4D Molecular Therapeutics, Inc.

4D Molecular Ther apeutics, Inc.

Notes to Financial Statements

1. The Company

4D Molecular Therapeutics, Inc. (the “Company”) was formed as a limited liability company in September 2013 under the name 4D Molecular Therapeutics, LLC. The Company changed its name and converted into a corporation which was incorporated in the state of Delaware in March 2015. The Company is a late-stage biotechnology company advancing durable and disease-targeted therapeutics with potential to transform treatment paradigms and provide benefits to patients.

2024 Follow On Public Offering

In February 2024, the Company completed an underwritten public offering (the “2024 Offering”) in which 6,586,015 shares of the Company’s common stock were sold at an offering price of $29.50 per share, as well as pre-funded warrants to purchase 3,583,476 shares of the Company’s common stock at an offering price of $29.4999 per underlying share pursuant to an effective Registration Statement on Form S-3. The net proceeds from the 2024 Offering were $281.2 million, after deducting underwriting discounts and commissions and other offering expenses. The Company also granted the underwriters the option to purchase up to 1,525,423 additional shares of common stock in connection with the offering. In March 2024, the underwriters exercised their option to purchase 1,259,299 additional shares of common stock resulting in net proceeds of $34.9 million, after deducting commissions.

2025 Offering

In November 2025, the Company completed an underwritten offering (the “2025 Offering”) in which 8,385,809 shares of the Company’s common stock were sold at an offering price of $10.51 per share, as well as pre-funded warrants to purchase 1,128,949 shares of the Company’s common stock at an offering price of $10.5099 per underlying share pursuant to an effective Registration Statement on Form S-3. The net proceeds from the 2025 Offering were approximately $93.3 million, after deducting the underwriting discounts and commissions and other offering expenses.

Liquidity

The Company has incurred significant losses and negative cash flows from operations and had an accumulated deficit of$716.3 million as of December 31, 2025. The Company had cash, cash equivalents and marketable securities of$514.0 million as of December 31, 2025. The Company believes that its cash and cash equivalents and marketable securities as of December 31, 2025 are sufficient for the Company to fund planned operations for at least one year from the issuance date of these financial statements for the year ended December 31, 2025. The Company has historically financed its operations primarily through the sale of equity securities, and to a lesser extent, from cash received pursuant to its collaboration and license agreements. To date, none of the Company’s product candidates have been approved for sale, and therefore, the Company has not generated any revenue from product sales. Management expects operating losses and negative cash flows from operations to continue for the foreseeable future. The Company plans to raise additional funding as required based on the status of its clinical trials and projected cash flows. There can be no assurance that, in the event the Company requires additional financing, such financing will be available on terms acceptable to the Company, if at all. Failure to generate sufficient cash flows from operations, raise additional capital and reduce discretionary spending should additional capital not become available could have a material adverse effect on the Company’s ability to achieve its business objectives.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”).

Use of Estimates and Judgments

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses; and disclosure of contingent assets and liabilities as of the date of the financial statements. Such estimates include the determination of useful lives for property and equipment, the contract term, transaction price and costs of collaboration agreements, stock options and the derivative instrument and income tax uncertainties. Actual results could differ from those estimates.

Due to the war in Ukraine, conflicts in the Middle East, any expansion of these conflicts, rising interest rates, tariffs and inflation, natural disasters and health crises, such as pandemics, there has been uncertainty and disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of December 31, 2025. While there was not a material impact to the Company’s financial statements as of December 31, 2025, these estimates may change, as new events occur and additional information is obtained, as well as other factors that could result in material impacts to the financial statements in future reporting periods.

Segment Information

The Company manages its business asone segment which includes all activities related to the discovery, development, and commercialization of medicines for specific diseases. See Note 17, Segment Information, for financial information related to the Company'sone segment.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, marketable securities and accounts receivable. The Company’s cash is held attwo financial institutions in the United States of America. The Company’s cash equivalents are invested in money market funds. The Company also invests in U.S. Treasuries, U.S. government sponsored agencies, commercial paper, corporate bonds and certificates of deposit. The Company has not experienced any losses on its deposits of cash and cash equivalents. Such deposits may, at times, exceed federally insured limits.

The Company’s partners in collaboration and license agreements who represent 10% or more of the Company’s total revenue are as follows:

• Less than 10%

The Company didnot have accounts receivable from its partners in collaboration and license agreements as of December 31, 2025 and 2024.

The Company’s total revenues by geographic region, based on the location of the customer, are as follows (in thousands):

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist of money market funds.

Marketable Securities

Marketable securities consist of certificates of deposit, commercial paper, corporate bonds, U.S. Treasuries and U.S. government sponsored agencies and are included in current and noncurrent assets. The Company classifies its marketable securities as available-for-sale and carries them at fair value on its balance sheet. Fair value is estimated using independent pricing sources based on quoted prices in active markets for similar securities. Unrealized gains and losses on the marketable securities are reported as a component of stockholders' equity in accumulated other comprehensive loss. The amortized cost of marketable securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the statements of operations. Realized gains and losses are included in interest income on the statements of operations.

The Company periodically evaluates its marketable securities to assess whether those with unrealized loss positions are other than temporarily impaired. The Company considers various factors in determining whether to recognize an impairment charge. If the Company determines that the decline in an investment's fair value is other-than-temporary, the difference is recognized as an impairment loss under other income (expense) in the statements of operations.

Acquisitions

The Company first determines whether a set of assets acquired constitute a business and should be accounted for as a business combination. If the assets acquired do not constitute a business, the Company accounts for the transaction as an asset acquisition where the cost of the acquisition is allocated to the assets acquired and liabilities based on their relative fair values. In-process research and development ("IPR&D") projects with no alternative future use are recorded as research and development expense upon acquisition, and contingent consideration obligations incurred in connection with an asset acquisition are recorded when it is probable that they will occur and they can be reasonably estimated. Business combinations are accounted for by means of the acquisition method of accounting. Under the acquisition method, assets acquired, including IPR&D projects, and liabilities assumed are recorded at their respective fair values as of the acquisition date. The excess of the fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill.

Other Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, suppliers for key raw materials, contract development and manufacturing organizations (“CDMOs”) and contract research organizations (“CROs”), compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance and reporting.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s 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 other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties (including for clinical trials and some aspects of research and preclinical testing).

Fair Value Measurements

The Company applies fair value accounting for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a 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, a three-level fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

•

Level 1— Observable inputs that reflect unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

•

Level 2— Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company accounts for transfers of financial instruments between levels of the fair value hierarchy on the date of the event or change in circumstance that caused the transfer.

Accounts Receivable—Allowance for Doubtful Accounts

The Company regularly reviews accounts receivable for collectability and establishes an allowance for probable credit losses and writes off uncollectible accounts as necessary. The Company has determined thatno allowance was required at December 31, 2025 and 2024. The Company didnot have any write-offs relating to uncollectible accounts receivable during the years ended December 31, 2025 and 2024.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation for acquired assets. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, which are as follows:

Upon sale or retirement of assets, the costs and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected within operating expenses in the statements of operations. Maintenance and repairs are charged to expense as incurred.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future undiscounted net cash flows, which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is typically measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. There have beenno such impairments of long-lived assets in the years ended December 31, 2025 and 2024.

Common Stock Warrants

The Company accounts for common stock warrants which meet the definition of a derivative as liabilities if the warrant requires net cash settlement or gives the holder the option of net cash settlement. The Company accounts for common stock warrants as equity if the contract requires physical settlement or net physical settlement or if the Company has the option of physical settlement or net physical settlement. Common stock warrants classified as liabilities are initially recorded at fair value and remeasured at fair value each balance sheet date with the offset adjustments recorded in other income (expense), net within the statements of operations. Common stock warrants classified as equity are initially measured at fair value on the grant date and are not subsequently remeasured.

Leases

The Company’s lease obligations relate primarily to leased office, laboratory and warehouse facilities under noncancelable operating leases.

At contract inception, the Company determines if an arrangement is or contains a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If determined to be or contain a lease, the lease is assessed for classification as either an operating or finance lease at the lease commencement date, defined as the date on which the leased asset is made available for use by the Company, based on the economic characteristics of the lease.

