SGMT US Equity☆

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

The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements that involve risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by such forward-looking statements as a result of many important factors, including those set forth in Part I of this Annual Report on Form 10-K under the caption “Risk Factors.” Please also see the section titled “Forward-Looking Statements”. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report.

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Overview

We are a clinical-stage biopharmaceutical company developing novel therapeutics called fatty acid synthase (FASN) inhibitors that target dysfunctional metabolic and fibrotic pathways in diseases resulting from the overproduction of the fatty acid, palmitate. Our lead drug candidate, denifanstat, is an oral, once-daily pill and selective FASN inhibitor in development for the treatment of metabolic dysfunction-associated steatohepatitis (MASH), acne and select forms of cancer. Our second FASN inhibitor, TVB-3567, is a potent and selective small molecule FASN inhibitor in development for acne.

FASN inhibition for the treatment of MASH

The critical role of FASN overactivity in MASH makes it an attractive target for drug therapy. Our FASN inhibitor, denifanstat, targets multiple drivers of MASH by reducing steatosis, inflammation and fibrosis.

Phase 2b FASCINATE-2 clinical trial of denifanstat in MASH

Denifanstat met all primary and multiple secondary endpoints in the Phase 2b FASCINATE-2 clinical trial evaluating denifanstat in 168 biopsy-confirmed MASH patients with stage F2 or F3 fibrosis compared to placebo at week 52. We announced topline results in January 2024 and published the trial results in The Lancet Gastroenterology & Hepatology in October 2024. Denifanstat also demonstrated anti-fibrotic activity, including in patients with advanced fibrosis, as seen in the F3 modified intention to treat (mITT) population and qF4 patients (qF4 patients are AI-defined F4, based on the second harmonic generation (SGH) HistoIndex platform, which may encompass late stage F3 as well as F4 patients):

As in prior studies, denifanstat was generally well tolerated. No treatment-related serious adverse events (SAEs) were observed, and the majority of adverse events (AEs) were mild to moderate in nature (Grades 1 and 2). There were no Grade ≥3 treatment-related AEs and no drug-induced liver injury (DILI) signal in the study. The most common treatment-related AEs by system organ class (observed in ≥5% of patients in the study) were eye disorders, gastrointestinal disorders, and skin and subcutaneous tissue disorders. The incidence of treatment emergent adverse events (TEAEs) leading to treatment discontinuation was 19.6% in the denifanstat group compared to 5.4% in placebo.

Combination of denifanstat and resmetirom for the treatment of MASH

The Company is developing a combination of its oral once-daily FASN inhibitor, denifanstat, and the thyroid hormone receptor beta (THR-β) agonist, resmetirom (commercially available as Rezdiffra), for cirrhotic patients living with F4-stage MASH.

Phase 1 pharmacokinetic (PK) clinical trial of a combination of denifanstat and resmetirom

In December 2025, we announced completion of our Phase 1 PK trial of a combination of denifanstat and resmetirom. The Phase 1 PK was an open-label, 2-cohort study that enrolled 40 healthy adult participants. The trial objectives were to evaluate multiple-dose and

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single-dose pharmacokinetics, identify any potential drug-drug interactions (DDI), and assess the safety and tolerability of the combination. The combination of denifanstat and resmetirom was generally well-tolerated over the duration of the study, with no safety signals. No SAEs occurred, and there were no clinically significant laboratory AEs, and no treatment-related discontinuations.

Our combination program builds upon preclinical data we presented at the European Association for the Study of the Liver (EASL) Congress in 2024 for two mouse models of MASH, showing that the combination of a FASN inhibitor (TVB-3664, a surrogate for denifanstat) and resmetirom, had a synergistic effect on important liver disease markers, including improvement of NAS by histologic analysis and more robust improvement in hepatic collagen content compared to the single agents. Synergistic activity of the combination was demonstrated in the rate of histological improvement (NAS ≥2 points), which was 33% for FASN inhibitor monotherapy, 25% for resmetirom monotherapy, and 80% for the combination of the two, a level of improvement that greatly exceeds a simple addition of the activity of the two drugs.

We plan to use these data to advance the development of the combination into a Phase 2 proof-of-concept efficacy trial for patients living with MASH with F4 fibrosis, expected to initiate in the second half of 2026, subject to consultation with regulatory authorities.

Acne

In addition to MASH, we are evaluating our FASN inhibitors in acne, a disorder in which dysregulation of fatty acid metabolism also plays a key role. Denifanstat is being developed for acne in China by our license partner for China, Ascletis BioScience Co. Ltd. (Ascletis), a subsidiary of Ascletis Pharma Inc. (Ascletis Pharma). Our potent and selective small molecule FASN inhibitor, TVB-3567, is currently in a first-in-human Phase 1 clinical trial for development of an acne indication. Acne is a promising therapeutic area for application of FASN inhibitors because FASN is required for sebum production, which is upregulated in acne and leads to exacerbation of acne lesions including development of nodules and cysts.

Phase 3 clinical trial of denifanstat in acne

In January 2026, Ascletis reported positive topline results in the open-label Phase 3 trial evaluating the long-term safety of ASC40 (denifanstat) tablets in patients with moderate to severe acne in China.

In December 2025, Ascletis announced that the China National Medical Products Administration (NMPA) accepted its New Drug Application (NDA) for denifanstat for the treatment of moderate to severe acne.

In June 2025, Ascletis announced that denifanstat met all primary and secondary endpointsin its Phase 3 trial in moderate to severe acne vulgaris in China. The Phase 3 clinical trial was a randomized, double-blind, placebo-controlled, multicenter clinical trial of 480 enrolled patients randomized 1:1 to receive denifanstat 50mg or placebo, once daily for 12 weeks.

Ascletis reported the following efficacy data from the Phase 3 trial:

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● All primary endpoints were met, including:

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Ascletis reported that denifanstat was generally well-tolerated. Following 12 weeks of once-daily oral administration at 50 mg, the incidence rates of TEAEs were comparable between denifanstat and placebo.

Phase 1 clinical trial of TVB-3567

In June 2025, we initiated a first-in-human Phase 1 clinical trial of our potent and selective small molecule FASN inhibitor, TVB-3567, for development of an acne indication. The Phase 1 clinical trial is a randomized double-blind placebo-controlled trial designed to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of TVB-3567 in healthy participants with or without acne. The trial is comprised of several parts, including single ascending dose cohorts and multiple ascending dose cohorts in participants without acne, followed by testing in participants with acne including evaluation of pharmacodynamic biomarkers.

Subject to consultation with regulatory authorities, and contingent on the results of the Phase 1 trial, we anticipate initiating the Phase 2 trial of TVB-3567 in 2026.

Components of results of operations

Research and development expenses

Research and development expenses represent costs incurred in performing research, development and manufacturing activities in support of our own product development efforts and include internal personnel-related costs (such as salaries, employee benefits and stock-based compensation) for our personnel in research and development functions; as well as external costs, including costs related to acquiring, developing and manufacturing supplies for preclinical studies, clinical trials and other studies, including fees paid to contract manufacturing organizations (CMOs); costs and expenses related to agreements with contract research organizations (CROs), investigative sites and consultants to conduct non-clinical and preclinical studies and clinical trials; and professional and consulting services costs. Research and development expenses also include the costs of acquired product licenses and related technology rights where there is no alternative future use.

All research and development expenses are charged to operations as incurred in accordance with Accounting Standards Codification 730, Research and Development. We account for non-refundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received, rather than when the payment is made.

We expect our research and development expenses to increase substantially for the foreseeable future as we advance our drug candidates into and through preclinical studies and clinical trials, pursue regulatory approval and expand our pipeline.

