NASDAQ: DTIL

Common stock: $0.000005 par value— 200,000,000 shares authorized as of December 31, 2025 and December 31, 2024; 24,115,346 shares issued and 24,088,425 shares outstanding as of December 31, 2025; 8,229,730 shares issued and 8,202,715 shares outstanding as of December 31, 2024
1 1

Additional paid-in capital621,387 539,808

Accumulated deficit(528,188)(482,464)

Treasury stock(952)(952)

Total stockholders’ equity92,248 56,393

Total liabilities and stockholders’ equity$154,416 $136,388

See notes to financial statements

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PRECISION BIOSCIENCES, INC.

STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

For the Years Ended December 31,

20252024

Revenue$34,264 $68,696

Operating expenses

Research and development54,172 59,559

General and administrative32,240 35,299

Total operating expenses86,412 94,858

Operating loss(52,148)(26,162)

Other income (expense):

Loss from equity method investment(5,284)(1,084)

(Loss) gain on changes in other fair value adjustments(2,666)258

Gain on change in fair value of warrant liability11,129 29,610

Interest expense(1,422)(1,782)

Interest income4,239 6,763

Loss on disposal of assets(421)(436)

Impairment charges(36)—

Total other income5,539 33,329

(Loss) income from continuing operations$(46,609)$7,167

Gain from discontinued operations885 $—

Net (loss) income$(45,724)$7,167

Net (loss) income per share

Basic$(3.56)$1.05

Diluted$(3.56)$1.04

Weighted-average shares of common stock outstanding

Basic12,826,0786,832,982

Diluted12,826,0786,883,911

See notes to financial statements

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PRECISION BIOSCIENCES, INC.

STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

Common StockAdditional

Paid-In

CapitalAccumulated

DeficitTreasury

StockTotal

Stockholders’

Equity

SharesAmount

Balance- December 31, 20234,191,0531 $509,443 $(489,631)$(952)$18,861

Issuance of common stock under employee stock purchase plan23,831— 249 — — 249

Share-based compensation expense—— 12,604 — — 12,604

Proceeds from issuance of common stock and warrants through underwritten offering, net of issuance costs2,500,000— 4,610 — — 4,610

Proceeds from issuance of common stock to collaboration partners and licensees97,360— 905 — — 905

Proceeds from issuance of common stock through ATM facility, net of issuance cost1,290,354— 11,697 — — 11,697

Proceeds from issuance of common stock, net of issuance cost25,000— 300 — — 300

Restricted stock units vested102,132— — — — —

Net income—— — 7,167 — 7,167

Balance- December 31, 20248,229,730$1 $539,808 $(482,464)$(952)$56,393

Issuance of common stock under employee stock purchase plan49,744— 218 — — 218

Share-based compensation expense—— 10,186 — — 10,186

Proceeds from issuance of common stock and warrants through underwritten offering, net of issuance costs10,815,000— 45,952 — — 45,952

Proceeds from issuance of common stock to collaboration partners and licensees220,712— 1,031 — — 1,031

Proceeds from issuance of common stock through ATM facility, net of issuance cost4,364,467— 23,933 — — 23,933

Proceeds from issuance of common stock, net of issuance cost47,564— 259 — — 259

Restricted stock units vested388,129— — — — —

Net loss—— — (45,724)— (45,724)

Balance- December 31, 202524,115,346$1 $621,387 $(528,188)$(952)$92,248

See notes to financial statements

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PRECISION BIOSCIENCES, INC.

STATEMENTS OF CASH FLOWS

(In thousands)

For the Years Ended December 31,

20252024

Cash flows from operating activities:

Net (loss) income$(45,724)$7,167

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Depreciation and amortization1,468 3,404

Share-based compensation10,186 12,604

Impairment charges36 —

(Gain) loss on disposal of assets421 436

Issuance of common stock in exchange for services259 —

Non-cash interest expense186 249

Amortization of right-of-use assets1,285 1,173

Loss (gain) on changes in other fair value adjustments2,666 (258)

Loss from equity method investment5,284 1,084

Gain from disposal of business(855)—

Amortization of discount on note receivable(682)(695)

Gain on change in fair value of warrant liability(11,129)(29,610)

Changes in operating assets and liabilities:

Prepaid expenses3,331 (464)

Marketable securities(4,536)1,990

Convertible note receivable— 9,750

Accounts receivable229 672

Contract asset1,469 (1,469)

Other assets and other current assets339 (262)

Accounts payable(737)(2,096)

Other liabilities and other current liabilities(1,762)(2,128)

Deferred revenue(26,257)(58,860)

Lease liabilities(1,320)(1,132)

Net cash used in operating activities(65,843)(58,445)

Cash flows from investing activities:

Purchases of property, equipment and software(85)(250)

Purchases of intangibles assets(615)(25)

Proceeds from sale of equipment66 60

Net cash used in investing activities(634)(215)

Cash flows from financing activities:

Proceeds from employee stock purchase plan218 249

Proceeds from offering of common stock and warrants through underwritten offering, net of issuance costs69,980 37,025

Proceeds from issuance of common stock through ATM facility, net of issuance cost23,933 12,308

Proceeds from offering of common stock to collaboration partners and licensees1,031 905

Repayment of revolving credit facility— (22,505)

Borrowings from term loan debt facility, net of issuance costs paid to lender— 22,468

Net cash provided by financing activities95,162 50,450

Net increase (decrease) in cash, cash equivalents and restricted cash28,685 (8,210)

Cash, cash equivalents, and restricted cash—beginning of period108,468 116,678

Cash, cash equivalents, and restricted cash —end of period$137,153 $108,468

Reconciliation of cash, cash equivalents and restricted cash:

Cash and cash equivalents$110,823 $85,899

Restricted cash$26,330 $22,569

Total of cash, cash equivalents and restricted cash$137,153 $108,468

Supplemental disclosures of noncash financing and investing activities:

Property, equipment and software additions included in accounts payable, accrued expenses and other current liabilities$— $48

Intangible asset additions included in accounts payable and accrued expenses and other current liabilities$300 $250

Cash paid for interest$1,355 $1,738

See notes to financial statements

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Precision BioSciences, Inc.

Notes to Financial Statements

NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Precision BioSciences, Inc. (the “Company”) was incorporated on January 26, 2006 under the laws of the State of Delaware and is based in Durham, North Carolina. The Company is a gene editing company dedicated to improving life by developing in vivo therapies for genetic and infectious diseases with the application of the Company’s wholly-owned proprietary ARCUS genome editing platform.

Since its inception, the Company has devoted substantially all of its efforts to research and development activities, recruiting skilled personnel, establishing its intellectual property portfolio and providing general and administrative support for these operations. The Company is subject to a number of risks similar to those of other companies conducting early-stage research and development of product candidates. Principal among these risks are the Company’s dependence on key individuals and intellectual property, competition from other products and companies, and the technical risks associated with the successful research, development and clinical manufacturing of its product candidates. The Company’s success is dependent upon its ability to continue to raise additional capital in order to fund ongoing research and development, obtain regulatory approval of its products, successfully commercialize its products, generate revenue, meet its obligations, and, ultimately, attain profitable operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Actual results could differ from those estimates. Significant estimates include recording revenue for performance obligations recognized over time, determination of the fair value of share-based compensation grants, estimating services expended by third-party service providers used to recognize research and development expense and determination of the fair value of investments.

Basis of Presentation

These financial statements have been prepared in accordance with GAAP. Additionally, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The accompanying financial statements have been recast for all periods presented to reflect the assets, liabilities and expenses related to discontinued operations (discussed below). The accompanying financial statements are generally presented in conformity with the Company’s historical format.

Reverse Stock Split

On February 13, 2024, the Company amended its amended and restated certificate of incorporation in order to effect a 1-for-30 reverse stock split of its outstanding shares of capital stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 30 shares of the Company’s common stock issued or outstanding were automatically reclassified into one new share of common stock, subject to the treatment of fractional shares as described below, without any action on the part of the holders. All historical share and per-share amounts reflected throughout the accompanying financial statements and other financial information in this Annual Report on Form 10-K have been retroactively adjusted to reflect the 2024 Reverse Stock Split as if the split occurred as of the earliest period presented. The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise have been entitled to receive fractional shares as a result of the Reverse Stock Split were entitled to a cash payment in lieu thereof at a price equal to the fraction to which the stockholder would otherwise be entitled multiplied by the closing sales price per share of the common stock (as adjusted to give effect to the Reverse Stock Split) on The Nasdaq Capital Market on February 13, 2024, the last trading day immediately preceding the effective time of the Reverse Stock Split.

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Summary of Significant Accounting Policies

Cash and Cash Equivalents

As of December 31, 2025 and December 31, 2024, the Company held cash equivalents which are composed of money market funds.

