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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other information included elsewhere in this Annual Report on Form 10-K. In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties, assumptions, and other important factors. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in Part I, Item 1A. Risk Factors and the section titled “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “will,” “would,” and similar expressions to identify forward-looking statements.

Business Overview

We are a clinical-stage metabolic therapeutics company focused on pioneering novel approaches to treat obesity and type 2 diabetes (“T2D”). Our Revita® and Rejuva® candidates are designed to target root causes of metabolic diseases, allowing us to advance metabolic disease treatment from chronic management towards prevention and reversion of the disease. For a detailed description of our business, product candidates, and development programs, see Part I, Item 1, “Business.”

Key Developments During 2025

During the year ended December 31, 2025, we made significant progress advancing our two product candidates:

Revita. We completed enrollment of the REMAIN-1 Pivotal Cohort in July 2025, a randomized, double-blind, sham-controlled pivotal study evaluating the safety and efficacy of Revita in maintaining weight loss after GLP-1 based therapy discontinuation. We completed randomization of the pivotal cohort in February 2026, with topline six-month data anticipated in the early fourth quarter of 2026.

Strategic Reprioritization. On January 31, 2025, we announced our Strategic Reprioritization, announcing we paused investment in our Revita for T2D, including the REVITALIZE-1 study and the Germany Real-World Registry study. Our decision to pause these studies was not driven by any safety or efficacy concerns. We continue to follow existing participants per protocol and report outcomes on an ongoing basis for these studies. The Strategic Reprioritization included a workforce reduction impacting 22 employees, or approximately 17% of our workforce, and has been substantially implemented.

Rejuva. We completed key preclinical in vivo studies to support clinical trial applications (“CTAs”) for RJVA-001, our lead gene therapy candidate and subsequently submitted CTAs for RJVA-001 in T2D to regulators in the EU (Netherlands) and Australia in the second half of 2025, advancing the program toward its anticipated first-in-human study. We also advanced RJVA-002, our dual GIP/GLP-1 gene therapy candidate, through preclinical development.

Anticipated 2026 Revita Milestones

With randomization complete, we are advancing toward multiple anticipated clinical and regulatory milestones toward pivotal readout and potential U.S. regulatory submission. In March 2026 in connection with its regulatory strategy, the Company received pre-submission feedback from the FDA in which it acknowledged that the safety profile of the Revita DMR System, based on clinical data from over 300 procedures, is consistent with a Class II device classification. As in all applications, the FDA indicated that final pathway determinations will be made following review of the complete safety dataset which the Company intends to include in its potential De Novo marketing application submission.

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One-year REVEAL-1 Cohort data in the second quarter of 2026.

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One-year REMAIN-1 Midpoint Cohort randomized data in the third quarter of 2026.

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Topline six-month randomized data from the REMAIN-1 Pivotal Cohort in the early fourth quarter of 2026.

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Potential FDA De Novo marketing application submission in post-GLP-1 weight maintenance in the late fourth quarter of 2026.

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Anticipated 2026 Rejuva Milestones

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Regulatory feedback on CTAs for RJVA-001 in the second quarter of 2026.

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First-in-human dosing of RJVA-001, subject to CTA authorization, and expected reporting of preliminary data in the second half of 2026.

We are pursuing opportunities to strengthen our balance sheet and fund our path towards potential commercialization, leveraging the achievement of clinical data milestones.

Management believes that our available cash and cash equivalents balance of $81.5 million as of December 31, 2025, combined with $4.1 million in subsequent proceeds from Tranche A warrant exercises received in January 2026, will be sufficient to fund our operating expenses and capital expenditure requirements into early 2027. Importantly, we are well funded through multiple key clinical and regulatory milestones in 2026, including the anticipated topline six-month randomized data from the REMAIN-1 Pivotal Cohort, anticipated De Novo marketing application submission in post-GLP-1 weight maintenance, and initial dosing and preliminary data from our RJVA-001 clinical program. For additional information regarding our liquidity, funding requirements and going concern assessment, see “Liquidity and Capital Resources—Funding Requirements and Going Concern” below and Part I, Item 1A, “Risk Factors—Risks Related to Our Financial Condition and Capital Requirements.”

Components of our Consolidated Results of Operations

Revenue and Cost of Goods Sold

To date, we have generated revenue in Germany since the limited pilot commercial launch of Revita in the first quarter of 2023. We have not generated any revenue in the U.S. and do not expect to generate any revenue there unless and until we successfully complete clinical development and obtain marketing approvals for one or more of our product candidates. On January 31, 2025, we approved a Strategic Reprioritization, in which we have paused investment in our Revita programs for T2D, which consists of the REVITALIZE-1 study and the Germany Real World Registry study. As a result, we have not generated any revenue in 2025.

Cost of goods sold primarily consist of material costs, direct labor, and manufacturing overhead costs. We currently manage the final assembly and testing of Revita in the manufacturing space at our headquarters in Burlington, Massachusetts. We contract with third-party manufacturers to produce certain key parts of our single-use devices and consoles.

Operating Expenses

Research and Development Expenses

Research and development expenses primarily consist of personnel-related expenses, including salaries, bonuses, fringe benefits and stock-based compensation expense, for employees engaged in research and development functions. These expenses also include external costs associated with our ongoing clinical studies, including payments to clinical sites and our clinical research organization (“CRO”) and clinical manufacturing costs, as well as fees paid to third party consultants and contractors for engineering, quality assurance and regulatory support. In addition, research and development expenses include costs associated with our preclinical research and Chemistry, Manufacturing, and Controls (“CMC”) activities related to our Rejuva gene therapy platform.

We expense research and development costs as incurred. Non-refundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses and other current assets or as other long-term assets, which are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered or the services rendered.

A significant portion of our research and development costs have been, and will continue to be, external costs. We track these external costs – such as fees paid to our CRO, preclinical study vendors and other third parties in connection with our product engineering, sub-assembly component manufacturing and manufacturing process development, clinical studies, preclinical studies, and other research activities – on a program-by-program basis. We also use a portion of our personnel and infrastructure resources for our research and development efforts, which are shared across multiple programs under development, and as such, are not tracked on a program-by-program basis. The following table reflects our research and

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development expense, including direct program-specific expense summarized by program, indirect expenses, and personnel-related expenses recognized during each period presented:

Year Ended December 31,

Direct program-specific expenses:

Total direct program-specific expenses 40,577 33,093

Personnel-related expenses (including stock-based compensation) 25,994 28,340

Total research and development expenses $ 74,536 $ 70,471

We expect our research and development expenses to decrease in the near term as a result of the completion of randomization in the REMAIN-1 pivotal study, as spending shifts from enrollment-related activities to patient follow-up and data collection. This decrease may be partially offset by costs associated with initiating the Rejuva first-in-human study.

Selling, General and Administrative Expenses

Selling, general and administrative expenses primarily consist of personnel-related costs, including salaries, bonuses, fringe benefits and stock-based compensation expense, for our personnel and external contractors involved in our executive, finance, legal, and other administrative functions. Selling, general and administrative expenses also include costs incurred for outside services associated with such functions, including costs associated with obtaining and maintaining our patent portfolio and professional fees for accounting, auditing, tax, legal services, and other consulting expenses.

We expect our selling, general and administrative expenses to stay stable in the near term. If marketing approval or certification for our product candidate is obtained, we anticipate that our selling, general and administrative expenses will increase over time as we expand our commercial and administrative function to support our transition towards commercial readiness and the potential launch, as well as pursue payor coverage and reimbursement for our current and future product candidates.

Other Income (Expenses), Net

Other income (expense), net is primarily comprised of interest income, change in fair value of notes payable, and change in fair value of warrant liabilities.

Interest Income

Interest income is primarily generated from cash interest earned on our cash, cash equivalents, and restricted cash balances.

Change in Fair Value of Notes Payable

In January 2022, we entered into a financing arrangement with certain lenders in which we issued convertible promissory notes (the “2022 Convertible Notes”). Upon the closing of our IPO in February 2024, all outstanding principal plus accrued interest under the 2022 Convertible Notes were converted into our common stock. The 2022 Convertible Notes were marked to market to their fair value as of the time of the conversion before being reclassified to equity.

In September 2023, we entered into a credit agreement with certain lenders that provides for term loans (the “2023 Notes”). We elected the fair value option to account for these notes payable, which are re-measured at the end of each reporting period with changes in fair value recognized as a component of other income (expense), net. We will continue to recognize changes in fair value of the notes payable until they are repaid in cash.

Change in Fair Value of Warrant Liabilities

In January 2014, we issued a fully vested warrant to purchase shares of our Series B convertible preferred stock in connection with a loan and security agreement entered into in January 2014. In connection with our IPO in February 2024,

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warrants to purchase our convertible preferred stock converted into warrants to purchase our common stock and related liabilities were reclassified to additional paid-in capital.