A right-of-use asset represents the economic benefit conveyed to the Company by the right to use the underlying asset over the lease term. A lease liability represents the obligation to make lease payments arising from the lease. Operating lease right-of-use assets represent the Company's right to use an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make payments arising from the lease. Operating right-of-use assets and liabilities are recognized at the commencement date of the lease and are measured at the present value of the fixed payments due over the expected lease term less the present value of any incentives, rebates, or abatements the Company expects to receive from the lessor. The Company records amortization of operating right-of-use assets and accretion of lease liabilities as a single lease cost on a straight-line basis over the lease term. No lease renewal options are recognized as part of the right-of-use assets and lease liabilities.

The Company's operating leases are presented in the balance sheet as operating lease right-of-use assets, classified as noncurrent assets, and operating lease liabilities, classified as current and noncurrent based on the discounted lease payments to be made within the proceeding twelve months.

As the implicit rate in the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate to discount lease payments. The incremental borrowing rate represents an estimated rate of interest that the Company would have to pay to borrow equivalent funds on a collateralized basis at the lease commencement date.

Revenue Recognition

The Company determines revenue recognition for arrangements within the scope of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) by performing the following five steps: (i) assessment whether a contract with a customer exists; (ii) determination of whether the promised goods or services are performance obligations; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated standalone selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company’s revenue is primarily derived through its license, research, development and commercialization agreements. The terms of these types of agreements may include (i) licenses to the Company’s technology, (ii) research and development services, and (iii) supplies of clinical and commercial materials. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. Significant judgment is required to determine whether the individual promised goods or services are distinct. Items are considered distinct if the customer can benefit from them on their own, or together with other readily available resources, and if they are separately identifiable from other items in the contract.

Payments to the Company under these arrangements typically include one or more of the following: nonrefundable upfront and license fees, cost-sharing and other forms of research funding, milestone and other contingent payments to the Company for the achievement of defined collaboration objectives and certain preclinical, clinical, regulatory and sales-based events, as well as royalties on sales of any commercialized products.

The Company recognizes as revenue sales-based royalties and milestone payments at the later of (i) when the related sales occur, or (ii) when the performance obligation to which the royalty has been allocated has been satisfied.

Other variable amounts, such as cost-sharing and development and regulatory milestones, are included in the transaction price to the extent it is probable a significant reversal of cumulative revenue recognized will not occur when the associated uncertainties are resolved. The Company uses the most likely or expected value amount methods as appropriate to estimate variable consideration.

At the end of each reporting period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price.

The Company allocates the total transaction price to each performance obligation based on the estimated standalone selling prices. Variable consideration is allocated to the specific performance obligations if it is triggered by the Company’s performance or the outcomes from such performance, and if such allocation meets the allocation objective of recognizing revenue in amounts of consideration to which the Company expects to be entitled in exchange for transferring its promised goods or services to the customer.

The Company recognizes revenue when, or as, the performance obligation is satisfied. Performance obligations recognized at a point in time, such as distinct licenses to the Company’s intellectual property, are recognized when control transfers, including commencement of the license term. Performance obligations recognized over time, such as research and development services, are recognized using an appropriate measure of progress, such as total cost incurred.

The Company records accounts receivable when the Company’s right to consideration is unconditional, i.e. if only passage of time is required before payment is due. Amounts collected or included in accounts receivable but not yet recognized in revenue are recorded as deferred revenues. Amounts recognized in revenue but not included in accounts receivable are recorded as contract assets.

Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. Changes in these estimates can have a material effect on revenue recognized.

Research and Development Expenses

Costs related to research, design and development of programs are charged to research and development expense as incurred. Research and development costs include, but are not limited to, payroll and personnel expenses including stock-based compensation, materials, laboratory supplies, outside services and allocated overhead, including rent, insurance, repairs and maintenance, depreciation and utilities. The Company expenses all research and development costs in the period in which they are incurred.

Costs incurred in obtaining technology licenses are charged to research and development expense as acquired in-process research and development if the technology licensed has not reached technological feasibility and has no alternative future use.

Accrued Clinical Research Organization Cost

The Company has entered into various agreements with clinical research organizations (CROs). Accrued CRO costs include direct costs, as well as costs associated with patient visits and site activations. These costs are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced by CROs, are included in accrued and other current liabilities on the balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly. Estimating the accrued research organization costs as of each balance sheet date requires the process of reviewing contracts and purchase orders with service providers, identifying services that have been performed on the Company’s behalf and estimating the level of service performed, the expected remaining period of performance and the associated expenses incurred for the service when the Company has not yet been invoiced or notified of actual cost. Payments made to CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses, other current assets or long-term other assets until the services are rendered.

Stock-Based Compensation

The Company accounts for stock-based compensation for stock options granted to employees, directors and nonemployees as measured at grant date, based on the fair value of the award. The Company measures the fair value of awards granted using the Black-Scholes option pricing model and recognizes the expense in the statements of operations over the requisite service period, generally four years, using the straight-line method. Forfeitures are accounted for as they occur. The Company’s policy for issuing stock upon stock option exercise is to issue new common stock.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax basis of the Company’s assets and liabilities and their financial statement reported amounts. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse. A valuation allowance is provided against deferred tax assets unless it is more likely than not that they will be realized.

The Company accounts for uncertain tax positions by assessing all material positions taken in any assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits.

Embedded Derivative

Embedded derivatives that are required to be bifurcated from the underlying host instrument are accounted for and valued as a separate financial instrument. An embedded derivative exists in the award agreement with the Cystic Fibrosis Foundation (“CFF”). As described in Note 14, Derivative Liability, the embedded derivative has been bifurcated and is classified as a liability on the balance sheet and separately accounted for at its fair value. The derivative liability is subject to remeasurement to fair value each reporting period. Changes in the fair value of the derivative liability are recognized as a component of other income (expense), net within the statements of operations.

Deferred Offering Costs

The Company capitalizes certain legal, accounting and other third-party fees that are directly related to the Company’s in-process financings, until such financings are consummated. After consummation of the financing, these costs are recorded as a reduction of the proceeds received as a result of the offering. In the event that a planned offering does not occur or is significantly delayed, all related deferred offering costs will be expensed immediately within the Company’s statements of operations.

Net Loss Per Share, Basic and Diluted

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common shares outstanding for the period. For purposes of this calculation, stock options to acquire shares of common stock, common stock warrants, and common stock expected to be issued under the ESPP, are considered potentially dilutive common shares, but have been excluded from the calculation of diluted net loss per share as their effect is antidilutive.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Improvements to Income Tax Disclosures. The final guidance adds clarifications related to the presentation of rate reconciliation for public business entities and definitions of specific categories in rate reconciliation. These amendments are effective for public business entities for annual periods beginning after December 15, 2024. The Company adopted ASU No. 2023-09 for the 2025 calendar year prospectively. The adoption impacted disclosures only anddid not impact the Company’s statements of operations or balance sheets.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220) - Disaggregation of Income Statement Expenses. ASU 2024-03 requires public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in the notes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 (fiscal 2027) and interim periods within fiscal years beginning after December 15, 2027 (fiscal 2028). The ASU must be applied prospectively and may be applied retrospectively if elected. The Company is currently evaluating the effect of adopting this new accounting guidance.

3. Fair Value Measurements and Marketable Securities

The following tables represent the Company’s fair value hierarchy for financial assets and financial liabilities measured at fair value on a recurring basis (in thousands):

There areno Level 3 assets and no Level 1 or 2 liabilities.

Level 3 Inputs

The fair value of the derivative liability is based on significant inputs not observable in the market, which represent a Level 3 measurement within the fair value hierarchy. The fair value of the derivative liability was determined using a present value analysis with multiple scenarios. In determining the fair value of the derivative liability, the inputs impacting fair value include the change of control payment to Cystic Fibrosis Foundation, the probability of a change of control event, the product status at time of a change of control event and the discount rate. See Note 14, Derivative Liability, for further discussion on the embedded derivative.

There wereno transfers between Level 1, 2 and 3 for assets or liabilities during the periods presented.

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 derivative liability (in thousands):

All marketable securities held as of December 31, 2025 had contractual maturities of less thantwo years. There have beenno material realized gains or losses on marketable securities for the periods presented.

Aggregate fair values of marketable securities with unrealized losses and gains were as follows (in thousands):

The Company manages credit risk associated with its investment portfolio through its investment policy, which limits purchases to high-quality issuers and also limits the amount of its portfolio that can be invested in a single issuer. The Company didnot record an allowance for credit losses or other impairment charges related to its marketable securities for any period presented. The Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. The Company further considered the maximum unrealized loss amounts both at the individual instrument level, $1 thousand, as well as in aggregate, $3 thousand, as of December 31, 2025, as immaterial. These unrealized losses were not attributed to credit risk and were associated with changes in market conditions. The Company periodically reviews its marketable securities for indications of credit losses. The Company anticipates that it will recover the entire amortized cost basis of such securities, and therefore, no credit loss existed as of December 31, 2025.