Restricted Cash

Restricted cash includes a cash security account with Banc of California pursuant to the 2024 Loan and Security Agreement (as defined in Note 12, Debt, below) and the escrow account pursuant to the amended employment agreements (as described in Note 14, Commitments and Contingencies, below). Both of these balances are classified as long-term on the Company’s balance sheets as the maturity date under the 2024 Loan and Security Agreement is June 30, 2027 and the escrow account balance will be held in perpetuity in accordance with the employment agreements. As of December 31, 2025, the Company had a restricted cash balance of $26.3 million. The restricted cash balance as of December 31, 2024 was $22.6 million.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, and receivables. All of the Company’s cash and cash equivalents are held at financial institutions that management believes to be of high credit quality. The Company may maintain cash deposits in financial institutions in excess of government insured limits. The Company regularly invests excess cash deposits in money market funds and repurchase agreements. The Company believes that the credit risk arising from the holdings of these financial instruments is mitigated by the fact that these securities are of short duration, government backed and of high credit rating. The Company has not experienced any losses on cash and cash equivalents to date.

Revenue from Novartis Pharma AG (“Novartis”) and Imugene (defined below) accounted for 77% and 23% of revenue during the year ended December 31, 2025, respectively. Revenue from Prevail Therapeutics, Inc. (“Prevail”) and TG Therapeutics (as defined below) accounted for 77% and 12% of revenue during the year ended December 31, 2024, respectively.

Property, Equipment and Software

Property, equipment and software (“PP&E”) are stated at cost, net of depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset.

The depreciation and amortization periods for the Company’s significant PP&E categories are as follows:

Laboratory equipment
5 to 7 years

Furniture and fixtures and office equipment
3 to 5 years

Leasehold improvementsLesser of remaining lease term or useful life

Repairs and maintenance are charged to operations as incurred, and expenditures for additions and improvements that extend the useful life of the asset are capitalized.

Intangible Assets

Intangible assets primarily include in-licenses and capitalized patent costs. The Company capitalizes license fees paid to acquire access to proprietary technology if the technology is expected to have alternative future use in multiple research and development projects. The cost of licensed technology rights is amortized using the straight-line method over the estimated useful life of the technology. If the access to use the technology rights is one year or less, the cost is recorded as a prepaid expense and amortized over the period identified in the agreement. Amortization expense for licensed technology and capitalized patent costs is included in research and development expenses within the accompanying statement of operations.

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Impairment Charges

Long-lived assets, such as PP&E, intangible assets, and long-term prepaid assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is assessed when future undiscounted cash flows are less than the assets’ carrying value and recognized when the carrying value of the asset exceeds fair value. Fair value is calculated by estimating the discounted future cash flows expected to be generated by the asset as well as other valuation techniques. An impairment charge is recognized for the amount by which the carrying amount exceeds the fair value of the asset.

Fair Value Measurements

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. ASC 820, Fair Value Measurement, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from our independent sources. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used to value the assets and liabilities:

•Level 1 - Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities

•Level 2 - Inputs, other than quoted prices in active markets, that are observable either directly or indirectly

•Level 3 - Unobservable inputs for which there is little or no market date, which require the Company to develop its own assumptions

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Investments in Equity Securities

The Company carries investments in equity securities for which it does not possess the ability to exercise significant influence or control at fair value in the balance sheets and records changes in fair value in the statements of operations as a component of other income or expense.

As of December 31, 2025, the Company held common stock in iECURE (defined below) with a fair value of $0.7 million. The fair value of the iECURE investment as of December 31, 2024 was $3.2 million.

Investments under the Equity Method

The Company utilizes the equity method to account for investments when it is determined that the Company possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted.

In applying the equity method, the Company subsequently increases or decreases the carrying amount of the investment by the Company’s proportionate share of the net earnings or losses and other comprehensive income of the investee. In the event that net losses of the investee reduce the carrying amount to zero, additional net losses are recorded if other investments in the investee are at-risk, even if the Company has not committed to provide financial support to the investee.

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Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Lease liabilities and corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. As the rate implicit in the Company’s leases are not readily determinable, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Revenue Recognition for Contracts with Customers

The Company’s revenues are generated primarily through collaborative research, license, development and commercialization agreements.

ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company evaluates the performance obligations promised in the contract that are based on goods and services that will be transferred to the customer and determines whether those obligations are both (i) capable of being distinct and (ii) distinct in the context of the contract. Goods or services that meet these criteria are considered distinct performance obligations. If both these criteria are not met, the goods and services are combined into a single performance obligation. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses if these options provide a material right to the customer and if so, these options are considered performance obligations. The exercise of a material right is accounted for as a contract modification for accounting purposes.

The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and if over time this is based on the use of an output or input method. For the year ended December 31, 2025, the Company did not record a cumulative catch up adjustment on its contracts with partners. During the year ended December 31, 2025, the Company recorded $26.3 million in revenue that was included in deferred revenue as of December 31, 2024.

Invoices issued as stipulated in contracts prior to revenue recognition are recorded as deferred revenue. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue within current liabilities in the accompanying balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as noncurrent deferred revenue. Amounts recognized as revenue, but not yet invoiced are generally recognized as contract assets in the other current assets line item in the accompanying balance sheets.

Milestone Payments – If an arrangement includes development and regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore revenue recognized is constrained as management is unable to assert that a reversal of revenue would not be probable. The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and, if necessary, adjusts its estimate of the overall transaction

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price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenues and earnings in the period of adjustment.

Royalties – For arrangements that include sales-based royalties, including milestone payments based on a level of sales, which are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation linked to some or all of the royalty has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements.

Significant Financing Component – In determining the transaction price, the Company adjusts consideration for the effects of the time value of money if the timing of payments provides the Company with a significant benefit of financing. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less. The Company assessed each of its revenue arrangements in order to determine whether a significant financing component exists and concluded that a significant financing component does not exist in any of its arrangements.

Collaborative Arrangements – The Company has entered into collaboration agreements, which are within the scope of ASC 606, to discover, develop, manufacture and commercialize product candidates. The terms of these agreements typically contain multiple promises or obligations, which may include: (1) licenses, or options to obtain licenses, to use the Company’s technology, (2) research and development activities to be performed on behalf of the collaboration partner, and (3) in certain cases, services in connection with the manufacturing of preclinical and clinical material. Payments the Company receives under these arrangements typically include one or more of the following: non-refundable, upfront license fees; option exercise fees; funding of research and/or development efforts; clinical and development, regulatory, and sales milestone payments; and royalties on future product sales.

The Company analyzes its collaboration arrangements to assess whether the collaboration agreements are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, are within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to ASC 606. For those elements of the arrangement that are accounted for pursuant to ASC 606, the Company applies the five-step model described above.

For additional discussion of accounting for collaboration revenues, see Note 2, Collaboration and License Agreements.

Research and Development

Research and development costs are expensed as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities including salaries, benefits, share-based compensation, allocations for rent and facility costs, depreciation, preclinical manufacturing expenses, costs of services provided by contract research organizations (“CROs”) in connection with clinical trials and contract manufacturing organizations (“CMOs”) engaged to manufacture clinical trial material, costs of licensing technology, and costs of services provided by research and development service providers. Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred if the technology is not expected to have any alternative future uses other than the specific research and development project for which it was intended. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed rather than when the payment is made.

The Company is required to estimate accrued research and development expenses resulting from its obligations under contracts with CROs, CMOs, research organizations, service providers, vendors and consultants in connection with research and development activities. The financial terms of these contracts are subject to negotiations and vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are

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provided to the Company under such contracts. The Company’s objective is to reflect the appropriate research and development expenses in its statements of operations by matching those expenses with the period in which the services and efforts are expended. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of the expense. In accruing fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the Company’s estimate, the Company adjusts the accrual or amount of prepaid expense accordingly.

Discontinued Operations

The Company determined that its decision to no longer internally develop ex vivo allogeneic chimeric antigen receptor (“CAR T”) immunotherapies and related sale of its CAR T infrastructure to Imugene met the criteria for classification as a discontinued operation in accordance with ASC Subtopic 205-20, Discontinued Operations. Accordingly, the accompanying financial statements for all periods have been updated to present the assets and liabilities associated with the development of ex vivo allogeneic CAR T immunotherapies separately as discontinued operations on the balance sheets and the results of all discontinued operations are reported as a separate component in the statements of operations. The accompanying financial statements are generally presented in conformity with the Company’s historical format.

For additional information related to discontinued operations, refer to Note 6, Discontinued Operations.

Comprehensive (Loss) Income

Comprehensive income (loss) includes net (loss) income as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. For the years ended December 31, 2025 and December 31, 2024, there were no differences between net (loss) income and comprehensive (loss) income in the accompanying statements of operations.

Net (Loss) Income per Share

Basic net (loss) income per share is computed by dividing net (loss) income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net (loss) income per share is computed using the weighted-average number of shares of common stock outstanding during the period and, if dilutive, the weighted-average number of potential shares of common stock.

Share-Based Compensation

The Company accounts for all share-based compensation awards, including stock options, restricted stock units and its employee stock purchase plan, at fair value. Compensation expense is recognized for the Company’s share-based compensation awards, net of actual forfeitures, over the requisite service period, which is the vesting period of the respective award.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which uses as inputs the fair value of the Company’s common stock and assumptions the Company makes for the expected volatility of its common stock, the expected term of the stock options, the risk-free interest rate for a period that approximates the expected term of the stock options and the Company’s expected dividend yield. Expected volatility is estimated based on the historical volatility of the Company and other comparable publicly traded peer companies. The expected term of the options has been determined utilizing a weighted average value considering actual exercise history and estimated expected term based on the midpoint of final vest date and expiration date. 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 award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The fair value of each restricted stock unit is determined based on the closing market price of the Company’s common stock on the date of grant.

