ALX ONCOLOGY HOLDINGS INC

(1) ORGANIZATION

Organization

ALX Oncology Holdings Inc., or the Company, was formed as a Delaware corporation on April 1, 2020, or Inception. The Company was formed for the purpose of completing the Company’s initial public offering of its common stock and related transactions in order to carry on the business of ALX Oncology Limited. The Company is a clinical-stage biotechnology company advancing a pipeline of novel therapies designed to treat cancer and extend patients’ lives.

ALX Oncology Holdings Inc. is incorporated in Delaware. ALX Oncology Limited, incorporated in Ireland, is a wholly-owned subsidiary of ALX Oncology Holdings Inc. ALX Oncology Inc., incorporated in Delaware, is a wholly-owned subsidiary of ALX Oncology Limited. All the companies, except for ALX Oncology Holdings Inc., are collectively known as the Subsidiaries.

As of June 30, 2026, the Company has devoted substantially all of its efforts to the formation and financing of the Company, as well as product development, and has not realized product revenues from its planned principal operations. The Company does not have manufacturing facilities and all manufacturing related activities are contracted out to third-party service providers.

Management expects to incur additional losses in the future to conduct product candidate research and development and to conduct pre-commercialization activities and recognizes that the Company will be required to raise additional capital to fully implement its business plan. The Company intends to raise such capital through the sale of additional equity, debt financings and/or strategic alliances with third parties. However, there can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its operations or on terms acceptable to the Company. If the Company is unsuccessful in its efforts to raise additional financing, the Company could be required to significantly reduce operating expenses and delay, reduce the scope of or eliminate some of its development programs or its future commercialization efforts, out-license intellectual property rights to its product candidates and sell unsecured assets, or a combination of the above, any of which may have a material adverse effect on the Company’s business, results of operations, financial condition and/or its ability to fund its scheduled obligations on a timely basis or at all. The Company believes that the existing capital resources will be sufficient to fund the projected operating requirements for at least the next twelve months after the date the condensed consolidated financial statements are issued.

(2) SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 9, 2026.

The condensed consolidated balance sheet as of December 31, 2025 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP.

The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year ending December 31, 2026.

Principles of Consolidation

All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the estimated useful lives of long-lived assets, clinical and contract manufacturing accruals, fair value of assets and liabilities, fair value of investments, and stock-based compensation. The Company evaluates its estimates and assumptions on an ongoing basis based on historical experience and on various other market-specific and relevant assumptions that the Company believes to be reasonable under the circumstances and adjusts those estimates and assumptions when facts and circumstances change. Actual results could differ from those estimates.

Significant Accounting Policies

There have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In December 2025, the FASB issued ASU 2025-12, Codification Improvements(ASU 2025-12). ASU 2025-12 aims to make the Codification easier to understand and apply by making changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Key improvements include clarifying the calculation of diluted earnings per share (EPS) when a loss from continuing operations exists. ASU 2025-12 is effective for annual periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted. The guidance can be applied on a prospective or retrospective basis. The Company adopted ASU 2025-12 on January 1, 2026. The adoptiondid not have a material impact on the Company’s consolidated financial statements.

Recently issued accounting pronouncements not yet adopted

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 (ASU 2024-03). ASU 2024-03 requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation and amortization, within relevant income statement captions. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. The guidance is applied on a prospective basis with the option for retrospective application. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (ASU 2025-11). ASU 2025-11 clarifies interim disclosure requirements and the applicability of Topic 270. ASU 2025-11 is effective for annual periods beginning after December 15, 2027 and interim periods beginning after December 15, 2028. Early adoption is permitted. The guidance can be applied either on a prospective basis or a retrospective basis to any or all prior periods presented in the financial statements. The Company is evaluating the impact of this guidance and does not expect it to have a material impact on its consolidated financial statements and related disclosures.

(3) SEGMENT REPORTING

The Company manages its operations as asingle operating segment. The Company’s chief operating decision maker (CODM) uses consolidated, single-segment financial information for the purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

The CODM assesses performance and decides how to allocate resources based on the Company’s consolidated net loss, including key components of research and development costs and general and administrative costs. These measures are used to monitor budget versus actual results and to evaluate the performance of the segment.

The CODM reviews cash, cash equivalents and investments as a measure of segment assets. As of June 30, 2026 and December 31, 2025, the Company’s cash, cash equivalents and investments were$153.4 million and$48.3 million, respectively.

