Definium Therapeutics, Inc.

DESCRIPTION OF THE BUSINESS

Definium Therapeutics, Inc. (the “Company” or “Definium”) is incorporated under the laws of the Province of British Columbia. Its wholly owned subsidiaries, Definium Therapeutics US, Inc. (“Definium US”) and HealthMode, Inc. are both incorporated in Delaware. Definium US was incorporated on May 30, 2019.

On January 9, 2026, the Company changed its corporate name from Mind Medicine (MindMed) Inc. to Definium Therapeutics, Inc. On January 12, 2026, the Company changed the name of its wholly-owned subsidiary from Mind Medicine, Inc. to Definium Therapeutics US, Inc.

Definium is a late-stage clinical biopharmaceutical company developing novel product candidates to treat brain health disorders. The Company's mission is to forge a new era of psychiatry by applying scientific rigor to psychedelics, with the goal of developing accessible treatments that unlock healing at scale. This specifically includes pharmaceutically optimized product candidates derived from the psychedelic and empathogen drug classes including DT120 and DT402, the Company's lead product candidates.

Liquidity

As of December 31, 2025, the Company had an accumulated deficit of $582.7 million. Through December 31, 2025, the Company’s financial support has primarily been provided by proceeds from the issuance of its common shares, no par value per share (“Common Shares”), warrants to purchase Common Shares, and the Company’s credit facility.

As the Company continues its expansion, it may seek additional financing and/or strategic investments; however, there can be no assurance that any additional financing or strategic investments will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it will most likely be required to reduce its plans and/or certain discretionary spending, which could have a material adverse effect on the Company’s ability to achieve its intended business objectives. The accompanying consolidated financial statements do not include any adjustments that might be necessary if it were unable to continue as a going concern. Management believes that it has sufficient working capital on hand to fund operations through at least the next twelve months from the date of the issuance of these consolidated financial statements.

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result of this election, the consolidated financial statements may not be comparable to companies that comply with public company Financial Accounting Standards Board (“FASB”) standards’ effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the first sale of its common equity securities under an effective Securities Act of 1933 (the "Securities Act") registration statement, which is expected to be on December 31, 2026, or such earlier time that it is no longer an emerging growth company.

BASIS OF pRESENTATION AND Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates of the Financial Accounting Standards Board (“FASB”).

The preparation of financial statements in conformity with U.S. GAAP requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates under different assumptions or conditions.

Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the valuation, accrual for research and development costs, and the fair value of share-based awards and warrants. Actual results could differ from those estimates, and such differences could be material to the consolidated balance sheets and statements of operations and comprehensive loss.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to significant concentration of credit risk consist of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of U.S. federally insured limits and invests in short-term investments with the primary objectives of seeking to preserve principal, achieve liquidity requirements and safeguard funds. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held and the nature, including the credit-ratings, of its short-term investments.

Foreign Currency

Prior to April 1, 2024, the Company’s functional currency was the Canadian dollar (“CAD”). Translation gains and losses from the application of the U.S. dollar (“USD”) as the reporting currency during the period that the Canadian dollar was the functional currency were included as part of cumulative currency translation adjustment, which is reported as a component of shareholders’ equity as accumulated other comprehensive income.

Following the Company’s voluntary delisting from Cboe Canada effective April 10, 2024, the Company reassessed its functional currency and determined that, as of April 1, 2024, its functional currency had changed from the CAD to the USD.

For periods commencing April 1, 2024, monetary assets and liabilities denominated in currencies other than USD are remeasured at period-end using the period-end exchange rate. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets acquired, and non-monetary liabilities incurred after April 1, 2024, are translated at the approximate exchange rate prevailing at the date of the transaction. Income and expense accounts are translated at the average rates in effect during the fiscal year. Foreign exchange gains and losses are included in the consolidated statements of operations and comprehensive loss.

Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as one segment. The Company has determined that its Chief Executive Officer is the Chief Operating Decision Maker (“CODM”) for purposes of segment reporting.

Cash Equivalents

The Company considers all investments with an original maturity date at the time of purchase of three months or less to be cash equivalents. As of December 31, 2025, the Company’s cash equivalents consisted of U.S. government money market funds at a high-credit quality and U.S. federally insured financial institution. The Company’s accounts may, at times, exceed U.S. federally insured limits. The Company had cash equivalents of $255.3 million and $271.5 million as of December 31, 2025 and December 31, 2024, respectively.

Short-Term Investments

All investments are carried at fair value as determined based upon quoted market prices or pricing models for similar securities at period end. The Company has classified these investments as available-for-sale securities, as the sale of such investments may be required prior to maturity to implement management strategies, and therefore has classified all investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying balance sheets. Dividend and interest income are recognized when earned. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of securities sold. Unrealized gains and losses are reported as a component of accumulated other comprehensive loss.

