Seres Therapeutics, Inc.

Inthe ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third-parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it hasnot accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2025 or 2024.

Legal Contingencies

The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and that the Company can reasonably estimate the amount of the loss. The Company reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and the views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period in which such determination is made.

In addition, in accordance with the relevant authoritative guidance, for any matters in which the likelihood of material loss is at least reasonably possible, the Company will provide disclosure of the possible loss or range of loss. If a reasonable estimate cannot be made, however, the Company will provide disclosure to that effect. The Company expenses legal costs as they are incurred.

The Company didnot accrue any liabilities related to legal contingencies in its consolidated financial statements as of December 31, 2025 or 2024.

11. Income Taxes

During the years ended December 31, 2025, 2024 and 2023, the Company recordedno income tax benefits for the net operating losses incurred in each year or interim period, due to its uncertainty of realizing a benefit from those items.

A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate after the adoption of ASU 2023-09 is as follows:

[1]State and local taxes in Massachusetts comprise the majority of this category.

A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate for years prior to the adoption of ASU 2023-09 is as follows:

Net deferred tax assets as of December 31, 2025 and 2024 consisted of the following:

The Tax Cuts and Jobs Act (“TCJA”), which was enacted in 2017, required taxpayers to capitalize and amortize research and experimental expenditures under IRC Section 174 for tax years beginning after December 31, 2021. This rule became effective for the Company during the year ended December 31, 2022 and resulted in the capitalization of research and development costs for the years ended December 31, 2024, 2023, and 2022. The TCJA required the Company to amortize these costs for tax purposes over five years if the research and development was performed in the U.S. and over 15 years if the research and development was performed outside the U.S. On July 4, 2025, new U.S. tax legislation was signed into law (known as the “One Big Beautiful Bill Act”, or “OBBA”) which generally allows taxpayers to (i) immediately deduct research and experimental expenditures attributable to U.S.-based research paid or incurred in taxable years beginning after December 31, 2024 and (ii) elect to accelerate, over a period ofone or two years, any unamortized research and experimental expenditures attributable to U.S.-based research incurred in taxable years beginning after December 31, 2021 and before January 1, 2025. The Company deducted 100% of its research and experimental expenditures incurred in 2025 during the year ended December 31, 2025. Further, the Company has elected not to accelerate the unamortized research and experimental expenditures from prior years and instead recognize them over the remaining amortization period of five years from when they were initially capitalized.

For the year ended December 31, 2025, the Company didnot have any material cash payments or refunds for income taxes.

As of December 31, 2025, the Company had net operating loss carryforwards (“NOLs”) for federal and state income tax purposes of $616,412 and $597,758, respectively. Federal NOLs of $98,756, generated before 2018, will begin expiring in varying amounts in 2035 unless utilized. The remaining federal NOLs of $517,656, generated after 2017, will be carried forward indefinitely and could be used to offset up to 80% of taxable income in future tax years. The Company's state NOLs will expire at various times starting in 2035. As of December 31, 2025, the Company also had available gross research and development tax credit carryforwards for federal and state income tax purposes of $55,341 and $14,767, respectively, which begin to expire in 2031 and 2028, respectively. The federal research and development tax credits include an orphan drug credit carryforward of $25,876.

Utilization of the NOLs and research and development tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the IRC due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. Since its formation, the Company has raised capital through the issuance of capital stock on several occasions. These financings, combined with the purchasing shareholders' subsequent disposition of those shares, may have resulted in an ownership change or could result in an ownership change in the future upon subsequent disposition. The Company conducted an analysis to determine if historical changes in ownership through December 31, 2024 would limit or otherwise restrict its ability to utilize these NOLs and research and development credit carryforwards. As a result of this analysis, the Company does not believe there are any significant limitations on its ability to utilize these carryforwards. However, future changes in ownership after December 31, 2024 could affect the limitation in future years. Any limitation may result in expiration of a portion of the NOLs or research and development credit carryforwards before utilization.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of commercialization of any products or generation of any revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Accordingly, a full valuation allowance has been established against the deferred tax assets as of December 31, 2025 and 2024. Management reevaluates the positive and negative evidence at each reporting period.

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2025, 2024 and 2023 related primarily to the increases or decreases in NOLs, research and development tax credit carryforwards, capitalized research and development expenses pursuant to IRC Section 174, and non-deductible stock-based compensation expenses. A rollforward of the valuation allowance is as follows:

During the year ended December 31, 2023, the Internal Revenue Service ("IRS") concluded their examination of the Company for the period ended December 31, 2018 related to the Company's 2018 research and development tax credits ("R&D Credit(s)"). The Company has adjusted its 2018 R&D Credits and its overall federal and state R&D Credit carryforward balance from the Company's inception to December 31, 2025 to account for the conclusions drawn by the IRS. Also, the Company has reviewed each of its overall filing positions since inception and has not identified any additional positions that do not meet the more likely than not threshold. The Company does not anticipate a material change to its uncertain tax position reserves in the next 12 months. The changes in the Company's unrecognized tax benefits for the years ended December 31, 2025, 2024, and 2023 were as follows:

The Company has not yet conducted a study of its research and development credit carry forwards. This study may result in further adjustment to the Company’s R&D Credits; however, a full valuation allowance has been provided against the Company’s R&D Credits, and if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the consolidated balance sheets or statements of operations if an adjustment were required. The Company had no other unrecognized tax benefits accrued for the years ended December 31, 2025 and 2024, or related interest and penalties as of such dates. The Company will recognize any interest and penalties related to uncertain tax positions in income tax expense.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. The Company's tax years are still open under statute from 2011 to present. All years may be examined to the extent the tax credit or net operating loss carryforwards are used in future periods.