The following table presents the significant segment expenses for thethree months and six months ended June 30, 2026 and 2025 (in thousands):

(4)FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of the Company’s financial assets and liabilities are determined in accordance with the fair value hierarchy established in ASC 820, Fair Value Measurements and Disclosures.

The following table presents the Company’s investments, which consist of cash equivalents and investments classified as available-for-sale investments, that are measured at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2026 and December 31, 2025 (in thousands):

The fair value of cash equivalents and available-for-sale investments by classification included in the condensed consolidated balance sheets was as follows as of June 30, 2026 and December 31, 2025 (in thousands):

Cash and cash equivalents in the above table excludes bank account cash of$11.2 million and$1.7 million as of June 30, 2026 and December 31, 2025, respectively.

The fair value of cash equivalents and available-for-sale investments by contractual maturity was as follows as of June 30, 2026 and December 31, 2025 (in thousands):

The primary objective of the Company’s investment portfolio is to maintain safety of principal, prudent levels of liquidity and acceptable levels of risk. The Company’s investment policy limits investments to certain types of instruments issued by institutions with investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.

There wereno transfers of financial instruments between the fair value measurement levels during thethree months and six months ended June 30, 2026 and 2025 and there wereno financial instruments classified as Level 3 as of June 30, 2026 and December 31, 2025.

As of June 30, 2026 and December 31, 2025, accrued interest receivable related to the Company’s investments of$1.2 million and$0.3 million was included inprepaid expenses and other current assets on the condensed consolidated balance sheet.

As of June 30, 2026, the unrealized losses for available-for-sale investments were non-credit related and the Company does not intend to sell the investments that were in an unrealized loss position, nor does it foresee or project that it will be required to sell those investments before recovery of their amortized costs basis, which may be maturity. As of June 30, 2026 and 2025, no allowance for credit losses for the Company’s investments was recorded. As of June 30, 2026 and December 31, 2025, no securities were in a continuous net unrealized loss position for more than 12 months. As of June 30, 2026 and 2025, the Company hasnot recognized any impairment losses on available-for-sale investments.

(5)BALANCE SHEET COMPONENTS

Prepaid Expenses and Other Current Assets

The following table presents the components of prepaid expenses and other current assets as of June 30, 2026 and December 31, 2025 (in thousands):

Property and Equipment, Net

The following table presents the components of property and equipment, net as of June 30, 2026 and December 31, 2025 (in thousands):

Depreciation was$0.1 million and$0.2 million for the three months ended June 30, 2026 and 2025, respectively. Depreciation was$0.2 million and$0.4 million for the six months ended June 30, 2026 and 2025, respectively.

During the three months and six months ended June 30, 2026, the Company disposed of property and equipment, which consisted of laboratory equipment with a carrying amount of $0.4 million and leasehold improvements with a net carrying amount of $0.4 million, as a result of the Palo Alto lease termination (see Note 6 “Leases”). These disposals included sale of certain laboratory equipment for total proceeds of $0.2 million. Forthe three months and six months ended June 30, 2026, the Company incurred losses on disposal of fixed assets of $0.2 million.

Other Assets

The following table presents the components of other assets as of June 30, 2026 and December 31, 2025 (in thousands):

Accrued Expenses and Other Current Liabilities

The following table presents the components of accrued expenses and other current liabilities as of June 30, 2026 and December 31, 2025 (in thousands):

(6)LEASES

South San Francisco Lease

In May 2021, the Company entered into a lease agreement for approximately 10,000 square feet of office space located in South San Francisco, California. The lease commenced on June 6, 2021 and expires on August 31, 2026. The lease doesnot provide an option to extend after it expires. The total lease payments for the life of the lease are approximately $2.0 million. The Company classified the lease as an operating lease.

In May 2026, the Company entered into the first amendment to the lease agreement for the office space located in South San Francisco, California, which extended the lease term bysix months from September 1, 2026 to February 28, 2027. This lease modification increase total lease payments by $0.2 million. The Company continues to classify the lease as an operating lease.

Palo Alto Lease

In February 2022, the Company entered into a lease agreement totaling approximately 11,074 square feet of office and laboratory space located in Palo Alto, California. The lease consists of two premises and expires in February 2030. The lease provides for anoption to extend fortwo years after expiration. The lease for one of the premises commenced in February 2022 and the lease for the second premises commenced in April 2022. The total lease payments for the life of the lease are approximately $6.9 million. The Company is also responsible for leasehold improvement costs related to the second premises, which totaled to $2.3 million, of which $1.5 million is to be paid with interest at a rate of 7% per annum as additional payments over the life of the lease. The Company classified the lease as an operating lease.