The Company reviews its portfolio of available-for-sale debt securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost have resulted from a credit-related loss or other factors. If the decline in fair value is due to credit-related factors, a loss is recognized in statements of operations, whereas if the decline in fair value is not due to credit-related factors, the loss is recorded in other comprehensive loss. The fair value of the Company's investments was $153.8 million as of December 31, 2025. The Company hadno investments as of December 31, 2024. As of December 31, 2025, the Company has not recognized any impairment charges related to its investments.

Liability Classified Warrants (2022 USD Financing Warrants)

In September 2022, the Company closed an underwritten public offering of 7,058,823 Common Shares and accompanying 2022 USD Financing Warrants to purchase 7,058,823 Common Shares. Each 2022 USD Financing Warrant is immediately exercisable for one Common Share at an initial exercise price of $4.25 per Common Share, subject to certain adjustments, and will expire in September 2027. These warrants are liability classified due to not meeting the criteria for equity treatment under the guidance in ASC 815-40, Derivatives and Hedging (Topic 815-40). Accordingly, the 2022 USD Financing Warrants were recognized at fair value upon issuance and are remeasured to fair value at the end of each reporting period. Any change in fair value is recognized on the consolidated statements of operations.

Research and Development (R&D) Expenses

R&D expenses are expensed in the periods in which they are incurred. External expenses consist primarily of payments to contract research organizations, outside consultants and other third parties in connection with the Company’s discovery, preclinical and clinical activities, process development, manufacturing activities, regulatory and other services. Certain R&D external expenses are recognized based on an evaluation of the progress to completion of specific tasks using information provided to the Company by its service providers or the estimate of the level of service that has been performed at each reporting date. R&D expenses amounted to $117.7 million and $65.3 million, respectively, for the years ended December 31, 2025 and 2024.

Stock-Based Compensation

In February 2020, the Company adopted the Stock Option Plan (as amended and restated, the "2020 Stock Option Plan") and the Restricted Share Unit Plan (as amended and restated, the “2020 PRSU Plan”, and together with the 2020 Stock Option Plan, the “Prior Plans”), and subsequently, in June 2025, adopted the 2025 Equity Incentive Plan (the "2025 Plan"). The 2020 Stock Option Plan, the 2020 PRSU Plan and 2025 Plan were approved by the Company's shareholders. The 2020 Option Plan and 2020 PRSU Plan were retired effective March 24, 2025. Under the 2025 Plan and the Prior Plans, awards are measured at fair value and recognized over the requisite service period. Forfeitures are accounted for in the period they occur. The Company estimates the fair value of each stock-based award on the date of grant using the Black-Scholes option pricing model which requires the input of subjective assumptions, including expected volatility of the underlying stock, risk-free interest rate, dividend yield, and expected term of the option. The expected volatility of stock options is based upon the historical volatility of a number of publicly traded companies in similar stages of clinical development.

In June 2024, the Company adopted the Definium Therapeutics, Inc. Employee Share Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s shareholders. The fair value of Common Shares to be issued under the ESPP is also estimated using the Black-Scholes option pricing model.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the consolidated statements of operations in the period that includes the enactment date.

The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process whereby (i) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. To date, there have beenno interest charges or penalties related to unrecognized tax benefits.

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted-average number of Common Shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted-average number of Common Shares and potentially dilutive securities outstanding for the period.

Typically, when the Company reports a net loss for the period, basic and diluted net loss per share are the same, as the inclusion of potentially dilutive securities would be anti-dilutive. However, in periods in which there is a gain on the fair value of the 2022 USD warrants, which are classified as liability-classified warrants, the gain is included in the numerator and the related incremental shares are included in the denominator for the calculation of diluted net loss per share, if the impact is dilutive.

The following table sets forth the computation of basic and diluted net loss per share attributable to common shareholders (in thousands, except share and per share amounts). As the exercise price of the Company’s pre-funded warrants is $0.001 per share, it was determined to be non-substantive for accounting purposes and the weighted-average pre-funded warrants were included the denominator of both basic and diluted EPS:

The following potentially dilutive securities have been excluded from the calculation of diluted net loss per share due to their anti-dilutive effect:

Recently Adopted Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations, or cash flows upon adoption.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09"). ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures. The amendments require additional disaggregation of income tax expense and income taxes paid by jurisdiction, among other disclosure requirements. The Company adopted ASU 2023-09 effective January 1, 2025. The adoption of this standard didnot have a material impact on the Company’s consolidated financial statements. The Company continues to maintain a full valuation allowance against its deferred tax assets.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)which requires public entities to provide additional disclosures about certain expense categories in the income statement. The amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. As an emerging growth company, the Company is currently evaluating the timing and impact of adoption, including the potential effect of losing emerging growth company status as of December 31, 2026. The Company expects the amendments to primarily impact the presentation and disclosure of research and development and general and administrative expenses.

INVESTMENTS

The Company's available-for-sale investments consisted of the following (in thousands):

The following table summarizes the maturities of the Company's investments at December 31, 2025 (in thousands):

The Company has determined that there were no material declines in the fair value of its investments due to credit-related factors as of December 31, 2025. The Company heldno available-for-sale investments as of December 31, 2024.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

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Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

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Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

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Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).

