant impact on its consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Comprehensive Income - Expense Disaggregation Disclosures , which will improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions such as cost of sales, selling, general and administrative, and research and development. The amendments are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted for annual financial statements that have not yet been issued or made available. The amendments should be applied on either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the provisions of the amendments and the effect on its future consolidated financial statements.

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In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and modernizes the accounting for costs related to internal-use software. The amendments remove all references to project stages and clarify the threshold entities apply to begin capitalizing costs. The amendments are effective for fiscal years beginning after December 15, 2027 and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the provisions of the amendments and the effect on its future consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements, which clarifies required interim disclosures under Topic 270 by providing a comprehensive list of required interim disclosures, and clarifies the applicability of Topic 270. This update is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within annual reporting periods beginning after December 15, 2028, with early adoption permitted. ASU 2025-11 may be adopted on a prospective or retrospective basis. The Company is currently evaluating the impact of this guidance on its future consolidated financial statements.

3.

Fair Value Measurements

The following tables present the financial instruments carried at fair value on a recurring basis as of December 31, 2025 and 2024 in accordance with the ASC 820, Fair Value Measurement (ASC 820) hierarchy (in thousands):

Fair Value Measurements at December 31, 2025

Level 1 Level 2 Level 3 Total

Assets

Fair Value Measurements at December 31, 2024

Level 1 Level 2 Level 3 Total

Assets

The Company’s cash equivalents represent deposits in a short-term U.S. Treasury money market fund quoted in an active market, which were classified as a Level 1 fair value measurement, and fixed income securities (U.S. treasury bills) with original maturities of 90 days or less. Marketable securities consist primarily of fixed income securities (U.S. treasury bills and notes) and corporate bonds with original maturities greater than 90 days. All fixed income securities and corporate bonds were classified as a Level 2 fair value measurement.

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

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4.

Property and Equipment, Net

The components of property and equipment, net as of December 31, 2025 and 2024 were as follows (in thousands):

Leasehold Improvements $ 10,499 $ —

Manufacturing and lab equipment 5,982 —

Machinery and Equipment 589 359

Total property and equipment, cost 17,070 359

Less: Accumulated depreciation (1,474 ) (87 )

Property and equipment, net $ 15,596 $ 272

Depreciation expense for the year ended December 31, 2025 was $1.4 million and was less than $0.1 million for both of the years ended December 31, 2024 and 2023.

5.

Goodwill and Intangibles, Net

Goodwill

In connection with the Conversion Event in July 2025, the Company recognized goodwill of $10.3 million. See Note 17 for additional information on this transaction.

The Company annually assesses goodwill for impairment in the fourth quarter of each calendar year and at an interim date if indications of impairment exist. During the year ended December 31, 2025, no goodwill impairment was recognized.

Intangible Assets

As part of the Conversion Event, the Company acquired customer relationships of $0.3 million and trade names and trademarks of $0.3 million. The components of intangible assets as of December 31, 2025 were as follows (in thousands):

Total intangible assets, net $ 600 $ 25 $ 575

The Company's intangible assets are amortized on a straight-line basis over their useful lives. Intangible assets amortization expense was less than $0.1 million for the year ended December 31, 2025. The following table presents the estimated future amortization expense related to intangible assets as of December 31, 2025 (in thousands):

Accumulated Amortization

Total future amortization expense $ 575

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6.

Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities for the years ended December 31, 2025 and 2024 were as follows (in thousands):

External research and development expenses $ 13,936 $ 7,181

Deferred revenue 286 —

Total accrued expenses and other current liabilities $ 24,207 $ 14,665

7.

Commitments and Contingencies

Operating Leases

The Company has entered into non-cancellable operating leases with remaining lease terms expiring between 2026 and 2034. Of the four operating leases that have commenced as of December 31, 2025, three are leases in which the Company is the lessee for office space. The remaining operating lease was acquired in connection with the Conversion Event and includes office, manufacturing, and warehouse space. In the fourth quarter of 2025, the Company entered into an additional non-cancelable operating lease for office space with a term of approximately eight years, which, along with rent payments, is expected to commence in the third quarter of 2026. The Company had no finance leases as of December 31, 2025 and 2024.