4. Property and Equipment, Net

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

All property and equipment are maintained in the United States. Depreciation expense was $5.2 million and $4.8 million for the years ended December 31, 2025 and 2024, respectively.

5. Accrued and Other Current Liabilities

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

6. Research and Collaboration Arrangements

Collaboration and license revenue for each period was as follows (in thousands):

Deferred revenue is summarized as follows (in thousands):

The total amount of revenue in each of the years ended December 31, 2025 and 2024, which was included in deferred revenue at January 1, 2025 and 2024, was immaterial.

uniQure

In January 2014, the Company and uniQure biopharma B.V. (“uniQure”) entered into a Collaboration and License Agreement (the “uniQure Agreement”) to collaborate on the discovery and non-clinical research activities related to the Company’s Therapeutic Vector Evolution platform in order to generate and validate vectors for gene delivery to treat diseases within the central nervous system and liver (together, the “uniQure Field”).

The uniQure Agreement provided uniQure with a research license as well as an exclusive development and commercialization license for each project variant selected for further development. The initial research term is three years with an option for uniQure to extend the research term one time for an additional year. Once the Company’s research plan has concluded, uniQure is solely responsible for the continued development, manufacturing and commercialization of the project variants as potential product candidates. In October 2016, uniQure exercised its option to extend the research term for an additional year to January 2018. The Company was also required to work exclusively with uniQure in the uniQure Field (the “uniQure Exclusivity Clause”).

Pursuant to the uniQure Agreement, the Company received upfront payments of $0.2 million, and was entitled to receive (i) contingent payments for the achievement of research and development milestones of up to $5.0 millionfor each licensed product selected under the arrangement, and (ii) royalties in the single digit range on future sales of the potential product candidates and sublicense consideration in the low teens to low thirties range on any future sublicensing arrangements. The Company also received capped research and development service fees based on contractual full-time employee rates per year. In connection with the performance obligations under the uniQure Agreement, the founders of 4D Molecular Therapeutics, LLC received equity options to purchase an aggregate of 609,744 of uniQure ordinary shares that vested over the initial three-year term of the agreement.

The upfront payment of $0.2 million was recorded as deferred revenue and was recognized on a ratable basis over the estimated performance period offour years. Payments and reimbursements for research costs were recognized on an as-incurred basis. The options to purchase uniQure shares were deemed to be a noncash component of the arrangement consideration, as the vesting of options is linked to the uniQure Agreement and there is a requirement for the holders of the options to provide services under the agreement. The fair value of the uniQure options, which was estimated to be $10.6 million, was recognized ratably as revenue over the estimated performance period offour years and the associated compensation expense related to the stock options was recorded as research and development expense.

In August 2019, the Company and uniQure entered into an Amended and Restated Collaboration and License Agreement (the “Amended uniQure Agreement”), which amended and restated the uniQure Agreement, and a separate Collaboration and License Agreement (the “Second uniQure Agreement”). Under these agreements, the Company agreed to transfer incremental rights and services to uniQure in exchange for uniQure eliminating the uniQure Exclusivity Clause and transferring other rights back to the Company.

Under the Amended uniQure Agreement, uniQure continues to have an exclusive license to select AAV capsid variants (the “Selected Variants”) in the uniQure Field. uniQure continues to be solely responsible, at its cost, to develop and commercialize the compounds and products containing the Selected Variants. The amended uniQure Agreement eliminated the uniQure Exclusivity Clause in the uniQure Agreement. Furthermore, the contingent payments that the Company was entitled to from uniQure for the achievement of research and development milestones of up to $5.0 million for each licensed product selected under the uniQure Agreement were eliminated and sublicense consideration on any future sublicensing arrangements was reduced from the low teens to low thirties percentages to mid-single digit to mid-twenties percentages.

Under the Second uniQure Agreement, the parties agreed to research and develop new AAV capsid variants (the “New Variants”) that are not Selected Variants that affect certain targets selected by uniQure (the “uniQure Targets”) in the uniQure Field. The Company is solely responsible, at its cost, for the research of the New Variants. The Company granted uniQure an exclusive license to a certain number of the New Variants (the “uniQure New Variants”) that affect the uniQure Targets. uniQure is solely responsible, at its cost, to develop and commercialize the compounds and products containing the uniQure New Variants that affect the uniQure Targets (the “Licensed Products”). The Company retains all rights to New Variants in the uniQure Field that affect targets other than the uniQure Targets.

Under both the Amended uniQure Agreement and the Second uniQure Agreement, uniQure will be required to pay the Company royalties on worldwide annual net sales of Licensed Products at a mid-single digit percentage rate, subject to certain specified reductions. uniQure will also be required to pay the Company sublicensing consideration for sublicensing the Company’s intellectual property rights licensed under the Amended uniQure Agreement or the Second uniQure Agreement to third parties at a rate between the mid-single digit to mid-twenties. The Company has reciprocal obligations, at the same percentage rates as uniQure, to pay uniQure royalties and sublicensing consideration for sublicensing certain intellectual property rights licensed under the Amended uniQure Agreement or the Second uniQure Agreement to third parties.

The Company concluded that the Amended uniQure Agreement and the Second uniQure Agreement should be accounted for as one combined contract that should be accounted for as a separate contract from the uniQure Agreement given that the incremental licensed intellectual property rights and research and development services are distinct from the rights and services previously transferred to uniQure under the uniQure Agreement and the transaction price increased by an amount that equals the standalone selling price of the incremental rights and services to be transferred to uniQure under the Amended uniQure Agreement and Second uniQure Agreement.

Neither party was required to pay monetary consideration in connection with the execution of the Amended uniQure Agreement or the Second uniQure Agreement or for subsequent performance by the parties under those agreements, notwithstanding the potential future royalty and sublicense consideration described above. The fair value of the non-monetary consideration given by uniQure to the Company, for the intellectual property right was $5.1 million. This intellectual property right was considered to be an in-process research and development asset with no alternative future use and, accordingly, was written off as acquired in-process research and development expense in the year ended December 31, 2019.

In accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers, the incremental transaction price described in the paragraph above was recorded as deferred revenue given that the Company identified one single combined performance obligation, which includes the licenses to the New Variants, research services and participation in the joint steering committee (“JSC”). Revenue is being recognized using the input method based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligation. The Company completed its performance obligation during the third quarter of 2023 and the deferred revenue was recognized as revenue in the same period.

The Company determined the transaction price using the risk adjusted net present value analysis (“rNPV”) methodology to value the elimination of the uniQure exclusivity clause and other material rights received by the Company, including the potential royalties the Company would receive from uniQure. The rNPVs incorporate estimates and assumptions including the number of products the Company and uniQure would develop, the risk-adjusted probability of successfully developing a biopharmaceutical product, the probability that uniQure will develop a product, the research and development costs, the potential worldwide sales and associated commercialization costs, corporate tax rate, and discount rate.

During each of the years ended December 31, 2025 and 2024, the Company recognized revenue ofzero under the Amended uniQure Agreement and the Second uniQure Agreement, respectively. As of December 31, 2025 and 2024, there wasno deferred revenue relating to uniQure, and the aggregate amount of the transaction price allocated to the remaining performance obligation waszero. There wereno amounts due from uniQure under the uniQure Agreement, Amended uniQure Agreement or Second uniQure Agreement as of December 31, 2025 and 2024. The Amended uniQure Agreement and the Second uniQure Agreement were terminated by mutual agreement in November 2025. The Company did not incur any charges related to the termination of the uniQure Agreement.