In July 2023, we issued fully vested warrants to purchase shares of our common stock in connection with the issuance of the amended and restated 2022 Convertible Notes. In September 2023, we issued fully vested warrants to purchase shares of our common stock or convertible preferred stock in connection with the 2023 Notes. In August 2025, we issued fully vested warrants to purchase shares of our common stock in connection with our August 2025 Offering.

These warrants were classified as liabilities on our consolidated balance sheet and were initially recorded at fair value on the grant date. They are subsequently remeasured to fair value at the end of each reporting period and at exercise with changes in fair value recognized as a component of other income (expense), net. We will continue to recognize changes in fair value of the warrant liabilities until the warrants are exercised or expire.

Critical Accounting Policies and Significant Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and recorded amounts of expenses 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 – “Significant Accounting Policies” of our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies used in the preparation of our consolidated financial statements require the most significant judgments and estimates. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our audited consolidated financial condition and results of operations.

Determination of the Fair Value of Notes Payable

We elected the fair value option to account for our 2023 Notes, and remeasure the fair value at each reporting date. The fair value of the 2023 Notes as of December 31, 2025 and 2024 was estimated using a discounted cash flow model by discounting projected future cash flows associated with the 2023 Notes to their present value. The discount rate used in the model is based on observable market yields for similarly rated instruments, adjusted for any specific risks inherent in the 2023 Notes, which is a level 3 fair value measurement and requires judgment to determine at each period end.

Accrued Research and Development Expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses. 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 actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advanced payments. We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of these estimates with the service providers and make adjustments if necessary. Examples of estimated accrued research and development expenses include fees paid to:

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vendors, including central laboratories and research organizations, in connection with preclinical development activities and our research programs;

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CRO and investigative sites in connection with preclinical and clinical studies; and

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Clinical Manufacturing Organizations (“CMOs”), in connection with devices and consumables used in the clinical studies.

We base our expenses related to preclinical and clinical studies on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple research institutions that conduct and manage preclinical and clinical studies 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 expense. Payments under some of these contracts depend on factors such as the successful enrollment of participants and the completion of clinical study milestones. 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 the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Results of Operations

The following table summarizes our consolidated results of operations for the years ended December 31, 2025 and 2024:

Year EndedDecember 31, Change

Operating expenses:

Revenue and Cost of Goods Sold

Revenue and cost of goods sold during the year ended December 31, 2024, was related to our pilot commercial launch in Germany. In January 2025, we approved a Strategic Reprioritization in which we paused investment in our Revita program for T2D, which also included the pilot commercial launch in Germany. Therefore, we did not recognize any revenue in 2025.

Research and Development Expenses

Research and development expenses increased by $4.1 million, or 5.8%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to the advancements made in our Revita and Rejuva programs.

Revita-related expenses increased by $3.0 million, mainly due to a $6.1 million increase in clinical related expenses, partially offset by a $2.0 million decrease in collaborative medical research expenditures and a $1.1 million decrease in Revita related engineering expenses. Increases in clinical expenses were primarily driven by the positive progress made in our REMAIN-1 study, partially offset by reduced expenses from the REVITALIZE-1 study as a result of our Strategic Reprioritization, which also contributed to the decrease in collaborative medical research expenditures. Revita related engineering expenses decreased as our development efforts gradually shifted to validation and regulatory approval support

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activities. Rejuva-related expenses increased by $4.5 million as we advanced preclinical CMC activities and clinical preparation work in support of the RJVA-001 first-in-human study.

Personnel related expenses decreased by $2.3 million, which was mainly the result of a $3.6 million decrease in stock-based compensation expense, partially offset by a $1.3 million increase in bonuses, severance and associated payroll taxes. Allocated facilities expenses also decreased by $1.2 million due to the expenses incurred when we moved into our new office and laboratory space in Burlington, MA in the first quarter of 2024.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased by $0.8 million, or 3.6%, during the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to decreased personnel-related expenses of $2.9 million driven by a $4.1 million decrease in stock-based compensation expense, partially offset by a $1.2 million increase in salary, bonus and severance expenses. This personnel-related decrease was partially offset by a $1.8 million increase in offering costs primarily associated with the issuance of warrants in the August 2025 Offering and a $0.7 million increase in legal, audit, investor relations and other administrative expenses incurred to support our operation as a public company.

Other Income (Expense), Net

Other expense, net, of $44.1 million during the year ended December 31, 2025, was primarily attributable to a $40.9 million loss from the change in fair value of warrant liabilities, a $4.7 million loss from the change in fair value of notes payable, partially offset by $1.5 million in net interest income. Other income, net, of $24.8 million during the year ended December 31, 2024, was primarily attributable to a $17.9 million gain from the change in fair value of notes payable, a $2.8 million gain from the change in fair value of warrant liabilities, and $4.1 million in net interest income.

Changes in fair value of warrant liabilities and changes in fair value of the 2022 Convertible Notes were mainly a result of the fluctuation of the value of the underlying shares of our common stock. Changes in fair value of the 2023 Notes were primarily driven by a combination of interest on the notes payable and the fluctuation of market interest rates. Interest income earned from our cash deposits decreased by $2.6 million mainly due to lower overall deposit balances and lower interest rate during 2025 as compared to 2024.

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. GAAP, we also evaluate our performance using Adjusted EBITDA, a non-GAAP financial measure. We define Adjusted EBITDA as net loss adjusted to exclude (i) interest income, net, (ii) depreciation expense, (iii) stock-based compensation expense, (iv) changes in the fair value of notes payable and (v) changes in the fair value of warrant liabilities.

We present Adjusted EBITDA as supplemental information because management believes it provides additional insight into our operating performance and facilitates comparisons of our results from period to period by excluding items that are non-cash or non-operational in nature and may vary in magnitude. Management uses Adjusted EBITDA in evaluating our operating performance and in planning and forecasting future periods.

Adjusted EBITDA should not be considered in isolation or as a substitute for, or superior to, net loss or any other measure of financial performance prepared in accordance with GAAP. Adjusted EBITDA does not reflect interest income, depreciation, stock-based compensation expense, or changes in the fair value of certain financial instruments, each of which may be significant. In addition, our definition of Adjusted EBITDA may differ from similarly titled measures used by other companies and therefore may not be comparable.

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A reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA is presented below.

Year EndedDecember 31,

Net loss and comprehensive loss $ (140,954 ) $ (68,694 )

Change in fair value of notes payable 4,724 (2,830 )

Change in fair value of warrant liabilities 40,901 (17,908 )

Liquidity and Capital Resources

We manage our cash and capital structure to maximize shareholder return, maintain financial condition and maintain flexibility for future strategic initiatives. We continuously assess our working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements and future investments.

Loan and Security Agreements

2023 Notes

On September 7, 2023, we entered into a credit agreement, as amended from time to time (the “Credit Agreement”), with Symbiotic Capital Opportunities Holding, L.P. and Catalio Structured Opportunities AIV I LP (the “2023 Lenders”) that provided for term loans up to an aggregate principal amount of $45.0 million (the “2023 Notes”) in two tranches. The first tranche, with a principal amount of $30.0 million, was drawn on September 7, 2023, resulting in net proceeds of approximately $28.4 million. The second tranche, with a principal amount of $15.0 million, would have been extended upon our achievement of certain operating and funding milestones as defined in the Credit Agreement, by July 31, 2024. The Credit Agreement also provides for a third tranche with an uncommitted principal amount of $20.0 million that may be extended to us, subject to the 2023 Lenders’ prior written consent in their sole discretion. Due to a shift in business strategy to include the weight maintenance study, we decided not to pursue the milestones required to access the second tranche. As a result, the second tranche was not extended.

The Credit Agreement, as amended, contains financial covenants including a minimum liquidity covenant requiring us to maintain a minimum $10.0 million balance in cash and cash equivalents on deposit in accounts, subject to certain exceptions. As of December 31, 2025, we were in compliance with the financial covenants and other terms of the arrangement. Our obligations under the Credit Agreement are collateralized by substantially all of our assets, including our intellectual property, but excluding certain customary and agreed upon assets.

The outstanding balances under the 2023 Notes bear interest at a floating annual rate equal to the greater of 5.5% above the Wall Street Journal prime rate or 13.25%. On and prior to September 30, 2024, 6.0% of the interest was payable in kind and added to the outstanding principal amount of the 2023 Notes. Monthly principal payments of 1.5% of the aggregate outstanding principal balance, including accrued PIK interest, were originally scheduled to commence on September 30, 2026. Under the terms of the Credit Agreement, we had the right to extend the first principal payment date to September 30, 2027, provided that certain financing milestones defined in the Credit Agreement were achieved on or prior to September 30, 2026. Having achieved those milestones during 2024, we exercised that election, and principal payments are now scheduled to commence on September 30, 2027. In addition, upon any principal payment, we are required to make an additional payment to the 2023 Lenders of a 6.0% fee (the “Exit Fee”) of the principal and accrued PIK interest paid. The aggregate Exit Fee of the 2023 Notes is equal to 6.0% of the total commitment of $45.0 million plus all accrued PIK interest. All remaining outstanding principal balance, accrued interest and Exit Fee on the 2023 Notes shall be due and payable on the maturity date of September 7, 2028.