The components of lease expense for the years ended December 31, 2025 and 2024 were as follows (in thousands):

Year Ended December 31,

Lease cost

Operating lease cost $ 699 $ 228

Other information

Weighted-average remaining lease term (years) 4.04 1.20

Weighted-average discount rate 6.89 % 1.63 %

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

Total lease payment 4,618

Less: amount representing imputed interest (597 )

Total future minimum lease obligations $ 4,021

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Legal Proceedings

A liability for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources is recorded in the consolidated financial statements if it is determined that it is probable that a loss has been incurred, and that the amount (or range) of the loss can be reasonably estimated.

On March 4, 2024, a complaint was filed against the Company in the Superior Court of the State of Delaware by ANI Pharmaceuticals, Inc. seeking a declaratory judgement that a provision in an assignment and technology transfer agreement between the Company and ANI, dated November 15, 2010 (the ANI Agreement), obligates the Company to pay ANI a royalty on certain “net sales” of cretostimogene, and (ii) compensatory damages alleging the Company was unjustly enriched by obtaining the benefit of certain non-patent assets under the ANI Agreement without paying adequate consideration to ANI. On July 16, 2025, the Superior Court granted the Company’s motion for summary judgment with respect to ANI’s request for a declaratory judgment to receive royalty payments from the potential sale of cretostimogene but denied the Company’s motion for summary judgment with respect to ANI’s unjust enrichment claim. On July 29, 2025, a jury entered a verdict in favor of the Company, unanimously rejecting all of ANI's claims for unjust enrichment damages. As a result, the Company will not owe ANI a future royalty of 5% on commercial sales of cretostimogene, no damages have been awarded to ANI, and there are no further payments due to ANI under the ANI Agreement.The Company will continue to vigorously defend any post-trial motions and appeals brought by ANI.

Indemnification

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with officers and members of the Board that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. As of December 31, 2025 and 2024, the Company had not experienced any losses related to these indemnification obligations, and no claims with respect thereto were outstanding.

8.

License and Collaboration Agreements

Lepu Biotech Co., Ltd.

In March 2019, the Company entered into a development and license agreement with Lepu for cretostimogene (the Lepu License Agreement). Under the terms of the Lepu License Agreement, the Company granted to Lepu an exclusive license to develop, manufacture and commercialize cretostimogene and/or DDM to treat and/or prevent cancer in mainland China, including Hong Kong and Macau (the Lepu Territory). The Company is obligated to use commercially reasonable efforts to supply Lepu with its requirements of cretostimogene and DDM for its development activities at Lepu’s cost and to periodically provide Lepu with manufacturing documentation and, at Lepu’s cost, reasonably requested assistance related to the manufacture of clinical and, if applicable, commercial supplies of cretostimogene and DDM. The Company determined that control of the license was transferred to Lepu on March 2019 upon execution of the contract.

Lepu paid to the Company a one-time upfront payment of $4.5 million and is obligated to make regulatory milestone payments of up to $2.5 million and commercial milestone payments of up to $57.5 million. The Company is entitled to receive a high single-digit royalty on net sales of cretostimogene and/or DDM sold in the Lepu Territory, subject to a specified reduction. Lepu’s royalty obligations will expire upon termination of the Lepu License Agreement.

The Company assessed the Lepu License Agreement in accordance with ASC 606 and determined that the performance obligation is comprised solely of the license grant to Lepu. The Company determined the transaction price was $4.5 million and recorded the entire amount upon transfer of control of the functional intellectual property license rights in 2019. The Company evaluated the provision of manufacturing activities related to clinical and commercial supply of the licensed products and concluded that the manufacturing activities were not performance obligations as the terms do not provide a material right to Lepu.

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Future milestone payments are fully contingent as the risk of significant revenue reversal will only be resolved depending on future regulatory approval and sales level outcomes. The Company will re-evaluate the likelihood of achieving future milestones at the end of each reporting period.

The sales-based royalty fee is considered variable consideration and will be recognized as revenue as such sales occur. The sales-based royalty fee qualifies for the royalty constraint exception and does not require an estimate of the future transaction price.

For the years ended December 31, 2025, 2024 and 2023, zero, $1.0 million and less than $0.1 million in collaboration and license fee revenue were recorded, respectively.