General and administrative expenses

Our general and administrative expenses consist primarily of costs and expenses related to: personnel (including salaries, employee benefits and stock-based compensation) in our executive, finance and accounting and other administrative functions; legal services, including relating to intellectual property and corporate matters; accounting, auditing, consulting and tax services; insurance; information technology; and facility and other allocated costs not otherwise included in research and development expenses.

We expect our general and administrative expenses to increase for the foreseeable future as we increase our headcount and continue to grow our corporate infrastructure.

Other income

Other income consists primarily of interest income earned on our cash, cash equivalents and marketable securities offset by accretion of discounts to maturity on our marketable securities.

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Results of operations

Comparison of the years ended December 31, 2025 and 2024

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

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​ ​ Years Ended December 31, ​ ​ ​ ​ ​

​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ Change ​ ​ ​ % Change

Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

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Research and development – Research and development expenses for the years ended December 31, 2025 and 2024 were comprised of the following (in thousands):

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​ ​ Years Ended December 31, ​ ​ ​ ​ ​

​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ Change ​ ​ ​ % Change

External expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Internal expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Stock-based compensation ​ ​ 933 ​ ​ 982 ​ ​ (49) ​ (5) %

Other internal operating expenses ​ ​ 198 ​ ​ — ​ ​ 198 ​ 100 %

Total research and development expenses ​ $ 39,054 ​ $ 38,444 ​ $ 610 2 %

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Research and development expenses increased by $0.6 million, or 2%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. This increase was primarily due to (i) a $2.9 million increase in manufacturing and non-clinical expenses relating primarily to the $2.5 million up-front license fee recognized in connection with a license agreement with Assia Chemical Industries Ltd., and (ii) a $0.8 million increase in personnel costs due to an increase in headcount. These increases were partially offset by a net decrease in clinical development and research expenses of $2.9 million driven by lower clinical trial costs in connection with start-up activities for a Phase 3 trial of denifanstat in MASH, lower clinical trial expenses for the Phase 2b FASCINATE-2 trial as the trial was substantially complete in the first quarter of 2024 with topline results for the trial announced in January 2024, as well as lower costs for other denifanstat studies. The decrease in clinical development and research expenses were partially offset by an increase in clinical trial costs incurred for our Phase 1 clinical trial of TVB-3567, which was initiated in June 2025, and the Phase 1 PK clinical trial for the combination of denifanstat and resmetirom, which was initiated in September 2025.

External research and development expenses for the years ended December 31, 2025 and 2024 were comprised of the following (in thousands):

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​ ​ Years Ended December 31, ​ ​ ​ ​ ​

​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ Change ​ ​ ​ % Change

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General and administrative – General and administrative expenses increased by $1.8 million, or 11%, for the year ended December 31, 2025, compared to the year ended December 31, 2024 primarily due to (i) a $1.2 million increase in stock-based compensation expense driven by an increase in headcount and (ii) a $0.8 million increase in professional fees, driven by legal fees and the write-off of deferred financing costs related to the 2024 ATM Offering (defined below).

Other income – Other income decreased by $3.0 million, or 34%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a decrease in interest income earned driven by a lower cash, cash equivalents and marketable securities balance as well as lower yields during the year ended December 31, 2025.

Liquidity and capital resources

Sources and uses of cash

Since our inception, we have devoted substantially all of our resources to researching, discovering and developing our pipeline of proprietary FASN inhibitors and other drug targets, organizing and staffing our company, performing business planning, establishing our intellectual property portfolio, raising capital and general and administration activities to support and expand such activities. We do not have any products approved for sale and have not generated any revenue from product sales. Our revenues to date have been generated solely from the license agreement with Ascletis.

To date, we have financed our operations primarily through public and private equity and debt financings, including our IPO of Series A common stock in July 2023 and our follow-on offering in January 2024, from which we received aggregate net proceeds of $190.9 million. Prior to becoming a public company, we raised $233.3 million in gross proceeds from the sale of our redeemable convertible preferred stock and convertible notes.

In August 2024, we entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co. to establish an at-the-market offering (2024 ATM Offering) through which we could offer and sell, from time to time at our sole discretion, up to $75.0 million of shares of our Series A common stock. In connection with the establishment of the 2025 ATM Offering (as defined below), we terminated the 2024 ATM Offering. No shares of Series A common stock were sold under the 2024 ATM Offering prior to such termination.

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In August 2025, we entered into a Sales Agreement with Leerink Partners LLC to establish an at-the-market offering (2025 ATM Offering) through which we may sell, from time to time at our sole discretion, up to $75.0 million shares of our Series A common stock. There were no sales under the 2025 ATM Offering during the year ended December 31, 2025.

As of December 31, 2025, we had cash, cash equivalents and marketable securities of $113.1 million. We do not expect to generate any revenue from commercial product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our drug candidates, which we expect will take a number of years, if ever. We anticipate that we will continue to incur significant expenses for the foreseeable future as we continue to advance our drug candidates through preclinical and clinical trials; manufacture supplies for our preclinical studies and clinical trials; expand our corporate infrastructure, including the costs associated with being a public company; pursue regulatory approval of our drug candidates; hire additional personnel; acquire, discover, validate and develop additional drug candidates; and obtain maintain, expand and protect our intellectual property portfolio.

Until we can generate a sufficient amount of revenue from the commercialization of our drug candidates or additional revenue from collaboration agreements with third parties, if ever, we expect to finance our future cash needs through public or private equity or debt financings, third-party funding and marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches. The sale of equity or convertible debt securities may result in dilution to our stockholders and, in the case of preferred equity securities or convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock. Debt financings may subject us to covenant limitations or restrictions on our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Our ability to raise additional funds may be adversely impacted by macroeconomic conditions, disruptions to and volatility in the credit and financial markets and geopolitical turmoil. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable or acceptable to us. If we are unable to obtain adequate financing when needed or on terms favorable or acceptable to us, we may be forced to delay, reduce the scope of or eliminate one or more of our research and development programs.

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Our future capital requirements will depend on many factors, including:

● slow enrollment and retention rate of subjects in our clinical trials;

● lack of adequate funding to continue clinical trials;

● subjects experiencing severe or unexpected drug-related adverse effects;

A change in the outcome of any of these or other variables could significantly change our costs and timing associated with the development of our drug candidates. Furthermore, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such change.

We rely and will continue to rely on third parties in the conduct of our preclinical studies and clinical trials and for manufacturing and supply of our drug candidates. We have no internal manufacturing capabilities, and we will continue to rely on third parties for our preclinical study and clinical trial materials. Given our stage of development, we do not yet have a marketing or sales organization or

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commercial infrastructure. Accordingly, if we obtain regulatory approval for any of our drug candidates, we also expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

We enter into contracts in the normal course of business for products and services, including contract research and contract manufacturing services, which include provisions allowing for termination under certain conditions and timelines. These contracts generally do not include payments for early termination and are considered cancellable contracts.

Based on our current business plan, we believe that our existing cash, cash equivalents and marketable securities as of December 31, 2025, will be sufficient for us to fund our operating expenses for at least the next 12 months from the issuance of our audited financial statements.

Cash flows

The following table shows a summary of our cash flows for each of the periods presented below (in thousands):

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​ ​ Years Ended December 31,

Net cash (used in) provided by: ​ ​ ​ ​

Net (decrease) increase in cash and cash equivalents ​ $ (40,819) ​ $ 701

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Cash flows from operating activities - Net cash used in operating activities was $45.7 million for the year ended December 31, 2025, and primarily related to cash used to fund clinical development, manufacturing and other non-clinical activities for denifanstat, inclusive of start-up costs for a Phase 3 trial of denifanstat in MASH as well as the Phase 1 PK clinical trial for the combination of denifanstat and resmetirom, clinical development and manufacturing costs for TVB-3567, as well as costs associated with operating as a public company.

