Edgewise Therapeutics, Inc.

NOTE 1 DESCRIPTION OF BUSINESS

Organization and Description of Business

Edgewise Therapeutics, Inc. (the Company) is a clinical-stage biopharmaceutical company focused on advancing therapies for people living with serious cardiovascular diseases. The Company’s pipeline includes EDG-7500, a novel, oral, selective, cardiac sarcomere modulator, in development for the treatment of hypertrophic cardiomyopathy (HCM), including both obstructive HCM (oHCM) and nonobstructive HCM (nHCM). The Company is also advancing EDG-15400, an oral next-generation cardiac sarcomere modulator in clinical development for the treatment of heart failure with preserved ejection fraction (HFpEF). In addition, the Company is leveraging its precision medicine platform to advance additional research programs focused on genetically defined cardiovascular and cardiometabolic diseases.

On May 31, 2026, the Company entered into an Asset Purchase Agreement (Sevasemten Purchase Agreement) with Servier Pharmaceuticals LLC and Les Laboratoires Servier (Servier) for the sale of the sevasemten muscular dystrophy program, including certain related assets, intellectual property, know-how, select employees, contracts, regulatory filings and clinical data, and assumed certain related liabilities (Sevasemten Sale). The Sevasemten Sale closed on July 10, 2026. Following completion of the Sevasemten Sale, the Company is focused on advancing its cardiovascular pipeline and related research and development activities.

Risks and Uncertainties

The board of directors of the Company discusses with management macroeconomic and geopolitical developments, including inflation, instability in the banking and financial services sector, tightening of the credit markets, the impact of changes in the U.S. government administration and policy positions, international conflicts, public health pandemics, cybersecurity, sanctions, and changes in tariffs so that the Company can be prepared to react to new developments as they arise. The board of directors and the management of the Company are carefully monitoring these developments and the resulting economic impact on its financial condition and results of operations.

Liquidity and Capital Resources

The Company has retained earnings of $513.4 million and cash, cash equivalents and marketable securities of $1,743.9 million as of September 30, 2026. The Company may seek additional capital in the future to support strategic opportunities, business development activities, commercialization initiatives or expanded development programs.

On May 10, 2024, the Company filed an automatic shelf registration statement on Form S-3ASR that allows the Company to undertake various equity and debt offerings. Additionally, on May 10, 2024, the Company filed a prospectus supplement to the shelf registration statement and entered into a sales agreement with Leerink Partners LLC (Leerink Sales Agreement) under which the Company may offer and sell shares of common stock, having aggregate sales proceeds of up to $175.0 million from time to time, through an “at the market offering” program (Leerink ATM) under which Leerink Partners LLC will act as sales agent. The Company has not yet offered or sold any shares of common stock related to the Leerink ATM.

On April 3, 2025, the Company closed an underwritten registered direct offering of 9,935,419 shares of common stock at a public offering price of$20.13 per share (April 2025 Offering). The aggregate gross proceeds from the April 2025 Offering were$200.0 million, and the net proceeds were$187.1 million, after deducting underwriting discounts and commissions of$12.0 million and offering expenses of$0.9 million.

On July 10, 2026, the Company completed the Sevasemten Sale receiving$1,396.1 million in upfront cash proceeds, with an additional$153.9 million deposited into escrow in accordance with the Sevasemten Purchase Agreement, for total expected initial proceeds of$1,550.0 million. The Company is also eligible to receive up to$1,100.0 million in potential future milestone payments, including (a) a potential milestone payment upon achieving U.S. marketing approval for sevasemten for Becker muscular dystrophy in the amount of (i)$200.0

million, in cash, payable in the event of an approved labelling including specified adult and adolescent populations or (ii)$100.0 million in cash, payable in the event of an approved labelling including only specified adult populations (if (i) has not previously been achieved); (b) a potential milestone payment of $600.0 million in cash, payable upon the achievement of U.S. marketing approval for sevasemten for Duchenne muscular dystrophy; and (c) a potential milestone payment of$300.0 million in cash, payable upon the achievement of annual U.S. net sales of sevasemten products exceeding$550.0 million. Together, the total expected initial proceeds and potential future milestone payments constitute aggregate potential consideration of up to$2,650.0 million.