The Company's credit facility bears variable interest rates, and the carrying amount of the Company's credit facility approximates fair value because interest rates approximate the current rates available to the Company.

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 (in thousands) and the fair value hierarchy of the valuation techniques utilized. The Company classifies its assets and liabilities as either short- or long-term based on maturity and anticipated realization dates.

There wereno transfers into or out of Level 1, Level 2, or Level 3 during the years ended December 31, 2025 and 2024.

The Company's cash equivalents includes a U.S. government money market fund which invests in highly liquid securities that are issued or guaranteed by the U.S. government or by U.S. government agencies and instrumentalities, and are measured at fair value in accordance with the fair value hierarchy.

The Company's U.S. agency bonds are classified as Level 2 in the fair value hierarchy as they are valued using observable inputs, including market yields and spreads, in the absence of active market quotes for identical securities.

The fair value of the warrant liability is measured at fair value on a recurring basis. The 2022 USD Financing Warrants (as defined below in Note 8) are classified as Level 3 in the fair value hierarchy and are determined using the Black-Scholes option pricing model using the following assumptions:

GOODWILL

Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. The recognition of goodwill represents the strategic and synergistic benefits the Company expects to realize from acquisitions.

Goodwill is not amortized to earnings, rather, it is assessed for impairment annually during the fourth quarter for its single reporting unit. The Company also performs an assessment at other times if events or changes in circumstances indicate the carrying value of the assets may not be recoverable. When impairment indicators are identified, the Company compares the reporting unit’s fair value to its carrying amount, including goodwill. An impairment loss is recognized as the difference, if any, between the reporting unit’s carrying amount and its fair value, to the extent the difference does not exceed the total amount of goodwill allocated to the reporting unit.

In conducting the annual impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that the fair value of the reporting unit is less than its carrying amount, a quantitative assessment is performed and the fair value of the reporting unit is determined by analyzing the total fair value of equity compared to the carrying value of the reporting unit. If the carrying value of the reporting unit continues to exceed its fair value, the implied fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded. No impairment charges have been recorded during the years ended December 31, 2025 and 2024.

During the year ended December 31, 2025, the Company has madeno additions to its outstanding goodwill.

ACCRUED EXPENSES

At December 31, 2025 and 2024, accrued expenses consisted of the following (in thousands):

SHAREHOLDERS’ EQUITY

Common Shares

The Company is authorized to issue an unlimited number of Common Shares, which haveno par value. As of December 31, 2025, the Company had 98,776,265 Common Shares issued and outstanding.

Voting Rights -Holders of Common Shares are entitled to one vote per share and may attend, vote, and participate in shareholder meetings, except where a specific class of shares is entitled to vote separately under the Business Corporations Act (British Columbia). A quorum is met if at least two shareholders holding at least 33 1/3% of the issued shares entitled to vote are present in person or by proxy. If a quorum is not present within 30 minutes of the scheduled meeting time, the meeting is adjourned to a time and place set by the chair or Board.

At-The-Market Facilities

On May 4, 2022, the Company filed a shelf registration statement on Form S-3 (the “2022 Registration Statement”), as well as an accompanying prospectus supplement ("Prior ATM Prospectus"). In connection with the filing of the 2022 Registration Statement, the Company also entered into a sales agreement (the “Prior Sales Agreement”) with Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. as sales agents (together, the “Prior Agents”), pursuant to which the Company could issue and sell Common Shares for an aggregate offering price of up to $100.0 million in accordance with the Prior ATM Prospectus under an at-the-market offering program (the “2022 ATM”). Pursuant to the 2022 ATM, the Company paid the Prior Agents a commission rate equal to 3.0% of the gross proceeds from the sale of any Common Shares. The Company was not obligated to make any sales of its Common Shares under the 2022 ATM. During the year ended December 31, 2024, the Company sold 171,886 Common Shares for net proceeds of $0.7 million under the 2022 ATM. As of March 7, 2024, the Company had raised an aggregate of $40.9 million under the 2022 ATM and had the remaining availability of $59.1 million. On March 7, 2024, the Company announced that it had delivered written notice to the Prior Agents that it was suspending and terminating the 2022 ATM prospectus, dated May 16, 2022. On May 28, 2024, the Company delivered written notice to the Prior Agents that it was terminating the Prior Sales Agreement.

On June 28, 2024, the Company filed a shelf registration statement on Form S-3 (the “2024 Registration Statement”), as well as an accompanying prospectus supplement (“New ATM Prospectus”). In connection with the filing of the 2024 Registration Statement and the New ATM Prospectus, the Company entered into a sales agreement (the "Sales Agreement") with Leerink Partners LLC (the “Sales Agent”) pursuant to which the Company may issue and sell from time to time Common Shares for an aggregate offering price of up to $150.0 million in accordance with the New ATM Prospectus under an at-the-market offering program (the "2024 ATM"). Pursuant to the 2024 ATM, the Company will pay the Sales Agent a commission rate of up to 3.0% of the gross proceeds from the sale of any Common Shares. The Company is not obligated to make any sales of its Common Shares under the 2024 ATM. The Company has not sold any Common Shares under the 2024 ATM as of December 31, 2025.