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Warrant Liability

As of December 31, 2025, warrants representing 2,500,000 shares of common stock issued in the March 2024 Public Offering and warrants representing 6,107,500 shares of common stock issued in the November 2025 Public Offering were outstanding. These warrants are classified as a liability since the warrants meet the classification requirements for liability accounting pursuant to ASC 815. This liability is subject to remeasurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the Company’s statements of operations. The Company classifies the warrant liability within Level 3 of the fair value hierarchy as the assessed fair value is based on both observable and unobservable market inputs including the Company’s stock price, risk-free rate, and volatility. See Note 13, Warrants for more information.

Income Taxes

Deferred tax assets and liabilities are determined based on the temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse. In estimating future tax consequences, all expected future events are considered other than the enactment of changes in the tax law or rates. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

Accounting Standards Updates

Recently Adopted Accounting Standards

In December 2024, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to expand the disclosure requirements for income taxes. Upon adoption, companies will be required to disclose additional specified categories in the rate reconciliation. Companies will also be required to disclose the amount of income taxes paid disaggregated by jurisdiction, among other disclosure requirements. The standard is effective for annual periods beginning after December 15, 2024, and can be applied either prospectively or retrospectively. The Company adopted ASU 2023-09 as of the required effective date and applied the guidance retrospectively to all periods presented. The adoption did not have a material impact on the financial statements. Refer to our income taxes disclosure in Note 15, Income Taxes for more information.

Recently Issued Accounting Standards

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, to improve disclosures around an entity’s expenses. Upon adoption, companies will be required to disclose in the notes to the financial statements a disaggregation of certain expense categories included within the expense captions on the face of the income statement. The standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted, and can be applied either prospectively or retrospectively. We plan to adopt the standard in our 2027 annual period and are currently assessing its effect on our financial statement disclosures.

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NOTE 2: COLLABORATION AND LICENSE AGREEMENTS

TG Therapeutics

On January 7, 2024, the Company entered into a license agreement (the “TG License Agreement”) with TG Cell Therapy, Inc. (“TG Subsidiary”) and its parent company TG Therapeutics, Inc. (“TG Parent” and, together with TG Subsidiary, “TG Therapeutics”), pursuant to which the Company granted TG Subsidiary certain exclusive and non-exclusive license rights to develop, manufacture, and commercialize azer-cel for autoimmune diseases and other indications outside of cancer pursuant to the terms of the TG License Agreement.

Under the TG License Agreement, the Company received an upfront cash payment of $10.0 million (the “Upfront Payment”) and is entitled to receive an additional cash payment of $7.5 million from TG Therapeutics following the achievement of a clinical milestone (the “Initial Milestone Payment”). In addition, the Company is entitled to additional payments upon the achievement of additional specified milestones of up to $288.6 million (the “Additional Milestone Payments”). As described below, up to $10.0 million of the cash payments received and potentially payable to the Company are payable in exchange for the issuance (the “Company Stock Issuances”) to TG Subsidiary of shares of the Company’s common stock.

The Upfront Payment of $10.0 million was comprised of (i) a $5.25 million cash payment that was paid to the Company on February 5, 2024, (ii) a $2.25 million cash payment that was paid to the Company on February 5, 2024 in exchange for 97,360 shares of the Company’s common stock, based on a price per share equal to a 100% premium to the VWAP of the Company’s common stock for the 30 days trading prior to the date of the TG License Agreement, and (iii) a deferred cash payment of $2.5 million that was paid to the Company on January 6, 2025 in exchange for 220,712 shares of the Company’s common stock, based on a price per share equal to the greater of (A) 100% premium to the VWAP of the Company’s common stock for the 30 days trading prior to the date of payment or (B) a minimum price of $11.1660 determined in accordance with Nasdaq Listing Rule 5635(d) (the “Minimum Price”).

The Initial Milestone Payment of $7.5 million will consist of (i) a $5.25 million cash milestone payment and (ii) a $2.25 million cash payment in exchange for 201,504 shares of the Company’s common stock determined based on the Minimum Price.

The Additional Milestone Payments become due upon the achievement of certain milestones as specified in the TG License Agreement. Included within the Additional Milestone Payments is a potential payment of $3.0 million in connection with achievement of a milestone specified in the TG License Agreement, payable in exchange for such number of shares of the Company’s common stock determined based on a price per share equal to the greater of (A) 100% premium to the VWAP of the Company’s common stock for the 30 days trading prior to the achievement of such milestone or (B) the Minimum Price.

Subject to the terms and conditions of the TG License Agreement, TG Therapeutics is permitted to pay up to 50% of the value of each Additional Milestone Payment (other than the Additional Milestone Payment described above that would, upon achievement, involve the issuance of $3.0 million of Shares by Precision) in freely tradable shares of common stock of TG Parent, valued based on the VWAP of the TG Parent shares of common stock on Nasdaq for the 30 days trading prior to the achievement of the applicable milestone.

If a licensed product under the TG License Agreement is approved and sold, TG Therapeutics is also required to pay the Company tiered royalties ranging from high-single-digit to low-double-digit percentages on net sales of the licensed product. TG Therapeutics’ obligation to pay royalties to the Company expires on a country-by-country and licensed product-by-licensed product basis, upon the latest to occur of (i) the expiration of the last-to-expire valid claim in such country covering such licensed product; (ii) the expiration of any period of data, regulatory, or market exclusivity, or supplemental protection certificates (other than patents) covering the licensed product in such country; and (iii) a period of 10 years following the first commercial sale of the respective licensed product in such country.

Unless earlier terminated, the TG License Agreement will remain in effect on a licensed product-by-licensed product and country-by-country basis until the expiration of a defined royalty term for each licensed product and country. The Company may terminate the TG License Agreement if TG Therapeutics fails to initiate certain development activities with respect to the licensed product by a specified date or ceases active development of the licensed product for a specified period of time. In addition, the Company may terminate the TG License Agreement if TG Therapeutics or any of its affiliates or sublicensees challenges the validity of any patents controlled by the Company. The Company or TG

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Therapeutics may terminate the TG License Agreement (i) for material breach by the other party and a failure to cure such breach within the time period specified in the TG License Agreement or (ii) the other party’s insolvency.

Sale of Azer-cel CAR T Platform to Imugene

On August 15, 2023 the Company entered into an asset purchase agreement (the “Imugene Purchase Agreement”) with Imugene Limited (“Imugene Limited”), and its wholly owned subsidiary Imugene (USA) Inc. (“Imugene US” and together with Imugene Limited, “Imugene”). Pursuant to and simultaneously with the execution of the Imugene Purchase Agreement, Imugene US acquired the Company’s manufacturing infrastructure used in the development and manufacture of azer-cel, including assuming the lease to the Company’s manufacturing facility and certain contracts with respect to our manufacturing facility, and related equipment, supplies, azer-cel clinical trial inventory and other assets related to the Company’s CAR T cell therapy platform (the “Acquired Assets”). As part of the Imugene Purchase Agreement, Imugene US hired a number of the Company’s employees who were associated with the Company’s historical CAR T cell therapy operations.

In consideration for the Acquired Assets, Imugene US assumed certain liabilities, paid the Company $8.0 million in cash, and issued the Company convertible notes pursuant to the terms and conditions set forth in a convertible note subscription deed (collectively, the “Imugene Convertible Note”) in an aggregate principal amount of $13.0 million. The Imugene Convertible Note was non-interest bearing and had a maturity date of the first anniversary of the Closing Date (the “Maturity Date”). On the Maturity Date, the Imugene Convertible Note was redeemed through the payment of $9.75 million in cash and the remaining amount of the note was converted into ordinary shares of Imugene Limited. The ordinary shares of Imugene Limited were determined using a conversion price based on the 10 days volume weighted average price of Imugene Limited’s ordinary shares prior to the date of conversion.

Additionally, the Company entered into a license agreement with Imugene (the “Imugene License Agreement”) on the Closing Date, pursuant to which the Company granted Imugene US certain exclusive and non-exclusive license rights to develop, manufacture, and commercialize oncological applications of our allogeneic CAR T therapy, azer-cel, and up to three additional research product candidates directed to targets that Imugene US may nominate prior to the fifth anniversary of the effective date of the Imugene License Agreement, pursuant to the terms of the Imugene License Agreement.

In addition, under the License Agreement, the Company is eligible to receive milestone payments of up to an aggregate of $206.0 million for azer-cel, inclusive of an $8.0 million milestone payment from Imugene, which the Company received in October 2025, including $3.0 million in cash and $5.0 million in Imugene stock. For azer-cel, the Company is eligible to receive double-digit royalties on net sales. For up to three additional research programs to be developed by Imugene, the Company is eligible for up to $145.0 million in milestone payments and, if licensed products are approved and sold, tiered royalties ranging from the mid-single digit to low-double digit percentages on net sales of such licensed products. In addition, the Company is eligible to receive mid-single digit percentage-based fees for certain change of control transactions involving Imugene and for partnering transactions involving a licensed product. Imugene’s obligation to pay royalties to the Company expires on a country-by-country and licensed product-by-licensed product basis, upon the latest to occur of certain events related to expiration of patents, regulatory exclusivity or a period of 10 years following the first commercial sale of the respective licensed product.