The Company may seek additional capital in the future through equity or debt financings, strategic transactions or other sources. The availability and terms of any future financing will depend on a number of factors, including the Company’s clinical and regulatory progress, market conditions and other factors. If the Company raises additional capital through the issuance of equity securities, its stockholders may experience dilution, and debt financing, if available, may include restrictive covenants. The Company’s future capital requirements will depend on its operating plans, including the scope and timing of its clinical development programs, commercialization activities and potential strategic opportunities.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. The Company believes that its $1,743.9 million of cash, cash equivalents and marketable securities as of September 30, 2026 will be sufficient to fund its planned operations and meet its liquidity needs through at least the next 12 months from the issuance of these financial statements.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed financial statements and related notes to the condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2026. Except as noted in this Note 2, there have been no material changes to the summary of significant accounting policies as disclosed in that filing.

These interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and include all adjustments consisting of normal recurring adjustments that management believes are necessary for a fair presentation of the periods presented and are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.

Marketable Securities, Available for Sale

All marketable securities have been classified as “available-for-sale” and are carried at fair value, based upon quoted market prices. The Company considers its available-for-sale portfolio as available for use in current operations. Accordingly, the Company classifies its investments as short-term marketable securities, even though the stated maturity date may be one year or more beyond the current balance sheet date. Unrealized gains and losses, net of any related tax effects, are excluded from earnings and are included in other comprehensive income (loss) and reported as a separate component of stockholders’ equity until realized. Interest income, realized gains and losses, and allowance for credit losses, if any, on available-for-sale securities are included in other income. The cost of securities sold is based on the specific-identification method. The amortized cost of securities is adjusted for amortization of premiums and accretion of discounts to maturity. In accordance with the Company’s investment policy, management invests in money market funds, corporate debt securities, commercial paper, asset-backed securities and government securities. The Company has not experienced any realized losses on its deposits of cash, cash equivalents, and marketable securities since inception.

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

The Company’s money market funds are classified as Level 1 because they are valued using quoted market prices. Investments in asset-backed securities, corporate debt securities, commercial paper and U.S. government treasury and agency securities, and supranational and sovereign government securities have been classified as Level 2 as they are valued using quoted prices in less active markets or other directly or indirectly observable inputs. Fair values of asset-backed securities, corporate debt securities, commercial paper, and U.S. government treasury and agency securities were derived based on input of market prices from multiple sources at each reporting period. With regard to commercial paper, all of the securities had high credit ratings and one year or less to maturity; therefore, fair value was derived from accretion of purchase price to face value over the term of maturity or quoted market prices for similar instruments if available. There wereno transfers of financial assets between Level 1, Level 2, or Level 3, during the periods presented. As of September 30, 2026, $1,159.3 million of marketable securities had remaining contractual maturities of less thanone year and $521.5 million of marketable securities had remaining contractual maturities betweenone andtwo years.

The Company periodically reviews its portfolio of debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns. For debt securities where the fair value of the investment is less than the amortized cost basis, the Company has assessed at the individual security level for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment. Unrealized losses on marketable securities at September 30, 2026 were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities.

Contingent Consideration

In connection with the Sevasemten Sale, the Company may receive additional consideration upon the achievement of specified regulatory and commercial milestones. The Company accounted for the Sevasemten Sale as a derecognition of nonfinancial assets under ASC 610-20. In determining the consideration recognized in the gain on sale, the Company applies the recognition and measurement guidance in ASC 606, including the requirements for estimating and constraining variable consideration.

The contingent milestone payments represent variable consideration. The Company estimates variable consideration using the most likely amount method, which it believes is appropriate because the milestone arrangements have a limited number of discrete outcomes. The Company includes estimated variable consideration in the gain on sale only to the extent that it is probable that a significant reversal in the cumulative gain recognized will not occur when the related uncertainty is resolved.

Recently Adopted Accounting Standards

In September 2025, the Financial Accounting Standards Board (FASB) issuedAccounting Standards Update (ASU) 2025-07,Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. This ASU adds a new scope exception, with exceptions, to derivative accounting guidance for non-exchange traded contracts with underlyings based on operations or activities specific to one of the parties to the contract. This ASU is effective for the Company’s interim and annual reporting periods beginning on January 1, 2027. The guidance may be applied on a prospective or modified retrospective basis and early adoption is permitted. During the third quarter of 2026, the Company early adopted this ASU on a prospective basis to new contracts entered into on or after January 1, 2026. The adoption of this ASU did not have a material impact on the Company’s financial statements as of September 30, 2026.

