Vera Therapeutics, Inc.

Notes to Unaudited Condensed Financial Statements

1. ORGANIZATION AND DESCRIPTION OF THE BUSINESS

Description of Business

Vera Therapeutics, Inc. (the Company) is a clinical stage biotechnology company focused on developing and commercializing treatments for patients with serious immunological diseases. The Company was incorporated in May 2016 in Delaware. The Company’s headquarters are in Brisbane, California. The Company operates in one segment, Therapeutics, focused on developing and commercializing transformative treatments for patients with serious immunological diseases.

Liquidity

Since inception, the Company has devoted substantially all of its resources to its research and development efforts, pre-clinical studies and clinical trials, establishing and maintaining its intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations. The Company has incurred recurring net operating losses and has not generated positive cash flows from operations since its inception and had an accumulated deficit of$589.5 million as of June 30, 2025. The Company had cash, cash equivalents and marketable securities of$556.8 million as of June 30, 2025. The Company has funded its operations primarily through the issuance of common stock, redeemable convertible preferred stock, debt financing and convertible notes. Management expects to continue to incur losses and negative cash flows from operations for at least the next several years.

Management believes that the Company’s cash, cash equivalents and marketable securities as of June 30, 2025 will be sufficient to fund its planned operations and capital expenditure requirements for at least the next 12 months subsequent to the issuance date of these financial statements. The Company intends to raise additional capital through public or private equity offerings, debt financing, or other capital sources, which may include strategic collaborations or other arrangements with third parties in order to achieve its long-term business objectives. If the Company fails to obtain necessary capital when needed on acceptable terms, or at all, it could force the Company to delay, limit, reduce or terminate its product development programs, commercialization efforts or other operations.

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting. The U.S. dollar is the Company’s functional and reporting currency.

Unaudited Condensed Financial Statements

In the opinion of management, the unaudited condensed financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the periods presented. Interim results are not necessarily indicative of results for a full year or any other period. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025.

Use of Estimates

The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Management estimates that affect the reported amounts of assets and liabilities include the accrual of research and development expenses, valuation of equity awards for stock-based compensation, determination of incremental borrowing rate for operating leases, the valuation allowance for deferred tax assets and fair value of marketable securities. The Company evaluates and adjusts its estimates and assumptions on an ongoing basis using historical experience and other factors. Actual results could differ from those estimates.

Concentrations of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company maintains bank deposits in federally insured financial institutions and these deposits may exceed federally insured limits. The Company is exposed to credit risk in the event of default by any of the financial institutions holding its cash, cash equivalents, and marketable securities to the extent recorded in the balance sheet. The Company has not experienced any losses to date related to these concentrations.

The Company’s future results of operations involve a number of other risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s current and potential future product candidates, uncertainty of market acceptance of the Company’s product candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals or sole-source suppliers. The Company relies on single-source suppliers for some components of its supply chain. If any of the single source suppliers fails to satisfy the Company’s requirements on a timely basis, it could suffer delays in its clinical development programs and commercial preparation activities, which could adversely affect operating results.

The Company’s product candidates require approvals from the U.S. Food and Drug Administration and comparable foreign regulatory authorities prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidates will receive the necessary approvals. If the Company was denied approval, approval was delayed, or the Company was unable to maintain approval for any product candidate, it could have a materially adverse impact on the Company.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU is intended to enhance the transparency and decision usefulness of income tax disclosures in response to investor requests. The amendments in ASU 2023-09 address these requests primarily through changes to the effective tax rate reconciliation, disaggregation of income taxes paid, and certain additional income tax-related disclosures. A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. Early adoption is permitted. The Company will adopt the standard as of and for the year ending December 31, 2025, and is currently evaluating the impact of the adoption on its financial statements and related disclosures. The Company does not anticipate any material impacts, as it does not have any foreign entities and has a minimal state income tax footprint.

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. This update will improve disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling, general, and administrative expenses, and research and development). The ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. This ASU will result in the required additional disclosures being included in the Company’s financial statements upon adoption.

Income Taxes

On July 4, 2025, President Trump signed H.R. 1, the “One Big Beautiful Bill Act”, into law. In accordance with GAAP, the Company will account for the effects of the changes in tax law in the period of enactment which is the three-month period ending September 30, 2025. The Company does not expect a material impact on the financial statements.

3. OTHER FINANCIAL STATEMENT INFORMATION

Prepaid Expenses and Other Current Assets

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

Accrued Expenses and Other Current Liabilities

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

4. CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES

The Company’s cash equivalents and available-for-sale investment securities are classified within the fair value hierarchy as defined by authoritative guidance. Level 1 securities consist of highly liquid money market funds for which the carrying amount approximates the fair value of identical assets as quoted in the active markets. Level 2 securities, consisting of U.S. Treasuries, U.S. agency securities and corporate debt securities, are measured based on other observable inputs, including broker or dealer quotations or other valuations using observable market data. The Company’s debt securities are accounted for as available-for-sale securities.

