Pyxis Oncology, Inc.

1. Descriptionof Business

Nature of Business

Pyxis Oncology, Inc. (the “Company”), a Delaware corporation, was founded in June 2018 and launched its operations in July 2019. The Company is a clinical stage oncology company executing on a development strategy designed to address unmet medical needs in patients with solid tumors with a specific focus on head and neck squamous cell carcinoma (HNSCC) tumors.

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Company’s fiscal year ends on December 31 and its first three fiscal quarters end on March 31, June 30 and September 30. The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). The consolidated financial statements include the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

Liquidity and Going Concern

The Company has incurred losses and negative cash flows from operations since inception, including net losses of$79.6 million and$77.3 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the Company had an accumulated deficit of$443.2 million and cash, cash equivalents, and marketable debt securities of$66.9 million.

The Company’s future cash flows are dependent on key variables such as its ability to secure additional sources of funding in the form of public or private financing of equity or debt, collaboration agreements, or a combination of these. While the Company remains optimistic to obtain additional funding, the current available cash, cash equivalents and marketable debt securities will not be sufficient to fund the Company's operations over the next 12 months from the date these consolidated financial statements were included within this Annual Report on Form 10-K. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these consolidated financial statements were issued.

The Company plans to continue to fund its losses from operations and capital funding needs through public or private equity, convertible or debt financing or other sources. There are inherent uncertainties as the outcome of these potential transactions are outside management’s control, and therefore there are no assurances that any of these potential transactions will occur. In addition, there can be no assurances that these transactions will sufficiently improve the Company's liquidity or that the Company will otherwise realize the anticipated benefits. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects.

The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and related disclosures. The Company regularly evaluates estimates and assumptions related to assets, liabilities, stock-based compensation, operating leases, assessment of the useful lives of property and equipment, marketable debt securities, fair value of intangible assets, deferred tax and related valuation allowance and research and development costs, including clinical trial accruals. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results could differ from those estimates and there may be changes to management’s estimates in future periods.

Risks and Uncertainties

The Company is subject to risks common to early clinical stage companies in the biopharmaceutical industry including, but not limited to, uncertainties related to commercialization of products, regulatory approvals, dependence on key suppliers for active ingredients, third party service providers such as contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs), protection of intellectual property rights and the ability to make milestone, royalty or other payments due under any license, collaboration or supply agreements.

Concentration of Credit Risks

Financial instruments which potentially subject the Company to significant concentration of credit risk consist of cash and cash equivalents, restricted cash and short-term investments.

The Company invests its excess cash primarily in money market funds and highly liquid United States (U.S.) Treasury securities. The Company has adopted an investment policy that includes guidelines relative to credit quality, diversification and maturities to preserve principal and liquidity.

Cash and Cash Equivalents

The Company considers all short term, highly liquid investments with original maturities of 90 days or less to be cash equivalents. Cash equivalents consist primarily of money market funds as of December 31, 2025 and 2024.

Investments

Short-term investments consist of U.S. Treasury securities with original maturities greater than three months. The Company may sell investments at any time for use in current operations even if the investments have not yet reached maturity. As a result, the Company classifies its investments as current assets. All investments have been classified as available-for-sale marketable debt securities. Marketable debt securities are recorded at fair value, with unrealized gains and losses, net of tax, included as a component of accumulated other comprehensive income (loss) in stockholders’ equity and a component of total comprehensive loss in the consolidated statements of operations and comprehensive loss, until realized. The fair value of these securities is determined based upon quoted market prices at period end. Premiums paid or discounts received at the time of purchase of marketable securities, are amortized to interest and investment income over the terms of the related securities. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of securities sold.

At each reporting date the Company will evaluate available-for-sale marketable debt securities in an unrealized loss position, using the discounted cash flow model, to determine whether the unrealized loss or any potential credit losses should be recognized in net loss. For available-for-sale marketable debt securities in an unrealized loss position, the Company will assess (i) whether it intends to sell, or (ii) it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If the aforementioned criteria is met, such marketable debt security’s amortized cost basis will be written down to its fair value through earnings along with any existing allowance for credit losses. For available-for-sale marketable debt securities that do not meet this criteria, the Company will evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the severity of the impairment, any changes in interest rates, underlying credit ratings and forecasted recovery, among other factors. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded as an allowance in interest income.

There have been no impairment or credit losses recognized during the periods presented in the accompanying consolidated statements of operations and comprehensive loss.

Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principle or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, the first two are considered observable and the last is considered unobservable:

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

Level 2—Quoted prices in markets that are not considered to be active or financial instrument valuations for which all significant inputs are observable, either directly or indirectly; and

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

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3.

Property and Equipment, net

Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful lives of the related assets as follows:

Depreciation and amortization expense is included in research and development and general and administrative expenses. Major additions and upgrades are capitalized; maintenance and repairs, which do not improve or extend the life of the respective assets, are expensed as incurred. Upon retirement or sale, the cost of assets disposed of, and the related accumulated depreciation and amortization are removed from the respective accounts and any resulting gain or loss is included in the consolidated statements of operations and comprehensive loss.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets, which consist of property and equipment and lease right-of-use assets, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. Management then determines whether the remaining useful life continues to be appropriate, or whether there has been an impairment of long-lived assets based primarily upon whether expected future undiscounted cash flows are sufficient to support the assets’ recovery. Recoverability of these assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. The Company recognizedno impairment losses related to long-lived assets for the years ended December 31, 2025 and 2024.

Intangible Assets, Net

Acquired In-Process Research & Development

The Company’s indefinite-lived intangible assets consisted of in-process research and development (IPR&D), which were acquired in connection with the acquisition of Apexigen Inc., (Apexigen). IPR&D represents the fair value assigned to research and development projects acquired which were in-process but not yet completed at the time of acquisition. The primary basis for determining the completion of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region.