Accounting Standards Not Yet Adopted

In November 2024, the FASB issuedASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU is expected to improve the 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, SG&A, and research and development). This ASU is effective beginning with the Company’s 2027 fiscal year annual reporting period and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.

In December 2025, the FASB issuedASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements. This ASU is expected to improve the navigability of the required interim disclosures, clarify when that guidance is applicable, and provide additional guidance on what disclosures should be included in interim reporting periods. It also adds a principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its interim financial statements.

NOTE 3 PREFERRED STOCK AND COMMON STOCK

The Company is authorized to issue two classes of stock designated as common stock and preferred stock. As of September 30, 2026, the total number of shares authorized was 1,200,000,000. The total number of shares of common stock authorized was 1,000,000,000. The total number of shares of preferred stock authorized was 200,000,000. All shares of the Company’s capital stock have a par value of $0.0001 per share.

Common stockholders are entitled to dividends if and when declared by the board of directors of the Company and after any convertible preferred share dividends are fully paid. The holder of each share of common stock is entitled toone vote.

NOTE 4 STOCK-BASED COMPENSATION AWARDS

Equity Incentive Plans

In March 2021, the Company’s board of directors adopted, and its stockholders approved, the Company’s 2021 Equity Incentive Plan (2021 Plan), which became effective in March 2021 in connection with the IPO. Upon adoption of the 2021 Plan, the Company restricted the grant of future equity awards under its 2017 Equity Incentive Plan, as amended and restated (2017 Plan).

The 2021 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees and any of its parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units (RSUs), stock appreciation rights, performance units, and performance shares to its employees, directors, and consultants and its subsidiary corporations’ employees and consultants.

The vesting of stock options is stated in each individual grant agreement, which is generally four years. Options granted expire 10 years after the date of grant. An RSU represents the right to receiveone share of common stock upon vesting of the RSU. The fair value of each RSU is based on the closing price of the Company’s common stock on the date of grant and generally vest over 2 to 4 years. A total of 5,040,000 shares of the Company’s common stock were initially reserved for issuance pursuant to the 2021 Plan. The 2021 Plan share reserve increases by the number of shares under the 2017 Plan that are repurchased, forfeited, expired or cancelled after the effective date of the 2021 Plan up to the limit under the 2021 Plan. The number of shares available for issuance under the 2021 Plan increases annually on the first day of each fiscal year beginning with the Company’s 2022 fiscal year, equal to the least of (1)5,040,000 shares, (2) five percent (5%) of the outstanding shares of its common stock as of the last day of the immediately preceding fiscal year; or (3) such other amount as the Company’s board of directors may determine. As of September 30, 2026, there were 6,644,216 shares of common stock available for future issuance under the 2021 Plan.

During the nine months ended September 30, 2026, under the 2021 Plan, the Company granted 1,382,848 stock options with a fair value of$42.0 million that vest over a weighted average period of 3.8 years and 654,948 RSUs with a fair value of$28.4 million that vest over a weighted average period of 4.0 years.

Inducement Equity Incentive Plan

Effective August 10, 2024, the Company’s board of directors adopted the Company’s 2024 Inducement Equity Incentive Plan (Inducement Plan) and, subject to the adjustment provisions of the Inducement Plan, reserved 2,000,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan.

The Inducement Plan was adopted without stockholder approval pursuant to the applicable The Nasdaq Stock Market LLC’s (Nasdaq) Listing Rules. The Inducement Plan provides for the grant of equity-based awards, including nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards, and its terms are substantially similar to the 2021 Plan, including with respect to treatment of equity awards in the event of a “merger” or “change in control” as defined under the Inducement Plan, but with such other terms and conditions intended to comply with the Nasdaq inducement award exception or to comply with the Nasdaq acquisition and merger exception.

In accordance with the Nasdaq Listing Rules, awards under the Inducement Plan may only be made to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company, or, to the extent permitted by the Nasdaq Listing Rules, in connection with a merger or acquisition. The vesting of stock options is stated in each individual grant agreement, which is generally four years, and expires 10 years after the date of grant. The fair value of each RSU is based on the closing price of the Company’s common stock on the date of grant and vests over 4 years. As of September 30, 2026, there were 703,748 shares available for future issuance under the Inducement Plan.