Kissei Pharmaceutical Co., Ltd.

In March 2020, and amended as of September 2022, the Company entered into a license and collaboration agreement with Kissei (the Kissei License Agreement). Under the terms of the Kissei License Agreement, the Company granted to Kissei an exclusive license to certain intellectual property rights in Bangladesh, Bhutan, Brunei, Cambodia, India, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, Nepal, Pakistan, Palau, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam (the Kissei Territory), for Kissei to develop and commercialize, but not manufacture, cretostimogene in combination with DDM (the Licensed Product) for all uses in oncology indications for which marketing approval is being sought. Under the Kissei Agreement, the Company and Kissei agree to use commercially reasonable efforts to collaborate on clinical development activities in the Kissei Territory and each party is responsible for conducting the applicable activities pursuant to an agreed development plan. Kissei is responsible for the costs of developing the Licensed Product in the Kissei Territory, and the Company is responsible for the costs of developing the Licensed Product outside the Kissei Territory (Global Development), provided that Kissei is responsible for a low-double digit percentage and the Company is responsible for a high-double digit percentage of the cost of development activities that cannot be attributed solely to the Kissei Territory or outside the Kissei Territory. The Company is obligated to supply and Kissei will exclusively purchase its clinical and commercial requirements of Licensed Product from the Company. Kissei is responsible for commercializing the Licensed Product in the Kissei Territory and is obligated to use commercially reasonable efforts to seek regulatory approval for and commercialize at least one Licensed Product in a specified indication. Until a certain period of time has passed after the first regulatory approval of the Licensed Product, the Company is prohibited from commercializing certain competing products worldwide and Kissei is prohibited from researching, developing or commercializing certain competing products worldwide.

Under the terms of the Kissei License Agreement, the Company received a $10.0 million one-time upfront payment and, in connection with entry into this agreement, Kissei purchased $30.0 million worth of Series D redeemable convertible preferred stock as part of the Company’s Series D financing. Kissei is obligated to make development and regulatory milestone payments to the Company of up to $33.0 million and commercial milestone payments of up to $67.0 million. The Company has agreed to pay Kissei a royalty on net sales of Licensed Product outside the Kissei Territory and outside the Lepu Territory (as described above), including on any U.S. sales, in a low-single digit percentage, subject to certain capped reductions. We are entitled to receive a royalty on net sales of Licensed Product in the Kissei Territory in the mid-twenties percentage, subject to certain capped reductions. Also, Kissei has the right to offset the royalty payments due to the Company with respect to the cost for the supply of Licensed Product sold by the Company to Kissei, and to indefinitely carryforward credits for any excess supply amounts paid over royalty amounts owed in a given quarter. The Company is entitled to receive a specified minimum percentage of royalties on net sales of a given Licensed Product in a given country and a given quarter, unless, if for such Licensed Product in such country and such quarter, Kissei has taken the maximum allowable reductions and the ratio of the cost for the supply of Licensed Product to the sales price for Licensed Product exceeds a low-double digit percentage threshold, then the Company shall receive no royalties on the net sales of such Licensed Product in such country and such quarter. Kissei’s and the Company’s royalty obligations will expire on a Licensed Product-by-Licensed Product and country-by-country basis on the later of twelve years from the date of first commercial sale of such Licensed Product in such country or when there is no longer a valid patent claim covering such Licensed Product in such country.

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The Kissei Agreement will expire on a Licensed Product-by-Licensed Product and country-by-country basis when there is no remaining royalty or milestone payment obligation due to a party with respect to such Licensed Product in such country. Following expiration of the Kissei Agreement in its entirety, the licenses the Company granted to Kissei will become non-exclusive, fully-paid royalty-free and irrevocable and Kissei will have the right to negotiate directly with our product suppliers for the direct supply of Licensed Product to Kissei. The Kissei Agreement may be terminated either by Kissei or by the Company in the event of an uncured material breach by the other party or in the event the other party becomes subject to specified bankruptcy, insolvency or similar circumstances. In addition, the Company have the right to terminate the Kissei Agreement in the event that Kissei commences a legal action challenging the validity, enforceability or scope of any licensed patents under the Kissei Agreement. Kissei may terminate the Kissei Agreement at will upon specified written notice. Additionally, Kissei may terminate the Kissei Agreement for our willful and malicious misconduct that results in substantial and irreparable harm to the commercial value of the Licensed Products in the Kissei Territory and upon any such termination, the licenses the Company granted to Kissei will become royalty-free and fully paid-up and Kissei will have the right to negotiate directly with our contract manufacturing organizations for the supply of Licensed Product. Upon termination of the Kissei Agreement for any other reason all rights and licenses granted to Kissei to develop and commercialize the product under the Kissei Agreement will terminate, subject to certain rights to sell existing inventory of Licensed Products by Kissei and its sublicensees. Upon termination of the Kissei Agreement for Kissei’s breach, any sublicenses granted by Kissei may, upon the Company’s discretion, continue.