Net cash used in operating activities was $42.4 million for the year ended December 31, 2024, and primarily related to cash used to fund clinical development, manufacturing and other non-clinical activities for denifanstat, inclusive of clinical-batch manufacturing and other trial start-up costs for a Phase 3 trial of denifanstat in MASH, as well as costs to build out our corporate infrastructure and costs associated with being a public company.

Cash flows from investing activities - Net cash provided by investing activities was $4.6 million for the year ended December 31, 2025 and related to proceeds received from the sale and maturity of marketable securities of $111.4 million, partially offset by purchases of marketable securities of $106.8 million.

Net cash used in investing activities was $61.7 million for the year ended December 31, 2024 and related to purchases of marketable securities of $108.1 million, partially offset by proceeds received from the sale and maturity of marketable securities of $46.4 million.

Cash flows from financing activities - Net cash provided by financing activities was approximately $0.3 million for the year ended December 31, 2025, relating to proceeds from stock option exercises during the period.

Net cash provided by financing activities was $104.8 million for the year ended December 31, 2024, which primarily related to net cash proceeds of $105.7 million received from the sale of Series A common stock in our January 2024 follow-on offering and $0.1 million in proceeds from stock option exercises during the period, offset by the payment of financing costs related to the January 2024 follow-on offering of $1.0 million.

Critical accounting policies and estimates

We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made and changes in estimates may occur.

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While our significant accounting policies are described in more detail in Note 2 in our financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Accrued research and development expenses

As part of the process of preparing our 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 applicable 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 require advance payments; however, some invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in the financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of the estimates with the service providers and make adjustments if necessary.

We base our expenses related to manufacturing, preclinical studies, clinical trials and other studies on our estimates of the services performed pursuant to contracts with research institutions, CROs and CMOs that conduct and manage such activities 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 patients and the completion of clinical trial milestones. In accruing service fees when we have not yet been invoiced or otherwise notified of actual costs, we estimate the level of activity completed in each period. These estimates are based on the review of underlying contracts, discussions with key research and development personnel as to the progress of studies, and communications with the third-party service providers. We also monitor patient enrollment levels and related activities to the extent possible through discussions with CRO personnel to estimate clinical trial costs based on the best information available at each balance sheet date. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or prepaid expense 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. There have been no material changes in estimates for the periods presented within this Annual Report on Form 10-K.

Stock-based compensation expense

We recognize stock-based compensation expense in an amount equal to the estimated grant date fair value of each option grant or stock award over the estimated period of service and vesting. This estimation of the fair value of each stock-based grant or issuance on the date of grant involves numerous assumptions by management. Although we calculate the fair value using the Black Scholes option pricing model, which is a standard option pricing model, this model still requires the use of numerous estimates, including, among others, the expected term of the award, the volatility of the underlying equity security, a risk-free interest rate, fair value of common stock, and expected dividends. The use of different values in connection with these estimates in the Black Scholes option pricing model could produce substantially different results.

For awards with service-based vesting conditions only, we recognize stock-based compensation expense on a straight-line basis over the requisite service or vesting period. For awards with service- and performance- based vesting conditions, we recognize stock-based compensation expense using the graded vesting method over the requisite service period beginning in the period in which the awards are deemed probable to vest, to the extent such awards are probable to vest. We recognize the cumulative effect of changes in the probability outcomes in the period in which the changes occur.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Due to the lack of trading history, our computation of expected stock volatility is based on the volatility rates of comparable publicly held companies over a period equal to the expected term of the option. We expect to continue to do so until such time we have adequate historical data regarding the volatility of our traded stock price. Our computation of expected term is determined using the simplified method, which represents the average of the contractual term of the options and the weighted-average expected vesting period. We believe that we do not have sufficient reliable exercise data in order to justify the use of a method other than the simplified method of estimating the expected exercise term of employee stock option grants. For non-employee stock option grants, we have the option to utilize either the expected term or the contractual term, determined on an award-by-award basis. The risk-free interest rate is determined by reference to 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

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option. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends to stockholders and have no current intentions to pay cash dividends. The fair value of the common stock is determined based on the quoted market price of our Series A common stock.

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Stock-based compensation expense is included in both research and development expenses and general and administrative expenses in the statements of operations and comprehensive loss. There have been no material changes in estimates, or our estimation methods, for the periods presented within this Annual Report on Form 10-K.

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Emerging growth company and smaller reporting status

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We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act (the JOBS Act). Under the JOBS Act, emerging growth companies can delay the adoption of new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for emerging growth companies include an exemption from the requirement to provide an auditor’s report on internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation and less extensive disclosure about our executive compensation arrangements. We have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenues of $1.235 billion or more, (ii) December 31, 2028, (iii) the date on which we are deemed to be a large accelerated filer, under the rules of the SEC, which means the market value of equity securities that is held by non-affiliates exceeds $700.0 million as of the prior June 30th and (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Recently adopted accounting pronouncements

See “Notes to the Financial Statements—Note 2” included in our financial statements in Item 8 in this Annual Report for more information.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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Item 8. Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID: 185) 128

Report of Independent Registered Public Accounting Firm (PCAOB ID: 34) 129

Balance Sheets 130

Statements of Operations and Comprehensive Loss 131

Statements of Stockholders’ Equity 132

Statements of Cash Flows 133

Notes to the Financial Statements 134

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Report of Independent Registered Public Accounting Firm

To the stockholders and the Board of Directors of Sagimet Biosciences Inc.

Opinion on theFinancial Statements

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We have audited the accompanying balance sheet of Sagimet Biosciences Inc. (the Company) as of December 31, 2025, the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

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We also have audited the adjustments to the 2024 financial statements to retrospectively adopt ASU 2023-09 as described in Note 2. In our opinion, such adjustments are appropriate and have been properly applied. We are not engaged to audit, review, or apply any procedures to the 2024 financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2024 financial statements taken as a whole.

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Basis for Opinion

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These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. 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.

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We conducted our audit 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 audit, 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.

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Our audit 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 audit 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 audit provides a reasonable basis for our opinion.

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/s/ KPMG LLP

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We have served as the Company’s auditor since 2025.

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Philadelphia, Pennsylvania

March 11, 2026

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Report of Independent Registered Public Accounting Firm

To the stockholders and the Board of Directors of Sagimet Biosciences Inc.

Opinion on the Financial Statements

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We have audited, before the effects of the adjustments to retrospectively apply the change in accounting discussed in Note 2 to the financial statements, the balance sheet of Sagimet Biosciences Inc. (the "Company") as of December 31, 2024, the related statement of operations and comprehensive loss, stockholders’ equity, and cash flows, for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements") (the 2024 financial statements before the effects of the retrospective adjustments discussed in Note 2 to the financial statements are not presented herein). In our opinion, the 2024 financial statements, before the effects of the adjustments to retrospectively apply the change in accounting discussed in Note 2 to the financial statements, present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

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We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in accounting discussed in Note 2 to the financial statements, and accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied. Those retrospective adjustments were audited by the successor auditor.

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Basis for Opinion

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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.

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

​

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

​

/s/ Deloitte & Touche LLP

​

San Francisco, California

March 12, 2025

​

We began serving as the Company’s auditor in 2015. In 2025 we became the predecessor auditor.

​

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SAGIMET BIOSCIENCES INC.