Founder Stock Options

On September 19, 2017, the Company granted one of its founders the option to purchase 1,795,880 shares of the Company’s common stock at an exercise price of $0.18 per share which vested monthly over afour-year period and expire 15 years after the date of grant. This grant is separate from the Company’s equity incentive plans discussed above. As of September 30, 2026,1,077,717 options were both outstanding and exercisable.

2021 Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan (2021 ESPP) enables eligible employees of the Company to purchase shares of common stock at a discount. A total of 504,000 shares of the Company’s common stock were initially reserved for issuance pursuant to the 2021 ESPP. The number of shares available for issuance under the 2021 ESPP increases

annually on the first day of each fiscal year beginning with the Company’s 2022 fiscal year, equal to the least of (1)1,008,000 shares, (2) one percent (1%) of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (3) such other amount as the Company’s board of directors may determine. As of September 30, 2026, there were 3,848,431 shares of common stock available for future issuance under the 2021 ESPP.

The 2021 ESPP provides fortwo offering periods of approximately twelve months’ duration, with purchase periods commencing on the first trading day on or after May 15 and November 15 and terminating on the last trading day on or before November 15 of the same year and May 15 of the following year, respectively. Contributions under the 2021 ESPP are limited to 15% of an employee’s eligible compensation, IRS limitations, and a maximum of 6,000 shares of common stock during each offering period. 2021 ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of (1) the fair market value per share of the common stock on the first trading day of the offering period or (2) the fair market value of the common stock on the purchase date.

Total stock-based compensation expense related to all equity plans was allocated as follows (in thousands):

NOTE 5 COMMITMENTS AND CONTINGENCIES

Litigation

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the three and nine months ended September 30, 2026 and no material legal proceedings are currently pending or threatened.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising from breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its financial statements as of September 30, 2026.

In connection with the Sevasemten Sale, the Company agreed to provide the buyers with indemnification for specified matters under the related transaction agreements. As of September 30, 2026, the Company has not recognized contingent consideration subject to the indemnity arrangements in the gain on sale. The Company is continuing to evaluate potential resolution alternatives and will reassess the amount of consideration expected to be recoverable, the need for any liability recognition, and related disclosure requirements at each reporting date.

Commitments

The Company has committed to purchase federal transferable production tax credits. As of September 30, 2026, the Company has a remaining commitment of $40.0 million through January 2027. The Company’s commitments are contingent upon the satisfaction of certain legal and contractual conditions from the sellers, and the continued availability of the credits under federal tax laws. The Company expects to utilize these credits in the same quarter in

which they are purchased, offsetting federal income tax estimated payments and reducing income tax expense in the associated periods.

NOTE 6 NET EARNINGS (LOSS) PER SHARE

Basic net earnings (loss) per common share is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net earnings (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net earnings (loss) per share calculation, common stock options and unvested restricted stock units are considered to be potentially dilutive securities. For the periods in which the Company reported a net loss, diluted net earnings (loss) per common share is the same as basic net earnings (loss) per common share.

The following table sets forth the computation of the basic and diluted net earnings (loss) per share (in thousands, except share and per share data):

The following weighted average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net earnings (loss) per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive:

NOTE 7 PROPERTY AND EQUIPMENT

Property and equipment consisted of the following amounts (in thousands):

Depreciation expense was $0.5 million and $1.6 million for the three and nine months ended September 30, 2026 and $0.5 million and $1.6 million for the three and nine months ended September 30, 2025.

NOTE 8 ACCRUED OTHER EXPENSES

Accrued other expenses consisted of the following amounts (in thousands):

NOTE 9 SEGMENT REPORTING

There have been no changes in the Company’s assessment of the basis ofsegmentation or in the basis of measurement of segment profit or loss since the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2026.

a Other segment expense included in Segment net income (loss) includes contracted administrative expenses, intellectual property fees, software costs, occupancy & equipment costs, and other overhead expenses*.*

NOTE 10 ASSET DISPOSITIONS

On May 31, 2026, the Company entered into the Sevasemten Purchase Agreement with Servier, to sell the assets and transfer the liabilities comprising its sevasemten program (the Disposal Group). The transaction was completed on July 10, 2026, and the Company received $1,396.1 million in upfront cash proceeds, with an additional $153.9 million deposited into escrow in accordance with the Sevasemten Purchase Agreement, for total expected initial proceeds of $1,550.0 million. The Company recognized $3.9 million of the escrowed amount as consideration at closing, which is included in Prepaid expenses and other assets as of September 30, 2026. The Company is also eligible to receive up to $1,100.0 million of additional contingent consideration payable upon the achievement of specified clinical, regulatory and commercial milestones for the sevasemten program.