The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the associated research and development efforts are either completed or abandoned. IPR&D becomes definite-lived upon the completion or abandonment of the associated research and development efforts. Indefinite-lived intangible assets are not amortized but evaluated for impairment on an annual basis or more frequently if an indicator of impairment is identified. All research and development costs incurred subsequent to the acquisition of IPR&D are expensed as incurred. As described in Note 10, Intangible Assets, Net, the Company fully impaired its IPR&D during the year ended December 31, 2024.

Definite-Lived Intangible Assets

Definite-lived intangible assets are recorded at cost, net of accumulated amortization, and, if applicable, impairment charges. Definite-lived intangible assets consist of a retained royalty right under an Apexigen agreement. The useful life was determined based on the terms and conditions underlying the licensing agreement and the expected use of the asset by the Company. Amortization of definite-lived intangible assets is recorded over the assets’ estimated useful lives on a straight-line basis and is included as part of research and development expenses within the accompanying consolidated statements of operations and comprehensive loss. As of December 31, 2025, the Company has fully amortized its definite-lived intangible assets as the related retained royalty rights were sold during the year.

Operating Leases

Operating lease right-of-use (ROU) assets represent the Company’s right to use an underlying asset during the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are initially recognized and measured based on the present value of the future fixed lease payments over the expected lease term at the commencement date calculated using the Company’s incremental borrowing rate applicable to the lease asset, unless the implicit rate is readily determinable. The Company determines the lease term as the non-cancellable period of the lease and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease ROU assets also include any initial direct costs incurred and any lease payments made on or before the lease commencement date, less lease incentives received. Operating lease ROU assets are subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Leases with a term of 12 months or less are not recognized on the consolidated balance sheets. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease costs such as common area costs and other operating costs are expensed as incurred. The Company accounts for lease and non-lease components as a single lease component for all its facilities leases.

Contingencies

The Company, from time to time, may be a party to various disputes and claims arising from normal business activities. The Company continually assesses disputes and claims including resulting litigation to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss which could be estimated. The Company accrues for all contingencies at the earliest date at which the Company deems it probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely than another, the Company accrues the minimum of the range. In the cases where the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the contingencies, including an estimable range, if possible.

Revenue Recognition

Revenue is recognized when the customer obtains control of the promised goods or services, at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company has not commenced sales of its drug candidates and does not have any products approved for marketing as of December 31, 2025.

The Company may also earn contingent fees, including milestone payments, based on counterparty performance and royalties on sales, from collaborations and other out-license arrangements. The Company recognizes revenue related to sales-based royalties, wherein the license is deemed to be the sole or predominant item to which the payments relate, upon the later of: (i) when the related sales occur or (ii) when the performance obligation to which some or all of the payment has been allocated has been satisfied (or partially satisfied). The Company recognizes milestone payment revenues when it is probable that a significant reversal in revenue will not occur.

The Company expenses research and development costs as incurred. The Company’s research and development expenses consist primarily of license fees to acquire intellectual property which does not meet the definition of intangible assets and costs incurred in performing research and development activities, including personnel-related expenses such as salaries, stock-based compensation and benefits, facilities costs, depreciation as well as external costs from third parties who conduct research and development activities (including manufacturing) on behalf of the Company. The Company accrues expenses related to development activities performed by third parties based on an evaluation of services received and efforts expended pursuant to the terms of the contractual arrangements. Payments under some of these contracts depend on preclinical and/or clinical trial milestones. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of expenses. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company adjusts the accrual or prepaid expense accordingly.

Stock-Based Compensation

The Company maintains an equity incentive plan as a long-term incentive for employees, consultants and directors. The Company accounts for all stock-based awards granted to employees and non-employees based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. The grant date fair value of the stock-based awards with graded vesting is recognized on a straight-line basis over the requisite service period. The Company recognizes forfeitures related to stock-based compensation awards as they occur and reverses any previously recognized compensation cost associated with forfeited awards in the period the forfeiture occurs. The Company classifies stock-based compensation expense in the consolidated statements of operations and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified.

The Company values its stock options with service conditions using the Black-Scholes option-pricing model. The Company uses certain assumptions to determine fair value of the stock options pursuant to the Black-Scholes option-pricing model, including the expected life of the award, volatility of the underlying shares, the risk-free interest rate, expected dividend yield and the fair value of the Company’s common stock. Since the Company lacks sufficient historical option exercise data to provide a reasonable basis upon which to estimate the expected term, the Company uses the simplified method described in the U.S. Securities and Exchange Commission's (SEC) Staff Accounting Bulletin No. 107, Share-Based Payment(“SAB 107”), to determine the expected life of the option grants. The Company lacks sufficient company-specific historical and implied volatility information that is at least equal to the expected life of most stock options. Therefore, the Company estimates the expected stock volatility based on a blend of the historical volatility of a publicly traded set of peer companies and the Company’s own volatility. The risk-free interest rate is based on the rates paid on securities issued by the U.S. Treasury with a term approximating the expected life of the equity award. As the Company has never paid and does not anticipate paying cash dividends on its common stock, the expected dividend yield is considered as zero. When determining the grant-date fair value of stock-based awards, management further considers whether an adjustment is required to the observable market price or volatility of the Company’s common stock that is used in the valuation as a result of material non-public information, if that information is expected to result in a material increase in share price.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between amounts in the consolidated financial statements and the tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income tax (benefit) expense in the consolidated statements of operations and comprehensive loss in the period that includes the enactment date. The Company’s policy is to recognize interest and/or penalties related to income tax matters in provision for income taxes.

The Company may be subject to withholding taxes imposed by foreign jurisdictions on upfront fees, milestone payments and royalties earned under its collaboration and license agreements. Such withholding taxes are recorded as a component of income tax expense in the period the related revenue is recognized, unless the withholding tax represents a tax collected from the customer, in which case such amounts are excluded from revenue.

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

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

Net Loss per Share

Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the diluted weighted average number of common shares outstanding for the period.

