Tectonic Therapeutic, Inc.

(in thousands, except share and per share data )

1. NATURE OF BUSINESS

Description of the Business

Tectonic Therapeutic, Inc. (formerly AVROBIO, Inc.) (the “Company” or “Tectonic”) is a clinical-stage biotechnology company focused on the discovery and development of therapeutic proteins and antibodies that modulate the activity of G-protein coupled receptors (“GPCRs”). Leveraging its proprietary technology platform called GEODe™ (GPCRs Engineered for Optimal Discovery), Tectonic is focused on developing biologic medicines that overcome the existing challenges of GPCR-targeted drug discovery and harness the human body to modify the course of disease. Tectonic focuses on areas of significant unmet medical need, often where therapeutic options are poor or nonexistent, as these are areas where new medicines have the potential to improve patient quality of life.

Merger

On June 20, 2024, the Company completed its previously announced merger transaction in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of January 30, 2024 (the “Merger Agreement”) with AVROBIO, Inc. (“AVROBIO”), pursuant to which Alpine Merger Subsidiary, Inc., a wholly owned subsidiary of AVROBIO, merged with and into the entity formerly known as Tectonic Therapeutic, Inc., now known as Tectonic Operating Company, Inc. (“Legacy Tectonic”), with Legacy Tectonic continuing as a wholly owned subsidiary of the surviving corporation of AVROBIO (the “Merger”). The Merger was accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States of America (“GAAP”), with AVROBIO treated as the acquired company for financial reporting purposes, and Legacy Tectonic treated as the accounting acquirer. Accordingly, the historical financial statements prior to the Merger reflect those of Legacy Tectonic.

Risks and Uncertainties

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance reporting capabilities.

The Company’s proprietary GEODe™ platform is currently in development. There can be no assurance that current and future research and development activities will be successfully completed, that adequate protection for owned intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies.

Liquidity and Capital Resources

Since inception, the Company has incurred recurring losses and negative cash flows from operations and expects such losses to continue in the future as it conducts research and development activities and continues to develop its product candidates. The Company generated net losses of$74.2 million and$58.0 million for the years ended December 31, 2025 and 2024, respectively and had an accumulated deficit of $222.7 million as of December 31, 2025. The Company has financed its operations primarily through the sale and issuance of common stock, convertible equity instruments, and the Merger. In February 2025, the Company sold shares of its common stock under a securities purchase agreement in exchange for net proceeds of approximately $173.1 million. The Company has devoted substantially all of its financial resources and efforts to business planning, conducting research and development, recruiting management and technical staff, and raising capital. The Company also has an effective shelf registration statement on Form S-3 filed with the SEC, which may be used to offer from time to time any combination of common stock, preferred stock, debt securities, and warrants up to an aggregate amount of $400 million. Of this amount, the Company has the ability to sell up to $100 million of additional shares of common stock to the public through an at the market offering (“ATM”). During the year ended December 31, 2025, the Company did not sell any shares under the ATM program. As of December 31, 2025, the full $100 million remained available for issuance under the ATM program.

As the Company continues to develop its proprietary platform and potential product candidates, it will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. It may never achieve profitability, and unless and until it does, it will continue to need to raise additional capital to fund its operations. The Company had cash and cash equivalents of$253.8 million as of December 31, 2025. In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.

The Company believes that its existing cash and cash equivalents will be sufficient to allow the Company to fund operations beyond twelve months from the date of issuance of these consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance refers to U.S. GAAP as codified in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”).

Principles of Consolidation

The Company consolidates the financial statements of its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reverse Stock Split and Exchange Ratio

Upon the closing of the Merger, each outstanding share of Legacy Tectonic’s common stock, including outstanding and unvested restricted stock, was converted into the right to receive a number of shares of AVROBIO’s common stock based on the Exchange Ratio of 0.53, after giving effect to the 1-for-12 reverse stock split of AVROBIO common stock that was effected on June 20, 2024. The exchange ratio was retroactively applied to all outstanding common shares, convertible preferred shares, stock options and restricted stock for all periods presented.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. These estimates are based on historical experience and other assumptions that the Company believes are reasonable under the circumstances. Revisions to estimates are recorded in the period in which the change becomes known.

Significant estimates include the valuation of stock-based awards, prepaid and accrued research and development activities, and income taxes. Actual results may differ from these estimates, and such differences could be material to the Company’s financial position and results of operations.

Foreign Currency

The operations of each of the Company’s subsidiaries are measured in the currency of the primary economic environment in which the subsidiary operates (the “functional currency”). Assets and liabilities of foreign subsidiaries whose functional currency is the local currency are translated into U.S. dollars using period-end exchange rates. Income and expense items are translated at the average exchange rate in effect during each fiscal month. Translation adjustments resulting from the remeasurement of foreign subsidiary financial statements are included as a component of Accumulated Other Comprehensive Loss in the Consolidated Balance Sheets. Gains and losses from foreign currency transactions are included in Other Income (Expense), Net in the Consolidated Statements of Operations and Comprehensive Loss.