Impairment of Long-Lived Assets

The Company has determined it operates in asingle operating segment and hasone reportable segment. The Company reviews for indicators of impairment on a quarterly basis, including changes in how its property is being used.

In May 2025, the Company made a decision to sublease its leased property in Palo Alto. The Company determined that the change in how this building is being used could indicate impairment. The Company identified this to-be-sublet property as a separate asset group for purposes of long-lived asset impairment assessment. The Company concluded that the carrying value of this to-be-sublet property asset group was not recoverable and the estimated fair value of this asset group was below its carrying value. The Company applied a discounted cash flow method to estimate fair value of its right-of-use (ROU) asset and leasehold improvements. Based on this analysis, the Company concluded the fair value of the ROU asset and leasehold improvements of $1.5 million was lower than its net book value of $4.7 million. The Company recognized a pre-tax long-lived asset impairment charge of $3.2 million on the ROU asset and leasehold improvements in the second quarter of 2025.

Lease Termination

In May 2026, the Company entered into a lease termination agreement for the office and laboratory space located in Palo Alto, California. Pursuant to the lease termination agreement, the Company vacated the premises in June 2026 and paid total termination fees of $2.4 million, which included brokerage costs. Since the termination fees were not already included in the lease payments, the termination fees were recognized as a loss on lease termination. The Company derecognized operating lease liabilities of $3.8 million and operating lease assets of $1.3 million associated with the terminated lease, resulting in a gain of $2.5 million. The net impact is a gain on lease termination of $0.2 million, which was recorded within operating expense in the condensed consolidated statement of operations for the three and six months ended June 30, 2026.

The following table presents the maturities and balance sheet information of the Company’slease liabilities as of June 30, 2026 (in thousands, except lease term and discount rate):

(i)

Current lease liabilities are presented within accrued expenses and other current liabilities on the condensed consolidated balance sheets.

(ii)

Non-current lease liabilities are presented within other non-current liabilities on the condensed consolidated balance sheets.

The following table presents the components of lease costs for thethree months and six months ended June 30, 2026 and 2025 (in thousands):

(i)

The variable lease cost and other, net is comprised primarily of common area maintenance charges or refunds for the operating lease, which are dependent on usage. These costs are classified as operating lease expense due to the election to not separate lease and non-lease components. These costs were not included within the measurement of the Company’s operating lease right-of-use assets and operating lease liabilities.

The following table presents the supplemental cash flow disclosures for cash paid for leases for thesix months ended June 30, 2026 and 2025 (in thousands):

(7)TERM LOAN

Oxford Finance and Silicon Valley Bank Loan

In October 2022, the Company entered into a loan and security agreement, as amended, the Oxford-SVB Loan Agreement, with Oxford Finance LLC, Oxford Finance Credit Fund II LP, and Silicon Valley Bank, or SVB, collectively the Oxford-SVB Lenders, for a secured term loan facility of up to $100.0 million. Pursuant to the Oxford-SVB Loan Agreement, the Company drew an initial loan of $10.0 million. Under the original terms of the Oxford-SVB Loan Agreement, the Company had the right to draw an additional $40.0 million through the end of December 2023. In December 2023, the original terms of the Oxford-SVB Loan Agreement were amended to extend the draw deadline to June 2024. The original terms of the Oxford-SVB Loan Agreement provided for an additional $50.0 million over three tranches, with $12.5 million available in each of two tranches based upon the achievement of milestones related to the development of evorpacept and one preclinical product candidate, and $25.0 million at the Oxford-SVB Lenders’ sole discretion. The Company decided not to draw down on any portion of the $40.0 million available under the Oxford-SVB Loan Agreement by the deadline of June 30, 2024 and did not achieve all of the requirements needed to gain access to each of the two tranches available upon the achievement of pre-determined development milestones by the deadline of December 31, 2024.

The proceeds of the loans were permitted to be used by the Company for working capital and to fund its general business requirements.