As of December 31, 2025, the balance of the 2023 Notes was carried at its fair value of $30.6 million.

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S-3 Registration Statement

On March 3, 2025, we filed a Registration Statement on Form S-3 with the U.S. Securities and Exchange Commission (“SEC”), which was subsequently amended on March 13, 2025 (as amended, the “S-3 Registration Statement”). The S-3 Registration Statement became effective on March 18, 2025. It contains a base prospectus, which covers the offering, issuance and sale of up to $300.0 million in the aggregate of the securities from time to time in one or more offerings.

At-The-Market Offering

On March 3, 2025, concurrently with the filing of the S-3 Registration Statement, we entered into a sales agreement with Jefferies LLC as sales agent (the “Sales Agreement”) and filed a prospectus supplement under an at-the-market offering (the “ATM Offering”) covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $100.0 million of our common stock. As of December 31, 2025, we issued and sold 4,701,960 shares of our common stock under the ATM Offering at a weighted average price of $1.53 per share, resulting in net proceeds of approximately $6.8 million, after deducting commissions and offering expenses. No shares were sold under the Sales Agreement subsequent to December 31, 2025. On March 23 2026, we notified Jefferies LLC of our intention toterminate the Sales Agreement pursuant to its terms. As a result, the Sales Agreement will be terminated effective April 6, 2026 and no further sales will be made thereunder after such date.

August 2025 Offering

On August 6, 2025, we entered into an underwriting agreement with Ladenburg Thalmann & Co. Inc. (“Ladenburg”), in connection with the underwritten offering, issuance and sale by us of 19,047,619 shares of our common stock, warrants to purchase up to 19,047,619 shares of our common stock (the “Tranche A Warrants”) and warrants to purchase 19,047,619 shares of our common stock (the “Tranche B Warrants”). The combined offering price for each share of our common stock, accompanying Tranche A Warrant and accompanying Tranche B Warrant was $1.05. The securities were issued pursuant to the S-3 Registration Statement and a related prospectus supplement filed with the SEC (the “August 2025 Offering”).

Each Tranche A Warrant has an exercise price per share of common stock equal to $1.05, subject to certain adjustments. The Tranche A Warrants are exercisable at any time on or after August 7, 2025 and will expire on August 7, 2027. The Tranche A Warrants are callable at our option following the release of 3-month randomized midpoint clinical data from the ongoing REMAIN-1 study, which data was published on September 26, 2025, subject to satisfaction of certain conditions including that the average trading price of the stock exceeds $1.37 per share for 15 consecutive trading days and a minimum daily trading volume threshold.

Each Tranche B Warrant has an exercise price per share of common stock equal to $1.05, subject to certain adjustments. The Tranche B Warrants are exercisable upon receipt of the Tranche B Warrant Stockholder Approval, which was obtained at the Special Meeting of Stockholders and the Tranche B Warrants became exercisable on October 3, 2025. The Tranche B Warrants will expire on October 3, 2030, which is the date that is five years from the date of the Tranche B Warrant Stockholder Approval.

In addition, we granted Ladenburg a 30-day option to purchase up to an additional 2,857,142 shares of our common stock, along with associated Tranche A Warrants and Tranche B Warrants, at the combined public offering price of $1.05 per share, less underwriting commissions. On August 6, 2025, Ladenburg exercised the option to purchase additional shares of our common stock, along with associated Tranche A Warrants and Tranche B Warrants, in full.

The August 2025 Offering closed on August 7, 2025, from which we received approximately $22.6 million of net proceeds, after deducting underwriting commissions and offering expenses, excluding any potential future proceeds from the exercise of the Tranche A Warrants and Tranche B Warrants.

In December 2025, the conditions necessary to call the Tranche A warrants were satisfied and we exercised our call option. As of December 31, 2025, Tranche A Warrants were exercised to purchase 21,904,261 shares of our common stock for total proceeds of $23.0 million, $4.1 million of which was not received until January 2026. The remaining unexercised 500 warrants were cancelled on December 30, 2025 upon expiration of the warrant call.

As of December 31, 2025, certain holders exercised Tranche B warrants at an exercise price of $1.05 per share resulting in the issuance of 757,759 shares of our common stock for net proceeds of $0.8 million.

September 2025 Offering

On September 26, 2025, we entered into an underwriting agreement with BofA Securities, Inc. and Evercore Group L.L.C., as representatives of several underwriters, pursuant to which we issued and sold 60,000,000 shares of our common stock, at

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a price to the public of $1.00 per share. The securities were issued pursuant to the S-3 Registration Statement and a related prospectus supplement filed with the SEC (the “September 2025 Offering”).

The September 2025 Offering closed on September 29, 2025, from which we received approximately $56.0 million of net proceeds, after deducting underwriting commissions and offering expenses.

Funding Requirements and Going Concern

Our future success is dependent on our ability to develop product candidates, generate significant revenue, and upon our ability to attain profitable operations. We are subject to a number of risks similar to other early-stage life science companies, including, but not limited to, successful discovery and development of our product candidates, raising additional capital with favorable terms, development by our competitors of new technological innovations, protection of proprietary technology and market acceptance of our products. The successful discovery and development of product candidates requires substantial capital which may not be available to us on favorable terms or not at all.

To date, we have financed our operations primarily through our equity and debt financings. We have a history of operating losses and had an accumulated deficit of $556.3 million as of December 31, 2025. Management believes that our available cash and cash equivalents of $81.5 million as of December 31, 2025, combined with $4.1 million subsequent proceeds received in January 2026 from the Tranche A warrant exercises, will be sufficient to fund our operating expenses and capital expenditure requirements into early 2027, through multiple key clinical and regulatory milestones. Our estimate as to how long we expect our existing cash and cash equivalents will be able to continue to fund our operating expenses and capital expenditure requirement is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we expect. In addition, without additional financing, we may not be able to comply with the minimum liquidity covenant related to our 2023 Notes by the end of 2026. Given the inherent risk and uncertainty of future cash flow estimates as well as the minimum liquidity covenant requirement, we have concluded that substantial doubt exists about our ability to continue as a going concern for at least 12 months from the issuance date of this Annual Report on Form 10-K. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

We expect to seek additional funds through equity or debt financings or through collaboration or licensing transactions or other sources. We may be unable to obtain equity or debt financings or enter into collaboration or licensing transactions and, if necessary, we will be required to implement cost reduction strategies which could curtail or delay our current operating plans.

Because of the numerous risks and uncertainties associated with product development, and because the extent to which we may enter into collaborations with third parties for the development of our product candidates is unknown, we may incorrectly estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. Our funding requirements and timing and amount of our operating expenditures will depend on many factors, including, but not limited to:

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the scope, progress, results and costs of research and development for our current and future product candidates, including our current and planned Revita clinical studies, and ongoing preclinical development for our current and future product candidates;

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the scope, prioritization and number of our research and development programs;

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

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the costs of securing manufacturing materials for use in preclinical and clinical studies and, for any product candidates for which we receive regulatory approval, use as commercial supply;

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our ability to seek, establish and maintain a collaboration to develop our product candidate with a collaborator, including the financial terms and any cost-sharing arrangements of any such collaboration;

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the costs and timing of future commercialization activities for any of our product candidates for which we receive regulatory approval;

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the amount and timing of revenue, if any, received from commercial sales of any product candidates for which we receive regulatory approvals;

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

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the extent to which we may acquire or in-license other products, product candidates, technologies or intellectual property, as well as the terms of any such arrangements; and

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the costs of continuing to expand our operations and operating as a public company.

Identifying potential product candidates and conducting preclinical testing and clinical studies is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales in the U.S. or elsewhere. In addition, our product candidates, if approved, may not achieve commercial success. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives.

Our expectation with respect to our ability to fund current planned operations is based on estimates that are subject to risks and uncertainties. Our operating plan may change as a result of many factors currently unknown to management and there can be no assurance that the current operating plan will be achieved in the time frame anticipated by us, and we may need to seek additional funds sooner than planned.

Adequate additional funds may not be available to us on acceptable terms, or at all. Market volatility resulting from pandemics, monetary policy changes, or other factors could also adversely impact our ability to access capital as and when needed. To the extent that 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. Additional debt financing and convertible 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 capital expenditures or declaring dividends and may require the issuance of warrants, which could potentially dilute your ownership interest.

If we raise additional funds through collaborations, strategic alliances or licensing arrangements 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 have to significantly delay, reduce or eliminate some or all of 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.

For additional information on risks associated with our substantial capital requirements, please see Part I, Item 1A, “Risk Factors—Risks Related to Our Financial Condition and Capital Requirements.”