In periods in which the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per common share and diluted net loss per common share are equivalent. Potentially dilutive common stock has been excluded from the diluted net loss per common share computations in all periods presented because such securities have an anti-dilutive effect on net loss per common share due to the Company’s net loss. There are no reconciling items used to calculate the weighted-average number of total common stock outstanding for basic and diluted net loss per common share data.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures. The amendment requires (i) enhanced disclosures in connection with an entity's effective tax rate reconciliation and (ii) income taxes paid disaggregated by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024. On January 1, 2025, the Company adopted ASU 2023-09 prospectively. The adoption of ASU 2023-09 didnot have an impact on the Company's consolidated financial statements, but resulted in expanded income tax disclosures. Refer to the disclosure included in Note 16, Income Taxes.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendment requires disaggregated disclosure of (i) certain costs and expenses, (ii) certain already required disclosures must be included in the same disclosure as the new disaggregation requirements and (iii) a qualitative description of the amounts not separately disaggregated. The amendments are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, early adoption is permitted. The Company is currently evaluating the impact of the new standard on the Company's consolidated financial statements and related disclosures.

3. Licensing Agreements

The University of Chicago Agreement

In April 2020, the Company entered into a license agreement (the University License Agreement), as well as a sponsored research agreement, with the University of Chicago (the University). Under the terms of the license, the Company has the global right to develop and commercialize products that are covered by a valid claim of a licensed patent, incorporate or use the licensed know-how and materials or are known to assess, modulate or utilize the activity of certain specified biological targets. In partial consideration for the license from the University, the Company issued to the University 48,919 shares of its common stock in 2020.

Pursuant to the University License Agreement, the Company is obligated to pay potential development and commercial milestones of up to $7.7 million as well as running royalties on net sales of licensed products at varying rates ranging from less than a percent to the low single digits, subject to a minimum annual royalty of up to $3.0 million during certain years following the effective date. The Company is also obligated to pay the University a percentage of certain sublicensing revenue ranging from low- to mid-teens based on the date of entering into the applicable sublicense.

The Company assessed the milestone and royalty events under the University License Agreement as of December 31, 2025 and 2024, and determined thatno such amounts were required.

Pfizer Inc. Agreement

In December 2020, the Company entered into a license agreement (as amended, the Pfizer License Agreement) with Pfizer Inc. (Pfizer) for worldwide development and commercialization rights to ADC product candidates directed to certain licensed targets, including micvotabart pelidotin (MICVO, formerly PYX-201) and PYX-203, and products containing the ADC product candidates. The Company’s rights are exclusive with respect to certain patents owned or controlled by Pfizer covering the licensed ADCs. The initial licensed targets include CD123 and EDB+FN and the Company has the option to expand the scope of its license to add additional licensed targets that have not been licensed to a third party or are not the subject of a Pfizer ADC development program. The Pfizer License Agreement became effective in March 2021 and the Company paid a combined $25.0 million for the license fee, consisting of an upfront cash payment of $5.0 million and issued 12,152,145 shares of Series B convertible preferred stock, which was converted into 1,911,015 shares of its common stock upon the initial public offering (IPO) in October 2021, with a value of $20.0 million to Pfizer.

On October 6, 2022, the Company entered into an amended and restated license agreement (the A&R License Agreement) with Pfizer, which amends and restates the Pfizer License Agreement. Pursuant to the A&R License Agreement, Pfizer granted to the Company exclusive worldwide rights under Pfizer’s Flexible Antibody Conjugation Technology (FACT) Platform to develop and commercialize ADC product candidates directed to certain licensed targets, including MICVO and PYX-203, and products containing the ADC product candidates. Additional ADC targets may be licensed for a nominal upfront payment and milestones. In accordance with the terms of the A&R License Agreement, the Company issued 2,229,654 shares of its common stock to Pfizer in October 2022, paid $8.0 million to Pfizer in January 2023 and issued 1,811,594 shares of its common stock to Pfizer in March 2023.

The Company is also obligated to pay future contingent payments including development, regulatory and commercial milestones up to an aggregate of $665 million for the first four licensed ADCs. In addition, the Company is required to pay future contingent payments including development, regulatory and commercial milestones for ADCs to each additional licensed target beyond the first four licensed ADC targets developed and commercialized via the FACT Platform. Additionally, if ADC licensed products are launched, the Company will pay Pfizer tiered royalties on net sales of licensed products in varying royalty rates ranging from low single digits to mid-teens. The Company’s royalty obligations apply on a licensed product-by-licensed product and country-by-country basis from first commercial sale until the latest to occur of: (1)12 years from first commercial sale; (2) the expiration of all regulatory or data exclusivity; and (3) the expiration of the last valid claim of a licensed patent covering the licensed product in a country. The Company is also obligated to pay Pfizer a percentage of certain sublicensing revenue ranging from low-double digits to twenty percent based on the stage of development of the licensed product at the time of entering into the applicable sublicense.

The Company assessed the milestone and royalty events under the A&R License Agreement as of December 31, 2025 and 2024, and determined thatno such amounts were required.

License Agreement with Biosion USA, Inc.

On March 28, 2022, the Company entered into a license agreement (the Biosion License Agreement) with Biosion USA, Inc. (Biosion), pursuant to which the Company obtained an exclusive, worldwide (other than Greater China (mainland China, Hong Kong, Macau and Taiwan)) license for development, manufacturing and commercialization rights for BSI-060T, a Siglec-15 targeting antibody, an IO product candidate (now referred to as PYX-106), and products containing the licensed compound. Under the terms of the Biosion License Agreement, each party granted to the other party a right of first offer to obtain an exclusive license in the other party’s territory (Greater China for Biosion, and the rest of the world for Pyxis) to develop, manufacture and commercialize any bi-specific or multi-specific antibody any ADC controlled by a party or its affiliate that inhibits, modulates or binds to Siglec-15 as an intended mechanism of action.