Unless earlier terminated, the Imugene License Agreement will remain in effect on a licensed product-by-licensed product and country-by-country basis until the expiration of a defined royalty term for each licensed product and country. The Company may terminate the entire Imugene License Agreement due to a challenge to the Company’s patents brought by Imugene and a breach by Imugene in any material respect of the Imugene License Agreement, the Imugene Purchase Agreement or any related transaction documents. The Company may also terminate the Imugene License Agreement with respect to azer-cel if Imugene fails to initiate certain development activities with respect to azer-cel by a specified date, if Imugene fails to expend certain amounts on the development of azer-cel or if Imugene ceases active development of azer-cel for a specified period of time. Either party may terminate the Imugene License Agreement (i) for material breach by the other party and a failure to cure such breach within the time period specified in the agreement or (ii) the other party’s insolvency.

In connection with the Imugene Purchase Agreement and the Imugene License Agreement, the Company and Imugene have entered into other related agreements and documents, including a registration rights agreement, a transition services agreement, a sublease for laboratory space at our headquarters and a parent company guaranty from Imugene Limited.

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The Company concluded the Imugene License Agreement represents functional intellectual property in accordance with ASC 606 given the Company does not expect to provide any additional services to Imugene outside of the right to use the licensed intellectual property. As of December 31, 2025 management has constrained all remaining variable consideration related to milestone payments in the Imugene License Agreement given the level of uncertainty associated with achievement of the milestone payments. As a result of the milestone payment received in October 2025, $8.0 million of revenue was recognized under the Imugene License Agreement during the year ended December 31, 2025. There was no revenue recognized under the Imugene License Agreement during the year ended December 31, 2024.

Collaboration and License Agreement with Novartis

On June 14, 2022, the Company entered into the Novartis Agreement, which became effective on June 15, 2022 (the “Novartis Effective Date”), to collaborate to discover and develop in vivo gene editing products incorporating its custom ARCUS nucleases for the purpose of seeking to research and develop potential treatments for certain diseases (collectively referred to as licensed products). Any initial licensed products under the Novartis Agreement will be developed for the potential treatment of certain hemoglobinopathies, including sickle cell disease and beta thalassemia.

In July 2022, the Company received a $50.0 million upfront cash payment under the Novartis Agreement. Additionally, on the Novartis Effective Date, Novartis made an equity investment in the Company’s common stock pursuant to a stock purchase agreement (the “Novartis Stock Purchase Agreement”) pursuant to which, on the Novartis Effective Date, the Company issued and sold to Novartis 413,581 shares of its common stock (the “Novartis Shares”) in a private placement transaction for an aggregate purchase price of $25.0 million, or approximately $60.30 per share. The price per share of the Company’s common stock under the Novartis Stock Purchase Agreement represented a 20% premium over the volume-weighted-average-price of the Company’s common stock over the ten days trading preceding the execution date of the Novartis Stock Purchase Agreement.

On October 31, 2025, the Company received written notice from Novartis of its termination of the Novartis Agreement. The notice informed that Novartis was exercising its right to terminate the Novartis Agreement in its entirety without cause upon 90 days’ prior written notice. The termination was effective on January 30, 2026.

During the years ended December 31, 2025 and 2024, the Company recognized revenue under the Novartis Agreement of $26.3 million and $6.4 million, respectively. There is no deferred revenue related to the Novartis Agreement as of December 31, 2025. As of December 31, 2024, there was $26.3 million of deferred revenue on the Company’s balance sheet, of which $3.0 million was included in current liabilities.

Development and License Agreement with iECURE

In August 2021, the Company and iECURE entered into a development and license agreement (the “iECURE DLA”), pursuant to which the Company is eligible to receive milestone and mid-single digit to low-double digit royalty payments on sales of iECURE products developed with ARCUS. In connection with the iECURE DLA, the Company and iECURE entered into an equity issuance agreement (the “iECURE Equity Agreement”), pursuant to which iECURE issued the Company common stock in iECURE as additional consideration for the license to use the Company’s PCSK9-directed ARCUS nuclease.

The Company adjusts the carrying value of the iECURE equity to fair value each reporting period with any changes in fair value recorded to other income (expense). There was a $2.5 million decrease in the fair value of the iECURE equity during the year ended December 31, 2025. During the year ended December 31, 2024, there was no change in the carrying value of the iECURE equity.

NOTE 3: SHARE-BASED COMPENSATION

The Company previously granted stock options under its 2015 Stock Incentive Plan (the “2015 Plan”). As of December 31, 2025 there were 25,764 stock options outstanding under the 2015 Plan and no remaining stock options available to be granted under the 2015 Plan.

On March 12, 2019, the Company’s board of directors adopted, and, on March 14, 2019 the Company’s stockholders approved, the Precision BioSciences, Inc. 2019 Incentive Award Plan (“2019 Plan”) and the 2019 Employee Stock Purchase Plan (“2019 ESPP”), both of which became effective on March 27, 2019. On April 24, 2024, the Company’s

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board of directors adopted, and on June 4, 2024, the Company’s stockholders approved, the amendment and restatement of the Precision BioSciences, Inc. 2019 Incentive Award Plan (as amended and restated, the “2019 Plan”).

The 2019 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other share-based awards. The 2019 Plan had 44,374 stock options and 1,604,989 restricted stock units (“RSUs”) outstanding as of December 31, 2025.

The number of shares available for issuance under the 2019 Plan initially equaled 158,333 shares of common stock. The 2019 Plan provides for an annual increase to the number of shares of common stock available for issuance on the first day of each calendar year beginning January 1, 2020 and ending on and including January 1, 2029 by an amount equal to the lesser of (i) 4% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by the board of directors. As of December 31, 2025, the aggregate number of shares available for issuance under the 2019 Plan has been increased by 862,285 pursuant to this provision. Additionally, the number of shares available for issuance under the plan was increased by an additional 630,000 shares in connection with the amendment and restatement of the 2019 Plan approved at the Company’s annual meeting of stockholders on June 4, 2024. Any shares that are subject to awards outstanding under the Company’s 2006 Plan and 2015 Plan as of the effective date of the 2019 Plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased, or canceled without having been fully exercised or forfeited, to the extent so unused, will become available for award grants under the 2019 Plan. As of December 31, 2025, no shares were available to be issued under the 2019 Plan.

Up to 17,500 shares of the Company’s common stock were initially reserved for issuance under the 2019 ESPP. The 2019 ESPP provides for an annual increase to the number of shares available for issuance on the first day of each calendar year beginning January 1, 2020 and ending on and including January 1, 2029 by an amount equal to the lesser of (i) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by our board of directors. As of December 31, 2025, the aggregate number of shares available for issuance under the 2019 ESPP has been increased by 133,543 shares pursuant to this provision. The purchase price of the shares under the 2019 ESPP, in the absence of a contrary designation, will be 85% of the lower of the fair market value of our common stock on the first trading day of the offering period or on the purchase date. As of December 31, 2025, we had issued 106,910 shares under the 2019 ESPP. As of December 31, 2025, 44,133 shares were available to be issued under the 2019 ESPP. The Company recognized share-based compensation expense related to the ESPP of $0.1 million during the years ended December 31, 2025 and 2024.

On August 9, 2021, the Company’s board of directors approved the adoption of the Precision BioSciences, Inc. 2021 Employment Inducement Incentive Award Plan (as amended, the “Inducement Award Plan”).

The Inducement Award Plan provides for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSUs and other share-based awards to newly hired employees who have not previously been an employee or member of the board, or an employee who is being rehired following a bona fide period of non-employment by the Company. No more than 1,100,000 shares of the Company’s common stock may be issued under the Inducement Award Plan. As of December 31, 2025, 973,001 shares were available to be issued under the Inducement Award Plan. The Inducement Award Plan had 98,855 stock options and 18,944 RSUs outstanding as of December 31, 2025.

The Company recorded employee and nonemployee share-based compensation expense as follows (in thousands):

Years Ended December 31,

20252024

Employee$9,506 $11,023

Nonemployee680 1,581

$10,186 $12,604

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Share-based compensation expense is included in the following line items in the statements of operations (in thousands):

Years Ended December 31,

20252024

Research and development$1,874 $2,560

General and administrative8,312 10,044

$10,186 $12,604

Determining the appropriate fair value model to measure the fair value of the stock option grants on the date of grant and the related assumptions requires judgment. The fair value of each stock option grant is estimated using a Black-Scholes option-pricing model on the date of grant using the following inputs:

Years Ended December 31,

20252024

Estimated dividend yield0.00%0.00%

Weighted-average expected stock price volatility—%87.93%

Weighted-average risk-free interest rate—%3.67%

Expected term of options (in years)0.005.63

Weighted-average fair value per option$— $10.58

The expected volatility rates are estimated based on the actual volatility of a peer group comprising the Company and other comparable public companies over the expected term. The expected term represents the average time that stock options are expected to be outstanding. The Company does not have sufficient history of exercising stock options to estimate the expected term of employee stock options and thus utilizes a weighted value considering actual history and estimated expected term based on the midpoint of final vest date and expiration date. The risk-free rate is based on the United States Treasury yield curve at the time of grant for the expected term of the option.