Unrealized gains and losses are reported as a component of other comprehensive income (loss). Fair value of the debt securities was $507.7 million and $552.8 million as of June 30, 2025 and December 31, 2024, respectively.

The following table presents the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

Marketable debt securities that had been in unrealized loss positions as of June 30, 2025, and December 31, 2024 were in an unrealized loss position for less than 12 months. Unrealized losses from marketable debt securities are primarily attributable to changes in interest rates and not due to credit-related factors. Management does not believe any remaining unrealized losses represent impairments or credit-related losses based on evaluation of available evidence.

The following table classifies the estimated fair value of investments in available-for-sale marketable debt securities by effective contractual maturity dates (in thousands):

5. LEASES

The Company has entered into non-cancellable operating leases, including a sublease entered into in August 2024 for an office facility serving as its corporate headquarters in Brisbane, California. This sublease expires in 2029. The Company also leases a facility in South San Francisco, California, that is subleased to a third party under a non-cancellable agreement, which ends concurrently with the original lease in September 2025.

Components of net lease cost are as follows(in thousands):

Other supplemental information related to operating leases is as follows (in thousands):

As of June 30, 2025, the maturities of operating lease liabilities are as follows (in thousands):

As of June 30, 2025, under the terms of the sublease agreement of the South San Francisco facility to a third party, the Company is entitled to receive sublease payments of $0.5 million until the end of the sublease term in September 2025, and the Company remains responsible for future lease payments of $0.6 million under the terms of the lease for this facility. As of June 30, 2025, the Company had not executed any leases that were yet to commence.

6. NOTES PAYABLE

Notes payable consist of the following (in thousands):

2021 Loan Agreement

In June 2025, the Company refinanced its debt under the non-revolving loan and security agreement (2021 Loan Agreement) with a loan syndicate involving Oxford Finance LLC (Oxford Finance), Oxford Finance Credit Fund II LP (OFCF II), and Oxford Finance Credit Fund III LP (OFCF III) entered into in December 2021, by entering into a new non-revolving loan and security agreement, the proceeds of which were partially used to prepay the outstanding principal balance of the 2021 Loan Agreement in full. The Company paid an exit fee of $3.0 million, equal to 6% on the aggregate principal amount of the loan, as 1% of the original 7% exit fee was waived in connection with the refinancing. The entirety of the 2% prepayment fee that would have applied to the prepayment of the $25.0 million of debt drawn in December 2023 was also waived in connection with the refinancing.

2025 Loan Agreement

On June 2, 2025, the Company entered into a new non-revolving loan and security agreement (the 2025 Loan Agreement) with a loan syndicate involving Oxford Finance, OFCF II, OFCF III, and Oxford Finance Credit Fund IV LP (OFCF IV) (collectively, Oxford). The 2025 Loan Agreement has a total borrowing capacity of up to $500.0 million, of which $75.0 million was funded at closing and $50.0 million remains available for draw at the Company’s discretion from January 1, 2026 through December 31, 2026. The Company also has the option to draw up to $75.0 million upon accelerated approval of atacicept in immunoglobulin A nephropathy (IgAN), two tranches of a maximum of $50.0 million upon achievement of certain commercial milestones related to atacicept in IgAN once approved, and up to $200.0 million available at the mutual discretion of the Company and Oxford. As of June 30, 2025, the Company’s outstanding borrowing under the 2025 Loan Agreement was $75.0 million.

The Company accounted for the loan syndicate on a creditor-by-creditor basis. With respect to the continuing creditors, Oxford Finance, OFCF II, and OFCF III, the Company accounted for this transaction as a loan modification, and with respect to the new lender, OFCF IV, the Company accounted for this transaction as an issuance of debt. Of the $3.7 million in exit fees on the 2021 Loan Agreement and fees paid to creditors as part of the refinancing, $1.6 million was recorded as a reduction to the net carrying amount of the debt drawn under the 2025 Loan Agreement at close, and $2.0 million was recorded as noncurrent deferred debt issuance costs. Of the $2.3 million in fees paid by the Company to third parties in connection with the refinancing, $0.8 million was recorded as other expense, and $1.4 million was recorded as noncurrent deferred debt issuance costs. Deferred debt issuance costs will be amortized over the respective draw periods of each of the loan commitment tranches on a straight-line basis.