Segment Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is made available for evaluation by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company’s CODM is its chief executive officer, who reviews financial information on a consolidated basis for the purpose of making operating decisions, assessing financial performance, and allocating resources. The Company manages and evaluates its operations on a consolidated basis and has one reportable segment. The CODM primarily evaluates the Company’s performance based on net loss and reviews significant expense categories at the consolidated level. Segment assets are not separately monitored, as the CODM focuses on cash and expense impact. Refer to Note 16, Segment Information, for additional disclosures regarding the Company’s single reportable segment, including segment net loss and significant expense categories.

Summary of Significant Accounting Policies

Cash, Cash Equivalents, Restricted Cash, and Concentration of Credit Risk

The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents consisted of cash on deposit with banks denominated in U.S. dollars and investments in money market funds.

Restricted cash represents cash held to support letters of credit related to certain operating leases and is classified within other current or non-current assets on the Consolidated Balance Sheets based on the expected timing of release.

The following table provides a reconciliation of cash, cash equivalents and restricted cash within the Consolidated Balance Sheets that total the same such amounts shown in the Consolidated Statements of Cash Flows:

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and restricted cash. The Company maintains its cash, cash equivalents, and restricted cash with multiple accredited financial institutions. Deposits held with these institutions may exceed federally insured limits. The Company has not experienced any losses related to these accounts and does not believe it is exposed to significant credit risk beyond the normal risks associated with commercial banking relationships.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally ranging from three to five years, depending on the nature of the asset. Leasehold improvements are amortized over the shorter of the asset’s estimated useful life or the remaining lease term.

Construction-in-progress reflects amounts incurred for property and equipment that have not yet been placed in service and, accordingly, are not depreciated or amortized until the related assets are ready for their intended use.

Expenditures for major renewals and improvements that extend the useful life of an asset or increase its functionality are capitalized when they meet the Company’s capitalization criteria. Routine maintenance and minor repairs that do not extend the useful life of an asset are expensed as incurred.

Upon retirement or disposal of property and equipment, the cost of the asset and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in operating expenses in the Consolidated Statements of Operations and Comprehensive Loss.

Long-Lived Assets

The Company reviews long-lived assets, which consist primarily of property and equipment, for impairment in accordance with ASC 360, Property, Plant, and Equipment. Long-lived assets are evaluated for recoverability whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Asset groups are determined at the lowest level for which identifiable cash flows are largely independent.

Recoverability is assessed by comparing the carrying amount of the asset group to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If the carrying amount exceeds the undiscounted cash flows, an impairment loss is recognized and measured as the amount by which the carrying amount exceeds the asset group’s fair value. Fair value is determined using valuation techniques consistent with ASC 820, Fair Value Measurement, which may include market and income approaches, as appropriate.

Changes in estimates of useful lives or residual values are accounted for prospectively and result in adjustments to depreciation or amortization expense over the remaining useful lives of the related assets.

No impairment losses were recognized during the years ended December 31, 2025 and 2024.

Fair Value Measurements

The Company measures certain financial instruments at fair value on a recurring basis. Fair value is defined as the price that would be received to sell 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 at the measurement date. Fair value is a market-based measurement and is determined based on assumptions that market participants would use in pricing an asset or liability.

The Company’s financial instruments measured at fair value consist solely of cash equivalents, which are valued using quoted prices in active markets. Accordingly, these instruments are classified within Level 1 of the fair value hierarchy. The Company does not have any financial instruments classified within Level 2 or Level 3 of the fair value hierarchy.

A three-level fair value hierarchy has been established to prioritize the inputs used in measuring fair value as follows:

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

Level 2 — Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or valuations with significant inputs that are observable, either directly or indirectly.

Level 3 — Valuations that require inputs that are both significant to the fair value measurement and unobservable.

Financial instruments are classified in their entirety within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Leases

The Company accounts for leases in accordance with ASC Topic 842, Leases (“ASC 842”). The Company’s leases primarily consist of real estate and laboratory equipment. At lease inception, the Company determines whether an arrangement contains a lease and classifies it as either an operating or finance lease. The Company’s operating and finance lease assets are included in right-of-use assets, net, and the current and non-current portions of the lease liabilities are included in lease liabilities and lease liabilities, non-current, respectively, on the Consolidated Balance Sheets. Right-of-use assets and lease liabilities are initially measured at the present value of future lease payments over the lease term, including fixed payments and certain in-substance fixed payments. Right-of-use assets are based on the corresponding lease liability, adjusted for (i) payments made at or before the commencement date, (ii) initial direct costs incurred, and (iii) tenant incentives under the lease. Variable lease payments that do not depend on an index or rate are excluded from the measurement of lease liabilities and are recognized as expense as incurred.

The Company does not account for renewals or early terminations unless it is reasonably certain that such options will be exercised at lease commencement. Lease modifications are accounted for in accordance with ASC 842 when the modification results in a separate contract or a remeasurement of the existing lease. The Company has elected the practical expedient to account for lease and non-lease components as a single lease component for both operating and finance leases.