During the three months ended June 30, 2026 and 2025, interest expense incurred in connection with the Oxford-SVB Loan Agreement was$0.2 million and$0.3 million, respectively. During the six months ended June 30, 2026 and 2025, interest expense incurred in connection with the Oxford-SVB Loan Agreement was$0.5 million and$0.7 million, respectively.

On June 25, 2026, all outstanding principal, interest and other amounts owed under the Oxford-SVB Loan Agreement totaling to $8.2 million were paid off as part of a refinancing in connection with entry into the HSBC Loan Agreement.

HSBC Loan

On June 25, 2026, the Company’s wholly-owned subsidiary, ALX Oncology Inc. (the Borrower), entered into a loan and security agreement, the HSBC Loan Agreement, with HSBC Ventures USA Inc., or HSBC, the HSBC Lender, for a secured multi-tranche term loan facility of up to $50.0 million. Pursuant to the HSBC Loan Agreement, the Borrower drew an initial loan of $10.0 million at closing, the proceeds of which were used to refinance the existing Oxford-SVB Loan Agreement and to pay closing fees and expenses. Under the HSBC Loan Agreement, subject to the satisfaction of customary conditions, the Borrower has the right to draw an additional $20.0 million through June 30, 2028. The HSBC Loan Agreement provides for an additional $20.0 million over two tranches, with $10.0 million available upon the achievement of milestones related to the clinical development of evorpacept and ALX2004 and $10.0 million at the HSBC Lender’s sole discretion. The proceeds of the loans may be used by the Borrower for general corporate purposes.

The term loans mature on June 1, 2030. The term loans will amortize in equal monthly installments beginning on July 1, 2028. However, upon the occurrence of the Interest Only Extension Event (as defined in the HSBC Loan Agreement), the term loans will begin to amortize in equal monthly installments beginning on July 1, 2029.

The term loans accrue interest at a floating per annum rate equal to the greater of (a) the Prime Rate (as defined in the HSBC Loan Agreement) and (b)6.0%. Interest on the term loans is payable monthly in arrears. The term loans once repaid or prepaid may not be reborrowed. The term loans may be prepaid in full in their entirety at any time, subject to a prepayment fee. Upon the earlier of prepayment or maturity, the Company is required to pay a final payment fee of 2.0% of the original principal amount of funded term loans.

The Borrower’s and the guarantors’ obligations under the HSBC Loan Agreement are secured by substantially all of the Borrower’s and the guarantors’ assets, with a negative pledge on intellectual property, and will be guaranteed by future subsidiaries of the Company, subject to certain limitations.

The Borrower received net proceeds from issuance of the term loan of $9.7 million after deduc ting debt issuance costs of approximately $0.3 million. A portion of the net proceeds were used to refinance and pay off the existing Oxford-SVB Loan Agreement. Debt issuance costs were recorded as debt discount on the term loan, offsetting term loan, non-current on the condensed consolidated balance sheets. The debt discount will be amortized over the term of the loan as interest expense using the effective interest method. During the three months and six months ended June 30, 2026, interest expense incurred in connection with the HSBC Loan Agreement was a nominal amount.

The Company determined that certain loan features were embedded derivatives requiring bifurcation and separate accounting. Those embedded derivatives were bundled together as a single, compound embedded derivative and then bifurcated and accounted for separately from the host contract. As of June 30, 2026, the value of the embedded derivative is not material, but could become material in future periods if an event of default became more probable than is currently estimated. As of June 30, 2026, the Borrower and the guarantors were in compliance with all financial reporting covenants under the HSBC Loan Agreement.

As of June 30, 2026, the future maturities under the HSBC Loan Agreement are as follows (in thousands):

(8)STOCKHOLDERS’ EQUITY

On July 21, 2020, the Company’s amended and restated certificate of incorporation became effective, authorizing 1,000,000,000 shares of common stock, $0.001 par value per share, and 100,000,000 shares of undesignated preferred stock, $0.001 par value per share. As of June 30, 2026 and December 31, 2025, the Company had 138,216,247 and 54,388,022 shares of common stock outstanding, respectively, andno shares of undesignated preferred stock outstanding, respectively.

Common Stock

In February 2026, the Company completed a registered offering (the February 2026 Offering) and issued an aggregate of 76,979,112 shares of common stock at an offering price of $1.57 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase 18,574,120 shares of common stock at an offering priceof $1.569 per pre-funded warrant. Net proceeds were approximately $140.4 million, after deducting underwriting discounts and commissions of $9.0 million and offering-related expenses of $0.6 million.