Pursuant to the Biosion License Agreement, the Company paid an upfront license fee of $10.0 million in March 2022. Further, the Company is obligated to pay future contingent payments including development, regulatory and commercial milestones up to an aggregate of $217.5 million in case of normal approval and $222.5 million in case of Accelerated Approval. Additionally, if products are launched, the Company will pay Biosion tiered royalties on net sales of licensed products in varying royalty rates ranging from low single digits to low teens. The Company’s royalty obligations apply on a licensed product-by-licensed product and country-by-country basis from first commercial sale until the latest to occur of: (1)12 years from first commercial sale; (2) the expiration of all regulatory or data exclusivity; and (3) the expiration of the last valid claim of a licensed patent covering the licensed product in a country. The Company is also obligated to pay Biosion a percentage of certain sublicensing revenue ranging from low-double to mid-double digits based on the stage of development of the licensed product at the time of entering into the applicable sublicense.

The Company assessed the milestone and royalty events involving the Biosion License Agreement as of December 31, 2025 and 2024, and determined thatno such amounts were required.

Acquired Out-Licensing Agreements

In August 2023, the Company completed the acquisition of Apexigen (hereinafter referred to as the 'Acquisition') and assumed all out-licensing agreements of Apexigen upon the Acquisition.

Simcere License and Collaboration Agreement

In December 2008, Epitomics (Apexigen's predecessor) and Jiangsu Simcere Pharmaceutical R&D Co., Ltd. (Simcere) entered into a license and collaboration agreement (the Simcere Agreement) for the development and commercialization of suvemcitug (BD0801) for oncology in China. Suvemcitug is a humanized anti-VEGF rabbit monoclonal antibody molecule. Under the Simcere Agreement, Simcere had an exclusive, royalty-bearing license (without the right to sublicense) to rights in certain intellectual property to develop and commercialize suvemcitug in the field of oncology therapeutics in China.

Simcere granted the Company a non-exclusive, royalty-free, worldwide license (without the right to sublicense) to improvements derived from suvemcitug using the intellectual property the Company licensed to Simcere. Simcere was obligated to pay the Company milestone payments for achievement of certain clinical development milestones and low to high single-digit percentage royalties on net sales of suvemcitug in China until 15 years after the first commercial sale of suvemcitug.

On June 30, 2025, the National Medical Products Administration (NMPA) of China (formerly SFDA) granted final regulatory approval for suvemcitug in China. Upon suvemcitug approval by NMPA, the Company was entitled to a $3 million regulatory approval milestone under the Simcere Agreement. Accordingly, the Company recognized $2.8 million of milestone revenue ($3 million upon achievement of the regulatory milestone less $0.2 million of withholding tax in China) within the accompanying consolidated statements of operations and comprehensive loss during the year ended December 31, 2025.

Further, as described in Note 4, Sale of Royalty Rights, on December 11, 2025, the Company completed the sale of its rights to royalties from the commercialization of Enzeshu® (Suvemcitug for Injection) to Simcere for a one-time cash payment of $11 million and four semi-annual installments of $175,000 each.

T-Mab/Mabwell Agreement

In May 2008, Epitomics and Jiangsu T-Mab Biotechnology Ltd., Co. (T-Mab) entered into a license, co-development and contract manufacture agreement (the T-Mab Agreement) for the development and commercialization of therapeutic candidates, each directed to a specified target for specified fields, including VEGF for the treatment of ocular diseases, in China. Mabwell (Shanghai) Bioscience Co., Ltd. (Mabwell) acquired T-Mab in 2015.

Under the T-Mab Agreement, Mabwell was granted an exclusive, royalty-bearing, perpetual license (without the right to sublicense) to rights in certain intellectual property to develop and commercialize such therapeutic candidates. Mabwell is obligated to pay the Company a mid-single-digit percentage royalty on net sales of such therapeutic candidates in China. The royalty term for 9MW0211, an anti-VEGF antibody licensed under the T-Mab Agreement, will begin with the first commercial sale in China. As of December 31, 2025 and 2024, the Company assessed the milestone and royalty events involving Mabwell and determined thatno such amounts were receivable.

Toray Sublicense Agreement

In May 2012, Epitomics and Toray Industries, Inc. (Toray) entered into a non-exclusive sublicense agreement (the Toray Agreement) under which Epitomics granted Toray a non-exclusive, worldwide sublicense, with the right to grant further sublicenses, to develop and commercialize drug product candidates that Toray developed using antibodies created using the APXiMAB platform that target certain molecules to use in the development of its drug product candidates. Under the Toray Agreement, Toray paid an upfront fee and agreed to pay certain development- and regulatory-related milestone payments and a low single-digit percentage royalty on net sales of licensed products by Toray or its affiliates. Toray is also obligated to pay the Company a mid-teens percentage of certain payments Toray receives from sublicensees under the Toray Agreement, which payments may limit Toray’s obligations to pay the milestone payments described above. The Toray Agreement continues on a product-by-product and country-by-country basis until 10 years after the first commercial sale of such product in such country. As of December 31, 2025 and 2024, the Company assessed the milestone and royalty events involving Toray and determined thatno such amounts were receivable.

4. Sale of Royalty Rights

As described in Note 3, Acquired Out-Licensing Agreements, upon the acquisition of Apexigen, the Company assumed the Simcere License and Collaboration Agreement, an out-licensing agreement between Apexigen and Simcere, pursuant to which Simcere was obligated to pay the Company low to high single-digit percentage royalties on net sales of suvemcitug in China until 15 years after the first commercial sale of suvemcitug.

On December 11, 2025, the Company entered into an amendment to the License and Collaboration Agreement (the Simcere Royalty Agreement) with Simcere, pursuant to which the Company relinquished its rights to future royalties on the net sales of Enzeshu® to Simcere for a one-time amount of $11.0 million and four semi-annual installments of $175,000 each.