The 2025 Loan Agreement is scheduled to mature in June 2030, provided that the Company has not achieved a revenue-based interest-only extension milestone as of the end of the initial interest-only period in August 2029. If the Company achieves this interest-only extension milestone, the maturity date and end of the interest-only period will be extended to June 2031 and August 2030, respectively. The Company is permitted to prepay the loan, subject to certain conditions, and will incur prepayment fees of 2% if the loan is prepaid prior to June 4, 2027 or 1% if the loan is prepaid between June 5, 2027 and June 4, 2028. No prepayment fee shall be applicable after June 4, 2028. Additionally, upon maturity date, acceleration of the loan in the event of default, or prepayment of the loan, the Company is required to pay an exit fee equal to 5% of the aggregate principal amount of the loan. The Company will accrue for this exit fee over the life of the loan as an increase to the net carrying amount of debt using the effective interest rate method.

The variable interest rate on the drawn amount is 1-Month CME Term SOFR (subject to a per annum floor rate of 3.75%) plus 4.95% per annum. At the initial funding of the 2025 Loan agreement on June 4, 2025, the nominal interest rate was 9.27%. There are two financial covenants: (i) commencing on March 31, 2027, the Company is required to maintain certain levels of unrestricted cash subject to control agreements provided that such liquidity covenant shall not apply at any given time if the market capitalization of the Company is at least $1.0 billion on the measurement date, and (ii) commencing with the last day of the month in which the aggregate amount of Term Loans funded exceeds $200.0 million, the Company will be required to maintain a loan coverage ratio, which will replace the minimum cash covenant. The loan coverage ratio should not apply at any given time if the market capitalization of the Company is at least $1.25 billion on the measurement date. The loan is secured by substantially all of the Company’s assets. The proceeds from the 2025 Loan Agreement were partially used to prepay the outstanding principal balance of the 2021 Loan Agreement in full, with the remaining proceeds available for working capital, capital expenditures, and other general corporate purposes.

Principal installments due on the notes are as follows (in thousands):

7. COMMON STOCK

As of June 30, 2025, the Company’s amended and restated certificate of incorporation authorized the Company to issue 500,000,000 shares of Class A common stock and 14,600,000 shares of Class B common stock, each with a par value of $0.001 per share. Each share of Class A common stock entitles the holder toone vote on all matters submitted to a vote of the Company’s stockholders. Class B common stock is non-voting. There wereno shares of Class B common stock outstanding as of June 30, 2025 and December 31, 2024. Common stockholders are entitled to receive dividends, as may be declared by the board of directors. Through June 30, 2025, no cash dividends have been declared or paid.

8. STOCK COMPENSATION

Equity Plans

2024 Inducement Plan

In February 2024, the Company adopted the 2024 Inducement Plan (Inducement Plan). The Inducement Plan was adopted by the compensation committee of the Company’s board of directors without stockholder approval pursuant to Nasdaq Listing Rule 5635(c)(4). In accordance with Rule 5635(c)(4), awards made under the Inducement Plan, including stock options and restricted stock units, may only be granted to newly hired employees as a material inducement to accept employment with the Company. Stock options granted under the Inducement Plan expire no later thanten years from the date of grant.

2021 Equity Incentive Plan and 2017 Equity Incentive Plan

The 2021 Equity Incentive Plan (2021 EIP) and the 2017 Equity Incentive Plan (2017 EIP) became effective in May 2021 and February 2017, respectively. The Company may not grant any additional awards under the 2017 EIP. The 2017 EIP will continue to govern outstanding equity awards granted thereunder. Stock options granted under the 2021 EIP and 2017 EIP expire no later than 10 years from the date of grant.

2021 Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan (ESPP) became effective in May 2021. As of June 30, 2025,112,182 shares have been issued pursuant to the ESPP. The ESPP generally provides for six-month consecutive offering periods beginning every September 14 and March 14. The ESPP is a compensatory plan as defined by the authoritative guidance for stock compensation.

The table below summarizes the Company's equity plans as of June 30, 2025:

Option Activity

Stock option activity under the 2017 EIP, 2021 EIP, and 2024 Inducement Plan for the period ended June 30, 2025 is summarized as follows:

The aggregate intrinsic value of stock options exercised during the three months ended June 30, 2025 and 2024 was$1.0 million and $10.6 million, respectively. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2025 and 2024 was $3.7 million and $31.2 million, respectively. The weighted-average grant date fair value of options granted during the three months ended June 30, 2025 and 2024 was $20.20 per share and $28.97 per share, respectively. The weighted-average grant date fair value of options granted during thesix months ended June 30, 2025 and 2024 was $23.43 per share and $13.46 per share, respectively.