Operating lease expense is recognized on a straight-line basis over the lease term. Finance lease right-of-use assets are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the leased asset. The discount rate used to calculate the present value of lease liabilities is either the rate explicitly stated in the lease for finance leases or the Company’s incremental borrowing rate at the lease commencement date. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located. In determining the incremental borrowing rate, the Company considers factors including its credit rating, interest rates for similar debt instruments of entities with comparable credit ratings, the lease term, and the currency in which the lease is denominated.

The Company has elected the practical expedient to not recognize leases with a lease term of twelve months or less (“short-term leases”) on the balance sheet. Lease payments for such short-term leases are recognized as expense on a straight-line basis over the lease term.

Refer to Note 10, Leases, for additional information.

The Company expenses research and development costs as incurred in accordance with ASC 730, Research and Development. These costs primarily support discovery activities and the development of the Company’s product candidates and technology platform, including preclinical and clinical development of its development programs. Expenses include fees paid to third parties and contract research organizations (“CROs”), costs to manufacture materials for studies and trials, including payments to contract development and manufacturing organizations (“CDMOs”), and employee-related costs such as salaries, bonuses, benefits, and stock-based compensation. The Company also includes facilities-related costs, depreciation, and other direct or allocated expenses for rent, maintenance, and utilities, as well as licensing and license maintenance fees under agreements with no alternative future use and costs incurred to meet regulatory requirements.

The Company accrues expenses for research and development activities performed by third parties based on the level of services performed, the progress of studies (including the phase or completion of events), and contracted costs. Estimated costs of research and development provided but not yet invoiced are recorded in accrued expenses and other current liabilities on the Consolidated Balance Sheets. Accruals are adjusted as actual timing of services or levels of effort differ from estimates. Payments made to third parties in advance of the related services are recorded as prepaid expenses until the services are rendered. The Company estimates the period over which such services will be performed based on the terms of the agreements and the level of effort expected in each period.

Stock-Based Compensation Valuation and Expense

The Company measures all stock options and other stock-based awards granted to employees, non-employees, and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award, in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”) . Restricted stock units (“RSUs”) are measured and recognized over the vesting period based on the quoted market price of the Company’s common stock on the grant date.

The Company utilizes the Black-Scholes-Merton (“BSM”) option pricing model to determine the estimated fair value of stock options granted to employees and non-employees, including directors. In addition to the fair value of the Company’s common stock, the BSM model requires several key assumptions:

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Expected Term—The expected life represents the period of time that the stock options are expected to be outstanding. Because the Company does not have substantial historical exercise behavior, it determines the expected term in accordance with the simplified method, which is an average of the contractual term of the stock option and its vesting period.

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Expected Volatility— The estimated volatility is determined by evaluating the average historical volatility of a peer group of companies for the period preceding the stock option grant for a term that is approximately equal to the stock options’ expected term.

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Risk-Free Interest Rate—The risk-free interest rate is based on the implied yield currently available on U.S. Treasury issues with a term that is equal to the stock options’ expected term at the grant date.

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Expected Dividend—The expected dividend yield is assumed to be zero as the Company has not declared or paid dividends to date and does not anticipate declaring dividends for the foreseeable future.

The Company accounts for forfeitures as they occur. Stock-based compensation expense is recorded in research and development expense or general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss, based on the employee or non-employee’s functional role within the Company. See Note 8, Equity Incentive Plans, for additional information.

Income Taxes

The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, Income Taxes(“ASC 740”), 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, the Company determined deferred tax assets and liabilities on the basis of the differences between the consolidated financial statements and tax bases of assets and liabilities by 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 income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company 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 the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, it 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 in accordance with ASC 740 on the basis of a two-step process in which (1) the Company 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 (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company 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. Refer to Note 13, Income Taxes, for further information.

Net Loss per Share

Basic and diluted net loss per common share is calculated in accordance with ASC 260, Earnings per Share, by dividing net loss by the weighted-average number of common shares outstanding during the period. Potentially dilutive securities, including stock options and restricted stock units, are excluded from the computation of diluted net loss per share because their effect would be anti-dilutive for all periods presented. Refer to Note 9, Net Loss per Share, for the detailed computation of basic and diluted net loss per share and information regarding the potentially dilutive securities excluded from the computation.

Comprehensive Loss

Comprehensive loss is determined in accordance with ASC 220, Comprehensive Income, and includes net loss and other changes in stockholders’ equity resulting from transactions and economic events other than those with stockholders. For the Company, comprehensive loss consists of net loss plus foreign currency translation adjustments for all periods presented.

Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes(Topic 740) (“ASU 2023-09”), which enhances the income tax disclosure requirements for public entities on an annual basis. Under ASU 2023-09, public entities will be required to disclose in their rate reconciliation, on an annual basis, both percentages and amounts in their reporting currency for certain categories in a tabular format, with accompanying qualitative disclosures. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company adopted ASU 2023-09 during the year ended December 31, 2025. The adoption of this standard impacted the Company’s disclosures but did not have a material impact on its consolidated financial statements, results of operations, or financial position.