We will require substantial additional capital beyond the proceeds received from our prior financings to fund our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and development programs or future commercialization efforts.

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Cash Flows

The net change in cash, cash equivalents and restricted cash for the years ended December 31, 2025 and 2024 was as follows:

Year Ended December 31,

Net cash used in operating activities $ (90,328 ) $ (65,521 )

Net cash used in investing activities (557 ) (1,765 )

Net increase in cash, cash equivalents and restricted cash $ 14,076 $ 33,940

Operating Activities

Cash used in operating activities of $90.3 million for the year ended December 31, 2025 was primarily driven by spending on our ongoing clinical studies, Rejuva-related research activities, professional services related to our corporate and general administrative activities, as well as personnel-related expenses, including salaries, bonuses, and other compensatory benefits. Cash used in operating activities resulted primarily from our net loss of $141.0 million adjusted for net non-cash loss of $51.0 million, primarily consisting of $40.9 million non-cash loss from changes in the fair value of warrant liabilities, $0.4 million non-cash loss from change in fair value of notes payable, $6.7 million stock-based compensation expense, $1.6 million non-cash operating lease expense, $1.1 million depreciation expense and $0.3 million non-cash interest expense. Cash used in operating activities was also impacted by changes in working capital and other assets and liabilities of $0.4 million.

Cash used in operating activities of $65.5 million for the year ended December 31, 2024 was primarily driven by spending on Revita and Rejuva clinical and preclinical activities, professional services related to our corporate and general administrative activities, as well as personnel-related expenses, including salaries, bonuses, and other compensatory benefits. Cash used in operating activities resulted primarily from our net loss of $68.7 million adjusted to exclude net non-cash income of $6.4 million, primarily consisting of $17.9 million non-cash gain from change in fair value of warrant liabilities and $5.8 million non-cash gain from change in fair value of notes payable, offset by $14.4 million in stock-based compensation, $1.9 million non-cash operating lease expense, $0.7 million depreciation and $0.3 million non-cash interest expense. Cash used in operating activities was also impacted by changes in working capital and other assets and liabilities of $9.6 million.

Investing Activities

Cash used in investing activities for the years ended December 31, 2025 and 2024 was related to the purchase of property and equipment. The decrease in the year ended December 31, 2025 as compared with the year ended December 31, 2024 was primarily due to our spending on leasehold improvements, office furniture and information technology equipment as we moved into our new office and laboratory space in Burlington, MA, in the first quarter of 2024.

Financing Activities

Cash provided by financing activities of $105.0 million for the year ended December 31, 2025 was primarily driven by $85.4 million net proceeds received from our equity offerings, including $22.6 million from the August 2025 Offering, $56.0 million raised from the September 2025 Offering and $6.8 million from the ATM Offering. We also received proceeds of $19.7 million from warrant exercises and $0.3 million from option exercises. These financing cash inflows are partially offset by $0.4 million principal payments made on finance lease obligations.

Cash provided by financing activities of $101.2 million for the year ended December 31, 2024 was primarily driven by the $103.7 million capital raised from the IPO, net of discounts and commissions, partially offset by $2.9 million payments of public offering costs made to third-party service providers. We also received proceeds of $0.6 million from stock option exercises. These financing cash inflows are partially offset by $0.2 million principal payments made on finance lease obligations.

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Contractual Obligations and Commitments

We have entered into arrangements that contractually obligate us to make payments that will affect our liquidity and cash flows in future periods.

As of December 31, 2025, our lease commitments reflect payments due for our operating and finance leases. The operating leases include our corporate office and laboratory space in Burlington, MA that will expire in June 2034. The finance leases represent laboratory equipment used in our Rejuva preclinical activities. As of December 31, 2025, our future contractual commitments for our leases were $52.3 million, of which $51.5 million were related to our operating leases. For additional information on our leases and timing of future payments, please see Note 7— “Commitments and Contingencies” to the consolidated financial statements included in this Annual Report on this Form 10-K.

We have also entered into contracts in the normal course of business with various third parties for clinical trials, preclinical research studies, manufacturing, and other services and products for operating purposes. These contracts do not contain any minimum purchase commitments and provide for termination upon notice. Payments due upon cancellation generally consist only of payments for services provided or expenses incurred, including non-cancellable obligations of our service providers, up to the date of cancellation.

Recent Accounting Pronouncements

See Note 2— “Significant Accounting Policies” to our audited consolidated financial statements for the years ended December 31, 2025 and 2024 included elsewhere in this Annual Report on Form 10-K for more information.

JOBS Act Accounting Election

We are an “emerging growth company” within the meaning of the Jumpstart Our Business Act of 2012 (“JOBS Act”). Section 107(b) of the JOBS Act provides that an emerging growth company can leverage the extended transition period, provided in Section 102(b) of the JOBS Act, for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. We have elected to use this extended transition period and, as a result, our financial statements may not be comparable to companies that comply with public company effective dates. We have also elected to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

We would cease to be an emerging growth company on the date that is the earliest of (1) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (2) the last day of our fiscal year following the fifth anniversary of the date of the completion of our IPO; (3) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

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

We are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item 7A.

Item 8. Financial Statements and Supplementary Data.

The financial statements required to be filed pursuant to this Item 8 are appended to this report. An index of those financial statements is found in Part IV, Item 15. Exhibits and Financial Statement Schedules of this Annual Report on Form 10‐K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

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Item 9A. Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Annual Report on Form 10‐K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a‐15(e) and 15d‐15(e) under the Exchange Act). As part of this evaluation, management considered cybersecurity risks, including the potential for cyber incidents to affect the Company’s ability to record, process, summarize, and report information required to be disclosed in our SEC filings within the required time periods. Management’s assessment included consideration of the cybersecurity risk management program described in Part I, Item 1C of this Annual Report on Form 10-K, including the effectiveness of controls and procedures for identifying and escalating cybersecurity risks and incidents, and for assessing their potential impact on our financial reporting and disclosure obligations. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, using the criteria described in Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.

This Annual Report on Form 10‐K does not include an attestation report of our independent registered accounting firm. Our independent registered accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act or even after we no longer qualify as an “emerging growth company,” if we remain a “low-revenue smaller reporting company,” until we are no longer a “low-revenue smaller reporting company.”

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a‐15(f) and 15d‐15(f) under the Exchange Act) during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

(a) Disclosure in lieu of reporting on a Current Report on Form 8-K.

None.

(b)Insider Trading Arrangements and Policies.

During the three months ended December 31, 2025, no director or officer of the Company (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Information required by this item is incorporated by reference to the information set forth in the sections entitled “Our Board of Directors” and “Our Executive Officers” in our definitive proxy statement to be filed with the SEC on Schedule 14A in connection with our 2026 Annual Meeting of Shareholders (the “Proxy Statement”), which is expected to be filed no later than 120 days after December 31, 2025.

Our board of directors has adopted the Fractyl Health, Inc. Code of Business Conduct and Ethics that applies to all officers, directors and employees. This includes our principal executive officer, principal financial officer and principal accounting officer or controller or persons performing similar functions. The nominating and corporate governance committee is responsible for overseeing the Code of Business Conduct and Ethics and must approve any waivers of the Code of Ethics for our employees, executive officers and directors. The Code of Business Conduct and Ethics is available on our website at ir.fractyl.com. If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code of Business Conduct and Ethics to the principal executive officer, principal financial officer and principal accounting officer or controller or persons performing similar functions, we will promptly disclose the nature of the amendment or waiver on our website. Information contained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report on Form 10-K, and you should not consider information on our website to be part of this Annual Report on Form 10-K.

Item 11. Executive Compensation.

Information required by this item is incorporated by reference to the information set forth in the sections entitled “Executive Compensation” and “Director Compensation” in the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information required by this item is incorporated by reference to the information set forth in the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Information required by this item is incorporated by reference from the sections entitled “Certain Relationships and Related Transactions” and “Director Independence” in the Proxy Statement.

Item 14. Principal Accountant Fees and Services

Information required by this item is incorporated by reference to the information set forth in the section entitled “Independent Registered Public Accounting Firm Fees and Services” in the Proxy Statement.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements.

The following documents are included on pages F‐1 through F‐ attached hereto and are filed as part of this Annual Report on Form 10‐K.

Index to Consolidated Financial Statements

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 42) F-2

Consolidated Balance Sheets as of December 31, 2025 and 2024 F-3

Notes to Consolidated Financial Statements F-7 to F-

(a)(2) Financial Statement Schedules.

All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto.

(a)(3) Exhibits.

The following is a list of exhibits filed as part of this Annual Report on Form 10‐K.

Incorporated by Reference

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Incorporated by Reference

19.1 Fractyl Health, Inc. Insider Trading Compliance Policy *

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Incorporated by Reference

23.1 Consent of Independent Registered Public Accounting Firm *

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer *

31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer *

101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith

** Furnished herewith

† Indicates a management contract or compensatory plan or arrangement.

# Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.

Item 16. Form 10-K Summary.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Fractyl Health, Inc.

Date: March 24, 2026 By: /s/ Harith Rajagopalan

Harith Rajagopalan, M.D. Ph.D.

Co-Founder, Chief Executive Officer and Director

POWER OF ATTORNEY

KNOW ALL BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Harith Rajagopalan, M.D., Ph.D. and Lara Smith Weber, as his or her true and lawful attorneys-in-fact and agents, each with the full power of substitution, for him or her and in his or her name, place or stead, in any and all capacities, to sign any and all amendments to this Registration Statement (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Kelly BarnesKelly Barnes Director March 24, 2026

/s/ William W. BradleyWilliam W. Bradley Director March 24, 2026

/s/ Samuel Conaway Director March 24, 2026

Samuel Conaway

/s/ Marc EliaMarc Elia Director March 24, 2026

/s/ Clive MeanwellClive Meanwell, M.B., Ch.B., M.D. Director March 24, 2026

/s/ Ajay RoyanAjay Royan Chairman March 24, 2026

/s/ Ian SheffieldIan Sheffield Director March 24, 2026

/s/ Christopher C. Thompson Director March 24, 2026

Christopher C. Thompson, M.D., MSc

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Fractyl Health, Inc.

Index to Consolidated Financial Statements

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 42) F-2

Consolidated Balance Sheets as of December 31, 2025 and 2024 F-3

Notes to Consolidated Financial Statements F-7 to F-

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Fractyl Health, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Fractyl Health, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the two 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 as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring operating losses and negative cash flows, expects continuing operating losses and negative operating cash flows for the foreseeable future, projects that it may not comply with the minimum liquidity covenant related to the Company’s 2023 Notes without additional financing, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

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

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

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2017.

Boston, Massachusetts

March 24, 2026

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Fractyl Health, Inc.

Consolidated Balance Sheets

(in thousands, except for share and per share information)

December 31,

Assets

Current assets:

Inventory — 73

Prepaid expenses and other current assets 6,036 4,226

Liabilities, convertible preferred stock and stockholders’ equity

Current liabilities:

Accrued expenses and other current liabilities 11,651 11,579

Operating lease liabilities, current 5,104 4,956

Operating lease liabilities, long-term 25,956 27,382

Other long-term liabilities 663 998

Stockholders’ equity:

Total liabilities and stockholders’ equity $ 121,402 $ 108,077

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

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Fractyl Health, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except for share and per share information)

Year Ended December 31,

Revenue $ — $ 93

Cost of goods sold — 50

Gross profit — 43

Operating expenses:

Other income (expense), net:

Change in fair value of notes payable (4,724 ) 2,830

Change in fair value of warrant liabilities (40,901 ) 17,908

Other expense, net (53 ) (47 )

Accretion of dividends on convertible preferred stock — (1,737 )

Net loss attributable to common stockholders $ (140,954 ) $ (70,431 )

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

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Fractyl Health, Inc.

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

(in thousands, except for share information)

Shares Amount Shares Amount Capital Deficit Equity (Deficit)

Issuance of common stock from RSU vesting — — 604,509 — — — —

Exercise of common stock warrants — — 38,544 — — — —

Stock-based compensation expense — — — — 14,426 — 14,426

Issuance of common stock from RSU vesting — — 22,500 — — — —

Issuance of common stock under share purchase agreement — — 10,416 — 20 — 20

Exchange of common stock for pre-funded warrants — — (4,850,000 ) — — — —

Stock-based compensation expense — — — — 6,684 — 6,684

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

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Fractyl Health, 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:

Non-cash interest expense 296 357

Non-cash operating lease expense 1,587 1,869

Change in fair value of warrant liabilities 40,901 (17,908 )

Change in fair value of notes payable, non-cash 424 (5,840 )

Changes in operating assets and liabilities:

Accounts receivable — 22

Inventory 73 —

Prepaid expenses and other current assets 2,248 (2,197 )

Accrued expenses and other current liabilities 414 5,654

Operating lease liabilities (1,278 ) 1,098

Other long-term assets and liabilities (186 ) 2,329

Net cash used in operating activities (90,328 ) (65,521 )

Investing activities:

Purchases of property and equipment (557 ) (1,765 )

Net cash used in investing activities (557 ) (1,765 )

Financing activities:

Payments related to initial public offering costs — (2,854 )

Proceeds from issuance of common stock under share purchase agreement 20 —

Exercises of common stock warrants 19,737 —

Exercises of common stock options 280 572

Principal payments on finance lease obligations (457 ) (187 )

Net increase in cash, cash equivalents and restricted cash 14,076 33,940

Cash, cash equivalents and restricted cash at beginning of period 71,719 37,779

Cash, cash equivalents and restricted cash at end of period $ 85,795 $ 71,719

Supplemental disclosure of cash flow information:

Payment for operating leases within operating activities $ 5,248 $ 3,042

Non-cash investing and financing activities:

Reclassification of warrant liabilities into equity upon exercises $ 24,665 $ —

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

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Fractyl Health, Inc.

Notes to Consolidated Financial Statements

1. Nature of the Business

Fractyl Health, Inc. (the “Company” or “Fractyl”) was incorporated in Delaware on August 30, 2010 under the name MedCatalyst, Inc. The Company then changed its name to Fractyl Laboratories Inc. on January 10, 2012 and subsequently to Fractyl Health, Inc. on June 9, 2021. The Company is a clinical stage metabolic therapeutics company focused on pioneering novel approaches to treat obesity and T2D. The Revita® and Rejuva® candidates are designed to target root causes of metabolic diseases, allowing us to advance metabolic disease treatment from chronic management towards prevention and reversion of the disease.

Revita

The Revita DMR System (“Revita”) is based on the Company’s insights surrounding the potential role of the gut in obesity. Revita is designed to remodel the duodenal lining via hydrothermal ablation (i.e. duodenal mucosal resurfacing) to reverse damage to intestinal nutrient sensing and signaling mechanisms caused by chronic high-fat and high-sugar diets that are a root cause of metabolic disease. In the U.S., Revita is for investigational use only. Revita has U.S. FDA Breakthrough Device designation in weight maintenance for people with obesity who discontinue glucagon-like peptide-1 (“GLP-1”) based drugs. The Company has received favorable FDA feedback on its De Novo classification request for Revita and anticipate submitting a potential De Novo marketing application in the late fourth quarter of 2026. The Company is evaluating Revita in the REMAIN-1 weight maintenance program, which is designed to evaluate Revita’s potential to maintain weight loss following GLP-1 based therapy discontinuation. The REMAIN-1 program includes three distinct patient cohorts that are conducted under a single IDE: the REVEAL-1 Cohort, the REMAIN-1 Midpoint Cohort, and the REMAIN-1 Pivotal Cohort, designed to collectively establish the clinical and regulatory foundation for Revita in weight maintenance.

•

The REVEAL-1 Cohort (n=22) is an open-label study in individuals with obesity who have lost at least 15% of their total body weight on a GLP-1 medication and who either need or choose to discontinue GLP-1 therapy.

•

The REMAIN-1 Midpoint Cohort (n=45) is a randomized, double-blind, sham-controlled pilot study to assess the potential of Revita to maintain weight loss after GLP-1 based therapy discontinuation.

•

The REMAIN-1 Pivotal Cohort (n=315) is a randomized, double-blind, sham-controlled pivotal study to evaluate the safety and efficacy of Revita in maintaining weight loss.

The REMAIN-1 study was initiated in the third quarter of 2024. The Company completed enrollment of the REMAIN-1 Pivotal Cohort in July 2025, a randomized, double-blind, sham-controlled pivotal study evaluating the safety and efficacy of Revita in maintaining weight loss after GLP-1 based therapy discontinuation. The Company completed randomization of the pivotal cohort in February 2026, with topline six-month data anticipated in the early fourth quarter of 2026. The Company anticipates submitting a potential De Novo marketing application in post-GLP-1 weight maintenance in the late fourth quarter of 2026.

Pursuant to the Company’s Strategic Reprioritization in January 2025, Fractyl has paused additional investment in the REVITALIZE-1 clinical study of Revita for T2D and the Germany Real-World Registry study. The Company continues to follow existing participants in both studies per protocol and will report clinical, health economic, and patient-relevant outcomes from the Germany Real-World Registry study on an ongoing basis.