BALANCE SHEETS

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

​

​ ​ ​ ​ ​ ​ ​

​ ​ As of

​ ​ December 31, ​ December 31,

Assets ​ ​ ​ ​ ​ ​

Current assets: ​ ​ ​ ​

Prepaid expenses and other current assets ​ ​ 3,280 ​ ​ 1,524

Long-term marketable securities ​ ​ — ​ ​ 7,408

Operating lease right-of-use assets ​ ​ 78 ​ ​ 77

Liabilities and stockholders’ equity ​ ​ ​ ​

Current liabilities: ​ ​ ​ ​

Accrued expenses and other current liabilities ​ 3,714 ​ 2,951

Operating lease liabilities ​ 78 ​ 78

Total current liabilities ​ 5,101 ​ 4,454

Commitments and contingencies (Note 6) ​ ​ ​ ​

Stockholders’ equity: ​ ​ ​ ​

Accumulated other comprehensive income ​ 120 ​ 230

Total liabilities and stockholders’ equity ​ $ 116,482 ​ $ 160,259

​

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

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SAGIMET BIOSCIENCES INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

​

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Years Ended December 31,

Operating expenses: ​ ​ ​ ​ ​ ​

Other income: ​ ​ ​ ​ ​ ​

Interest income and other, net ​ ​ 5,851 ​ ​ 8,887

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​

Other comprehensive (loss) income: ​ ​ ​ ​

Net unrealized (loss) gain on marketable securities ​ (110) ​ 200

​

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

​

​

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SAGIMET BIOSCIENCES INC.

​

STATEMENTS OF

STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​

​ ​ Series A ​ Series B ​ Additional ​ ​ ​ ​ Other ​ Total

​ Shares Amount Shares Amount Capital Deficit Income Equity

Stock-based compensation expense ​ — ​ ​ — ​ — ​ ​ — ​ 5,288 ​ — ​ — ​ 5,288

Unrealized gain on marketable securities — ​ ​ — ​ — ​ ​ — ​ — ​ — ​ 200 ​ 200

Net loss — ​ ​ — ​ — ​ ​ — ​ — ​ (45,567) ​ — ​ (45,567)

Stock-based compensation expense — ​ ​ — ​ — ​ ​ — ​ 6,449 ​ — ​ — ​ 6,449

Net loss — ​ ​ — ​ — ​ ​ — ​ — ​ (51,038) ​ — ​ (51,038)

​

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

​

​

​

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​

SAGIMET BIOSCIENCES INC.

STATEMENTS OF CASH FLOWS

(in thousands)

​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended December 31,

Cash flows from operating activities ​ ​ ​ ​

Accretion of discount on marketable securities, net ​ (389) ​ (1,253)

Non-cash operating lease expense ​ 151 ​ 145

Stock-based compensation expense ​ 6,449 ​ 5,288

Write-off of deferred financing costs ​ ​ 230 ​ ​ —

Changes in operating assets and liabilities: ​ ​ ​ ​

Prepaid expenses and other current assets ​ (1,830) ​ (5)

Accounts payable, accrued expenses and other current liabilities ​ 929 ​ (907)

Operating lease liabilities ​ (152) ​ (136)

Net cash used in operating activities ​ (45,650) ​ (42,435)

Cash flows from investing activities ​ ​ ​ ​

Purchases of marketable securities ​ ​ (106,864) ​ ​ (108,087)

Sales and maturities of marketable securities ​ 111,420 ​ 46,404

Net cash provided by (used in) investing activities ​ 4,556 ​ (61,683)

Cash flows from financing activities ​ ​ ​ ​

Payment of financing costs ​ — ​ (1,045)

Proceeds from exercise of stock options ​ ​ 275 ​ ​ 114

Net cash provided by financing activities ​ 275 ​ 104,819

Net (decrease) increase in cash and cash equivalents ​ (40,819) ​ 701

Cash and cash equivalents at beginning of period ​ 75,840 ​ 75,139

Cash and cash equivalents at end of period ​ $ 35,021 ​ $ 75,840

​ ​ ​ ​ ​ ​ ​

Supplemental non-cash investing and financing activities: ​ ​ ​ ​ ​ ​

​

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

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SAGIMET BIOSCIENCES INC.

NOTES TO THE FINANCIAL STATEMENTS

1. Description of Business and Basis of Presentation

Sagimet Biosciences Inc. (the Company), a Delaware corporation headquartered in San Mateo, California, is a clinical-stage biopharmaceutical company developing novel therapeutics called fatty acid synthase (FASN) inhibitors that target dysfunctional metabolic and fibrotic pathways in diseases resulting from the overproduction of the fatty acid, palmitate. The Company’s lead drug candidate, denifanstat, is an oral, once-daily pill and selective FASN inhibitor in development for metabolic dysfunction-associated steatohepatitis (MASH), acne and select forms of cancer. The Company’s second FASN inhibitor, TVB-3567, is a potent and selective small molecule FASN inhibitor in development for acne.

In MASH, denifanstat met all primary and multiple secondary endpoints in FASCINATE-2, a Phase 2b clinical trial in F2/F3 MASH, was granted Breakthrough Therapy designation for the treatment of non-cirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis) by the U.S. Food and Drug Administration (FDA) and has completed end-of-Phase 2 interactions with the FDA. In December 2025, the Company announced completion of its Phase 1 pharmacokinetic (PK) clinical trial of a combination of denifanstat and thyroid hormone receptor beta (THR-β) agonist, resmetirom, for development in MASH.

In acne, denifanstat met all primary and secondary endpoints in a Phase 3 trial in moderate to severe acne vulgaris conducted by the Company’s license partner, Ascletis BioScience Co. Ltd. (Ascletis), in China. In December 2025, Ascletis announced that the China National Medical Products Administration (NMPA) accepted its New Drug Application (NDA) for denifanstat for the treatment of moderate to severe acne. In June 2025, the Company initiated a first-in-human Phase 1 clinical trial of Sagimet’s second FASN inhibitor, TVB-3567, for development of an acne indication.

Basis of presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted (GAAP) in the United States. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) promulgated by the Financial Accounting Standards Board (FASB).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Such estimates include accruals of research and development expenses, accrued costs for services rendered under agreements with third-party contract research organizations (CROs) and stock option valuations and stock-based compensation. On an ongoing basis, the Company evaluates its estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Emerging growth company status

The Company is an emerging growth company (EGC) as defined in the Jumpstart Our Business Startups Acts of 2012, as amended (the JOBS Act), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. The Company may take advantage of these exemptions until it is no longer an EGC under Section 107 of the JOBS Act and has elected to use the extended transition period for complying with new or revised accounting standards. As a result of this election, the Company’s financial statements may not be comparable to those issued by companies that comply with the effective dates pursuant to public company FASB standards.

Liquidity

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company will require substantial additional capital to fund its research and development and ongoing operating expenses. As of December 31, 2025, the Company has relied on public and private equity and debt financings and proceeds from licensing arrangements to fund its operations. The Company has incurred recurring losses and negative cash flows from operations since inception, and, as of December 31, 2025, had an accumulated deficit of $346.3 million and cash, cash equivalents and marketable securities of $113.1 million. The Company expects to incur additional losses and negative cash flows from operations for the foreseeable future.

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In July and August 2023, the Company completed its initial public offering (IPO) and, inclusive of the partial exercise of the underwriters’ overallotment option, the Company sold an aggregate of 6,026,772 shares of Series A common stock at a public offering price of $16.00 per share and received $86.2 million in net proceeds. In January 2024, the Company completed a follow-on offering whereby it sold 9,000,000 shares of its Series A common stock at a price of $12.50 per share and received $104.7 million in proceeds, net of issuance costs of $7.8 million.

In August 2024, the Company entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co. to establish an at-the-market offering (2024 ATM Offering) through which the Company could sell, from time to time at its sole discretion, up to $75.0 million shares of its Series A common stock. In connection with the establishment of the 2025 ATM Offering (as defined below), the Company terminated the 2024 ATM Offering. No shares of Series A common stock were sold under the 2024 ATM Offering prior to such termination.