The Simcere Royalty Agreement with Simcere constitutes a contract with a customer. Upon execution of the Simcere Royalty Agreement, the $11.0 million of payment ($11.7 million less $0.7 million of withholding tax in China) related to the sale of future royalties was recorded as revenues and the remaining definite-lived intangible asset of $2.4 million related to these royalty rights was recorded as cost of revenues within the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2025.

On March 25, 2024, the Company entered into the Fourth Amendment, Settlement Agreement, and Royalty Purchase Agreement (the Settlement Agreement) with Novartis, pursuant to which the Company transferred its rights to future royalties on the net sales of Beovu® to Novartis for a one-time amount of $8.0 million. Additionally, the dispute regarding Novartis’ obligation to pay royalties on Beovu® sales was resolved and royalties previously received by Apexigen and the Company, aggregating to $8.1 million, were agreed to be free from any reclaim rights. Upon the Settlement Agreement, the Company recognized revenue of $16.1 million during the year ended December 31, 2024.

5. Segment Disclosures

Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources in assessing performance. The Company hasone reportable segment related to the development of clinical and preclinical product candidates focused on addressing unmet medical needs in patients with solid tumors with a specific focus on HNSCC tumors. The Company’s chief operating decision maker (CODM) is the Chief Executive Officer.

The accounting policies of the single segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the segment based on net loss, which is reported on theconsolidated statements of operations and comprehensive loss as net loss. The measure of segment assets is reported on the consolidated balance sheets as total assets.

To date, the Company has not generated any product revenue. As described in Note 3, Licensing Agreements and Note 4, Sale of Royalty Rights, the Company generated revenue during the years ended December 31, 2025 and 2024 from the milestone payment upon approval of suvemcitug in China, the sale of its royalty rights under the Simcere Royalty Agreement with Simcere and Settlement Agreement with Novartis. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances the product candidate through all stages of development and clinical trials and, ultimately, seeks regulatory approval.

As such, the CODM uses cash forecast models in deciding how to allocate resources. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation, along with cash forecast models.

The table below summarizes segment net loss, including significant expenses for the years ended December 31, 2025 and 2024 (in thousands):

6. Fair Value Measurements

The following tables present the financial instruments carried at fair value on a recurring basis as of December 31, 2025 and 2024, respectively, in accordance with the fair value hierarchy (in thousands):

The Company’s cash equivalents represent deposits in a short-term money market fund quoted in an active market and classified as Level 1 assets. Marketable debt securities include investments in U.S. Treasury securities and are classified as Level 1 assets as they are valued using quoted prices in active markets. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the years ended December 31, 2025 and 2024.

7. Marketable Debt Securities

Marketable debt securities, all of which were classified as available-for-sale, consisted of the following (in thousands):

As of December 31, 2025 and 2024, the remaining contractual terms of the U.S. Treasury securities were less than 12 months. As of December 31, 2025 and 2024, the Company held no securities in an unrealized loss position. There wereno securities in a continuous unrealized loss position for greater than twelve months at December 31, 2025 or 2024.

To date, we have not recognized any allowances for credit losses or impairments in relation to our marketable securities as these securities are comprised of high credit quality, investment grade securities that we do not intend or expect to be required to sell prior to their anticipated recovery, and the decline in fair value of these securities is attributable to factors other than credit losses.

Interest and Investment Income, Net

Interest and investment income, net consisted of the following (in thousands):

8. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

9. Property and Equipment, Net

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

Depreciation and amortization expense on property and equipment for the years ended December 31, 2025 and 2024, was $1.9 million and $2.0 million, respectively, of which $1.6 million and $1.4 million, respectively, was included within research and development expenses and $0.3 million and $0.6 million, respectively, was included in general and administrative expenses in the accompanying statements of operations and comprehensive loss.

10. Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):

As described in Note 3, Licensing Agreements, the Company assumed all out-licensing agreements of Apexigen upon the completion of the Acquisition.

As described in Note 4, Sale of Royalty Rights, the Company sold its royalty rights under Simcere Royalty Agreement in 2025 and the Settlement Agreement with Novartis in 2024; therefore, the carrying value of intangible assets on the date of sale of royalty rights of $2.4 million and $0.5 million, respectively, were expensed as cost of revenue in the accompanying consolidated statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024, respectively.

IPR&Drelates to the research and development assets of Apexigen, renamed PYX-107, acquired by the Company in 2023. In December 2024, the Company announced a strategic realignment plan to prioritize resources towards clinical development of MICVO and continue to defer further clinical development of PYX-107. Given the uncertain timing of the future clinical development of PYX-107, the

Company recognized an impairment loss of $21.0 million during the year ended December 31, 2024. No impairment loss was recorded during the year ended December 31, 2025.

Amortization expense of $0.2 million and $0.3 million for the years ended December 31, 2025 and 2024, respectively, were recorded as part of research and development expense within the accompanying consolidated statements of operations and comprehensive loss.

11. Accrued Expenses and Other Current Liabilities

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

12. Operating Leases

Leases classified as operating leases are included in operating lease ROU, operating lease liabilities, current portion and operating lease liabilities, net of current portion, in the Company's consolidated balance sheets.

The Company leases its office and facilities in Boston, Massachusetts under a non-cancellable operating lease agreement that continues through December 31, 2032. Under the terms of the lease agreement, the Company is responsible for certain insurance, property taxes and maintenance expenses, which represents the Company’s proportionate share of the actual expenses incurred by the landlord. The operating lease agreement contains scheduled annual rent increases over the lease term.

The Company subleases approximately 17,729 square feet of office and laboratory space in the building located at 321 Harrison Avenue, Boston, Massachusetts. The Company remains jointly and severally liable under the head lease and accounts for the sublease as an operating lease. The lease term commenced on March 24, 2023, and is expected to end in May 2026. The Company recognized sublease income of$2.6 million and$2.9 million for the years ended December 31, 2025 and 2024, respectively.