Recently Issued Accounting Standards Not Yet Adopted

In January 2025, the FASB issued ASU No. 2025-01 to clarify the effective date of ASU No. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), which requires disaggregated disclosure of certain income statement captions within the footnotes to the financial statements. ASU 2025-01 requires adoption of the amendments of ASU 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270) (“ASU 2025-11”) to clarify the applicability of ASC 270 and improve the organization of the guidance. The ASU clarifies when an entity is subject to interim reporting requirements and establishes disclosure principles for material events occurring since the end of the most recent annual reporting period. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-12, Improvements to Accounting Standards Codification(“ASU 2025-12”), which addresses stakeholder suggestions and makes incremental improvements to U.S. GAAP. The amendments clarify guidance, correct errors, and make minor improvements to the Accounting Standards Codification. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating the impact of this standard on its financial statements and related disclosures.

3. Merger

As described in Note 1, Nature of the Business, the Company completed its Merger with AVROBIO on June 20, 2024. The Merger was accounted for as a reverse recapitalization in accordance with GAAP, with Legacy Tectonic as the accounting acquirer of AVROBIO. At the effective time of the Merger, substantially all the assets of AVROBIO consisted of cash and cash equivalents, as well as other nominal assets. Under such reverse recapitalization accounting, the assets and liabilities of AVROBIO were recorded at their fair value at the effective time of the Merger, which approximated book value due to the short-term nature. No goodwill or intangible assets were recognized. Consequently, the consolidated financial statements of the Company reflect the historical operations of Legacy Tectonic for accounting purposes together with the issuance of shares to the former shareholders of AVROBIO, the legal acquirer, and a recapitalization of the equity of Legacy Tectonic, the accounting acquirer. The exchange ratio was retroactively applied to all outstanding common shares, convertible preferred shares, stock options and restricted stock of Legacy Tectonic.

As part of the recapitalization, Legacy Tectonic recognized the assets and liabilities listed below:

The Company incurred transaction costs of $9.3 million which was recorded as a reduction to additional paid-in capital in the Consolidated Balance Sheet for the year ended December 31, 2024.

4. FAIR VALUE MEASUREMENTS

The following tables present information about financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:

Money market funds are included in cash and cash equivalents on the Consolidated Balance Sheets and are measured at fair value on a recurring basis. These instruments are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets for identical assets.

There wereno transfers between the Level 1, Level 2 or Level 3 categories during the years ended December 31, 2025 and 2024.

The carrying amounts reflected in the Company's Consolidated Balance Sheets for prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities approximate their fair values, due to their short-term nature.

SAFE Liabilities

From October through December 2023, Legacy Tectonic entered into multiple SAFE agreements with certain existing investors and received proceeds of $34.1 million. Prior to redemption, the SAFE liabilities were valued using a probability weighted scenario analysis and discount rates derived by application of the build-up method to reflect the cost of equity. The valuation model required a variety of inputs, including the probability of occurrence of events that would trigger conversion or redemption of the SAFEs, the expected timing of such events, and a discount rate.

Upon the closing of the Merger, the principal balance of the SAFE instruments was automatically redeemed for 2,752,216 shares of Legacy Tectonic common stock at the conversion price of $12.40 per share immediately prior to the Merger closing. As such the valuation inputs utilized to adjust the SAFE liability to fair value upon the closing of the Merger was $12.40. At closing, shares of Legacy Tectonic common stock issued pursuant to the redemption of Legacy Tectonic SAFEs were converted into 1,470,839 shares of AVROBIO common stock based on the Exchange Ratio, pursuant to the Merger Agreement. No level 3 instruments remain outstanding after the Merger.

The following table presents activity for the SAFE liabilities that were measured at fair value using significant unobservable Level 3 inputs during the year ended December 31, 2024:

5. PROPERTY and EQUIPMENT, NET

Property and equipment, net is comprised of the following:

Depreciation expense was $1.0 million and $1.2 million for the years ended December 31, 2025 and 2024, respectively, and is primarily attributable to research and development activities.

6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities is comprised of the following:

7. STOCKHOLDERS’ EQUITY

Common Stock

The Company is authorized to issue 150,000,000 shares of common stock at a par value of $0.0001 per share. Holders of voting common stock are entitled to one vote per share. In addition, holders of voting common stock are entitled to receive dividends, if and when declared by the Company’s Board of Directors. As of December 31, 2025, no dividends have been declared.

The Company reserved common stock for future issuance as follows:

Preferred Stock

The Company is authorized to issue 10,000,000 shares of undesignated preferred stock at a par value of $0.0001 per share, however no such shares were issued or outstanding as of December 31, 2025.