Cystic Fibrosis Foundation (“CFF”)

In September 2016, the Company entered into an award agreement for the Optimized Adeno-Associated Virus for Lung Epithelia Gene Delivery Development Program with CFF, a non-profit organization dedicated to finding a cure for cystic fibrosis, an inherited disorder that causes disease in the pulmonary airways leading to morbidity and mortality. Under this agreement, CFF contributes funding to help advance the Company’s cystic fibrosis research program. The September 2016 grant award agreement was incorporated into a new grant award agreement with CFF in September 2017 with the same objectives, which was subsequently amended in August 2018 and February 2021. In August 2023, the Company executed a third amendment to the agreement (the “August 2023 Amendment”), which modified the research plan, increased the aggregate milestone payments from $3.5 million to $6.3 millionand extended the estimated project completion date. The aforementioned September 2017 agreement and three amendments are collectively referred to as the “CFF Agreement”. The August 2023 Amendment represents a contract modification to an existing contract under ASC Topic 606, given the amendment did notinclude any additional goods or services, and the remaining research activities are not distinct from those previously provided. The August 2023 Amendment did not impact the transaction price, given the increased award amount relates to variable consideration for future milestones that are fully constrained. Accordingly, the contract modification did not result in a revenue adjustment. As of December 31, 2025 and 2024, the Company had achieved cumulative milestones totalling $1.8 million, under the CFF Agreement. The remaining award amount will be paid by CFF based on achievement of certain development milestones by the Company.

The Company expects to make payments to CFF equal tosix times the actual award received by the Company inthree installments within the first four years of the first commercial sale of a product developed under this agreement. The Company also has agreed to make future sales-based milestone payments to CFF of up tothree times the actual award received upon achieving specified commercialization milestones with respect to the first of any product developed utilizing any compound covered under the CFF Agreement. The CFF Agreement also requires the Company to pay to CFF royalties of a mid-single digit percentage, up tosix times the actual award received, on any amounts received by the Company from the sale, license or transfer to a third-party of rights in the technology developed as a result of this collaboration. Any such royalty payments shall be credited against the payments owed by the Company upon first commercial sale. In the event of a change of control of the Company, CFF will receive certain payments, depending on the timing of the change of control and the size of the transaction.

To date, the Company has not developed a commercial product in connection with the CFF Agreement, and it has not licensed, sold or otherwise transferred to another party the product developed under the CFF Agreement or the underlying technology.

If at any time prior to the first commercial sale of a product developed as a result of the CFF Agreement, the Company ceases to use commercially reasonable efforts to develop or commercialize any product under the CFF Agreement for a continuous period of 180 consecutive days and fails to present a reasonable plan to resume commercially reasonable efforts, the Company will grant to CFF an irrevocable, exclusive worldwide interruption license under all of the Company’s interest in the research plan technology to exploit such product. Any third-party license granted by the Company shall be subject to such interruption license.

The Company identified one performance obligation within the CFF Agreement for research activities. The CFF Agreement does not include a significant financing component.

The Company concluded that the transaction price should not include the variable consideration related to future research milestones as they were considered to be constrained as it is probable that the inclusion of such variable consideration could result in a significant reversal of cumulative revenue in the future. The Company re-evaluates the transaction price and estimated period of performance at each reporting period.

Revenue recognized during the year ended December 31, 2025 was $0.2 million, while revenue recognized during the year December 31, 2024 was immaterial. As of December 31, 2025 and 2024, deferred revenue relating to the CFF Agreement was $1.1 million and $1.3 million, respectively. There wereno accounts receivable from CFF under the CFF Agreement as of December 31, 2025 and 2024. As of December 31, 2025 and 2024, the aggregate amount of the transaction price allocated to the remaining performance obligation was $1.1 million and $1.3 million, respectively. Based on current timelines, the deferred revenue is expected to be recognized as revenue over the next four years as the Company performs research services through the completion of IND-enabling studies.

The obligation to make payments to CFF upon a change of control meets the definition of an embedded derivative that is required to be bifurcated and separately accounted for as a derivative liability. See Note 14, Derivative Liability, for further discussion of the embedded derivative.

Otsuka Pharmaceutical Co., Ltd

On October 31, 2025, the Company entered into a Collaboration and License Agreement ("Otsuka Agreement") with Otsuka Pharmaceutical Co., Ltd. (“Otsuka”). Pursuant to the Otsuka Agreement, the Company granted Otsuka an exclusive royalty-bearing sublicensable license to its intellectual property to develop, manufacture and commercialize 4D-150, its lead product candidate for ophthalmological diseases, in Japan, Korea, China, Australia, and certain other Asia-Pacific markets ("Otsuka Territory"). The Company retains full development and commercialization rights for 4D-150 outside the Otsuka Territory, including the United States, Latin America, and Europe.

Otsuka will lead all regulatory and commercialization activities in the Otsuka Territory. The Company will lead all Phase 3 clinical activity globally, including within the Otsuka Territory. In aggregate, the Company is currently responsible for separate global phase 3 trials for wet age-related macular degeneration ("wet AMD") and diabetic macular edema (“DME”), local clinical trials in the Otsuka Territory as required by local regulatory authorities, and several other studies, including the related regulatory activities and long-term follow up studies. The Company and Otsuka will coordinate and review the development and other activities through a joint steering committee.

The Company also will manufacture and supply 4D-150 to Otsuka for clinical and commercial use at a supply price derived from the Company's manufacturing costs plus a margin.

The Company has received a nonrefundable upfront cash payment of $85.0 million and is eligible to receive quarterly clinical trial cost sharing and reimbursement amounts. In addition, the Company is eligible for up to $335.5 million in potential regulatory and commercial milestone payments and tiered double-digit royalties on net sales in the Otsuka Territory, and subject to royalty reductions under certain circumstances.

The Otsuka Agreement will remain in effect, unless earlier terminated, on a country-by-country basis, until the date that Otsuka is no longer developing or commercializing 4D-150 in such country within the Otsuka Territory. Otsuka may terminate the Otsuka Agreement for convenience, on a country-by-country basis, upon sufficient prior written notice as per the Otsuka Agreement, or due to safety reasons or the failure of certain of the Company’s related clinical trials to achieve their primary endpoints. The Company may terminate the Otsuka Agreement upon notice if Otsuka ceases all development activities and commercialization of 4D-150 in Japan for an agreed upon period as per the Otsuka Agreement and does not resume such activities or commercialization within a specified notice period. Upon termination, any license granted by the Company to Otsuka will terminate.

The Company concluded that Otsuka is a customer and that the arrangement represents a contract with a customer under the scope of ASC 606. The Company identified the following promised goods and services that represent performance obligations:

•

the exclusive license to its intellectual property to develop, manufacture and commercialize 4D-150 in the Otsuka Territory,

•

performance of separate global phase 3 trials for wet AMD and DME, local clinical trials in the Otsuka Territory as required by the local regulatory authorities, and several other studies, including the associated regulatory and joint steering committee activities. Separate performance obligations were identified for each individual trial or study.

The license was considered functional intellectual property as of the inception of the Otsuka Agreement and distinct from other promises under the contract, as Otsuka can benefit from the license on its own or together with other readily available resources. Each of the clinical trial and other study services were considered distinct as the customer can benefit from these services together with the license transferred at the inception of the Otsuka Agreement. The clinical trial and other study services will not modify or customize the initial intellectual property transferred at contract inception due to the late stage of development of the intellectual property.

The Company concluded manufacturing and supply of 4D-150 for clinical and commercial use does not represent a performance obligation, as these activities are at Otsuka’s option. Product supply is priced at standalone selling prices, and therefore does not provide Otsuka with material rights.

To the extent Otsuka requests the Company to supply 4D-150, such supply will be considered a separate contract with the customer.

The initial transaction price includes the upfront cash payment and variable consideration for clinical trials and other studies performance obligations, some of which have started and others that have not yet started as of December 31, 2025. The upfront cash payment is $85 million and was received during the year ended December 31, 2025. The variable consideration in the form of the estimated cost sharing and reimbursement of approximately $40.0 million represents the amount allocated to unsatisfied or partially unsatisfied performance obligations, that have already started as of December 31, 2025, and was allocated entirely to the clinical trials and other studies performance obligations using the variable consideration allocation exception.

The regulatory milestone amounts are not currently probable and have not been included in the transaction price as the amounts are fully constrained. The sales-based commercial milestones and royalties relate to the granted intellectual property license and will be recognized when the related sales occur.

At the end of each reporting period, the Company will re-evaluate the estimated variable consideration and if necessary, adjust the transaction price.

To determine the standalone selling prices of each performance obligation, the Company used significant estimates and assumptions that include but are not limited to, expected market opportunity and pricing, expected future costs of clinical trials and other studies, and timelines and likelihood of success of clinical and regulatory activities. For the standalone selling price of the license, the Company used a discounted cash flow analysis of projected cash flows and potential revenues from the commercial sales of 4D-150 in the Otsuka Territory. To determine the standalone selling prices of the Company’s obligations to conduct clinical trials and other studies, the expected cost plus margin approach was used.