The components of lease expense were as follows (in thousands):

Variable lease costs primarily relate to common area costs and other operating costs, which are assessed based on the Company’s proportionate share of such costs for the leased premises. Total lease costs are included as operating expenses in the Company’s consolidated statements of operations and comprehensive loss.

Maturities of lease liabilities for the next five years, as of December 31, 2025, are as follows (in thousands):

13. Stockholders’ Equity

Shelf Registration Statement and ATM Offering Program

On November 26, 2025, the Company filed a registration statement on Form S-3 with the SEC for the issuance of common stock, preferred stock, warrants, debt securities, rights and units up to an aggregate of $350.0 million. On December 09, 2025, the registration statement was declared effective by the SEC. The registration statement includes an ATM offering program for the sale of up to $150.0 million of shares of the Company's common stock.

Any shares offered and sold in the ATM offering will be issued pursuant to the Company’s effective shelf registration statement on Form S-3 and the related prospectus supplement. Under the ATM, the sales agents may sell shares of common stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended. The Company will pay the sales agents a commission rate of up to 3% of the gross sales proceeds of any shares sold and has agreed to provide the sales agents with customary indemnification, contribution and reimbursement rights. The ATM contains customary representations and warranties and conditions to the placements of the shares pursuant thereto.

During the year ended December 31, 2024, the Company completed the sale of an aggregate of 4,050,000 shares of common stock under the ATM offering program, with an average sale price of $3.07 per share, resulting in gross proceeds of $12.4 million. The Company paid commissions of $0.3 million to the placement agent under the ATM offering program.

During the year ended December 31, 2025, the Company didnot sell any shares of common stock under the ATM offering program. As of December 31, 2025, the Company had $150.0 million of remaining capacity available under the ATM facility.

Preferred Stock

As of December 31, 2025, the Company had 10,000,000 authorized shares of preferred stock, with a par value of $0.001 per share. The board of directors has the authority, without further action by the stockholders to issue such shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the dividend, dividend rights, conversion rights, voting, redemption terms, liquidation preference and other rights, preferences and privileges of the shares.

There wereno issued and outstanding shares of preferred stock as of December 31, 2025 and 2024.

Common Stock

The Company was authorized to issue up to 190,000,000 shares of common stock as of December 31, 2025 and 2024, of which 62,690,229 and 59,967,814 shares were issued and outstanding as of December 31, 2025 and 2024, respectively.

Voting, dividend and liquidation rights of the holders of the common stock are subject to and qualified by the rights, powers and preferences of the holders of the preferred stock.

Voting– Each holder of outstanding shares of common stock shall be entitled toone vote in respect of each share.

Reserved Shares– The Company reserved the following shares of common stock for issuance:

14. Common Stock Warrants

Apexigen Replacement Warrants

Upon the Acquisition, each outstanding warrant issued by Apexigen was assumed and converted into a warrant to acquire the Company’s common stock, on substantially similar terms and conditions as were applicable under such Apexigen warrant agreements. The Company replaced 5,815,613 Apexigen warrants with 1,003,191 Pyxis Oncology warrants.

As of December 31, 2025, there were 344,259 warrants outstanding with an exercise price of $8.12 per share,17,212 warrants outstanding with an exercise price of $10.14 per share and 641,720 warrants with an exercise price of $66.67 per share. Each of the warrants with an exercise price of $66.67 per share will expire on July 29, 2027, or earlier upon redemption or liquidation. Each of the warrants with an exercise price of $8.12 per share and $10.14 per share will expire on July 30, 2028, or earlier upon redemption or liquidation.

The Company may call the warrants outstanding with an exercise price of $10.14 per share for redemption:

•

in whole or in part;

•

at a price of $0.01 per warrant;

•

upon a minimum of 30 days’ prior written notice of redemption; and

•

if, and only if, the last reported closing price of the ordinary shares equals or exceeds $104.35 per share for any 20 trading days within a 30-trading day period on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

Private Placement Warrants

In February 2024, the Company completed the private placement with certain institutional and accredited investors and received gross proceeds of $50 million by issuing (i)8,849,371 shares of the Company’s common stock, par value $0.001 per share, at a purchase price of $4.78 per share, and (ii) pre-funded warrants (‘Pre-Funded Warrant’) to purchase up to an aggregate of 1,611,215 shares of the Company’ common stock at a purchase price of $4.779 per Pre-Funded Warrant.

In January 2025, the pre-funded warrant holder exercised their right to convert the Pre-Funded Warrants to common stock and accordingly, the Company issued 1,611,215 shares of the Company’s common stock to the warrant holder.

15. Stock-Based Compensation

2019 Equity Incentive Plan

In 2019, the Company established the 2019 Equity Incentive Plan (the 2019 Plan), under which the Company is allowed to grant options and restricted stock to its employees and non-employees. The maximum number of shares of common stock reserved for issuance under the 2019 Plan is 4,042,408 shares. Options granted under the 2019 Plan include incentive stock options that can be granted only to the Company’s employees and non-statutory stock options that can be granted to the Company’s employees, consultants, advisors and directors. The 2019 Plan also permits the Company to issue restricted stock awards. Unless earlier terminated by the Board, the 2019 Plan will terminate on thetenth anniversary of the effective date.

As of December 31, 2025, options to purchase 1,822,815 shares of common stock and 363,444 restricted stock units were outstanding, and 264,094 shares remained available for future issuance under the 2019 Plan.