Convertible Preferred Stock

Prior to the conversion upon the closing of the Merger, Legacy Tectonic issued Series A-1, A-2, A-3 and A-4 convertible preferred stock (the “Convertible Preferred Stock”). Upon the closing of the Merger, all outstanding shares of the Convertible Preferred Stock were converted into 3,647,675 shares of common stock. No shares of Convertible Preferred Stock are authorized for issuance as of December 31, 2025.

Changes in Capital Structure

In February 2025, the Company entered into a securities purchase agreement (the “Private Placement”) pursuant to which the Company issued an aggregate of 3,689,465 shares of common stock, at a price of $50.00 per share to institutional accredited investors and $54.14 per share to individual accredited investors that are either an officer or director of the Company. The net proceeds from the Private Placement were approximately $173.1 million.

Upon the closing of the Merger as described in Note 3, Merger, all outstanding shares of convertible preferred stock were converted into an aggregate of 3,647,675 shares of the Company’s common stock and $80.6 million of mezzanine equity was reclassified to common stock and additional paid-in capital. As of December 31, 2024, there wereno shares of convertible preferred stock issued or outstanding.

Upon the closing of the Merger, the principal balance of the SAFE instruments was automatically redeemed for 2,752,216 shares of Legacy Tectonic common stock at the conversion price of $12.40 per share immediately prior to the Merger closing. At closing, shares of Legacy Tectonic common stock issued pursuant to the redemption of Legacy Tectonic SAFEs were converted into 1,470,839 shares of common stock based on the Exchange Ratio, pursuant to the Merger Agreement.

Concurrently with the closing of the Merger, on June 20, 2024, certain investors completed the purchase of shares of Legacy Tectonic common stock pursuant to the Subscription Agreement at a price of $12.40 per share for an aggregate purchase price of $96.6 million. The shares of Legacy Tectonic common stock that were issued pursuant to the Subscription Agreement were converted into 4,163,606 shares of common stock upon the closing of the Merger based on the exchange ratio, pursuant to the Merger Agreement.

8. EQUITY INCENTIVE PLANS

2019 Equity Incentive Plan

The Legacy Tectonic 2019 Equity Incentive Plan (the “2019 Plan”) provides employees, consultants and advisors and non-employee members of the Board of Directors with the opportunity to receive grants of stock options, stock awards and equity awards. Following the effectiveness of the 2024 Equity Incentive Plan as described below, no further grants are to be made under the 2019 Plan; however, outstanding equity awards granted under the 2019 Plan continue to be governed by the terms of the 2019 Plan.

2024 Equity Incentive Plan

On June 20, 2024, the Company adopted the 2024 Equity Incentive Plan (the “2024 Plan”) which became effective upon completion of the Merger. The 2024 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, consultants, and non-employee directors of the Company. The number of shares of common stock available for issuance under the 2024 Plan will automatically increase on January 1st of each year through January 1, 2034, in an amount equal to the lesser of (a) 5% of the total number of shares of common stock issued and outstanding determined as of the day prior to such increase, or (b) an amount determined by the Board of Directors. On January 1, 2026, the number of shares of common stock available for issuance under the 2024 Plan automatically increased by 936,912 shares.

2024 Employee Stock Purchase Plan

On June 20, 2024, the Company adopted the 2024 Employee Stock Purchase Plan (the “ESPP”), which became effective upon completion of the Merger. The number of shares of our common stock available for issuance under the ESPP will automatically increase on January 1st of each year through 2034, in an amount equal to the lesser of (a) 1% of the total number of shares of common stock issued and outstanding determined as of the day prior to such increase, (b) a number of shares qual to three times the initial share reserve , or (c)an amount determined by the Board of Directors. On January 1, 2026, the number of shares of common stock available for issuance under the ESPP increased by 187,382 shares. No offering periods under the ESPP have been initiated as of December 31, 2025.

Stock Options

Stock options granted to employees generally vest over a four-year period in multiple tranches and have a contractual term of ten years. Options granted to the Board of Directors generally vest over a one-year period.

The following table summarizes the stock option activity under the 2019 Plan and 2024 Plan for the year ended December 31, 2025:

During the years ended December 31, 2025 and 2024, the Company granted options with a weighted-average grant-date fair value of $29.04 and $14.90 per share, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2025 and 2024 was $3.2 million and $5.6 million, respectively.

The following table summarizes the stock option activity for the options that were assumed from AVROBIO upon the Merger closing for the year ended December 31, 2025:

As of December 31, 2025, no unexercised or outstanding stock options related to the Merger remain.

Fair Value of Stock Options Granted

The Company utilizes the BSM option-pricing model to determine the fair value of stock options granted.

The following table summarizes the assumptions used for estimating the fair value of stock options granted under the BSM option-pricing model:

Restricted Stock Units

Restricted stock units (“RSUs”), which are granted to employees, generally vest over a three-year period. The value of an RSU award is based on the quoted market price of the Company's stock on the grant date. The shares underlying the RSUs are not issued until the RSUs vest. The following table summarizes the RSU activity for the year ended December 31, 2025:

During the years ended December 31, 2025 and 2024, the Company granted RSUs with a weighted-average grant date fair value of $36.13 and $44.62 per unit, respectively. The total fair value of RSUs vested during the year ended December 31, 2025 was $0.1 million. No RSUs vested during the year ended December 31, 2024.