March 2024 Offering and Private Placement

On March 7, 2024, the Company entered into an underwriting agreement with Leerink Partners LLC and Cantor Fitzgerald & Co., as representatives of the underwriters named therein, in connection with the issuance and sale by the Company in an underwritten offering (the “March 2024 Offering”) of 16,666,667 Common Shares (the “Offering Shares”), at an offering price of $6.00 per Offering Share, less underwriting discounts and commissions.

The net proceeds to the Company from the March 2024 Offering were $93.5 million, after deducting underwriting discounts and commissions and other estimated offering expenses payable by the Company.

Also on March 7, 2024, the Company entered into a securities purchase agreement with certain investors, pursuant to which the investors agreed to purchase, and the Company agreed to sell 12,500,000 Common Shares (the “Private Placement Shares”), at a price of $6.00 per Private Placement Share, in a private placement transaction (the “Private Placement”).

The net proceeds to the Company from the Private Placement were $70.1 million, after deducting fees and expenses payable by the Company.

The Company has used the net proceeds from the March 2024 Offering and the March 2024 Private Placement for the research and development of the Company’s product candidates and working capital and general corporate purposes.

The March 2024 Offering and the Private Placement both closed on March 11, 2024.

August 2024 Offering

On August 9, 2024, the Company entered into an underwriting agreement with Leerink Partners LLC and Evercore Group L.L.C., as representatives of the several underwriters named therein, in connection with an underwritten public offering (the “August 2024 Offering”) of (i)9,285,511 Common Shares (the “Shares”), and (ii) to certain investors, pre-funded warrants (the “Pre-Funded Warrants”) to purchase 1,428,775 Common Shares (the "Pre-Funded Warrant Shares"). The offering price for the Shares was $7.00 per share, less underwriting discounts and commissions. The offering price for the Pre-Funded Warrants was $6.999 per Pre-Funded Warrant, which represents the per share public offering price for the Shares less a $0.001 per share exercise price for each such Pre-Funded Warrant.

The net proceeds to the Company from the August 2024 Offering were approximately $70.0 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. The August 2024 Offering closed on August 12, 2024.

The Company has used the net proceeds from the August 2024 Offering to fund the research and development of its product candidates and for working capital and general corporate purposes.

The Pre-Funded Warrants are exercisable at any time after the date of issuance. The exercise price and the number of Pre-Funded Warrant Shares are subject to appropriate adjustment in the event of certain share dividends and distributions, share splits, share combinations, reclassifications or similar events affecting the Common Shares as well as upon any distribution of assets, including cash, securities or other property, to the Company’s shareholders. The Pre-Funded Warrants will not expire and are exercisable in cash or by means of a cashless exercise. A holder of Pre-Funded Warrants may not exercise such Pre-Funded Warrants if the aggregate number of Common Shares beneficially owned by such holder, together with its affiliates, would exceed more than 4.99% or 9.99% (at the initial election of the holder) of the number of Common Shares outstanding following such exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants. A holder of Pre-Funded Warrants may increase or decrease this percentage not in excess of 19.99% by providing at least 61 days’ prior notice to the Company.

October 2024 Exchange Agreements

On October 17, 2024, the Company entered into exchange agreements (the “Exchange Agreements”) with Commodore Capital Master LP, Deep Track Biotechnology Master Fund, LTD and certain other investors (collectively, the “Holders”) pursuant to which the Holders exchanged an aggregate of 8,325,000 of Common Shares for pre-funded warrants to purchase an aggregate of 8,325,000 Common Shares of the Company with an exercise price of $0.001 per share. Such Common Shares were retired upon exchange. The exchange transactions represented offsetting increases and decreases with additional paid-in capital that had no overall impact to the Company’s financial statements.

October 2025 Offering

On October 29, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Jefferies LLC, Leerink Partners LLC and Evercore Group L.L.C., as representatives of the several underwriters named therein (the “Underwriters”), in connection with an underwritten public offering (the “October 2025 Offering”) of 18,375,000 Common Shares, at an offering price of $12.25 per Common Share, less underwriting discounts and commissions. In addition, under the terms of the Underwriting Agreement, the Company granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 2,756,250 Common Shares at the same price, which was exercised by the Underwriters in full on October 30, 2025.

The gross proceeds to the Company from the October 2025 Offering, including the full exercise by the Underwriters of their option to purchase additional Common Shares, were approximately $258.9 million. Net proceeds were approximately $242.8 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. The October 2025 Offering closed on October 31, 2025.

The Company intends to use the net proceeds from the October 2025 Offering to fund the research and development of its product candidates and working capital and general corporate purposes. The Company may also use a portion of the net proceeds to invest in or acquire additional businesses or compounds that the Company believes are complementary to its own.