The Company evaluated the Kissei Agreement to determine whether it is a collaborative arrangement in the scope of ASC 808. The Company concluded the Kissei Agreement is a collaborative agreement under ASC 808, as the Kissei Agreement involves a joint operating activity, each party is an active participant in the activities related to the Kissei Agreement, and both parties are exposed to significant risks and rewards dependent upon the commercial success of the activities related to the Kissei Agreement.

The Company determined the Kissei Agreement contained two material components: (i) an exclusive license granted to Kissei to certain intellectual property rights in the Kissei Territory, for Kissei to develop and commercialize, but not manufacture, the Licensed Product for all uses in oncology; and (ii) the parties’ participation in the Global Development of the Licensed Product. The Company used the criteria specified in ASC 606 to determine which of the components of the Kissei Agreement are performance obligations with a customer and concluded Kissei is the Company’s customer for the license and related activities in the Kissei Territory under ASC 606. The Global Development activities under the agreement does not present a transaction with a customer and the payments received by the Company for Global Development activities, including manufacturing, will be accounted for as a reduction of related expenses.

The Company evaluated the Kissei Territory specific license and related activities under ASC 606, as these transactions are considered transactions with a customer, and identified two material promises at the outset of the Kissei License Agreement, which consists of the following: (1) the exclusive license and (2) the manufacturing activities related to development and commercial supply of the Licensed Product in the Kissei Territory. The Company further evaluated the material promise associated with manufacturing activities related to development and commercial supply of the Licensed Products in the Kissei Territory. Given Kissei is not obligated to purchase any minimum amount or quantities of the development and commercial supply from the Company, the Company concluded, for the purpose of ASC 606, the provision of manufacturing activities related to development and commercial supply of the Licensed Product in the Kissei Territory was an option but not a performance obligation of the Company at the inception of the Kissei Agreement and will be accounted for if and when exercised. The Company also concluded there is no separate material right in connection with the development and commercial supply of the licensed product, as the expected pricing was not issued at a significant and incremental discount. Therefore, the manufacturing activities were excluded as performance obligation at the outset of the arrangement.

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The Company evaluated the license under ASC 606 and concluded the license is a functional intellectual property license. The Company determined Kissei benefited from the license at the time of grant and, therefore, the related performance obligation was satisfied at a point in time. Additionally, the Company is entitled to development and regulatory milestones as well as sales milestones and royalties from Kissei upon future sales of the Licensed Product in the Kissei Territory. Future milestone payments are fully contingent as the risk of significant reversal will only be resolved depending on future development milestones, regulatory approval and sales level outcomes. The Company re-evaluates the likelihood of achieving future milestones at the end of each reporting period. The royalties are considered variable consideration and will be recognized as revenue as such sales occur. The sales-based royalties qualify for the royalty constrain exception and do not require an estimate of the future transaction price.

As the sale of $30.0 million of the Company’s Series D redeemable convertible preferred stock and the Kissei License Agreement were entered into concurrently and negotiated as a package with a single commercial objective, the Company accounted for the two agreements as a single arrangement for accounting purposes. The total upfront payments of $40.0 million were comprised of $30.0 million attributed to the Series D redeemable convertible preferred stock sold to Kissei and $10.0 million attributed to the functional intellectual property license granted to Kissei. The Company determined that the sale of the Series D redeemable convertible preferred stock of $30.0 million was at fair value and did not include a premium or discount. As a result, $10.0 million of the total upfront payments was allocated to the transaction price of the exclusive license.