Rejuva

The Company is also developing Rejuva, a novel, locally administered, adeno-associated virus (“AAV”) delivered pancreatic gene therapy platform. Rejuva is designed to enable long-term remission of T2D and obesity by durably reprogramming pancreatic islet cells to endogenously produce metabolic hormones. Rejuva leverages advanced delivery systems and proprietary screening methods to identify and develop metabolically active gene therapy candidates targeting the pancreas. The lead candidate from the Rejuva platform, RJVA-001 is designed to be delivered to the pancreas via a single endoscopic intervention to enable pancreatic beta cells to express GLP-1 locally via nutrient-responsive control. This gene therapy approach enables physiologic GLP-1 secretion without the high circulating levels that contribute to side effects seen with systemic GLP-based drugs. The Company completed key preclinical in vivo studies to support a CTA for RJVA-001 and subsequently submitted CTAs for RJVA-001 in T2D to regulators in the EU (Netherlands) and Australia in

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the second half of 2025, advancing the program toward its anticipated first-in-human study. The Company expects to receive regulatory feedback in the second quarter of 2026 and, subject to CTA authorization, initiate first-in-human dosing of RJVA-001 and expected reporting of preliminary data in the second half 2026.

The Company is also developing RJVA-002, a dual GIP/GLP-1 gene therapy and is currently in preclinical development. RJVA-002 expands the Rejuva platform into obesity, targeting dual incretin biology with the goal of achieving durable, well-tolerated, weight loss from a single intervention.

The Company believes Revita and Rejuva, if approved by relevant regulatory bodies, have the potential to revolutionize treatment across the spectrum of obesity and T2D, align the clinical and economic interest of key stakeholders around the long-term regression of metabolic disease, and, at their fullest potential, significantly reduce the burden of metabolic disease globally.

Initial Public Offering (“IPO”)

On February 6, 2024, the Company completed its IPO, pursuant to which it issued and sold 7,333,333 shares of its common stock at a price to the public of $15.00 per share, resulting in net proceeds of approximately $98.9 million, after deducting the underwriting commissions and related offering expenses.

On March 5, 2024, the Company issued an additional 99,999 shares of its common stock pursuant to the partial exercise of the underwriters’ option to purchase additional shares at the IPO public price of $15.00 per share, resulting in additional net proceeds of approximately $1.4 million, after deducting the underwriting commissions.

S-3 Registration Statement

On March 3, 2025, the Company filed a Registration Statement on Form S-3 with the U.S. Securities and Exchange Commission (“SEC”), which was subsequently amended on March 13, 2025 (as amended, the “S-3 Registration Statement”). The S-3 Registration Statement became effective on March 18, 2025. It contains a base prospectus, which covers the offering, issuance and sale of up to $300.0 million in the aggregate of the securities from time to time in one or more offerings.

At-The-Market Offering

On March 3, 2025, concurrently with the filing of the S-3 Registration Statement, the Company entered into a sales agreement with Jefferies LLC as sales agent (the “Sales Agreement”) and filed a prospectus supplement under an at-the-market offering (the “ATM Offering”) covering the offering, issuance and sale of up to a maximum aggregate offering price of $100.0 million of the Company’s common stock. As of December 31, 2025, the Company issued and sold 4,701,960 shares of its common stock under the ATM Offering at a weighted average price of $1.53per share, resulting in net proceeds of approximately $6.8 million, after deducting commissions and offering expenses. No shares were sold under the Sales Agreement subsequent to December 31, 2025. On March 23, 2026, the Company notified Jefferies LLC of its intention toterminate the Sales Agreement pursuant to its terms. As a result, the Sales Agreement will be terminated effective April 6, 2026 and no further sales will be made thereunder after such date.

August 2025 Offering

On August 6, 2025, the Company entered into an underwriting agreement with Ladenburg Thalmann & Co. Inc. (“Ladenburg”), pursuant to which it issued and sold 19,047,619 shares of its common stock, accompanied by warrants to purchase up to 19,047,619 shares of its common stock (the “Tranche A Warrants”) and warrants to purchase 19,047,619 shares of its common stock (the “Tranche B Warrants”), at a combined offering price of $1.05 per share. As part of the underwriting agreement, the Company also granted Ladenburg a 30-day option to purchase up to an additional 2,857,142 shares of the Company’s common stock, along with associated Tranche A Warrants and Tranche B Warrants, at the combined public offering price of $1.05 per share. On August 6, 2025, Ladenburg exercised the option to purchase additional shares of the Company’s common stock, along with associated Tranche A Warrants and Tranche B Warrants, in full. The securities were issued pursuant to the S-3 Registration Statement and a related prospectus supplement filed with the SEC (the “August 2025 Offering”).

The August 2025 Offering closed on August 7, 2025, from which the Company received approximately $22.6 million of net proceeds, after deducting underwriting commissions and offering expenses, excluding any potential future proceeds from the exercise of the Tranche A Warrants and Tranche B Warrants. See Note 8—“Warrant Liabilities” for more details

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on the Tranche A Warrants and Tranche B Warrants.

September 2025 Offering

On September 26, 2025, the Company entered into an underwriting agreement with BofA Securities, Inc. and Evercore Group L.L.C., as representatives of several underwriters, pursuant to which it issued and sold 60,000,000 shares of its common stock, at a price to the public of $1.00 per share. The securities were issued pursuant to the S-3 Registration Statement and a related prospectus supplement filed with the SEC (the “September 2025 Offering”).

The September 2025 Offering closed on September 29, 2025, from which the Company received approximately $56.0 million, after deducting underwriting commissions and offering expenses.

Liquidity

Under ASC 205-40, Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Generally, to be considered probable of being effectively implemented, the plans must have been approved by the Company’s board of directors before the date that the financial statements are issued.

The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain profitable operations. The Company is subject to a number of risks similar to other early-stage life science companies, including, but not limited to, successful discovery and development of its product candidates, raising additional capital with favorable terms, development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company’s products. The successful discovery and development of product candidates requires substantial working capital which may not be available to the Company on favorable terms or not at all.

The Company has a history of operating losses and had an accumulated deficit of $556.3 million as of December 31, 2025. Management expects continuing operating losses in the future. The Company has financed its operations to date primarily through its equity and debt financings. Based on its current business plans, the Company believes that its available cash and cash equivalents of $81.5 million as of December 31, 2025, combined with $4.1 million subsequent proceeds received in January 2026 from the Tranche A warrant exercises, will be sufficient to fund the Company’s operating plan into early 2027. The Company’s forecast of its cash needs is subject to significant assumptions, which could change, and management could use its available capital resources sooner than it currently anticipates. In addition, without additional financing, management projects that it may not be able to comply with the minimum liquidity covenant related to the Company’s 2023 Notes by the end of 2026.

Given the inherent risk and uncertainty of future cash flow estimates as well as the minimum liquidity covenant requirement, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for at least one year after the date that these financial statements are issued. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

The Company plans to alleviate the substantial doubt about its ability to continue as a going concern by seeking additional funds through equity or debt financings or through collaboration or licensing transactions or other sources. The Company may be unable to obtain equity or debt financings or enter into collaboration or licensing transactions and, if necessary, the Company will be required to implement cost reduction strategies which could curtail or delay its current operating plans.

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2. Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its wholly owned subsidiary. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). All intercompany balances and transactions have been eliminated. These consolidated financial statements, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the Company’s financial position and results of operations for the years ended December 31, 2025 and 2024.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates relied upon in preparing these consolidated financial statements include, but are not limited to, the fair value of common stock warrants, the fair value of notes payable, the fair value of stock-based awards, the incremental borrowing rate for lease accounting, estimates of future cash flows used in the assessment of our ability to continue as a going concern, and the accrual of research and development expenses. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

The Company considers all short-term, highly liquid investments with original maturities of 90 days or less at the date of purchase to be cash equivalents. Cash equivalents, which consist of money market funds, are stated at fair value.

Restricted Cash

The Company’s restricted cash primarily represented cash held in separate collateral bank accounts in conjunction with the maintenance of letters of credit required under the Company’s facility leases. See Note 7—“Leases” for more information on the Company’s facility leases. The letter of credit was issued for an original effective period of 12 months with automatic annual renewal until the expiration date.

Concentration of Credit Risk

The Company’s financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. As of December 31, 2025, substantially all of the Company’s cash and cash equivalents were maintained at two financial institutions. The Company’s deposits at times may significantly exceed federally insured limits. Potential failure of either financial institution could impact access to our cash and cash equivalents and could adversely impact our operating liquidity and financial performance. To date, the Company has not experienced any losses related to its cash and cash equivalents.

Segment information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company’s chief operating decision-maker, the Company’s chief executive officer, views the Company’s operations and manages its business as a single operating segment. All of the Company’s long-lived assets are held in the U.S. See Note 15—“Segment Information” for additional information about the Company’s segment information.

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Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation and amortization expense is recognized using the straight-line method over the following estimated useful lives:

Asset Category Estimated Useful Life

Computer equipment 3 years

Furniture and fixtures 5 years

Laboratory and engineering equipment 3 years

Manufacturing equipment 5 years

Website development costs 3 years

Leasehold improvements Shorter of remaining lease term or 7 years

Costs of major additions and betterments are capitalized and amortized on a straight-line basis over the shorter of the remaining lease term or the estimated useful life of the asset. Upon retirement or sale, the cost of assets disposed of and the related accumulated amortization are removed from the accounts and any resulting gain or loss is included in the determination of net income or loss. Repairs and maintenance costs are expensed as incurred.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment and right-of-use operating and finance lease assets. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully 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 an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any impairment losses on long-lived assets.