12. Related Party Transactions

As described in Note 1, Nature of the Business and Basis of Presentation and Note 3, Discontinued Operations, in September 2024, the Company sold the VOWST Business, including inventory and equipment, certain patents and patent applications, know-how, trade secrets, trademarks, domain names, marketing authorizations and related rights, documents, materials, business records and data and contracts that are used or held for use primarily in the development, commercialization and manufacturing of VOWST, to SPN, and SPN assumed certain liabilities from the Company. As consideration for the Transaction, the Company received an upfront cash payment of $139,788, which consists of$100,000, less $17,857 owed by the Company to an affiliate of SPN under the prior license agreement between the Company and the SPN affiliate, less approximately $2,355 in satisfaction of fees due under the Bacthera Manufacturing Agreement; plus a prepayment of the $60,000 milestone payment tied to the achievement of worldwide annual net sales of VOWST of $150,000; plus an equity investment of $15,000 based on the Securities Purchase Agreement pursuant to which SPN purchased 714,285 shares of common stock at a purchase price of $21.00 per share.

For the years ended December 31, 2025 and 2024, the Accrued Liabilities due to SPN - related party on the Company's consolidated balance sheets were $3,278 and $17,750, respectively, which represents amounts due to SPN pursuant to the Purchase Agreement, which are further described in Note 3, Discontinued Operations and TSA. During the years ended December 31, 2025 and 2024, the Company paid $8,787 and $9,608, respectively, related to the outstanding liability. The Company also recognized a gain on sale of VOWST Business of $5,685 and $5,684, for the years ended December 31, 2025 and 2024, respectively, as a result of the change in the accrued liabilities due to SPN - related party, primarily as a result of SPN's actual Profit Sharing Payments as compared to the estimate as of the Closing.

As described in Note 3, Discontinued Operations and TSA, the Company entered into the TSA with NESA, an affiliate of SPN, in connection with the Transaction, through which the Company provided certain manufacturing services until December 31, 2025, and other transition services, for the duration specified in the schedule to the TSA for each service. For the years ended December 31, 2025 and 2024, the Company recognized $13,311 and $6,292 of TSA reimbursement income in other (expense) income, net in the Company’s consolidated statements of operations and comprehensive income (loss). For theyears ended December 31, 2025 and 2024, the Company incurred $6,544 and $3,532 of expenses related to manufacturing services and $3,592 and $3,136 of TSA labor and passthrough expenses to support the transition services, including finance and accounting, information technology, human resources, operations, and other services.

For the years ended December 31, 2025 and 2024, $14,897 and $3,724 was billed to NESA related to transition services performed by the Company, and the Company received $91,605 and $1,656 from NESA during the periods including the first installment payment of $50,000 received in January 2025 and the second installment payment of $25,000 receivedin July 2025 which were conditionedon the Company's material compliance with obligations under the TSA. The $75,000 of installment payments were recognized in Gain on sale of VOWST Business within continuing operations in the Company's consolidated statements of operation and comprehensive income for the year ended December 31, 2025 as the gain was realizable. As of December 31, 2025, the Company had $360 in accounts receivable due from SPN - related party in the Company’s consolidated balance sheets.

For the year ended December 31, 2025, Nestlé purchase certain manufacturing and laboratory equipment from the Company. The Company received $169 in proceeds from the sale, which is recognized in Other income (expense), net in the Company's consolidated statements of operations and comprehensive income (loss).

13. 401(k) Savings Plan

The Company has a defined contribution savings plan under Section 401(k) of the IRC. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Effective January 1, 2016, the Company elected to match 50% of the first 6% of an employee’s deferral. Company contributions are expensed in the year for which they are declared. During the years ended December 31, 2025, 2024, and 2023 the Company recorded expense of $592, $1,068, and $2,003, respectively, for 401(k) match contributions.

14. Segment Reporting

The Company's interim Chief Executive Officer, who is the Chief Operating Decision Maker ("CODM"), manages and allocates resources to the operations of the Company on a total company basis by assessing the overall level of resources available and how to best deploy these resources across functions and research and development projects that are in line with the Company's long-term company-wide strategic goals. The CODM uses the Company’s consolidated net income (loss) to monitor actual results versus the budget in assessing segment performance and the allocation of resources. The measure of segment assets is reported on the consolidated balance sheets as total assets.

The Company's reportable segment net income (loss) for the years ended December 31, 2025, 2024 and 2023, consisted of the following (in thousands):

[1]Other segment (income) expense includes manufacturing services expenses, research and development expenses on early stage programs, interest income and other (income) expense, net.

[2]See Note 3, Discontinued Operations and TSA, for further details.

15. Subsequent Events

Executive Officer Transition

On February 27, 2026, the Board of Directors (the “Board”) of the Company appointed Richard N. Kender, a current member of the Board, to serve as Executive Chair of the Board and as Interim Chief Executive Officer of the Company, Matthew Henn, Ph.D., the Company’s Chief Scientific Officer, to the additional role of President, and Kelly Brady, M.S., the Company’s Senior Vice President, Clinical Development, to the role of Executive Vice President, Chief Operating Officer, each effective March 2, 2026 (the “Effective Date”).

As a result of the appointment of Mr. Kender as Interim Chief Executive Officer and Dr. Henn as President, Thomas J. DesRosier and Marella Thorell ceased serving as Co-Chief Executive Officers and Co-Presidents of the Company as of the Effective Date. Mr. DesRosier will continue to serve as the Company’s Executive Vice President, Chief Legal Officer, and Ms. Thorell will continue to serve as the Company’s Executive Vice President, Chief Financial Officer.