Common Shares Reserved for Issuance

A summary of shares reserved for issuance as of December 31, 2025 is summarized below:

WARRANTS

2022 USD Financing Warrants

On September 30, 2022, the Company closed an underwritten public offering of 7,058,823 Common Shares and accompanying 2022 USD Financing Warrants (each whole warrant, a "2022 USD Financing Warrant") to purchase 7,058,823 Common Shares. Each 2022 USD Financing Warrant is immediately exercisable for one Common Share at an initial exercise price of $4.25 per Common Share, subject to certain adjustments, and will expire on September 30, 2027.

The below table represents the activity associated with the Company'soutstanding liability-classified 2022 USD Financing Warrants for the year ended December 31, 2025:

The 2022 USD Financing Warrants are liability-classified. Accordingly, the 2022 USD Financing Warrants are recognized at fair value upon issuance and are adjusted to fair value at the end of each reporting period. Any change in fair value is recognized on the consolidated statements of operations and comprehensive loss.

The below table summarizes the activity of the outstanding liability for the 2022 USD Financing Warrants for the year ended December 31, 2025 (in thousands):

STOCK-BASED COMPENSATION

Prior to March 14, 2025, the Company was authorized to issue a number of equity awards equal to 15% of the Company’s issued and outstanding Common Shares under the terms of the 2020 Option Plan, together with Common Shares that were issuable pursuant to outstanding awards or grants under any other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares, including the 2020 PRSU Plan and ESPP. The 2020 Option Plan and the 2020 PRSU Plan were retired effective March 14, 2025, andno further grants will be made under the 2020 Option Plan or the 2020 PRSU Plan. With the retirement of the 2020 Option Plan and the 2020 PRSU Plan, the ESPP and any other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares (including inducement grants made outside a plan) are no longer subject to the 15% limitation from the Prior Plans.

In June 2025, the Company adopted the 2025 Plan, consisting of (a)4,500,000 Common Shares reserved for issuance under the 2025 Plan, and (b) a maximum of 9,318,090 Common Shares (the “Outstanding Award Shares”) consisting of (i) an aggregate of 3,500,979 Common Shares that were subject to outstanding option awards under the 2020 Option Plan and (ii) an aggregate of 5,817,111 Common Shares subject to outstanding restricted stock unit ("RSU") awards and performance share unit ("PSU") awards under the 2020 PRSU Plan. The Outstanding Award Shares will become available for issuance under the 2025 Plan if and as such awards under the 2020 Option Plan and the 2020 PRSU Plan are forfeited or otherwise terminated. As of December 31, 2025,375,935 stock options andno RSUs have been granted under the 2025 Plan.

The Company also grants inducement equity awards consisting of stock options, RSUs or PSUs to newly hired employees as an inducement material to the employees entering into employment with the Company in accordance with NASDAQ Listing Rule 5635(c)(4). All such inducement grants are granted outside of the Company’s equity incentive plans and are approved by the Compensation Committee of the Company’s Board of Directors prior to issuance. During the year ended December 31, 2025, the Company issued inducement grants consisting of 2,358,300 stock options and 284,500 PSUs. As of December 31, 2025, there were an aggregate of 3,403,800 inducement awards outstanding consisting of (i)3,059,300 stock options, (ii)60,000 RSUs and (iii)284,500 PSUs.

Stock Options

The following table summarizes the Company’s stock option activity for the year ended December 31, 2025:

The weighted average grant date fair value of options granted during the year ended December 31, 2025 was $6.24. The aggregate intrinsic value of options vested and exercised during the year ended December 31, 2025 was $2.7 million and $0.9 million, respectively. The expense recognized related to options during the years ended December 31, 2025 and 2024 was $7.7 million and $8.2 million, respectively.

The following table presents the assumptions used for the stock option grants for the years ended December 31, 2025 and 2024:

Share price (fair value of Common Shares)— The fair value of the Company’s Common Shares is determined based upon the closing price of the Common Shares one day prior to grant.

Expected volatility—Due to the Company's limited operating history and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The peer group was developed based on companies in the biotechnology industry. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Risk-free interest rate—The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of the Company's stock options.

Expected life—The expected term represents the period that the stock-based awards are expected to be outstanding. The Company has opted to use the “simplified method” for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option, which is generally between 5 to 10 years.

Dividend yield—The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends and, therefore, used an expected dividend yield of zero.

Restricted Share Units

The following table summarizes the Company's RSU activity for the year ended December 31, 2025:

RSU activity includes PSUs. As of December 31, 2025, there are 1,982,500 PSUs that vest based on the achievement of certain clinical milestones and require service for 36 months after grant. The Company has determined that all of these milestones are probable of achievement, which means that the PSUs would vest at 200% or a total of 3,965,000 PSUs, which is included in the table above. The Company will recognize the related compensation expense for awards that are probable of vesting over the 36 month requisite service period.

The fair market value of RSUs vested during the year ended December 31, 2025 was $7.5 million. The expense recognized related to RSUs during the years ended December 31, 2025 and 2024 was $12.1 million and $8.7 million, respectively.