Fair Value Measurements

Certain assets and liabilities of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

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

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The Company’s cash equivalents, notes payable, and warrant liabilities are carried at fair value, determined according to the fair value hierarchy above. See Note 3—“Fair Value Measurements” for additional detail on these fair value measurements. The carrying values of the Company’s accounts payable and accrued expenses approximate their fair value due to the short-term nature of these liabilities.

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Leases

The Company applies the provisions of ASC 842, Leases, (“ASC 842”) to account for its operating leases for office and laboratory spaces and finance leases for certain laboratory equipment.

The Company determines whether an arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement at inception. Operating leases are included in right-of-use lease assets (“ROU assets”) and current and long-term lease liabilities on the Company’s consolidated balance sheets. Lease expenses for operating leases are recognized on a straight-line basis over the lease term as an operating expense. Assets subject to finance leases are included in property and equipment, net, on the Company’s consolidated balance sheets. Current and long-term portion of the related lease liabilities of the finance leases are included in accrued expenses and other current liabilities and other long-term liabilities, respectively, on the Company’s consolidated balance sheets. Lease expenses for finance leases consist of depreciation of the assets, which is recognized on a straight-line basis over the useful life of the assets as an operating expense, and interest expense using the effective interest method over the lease term.

At the lease commencement date, the Company recognizes an ROU asset and a lease liability based on the present value of fixed lease payments over the expected lease term. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is a reasonable certainty that the Company will renew. Certain adjustments to the ROU asset may be required for items such as incentives received. The interest rate implicit in the lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

The Company has elected the short-term lease recognition exemption for short-term leases, which allows the Company not to recognize lease liabilities and ROU assets on the consolidated balance sheets for leases with an original lease term of twelve months or less. Rent expenses for short-term leases are directly expensed as operating expenses in the consolidated statements of operations and comprehensive loss.

The Company has elected to not separate lease and non-lease components. Only the fixed costs for lease components and their associated non-lease components are accounted for as a single lease component and recognized as part of the ROU asset and lease liability. Variable lease costs such as taxes, operating expenses and other expenses are based on actual costs incurred and are directly expensed as operating expenses in the consolidated statements of operations and comprehensive loss.

Assumptions made by the Company at the commencement date are re-evaluated upon occurrence of certain events, including lease modification. A lease modification results in a separate contract when the modification grants the lessee an additional right of use not included in the original lease and when lease payments increase commensurate with the standalone price for the additional right of use. When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease.

See Note 7—“Leases” and Note 9—“Commitments and Contingencies” for additional information about the Company’s leases.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses include salaries, stock-based compensation and employee-related benefits, product development, clinical trial and related clinical manufacturing costs, allocation of facility-related expenses, overhead expenses and other outside expenses. Nonrefundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

Research Contract Costs and Accruals

The Company has entered into various research and development contracts with companies and individuals globally. These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research and development costs. When evaluating the adequacy of

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the accrued liabilities, the Company analyzes progress of the studies or projects, including the phase or completion of events, invoices received and contracted costs. Judgments and estimates are made in determining the accrued balance at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs.

Patent Costs

All patent-related costs incurred in connection with filing and prosecuting patent applications are recorded as general and administrative expenses as incurred, as recoverability of such expenditures is uncertain.

Notes Payable

The Company elected to apply the fair value option (“FVO”) to its notes payable in accordance with ASC 825, Financial Instruments (“ASC 825”). Accordingly, the notes payable are re-measured at the end of each reporting period with changes in fair value recognized as a component of other income (expense) in the consolidated statements of operations and comprehensive loss. Changes in fair value resulting from changes in instrument-specific credit risk, if any, will be recognized separately in other comprehensive income. The primary reason for electing the fair value option was to address simplification and cost-benefit considerations that result from accounting for hybrid financial instruments at fair value in their entirety versus bifurcation of the embedded derivatives from the debt hosts.

The fair values of the notes payable are determined using valuation models that incorporate assumptions and estimates. The Company assesses these assumptions and estimates at each financial reporting period as additional information impacting the assumptions is obtained. Assumptions in the models include but are not limited to equity value, volatility, time to conversion event, risk-free rate, scenario weightings and observable market yields for similarly rated instruments. The fair value measurements of the notes payable are based on significant inputs that are not observable in the market and represent a Level 3 measurement. See Note 6—“Notes Payable.”

Warrant Liabilities

The Company classifies warrants to purchase shares of its common stock as liabilities on its consolidated balance sheets as such warrants may result in delivery of variable number of shares or delivery of a settlement amount that is not solely indexed to the Company’s own stock. These warrants were initially recorded at fair value on the grant date, and are subsequently remeasured to fair value at the end of each reporting period and at exercise with changes in fair value recognized as a component of other income (expense) in the consolidated statements of operations and comprehensive loss. The Company will continue to adjust the liabilities until the earlier of exercise or expiration of the warrant.

The fair values of these warrant liabilities are determined using either a Black-Scholes option-pricing model or a Monte Carlo simulation model, depending on the nature of the warrants. The valuation model used incorporates assumptions and estimates, which the Company assesses at each financial reporting period as additional information impacting the assumptions is obtained. Estimates and assumptions impacting the fair value measurement include the fair value per share of the underlying shares, the remaining contractual term of the warrants, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying shares. The fair value of the underlying shares represents the closing price of its common stock traded on the Nasdaq Global Market. The Company was historically a private company until its IPO in February 2024, and lacked company-specific historical and implied volatility information of its stock. Therefore, it estimated its expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrants and expects to continue to consider peer company volatility until such time as it has adequate historical data regarding the volatility of its own traded stock price. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrant. Expected dividend yield for the common stock warrants is 0% based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends on common stock in the foreseeable future.

This fair value measurement of the warrant liabilities is based on significant inputs that are not observable in the market and represent a Level 3 measurement. See Note 8—“Warrant Liabilities.”

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Stock-Based Compensation

The Company measures all stock options and other stock-based awards based on their fair value on the date of the grant. Those awards typically have a graded vesting schedule and compensation expense for awards with only service conditions is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. Compensation costs recognized for performance-based awards reflect the number of awards that are expected to vest during the requisite service period and are recognized using an accelerated attribution method. Upon final determination of the performance conditions achieved, the compensation costs are adjusted to reflect those awards that ultimately vest. Historical performance patterns, to the extent that they are indicative of the performance conditions to be achieved, are used in developing estimates for the probability of attaining these performance conditions.

The Company classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

The Company uses the Black-Scholes option pricing model, which incorporates assumptions and estimates, to measure the fair value of its option awards on the date of grant of each stock option award. The Company considers the fair value of its common stock to be equal to the closing price of its common stock traded on the Nasdaq Global Market. Due to the limited company-specific historical and implied volatility information available to the Company, the expected stock volatility used in the option pricing model was based on an analysis of reported data for a publicly traded peer group of companies that granted options with substantially similar terms and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term assumption for employee grants is determined by using the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is based on the rate of the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is 0% based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. Forfeitures are accounted for as they occur.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax basis of existing assets and liabilities and for loss and credit carryforwards using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

Comprehensive Loss

Comprehensive loss is comprised of two components: net loss and other comprehensive loss, which includes other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company had no items qualifying as other comprehensive loss; accordingly, comprehensive loss equaled total net loss for each of the years ended December 31, 2025 and 2024.

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Net Loss Per Share

Net loss per share attributable to common stockholders is calculated using the two-class method, which is an earnings allocation formula that determines net loss per share for the holders of the Company’s common shares and participating securities. Net loss attributable to common stockholders and participating securities is allocated to each share on an as-converted basis as if all of the earnings for the period had been distributed. However, the participating securities do not include a contractual obligation to share in the losses of the Company and were not included in the calculation of net loss per share in the periods that had a net loss.

Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the more dilutive of (a) the two-class method or (b) the if-converted method and treasury stock method, as applicable. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Diluted net loss per share is equivalent to basic net loss per share for the years presented herein because common stock equivalent shares from stock option awards and outstanding warrants to purchase common stock were anti-dilutive. See Note 14—“Net Loss Per Share” for additional information.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The Company may take advantage of these exemptions until the Company is no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its consolidated financial statements may not be comparable to companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of an offering or such earlier time that it is no longer an “emerging growth company.”