The following table summarizes activity in the Company’s stock option plans for the years ended December 31, 2024 and December 31, 2025 :

Outstanding

Option

SharesWeighted-

Average

Exercise Price

Balance as of December 31, 2023349,662172.13

Granted85,03410.58

Exercised——

Forfeited/canceled(58,145)166.04

Balance as of December 31, 2024376,551136.59

Granted——

Exercised——

Forfeited/canceled(207,558)113.02

Balance as of December 31, 2025168,993165.54

The intrinsic value of stock options exercised was $0 for the years ended December 31, 2025 and December 31, 2024 as no stock options were exercised during each period.

During the year ended December 31, 2025, the Company granted 1,059,333 RSUs with a grant date fair value of $5.3 million. The fair value of the RSUs will be recognized as expense over the requisite vesting period.

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The following table summarizes the Company’s RSU activity for the years ended December 31, 2025 and December 31, 2024:

RSU AwardsWeighted-Average Grant Date Fair Value

Unvested RSUs as of December 31, 2023214,85751.03

Granted881,23310.33

Forfeited(18,438)23.04

Vested(102,132)55.51

Unvested RSUs as of December 31, 2024975,52014.32

Granted1,059,3335.04

Forfeited(22,791)18.39

Vested(388,129)17.88

Unvested RSUs as of December 31, 20251,623,9337.36

There was approximately $7.0 million of total unrecognized compensation cost related to unvested stock options and RSUs as of December 31, 2025, which is expected to be recognized over a weighted-average period of 1.6 years.

The following table summarizes certain information about stock options granted under the stock option plans which are vested or expected to vest as of December 31, 2025 and December 31, 2024.

Years Ended December 31,Number of OptionsWeighted-

Average

Remaining

Contractual

Life (in years)Weighted-

Average

Exercise

Price

2025Expected to be exercisable168,9935.06$165.54

2025Currently exercisable155,2824.90$176.53

2024Expected to be exercisable376,5517.10$136.59

2024Currently exercisable248,6176.31$178.27

The following table summarizes certain information about stock options outstanding under the stock option plans for the years ended December 31, 2025 and December 31, 2024, respectively:

Year Ended December 31, 2025

Exercise priceNumber of Options OutstandingWeighted- Average

Remaining LifeNumber of Options Exercisable

$12.59 - $46.50
47,5726.0538,160

$50.40 - $100.20
34,6686.3931,018

$122.40 - $174.90
19,2624.4818,613

$193.50 - $293.70
36,0655.1836,065

$305.10 - $480.00
31,4262.3131,426

168,993155,282

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Year Ended December 31, 2024

Exercise priceNumber of Options OutstandingWeighted- Average

Remaining LifeNumber of Options Exercisable

$10.33- $46.50
130,8728.4041,626

$50.40 - $100.20
77,2077.3561,168

$122.40 - $174.90
50,0566.8737,295

$189.30 - $293.70
60,9166.2053,729

$305.10 - $480.00
57,5004.9754,799

376,551248,617

NOTE 4: RETIREMENT PLAN

In January 2011, the Company established a defined contribution 401(k) retirement savings plan (the “Retirement Plan”) available to all full-time employees. Employee contributions to the Retirement Plan can be 100% of annual compensation up to the prescribed annual maximum under the Internal Revenue Code. Administrative fees of less than $0.1 million were paid by the Company for the years ended December 31, 2025 and December 31, 2024.

The Retirement Plan includes a safe-harbor matching employer contribution equal to 100% of participants’ deferral contributions up to 4%. The Company made contributions of $0.7 million and $0.6 million to the Retirement Plan during each of the years ended December 31, 2025 and December 31, 2024, respectively. Retirement plan contributions made by the Company are recorded to research and development expense and general and administrative expense as incurred and are included in the statements of operations.

NOTE 5: IMPAIRMENT CHARGES

The Company recorded an amount less than $0.1 million of impairment charges in continuing operations during the year ended December 31, 2025 related to the impairment of intangible assets. Additionally, the Company also recorded $0.1 million of impairment charges in losses on the disposal of assets for property, plant, and equipment that met the criteria for classification as held for sale during the year ended December 31, 2025. No impairment charges were recorded by the Company in continuing operations during the year ended December 31, 2024 related to the impairment of intangible assets. $0.2 million of impairment charges were recorded in losses on the disposal of assets for property, plant, and equipment that met the criteria for classification as held for sale during the year ended December 31, 2024

See Note 8, Property, Equipment and Software and Assets Held for Sale, for additional information regarding the impairment charges the Company recorded during the year ended December 31, 2025.

NOTE 6: DISCONTINUED OPERATIONS

The Company determined that the sale of its cell therapy operations qualified for discontinued operations accounting treatment in accordance with ASC 205-20.

The historical balance sheet and statements of operations of the Company and the related notes to the financial statements have been presented as discontinued operations in the financial statements and prior periods have been recast. Discontinued operations include the results of the Company’s historical cell therapy operations.

During the year ended December 31, 2025, the Company recognized a $0.9 million gain on discontinued operations from the release of the Company’s remaining accrued research and development expenses related to azer-cel based on the Company's updated estimates for the remaining obligation owed.

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The following table shows amounts included in liabilities of discontinued operations on the Company’s balance sheets as of December 31, 2025 and December 31, 2024:

December 31, 2025December 31, 2024

Current liabilities of discontinued operations

Accrued research and development expenses— 1,204

Total current liabilities of discontinued operations— 1,204

The following table summarizes the results of operations of the Company’s discontinued operations for the years ended December 31, 2025 and 2024:

For the Years Ended December 31,

20252024

Gain from discontinued operations885 —

The following table presents the significant non-cash items related to discontinued operations for the years ended December 31, 2025 and 2024 that are included in the accompanying statements of cash flows:

For the Years Ended December 31,

20252024

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

Gain on disposal of business$(885)—

NOTE 7: EARNINGS PER SHARE

The Company calculates basic net (loss) income per share by dividing net (loss) income for each respective period by the weighted-average number of common shares outstanding for each respective period. The Company computes diluted net (loss) income per share after giving consideration to the dilutive effect of unvested RSUs, stock options, unsettled ESPP contributions, and warrants that are outstanding during the period, except where such securities would be anti-dilutive.

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The computations of basic and diluted net (loss) income per share attributable to common stockholders are as follows:

Years Ended December 31,

20252024

(Loss) income from continuing operations (in thousands)$(46,609)$7,167

Gain (loss) from discontinued operations (in thousands)885 —

Net (loss) income (in thousands)$(45,724)$7,167

Basic weighted-average common shares12,826,0786,832,982

Dilutive impact of share-based awards—50,929

Diluted weighted-average common shares (1)12,826,0786,883,911

Basic net (loss) income per share:

Basic (loss) income from continuing operations(3.63)1.05

Basic gain (loss) from discontinued operations0.07 —

Basic net (loss) income per share(3.56)1.05

Diluted net (loss) income per share:

Diluted (loss) income from continuing operations(3.63)1.04

Diluted gain (loss) from discontinued operations0.07 —

Diluted net (loss) income per share(3.56)1.04

(1)3,348,161 total common stock equivalents were excluded from the diluted weighted-average common shares calculation for the year ended December 31, 2024 as their inclusion would have been anti-dilutive. For the year ended December 31, 2025 all outstanding total common stock equivalents were excluded from the diluted calculation as their inclusion would have been anti-dilutive.

NOTE 8: PROPERTY, EQUIPMENT AND SOFTWARE AND ASSETS HELD FOR SALE

Property, equipment, and software consisted of the following as of December 31, 2025 and December 31, 2024 (in thousands):

20252024

Construction in progress$— $9

Leasehold improvements12,064 12,028

Software432 432

Laboratory equipment14,011 15,086

Office equipment1,486 1,486

Furniture and fixtures2,124 2,124

Total property, equipment and software30,117 31,165

Less accumulated depreciation and amortization28,692 28,076

Property, equipment and software - net$1,425 $3,089

Depreciation expense for continuing operations, including amortization of leasehold improvements and software, was $1.5 million and $3.4 million for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Company had impaired the remaining $0.1 million balance of in property, plant, and equipment that met the criteria for classification as held for sale based on the Company's updated assessment of fair value for these remaining assets.

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NOTE 9: INTANGIBLE ASSETS

Intangible assets, net, consisted of the following as of December 31, 2025 and December 31, 2024 (in thousands):

20252024

License cost$1,486 $821

Less: accumulated amortization(284)(199)

Less: impairments(36)—

Intangible assets, net$1,166 $622

Amortization expense of intangible assets was less than $0.1 million for each of the years ended December 31, 2025 and December 31, 2024. Amortization expense for intangible assets with definite lives will be $0.1 million for each of the following five years with the remaining $0.6 million amortized to expense in 2031 and beyond.