Variable consideration to which the Company is entitled to is allocated directly to the associated performance obligations, as it is triggered by the Company’s performance or represents specific outcomes from such performance, and the resulting allocation meets the allocation objective.

The upfront amount of $85.0 million was allocated entirely to the license performance obligation and was recognized at a point in time upon the transfer of control during the year ended December 31, 2025.

Revenue attributable to the remaining performance obligations to conduct clinical trials and other studies will be recognized over time as the underlying services are performed, over the period through the completion of program development activities. Progress is measured using an input method based on cumulative cost incurred relative to the total estimated cost of the performance obligation. Estimated progress and the underlying costs will be reviewed and adjusted as necessary at every reporting date. Revenue from clinical trials and other studies performance obligations was immaterial during the quarter and the year ended December 31, 2025.

The transaction price amount allocated to unsatisfied or partially unsatisfied performance obligations, which have started as of December 31, 2025 was approximately $40.0 million, expected to be recognized during 2026 through 2032 as clinical trials and other studies continue. Certain performance obligations have not started as of December 31, 2025 and the related amounts are not included above.

7. License Arrangements

Astellas Gene Therapies, Inc.

On July 5, 2023, the Company entered into a licensing agreement (the “Astellas License Agreement”) with Astellas Gene Therapies, Inc. (“AGT”), pursuant to which the Company granted to AGT a license to utilize its intravitreal R100 vector (“4D Vector”) to develop and commercialize licensed compounds and licensed products for one genetic target implicated in rare monogenic ophthalmic disease(s), with options to add up to two additional targets implicated in rare monogenic ophthalmic diseases after paying additional option exercise fees. Under the terms of the Astellas License Agreement, the Company has provided its 4D vector technology to AGT to deliver AGT’s genetic payloads for the treatment of rare monogenic diseases. AGT will conduct all subsequent research, development, manufacturing, and commercialization activities. As partial consideration for the rights and licenses granted to AGT by the Company under this Astellas License Agreement, AGT paid the Company an upfront amount of $20.0 million, which was received in July 2023. The Company may receive potential future option fees and milestones of up to $942.5 million, including $42.5 million of potential future option fees, $90.0 million potential future development milestones, $120.0 million potential future regulatory milestones and $690.0 million potential future commercial sales milestones. In addition, the Company is entitled to receive mid-single digit to double-digit, sub-teen royalties on net sales of all licensed products.

Under the Astellas License Agreement, the Company’s performance obligation is to grant and make available to AGT the Licensed IP and Licensed Know-How (each as defined in the Astellas License Agreement) with respect to the 4D Vector. In connection with the grant of the license, in July 2023, the Company delivered to AGT the Transferred Material (as defined in the Astellas License Agreement). This agreement was terminated by AGT in July 2025 for convenience. The Company didnot incur any charges related to the termination of the Astellas License Agreement. As of December 31, 2025, there wasno deferred revenue andno accounts receivable relating to the Astellas License Agreement.

Aevitas Therapeutics, Inc. and The Trustees of the University of Pennsylvania

On April 21, 2023, the Company entered into an agreement (the “Aevitas Agreement”) with Aevitas Therapeutics, Inc. (“Aevitas”), pursuant to which the Company acquired all of Aevitas’ worldwide rights to short-form human complement factor H (sCFH), which the Company plans to use for its 4D-175 product candidate research program. The asset purchase was accounted for as an asset acquisition. As consideration for the Aevitas Agreement, the Company shall pay Aevitas up to approximately $144.1 millionin cash upon certain late-stage milestones being achieved, including $7.2 million for development milestones, $68.0 million for regulatory milestones and $68.9 million for sales milestones plus royalties in the low single digits range on sales of 4D-175. In addition, as part of the Aevitas Agreement, the Company was assigned a License Agreement for sCFH with the Trustees of the University of Pennsylvania, under which the Company shall pay the University of Pennsylvania up to approximately$41.6 million in cash upon certain late-stage milestones being achieved, including $1.9 million development, $21.5 million regulatory and $18.2 million sales milestones plus royalties in the low single digits range on sales of 4D-175. No upfront consideration was paid under the Aevitas Agreement.

As of December 31, 2025, the Company hasnot recorded a liability related to contingent consideration for future milestone and royalty payments to either Aevitas or the University of Pennsylvania, as the achievement of such milestones has not occurred and was not deemed probable and product sales have not commenced.

Regents of the University of California

The Company has exclusive, worldwide license agreements (the “UC Agreements”) with the Regents of the University of California (the “UC Regents”) relating to the use of certain patents and intellectual property surrounding its core technologies, including Therapeutic Vector Evolution. Pursuant to each of the UC Agreements executed prior to January 2019, the Company was obligated to pay a (i)

non-refundable license fee of $5,000 upon execution, (ii) a non-refundable license fee of $5,000 each year thereafter, until sales of a licensed product are made and royalties are paid to the UC Regents, (iii) reimbursement of domestic and foreign patent filing, prosecution and maintenance fees, and (iv) either $50,000 or issuance of a 3% equity interest in the Company upon the closing of the first qualified financing at the option of the UC Regents. The Company’s first qualified financing occurred in 2015 and at the election of the UC Regents, the Company issued the UC Regents in January 2016 an amount of common stock equal to 6% of the equity interests in the Company pursuant to the applicable clause in each of the UC Agreements.

Pursuant to an agreement with the UC Regents executed in January 2019 the Company paid a non-refundable license fee of $50,000 to the UC Regents upon execution of the agreement. The Company is obligated to pay a non-refundable license fee of $5,000 on the one-year anniversary of the contract effective date and each year thereafter, until sales of a licensed product are made and royalties are paid to the UC Regents.

In addition, the Company is obligated to make certain contingent payments including (i) development milestones up to $3.1 million, (ii) low single digit royalties on the net sales of its developed products that consist of a minimum annual royalty of up to $0.1 million per year for the term of the agreement beginning in the first calendar year after the year in which net sales first occurred, and (iii) sublicense consideration in the mid-teens to the mid-twenties-range on any future sublicensing arrangements the Company may enter into with third-party licensees.

As of December 31, 2025, the Company hasnot recorded a liability related to contingent consideration for future milestone and royalty payments to UC Regents, as the achievement of such milestones has not occurred and was not deemed probable and product sales have not commenced.

8. Commitments and Contingencies

Operating Lease Commitments

5980 Horton Street Building Lease

In May 2015, the Company executed a lease agreement (the “5980 Horton Lease”) for office and laboratory space in Emeryville, California. The 5980 Horton Lease, as amended, expires in August 2026. As of December 31, 2025, the right-of-use asset and lease liability related to the 5980 Horton Lease were $0.3 million and $0.4 million, respectively. As of December 31, 2024, the right-of-use asset and lease liability related to the 5980 Horton Lease were $0.8 million and $0.9 million, respectively.

5858 Horton Street Lease and Expansion

In October 2018, the Company executed a lease agreement (the “5858 Horton Lease”) for office and laboratory facilities in Emeryville, California. The 5858 Horton Lease, as amended in 2019, 2021 and 2022, consists of approximately 40,802 square feet of space and has a lease term through December 31, 2029. In July 2024, the Company extended the term of the 5858 Horton Lease for a period of twelve months to December 31, 2030. In accordance with ASC Topic 842, Leases, the Company accounted for the extension as a modification and remeasured the lease liability based on the new lease term and an updated, estimated incremental borrowing rate of 10.75%. The modification resulted in an increase to the lease liability of $0.8 million and a corresponding increase to the carrying value of the right-of-use asset. No gain or loss was recognized upon the modification. As of December 31, 2025, the right-of-use asset and lease liability related to the 5858 Horton Lease was $8.8 million and $11.2 million, respectively. As of December 31, 2024, the right-of-use asset and lease liability related to the 5858 Horton Lease were $9.9 million and $12.6 million, respectively.

In July 2024, the Company also entered into a lease agreement for additional office and laboratory space in Emeryville, California (the “5858 Horton Expansion Lease”). The 5858 Horton Expansion Lease consists of approximately 32,038 square feet of space and commenced on September 1, 2024 andhas a lease term through December 31, 2030. As of December 31, 2025, the right-of-use asset and lease liability related to the 5858 Horton Expansion Lease were $7.8 million and $8.6 million, respectively. As of December 31, 2024, the right-of-use asset and lease liability related to the 5858 Horton Expansion Lease were $8.9 million and $9.6 million, respectively. The discount rate used to measure the lease liability was 11.02%.