For the purposes of ASC 606, the transaction price of the Kissei Agreement as of the outset of the arrangement was determined to be $10.0 million, which consisted of the one-time upfront payment. The other potential milestone payments the Company is eligible to receive were excluded from the transaction price, as all milestone amounts were fully constrained based on the probability of achievement. The Company satisfied the performance obligation upon delivery of the license and recognized the upfront payment of $10.0 million as revenue during the year ended December 31, 2020.

During the year ended December 31, 2021, the Company recognized milestone revenue of $10 million for cash consideration received associated with an achieved development milestone and $0.4 million in development income related to the Kissei License Agreement.

During the years ended December 31, 2025, 2024 and 2023, the Company recorded $0.8 million, $0.2 million, $0.2 million in development income, respectively, related to the Kissei License Agreement.

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9.

Segment Disclosures

The Company operates as a single operating segment. The Company's chief operating decision maker (CODM) is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated net income (loss) to assess financial performance and allocate resources. The CODM does not review assets in evaluating the results of the single segment and therefore, such information is not presented.

The following table presents selected financial information with respect to the Company's single operating segment for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,

Revenues

Commercial and development revenue $ 3,234 $ — $ —

Less:

Cost of sales 4,647 — —

Research and development

10.

Redeemable Convertible Preferred Stock

As of December 31, 2025, the Company has no outstanding redeemable convertible preferred stock as all redeemable convertible preferred stock converted into common stock concurrently with the initial public offering in January 2024.

11.

Common Stock

The Company is authorized to issue up to 700,000,000 shares of common stock as of December 31, 2025 and 2024, of which 80,689,128 and 76,154,783 shares were issued and outstanding as of December 31, 2025 and 2024, respectively.

Voting, dividend and liquidation rights of the holders of the common stock are subject to and qualified by the rights, preferences and privileges of the holders of the redeemable convertible preferred stock, of which there are none as of December 31, 2025 and 2024.

Dividends

The holders of common stock shall be entitled to receive dividends out of funds legally available therefore at such times and in such amounts as the board of directors may determine in its sole discretion.

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Liquidation Rights

Upon any voluntary or involuntary liquidation, dissolution or winding-up of the Company or deemed liquidation event of the Company, all of the remaining assets of the Company available for distribution to the stockholders shall be distributed among the holders of the common stock, pro rata based on the number of shares held by each such holder.

Reserved Shares

As of December 31, 2025, the Company reserved the following shares of common stock for issuance:

December 31,

Stock options and awards outstanding 8,124,561

Reserved for future stock award issuances 4,066,840

Reserved for future ESPP issuances 713,703

12.

Stock-Based Compensation

In 2015, the Company established the 2015 Plan, under which the Company may grant options and restricted stock to its employees and certain non-employees. As of December 31, 2025, there were 646,116 shares of common stock subject to outstanding awards under the 2015 Plan. In 2022, the Company established the 2022 Plan, under which the Company may grant options, restricted stock units, restricted stock, stock appreciation rights, dividend equivalents and other stock and cash-based awards to its employees and certain non-employees. As of December 31, 2025, there were 3,206,430 shares of common stock subject to outstanding awards under the 2022 Plan.

On January 11, 2024, the Company’s board of directors and stockholders approved the 2024 Equity Incentive Plan (the 2024 Plan), which became effective on the date immediately preceding the date on which the Company’s registration statement with respect to its initial public offering was declared effective by the SEC. The 2024 Plan replaced the 2022 Plan, as the Company’s board of directors has determined to not make additional grants under the 2022 Plan following the closing of the offering. However, the 2015 and 2022 Plan will continue to govern outstanding equity awards granted under the 2015 and 2022 Plans. The 2024 Plan allows the Company to make equity-based and cash-based incentive awards to its officers, employees, directors and consultants. The number of shares initially available for issuance under awards granted pursuant to the 2024 Plan is (1) 8,246,565 shares, plus (2) any shares subject to outstanding awards under the 2015 Plan and 2022 Plan as of the effective date of the 2024 Plan that become available for issuance under the 2024 Plan thereafter in accordance with its terms. As of December 31, 2025, there were 4,105,673 shares of common stock subject to outstanding awards and 4,066,835 shares of common stock remaining and available for issuance under the 2024 Plan.