Employee Share Purchase Plan

In August 2024, the Company commenced the first offering under the ESPP. Subsequent to this offering, new offerings under the ESPP will commence automatically every six months until the earlier of (i) termination or modification by the Compensation Committee of the Company’s Board of Directors and (ii) such time when all Common Shares reserved under the ESPP have been issued. During the year ended December 31, 2025, the Company recognized $0.2 million of expense in relation to its ESPP and issued 66,165 Common Shares under the ESPP.

Stock-based Compensation Expense

Stock-based compensation expense for all equity arrangements for the years ended December 31, 2025 and 2024 was as follows (in thousands):

As of December 31, 2025, there was approximately $21.0 million of total unrecognized stock-based compensation expense related to unvested options granted to employees under the 2025 Plan that is expected to be recognized over a weighted average period of 3.1 years. As of December 31, 2025, there was approximately $27.3 million of total unrecognized stock-based compensation expense related to RSUs granted to employees under the RSU Plan that is expected to be recognized over a weighted average period of 2.4 years. As of December 31, 2025, there was a nominal amount of total unrecognized stock-based compensation expense related to the Common Shares to be issued under the ESPP that is expected to be recognized over a weighted average period of 0.2 years.

Directors’ Deferred Share Unit Plan

On April 16, 2021, the Company adopted the Definium Therapeutics Director’s Deferred Share Unit Plan (the “DDSU Plan”). The DDSU Plan sets out a framework to grant non-employee directors DDSUs, which are cash settled awards. The DDSUs generally vest ratably over twelve months after grant and are settled within 90 days of the date the director ceases service to the Company. For the year ended December 31, 2025, $1.5 million of stock-based compensation expense was recognized relating to the revaluation of the vested DDSUs, and recorded in general and administrative expense in the accompanying consolidated statements of operations and comprehensive loss. For the year ended December 31, 2024, $0.8 million of stock-based compensation expense was recognized relating to the revaluation of the vested DDSUs.

During the years ended December 31, 2025 and 2024, the Company did not issue any additional DDSUs. There were 196,838 DDSUs vested as of December 31, 2025. The liability associated with the outstanding vested DDSU’s was $2.6 million as of December 31, 2025, and was recorded to accrued expenses in the accompanying consolidated balance sheets.

INCOME TAXES

The Components of the loss before income taxes were as follows (in thousands):

Note that the Company is domiciled in Canada; however, predominant operations are in the United States, and under the Company’s tax structure the parent entity files tax returns in both the United States and Canada. Therefore, the Company is reconciling to the United States federal statutory rate. Upon adoption of ASU 2023-09, the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 was as follows (in thousands, except for percentages):

The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2024 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows (in thousands):

The difference between the statutory federal income tax rate and the Company’s effective tax rate in 2025 and 2024 is primarily attributable to the change in valuation allowance, foreign rate differential, executive compensation, and capitalized research expenses.

The following table provides the effect of temporary differences that created deferred income taxes as of December 31, 2025 and 2024. Deferred tax assets and liabilities represent the future effects on income taxes resulting from temporary differences and carryforwards at the end of the respective periods (in thousands):

As of December 31, 2025 and 2024, management assessed the realizability of deferred tax assets and evaluated the need for a valuation allowance for deferred tax assets on a jurisdictional basis. This evaluation utilizes the framework contained in ASC 740, Income Taxes, wherein management analyzes all positive and negative evidence available at the balance sheet date to determine whether all or some portion of the Company’s deferred tax assets will not be realized. Under this guidance, a valuation allowance must be established for deferred tax assets when it is more-likely-than-not that the asset will not be realized. In assessing the realization of the Company’s deferred tax assets, management considers all available evidence, both positive and negative.

In concluding on the evaluation, management placed significant emphasis on guidance in ASC 740, which states that “a cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome.” Based upon available evidence, it was concluded on a more-likely-than-not basis that all deferred tax assets were not realizable as of December 31, 2025 and 2024. Accordingly, a valuation allowance of $109.7 million has been recorded to offset this deferred tax asset. The valuation allowance increased by $39.8 million for the year ended December 31, 2025.

As of December 31, 2025, the Company has accumulated federal and state net operating loss (“NOL”) carryforwards of $323.4 million and $20.0 million, respectively. The federal NOL carryforwards can be carried forward indefinitely, subject to 80% taxable income limitation. The state NOL carryforwards will begin to expire in 2037, unless previously utilized.

As of December 31, 2025, the Company had combined foreign net operating loss carryforwards available to reduce future taxable income of approximately $36.0 million, of which $0.8 million carryforward indefinitely, $29.9 million begin to expire in 2040, and $5.3 million begin to expire in 2028.

Utilization of the Company’s net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. Such an annual limitation could result in the expiration or elimination of the net operating loss and tax credit carryforwards before utilization. Management believes that the limitation will not limit utilization of the carryforwards prior to their expiration.