Emeryville Warehouse Lease

In January 2024, the Company entered into a lease agreement for warehouse space in Emeryville, California (the “Warehouse Lease”). The Warehouse Lease commenced on August 1, 2024. The Warehouse Lease consists of approximately 7,800 square feet of warehouse space and has a lease term through December 31, 2029. As of December 31, 2025, the right-of-use asset and lease liability related to the Warehouse Lease were each $1.2 million. As of December 31, 2024, the right-of-use asset and lease liability related to the Warehouse Lease were each $1.5 million. The discount rate used to measure the lease liability related to the Warehouse Lease was 10.69%.

The following table summarizes the components of lease expense for the years ended December 31, 2025 and 2024, which are included in operating expenses in the Company’s statements of operations (in thousands):

Variable lease payments include amounts relating to common area maintenance and are recognized in the statements of operations as incurred.

Cash paid for amounts included in the measurement of the Company’s operating lease liabilities and presented within cash used in operating activities in the statements of cash flows was $5.6 million and $3.3 million for the years ended December 31, 2025 and 2024, respectively.

The following table summarizes supplemental information related to operating leases:

The following table summarizes the maturities of lease liabilities as of December 31, 2025 (in thousands):

Indemnification Agreements

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions, such as with vendors and other parties. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that 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 to the fullest extent permitted by Delaware corporate law. The Company currently maintains directors’ and officers’ liability insurance that would generally enable it to recover a portion of any future amounts paid. The Company believes the estimated fair value of its indemnification agreements in excess of applicable insurance coverage is not material.

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising from the ordinary course of its business. If applicable, the Company records a legal liability when it believes that it is both probable that a liability may have been incurred, and the amount of the liability can be reasonably estimated. Significant judgment by the Company is required to determine both probability and the estimated amount. There are no material legal proceedings outstanding at December 31, 2025.

9. Income Taxes

The Company didnot record any income tax expense during the years ended December 31, 2025 and 2024. The Company has a net operating loss and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets. All losses before income taxes arose in the United States.

The Company adopted ASU No. 2023-09 for the 2025 calendar year prospectively. The effective tax rate of the Company’s income tax expense (benefit) differs from the federal statutory rate pursuant to the disclosure requirements of ASU No. 2023-09 for the year ended December 31, 2025 as follows (in thousands):

The effective tax rate of the Company’s income tax expense (benefit) differs from the federal statutory rate for the year ended December 31, 2024 as follows:

The tax effects of temporary differences that give rise to significant components of the deferred taxes are as follows (in thousands):

The Company's valuation allowance increased by $30.5 million during the year ended December 31, 2025 and $10.6 million during the year ended December 31, 2024. The increase in the valuation allowance for each of the years ended December 31, 2025 and 2024 was primarily driven by net losses incurred, capitalized research expenditures, stock-based compensation expense and tax credits generated within the U.S.

The Company had federal net operating loss (“NOL”) carryforwards of $307.6 million and $298.3 million as of December 31, 2025 and 2024, respectively, of which $9.5 million will begin to expire in 2037 and $298.1 million can be carried forward indefinitely. The Company had state NOL carryforwards of $142.3 million and $142.2 million as of December 31, 2025 and 2024, respectively. The state NOL carryforwards will begin to expire in 2036.

As of December 31, 2025 and 2024, the Company had federal research and development credit carryforwards of $9.9 million and $3.3 million, respectively, and California research and development credit carryforwards of $14.6 million and $12.5 million, respectively. The federal credit carryforwards begin to expire in 2044, and the California credits can be carried forward indefinitely.

Utilization of the NOL carryforwards and research credit carryforwards may be subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code Sections 382 and 383, and similar state provisions. Annual limitations may result in the expiration of the NOL and tax credit carryforwards before they are utilized. The Company has experienced ownership changes in the past. As a result of the ownership changes, approximately $21.1 million of the federal research and development credits are permanently limited and will expire unused for federal income tax purposes, and such amounts are excluded from the federal research and development credit carryforwards as of 2024. Subsequent ownership changes may result in additional limitations.

A reconciliation of the beginning and ending unrecognized tax benefits amounts is as follows (in thousands):

The unrecognized tax benefits would not impact the Company’s effective tax rate if recognized. During the years ended December 31, 2025 and 2024, the Company didnot recognize accrued interest and penalties related to unrecognized tax benefits.

The Company files income tax returns in the U.S. federal and certain state tax jurisdictions. For jurisdictions in which tax filings have been filed, all tax years remain open for examination by the federal and state authorities forthree andfour years, respectively, from the date of utilization of any net operating losses or credits. The Company did not make any material federal and state tax payments during the years ended December 31, 2025 and 2024. The Company has no ongoing income tax examinations by tax authorities at this time.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”) was enacted, introducing amendments to U.S. tax laws with various effective dates from 2025 to 2027. The OBBB Act modified certain business deductions, including an immediate deduction for domestic research and development expenditures, and restoration of 100% bonus depreciation. The OBBB Act did not result in a material impact to the Company’s income tax provision or effective tax rate.

10. Common Stock

As of December 31, 2025 and 2024, the Company’s certificate of incorporation authorized the Company to issue 300,000,000 shares of common stock, at the par value of $0.0001 per share. The holder of each share of common stock is entitled toone vote per share.

Common stockholders are entitled to dividends if and when declared by the board of directors, subject to the prior rights of the preferred stockholders. As of December 31, 2025 and 2024, no dividends on common stock had been declared by the board of directors.

The Company has reserved common stock, on an as-converted basis, for future issuance as follows:

Funding Agreement with CFF— In April 2020, CFF made a $10.0 million investment in the Company’s Series C redeemable convertible preferred stock financing. In return for the investment, CFF received shares of Series C redeemable convertible preferred stock, and the Company and CFF entered into a Funding Agreement (the “Funding Agreement”). Pursuant to the terms of the Funding Agreement, except in the event of a technical failure, the $10.0 million received from CFF will be used to advance the development program for 4D-710, the Company’s lead product in cystic fibrosis, or any other therapeutic approved by the Program Advisory Group (“PAG”) to alleviate pulmonary complications of cystic fibrosis (the “Funding Agreement Product”).

CFF committed to provide an additional $4.0 million of funding upon acceptance of an IND application or its equivalent to allow for human testing of the Funding Agreement Product (“Acceptance”).

In October 2021, the IND was cleared by the U.S. Food and Drug Administration and CFF made the additional investment of $4.0 million in cash for the issuance of 125,715 shares of the Company’s common stock to CFF.

The Company was committed to providing an amount equal to the funding provided by CFF to be used solely to advance the Funding Agreement Product. As of December 31, 2025, the funding commitment has been fulfilled. Under the terms of the Funding Agreement, neither the $10.0 million investment in the Series C redeemable convertible preferred stock, which converted to common stock as of December 31, 2020, nor the $4.0 million of funding upon Acceptance are restricted as to withdrawal or usage.

CFF purchased 776,398 shares of the Company's common stock for $7.5 million in October 2025. The Company will use the proceeds of this investment to support continued development of 4D-710. The Company also agreed with CFF to form a Joint Steering Committee, with senior clinical development and regulatory expertise to enhance strategic planning, guidance, and coordination of 4D-710’s development. This agreement between CFF and the Company in October 2025 also provides that CFF will invest an additional $3.6 million in exchange for shares of the Company’s common stock subject to achievement of specific clinical milestones and at the option of the Company. This agreement between the Company and CFF in October 2025 does not modify the prior agreements with CFF.

Sales Agreement with Jefferies LLC (“Jefferies”) — In March 2022, the Company entered into an Open Market Sales Agreement (the “Jefferies Sales Agreement”) with Jefferies as sales agent to sell shares of the Company's common stock, from time to time, with aggregate gross sales proceeds of up to $100.0 million pursuant to the S-3 Registration Statement as an “at-the-market” ("ATM") offering under the Securities Act (the “2022 ATM Offering Program”). During the year ended December 31, 2024,535,938 shares of the Company's common stock had been sold pursuant to the Jefferies Sales Agreement for net proceeds to the Company of $15.3 million, after deducting issuance costs. On May 31, 2024, the Company terminated the Jefferies Sales Agreement and the 2022 ATM Offering Program pursuant to the terms of the Jefferies Sales Agreement. As of the point of termination,1,684,550 shares of the Company’s common stock had been sold pursuant to the Jefferies Sales Agreement for net proceeds to the Company of $34.4 million, after deducting issuance costs.