The Company may grant options to purchase authorized but unissued shares of the Company’s common stock. Options granted under the 2015 Plan, 2022 Plan and 2024 Plan include incentive stock options that can be granted only to the Company’s employees and non-statutory stock options that can be granted to the Company’s employees, consultants, advisors and directors.

The exercise prices, vesting and other restrictions of the awards to be granted under the 2015 Plan, 2022 Plan and 2024 Plan are determined by the Board, except that no stock option may be issued with an exercise price less than the fair market value of the common stock at the date of the grant or have a term in excess of ten years. Options granted under the 2015 Plan, 2022 Plan and 2024 Plan are exercisable in whole or in part at any time subsequent to vesting.

Stock Options

145

The following table summarizes stock option activity for the year ended December 31, 2025 (in thousands, except share and per share amounts):

(Years)

The aggregate intrinsic value is calculated as the difference between the exercise price of the stock options and the fair value of the Company's common stock. The aggregate intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $12.8 million, $33.2 million, and $4.9 million, respectively.

The weighted-average grant-date fair value of the options granted was $15.16, $22.53 and $4.27 per share for the years ended December 31, 2025, 2024 and 2023, respectively. The aggregate grant-date fair value of options vested during the years ended December 31, 2025, 2024 and 2023 was $27.1 million, $6.6 million and $0.9 million, respectively.

The following table provides the assumptions used in determining the fair value of option awards for the years ended December 31, 2025, 2024 and 2023:

Year Ended December 31,

Expected dividend yield 0% 0% 0%

The Company has recorded stock-based compensation expense related to stock options of $23.7 million, $9.5 million, and $1.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company had an aggregate $62.3 million of gross unrecognized stock-based compensation expense related to stock options as of December 31, 2025. This remaining expense is expected to be amortized over a weighted-average period of 2.9 years.

Performance-Based Restricted Stock Units

A Performance Stock Unit (PSU) represents one equivalent share of the Company's common stock to be issued after achievement of the performance metrics specified in the grant.The following table summarizes the Company's PSU activity for the year ended December 31, 2025:

146

Number of Shares Weighted Average Grant Date Fair Value

Nonvested at December 31, 2024 — $ —

The Company estimates the fair value of a PSU based upon the expected achievement of the performance metrics specified in the grant and the closing market price of the Company's common stock on the date of grant. The aggregate fair value of PSUs vested during the year ended December 31, 2025 was approximately $0.3 million.

Stock-based compensation expense associated with these PSUs is recognized if achievement of the underlying performance condition is considered probable of achievement based on the Company’s best estimates. The Company has recorded stock-based compensation expense related to PSUs of $0.3 million for the year ended December 31, 2025. As of December 31, 2025, the Company had an aggregate $6.6 million of gross unrecognized stock-based compensation expense related to unvested PSUs to be recognized over a weighted average period of 1.5 years, including the expense attributable to PSUs for which achievement is not considered probable and no current expense is being recognized.

Stock-based compensation expense related to stock awards and the 2024 Employee Stock Purchase Plan (see Note 13) recorded in the accompanying statements of operations for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):

Year Ended December 31,

The Company has not recognized and does not expect to recognize in the near future, any tax benefit related to employee stock-based compensation expense as a result of the full valuation allowance related to its net deferred tax assets.

13.

Employee Stock Purchase Plan

On January 11, 2024, the Company’s board of directors and stockholders approved the 2024 Employee Stock Purchase Plan (the ESPP), which became effective on the date on which the Company’s registration statement with respect to its initial public offering was declared effective by the SEC. The number of shares initially available for issuance pursuant to the ESPP is 812,242 shares. The ESPP provides for the sale of the Company's common stock to eligible employees at 85% of the fair market value of the Company's common stock at the commencement date of each offering period or the relevant date of purchase, whichever is lower. Payroll deductions are limited to 15% of the employee’s eligible compensation, subject to IRS limits. In addition, employees may not buy more than 100,000 shares during any purchase period or offering period. There were 69,393 shares purchased under the ESPP during the year ended December 31, 2025. As of December 31, 2025, there were approximately 0.7 million shares available for issuance under the ESPP.