The Company is subject to taxation in the United States, various states, Canada, Australia and Switzerland. The Company has not been notified that it is under audit by the IRS or any state or foreign taxing authorities, however, due to the presence of NOL carryforwards, all of the income tax years remain open for examination in each of these jurisdictions.

Deferred income taxes have not been provided for undistributed earnings of the Company’s consolidated foreign subsidiaries because of the Company’s intent to reinvest such earnings indefinitely in active foreign operations.

As of December 31, 2025 and 2024, the Company didnot have a liability for unrecognized tax benefits.

The Company didnot pay income taxes in any jurisdiction for the year ended December 31, 2025.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2025 and 2024, there wereno interest and penalties recognized.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) -Improvements to Income Tax Disclosures. The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The standard is effective for the Company beginning in fiscal year 2025.The Company has adopted ASU 2023-09 for the tax year ended December 31, 2025, applying the new standard prospectively. The impact of ASU 2023-09 to the Company's income tax footnote included expanded rate reconciliation detail disclosing additional information related to foreign tax effects and income taxes paid (net of refunds), by jurisdiction.

The One Big Beautiful Bill Act of 2025 ("OBBBA") was signed into law on July 4, 2025. The OBBBA makes changes to the U.S. corporate income tax rules including immediate expensing of domestic research and development costs while foreign expenditures will continue to be capitalized and amortized over 15 years, and modifications to the timing of the deduction for interest expense. The enactment of the legislation did not have a material impact on the Company's income tax rate during the year ended December 31, 2025 and is not expected to have a material impact on the Company's income tax rate in future years.

COMMITMENTS AND CONTINGENCIES

As of December 31, 2025 and 2024, the Company has obligations to make future payments, representing significant research and development contracts and other commitments that are known and committed in the amount of approximately $96.8 million and $103.8 million, respectively. Most of these agreements are cancelable by the Company with notice. These commitments include agreements related to the conduct of the clinical trials, sponsored research, manufacturing and preclinical studies.

The Company enters into research, development and license agreements in the ordinary course of business where the Company receives research services and rights to proprietary technologies. Milestone and royalty payments that may become due under various agreements are dependent on, among other factors, clinical trials, regulatory approvals and ultimately the successful development of a new drug, the outcome and timing of which are uncertain.

The Company periodically enters into research and license agreements with third parties that include indemnification provisions customary in the industry. These guarantees generally require the Company to compensate the other party for certain damages and costs incurred as a result of claims arising from research and development activities undertaken by or on behalf of the Company. In some cases, the maximum potential amount of future payments that could be required under these indemnification provisions could be unlimited. These indemnification provisions generally survive termination of the underlying agreement. The nature of the indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay. Historically, the Company has not made any indemnification payments under such agreements and no amount has been accrued in the consolidated financial statements with respect to these indemnification obligations.

During April 2022, the Company entered into athree-year operating lease for office space located in North Carolina with an expiration date of September 30, 2025. Total lease payments under the lease amounted to approximately $0.2 million. In June 2025, the Company amended the lease. The lease amendment extends the lease term from September 30, 2025 to February 1, 2031, and grants the Company additional space. The Company has rent abatement for the first 5 months of the new lease amendment. Total lease payments under the amended lease are expected to amount to approximately $0.8 million. In June 2025, a right-of-use asset and corresponding lease liability for $0.6 million were recorded on the accompanying consolidated balance sheet. The right-of-use asset is recorded inother non-current assets in the accompanying consolidated balance sheet. The current portion of the lease liability is recorded inaccrued expenses and the noncurrent portion is recorded in other non-current liabilities in the accompanying consolidated balance sheet. The incremental borrowing rate utilized in the determination of the lease liability was 10.25%.

From time to time, the Company may become involved in litigation or other legal proceedings arising in the ordinary course of business. The Company will accrue a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of December 31, 2025 and 2024, the Company is not a party to any material litigation, and the Company does not currently have any contingencies related to ongoing legal matters.

CREDIT FACILITY

On August 11, 2023, the Company and certain of its subsidiaries party thereto, as co-borrowers (together with the Company, the “Borrowers”) entered into a Loan and Security Agreement (the “Loan Agreement”) with K2 HealthVentures LLC (“K2HV”), as administrative agent and Canadian collateral agent for lenders thereunder (K2HV, together with any other lender from time to time, the "Lenders"), and Ankura Trust Company, LLC, as collateral trustee for the Lenders, providing for an aggregate principal amount of term loans of up to $50.0 million (the “Term Loans”).

On April 18, 2025 (the “Effective Date”), the Borrowers, entered into the First Amendment to the Loan Agreement with K2HV (as amended by the First Amendment, the “Amended Loan Agreement”).