Upon vesting of RSUs, the Company withholds shares with a fair value equal to the minimum statutory tax withholding requirements. During the year ended December 31, 2025,859 shares were withheld for tax purposes. Shares withheld are accounted for as a reduction of additional paid-in capital within stockholders’ equity.

Stock-Based Compensation Expense

The following table is a summary of stock-based compensation expense recognized by function:

The following table summarizes the unrecognized compensation expense and the weighted-average remaining period over which it is expected to be recognized, by type of award:

Modification of Certain Stock Options

In July 2024, the Company entered into a separation agreement with the Company’s Chief Operating Officer (the “Former Executive”). As part of the termination of employment, the Former Executive served as an advisor to the Company through March 31, 2025 (“Consulting Period”) on an as needed basis. Pursuant to the separation agreement, certain modifications to the Former Executive’s vested and non-vested stock option awards were executed including continued vesting of options during the Consulting Period and the extension of the post-termination exercise period of certain stock option awards. The services performed during the Consulting Period do not qualify as substantive services under ASC 718, Compensation—Stock Compensation; therefore, the continued vesting of these awards represents a modification to the original award. During the year ended December 31, 2024, the Company recorded the incremental stock-based compensation expense of $0.4 million for the modification of the stock options of the Former Executive. This amount is included in general and administrative expenses on the Consolidated Statement of Operations and Comprehensive Loss.

9. Net loss per share

The following table summarizes the computation of basic and diluted net loss per share:

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive:

10. Leases

The Company has lease obligations, including amounts due on leases of certain laboratory equipment and office and laboratory space under the terms of non-cancelable operating and finance leases.

Office and Laboratory Facilities Lease

In November 2020, the Company executed a facilities lease agreement to occupy approximately 19,000 square feet of office and laboratory space, which was subsequently amended on April 21, 2022. The lease requires the Company to pay fixed base rent, which is included in the measurement of the lease, as well as its proportionate share of the facilities operating expenses, which are treated as variable lease costs based on the Company’s election to combine lease and associated non-lease components and are excluded from the measurement of the lease. The lease expires on January 31, 2026, and, consistent with the Company’s current facilities plan noted below, will not be renewed. Operating lease cost is allocated between research and development and general and administrative expenses based on the usage of the leased facilities. The Company recognizes variable lease costs for operating leases, including its proportionate share of facilities operating expenses. These costs are excluded from the measurement of the lease liability. The reported lease term excludes the Company’s renewal options under its office and laboratory lease agreements, as the Company does not consider it reasonably certain to exercise the options.

The Company also has a limited operating lease arrangement for laboratory space that provides the right to use designated research premises through December 31, 2026. The Company initially entered into the lease in December 2023 for a one-year term. The lease term has subsequently been extended pursuant to amendments executed in the ordinary course of business, including an amendment entered into in December 2025 that extended the term through December 31, 2026. The Company has recognized a corresponding right-of-use asset and lease liability of $0.8 million on its Consolidated Balance Sheet related to this arrangement. The lease requires the Company to pay fixed base rent, which is included in the measurement of the lease liability.

Laboratory Equipment Leases

The Company has entered into various financing leases for laboratory equipment used in research and development activities.

Future Lease Commencements

In September 2025, the Company entered into a non-cancelable operating lease for office and laboratory space in Watertown, Massachusetts. The total future minimum lease payments under this agreement are approximately $5.3 million over the lease term of three years. As of December 31, 2025, the lease has not yet commenced, and therefore no right-of-use asset or lease liability has been recognized on the Company’s Consolidated Balance Sheet. The lease will be recorded on the balance sheet upon commencement in January 2026, at which time the Company will recognize a right-of-use asset and corresponding lease liability based on the present value of lease payments over the lease term.

The following table summarizes the components of lease costs for the years ended December 31, 2025 and 2024:

The following table summarizes the lease assumptions for the years ended December 31, 2025 and 2024.

Future commitments due under these lease agreements as of December 31, 2025 are as follows:

Future minimum lease payments of $5.3 million related to a lease entered into in September 2025 that had not commenced as of December 31, 2025 are excluded from the maturity table above, as no lease liability had been recognized as of that date.

11. License agreements

Harvard Agreement

In July 2020, Tectonic entered into an agreement with the President and Fellows of Harvard College (“Harvard”), for an option fee in the low five digits, whereby Harvard granted Tectonic an exclusive option to negotiate a worldwide, exclusive, royalty-bearing license under Harvard’s interest in the patent rights covering certain technology that was developed by Harvard. In October 2021, Tectonic exercised the option and on February 10, 2022, entered into a license agreement (“License Agreement”) with Harvard to conduct research and development activities using certain materials, technology and patent rights owned by Harvard, with the intent to develop, obtain regulatory approval for, and commercialize products. The License Agreement will remain in effect until the expiration of the last valid claim within the patent rights covering a product developed under the License Agreement or the termination of the License Agreement. The Company paid Harvard a one-time license fee and issued shares of common stock as consideration for the License Agreement.