​

In August 2025, the Company entered into a Sales Agreement with Leerink Partners LLC to establish an at-the-market offering (2025 ATM Offering) through which the Company may sell, from time to time at its sole discretion, up to $75.0 million shares of its Series A common stock. There were no sales under the 2025 ATM Offering during the year ended December 31, 2025.

​

The Company expects that its cash, cash equivalents and marketable securities as of December 31, 2025 will be sufficient to fund the Company’s operating expenses for at least the next 12 months from the issuance of these financial statements. In the future, the Company will need to raise additional funds until it is able to generate sufficient revenues to fund its development activities. The Company’s future operating activities, coupled with its plans to raise capital or issue debt financing, may provide additional liquidity in the future, however these actions are not solely within the control of the Company, and the Company is unable to predict the outcome of these actions to generate the liquidity ultimately required.

​

​

2. Significant Accounting Policies

Segment information

The Company determines and presents operating segments based on the information that is regularly reviewed by the Chief Executive Officer, who is the Company’s chief operating decision maker (CODM), in accordance with ASC 280, Segment Reporting. The Company has determined that it operates as a single business segment, developing and commercializing therapeutics for the treatment of MASH and other diseases where FASN plays a pathogenic role. Refer to Note 10, Segment Reporting for further information related to the Company’s segment.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents and marketable securities. The Company holds cash, cash equivalents and marketable securities at third-party financial institutions, that may from time to time, be in excess of Federal Deposit Insurance Corporation (FDIC) insurance limits. However, the Company believes its risk of loss is minimal as the majority of its cash, cash equivalents and marketable securities are held in custodial accounts at multiple large financial institutions which are well established and of high quality. The Company has not experienced any losses to date.

Cash and cash equivalents

The Company considers only those investments which are highly liquid, readily convertible to cash and purchased with an original maturity of three months or less to be cash equivalents. Marketable securities are those investments with original maturities in excess of three months. As of December 31, 2025 and 2024, cash and cash equivalents consisted of bank deposits, deposits in money market funds as well as investments in certain Agency securities.

Marketable securities

The Company classifies its marketable securities as available-for-sale and records such assets at estimated fair value in the balance sheets. The Company adopted ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments on January 1, 2024. Marketable securities for which the estimated fair value is lower than amortized cost are evaluated for credit impairment. Credit impairment is recorded through the statements of operations and comprehensive loss via an allowance for credit losses account, and any remaining unrealized gains and losses are reported as a component of other comprehensive income (loss) within the statements of operations and comprehensive loss and as a separate component of stockholders’ equity. The

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Company classifies marketable securities with remaining maturities greater than three months but less than one year as current assets on the balance sheets, and those with remaining maturities greater than one year are classified as long-term marketable securities. For all marketable securities which the estimated fair value was lower than the amortized cost as of December 31, 2025 and 2024, the decline in fair value was determined to be primarily driven by a decline in market interest rates and not driven by credit impairment. As of December 31, 2025, the Company has not recognized any impairment or credit losses on its available for sale securities.

Leases

The Company determines if an arrangement is or contains a lease and the classification of that lease at contract inception. Specifically, the Company considers whether it controls the underlying asset and has the right to obtain substantially all the economic benefits or outputs from the asset. The Company enters into lease agreements for its office facility and accounts for its lease obligations under ASU No. 2016-02, Leases (Topic 842). The Company’s operating lease asset is included in “operating lease right-of-use assets” ​(ROU assets) and the current portion of the operating lease liability is included in “operating lease liabilities” in the accompanying balance sheets. As of December 31, 2025 and 2024, the Company had no finance leases.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the lease commencement date. Operating lease ROU assets are based on the corresponding lease liability adjusted for (i) payments made at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company does not account for renewals or early terminations unless it is reasonably certain to exercise these options at commencement. Operating lease expense is recognized on a straight-line basis over the lease term. The Company accounts for lease and non-lease components as a single lease component for operating leases. The Company does not record leases with terms of 12 months or less on the balance sheets.

As the implicit rate for the operating lease was not determinable, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. The Company’s incremental borrowing rate was estimated to approximate the interest rate on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located. The Company determined the incremental borrowing rate by considering various factors, such as its credit rating, interest rates of similar debt instruments of entities with comparable credit rating, the lease term and the currency in which the lease was denominated.

Accrued research and development expense

Research and development expenses represent costs incurred in performing research, development and manufacturing activities in support of the Company’s product development efforts and include personnel-related costs (such as salaries, employee benefits and stock-based compensation) for personnel in research and development functions; as well as external costs, including costs related to acquiring, developing and manufacturing supplies for preclinical studies, clinical trials and other studies, including fees paid to contract manufacturing organizations (CMOs); costs and expenses related to agreements with contract research organization (CROs), investigative sites and consultants to conduct non-clinical and preclinical studies and clinical trials; and professional and consulting services costs. Research and development expenses also include the costs of acquired product licenses and related technology rights where there is no alternative future use.

All research and development expenses are charged to operations as incurred in accordance with ASC 730, Research and Development. Non-refundable advance payments for goods or services that will be used in future research and development activities are deferred and expensed when the services have been performed or as the goods are delivered, rather than when the payment is made.

​

The Company estimates its manufacturing, preclinical study, clinical trial and other study expenses based on the services performed pursuant to contracts with research institutions, CROs and CMOs that conduct and manage such activities on the Company’s behalf. In accruing service fees when the Company has not yet been invoiced or otherwise notified of actual costs, the Company estimates the level of activity completed in each period. These estimates are based on the review of underlying contracts, discussions with key research and development personnel as to the progress of studies and communications with the third-party service providers. The Company also monitors patient enrollment levels and related activities to the extent possible through discussions with CRO personnel to estimate clinical trial costs based on the best information available at each balance sheet date. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. There have been no material changes in estimates for the periods presented.

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Common stock warrants

From time to time, the Company has issued warrants to investors and creditors together with the Company’s debt and equity financings. The Company accounts for warrants in accordance with the guidance contained in ASC 815, Derivatives and Hedging. Under ASC 815-40, warrants that meet the criteria for equity treatment are recorded in stockholders’ equity. The warrants are subject to re-evaluation of the proper classification and accounting treatment at each reporting period. If the warrants no longer meet the criteria for equity treatment, they will be recorded as a liability and remeasured each period with changes recorded in the statement of operations and comprehensive loss. The Company values warrants using an option pricing model.

Stock-based compensation expense

The Company provides share-based payments in the form of stock options and restricted stock awards. For awards only subject to service conditions, the Company uses the straight-line attribution method for recognizing compensation expense over the requisite service period, which is generally the vesting period of the award. Compensation expense is recognized on awards ultimately expected to vest. Forfeitures are recorded when they occur.

For awards with performance vesting conditions, the Company evaluates the probability of achieving the performance condition at each reporting date. No compensation expense is recognized for awards subject to performance conditions until it is probable that the performance condition will be met. If the performance condition is probable of being achieved, the Company recognizes expense for such performance awards over the requisite service period using the accelerated attribution method.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Due to the lack of trading history, the Company’s computation of expected stock volatility is based on the volatility rates of comparable publicly held companies over a period equal to the expected term of the option. The Company 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 Company’s computation of expected term is determined using the simplified method, which represents the average of the contractual term of the options and the weighted-average expected vesting period. The Company believes that it does not have sufficient reliable exercise data in order to justify the use of a method other than the simplified method of estimating the expected exercise term of employee stock option grants. For non-employee stock option grants, the Company has the option to utilize either the expected term or the contractual term, determined on an award-by-award basis. The risk-free interest rate is determined by reference to 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 option. The Company utilizes a dividend yield of zero based on the fact that the Company has never paid cash dividends to stockholders and has no current intentions to pay cash dividends.