NOTE 10: FAIR VALUE MEASUREMENTS

The following represents assets measured at fair value on a recurring basis by the Company (in thousands):

December 31, 2025Fair ValueLevel 1Level 2Level 3

Assets:

Money market funds$15,286 $15,286 $— $—

Investment in iECURE744 — — 744

Imugene Marketable Securities4,762 4,762 — —

$20,792 $20,048 $— $744

Liabilities:

Final payment fee$208 $— $208 $—

Warrant liability15,695 — — 15,695

$15,903 $— $208 $15,695

December 31, 2024Fair ValueLevel 1Level 2Level 3

Assets:

Money market funds$14,687 $14,687 $— $—

Investment in iECURE3,206 — — 3,206

Imugene marketable securities413 413 — —

Assets held for sale169 — — 169

$18,475 $15,100 $— $3,375

Liabilities:

Final payment fee$194 $— $194 $—

Warrant liability2,796 — — 2,796

$2,990 $— $194 $2,796

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The following represents a reconciliation of assets measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) for the year ended December 31, 2025 (in thousands). The warrant reconciliation is disclosed in Note 13, Warrants:

Investment in iECUREAssets held for sale

Balance December 31, 2024$3,206 $169

Loss from changes in fair value included in earnings(2,462)(2)

Additions— —

Assets sold— (21)

Write-offs— (146)

Balance December 31, 2025$744 $—

The carrying amounts of the Company’s financial instruments, including accounts receivable, accounts payable, and accrued expenses and other current liabilities, approximate their respective fair values due to their short-term nature. The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis and to minimize the use of unobservable inputs when determining their fair value. The three tiers are defined as follows:

Level 1—Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities

Level 2—Inputs, other than quoted prices in active markets, that are observable either directly or indirectly

Level 3—Unobservable inputs for which there is little or no market data, which require the Company to develop its own assumptions

Cash Equivalents

As of December 31, 2025 and December 31, 2024, the Company held cash equivalents which were composed of investments in money market funds. The Company classifies investments in money market funds within Level 1 of the fair value hierarchy as the prices are available from quoted prices in active markets.

Investment in iECURE

In August 2021, the Company entered into an Equity Issuance Agreement with iECURE, Inc. (“iECURE”), pursuant to which iECURE issued the Company common stock in iECURE (the “iECURE equity”) as additional consideration for a license to use the Company’s PCSK9-directed ARCUS nuclease to insert genes into the PCSK9 locus to develop treatments for four pre-specified rare genetic diseases (the “PCSK9 license”). On issuance, the Company accounted for the iECURE equity at fair value under ASC 825, Financial Instruments (“ASC 825”). Accordingly, the Company adjusts the carrying value of the iECURE equity to fair value each reporting period with any changes in fair value recorded to other income (expense). During the year ended December 31, 2025, there was a $2.5 million change in the fair value of the iECURE equity.

The Company classifies the iECURE equity within Level 3 of the fair value hierarchy as the assessed fair value was based on significant unobservable inputs given iECURE equity is not traded on a public exchange

Assets Held for Sale

The fair values of property, plant, and equipment held for sale is classified as Level 3 in the fair value hierarchy due to a mix of unobservable inputs utilized such as independent research in the market as well as actual quotes from market participants.

Imugene Marketable Securities

As partial consideration for the assets acquired by Imugene in connection with the asset purchase agreement (the “Imugene Purchase Agreement”), Imugene issued to the Company convertible notes pursuant to the terms and conditions set forth in

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a convertible note subscription deed (collectively, the “Imugene Convertible Note”) in an aggregate principal amount of $13 million. The Imugene Convertible Note matured on August 30, 2024 and resulted in payment to the Company of $9.75 million in cash and $3.25 million in ordinary shares of Imugene Limited. The Company received 87,999,186 ordinary shares of Imugene Limited on August 30, 2024, of which the Company sold 72,312,592 shares as of December 31, 2024. The assessed fair value of the remaining ordinary shares at December 31, 2024 was $0.4 million. During the year ended December 31, 2024, the Company recognized a gain of $0.3 million on the Imugene Convertible Note and the ordinary shares still held by the Company. As of March 31, 2025, the Company had sold all of our ordinary shares from the Imugene Convertible Note.

On October 31, 2025, the Company received a $8.0 million milestone payment from Imugene, including $3.0 million in cash and $5.0 million in Imugene stock. The Company received 19,491,635 ordinary shares of Imugene Limited on October 31, 2025, of which none were sold by Company as of December 31, 2025. The assessed fair value of the remaining ordinary shares at December 31, 2025 was $4.8 million. During the year ended December 31, 2025, the Company recognized a loss of $0.2 million on the ordinary shares still held by the Company.

The Company classifies the Imugene ordinary shares within Level 1 of the fair value hierarchy as the prices are available from quoted prices in active markets.

Final Payment Fee

The final payment fee under the Banc of California Revolving Line was waived in connection with the Company entering into the 2024 Term Loan (the Revolving Line and the 2024 Term Loan each as defined in Note 12, Debt, below) and the Company will instead be required to pay a final payment fee of $225,000 upon maturity of the 2024 Term Loan in June 2027. The final payment fee on the 2024 Term Loan was initially measured at fair value and recorded as debt discount to be amortized to interest expense over the life of the 2024 Term Loan. Accordingly, the Company will adjust the carrying value of the final payment fee to fair value each reporting period with any changes in fair value recorded to other income (expense). The change in fair value of the final payment fee was less than $0.1 million during the year ended December 31, 2025.

The Company classifies the final payment fee within Level 2 of the fair value hierarchy as the assessed fair value is based on observable market inputs including the Company’s current borrowing rate. The final payment fee is included in other noncurrent liabilities within the balance sheet as of December 31, 2025, and December 31, 2024.

Warrant Liability

As of December 31, 2025, warrants representing an aggregate of 8,607,500 shares of common stock issued in the March 2024 Public Offering and November 2025 Public Offering were outstanding. These warrants are classified as a liability since the warrants meet the classification requirements for liability accounting pursuant to ASC 815. This liability is subject to remeasurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the Company’s statements of operations. The Company classifies the warrant liability within Level 3 of the fair value hierarchy as the assessed fair value is based on both observable and unobservable market inputs including the Company’s stock price, risk-free rate, and volatility.

NOTE 11: ELO TRANSACTION

On December 17, 2021, the Company and its then wholly-owned subsidiary, Elo Life Systems, Inc., entered into an agreement with a syndicate of investors, pursuant to which the Company contributed substantially all of the assets of Elo Life Systems, Inc. to a newly formed entity (the “Elo Transaction”). In connection with the Elo Transaction, the Company granted the newly formed entity (“Elo”) an exclusive license to certain of the Company’s intellectual property for use in non-medical applications with respect to plants, farm animals and certain other organisms. As consideration for the assets contributed and license granted by the Company to Elo, the Company received common stock in Elo and a $10.0 million promissory note payable from Elo (the “Note Receivable”).

Investment in Elo

It was determined that the Company possesses the ability to exercise significant influence over the operating and financial policies of Elo. Accordingly, the Company accounts for its investment in Elo under the equity method.

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The Company owned approximately 22% of Elo’s voting shares outstanding as of December 31, 2025 and 26% of Elo’s voting shares outstanding as of December 31, 2024. In February 2025, Elo raised additional funding from its Series A-2 financing. The Company recognized a $2.3 million gain on dilution under the equity method during the year ended December 31, 2025. The Company’s proportionate share of Elo’s net loss and fair value adjustment of the Note Receivable for the years ended December 31, 2025 and 2024 was $2.2 million and $3.8 million, respectively. As the Company’s cumulative proportionate share of Elo’s net loss exceeded the carrying value of the investment in Elo, the carrying value of the Investment in Elo has been reduced to $0. In accordance with ASC 323, during the years ended December 31, 2025 and December 31, 2024, the Company recorded its proportionate share of Elo’s net loss in the statements of operations along with a corresponding reduction in the carrying value of the Note Receivable.

Note Receivable

The Note Receivable matured on the earlier of (i) December 1, 2028 or (ii) a Deemed Liquidation Event (as defined in the Elo’s Amended and Restated Certificate of Incorporation). The Note Receivable accrued interest at 2.00% per annum and is payable annually on December 17th.

Due to cash runway constraints, Elo did not pay the interest due on the Note Receivable in December 2025. In evaluating the collectability as of December 31, 2025, the Company reduced the carrying amount of the Note Receivable to $0 million resulting in a net loss of $5.4 million. In January 2026, as part of Elo raising additional funding from its Series A-4 financing, the Company agreed to cancel the Note Receivable in exchange for a warrant to purchase shares of Elo’s Series A-3 Preferred Stock and the issuance of shares of Elo’s Series A-4 Preferred Stock annually through 2028 in lieu of forgone interest.

NOTE 12: DEBT

Pursuant to the terms of the amended and restated loan and security agreement (the “2024 Loan and Security Agreement”) with Banc of California the Company was provided with a term loan with a principal amount of $22.5 million (the “2024 Term Loan”). The maturity date under the 2024 Loan and Security Agreement is June 30, 2027 (the “2024 Term Loan Maturity Date”). The Company may prepay all or a portion of the amounts due under the 2024 Term Loan without penalty or premium at any time, provided that if the Company refinances the 2024 Term Loan with borrowings from another lender, the Company is required to pay Banc of California an early termination fee of $100,000. Once repaid, the Company may not reborrow amounts under the 2024 Term Loan.