Sales Agreement with Leerink Partners LLC (“Leerink”)— In June 2024, the Company entered into a Sales Agreement (the “Leerink Sales Agreement”) with Leerink as sales agent to sell shares of the Company's common stock, from time to time, with aggregate gross sales proceeds of up to $250.0 million pursuant to a Registration Statement on Form S-3 that the Company filed with the SEC in February 2024, and subsequently amended in February 2025, as an ATM offering under the Securities Act. For the year ended December 31, 2025,1,175,000 shares of the Company's common stock were sold pursuant to the Leerink Sales Agreement for net proceeds to the Company of $9.6 million, after deducting issuance costs. For the year ended December 31, 2024, no shares had been sold pursuant to the Leerink Sales Agreement.

11. Stock-based Compensation

2025 Employment Inducement Award Plan

On February 3, 2025, the Company’s board of directors adopted the 2025 Employment Inducement Plan (the “Inducement Plan”) pursuant to which the Company reserved 500,000 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market. The Inducement Plan provides for the grant of stock options, restricted stock units, and other stock-based awards. As of December 31, 2025, there were 262,650 shares available for future grants under the Inducement Plan.

2020 Incentive Award Plan

In December 2020, the Company adopted the 2020 Incentive Award Plan (“2020 Plan”), which became effective on December 10, 2020. The 2020 Plan initially reserved 2,606,546 shares of common stock for the issuance of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance bonus awards, performance stock units, dividend equivalents or other stock or cash based award granted to employees, directors and consultants of the Company. The number of shares reserved for future issuance under the 2020 Plan will increase annually on the first day of each fiscal year beginning in 2021 and ending in 2030 by the lesser of (i)5% of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the Company's board of directors, provided, however, no more than 18,000,000 shares of the Company’s common stock may be issued upon the exercise of incentive stock options. As a result of the operation of the automatic annual increase provision of the 2020 Plan, an additional 2,153,533 shares of common stock became available for issuance on February 29, 2024 and an additional 2,289,625 shares of common stock became available for issuance on February 28, 2025, under the 2020 Plan. All stock options are exercisable over a period not to exceed the contractual term often years from the date the stock options were issued. As of December 31, 2025, there were 2,243,784 shares available for grant under the 2020 Plan.

Following the effectiveness of the 2020 Plan, the Company will not make any further grants under the 2015 Equity Incentive Plan (the “2015 Plan”). However, the 2015 Plan continues to govern the terms of stock options that remain outstanding under the 2015 Plan.

2015 Equity Incentive Plan

The 2015 Plan provided for grants of stock options, stock appreciation rights, restricted stock and restricted stock unit awards to employees, directors and consultants of the Company. As of December 31, 2025, stock options to purchase 1,346,450 shares of common stock were outstanding under the 2015 Plan. All stock options are exercisable over a period not to exceed the contractual term often years from the date the stock options were issued and are granted at prices not less than the estimated fair market value of the Company’s common stock on the grant date as determined by the board of directors.

No additional grants will be made under the 2015 Plan, and all outstanding grants under the 2015 Plan that are repurchased, forfeited, expire or are cancelled are returned to the 2015 Plan and are not available for grant under the 2020 Plan.

Employee Stock Purchase Plan

In December 2020, the Company adopted the 2020 Employee Stock Purchase Plan (the “2020 ESPP”). Under the 2020 ESPP,252,337 shares of the Company’s common stock were initially reserved for employee purchases of the Company’s common stock under terms and provisions established by the Company’s board of directors and approved by the Company’s stockholders. The number of shares reserved for future issuance under the 2020 ESPP will increase annually on the first day of each fiscal year beginning in 2021 and ending in 2030 by the lesser of (i)1% of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the Company’s board of directors, provided, however, no more than 15,000,000 shares the Company’s common stock may be issued under the 2020 ESPP. As a result of the operation of this annual increase provision of the 2020 ESPP, an additional 50,000 shares of common stock became available on February 29, 2024 and an additional 150,000 shares of common stock became available for issuance on February 28, 2025, under the 2020 ESPP.

Under the 2020 ESPP, the Company’s employees may purchase common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the stock at the beginning of the offering period or at the end of each applicable purchase period. The 2020 ESPP provides for a series of overlapping 24-month offering periods comprising four six-month purchase periods. The initial offering period under the 2020 ESPP is longer than 24 months, commencing February 15, 2021 and ending on May 14, 2023. Contributions under the 2020 ESPP are limited to a maximum of 15% of an employee’s eligible compensation.

Restricted Stock Units

The Company has granted restricted stock unit ("RSU") awards under the 2020 Plan and the Inducement Plan that vest over a period offour years. The following table summarizes the RSU activity:

Stock Options

The following table summarizes the stock options activity:

The following table is a summary of stock compensation expense for employees and nonemployees by function (in thousands):

The total intrinsic value of stock options exercised was $0.7 million and $5.6 million for the years ended December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, the Company granted 2,384,549 and 1,821,891 stock options to employees with a weighted-average grant date fair value of $4.42 and $19.32 per share, respectively. During the years ended December 31, 2025 and 2024, the Company granted 11,250 and 12,000 stock options to nonemployees with a weighted-average grant date fair value of $2.04 and $18.55 pershare, respectively. As of December 31, 2025, the unrecognized stock-based compensation expense of unvested stock options and RSUs was $34.2 million and is expected to be recognized over a weighted-average period of 1.7 years.

There wereno share-based liabilities paid during the years ended December 31, 2025 and 2024.

Stock-based compensation expense recorded for employees was $20.3 million and $24.4 million for the years ended December 31, 2025 and 2024, respectively. Stock-based compensation expense recorded for nonemployee consultants was $1.7 million for each of the years ended December 31, 2025 and 2024.

The Company estimates the fair value of employee and nonemployee stock options using the Black-Scholes option pricing model. The fair value of employee and nonemployee stock options is recognized on a straight-line basis over the requisite service period of the awards. The fair value of the Company's stock options was estimated using the following assumptions for the years ended December 31, 2025 and 2024:

Expected Term. The expected term for employee stock options is calculated using the simplified method as the Company does not have sufficient historical information to provide a basis for this estimate. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. The expected term for nonemployee stock options is the contractual term of the options.

Expected Volatility. The expected volatility is based on a mix of the Company’s historical volatility and the historical volatility of comparable companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. For each grant, the Company measured historical volatility over a period equivalent to the expected term.

Risk-free Interest Rate. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues whose term is similar in duration to the expected term of the respective stock option.

Expected Dividend Yield. The Company has not paid and does not anticipate paying any dividends on its common stock in the future. Accordingly, the Company has estimated the dividend yield to bezero percent.

12. Common Stock Warrants

In May 2018, the Company issued a warrant for 23,669 shares of the Company’s common stock to a service provider with an exercise price of $3.19 per share. The fair value of the warrant was determined at the issuance date using the Black-Scholes option pricing model. The warrant was fully vested upon issuance and was exercised in May 2025 through a cashless exchange under the terms of the original agreement.

In December 2020, the Company issued a warrant for 30,000 shares of the Company’s common stock to a service provider with an exercise price of $18.00 per share. This warrant vests over a period offour years and expires in 2027. The fair value of the warrant was determined at the issuance date using the Black-Scholes option pricing model.

The Company recognizedno expense related to the above warrant shares duringthe year ended December 31, 2025. The Company recorded less than $0.1 million expense for the above warrants within operating expenses in the statements of operations during the year ended December 31, 2024.

In February 2024, the Company completed an underwritten public follow-on offering which included the sale of pre-funded warrants (the “Pre-funded Warrants”) to purchase 3,583,476 shares of the Company’s common stock at an offering price of $29.4999. The exercise price of each Pre-funded Warrant is $0.0001 per share, and each Pre-funded Warrant is exercisable from the date of issuance. The Pre-funded Warrants are classified as a component of stockholders’ equity within additional paid-in-capital. The Company valued the Pre-funded Warrants at issuance and recorded net proceeds of $99.4 million, after deducting underwriters fees, during the year ended December 31, 2024 related to the sale of the Pre-funded Warrants. In February 2025, two holders of the Pre-funded Warrants gave notice of exercise to purchase an aggregate of 508,476 shares of the Company’s common stock in a cashless exchange under the terms of the Pre-funded Warrants.