The fair value of the common stock is determined based on the quoted market price of the Company’s Series A common stock.

Income taxes

The Company accounts for income taxes using the asset and liability method. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates. In evaluating the ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, it would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period when such determination is made. As of December 31, 2025 and 2024, the Company has recorded a full valuation allowance on its deferred tax assets.

Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Interest and penalties related to unrecognized tax benefits are included within the provision for income tax.

Net loss per share attributable to common stockholders

Basic and diluted net loss per share is computed using the two-class method required for multiple classes of common stock and participating securities. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders for all periods presented. Basic net loss per common share

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attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share attributable to common stockholders’ calculation, common stock options, restricted stock units and common stock warrants are considered to be potentially dilutive securities. As the Company has reported a net loss for the periods presented, basic and diluted net loss per share attributable to common stockholders is the same as all potentially dilutive securities would have an anti-dilutive impact.

The following table presents the calculation of basic and diluted net loss per share for the years ended December 31, 2025 and 2024 (in thousands, except share and per share data):

​

​ ​ ​ ​ ​ ​ ​

​ ​ Years Ended December 31,

Numerator: ​ ​ ​ ​ ​ ​

Denominator: ​ ​ ​ ​ ​ ​

​

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of Series A and Series B common stock outstanding, as their effect would have been anti-dilutive:

​

​ ​ ​ ​ ​

​ ​ Years Ended December 31,

Warrants to purchase Series A common stock ​ 1,000 ​ 1,000

​

Foreign currency translation

The Company considers the U.S. dollar to be its functional currency. Expenses denominated in foreign currencies are translated at the exchange rate on the date the expense is incurred. The effect of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars is included in the statements of operations and comprehensive loss. Foreign exchange transaction gains and losses are included in the results of operations and are not material in the Company’s financial statements.

Recently adopted accounting pronouncements

The Company considers the applicability and impact of all ASUs. ASUs not discussed below were assessed and either determined to be not applicable or expected to have a minimal impact on the Company’s financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The new standard is effective for annual periods beginning after December 15, 2025 for EGCs under the JOBS Act. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company elected to early adopt ASU 2023-09 on a retrospective basis beginning with this Annual Report. See Note 9, Income Taxes, for the updated disclosures as a result of adopting this ASU.

New accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities

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to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently evaluating the impact of the adoption of this standard on its financial statements and related disclosures.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and modifications to capitalization of research and development expenses, among others. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company assessed the provisions of the OBBBA and included any changes that impacted the Company in its provision for income taxes for the year ended December 31, 2025. The OBBBA had no impact on the Company’s financial statements and results of operations due to its cumulative tax loss and tax effect of a full valuation allowance against those balances. The Company will continue to assess the future potential impacts of this legislation on its deferred tax assets, financial statements and related disclosures.

​

3. Fair Value Measurements and Fair Value of Financial Instruments

The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

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

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

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of December 31, 2025 and 2024, financial assets measured at fair value on a recurring basis consisted of cash equivalents and marketable securities. Cash equivalents consist primarily of money market funds and other investments that are readily convertible into cash and have maturities of three months or less at the time of acquisition. The fair value of cash equivalents was $34.7 million and $75.3 million as of December 31, 2025 and, 2024, respectively. The Company considers marketable securities with maturities greater than three months at the time of acquisition to be available for sale securities. The fair value of available for sale securities was $78.1 million and $82.8 million as of December 31, 2025, and 2024, respectively. These available-for-sale securities have expected maturities ranging from 0.5 to 12.0 months, and securities with an expected maturity greater than 12 months as of the balance sheet date, are classified in long-term. There were no available-for-sale securities with expected maturities greater than 12 months as of December 31, 2025. The fair value of marketable securities, which are Level 2 financial instruments, is based upon market prices quoted on the last day of the fiscal period or other observable market inputs. The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker-dealer quotes, bids and/or offers.

The Company evaluates securities with unrealized losses, if any, to determine whether the decline in fair value has resulted from credit loss or other factors, including various qualitative factors. As of December 31, 2025, the Company has not recognized any impairment or credit losses on the Company’s available for sale securities. While the Company classifies these securities as available for sale, the Company does not intend to sell its investments and based on its current plans, the Company currently believes it has the ability to hold these investments until maturity.

The carrying values of the Company’s accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these liabilities.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

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The Company’s Level 3 liabilities that are measured at fair value on a recurring basis consist of the Series A common stock warrant liability related to the warrant to purchase 1,000 shares of Series A common stock with an exercise price of $69.94 per share and an expiration date of July 18, 2026, the third anniversary date of the closing of the Company’s IPO. The fair value of the Series A common stock warrant liability was immaterial as of December 31, 2025 and 2024, as well as the change in fair value during the years ended December 31, 2025 and 2024. There were no transfers within the hierarchy during the periods presented.

The following tables set forth the Company’s financial assets that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ December 31, 2025

​ ​ ​ Valuation ​ ​ ​ Amortized ​ ​ ​ Unrealized ​ ​ ​ Unrealized ​ ​ ​ ​

​ ​ ​ Hierarchy ​ Cost ​ Gains ​ Losses ​ Fair Value

Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash equivalents: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Money market funds ​ ​ Level 1 ​ $ 33,219 ​ $ — ​ $ — ​ $ 33,219

Corporate debt securities ​ ​ Level 2 ​ ​ 1,499 ​ ​ — ​ ​ — ​ ​ 1,499

Total cash equivalents ​ ​ ​ ​ ​ 34,718 ​ ​ — ​ ​ — ​ ​ 34,718

Short-term marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Corporate debt securities ​ ​ Level 2 ​ ​ 1,500 ​ ​ 3 ​ ​ — ​ ​ 1,503

U.S. Treasury securities ​ ​ Level 2 ​ ​ 50,340 ​ ​ 92 ​ ​ — ​ ​ 50,432

Agency securities ​ ​ Level 2 ​ ​ 2,033 ​ ​ 1 ​ ​ — ​ ​ 2,034

Asset-backed securities ​ ​ Level 2 ​ ​ 6,049 ​ ​ 16 ​ ​ (2) ​ ​ 6,063

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ Valuation ​ ​ ​ Amortized ​ ​ ​ Unrealized ​ ​ ​ Unrealized ​ ​ ​ ​

​ ​ ​ Hierarchy ​ Cost ​ Gains ​ Losses ​ Fair Value

Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash equivalents: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Money market funds ​ ​ Level 1 ​ $ 72,800 ​ $ — ​ $ — ​ $ 72,800

U.S. Treasury securities ​ ​ Level 2 ​ ​ 2,477 ​ ​ — ​ ​ — ​ ​ 2,477

Total cash equivalents ​ ​ ​ ​ ​ 75,277 ​ ​ — ​ ​ — ​ ​ 75,277

Short-term marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Corporate debt securities ​ ​ Level 2 ​ ​ 6,909 ​ ​ 7 ​ ​ — ​ ​ 6,916

U.S. Treasury securities ​ ​ Level 2 ​ ​ 27,493 ​ ​ 123 ​ ​ — ​ ​ 27,616

Asset-backed securities ​ ​ Level 2 ​ ​ 5,030 ​ ​ 22 ​ ​ — ​ ​ 5,052

Long-term marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

U.S. Treasury securities ​ ​ Level 2 ​ ​ 4,884 ​ ​ 36 ​ ​ — ​ ​ 4,920

Asset-backed securities ​ ​ Level 2 ​ ​ 2,480 ​ ​ 8 ​ ​ — ​ ​ 2,488

Total long-term marketable securities ​ ​ ​ ​ ​ 7,364 ​ ​ 44 ​ ​ — ​ ​ 7,408

​

​

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4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ As of