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The ASU focuses on the rate reconciliation and income taxes paid. ASU 2023-09 requires the Company to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company elected to adopt ASU 2023-09 effective January 1, 2025 on a prospective basis. See Note 12—“Income Taxes,” for further disclosure.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”), which is intended to provide more detailed and disaggregated information about significant expense categories, such as purchases of inventory, employee compensation, depreciation and amortization and selling expenses. This new standard, including related updates, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively. The Company is currently assessing the impact ASU 2024-03 will have on its consolidated financial statements, including our footnote disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other- Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The ASU simplifies the guidance around capitalization of software development costs. ASU 2025-06 is effective for annual periods beginning December 31, 2027, with early adoption permitted. The Company plans to early adopt ASU 2025-06 effective January 1, 2026. The Company is currently evaluating the impact that adoption of the standard will have on its consolidated financial statements and related disclosures.

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3. Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of fair value hierarchy utilized to determine such fair values:

Fair Value Measurements as ofDecember 31, 2025

(in thousands) Level 1 Level 2 Level 3 Total

Assets:

Cash equivalents—money market funds $ 35,829 $ — $ — $ 35,829

Liabilities:

Warrant liabilities, long-term $ — $ — $ 36,410 $ 36,410

Fair Value measurements as ofDecember 31, 2024

(in thousands) Level 1 Level 2 Level 3 Total

Assets:

Cash equivalents—money market funds $ 38,295 $ — $ — $ 38,295

Liabilities:

Warrant liabilities, long-term $ — $ — $ 1,336 $ 1,336

During the years ended December 31, 2025 and 2024, there were no transfers between Level 1, Level 2 and Level 3.

See Note 6—“Notes Payable” for the discussion of the fair value methodology of the notes payable and a rollforward of the fair value. See Note 8—“Warrant Liabilities” for the discussion of the fair value methodology of the common stock warrants and a rollforward of the fair value.

4. Property and Equipment, Net

Property and equipment, net consisted of the following:

December 31,

Lab and engineering equipment 2,345 2,048

Manufacturing equipment 337 77

Website development costs 94 94

Less: accumulated depreciation (2,724 ) (1,595 )

Property, plant, and equipment in the table above includes leased equipment under the Company’s finance leases of $0.6 million and $1.1 million as of December 31, 2025 and 2024, respectively. Depreciation expense for the years ended December 31, 2025 and 2024 were $1.1 million and $0.7 million, respectively.

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5. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

December 31,

Payroll and payroll-related expenses $ 5,653 $ 4,184

Research and development services 4,316 5,750

Professional fees and consulting services 721 814

Other current liabilities 961 831

6. Notes Payable

2022 Convertible Notes

On January 11, 2022, the Company entered into a financing arrangement with certain lenders in which the Company issued convertible promissory notes in exchange for an aggregate principal amount of $20.1 million (the “2022 Convertible Notes”). On July 11, 2023, the Company issued amended and restated convertible promissory notes to certain of the lenders (the “Continuing 2022 Lenders”) in replacement of, but not in payment of, the remainder of the 2022 Convertible Notes. Following these amendments, $20.9 million in aggregate principal under the 2022 Convertible Notes remained outstanding and accrued interest at the rate of 10% per year until they were paid or converted in full.

In connection with entering into these amendments, the Company issued to the Continuing 2022 Lenders warrants to purchase shares of the Company’s common stock with par value of $0.00001 per share. The warrants were recorded as part of the warrant liabilities on the consolidated balance sheets.

Upon the closing of the IPO on February 6, 2024, all of the outstanding principal plus accrued interest under the 2022 Convertible Notes were converted into 1,841,321 shares of the Company’s common stock at a conversion price of $12.00 per share. The 2022 Convertible Notes were marked to market to their fair value as of the time of the conversion before being reclassified to equity.

2023 Notes

On September 7, 2023, the Company entered into a credit agreement (the “Credit Agreement”) with certain lenders (the “2023 Lenders”) that provided for term loans in an aggregate principal amount of $45.0 million (the “Applicable Commitments”) in two tranches (the “2023 Notes”). The first tranche with a principal amount of $30.0 million was extended on September 7, 2023. The second tranche with a principal amount of $15.0 million would have been extended upon the Company’s achievement of certain operating and funding milestones, as defined in the Credit Agreement, by July 31, 2024. Under the Credit Agreement, a further principal amount of $20.0 million may be extended to the Company, subject to the 2023 Lenders’ prior written consent in their sole discretion. Due to a shift in business strategy to include the weight maintenance study, the Company decided not to pursue the milestones required to access the second tranche. As a result, the second tranche was not extended.

The outstanding balances of the 2023 Notes bear interest at a floating annual rate equal to the greater of 5.5% above the Wall Street Journal prime rate or 13.25%. On and prior to September 30, 2024, 6.0% of the interest was payable in kind (the “PIK interest”) and added to the outstanding principal amount of the loans. Beginning September 30, 2026, the Company is required to make monthly principal payments in the amount of 1.5% of the aggregate principal amount outstanding, including accrued PIK interest. The Credit Agreement permits a one year extension of the commencement date to September 30, 2027, at the Company’s option if specified financing milestones are achieved by September 30, 2026. In 2024, the Company met these milestones and elected to extend the commencement date to September 30, 2027. In addition, upon any principal payment, the Company is required to make an additional payment to the 2023 Lenders of a 6.0% fee (the “Exit Fee”) over the principal and accrued PIK interest paid. The aggregate Exit Fee of the 2023 Notes should be equal to 6.0% of the total Applicable Commitments of $45.0 million plus all accrued PIK interest. All remaining outstanding principal balance, accrued interest and Exit Fee on the 2023 Notes shall be due and payable on the maturity date of September 7, 2028.

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In connection with the issuance of the first tranche of the 2023 Notes, the Company issued to the 2023 Lenders warrants to purchase, at the holders’ choice, shares of the Company’s Series F Convertible Preferred Stock, the most senior series of Preferred Stock of the Company that was then authorized, or the Company’s common stock. The warrants were recorded as part of the warrant liabilities on the consolidated balance sheets.

The Company elected to apply the FVO to the 2023 Notes in accordance with ASC 825, Financial Instruments. Accordingly, the 2023 Notes are marked to market at the end of each reporting period, with changes in fair value recognized as a component of other income (expense) in the consolidated statements of operations and comprehensive loss. The fair value was estimated using a discounted cash flow model by discounting projected future cash flows associated with the 2023 Notes to their present value. The discount rate used in the model is based on observable market yields for similarly rated instruments, adjusted for any specific risks inherent in the 2023 Notes, which is a level 3 fair value measurement and requires judgment to determine at each period end. Accrued interest on the 2023 Notes is incorporated into the determination of the fair value of the 2023 Notes.

This fair value measurement is based on significant inputs that are not observable in the market and represent a Level 3 measurement. The following table provides a roll forward of the fair value of the 2023 Notes:

(in thousands) Fair Value

Change in fair value 4,724

Payment of interest (4,300 )

The Credit Agreement contains a minimum liquidity covenant that requires the Company to maintain a $10.0 million minimum balance in cash and/or certain permitted cash equivalent investments, subject to certain exceptions. In addition, the Credit Agreement contains a customary events of default, subject to rights and remedies generally applicable to federal law or the laws of the State of Delaware. As of December 31, 2025, the Company was in compliance with the financial covenants and other terms of the arrangement. The Company’s obligations under the Credit Agreement are collateralized by substantially all of its assets, including its intellectual property, but excluding certain customary and agreed upon assets.

7. Leases

Lexington Lease

In November 2015, the Company entered into a lease agreement for 30,000 square feet of office and laboratory space in Lexington, Massachusetts (the “Lexington Lease”) with an initial lease term covering a seven-year period from May 1, 2016 through April 30, 2023. In June 2022, the Company extended the initial term of the Lexington Lease for twelve months. The Lexington Lease expired on April 30, 2024 at the end of its extended term.

Burlington Lease

In August 2022, the Company entered into a lease agreement for 78,000 square feet of office and laboratory space in Burlington, Massachusetts (the “Burlington Lease”). The lease contains a total lease term of 128 months, which includes an initial eight-month period of free rent and a remaining lease term of 10 years. Total lease payments for the Burlington Lease amount to $59.3 million. Additionally, the Burlington Lease incorporates a five-year renewal option exercisable at the Company’s discretion; however, these extensions were not included in the operating lease assets and lease liabilities recorded on the consolidated balance sheets as they were not reasonably certain of being exercised.

The Burlington Lease commenced on November 1, 2023, upon which the Company recognized the right-of-use asset and lease liability of $30.2 million on its consolidated balance sheet in accordance with ASC 842. The Company estimated the incremental borrowing rate at the time of the Burlington Lease commencement to be 12.67%, which was used as the discount rate in the measurement of the lease liabilities.

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The following table is a summary of the components of operating lease expenses for the years ended December 31, 2025 and 2024:

Short-term lease cost 13 138

The Company’s operating leases require payments for certain operating expenses, taxes, and other expenses based on actual costs incurred. As these amounts are variable in nature, these payments are expensed in the periods incurred and included in variable lease costs for the years ended December 31, 2025 and 2024.