In November and December 2024, the Company entered into exchange agreements (the “Exchange Agreements”) with each of Biotechnology Value Fund, L.P. and certain of its affiliates (collectively, “BVF”) and RA Capital Healthcare Fund, L.P. (“RA Capital”), respectively. Pursuant to Exchange Agreements, BVF and RA Capital exchanged 5,775,000 and 535,000 shares, respectively, of the Company’s common stock for pre-funded warrants to acquire the same respective number of shares of the Company’s common stock. The pre-funded warrants have an exercise price of $0.0001 per underlying share of common stock, are exercisable at any time until they are fully exercised and will not expire until they are fully exercised. The Pre-funded Warrants are classified as a component of stockholders’ equity within additional paid-in-capital. The number of shares of the Company’s common stock issuable upon exercise of each pre-funded warrant is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting shares of the Company’s common stock, as well as upon any distribution of assets, including cash, stock or other property, to the Company’s stockholders. The fair value of the common stock exchanged approximated the fair value of the pre-funded warrants issued as of the transaction dates and no net proceeds were recorded in connection with the transactions. On December 22, 2025, BVF gave notice of exercise to purchase an aggregate of 178,280 shares of the Company’s common stock in a cashless exchange under the terms of the pre-funded warrants.

In November 2025, the Company completed the 2025 Offering which included the sale ofpre-funded warrants to purchase 1,128,949 shares of the Company's common stock at an offering price of $10.5099 per underlying share. The exercise price of each pre-funded warrant is $0.0001 per share, and each pre-funded warrant is exercisable from the date of issuance. The pre-funded warrants are classified as a component of stockholders’ equity within additional paid-in-capital. The Company valued the pre-funded warrants at issuance and recorded net proceeds of $11.2 million, after deducting underwriters fees, during the year ended December 31, 2025.

13. Net Loss Per Share, Basic and Diluted

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

In February 2024, the Company issued and sold pre-funded warrants to purchase 3,583,476 shares of common stock at a nominal exercise price of $0.0001. In November and December 2024, the Company entered into Exchange Agreements with BVF and RA Capital to exchange 5,775,000 and 535,000 shares, respectively, of the Company’s common stock for pre-funded warrants to acquire the same respective numberof shares of the Company’s common stock. The pre-funded warrants have an exercise price of $0.0001 per underlying share of common stock. In November 2025, the Company issued and sold pre-funded warrants to purchase 1,128,949 sharesof the Company’s common stock. The pre-funded warrants have an exercise price of $0.0001 per underlying share of common stock (see Note 12, Common Stock Warrants). The shares of common stock into which the Pre-funded Warrants may be exercised are considered outstanding for the purposes of computing earnings per share, because the shares may be issued for little or no consideration, they are fully vested and the Pre-funded Warrants are immediately exercisable upon their issuance date.

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:

14. Derivative Liability

The Company identified an embedded derivative resulting from the change of control provision in the CFF Agreement. Embedded derivatives that are required to be bifurcated from the underlying host instrument are accounted for and valued as separate financial instruments. At the inception of the derivative in 2017, the Company recognized this derivative as a liability and revenue was reduced by the initial fair value of the derivative liability. The Company remeasures the derivative liability to fair value at each reporting period and records the change in fair value of the derivative liability as other income (expense), net. The Company uses a present value analysis with multiple scenarios, which incorporates assumptions and estimates to value the derivative instrument. The Company assesses these assumptions and estimates on a periodic basis as additional information impacting the assumptions is obtained. Estimates and assumptions impacting the fair value measurement include the change of control payment to CFF (range ofzero to $18.9 million at December 31, 2025 and 2024), the probability of a change of control event (range of 5.0% to 50.0% at December 31, 2025 and 2024), the probability of the product achieving development or commercial status at time of change of control (range of 4.8% to 17.2% at December 31, 2025 and 2024) and the discount rate (15% at December 31, 2025 and 2024). The Company determined the estimated fair value of this liability as of the inception date of the CFF Agreement and concluded that the amount was immaterial. The Company determined the fair value of this derivative liability was $0.4 million as of each of December 31, 2025 and 2024.

15. Related Party Transactions

In March 2024, the Company entered into a research and option agreement (the “Reignite Agreement”) with Reignite Therapeutics Inc. (“Reignite”), which was founded by David Kirn, M.D., Chief Executive Officer of the Company. Reignite has the expertise to develop high-capacity, helper-dependent adenovirus capsids which the Company plans to utilize as they expand their therapeutic capsid evolution platform. Reignite and the Company plan to collaborate on a one-to-two year program to develop these high capacity, helper-dependent adenovirus capsids. Under the Reignite Agreement, the Company shall have the final authority to amend and make updates to the plan and budget of the program. Further, the Company is responsible for the funding of the related research which includes the budgeted full-time employees and CRO costs, equipment costs not to exceed $60 thousand and all other costs, in total not to exceed $1.5 million in any year of the program. The Company will have an option to acquire up tothree capsids resulting from the program. The Company shall pay to Reignite an option exercise fee of $1.0 million per selected capsid for which the Company has exercised its option. The maximum total amount payable is $3.0 million.

During the years ended December 31, 2025 and 2024, the Company paid Reignite $1.1 million and $0.8 million, respectively, for research and development expenses. As of December 31, 2025, the Company owes $0.2 million to Reignite for unpaid research and development expense. No option exercise fees were incurred during year ended December 31, 2025.

In 2024, an immediate family member of the Company's President and Chief Operating Officer was employed in the Company's Information Technology department. During the year ended December 31, 2025, the Company paid an immaterial amount of compensation and granted equity awards consisting of RSUs and stock options with an immaterial aggregate grant date fair value.

16. 401(k) Plan

In 2014, the Company adopted a 401(k) plan for all employees who have met certain eligibility requirements. The 401(k) plan allows employees to make pre-tax and post-tax contributions up to the maximum allowable amount set by the Internal Revenue Service. The Company made contributions to the 401(k) plan for all eligible participants and recorded contribution expenses of $2.2 million and $1.6 million for the years ended December 31, 2025 and 2024, respectively.

17. Segment Information

The Company operates ina single operating and reportable segment, which includes all activities related to discovery, development and commercialization of durable and disease-targeted therapeutics. The determination of a single business segment is consistent with the financial information regularly provided to the Company's chief operating decision maker (the "CODM") whomanages the business activities on a consolidated basis. The Company's CODM is its Chief Executive Officer who assesses performance for the business and decides how to allocate resources based on net loss that also is reported on the statements of operations. In making this assessment, the CODM reviews and evaluates net loss to monitor budget versus actual results and to analyze cash flows for purposes of allocating resources and assessing financial performance.

In addition to the significant expense categories included within net loss presented in the Company's statements of operations, the following table provides disaggregated amounts that comprise research and development expenses (in thousands):

The measure of segment assets is reported on the balance sheets as total assets. As of December 31, 2025 and 2024, all of the Company’s long-lived assets were located in the United States. The Company's revenues by geographic region, based on the location of the customer, is disclosed in Note 2, Summary of Significant Accounting Policies.

18. Restructuring and Other Charges

On July 2, 2025, the Company announced a workforce reduction of approximately 25% of current and planned roles in July 2025, primarily in the areas supporting early-stage research and development and support functions to implement a strategic pipeline prioritization to focus on the development of 4D-150 and 4D-710. The Company recorded $3.2 million for severance benefits and related termination costs included in research and development expenses in the Company's statements of operations for the year ended December 31, 2025. There are no future payments in connection with the workforce reduction.

19. Subsequent Events

On January 22, 2026, the Company entered into exchange agreements with RA Capital and BVF and its affiliates, pursuant to which RA Capital exchanged 4,850,000 shares of the Company’s common stock for a pre-funded warrant to acquire 4,850,000 shares of the Company’s common stock, and BVF exchanged 1,750,000 shares of the Company’s common stock for a pre-funded warrant to acquire 1,750,000 shares of the Company’s common stock. The pre-funded warrants have an exercise price of $0.0001 per underlying share of common stock, are exercisable at any time until they are fully exercised, and will not expire until they are fully exercised. The number of shares of the Company’s common stock issuable upon exercise of the pre-funded warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s shares of common stock, as well as upon any distribution of assets, including cash, stock or other property, to the Company’s stockholders. The fair value of the common stock exchanged approximated the fair value of the pre-funded warrants issued as of the transaction dates and no net proceeds were recorded in connection with the transactions.