​ ​ December 31, ​ December 31,

Prepaid clinical costs ​ $ 973 ​ $ 436

Prepaid research and development costs ​ ​ 1,395 ​ ​ 48

Prepaid insurance ​ ​ 431 ​ ​ 577

Deferred financing costs ​ ​ 282 ​ ​ 306

Total prepaid expenses and other current assets ​ $ 3,280 ​ $ 1,524

​

​

5. Accrued Expenses and Other Current Liabilities

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

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ As of

​ ​ December 31, ​ December 31,

Accrued payroll-related costs ​ $ 1,617 ​ $ 1,358

Accrued clinical costs ​ ​ 561 ​ ​ 528

Accrued research and development costs ​ ​ 1,242 ​ ​ 516

Accrued general and administrative costs ​ ​ 267 ​ ​ 544

Total accrued expenses and other current liabilities ​ $ 3,714 ​ $ 2,951

​

​

​

6. Commitments and Contingencies

License and other agreements

Ascletis BioScience Co. Ltd

In January 2019, the Company entered into a license agreement that became effective in February 2019 with Ascletis BioScience Co. Ltd. (Ascletis), a subsidiary of Ascletis Pharma Inc. (Ascletis Pharma), a biotechnology company incorporated in the Cayman Islands and headquartered in Hangzhou, China. Ascletis Pharma, through a subsidiary, was the lead investor in the Company’s Series E redeemable convertible preferred stock financing in February 2019. The parties entered into this agreement with the intention to develop, manufacture, and commercialize the Company’s proprietary FASN inhibitor, denifanstat, which Ascletis refers to as ASC40. Under the terms of the license agreement, the Company granted Ascletis and its affiliates an exclusive, royalty-bearing sublicensable right and license under the Company’s intellectual property to develop, manufacture, commercialize and otherwise exploit denifanstat and other products containing denifanstat-related compounds in Greater China, consisting of the People’s Republic of China, Hong Kong, Macau and Taiwan.

The Company is eligible to receive development and commercial milestone payments from Ascletis in aggregate of up to $122.0 million as well as tiered royalties ranging from percentages in the high single digits to mid-teens on future net sales of denifanstat in Greater China. The license and the research and development services components of this license agreement are representative of a relationship with a customer, and therefore, the Company evaluated the license agreement under the provisions of ASC 606, Revenue from Contracts with Customers. The developmental and commercial event-based milestone payments represent variable consideration, and the Company used the most likely amount method to estimate this variable consideration because the potential milestone payment is a binary event, as the Company will either receive the milestone payment or it will not. Given the high degree of uncertainty around achievement of these milestones, the Company determined the milestone amounts to be fully constrained and will not recognize revenue until the uncertainty associated with these payments is resolved. Any consideration related to royalties will be recognized if and when the related sales occur. The Company re-assesses the transaction price in each reporting period and when events whose outcomes are resolved or other changes in circumstances occur.

In July 2023, the Company entered into an Assignment and Assumption Agreement with Ascletis and Ascletis’ affiliate Gannex Pharma Co., Ltd. (Gannex) under which Ascletis, while remaining responsible for performance under the license agreement, assigned

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all of its rights and obligations under the license agreement to Gannex and Gannex assumed such rights and obligations, effective as of October 2019.

Assia Chemical Industries Ltd.

In September 2025, the Company entered into a term sheet with Assia Chemical Industries Ltd. (Assia), doing business as TAPI Technology & API Series (TAPI), a subsidiary of Teva Pharmaceutical Industries Ltd. and in December 2025, the Company entered into a license agreement with TAPI replacing the term sheet (License Agreement). Under the agreement, TAPI granted the Company a global, exclusive license to certain intellectual property rights covering innovative forms of TAPI’s resmetirom active pharmaceutical ingredient (API) for Sagimet’s technical evaluation and manufacture, and, if elected by the Company, further development of a fixed-dose combination (FDC) product containing denifanstat and resmetirom.

Upon execution of the term sheet in September 2025, a non-refundable up-front payment of $2.5 million was due, which was paid and recognized in research and development expense during the year ended December 31, 2025. Pursuant to the License Agreement, the Company is obligated to pay TAPI potential additional manufacturing-related milestones of up to $5.5 million as well as a low single-digit royalty on net sales of the FDC product. The License Agreement terminates upon the date certain TAPI know-how ceases to be confidential information or the last of the TAPI patents expires, whichever is later, unless earlier terminated by either party in accordance with the terms of the License Agreement.

​

Facility Lease Agreement

In March 2019, the Company executed a 38-month non-cancelable operating lease agreement for 3,030 square feet of office space for its headquarters facility in San Mateo, California, which commenced April 1, 2019. In December 2021, the lease agreement was amended to extend the term of the lease through June 2024; in April 2024, the Company amended the lease agreement to (i) extend the lease through June 30, 2025 and (ii) increase the monthly lease payment to approximately $13,000 beginning on July 1, 2024, which resulted in an increase in the Company’s operating lease right-of-use asset and corresponding operating lease liability of $0.1 million on the amendment date. In May 2025, the Company amended the lease agreement to extend the term of the lease through June 2026, which resulted in an increase in the Company’s operating lease right-of-use asset and corresponding operating lease liability of $0.2 million on the amendment date.

Operating lease costs were $0.2 million and $0.2 million for the years ended December 31, 2025, and 2024, respectively.

The following is a schedule by year of future maturities of the Company’s operating lease liabilities (in thousands):

​

​ ​ ​ ​

​ ​ December 31,

Total lease payments ​ 80

Less: interest ​ (2)

Total ​ $ 78

​

Supplemental cash flow information related to leases was as follows (in thousands):

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Year Ended December 31,

Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​

Operating cash flows from operating leases ​ $ 159 ​ $ 159

​

Weighted-average remaining lease term and discount rate were as follows as of December 31, 2025:

​

​ ​ ​ ​

Weighted-average remaining lease term ​ 0.5 years

Weighted-average discount rate ​ 9 %

​

​

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Guarantees and indemnifications

In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of December 31, 2025, the Company does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

Legal Proceedings

From time to time, the Company may become involved in various legal proceedings that arise in the ordinary course of its business. The Company records a liability for such matters when it is probable that future losses will be incurred and that such losses can be reasonably estimated. Significant judgment by the Company is required to determine both probability and the estimated amount. The Company is not party to any material legal proceedings as of December 31, 2025.

​

7. Stockholders’ Equity

Common stock

As of December 31, 2025 and 2024, the Company had authorized 500,000,000 shares of Series A common stock, $0.0001 par value per share, and 15,000,000 shares of Series B common stock, $0.0001 par value per share. Holders of Series A common stock are entitled to one vote and Series B common stock are not entitled to vote. Upon the voluntary or involuntary liquidation, dissolution or winding up of the Company, the net assets of the Company will be distributed pro rata to the holders of Series A common stock and Series B common stock. Each share of Series B common stock is convertible, at any time at the option of the holder, into one share of Series A common stock, unless that holder would beneficially own a number of Series A common stock in excess of 4.99% of the total number of shares of Series A common stock then issued and outstanding.

In December 2025, certain holders of the Company’s Series B common stock elected to convert 952,996 shares of the Company’s Series B common stock into Series A common stock.

Undesignated preferred stock

As of December 31, 2025 and 2024, the Company had authorized 10,000,000 shares of undesignated preferred stock, $0.0001 par value per share, of which none were issued and outstanding.