The Company recorded stock-based compensation expense under the ESPP of approximately $2.6 million for the year ended December 31, 2025. As of December 31, 2025, the Company had $0.8 million of gross unrecognized stock-based compensation expense under the ESPP to be recognized over a weighted average period of 0.9 years.

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14.

Income Taxes

The components of the provision for income taxes are as follows (in thousands):

Year Ended December 31,

Current taxes:

Federal $ — $ — $ —

Total current taxes 8 1 1

Deferred taxes:

Federal (261 ) — —

State (17 ) — —

Total deferred taxes (278 ) — —

Provision for income taxes $ (270 ) $ 1 $ 1

The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 in accordance with the guidance upon adoption of ASU 2023-09 was as follows:

Tax Effect Effective Tax Rate

Income tax computed at federal statutory rate $ (33,784 ) 21.0 %

State and local income tax, net of federal income tax effect (71 ) 0.1

Nontaxable or nondeductible items 315 (0.2 )

Tax credits - research credits (2,937 ) 1.8

Changes in unrecognized tax benefits 412 (0.3 )

Changes in valuation allowance 35,883 (22.3 )

Effective income tax rate $ (270 ) 0.2 %

The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:

Twelve Months Ended

Income tax computed at federal statutory rate 21.00 % 21.00 %

State taxes, net of federal benefit (0.00) (0.00)

Permanent differences (0.62 ) (0.64 )

Stock-based compensation 6.18 (0.20 )

Research and development credit 2.64 2.97

Effective income tax rate 0.00 % 0.00 %

148

The Company’s deferred tax assets as of December 31, 2025 and 2024, consisted of the following (in thousands):

Year Ended December 31,

Deferred tax assets:

Operating lease liabilities 895 50

Stock compensation 4,919 —

Deferred tax liabilities:

Operating lease right-of-use assets (945 ) (46 )

Depreciation (1,042 ) —

Total gross deferred tax liabilities (2,235 ) (51 )

Net deferred tax asset $ (30 ) $ —

Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. For the year ended December 31, 2025, the valuation allowance for deferred tax assets increased by $36.9 million. This increase was primarily related to the establishment of a valuation allowance against additional net operating loss (NOL) and research credits generated in the current year.

No income tax audits were commenced or were in process during the years ended December 31, 2025 and 2024 and no tax related interest or penalties were incurred during those years. The Company’s tax returns beginning with the tax year ended December 31, 2011 remain subject to examination since the Company has not utilized any of its historical net operating losses.

As of December 31, 2025, the Company had $301.7 million and $11.3 million of federal and state NOL carryforwards, respectively. Of the $301.7 million in federal NOL carryforwards, $292.2 million is not subject to expiration and the other $9.5 million begin to expire in 2030. The state NOL carryforwards begin to expire in 2040. In addition, as of December 31, 2025, the Company had $10.9 million of federal research and development (R&D) credit carryovers which begin to expire in 2030 and $1.8 million of California credit carryovers, which can be carried forward indefinitely. There is also $0.1 million of Texas credit which can be carried forward for twenty years. These loss and credit carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.

149

Utilization of the Company’s NOL carryforwards and R&D credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (Section 382) as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change as defined by Section 382 results from transactions increasing the ownership of certain shareholders or public companies in the stock of a corporation by more than 50% over a three-year period. Since its formation, the Company has raised capital through the issuance of capital stock on several occasions. These financings could result in a change of control as defined by Section 382, and consequently the Company’s utilization of the NOL carryforwards would be subject to an annual limitation under Section 382 of the Code. Any limitation may result in expiration of a portion of the NOL carryforwards before utilization.

As of December 31, 2025 and 2024, the Company recorded $1.9 million and $1.4 million unrecognized tax benefits, respectively. The Company’s policy is to recognize interest and penalties accrued on any uncertain tax positions as a component of income tax expense, if any, in its statements of income. For the years ended December 31, 2025, 2024 and 2023, no estimated interest or penalties were recognized on uncertain tax positions, and as of December 31, 2025 the Company has not incurred any material interest or penalties as of the current reporting date with respect to income tax matters.

The following reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):

Year Ended December 31,

Beginning balance of unrecognized tax benefits $ 1,397 $ 1,000 $ 691

Additions for prior year tax positions (34 ) (12 ) 53