Common stock reserved for future issuance as of June 30, 2026 consists of the following:

At-the-Market Equity Offering

In December 2021, the Company entered into a sales agreement (as amended, Sales Agreement) with Cantor Fitzgerald & Co. and Credit Suisse Securities (USA) LLC (Credit Suisse), under which it may offer and sell shares of the Company’s common stock, having aggregate gross proceeds of up to $150.0 million, from time to time through them as the Company’s sales agents in its at-the-market (ATM) equity offering program. In August 2023, the Company entered into an amendment to the Sales Agreement to include UBS Securities LLC as an additional sales agent and to remove Credit Suisse as a sales agent. As of June 30, 2026, the Company had issued approximately 3,183,109 shares of common stock pursuant to the Sales Agreement for net proceeds of$31.4 million. The Company may terminate this ATM program at any time, pursuant to its terms.

Pre-Funded Warrants

In October 2023, the Company completed a registered offering (the October 2023 Offering) pursuant to a shelf registration statement, which provides for aggregate offerings of up to $450.0 million of the Company’s securities. As part of the October 2023 Offering, the Company issued pre-funded warrants (2023 Pre-Funded Warrants) to certain investors to purchase 1,250,000 shares of common stock at an offering price of $6.379 per pre-funded warrant. Each pre-funded warrant entitles the holder to purchase one share of common stock at an exercise price of $0.001 per share. Additional information regarding the 2023 Pre-Funded Warrants is included in our notes to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on March 9, 2026. As of June 30, 2026, zero shares underlying the 2023 Pre-Funded Warrants have been exercised.

As part of the February 2026 Offering, the Company issued pre-funded warrants (2026 Pre-Funded Warrants) to certain investors to purchase 18,574,120 shares of common stock at an offering price of $1.569 per pre-funded warrant. Each pre-funded warrant entitles the holder to purchase one share of common stock at an exercise price of $0.001 per share.

The 2026 Pre-Funded Warrants were classified as equity and accounted for as a component of additional paid-in capital. These pre-funded warrants were classified as equity because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, these pre-funded warrants do not provide any guarantee of value or return. The Company valued the 2026 Pre-Funded Warrants at issuance, concluding that their offering price approximated their fair value, and allocated the aggregate net proceeds from the offering proportionately to the common stock and pre-funded warrants, including approximately $29.1 million allocated to the pre-funded warrants and recorded as a component of additional paid-in capital on the consolidated balance sheets.

The 2026 Pre-Funded Warrants are exercisable at any time after their original issuance. However, these pre-funded warrants include a separate provision whereby the exercisability of the pre-funded warrants may be limited if, upon exercise, the warrant holder (together with its affiliates) would beneficially own more than 4.99% or 9.99%, as applicable, of the Company’s common stock. This threshold is subject to each warrant holder’s rights under its pre-funded warrants to increase or decrease such percentage to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from such warrant holder to the Company. The pre-funded warrants do not have a stated expiration date and remain outstanding until exercised in full.

As of June 30, 2026,6,100,317 shares underlying the 2026 Pre-Funded Warrants have been exercised.

The following table provides a summary of pre-funded warrants activity:

Outstanding pre-funded warrants as of June 30, 2026 and 2025 consists of the following:

Outstanding pre-funded warrants are included in the weighted-average number of shares of common stock used to calculate basic net loss per share attributable to common stockholders (see Note 10 “Net Loss Per Share”).

(9) STOCK-BASED COMPENSATION

Equity Incentive Plans

Amended and Restated 2020 Equity Incentive Plan

The Company’s Amended and Restated 2020 Equity Incentive Plan, or the 2020 Plan, serves as the successor to the Company’s 2020 Equity Incentive Plan and provides for the granting of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares.

On January 1, 2026, the number of shares available under the 2020 Plan was increased by 2,175,521 shares.

2025 Inducement Equity Incentive Plan

In January 2025, the Company adopted the 2025 Inducement Equity Incentive Plan, or the 2025 Plan. The 2025 Plan provides for the granting of equity-based awards, including non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares.

On January 21, 2026, the number of shares available under the 2025 Plan was increased by 1,300,000 shares.