2021 Equity Incentive Plan

On September 27, 2021, the Company’s board of directors and stockholders approved the 2021 Equity Incentive Plan (the 2021 Plan), which became effective on October 7, 2021, when the Company’s registration statement was declared effective by the SEC. The 2021 Plan allows the Company to make equity-based and cash-based incentive awards to its officers, employees, directors and consultants. The Company has initially reserved 3,852,807 shares of its common stock for the issuance of awards under the 2021 Plan. On October 23, 2024, the Company's stockholders approved an increase of 5,500,000 shares of common stock available for issuance under the 2021 Plan. The number of shares of common stock reserved for issuance under the 2021 Plan will automatically increase annually on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022, and continuing until (and including) the fiscal year ending December 31, 2031 by the lesser of (i)5% of the total number of shares of common stock outstanding on December 31st of the immediately preceding fiscal year and (ii) the number of shares as may be determined by the board of directors. On January 1, 2025, the number of shares of common stock available for issuance under the 2021 Plan increased by 2,998,390 shares as a result of the evergreen provision. The maximum number of shares of common stock that may be issued pursuant to the exercise of incentive options under the 2021 Planis 7,705,614. Unless earlier terminated by the Board, the 2021 Plan will terminate on thetenth anniversary of the effective date.

As of December 31, 2025, options to purchase 8,536,460 shares of common stock and 1,100,077 restricted stock units were outstanding, and 3,998,507 shares remained available for future issuance under the 2021 plan.

2022 Equity Inducement Plan

On July 1, 2022, the Company’s board of directors approved the 2022 Equity Inducement Plan (the 2022 Inducement Plan), which became effective on that date. The 2022 Inducement Plan allows the Company to make equity-based incentive awards to its officers and employees without stockholder approval pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules, or any successor rule relating to inducement awards. Unless earlier terminated by the Board, the 2022 Inducement Plan will terminate on thetenth anniversary of the effective date. The Company has initially reserved 1,400,000 shares of its common stock for the issuance of awards under the 2022 Inducement Plan.

As of December 31, 2025, options to purchase 987,753 shares of common stock and 107,485 restricted stock units were outstanding, and 56,002 shares remained available for future issuance under the 2022 Inducement Plan.

2022 Equity Incentive Plan

Upon the Acquisition, the Company assumed Apexigen's 2022 Equity Incentive Plan (the 2022 Plan), which allows the Company to grant options and restricted stock to eligible employees and non-employees. The Company initially reserved 443,912 shares of its common stock for the issuance of awards under the 2022 Plan. The number of shares of common stock reserved for issuance under the 2022 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2023 through January 1, 2032, in an amount equal to the lesser of (i)0.8625% of the total number of shares of common stock outstanding on the last day of the calendar month before the date of each automatic increase, (ii) 554,890 shares, or (iii) such number of shares determined by the administrator of the 2022 Plan. On January 1, 2025, the number of shares of common stock available for issuance under the 2022 Plan increased by 517,222 shares as a result of the evergreen provision. Unless earlier terminated by the Board, the 2022 Plan will terminate on the tenth anniversary of the effective date.

As of December 31, 2025, options to purchase 1,121,268 shares of common stock and 63,513 restricted stock units were outstanding under the 2022 Plan and 607,360 shares remained available for future issuance under the 2022 Plan.

2020 Equity Incentive Plan

The Company also assumed Apexigen's 2020 Equity Incentive Plan, (the 2020 Plan) as a result of the Acquisition. Outstanding awards granted under the 2020 Plan will remain subject to the terms of the plan, and shares underlying awards granted under such plan that are cancelled or forfeited will be available for issuance under the 2022 Plan, as applicable.

2021 Employee Stock Purchase Plan

On September 27, 2021, the Company’s board of directors and stockholders approved the 2021 Employee Stock Purchase Plan (the 2021 ESPP), which became effective on October 7, 2021, when the Company’s registration statement was declared effective by the SEC. The 2021 ESPP initially reserved and authorized the issuance of up to a total of 424,595 shares of common stock to participating employees. Thenumber of shares of common stock reserved for issuance under the ESPP will automatically increase annually on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022, and continuing until (and including) the fiscal year ending December 31, 2031 by the lesser of (i) 110,080 shares, (ii)1% of the total number of shares of common stock outstanding on December 31st of the immediately preceding fiscal year and (iii) the number of shares as may be determined by the board of directors. On January 1, 2025, the number of shares of common stock available for issuance under the 2021 ESPP increased by 110,080 shares as a result of the evergreen provision. During the year ended December 31, 2025, the Company issued 77,906 shares of common stock pursuant to the ESPP.

As of December 31, 2025, the authorized number of shares and shares available for issuance under the 2021 ESPP is 605,490.

Stock Options

Stock options granted under the 2022 Inducement Plan, 2022 Plan, 2021 Plan, 2020 Plan and 2019 Plan (together, the Plans) to employees generally vest over four years and expire after 10 years.

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

The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2025 and 2024 was $1.06 and $1.93 per share, respectively. The aggregate intrinsic value is calculated as the difference between the exercise price of all outstanding and exercisable stock options and the fair value of the Company’s common stock of $1.15 per share as of December 31, 2025, the last trading day of 2025. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2025 and 2024 was approximately $0.9 million and $0.3 million, respectively.

The Company has an aggregate $6.0 million of gross unrecognized stock-based compensation expense as of December 31, 2025, remaining to be amortized over a weighted average period of 2.9 years. The Company has not recognized and does not expect to recognize in the near future, any tax benefit related to employee stock-based compensation expense as a result of the full valuation allowance related to its net deferred tax assets.

The Company estimated the fair value of each stock option on the date of grant using the following key input assumptions in the Black-Scholes option-pricing model:

Restricted Stock Units (RSU)

The following table summarizes restricted stock unit activity for the year ended December 31, 2025:

Compensation costs related to these RSUs were recorded based on the Company's stock price on the date of issuance and amortized over the service period.

During the year ended December 31, 2025, the Company issued 687,859 shares of its common stock from the settlement of 777,261 shares of restricted common stock, with the remaining shares withheld for taxes.

The total fair value of restricted common stock that vested during the years ended December 31, 2025 and 2024 was $2.5 million and $5.2 million, respectively.

The Company has an aggregate $1.9 million of gross unrecognized restricted stock-based compensation expense as of December 31, 2025, remaining to be amortized over a weighted average period of 1.8 years.