Prior to closing, the assets and liabilities of the Disposal Group met the criteria for classification as held for sale under ASC 360-10-45-9 effective May 31, 2026. The Disposal Group was measured at the lower of its carrying amount or fair value less costs to sell. Because the estimated fair value less costs to sell of the Disposal Group exceeded its carrying amount, no impairment loss was recognized upon its classification as held for sale. Upon closing, the Company derecognized approximately $5.4 million of assets and $12.3 million of liabilities related to the Disposal Group. The Company concluded that substantially all of the fair value of the assets sold was concentrated in the Sevasemten intellectual property and that the Disposal Group did not constitute a business under ASC 805. Accordingly, the Company accounted for the transaction as the derecognition of nonfinancial assets under ASC 610-20. The Company did not present the Disposal Group as discontinued operations because the disposition did not represent a strategic shift that had or will have a major effect on the Company’s operations and financial results. The Disposal Group was included in the Company’s single operating and reportable segment, had not generated product revenue and did not represent a separate major line of business.

The Company recognized a gain on the Sevasemten Sale of approximately $1,348.1 million within Gain on the Sevasemten Sale for the three and nine months ended September 30, 2026. The gain reflects the consideration recognized at closing, including a receivable related to the indemnification arrangement, less the carrying amounts of assets transferred, transaction costs, and consideration allocated to transition services. In connection with the Sevasemten Sale, the Company incurred approximately $50.9 million of transaction related costs, which became fixed and determinable at closing and were recognized as a reduction of the gain on sale.

As of September 30, 2026, the Company concluded that no amount of the contingent milestone consideration met the threshold for inclusion in the gain on sale due to significant regulatory and commercial uncertainties that are outside of the Company’s control. Accordingly, the Company did not recognize a contingent consideration receivable related to the milestone payments. The Company reassesses this conclusion at each reporting date. Any contingent milestone consideration recognized in a subsequent period will be accounted for as an increase to the original gain on sale and presented within the same income statement caption as that gain. On November 3, 2026, Servier announced that the pivotal GRAND CANYON study of sevasemten in Becker muscular dystrophy did not meet its primary or secondary endpoints. Servier is conducting further analysis of the study results and relevant prior clinical data.

In connection with the Sevasemten Sale, the Company entered into a transition services agreement (TSA) with Servier. Income under the TSA comprises reimbursements for specified costs incurred in providing transition services and recognition of consideration allocated to those services at closing. The Company allocated $7.8 million of the closing consideration to its transition service obligations and deferred recognition of that amount until the related services are provided. Both cost reimbursements and amounts recognized from the deferred consideration are presented within Other income in the condensed statements of operations and comprehensive income (loss). Costs incurred in providing transition services are recorded within the applicable operating expense categories. As of September 30, 2026, $6.1 million remained deferred, of which $5.2 million and $0.9 million were included in Accrued other expenses and Other long term liabilities, respectively.

NOTE 11 INCOME TAXES

The Company’s effective tax rates for the three months ended September 30, 2026 and 2025 were 11.8% and 0.00%, respectively. The primary driver of the variance from the federal statutory tax rate for the three months ended

September 30, 2026 was discrete activity related to the taxable gain recognized on the Sevasemten Sale, offset by the release of valuation allowance, stock compensation adjustments, and benefit from the purchase of transferable federal income tax credits at a discount to their face amount. The primary driver of the variance from the federal statutory tax rate for the three months ended September 30, 2025 was valuation allowance activity.

The Company’s effective tax rates for the nine months ended September 30, 2026 and 2025 were 12.8% and 0.00%, respectively. The primary driver of the variance from the federal statutory tax rate for the nine months ended September 30, 2026 was discrete activity related to the gain on the Sevasemten Sale, offset by the release of valuation allowance, stock compensation adjustments, and benefit from the purchase of transferable federal income tax credits at a discount to their face amount. The primary driver of the variance from the federal statutory tax rate for the nine months ended September 30, 2025 was valuation allowance activity.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry back and carry forward periods), projected future taxable income and tax-planning strategies in making this assessment. For the three and nine months ended September 30, 2026, the Company does not believe it has sufficient positive evidence to conclude that its net remaining deferred tax assets are more likely than not to be realized.