The Company is responsible for payment of(1) annual maintenance fees ranging from the low five digits to the low six digits during the term of the License Agreement (through the first commercial sale of a royalty-bearing product); (2)milestone payments payable upon regulatory approval and the achievement of specified clinical and commercial milestones for licensed products or know-how enabled products; (3)royalty payments as a percentage in the low single digits of the annual net sales that the Company generates from products that utilize the license technology (“Licensed Products”) and royalty payments as a percentage in the low single digits of the annual net sales that the Company generates from know-how enabled product licenses (“Know-How Enabled Products”) and (4) a percentage between 10-20% of all non-royalty income received by the Company under sublicenses, strategic partnerships and know-how enabled product licenses that utilize the license technology. Subsequent to the first commercial sale of a royalty-bearing product, annual maintenance fees will increase to a low six digits for the remainder of the term of the License Agreement. The royalty term from sales of Licensed Products will terminate on a country-by-country and product-by-product basis on the earlier of (i) the expiration of the patent rights covering the product, expected to be no earlier than May 2041, and (ii) the termination of the License Agreement. The royalty term from sales of Know-How Enabled Products will terminate on the earlier of (i) ten years after the first commercial sale of the first Know-How Enabled Product and (ii) twelve years after the first commercial sale of the first Licensed Product. The Company incurred expense of $0.1 million and $0.4 million related to the License Agreement during the years ended December 31, 2025 and 2024, respectively.

12. COMMITMENTS AND CONTINGENCIES

Commitments

The Company enters into contractual agreements with various suppliers in the normal course of its business. All contracts are terminable, with varying provisions regarding termination. If a contract with a specific vendor were to be terminated, the Company would only be obligated for the products or services that the Company had received through the time of termination.

The Company is also party to lease commitments, as described in Note 10, Leases, and milestone, royalty and maintenance based commitments, as described in Note 11, License Agreements.

Contingencies

In connection with the Merger, the Company and its designated rights agent entered into a contingent value rights agreement (the “CVR Agreement”). Pursuant to the CVR Agreement, each holder of AVROBIO common stock immediately prior to the closing received a contractual contingent value right (“CVR”) representing the contractual right to receive a pro rata portion of any net proceeds, if any, resulting from the disposition of certain AVROBIO intellectual property after the closing, subject to the terms of the CVR Agreement. The CVR Agreement expired 18 months following the closing of the Merger and is no longer in effect. No AVROBIO intellectual property was sold or otherwise disposed of, and, as a result, no payments were made or are due under the agreement. The Company did not record any receivables or liabilities related to the CVRs on the Consolidated Balance Sheets as of December 31, 2025 and 2024.

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. There are no matters pending that the Company currently believes are reasonably possible or probable of having a material impact to the Company's financial position, results of operations, or statements of cash flows.

In the normal course of operations, the Company may become involved in various legal proceedings. As of December 31, 2025 and 2024, the Company has not recorded accruals for probable losses related to any existing or pending litigation as the Company’s management has determined that there are no matters where a potential loss is probable and reasonably estimable. The Company does not believe that any existing or pending claims would have a material impact on the Company’s consolidated financial statements.

13. INCOME TAXES

The components of net (loss) income before income tax expense are as follows:

The components of the provision for income taxes are as follows:

The reconciliation of the Company's statutory tax rate and effective tax rate is as follows:

(a)State taxes in Massachusetts make up the majority (greater than 50 percent) of the tax effect in this category.

The components of the Company’s net deferred tax assets and liabilities are as follows:

As of December 31, 2025, the Company had $453.3 million of U.S. federal net operating loss carryforwards, all of which have an unlimited carryforward period. As of December 31, 2025, the Company had $123.7 million of state net operating loss carryforwards, which begin to expire at various dates from 2038 through 2045. As of December 31, 2025, the Company had $8.0 million of foreign net operating loss carryforwards, which is comprised of $7.6 million in Australia that have an unlimited carryforward period and $0.4 million in Canada that begin to expire in 2044.

As of December 31, 2025, the Company had $11.9 million of U.S. federal research and development tax credits that begin to expire in 2039. As of December 31, 2025, the Company had $4.9 million of state research and development tax credits that begin to expire at various dates from 2034 through 2040.

The future realization of the tax benefits from existing temporary differences and tax attributes ultimately depends on the existence of sufficient taxable income. The Company assesses the realizability of its deferred tax assets at each balance sheet date. In assessing the realization of its deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers the projected future taxable income, expected reversal of existing deferred tax liabilities, and tax planning strategies in making this assessment. After consideration of all available evidence, both positive and negative, the Company determined that it is not more likely than not that its net deferred tax assets will be realized in the foreseeable future. As a result, the Company increased its valuation allowance by $18.7 million as of December 31, 2025.