Summary of Stock-Based Compensation Expense

The following tables summarize the total stock-based compensation expense for the years ended December 31, 2025 and 2024, respectively (in thousands):

Total stock-based compensation expense for stock options includes expense related to the 2021 ESPP of $0.1 million and $0.1 million for the years ended December 31, 2025 and 2024, respectively.

16. Income Taxes

On January 1, 2025, the Company adopted the guidance in ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures on a prospective basis.

Components of income tax expense (benefit) consist of the following (in thousands):

Cash paid for income taxes, net of refunds received, by jurisdiction for the year ended December 31, 2025 is as follows (in thousands):

The majority of state tax was paid to Massachusetts.

A reconciliation of the expected income tax expense computed using the federal statutory income tax rate to the Company's effective income tax rate is as follows for the year ended December 31, 2025:

(1) State taxes in Massachusetts made up the majority (greater than 50%) of the tax effect in this category.

The Company recorded an income tax expense of $1.4 million with an effective tax rate of (1.8%) for the year ended December 31, 2025.

A reconciliation of the expected income tax benefit computed using the federal statutory income tax rate to the Company's effective income tax rate is as follows for the year ended December 31, 2024:

The Company recorded an income tax benefit with an effective tax rate of 2.6% for the year ended December 31, 2024. A full valuation allowance eliminated the company's net deferred tax assets.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts recorded for income tax purposes. Significant components of the Company’s net deferred tax assets as of December 31, 2025 and 2024 were as follows (in thousands):

As of December 31, 2025, the Company's federal and state net operating losses in the United States were $82.1 million ($390.9 million before tax) and $14.3 million ($218.2 million before tax), respectively. The federal net operating loss carryforward generated in the United States after tax year 2017 can be carried forward indefinitely but may be subject to annual usage limitations to the extent certain substantial changes in the entity's ownership occur. The federal net operating loss carryforward relating to tax years prior to 2017 of $5.9 million ($28.3 million before tax), acquired with Apexigen, begin to expire in 2033. The state net operating loss carryforwards begin expiring in 2035. In addition, as of December 31, 2025, the Company had $10.0 million and $3.6 million of federal and state credit carryovers which begin to expire in 2030. These loss and credit carryforwards are subject to review and possible adjustment by the relevant taxing authorities.

The Company assesses the realizability of the deferred tax assets at each balance sheet date based on the available positive and negative evidence in order to determine the amount which is more likely than not to be realized and records a valuation allowance as necessary. Due to the Company's cumulative loss position which provides significant negative evidence, which is difficult to overcome, the Company has recorded a valuation allowance of $151.6 million as of December 31, 2025, representing the portion of the deferred tax asset that is not more likely than not to be realized. For the years ended December 31, 2025 and 2024, the valuation allowance for deferred tax assets increased by $11.1 million and $21.0 million, respectively. The amount of the deferred tax asset considered realizable, could be adjusted for future factors that would impact the assessment of the objective and subjective evidence. The Company will continue to assess the realizability of deferred tax assets at each balance sheet date in order to determine the proper amount, if any, required for a valuation allowance.

The Company has not completed a recent study of its research and development credit carryforward; accordingly, a portion of the tax credit carryforward may not be available to offset future income tax. Until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company's research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance.

The U.S. tax attributes may be subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986 (the “Code”), and similar state provisions if the Company experiences one or more ownership changes, which would limit the amount of the tax attributes that can be utilized to offset future taxable income. In general, an ownership change as defined by Section 382, results from the transactions increasing ownership of certain stockholders or public groups in the stock of the corporation of more than fifty percentage points over a three-year period. If a change in ownership occurs in the future, the net operating loss and research and development credit carryforwards could be eliminated or restricted. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate.

The Company is subject to tax and will continue to file federal income tax returns in the United States as well as in certain state and local jurisdictions. The Company is subject to tax examinations for tax years ended December 31, 2022 and forward in all applicable income tax jurisdictions. Tax audits and examinations can involve complex issues, interpretations and judgments. The resolution of matters may span multiple years particularly if subject to litigation or negotiation. The Company believes that it has appropriately recorded its tax position using reasonable estimates and assumptions, however the potential tax benefits may impact the results of operations or cashflows in the period of resolution, settlement, or when the statutes of limitations expire. The Company has recorded reserves related to unrecognized tax benefits on historical positions taken by Apexigen in periods before the merger. No interest or penalties have been calculated on the reserves for unrecognized tax benefits due to taxable losses in the years in which the benefits were recorded.

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

17. Net Loss per Share

The Company’s potentially dilutive securities, which include replacement warrants, restricted stock units, and stock options, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

Basic and diluted net loss per share was calculated as follows (in thousands, except share and per share amounts):

Pre-funded Warrant Shares of 1,611,215 shares were included in the computation of basic and diluted net loss per common share for the year ended December 31, 2024 as the Pre-Funded Warrants were issuable for nominal consideration.

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

18. Related Parties

The Company was founded out of Dr. Thomas Gajewski’s laboratory at the University of Chicago. In 2020, the Company entered into the License Agreement with the University of Chicago, as well as a sponsored research agreement. The Company incurred expenses of less than $0.1 million and less than $0.1 million during the years ended December 31, 2025 and 2024, respectively, with regards to the University License Agreement. Refer to Note 3, Licensing Agreements, for additional discussion.

19. Commitments and Contingencies

Legal Proceedings

From time to time, the Company may become involved in various legal proceedings that arise in the ordinary course of business. The Company is not currently a party to any material legal proceedings and is not aware of any pending or threatened legal proceeding against it that the Company believes could have an adverse effect on its business, operating results or financial condition.

Commitments

In the normal course of business, the Company enters into agreements with various third parties for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes, which are generally cancellable by the Company at any time, subject to payment of remaining obligations under binding purchase orders and, in certain cases, nominal early-termination fees. These commitments are not deemed significant.