Award Activity

The Company grants restricted stock units (RSU) pursuant to the 2021 EIP and satisfies such grants through the issuance of the Company’s Class A common stock. The following table shows RSU activity for the period ended June 30, 2025:

Stock-Based Compensation Expense

The following tables summarize the stock-based compensation expense for stock options and restricted stock units granted to employees and non-employees and for ESPP stock-based compensation that was recorded in the Company’s condensed statements of operations and comprehensive loss for thethree and six months ended June 30, 2025 and 2024 (in thousands):

As of June 30, 2025, the Company had $70.2 million of unrecognized stock-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately 2.8 years. For thethree months ended June 30, 2025 and 2024, the Company recognized $6.9 million and $3.8 million of stock-based compensation expense for stock options, respectively. For thesix months ended June 30, 2025 and 2024, the Company recognized $12.8 million and $7.3 million of stock-based compensation expense for stock options, respectively.

As of June 30, 2025, the Company had $36.9 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 3.4 years. For thethree months ended June 30, 2025 and 2024, the Company recognized $2.4 million and $1.0 million of stock-based compensation expense for restricted stock units, respectively. For thesix months ended June 30, 2025 and 2024, the Company recognized $4.1 million and $1.6 million of stock-based compensation expense for restricted stock units, respectively.

Stock-based compensation expense related to the ESPP for the three months ended June 30, 2025 and 2024 was $0.2 million and $0.1 million, respectively. Stock-based compensation related to the ESPP for thesix months ended June 30, 2025 and 2024 was $0.3 million and $0.1 million, respectively.

The fair value of stock options granted during thethree and six months ended June 30, 2025 and 2024 was estimated using the Black-Scholes option pricing model based on the following assumptions:

9. LICENSES

Stanford University

In January 2025, the Company entered into a license agreement (the Stanford Agreement) with Stanford University. Pursuant to the terms of the Stanford Agreement, as amended in April 2025, the Company acquired worldwide development and commercial rights to a fusion protein in preclinical development referred to as VT-109, with therapeutic potential in B cell mediated diseases, in exchange for license issue fees of $0.8 million, annual license maintenance fees, and potential future license fees, milestone payments and royalties if the compound advances to certain clinical development and commercial milestones.

10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company believes that there are no actions pending which would have a material adverse effect on its financial statements.

Indemnification

As of June 30, 2025, the Company did not have any material indemnification claims that were probable and consequently no related liabilities have been recorded.

Employee Agreements

The Company has signed employment agreements with certain key employees pursuant to which, if their employment is terminated following a change of control of the Company, the employees are entitled to receive certain benefits, including severance and accelerated vesting of equity incentives.

Development and Manufacturing Services Agreements

The Company enters into development and manufacturing contracts with vendors in the conduct of its business. Contracts with these vendors may be terminated at the Company’s option, with varying provisions regarding termination. If a contract with a specific vendor were to be terminated, the Company would be obligated to pay for the products or services that had been provided or received at the time the termination became effective, and potentially additional compensation based upon the period of time remaining between the date of notice of cancellation and the scheduled manufacturing.

11. NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

The following outstanding potentially dilutive shares were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have been anti-dilutive (on an as-converted basis):

12. SEGMENT REPORTING

The Company hasone reportable segment: Therapeutics. This segment is dedicated to developing and commercializing transformative treatments for patients with serious immunological diseases. The Company’s lead product candidate, atacicept, a fully humanized TACI-Fc fusion protein that binds both B-cell activating factor (BAFF) and A proliferation-inducing ligand (APRIL) and is self-administered subcutaneously, is being evaluated for the treatment of immunoglobulin A nephropathy (IgAN). The Company also holds worldwide, exclusive development and commercial rights to MAU868, a monoclonal antibody to treat reactivated BK virus (BKV) infections for which the Company completed a Phase 2 clinical trial in 2022, and worldwide, exclusive development and commercial rights to VT-109, a dual BAFF/APRIL inhibitor that is in preclinical development.

Since inception, the Company has devoted substantially all its resources to research and development efforts, pre-clinical studies and clinical trials, establishing and maintaining intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations. The Company does not have any product candidates approved for commercial sale and has not generated any revenue from product sales.

The accounting policies used in the segment reporting are the same as those disclosed in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The Company’s Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The CODM assesses performance for the single reportable segment and decides how to allocate resources based on net loss and total operating expenses. As the Company has not generated any revenue, total operating expenses is equivalent to loss from operations on the statements of operations and comprehensive loss. The measure of segment assets is reported on the balance sheet as total assets.

The CODM uses net loss as the reportable segment’s primary measure of profit or loss to evaluate the segment’s financial position and to determine the need for additional financing or equity offerings. The CODM also uses total operating expenses as a measure to evaluate controllable spend from total current assets, in deciding how to allocate resources within the Therapeutics segment.

The Company's reportable segment total operating expenses, including significant segment expenses, and net loss for thethree and six months ended June 30, 2025 and 2024, consisted of the following (in thousands):

*Other segment items included in total operating expenses primarily consist of consulting and contractors, professional services, equipment and software, travel and entertainment, facilities, medical affairs, commercial planning and corporate communications.

**Other segment items included in net loss consist of currency exchange gains and losses and other income/expense.