The future realization of the Company's net operating loss carryforwards and other tax attributes may also be limited by the change in ownership rules under the U.S. Internal Revenue Code Section 382. Under Section 382, if a corporation undergoes an ownership change (as defined), the corporation’s ability to utilize its net operating loss carryforwards and other tax attributes to offset income may be limited. The Company has not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes.

The Company does not provide for U.S. Federal, state, and applicable foreign income and withholding taxes on the financial reporting basis over the tax basis of its foreign subsidiary investment because the Company has the intentions and ability to indefinitely reinvest the undistributed earnings of its foreign subsidiaries. As a result, deferred taxes have not been recorded for the outside basis differences in its foreign subsidiary as of December 31, 2025 to the extent such differences are expected to result in future taxable income upon repatriation. The Company reviews its ability and intentions to indefinitely reinvest its foreign earnings at each balance sheet.

The Company records uncertain tax positions as liabilities in accordance with ASC 740-10 and adjusts these liabilities when judgment changes as a result of the evaluation of new information not previously available. Since there is complexity in some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. The calculation and assessment of the Company's income tax exposures generally involves the uncertainties in the application of complex tax laws and regulations for federal, state, and foreign jurisdictions. A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon local tax examination including resolutions of any related appeals or litigation on the basis of the technical merits.

The Company files income tax returns in the US, Australia and Canada, which are the Company's major jurisdictions where it is subject to tax examination by local tax authorities. The Company is not currently under examination for income taxes, and is not aware of any issues under review that could result in significant payments, accruals or material deviation from its tax positions. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by local tax authorities to the extent utilized in a future period. The statute of limitations for the Company has expired for tax years prior to 2021.

The following summarizes the Company's income taxes paid (net of refunds received) for the years presented :

The following summarizes the jurisdictions that exceeded 5% of the Company's total income taxes paid (net of refunds) for the years presented:

• Jurisdiction below the threshold for the period presented.

14. RELATED PARTY TRANSACTIONS

The Company enters into transactions with related parties in the ordinary course of business. Related parties include the Company’s directors, executive officers, principal stockholders, and entities in which such individuals have a controlling financial interest.

Scientific Advisory Board Member

One of the Company’s co-founders and former director is a member of the Company’s Scientific Advisory Board and meets the criteria of a related party. For each of the years ended December 31, 2025 and 2024, the Company incurred expense of $0.1 million for advisory services provided. There wereno amounts due to this related party as of December 31, 2025 or 2024.

License Agreement

Harvard meets the criteria of a related party resulting from the Company’s co-founders’ employment as professors in the Harvard Department of Molecular Pharmacology. Core intellectual property utilized by the Company is licensed from Harvard under the License Agreement described in Note 11, License Agreements.

The Company incurred expense of $0.1 million and $0.4 million related to the License Agreement during the years ended December 31, 2025 and 2024, respectively. No amounts were due to Harvard related to the License Agreement as of December 31, 2025 and 2024.

Private Placement

The Company issued shares in connection with the Private Placement at a price of $54.14 per share to accredited investors that are either an officer or director of the Company.

SAFE Agreements

From October through December 2023, Legacy Tectonic entered into multiple SAFE agreements with certain existing investors and received proceeds of $34.1 million. All investors were considered related parties of the Company. The SAFE agreements had no maturity date, bore no interest, and were redeemable by Legacy Tectonic upon the occurrence of a triggering event, including the Merger which qualified as a public listing transaction under the SAFE agreements. The SAFEs were redeemed for shares of Legacy Tectonic common stock in connection with the closing of the Merger. As of December 31, 2024, no related-party SAFEs were outstanding, and the Company hadno further obligations under these agreements.

15. EMPLOYEE BENEFIT PLAN

The Company has a 401(k) retirement plan (the “Plan”) that covers eligible U.S. employees. Eligible employees may elect to contribute up to the maximum limits, as set by the Internal Revenue Service, of their eligible compensation. The Company’s funding policy is to contribute 3% (“Nonelective Contribution”) of employees’ eligible pay to the Plan. The Company recognized compensation expense related to the Plan of $0.4 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively.

16. SEGMENT INFORMATION

The Company operates inone operating segment, and thereforeone reportable segment, focused on the discovery and development of therapeutic proteins and antibodies that modulate the activity of GPCRs. The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The determination of a single segment is consistent with the consolidated financial information regularly reviewed by the Chief Executive Officer, who serves as the CODM, in evaluating financial performance and allocating resources on a consolidated basis. The CODM primarily evaluates the Company’s performance based on net loss and significant expense categories.

No segment asset information is presented because the CODM focuses on cash and expense impact; segment assets are monitored at the same level as the Consolidated Balance Sheet.

The following table presents the segment net loss and significant segment expenses for the years ended December 31, 2025 and 2024:

1 Other segment expenses include expenses not captured in the primary employee-related, research and development, or general and administrative categories, such as stock-based compensation, depreciation and amortization, changes in the fair value of SAFE liabilities, income tax expense, interest income and interest expense.