The Amended Loan Agreement provides for, among other things: (i) an aggregate principal amount of term loans (the “Amendment Term Loans”) of up to $120.0 million, consisting of (A) a new Restatement First Tranche Term Loan (as defined in the Amended Loan Agreement) of $42.0 million, which was funded on the Effective Date, a portion of the proceeds of which was used on the Effective Date to refinance in full all Term Loans outstanding under the Loan Agreement, and to pay fees and expenses in connection with the Amended Loan Agreement and the refinancing of the existing Term Loans, (B) subsequent tranches of term loans totaling up to $28.0 million, subject to the occurrence of certain time-based clinical and regulatory milestones and (C) an additional tranche of term loans of up to $50.0 million upon the Company’s request, subject to review by the Lenders of certain information from the Company and discretionary approval by the Lenders, (ii) to the extent any Amendment Term Loans other than the Restatement First Tranche Term Loans are made during the term of the Amended Loan Agreement, a minimum liquidity covenant, beginning on the earlier to occur of (x) July 1, 2026 (which may be extended to July 1, 2027 to the extent the Company has achieved certain fundraising milestones) and (y) the date on which certain clinical and regulatory milestones are not achieved, which covenant shall be waived in any period where the Company’s market capitalization exceeds $500.0 million, (iii) a decrease in the interest rate applicable to all Amendment Term Loans under the Amended Loan Agreement to the greater of (x)10.25% and (y) the sum of (a) the Prime Rate as reported in The Wall Street Journal plus (b)2.75% per annum, and (iv) a conversion right at the election of the Lenders at any time following the Effective Date and prior to the full repayment of the Amendment Term Loans to convert up to $7.0 million of the outstanding Amendment Term Loans into the Company’s common shares (the “Amendment Conversion Shares”), at conversion prices ranging from $4.01 per Amendment Conversion Share to $9.00 per Amendment Conversion Share.

The embedded conversion option qualifies for a scope exception from derivative accounting because it is both indexed to the Company’s shares and meets the conditions for equity classification. On July 22, 2025, under the terms of the Amended Loan Agreement, K2HV converted $1.0 million of the outstanding Amendment Term Loans into 249,377 Common Shares. As of December 31, 2025, K2HV may convert up to an additional $6.0 million of the outstanding Amendment Term Loans into Common Shares at conversion prices ranging from $7.02 per Amendment Conversion Share to $9.00 per Amendment Conversion Share.

The Amendment Term Loans mature on April 1, 2029, provided that upon the occurrence of certain events the maturity date may be extended to October 1, 2029. The obligations of the Borrowers under the Amended Loan Agreement are secured by substantially all of the assets of the Borrowers, excluding intellectual property. Other than as described above, the proceeds of borrowings under the Amended Loan Agreement are expected to be used for working capital and other general corporate purposes and/or to further support commercial activities and/or business development opportunities. Once repaid, the Amendment Term Loans may not be reborrowed. The Company was in compliance with the Amended Loan Agreement as of December 31, 2025.

In accordance with ASC 470-50, Debt Modifications and Extinguishments, the Company evaluated the Amended Loan Agreement to determine whether it should be accounted for as a modification or extinguishment. As a result of this analysis, the Amended Loan Agreement was accounted for as a modification and no gain or loss was recognized. Transaction costs incurred from or paid on behalf of K2HV of approximately $0.4 million were capitalized as a deferred debt discount and will be amortized over the term of the Amended Loan Agreement. Transaction costs incurred with third parties directly relating to the Amended Loan Agreement were expensed as incurred.

The Company recorded $5.5 million in interest expense for the year ended December 31, 2025, which included a $1.7 million final payment in connection with the Amended Loan Agreement and the refinancing of the existing Term Loans.

Future expected repayments of principal amount due on the credit facility as of December 31, 2025 are as follows (in thousands):

As of December 31, 2025, the Company estimated the fair value of the credit facility to be $41.7 million, assuming $6.0 million of principal (the amount of Amendment Conversion Shares in-the-money as of December 31, 2025) is converted into Amendment Conversion Shares.

EMPLOYEE BENEFIT PLANS

The Company adopted a 401(k) savings plan for its employees in 2023. The Company is required to make matching contributions to the 401(k) plan equal to 100% of the first 3% of employee contributions, and 50% on the next 2% of employee contributions. The Company contributed $0.8 million and $0.5 million during the years ended December 31, 2025 and 2024, respectively.

SEGMENT REPORTING

The Company hasone reportable segment relating to the research and development of the Company’s neurological drug development platform.

The Company’s CODM, its Chief Executive Officer, reviews the Company’s operations, including reviewing budgets and trial related data, and decides how to allocate resources and assess performance. When evaluating the Company’s financial performance, the CODM regularly reviews total expenses and total assets and the CODM makes decisions using this information on a consolidated basis. The CODM uses consolidated net income or loss as a measure of profit or loss in allocating resources and assessing segment performance. In addition to the expense categories included within net income presented on the Company's Consolidated Statements of Operations and Comprehensive Loss, see below for additional expense detail that is routinely reviewed by the CODM (in thousands):

Internal expenses include employee-related costs such as salaries, related benefits, non-cash stock-based compensation expense for employees, and allocated operational expenses. External expenses include services rendered by third party providers for research and development as well as general and administrative activities.