8. Stock-Based Compensation

The 2023 Stock Option and Incentive Plan (2023 Plan) was adopted by the board of directors, approved by the Company’s stockholders on July 4, 2023, and became effective on July 13, 2023, replacing the 2017 Equity Incentive Plan. The number of shares initially reserved for issuance under the 2023 Plan was 2,585,968. The number of shares will automatically increase each January 1, by (i) 4% of the outstanding number of shares of the Company’s Series A common stock on the immediately preceding December 31 or (ii) a lesser number of shares as determined by the compensation committee of the board of directors. In accordance with the 2023 Plan, the shares reserved for issuance automatically increased by 855,016 shares on January 1, 2024, and by 1,226,994 shares on January 1, 2025. As of December 31, 2025, the aggregate maximum number of shares reserved for issuance under the 2023 Plan was 4,667,978, of which 1,395,328 shares were available for future grants. Option grants issued under the 2023 Plan are exercisable for up to 10 years from the date of issuance.

In connection with the 2023 Plan, the number of shares reserved for issuance under the 2023 Plan was automatically increased by 1,278,164 shares, effective January 1, 2026.

In March 2024, the Company established a pool of 1,000,000 shares of Series A common stock (Inducement Pool) from which equity grants in the form of options and restricted stock units may be issued as inducement for new employees to accept employment offers from the Company or for individuals returning to employment after a bona fide period of non-employment with the Company. Inducement Pool grants are granted outside of the 2023 Plan and do not require approval from the Company’s stockholders pursuant to

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the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4). In February 2025, the Company increased the number of shares available for issuance by 300,000 shares, increasing the total number of shares available for issuance under the Inducement Pool to 1,300,000 shares. As of December 31, 2025, 361,217 shares were available for future grants from the Inducement Pool.

Total stock-based compensation recorded in the statements of operations and comprehensive loss related to stock options, restricted stock units and the ESPP (defined below) for employees and non-employees was as follows (in thousands):

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Years Ended December 31,

Employee stock purchase plan ​ ​ 9 ​ ​ —

Total stock-based compensation expense ​ $ 6,449 ​ $ 5,288

Included in: ​ ​ ​ ​ ​ ​

General and administrative expense ​ $ 5,516 ​ $ 4,306

Research and development expense ​ 933 ​ 982

Total stock-based compensation expense ​ $ 6,449 ​ $ 5,288

​

Stock options

The Company grants stock options which consist of (i) time-based options, which vest and become exercisable, subject to the participant’s continued employment or service through the applicable vesting date and (ii) performance-based options, which vest based on performance measures against predetermined objectives that include successful completion of qualified equity offerings or announced topline results for clinical trials and positive clinical results over a specified performance period. The Company’s time-based options have various vesting schedules that range from vesting immediately to vesting over a four-year period.

The following table summarizes stock option activity (in thousands, except share and per share data):

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​

​ ​ Number of ​ ​ ​ ​ Average ​ ​ ​

​ ​ Shares ​ Weighted- ​ Remaining ​ ​ ​

​ ​ Underlying ​ Average ​ Contractual ​ Aggregate

​ ​ Outstanding ​ Exercise ​ Term ​ Intrinsic

​ ​ Options ​ Price ​ (in Years) ​ Value (1)

​

During the years ended December 31, 2025 and 2024, the weighted average grant-date fair value per share of stock options granted was $3.84 and $3.26, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2025 and 2024 was $0.2 million and $0.1 million, respectively. Additionally, during the years ended December 31, 2025 and 2024, cash received from the exercise of stock options was $0.3 million and $0.1 million, respectively.

As of December 31, 2025, there was $8.3 million of unrecognized compensation expense, which is expected to be recognized over a remaining weighted-average period of 2.1 years.

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Restricted stock units

The Company’s restricted stock units generally vest over a four-year period in equal amounts on an annual basis, provided the employee remains continuously employed with the Company. The fair value of the restricted stock units is equal to the closing price of the Company’s Series A common stock on the grant date.

The following table summarizes restricted stock unit activity:

​

​ ​ ​ ​ ​ ​

​ ​ ​ ​ Weighted-Average

​ ​ ​ ​ Restricted ​ ​ ​ Grant Date

​ ​ ​ ​ Stock Units ​ ​ ​ Fair Value

​

As of December 31, 2025, the total unrecognized compensation expense related to unvested restricted stock units was $2.3 million, which is expected to be recognized over a remaining weighted-average period of 2.3 years.

Valuation assumptions

The fair value of each stock option granted was estimated on the date of grant using the Black-Scholes option pricing model using the following assumptions:

​

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Years Ended December 31,

Expected volatility 95 - 96 % ​ 91 - 96 %

Risk-free interest rate 3.8 - 4.3 % ​ 3.6 - 4.5 %

Dividend yield — ​ —

Expected term (in years) 5.3 - 6.0 ​ ​ 5.3 - 6.1 ​

​

The expected term is determined using the simplified method, which represents the average of the contractual term of the options and the weighted-average expected vesting period. The risk-free interest rate is determined by reference to 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 option. The expected stock volatility rate is based on the volatility rates of comparable publicly held companies over a period equal to the expected term of the option. The Company utilizes a dividend yield of zero based on the fact that the Company has never paid cash dividends to stockholders and has no current intentions to pay cash dividends.

​

Employee stock purchase plan

The 2023 Employee Stock Purchase Plan (the ESPP) was adopted by the board of directors in July 2023 with an initial total of 215,497 shares of Series A common stock reserved for issuance. Under the ESPP plan, the amount of shares reserved automatically increases each January 1 through January 1, 2033, by the least of (i) 215,497 shares of Series A common stock, (ii) 1% of the outstanding number of shares of the Company’s Series A common stock on the immediately preceding December 31 or (iii) such lesser number of shares of Series A common stock as determined by the administrator of the ESPP. In accordance with the ESPP, the shares reserved for issuance automatically increased by 213,754 shares on January 1, 2024, and by 215,497 shares on January 1, 2025. As of December 31, 2025, the aggregate maximum number of shares reserved for issuance under the ESPP was 644,748. No shares of Series A common stock have been issued under the ESPP to date.

​

In connection with the ESPP, the number of shares reserved for issuance under the ESPP was automatically increased by 215,497 shares effective January 1, 2026.

​

9. Income Taxes

For the years ended December 31, 2025, and 2024, the Company did not record a provision or benefit for federal or state income taxes, as the Company has incurred a net loss for all periods presented and the Company has provided a full valuation allowance against

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its net deferred tax assets. The Company did not pay any income taxes in any jurisdiction for the years ended December 31, 2025 and 2024.

A reconciliation between the federal statutory tax rates and the Company’s effective tax rate for the years ended December 31, 2025, and 2024, is as follows:

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Years Ended December 31,

Research and development credits ​ 156 ​ 0.30 ​ ​ ​ 1,976 ​ 4.34 ​

Changes in unrecognized tax benefits ​ ​ 164 ​ 0.32 ​ ​ ​ 89 ​ 0.20 ​

Other ​ ​ (3) ​ (0.01) ​ ​ ​ (5) ​ (0.01) ​

Effective income tax rate ​ $ — ​ — % ​ $ — ​ — %

​

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents significant components of the Company’s net deferred tax assets as of December 31, 2025 and 2024 (in thousands):

​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ As of December 31,

Deferred tax assets: ​ ​ ​ ​ ​

Net operating loss carryforwards $ 46,665 ​ $ 35,045

Capitalized start-up costs and research expenses ​ 18,169 ​ ​ 20,137

Research and development credits ​ ​ 8,824 ​ ​ 8,265

Accruals, reserves and other ​ ​ 313 ​ ​ 270