The 2024 Term Loan bears interest at an annual rate equal to the greater of (i) 1.50% below the Prime Rate (as defined in the 2024 Loan and Security Agreement) then in effect or (ii) 4.50%. As of December 31, 2025, the stated interest rate on the 2024 Term Loan was 5.25% and the effective interest rate was 5.62%.

Upon the earliest to occur of the Term Loan Maturity Date, the date that the Company repays the 2024 Term Loan and elects to terminate the 2024 Term Loan, and the date that the 2024 Term Loan becomes due or Banc of California elects to terminate the 2024 Loan and Security Agreement in connection with an event of default thereunder, the Company is required to pay Banc of California a fee of $225,000.

Under the terms of the 2024 Loan and Security Agreement, the Company granted Banc of California a security interest in a cash security account at Banc of California (the “Cash Security Account”), and Banc of California agreed to terminate all other security interests it has in the Company’s assets. The Company is required to maintain an aggregate unencumbered balance in the Cash Security Account at least equal to the outstanding principal amount of the 2024 Term Loan then outstanding.

The 2024 Loan and Security Agreement includes customary representations, warranties and covenants (affirmative and negative), including restrictions on mergers by the Company with and into other companies, and the incurrence of secured indebtedness, in each case, subject to specified exceptions.

The 2024 Loan and Security Agreement also includes standard events of default, including in the event of a material adverse change. Upon the occurrence of an event of default, Banc of California may declare all outstanding obligations immediately due and payable, take such other actions as are set forth in the 2024 Loan and Security Agreement and increase the interest rate otherwise applicable to the amount outstanding under the 2024 Loan and Security Agreement by an additional 3.00%.

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As of December 31, 2025, $22.5 million in borrowings were outstanding under the 2024 Term Loan and the unamortized debt discount balance was $0.1 million.

NOTE 13: WARRANTS

The warrants issued in the March 2024 Public Offering and 2025 November 2025 Public Offering are classified as liabilities in accordance with ASC 815, since these warrants met the definition of a derivative instrument and did not qualify for equity classification. These warrant agreements include a fundamental transaction clause whereby, in the event that another person or entity becomes the beneficial owner of 50% of the outstanding shares of the Company’s common stock, and if certain other conditions are met, the Company may be required to purchase the warrants from the holders by paying cash in an amount equal to the Black-Scholes value of the remaining unexercised portion of the warrants on the date of such fundamental transaction. This liability is subject to remeasurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the Company’s statements of operations.

The warrants issued under the March 2024 Public Offering were recorded at their fair value of $32.4 million at issuance based on the Black-Scholes option-pricing model. The following assumptions were used to estimate the fair value of the warrants at the March 1, 2024 issuance date:

Estimated dividend yield0.00%

Weighted-average expected stock price volatility89.03%

Weighted-average risk-free interest rate4.17%

Expected term (in years)5.00

Weighted-average fair value per option$12.96

The warrants issued under the November 2025 Public Offering were recorded at their fair value of $24.0 million at issuance based on the Black-Scholes option-pricing model. The following assumptions were used to estimate the fair value of the warrants at the November 10, 2025 issuance date:

Estimated dividend yield0.00%

Weighted-average expected stock price volatility81.44%

Weighted-average risk-free interest rate3.72%

Expected term (in years)5.00

Weighted-average fair value per option$3.93

The fair value adjustment of the March 2024 Public Offering for the year ended December 31, 2025 was $0.9 million using the Black-Scholes option-pricing model. As of December 31, 2025 all of the 2,500,000 warrants are outstanding. The Company estimated the fair value of the warrant liability using the following assumptions as of December 31, 2025:

Estimated dividend yield0.00%

Weighted-average expected stock price volatility77.13%

Weighted-average risk-free interest rate3.57%

Expected term (in years)3.17

Weighted-average fair value per option$0.75

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The fair value adjustment of the November 2025 Public Offering for the year ended December 31, 2025 was 10.2 million using the Black-Scholes option-pricing model. As of December 31, 2025 all of the 6,107,500 warrants are outstanding. The Company estimated the fair value of the warrant liability using the following assumptions as of December 31, 2025:

Estimated dividend yield0.00%

Weighted-average expected stock price volatility79.30

Weighted-average risk-free interest rate3.72 %

Expected term (in years)4.86

Weighted-average fair value per option$2.26

The following table summarizes the Company’s warrant liability (in thousands):

Balance at December 31, 2024$2,796

Issuance of warrants24,028

Change in fair value of warrant liability(11,129)

Balance at December 31, 2025$15,695

NOTE 14: COMMITMENTS AND CONTINGENCIES

Litigation

The Company is subject to various legal matters and claims in the ordinary course of business. Although the results of legal proceedings and claims cannot be predicted with certainty, in the opinion of management, there are currently no such known matters that will have a material effect on the financial condition, results of operations or cash flows of the Company.

Servier Program Purchase Agreement

On April 9, 2021, the Company entered into a program purchase agreement with Les Laboratoires Servier and Institut de Recherches Internationales Servier (collectively, “Servier”), pursuant to which the Company reacquired all of its global development and commercialization rights previously granted to Servier pursuant to the Development and Commercial License Agreement by and between Servier and the Company, dated February 24, 2016, as amended (the “Servier Agreement”), and mutually terminated the Servier Agreement (the “Program Purchase Agreement”).

The Program Purchase Agreement requires the Company to make certain payments to Servier based on the achievement of regulatory and commercial milestones for each product. Management assessed the likelihood of each of the regulatory and commercial milestones included in the Program Purchase Agreement in accordance with ASC 450, Contingencies (“ASC 450”). If the assessment of a contingency indicates that it is probable that the milestone will be achieved and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements.

Accordingly, contingent liabilities of $10.0 million related to the Program Purchase Agreement are accrued and included in contract liabilities in the balance sheets as of December 31, 2025 and December 31, 2024.

Leases

The Company has an operating lease for real estate in North Carolina and does not have any finance leases.

On October 16, 2023, the Company and Venable Historic, LLC, successor-in-interest to Venable Tenant, LLC (the “Landlord”), entered into a Tenth Amendment to Lease Agreement (the “Lease Amendment”), which amended certain terms of the Lease Agreement dated April 5, 2010, as amended (the “Original Lease”) with respect to the Company’s headquarters facilities located in Durham, North Carolina. Among other things, the Lease Amendment extended the term of the Original Lease for an additional period of five years commencing upon August 1, 2024 and up to and through July 31, 2029.

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The Company has existing leases in which the non-lease components (e.g., common area maintenance, consumables, etc.) are paid separately from rent based on actual costs incurred and therefore are not included in the right-of-use assets and lease liabilities but rather reflected as an expense in the period incurred.

The elements of lease expense were as follows:

For the Years Ended December 31,

(in thousands)20252024

Lease Cost

Operating lease cost$1,933 $1,940

Short-term lease cost782 759

Variable lease cost463 413

Sublease income(20)(428)

Total Lease Cost$3,158 $2,684

Other Information

Operating cash flows used for operating leases1,962 1,888

Operating right-of-use assets obtained in exchange for lease obligations— —

Operating lease liabilities arising from obtaining right-of-use assets— —

Operating Leases

Weighted average remaining lease term (in years)3.64.6

Operating Leases

Weighted average discount rate9.2%9.2%

Future lease payments under non-cancelable operating leases with terms of greater than one year as of December 31, 2025, were as follows:

(in thousands)December 31, 2025

2026$2,019

20272,078

20282,140

20291,269

Total lease payments7,506

Less: imputed interest1,102

Total operating lease liabilities$6,404

Guarantees

The Company agreed to act as a guarantor of Imugene’s assumption of the Company’s lease for its Manufacturing Center for Advanced Therapeutics (the “MCAT Lease”) through the lease expiration date of August 31, 2027. If Imugene (including any successor or assignee of Imugene) fails to pay rent due on the MCAT Lease, the lessor may have contractual recourse against the Company.

As of December 31, 2025, the Company’s guarantee consists of a contingent liability for aggregate minimum lease payments of approximately $2.7 million. No contract liability for the Company’s guarantee of Imugene’s performance on the MCAT lease was recorded as of December 31, 2025, as it was not deemed probable that Imugene will be in default under the MCAT Lease.

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Compensatory Arrangements of Certain Officers

On August 26, 2025, the Company entered into amended and restated employment agreements to help retain each of its executive officers: Michael Amoroso, the Company’s President and Chief Executive Officer; Alex Kelly, the Company’s Chief Financial Officer; Dario Scimeca, the Company’s General Counsel and Secretary; and Jeff Smith, the Company’s Chief Research Officer. The employment agreements are substantively similar to their prior employment agreements, except that they reflect such executive’s current annual base salary and target bonus amounts, provide for the payment of existing cash severance in a lump sum, include provisions regarding termination without cause in connection with a “change in control” or a “restructuring event” (each as defined in the respective employment agreements), and provide for a payment to cover potential additional expenses. The amended employment agreements also include a requirement to fund the cash severance and expenses in an escrow account. As a result, the Company entered into escrow arrangements with JPMorgan Chase Bank, N.A. and the executives with respect to the funded amounts. Interest earned from the escrow account accrues to the Company and any unused funds return to the Company. As of December 31, 2025, the escrow account cash balance was $3.8 million.