Performance-Based Restricted Stock Units

In February 2024, the Company granted 365,000 performance-based restricted stock units, or PSUs, to certain employees under the 2020 Plan. The PSUs are subject to both performance-based and service-based vesting conditions with a fair value based on the closing price of the underlying common stock on the date of grant. Each PSU is split into two tranches with each tranche having performance goals based on the achievement of pre-determined clinical milestones that result in the shares attributable to such tranche being eligible for vesting, subject to the service-based vesting condition. The service-based vesting condition is satisfied on the one-year anniversary of the performance achievement date for each tranche and is subject to the employee’s continuous service through such vesting date. Upon vesting, each PSU will automatically convert intoone share of the Company’s common stock. If the performance condition for a tranche is not met by March 31, 2025, the shares attributable to such tranche will be forfeited.

The Company determined that the performance conditions for one tranche of PSUs was achieved by the March 31, 2025 deadline. During the three months and six months ended June 30, 2026, the Company recognized compensation expense ofzero and$0.1 million, respectively, related to this tranche of PSUs. During the three months and six months ended June 30, 2025, the Company recognized compensation expense of$0.1 million and$0.7 million, respectively, related to this tranche of PSUs. The performance conditions for the other tranche of PSUs was not achieved as of March 31, 2025, and therefore, these awards were forfeited. As of June 30, 2026, there wereno PSUs outstanding and unvested.

Employee Stock Purchase Plan

Under the Company’s 2020 Employee Stock Purchase Plan, or the ESPP, eligible employees are entitled to purchase shares of common stock with accumulated payroll deductions.

Stock-based Compensation Expenses

Total stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows (in thousands):

(10)NET LOSS PER SHARE

The following table sets forth the computation of the basic and diluted net loss per share for thethree months and six months ended June 30, 2026 and 2025 (in thousands, except share and per share data):

The weighted average shares of common shares outstanding includes pre-funded warrants to purchase 13,723,803 shares of common stock for thethree months and six months ended June 30, 2026 and 1,250,000 shares of common stock for the three months and six months ended June 30, 2025.

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods presented as the inclusion of all potential common stock outstanding would have been anti-dilutive.

The following outstanding potentially dilutive securities were excluded from the computation of diluted net loss per share for thethree months and six months ended June 30, 2026 and 2025 because including them would have been anti-dilutive:

(11)COMMITMENTS AND CONTINGENCIES

Guarantees and Indemnifications

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. The Company also has indemnification obligations to its officers and directors for specified events or occurrences, subject to some limits, while they are serving at the Company’s request in such capacities. There have been no claims to date and the Company has director and officer insurance that may enable the Company to recover a portion of any amounts paid for future potential claims. The Company believes the fair value of these indemnification agreements is minimal. Accordingly, the Company hasnot recorded any liabilities for these agreements as of June 30, 2026.

Contingencies

From time to time, the Company may be a party to various claims in the normal course of business. Legal fees and other costs associated with such actions will be expensed as incurred. The Company will assess, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies. Reserve estimates will be recorded when and if it is determined that a loss related matter is both probable and reasonably estimable. As of June 30, 2026, the Company hadno pending or threatened litigation.

Other Contractual Obligations and Other Commitments

The Company has other contractual obligations and other commitments from manufacturing and service contracts, which are presented as follows as of June 30, 2026 (in thousands):

In November 2015, the Company entered into a Master Service Agreement, or the MSA, with KBI Biopharma, Inc. relating to formulation development, process development and current good manufacturing practices, or cGMP, manufacturing of evorpacept for use in clinical trials on a project basis. The MSA had an initial term ofthree years with successiveone-year renewal periods, which was extended an additional eight years until November 2026, is cancellable upon notice and is non-exclusive. Statements of work under the MSA commit the Company to certain future purchase obligations of approxim ately$0.5 million. In addition, the Company has commitments with two other pharmaceutical contract manufacturers and suppliers, including certain future purchase obligations of approximately$1.5 million. These amounts are based on non-cancellable commitments and forecasts that include estimates of future market demand, quantity discounts and manufacturing efficiencies that may impact timing of purchases.

The Company enters into contracts in the normal course of business with various third parties for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes. These contracts generally provide for termination upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of the Company’s service providers, up to the date of cancellation.

(12) SUBSEQUENT EVENTS

In preparing the consolidated financial statements as of June 30, 2026, the Company evaluated subsequent events for recognition and measurement purposes through the filing date of this Quarterly Report on Form 10-Q. The Company concluded that no events or transactions have occurred that require disclosure in the accompanying consolidated financial statements.