Supply Agreements

The Company enters into contracts in the normal course of business with contract manufacturing organizations (“CMOs”) for the manufacture of clinical trial materials and contract research organizations (“CROs”) for clinical trial services. These agreements provide for termination at the request of either party with less than one-year’s notice and are, therefore, cancelable contracts. If canceled, these agreements are not anticipated to have a material effect on the financial condition, results of operations, or cash flows of the Company.

NOTE 15: INCOME TAXES

The Company recorded no federal or state income tax expense due to the operating losses for tax purposes incurred for the years ended December 31, 2025 and December 31, 2024.

The following were components of loss (income) before taxes for the years ended December 31, 2025 and December 31, 2024.

Years Ended December 31,

20252024

Pre-tax book income (loss)

Domestic$(45,724)$7,167

Foreign— —

Total pre-tax book income (loss)$(45,724)$7,167

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Significant components of the Company’s deferred tax assets and deferred tax liabilities are as follows (in thousands):

Years Ended December 31,

20252024

Noncurrent deferred tax assets:

Net operating loss carryforwards$73,788 $51,777

Contribution carryforwards26 26

Lease liability1,345 1,671

Deferred revenue— 5,681

Capitalized R&D costs22,533 31,282

Other assets12,816 14,845

Tax credits36,036 33,701

Less: valuation allowance(145,281)(136,872)

Total deferred tax assets, noncurrent1,263 2,111

Noncurrent deferred tax liability:

Investments in equity securities43 577

Right of use asset1,220 1,534

Total deferred tax liabilities, noncurrent1,263 2,111

Net deferred tax assets$— $—

As of December 31, 2025 and December 31, 2024, the Company has provided a valuation allowance for the full amount of the net deferred tax assets as the realization of the net deferred tax assets is not determined to be more likely than not. The net increase in the valuation allowance for the year ended December 31, 2025 of $8.4 million is comprised of an increase in the valuation allowance recorded against the deferred tax assets, primarily related to tax credits and net operating loss (“NOL”) carryforwards for the year.

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The reasons for the difference between actual income tax benefit for the years ended December 31, 2025 and December 31, 2024 and the amount computed by applying the statutory federal income tax rate to losses before income tax benefit after the adoption of ASU 2023-09 are as follows (in thousands):

Year Ended December 31, 2025Year Ended December 31, 2024

Amount% of Pre-Tax

LossAmount% of Pre-Tax

Loss

US federal statutory tax rate$(9,602)21.0%$1,501 21.0%

State and local income taxes, net of federal income taxes— —%— —%

Effect of changes in tax laws or rates enacted in the current period— —%— 0.0%

Tax credits

Research and development tax credits(2,336)5.1%(2,944)(41.2%)

Changes in valuation allowances9,730 (21.3%)5,691 79.6%

Nontaxable or nondeductible items

Equity compensation4,359 (9.5%)2,137 29.9%

Change in warrant liability(2,337)5.1%(6,218)(87.0%)

Other182 (0.4%)(4)(0.0%)

Changes in unrecognized tax benefits— —%— —%

Other Adjustments

Provision to return— —%(130)(1.8%)

Other4 0.0%(33)(0.5%)

Effective tax rate$— 0.0%$— 0.0%

As of December 31, 2025, the Company had federal and state NOL carryforwards of approximately $340.2 million and $317.3 million respectively. As of December 31, 2024, the Company had federal and state NOL carryforwards of approximately $235.5 million and $212.0 million, respectively. The federal NOL carryforward carries forward indefinitely. The state NOL carryforwards begin to expire in 2027.

As of December 31, 2025, the Company had federal and state R&D tax credits of $22.5 million and an amount less than $0.1 million, which begin to expire in 2029 and 2030, respectively. As of December 31, 2024, the Company had federal and state tax R&D credits of $20.2 million and an amount less than $0.1 million. As of December 31, 2025 and December 31, 2024, the Company had federal Orphan Drug credits of $13.5 million which begin to expire in 2038. As of December 31, 2025 and December 31, 2024, the Company had federal contribution carryforwards of $0.1 million and $0.1 million, respectively, which begin to expire in 2026.

The Company’s ability to utilize its NOL and R&D credit carryforwards may be substantially limited due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain stockholders or public groups. The Company has not completed a study to assess whether one or more ownership changes have occurred since the Company became a loss corporation under the definition of Section 382. If the Company has experienced an ownership change, utilization of the NOL or R&D credit carryforwards would be subject to an annual limitation, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Any such limitation may result in the expiration of a portion of the NOL or R&D credit carryforwards before utilization. Until a study is completed and any limitation known, no amounts are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Any carryforwards that expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance. Due to the existence of the valuation allowance, it is not expected that any possible limitation will have an impact on the results of operations of the Company.

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The Company reflects in the accompanying financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only if it is considered ‘more-likely-than-not’ that the position taken will be sustained by the appropriate taxing authority. As of December 31, 2025 and December 31, 2024, the Company had no unrecognized income tax benefits. The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying statements of operations. As of December 31, 2025 and December 31, 2024, the Company had no such accruals.

In November 2021, North Carolina enacted the 2021 Appropriations Act, which included a gradual corporate income tax rate decrease from the current 2.5% to 0% by 2030. For tax years beginning on or after January 1, 2025, the rate is 2.25%. The rate decreases to 2% in 2026 and 2027; and to 1% in 2028 and 2029. After 2029, the rate decreases to 0%. As a result of the revised tax rate, the Company adjusted its North Carolina net operating loss deferred tax asset as of December 31, 2024, by applying the revised tax rate, which resulted in a decrease to the deferred tax assets and corresponding decrease to the valuation allowance of approximately $8.5 million in 2024.

On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (OBBBA), which includes several changes to U.S. federal income tax law, including temporary and permanent extension, of expiring provisions of the Tax Cuts and Jobs Act of 2017. Significant provisions for corporate taxpayers include permanent 100% bonus depreciation for qualified property, immediate expensing of domestic R&D expenditures, and changes to the limitation on business interest expense deductions under Section 163(j). None of these provisions have a material impact on the Company’s 2025 income tax provision.

The amounts of cash income taxes paid (received) by the Company were as follows:

Years Ended December 31,

2025

Federal$—

State and local—

Foreign—

Income taxes, net of amounts refunded$—

NOTE 16: SEGMENT REPORTING

Operating segments are identified as components of an entity about which separate discrete financial information is available for evaluation by the chief operating decision maker or decision-making group (“CODM”) in making decisions on how to allocate resources and assess performance. The Company’s CODM, the Chief Executive Officer, views the Company’s operations as one operating segment, which includes the discovery and development of therapies utilizing our novel proprietary ARCUS platform. Our clinical and preclinical candidates were developed using the ARCUS platform to treat various forms of infectious and genetic disease.

The Company has not generated any revenue from product sales to date and expects to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through development and clinical trials. As such, the CODM uses cash forecast models in managing and allocating resources on a total company basis, such as pursuing clinical development or entering into potential strategic collaborations. The CODM assesses the overall level of resources available and how to best deploy these resources across functions and research and development projects that are in line with the Company’s long-term strategic goals.

Consistent with its management reporting, results of operations are reported on a Company-wide basis for purposes of segment reporting. The CODM uses Company-wide financial information, including net (loss) income, net cash used in operating activities for the period, and cash on hand for purposes of evaluating operating results and performance. As the Company operates in one operating segment, all measures of the segment assets are reported on the balance sheets as total assets. Please refer to the financial statements for further information related to these measures of segment performance.

The table below summarizes the significant research and development and general and administrative expense categories regularly provided to the CODM:

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Years Ended December 31,

(in thousands)20252024

Revenue$34,264 $68,696

Operating expenses

Research and development

Direct research and development expenses by product candidate:

PBGENE-HBV external development costs7,152 16,111

PBGENE-DMD external development costs1
15,298 1,230

PBGENE-3243 external development costs3,103 9,808

Platform development and early-stage research expenses:

Employee-related costs (including share-based compensation)19,939 21,313

Laboratory supplies and services1,798 2,621

CMOs and outsourced research and development504 247

Facility-related costs, laboratory equipment, and maintenance2,841 3,082

Depreciation and amortization1,299 2,718

Licensing fees and other research and development costs2,238 2,429

Total research and development expenses$54,172 $59,559

General and administrative expense

Employee-related costs (including share-based compensation)19,904 21,861

Consulting and professional services6,106 6,327

Other operating expenses and all other costs6,230 7,111

Total general and administrative expenses$32,240 $35,299

Total operating expenses$86,412 $94,858

Operating loss(52,148)(26,162)

Total other income5,539 33,329

(Loss) income from continuing operations$(46,609)$7,167

Gain from discontinued operations885 —

Net (loss) income$(45,724)$7,167

1 December 31,2024 amounts have been recast for comparability due to PBGENE-DMD being named a product candidate in the year ended December 31, 2025.

NOTE 17: SUBSEQUENT EVENTS

None.

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