Tectonic Therapeutic, Inc.

1. NATURE OF BUSINESS

Description of the Business

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

Risks and Uncertainties

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

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

Liquidity and Capital Resources

Since inception, the Company has incurred recurring losses and negative cash flows from operations, and expects such losses to continue in the future as it conducts research and development activities and continues to develop its product candidates. The Company generated net losses of$22.3 million and$47.5 million for the three and six months ended June 30, 2026, respectively, and had an accumulated deficit of $270.3 million as of June 30, 2026. The Company has financed its operations primarily through the sale and issuance of common stock, convertible equity instruments, and proceeds from prior corporate transactions. The Company has devoted substantially all of its financial resources and efforts to business planning, conducting research and development, recruiting management and technical staff, and raising capital. The Company also has an effective shelf registration statement on Form S-3 filed with the SEC, which may be used to offer from time to time any combination of common stock, preferred stock, debt securities, and warrants up to an aggregate amount of $400 million. Of this amount, the Company has an at the market offering program (the “ATM”) pursuant to which it may sell up to $100 million of common stock. During thesix months ended June 30, 2026, the Company sold 432,306 shares of its common stock under the ATM at an average price per share of $30.89 for gross proceeds of$13.4 million and net proceeds of$13.1 million after deducting commissions and offering expenses of$0.3 million. During the three months ended June 30, 2026, the Company sold 389,806 shares of its common stock under the ATM at an average price per share of$30.75 for gross proceeds of$12.0 million and net proceeds of$11.7 million after deducting commissions and offering expenses of$0.3 million.

As the Company continues to develop its proprietary platform and potential product candidates, it will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. It may never achieve profitability, and until it does, it will continue to need to raise additional capital to fund its operations. The Company had cash and cash equivalents of$227.1 million as of June 30, 2026. In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. The Company believes that its existing cash and cash equivalents will be sufficient to allow the Company to fund operations beyond twelve months from the date of issuance of these condensed consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance refers to GAAP as codified in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments and accruals) necessary for a fair statement of the results for the periods presented in accordance with GAAP. The year-end condensed consolidated balance sheet data was derived from our audited consolidated financial statements but does not include all disclosures required by GAAP. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2026. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting.

The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2025, which is included in our 2025 Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”).

Our significant accounting policies are disclosed in Note 2 of the consolidated financial statements for the year ended December 31, 2025, which is included in our 2025 Annual Report on Form 10-K. There have been no material changes to our significant accounting policies during the three and six months ended June 30, 2026.

Principles of Consolidation

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

In February 2026, the Company dissolved its wholly owned Australian subsidiary, Tectonic Therapeutic Pty Ltd. This entity was dissolved as part of a broader corporate initiative intended to streamline operations and reduce administrative costs. As a result, the Company reclassified $0.1 million of cumulative foreign currency translation losses from accumulated other comprehensive loss to other expense during thesix months ended June 30, 2026.

Use of Estimates

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

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

Recently Adopted Accounting Standards

From time to time, new accounting pronouncements are issued by the FASB, or other standard setting bodies and are adopted by the Company as of the specified effective dates. For the three months ended June 30, 2026, there were no newly adopted accounting pronouncements that had a material impact on the condensed consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted

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

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

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

3. FAIR VALUE MEASUREMENTS

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

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

There were no transfers between Levels 1, 2, or 3 of the fair value hierarchy during the periods presented.

The carrying amounts of prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities approximate fair value due to their short-term nature.

4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

5. STOCKHOLDERS’ EQUITY

Common Stock

The Company is authorized to issue 150,000,000 shares of common stock at a par value of $0.0001 per share.

The Company reserved common stock for future issuance as follows:

Changes in Capital Structure

During the six months ended June 30, 2026, the Company issued approximately 432,306 shares of its common stock under the ATM at an average price per share of $30.89 per share for gross proceeds of$13.4 million and net proceeds of$13.1 million after deducting commissions and offering expenses of$0.3 million.

The Company utilized the ATM for the first time in 2026; accordingly, there are no prior period issuances for comparison. The

Company intends to use the net proceeds for general corporate activities, including working capital.

6. EQUITY INCENTIVE PLANS

2019 Equity Incentive Plan

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

2024 Equity Incentive Plan

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

2024 Employee Stock Purchase Plan

On June 20, 2024, the Company adopted the 2024 Employee Stock Purchase Plan (the “ESPP”). The number of shares of our common stock available for issuance under the ESPP will automatically increase on January 1st of each year through 2034, in an amount equal to the lesser of (a) 1% of the total number of shares of common stock issued and outstanding determined as of the day prior to such increase, (b) a number of shares equal to three times the initial share reserve, or (c)an amount determined by the Board of Directors. On January 1, 2026, the number of shares of common stock available for issuance under the ESPP increased by 187,382 shares. No offering periods under the ESPP have been initiated as of June 30, 2026.

Stock Options

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

The following table summarizes the stock option activity under the 2019 Plan and 2024 Plan for thesix months ended June 30, 2026:

During the six months ended June 30, 2026 and 2025, the Company granted options with a weighted-average grant-date fair value of$22.56 and$34.44 per share, respectively. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2026 and 2025 was$0.6 million and$5.0 million, respectively.

Fair Value of Stock Options Granted

The Company utilizes the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair value of stock options granted.

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

Restricted Stock Units

Restricted stock units (“RSUs”), which are granted to employees, generally vest over a three-year period. The value of an RSU award is based on the quoted market priceof the Company’s common stock on the grant date. The shares underlying the RSUs are not issued until the RSUs vest. The following table summarizes the RSU activity for the six months ended June 30, 2026:

During the six months ended June 30, 2026 and 2025, the Company granted RSUs with a weighted-average grant date fair value of$27.58 and$44.96 per unit, respectively. The total fair value of RSUs vested during the six months ended June 30, 2026 and 2025 was$1.4 million and$0.1 million, respectively.

When RSUs vest the Company withholds shares with a fair value equal to the minimum statutory tax withholding requirements. During the six months ended June 30, 2026,20,202 shares were withheld for tax purposes. Shares withheld are accounted for as a reduction of additional paid-in capital within stockholders’ equity.

Stock-Based Compensation Expense

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

7. Net loss per share

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

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

8. Leases

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

Office and Laboratory Facilities Lease

In September 2025, the Company entered into a non-cancelable operating sublease for office and laboratory space in Watertown, Massachusetts. The lease commenced in January 2026, has a term of 3 years with the option to extend for one additional two year period. The payments under this lease are subject to escalation clauses. The Company provided the landlord a stand-by letter of credit in the amount of $0.5 million, which is classified as restricted cash, long-term on the condensed consolidated balance sheet. The lease contains customary provisions restricting assignment and subleasing, requiring landlord consent, and imposing obligations related to use, insurance, indemnification, and compliance with underlying lease terms.

The lease requires the Company to pay fixed base rent, which is included in the measurement of the lease, as well as its proportionate share of the facilities operating expenses which are treated as variable lease costs based on the Company’s election to combine lease and associated non-lease components and are excluded from the measurement of the lease. The Company is not reasonably certain to exercise the renewal option, therefore it is not included in the measurement of the lease. Upon commencement, the Company recognized a right-of-use asset of $3.7 million and a corresponding lease liability of $3.6 million.

The Company also has a limited operating lease arrangement for laboratory space that provides the right to use designated research premises through December 31, 2026. The Company initially entered into the lease in December 2023 for a one-year term. The lease term was subsequently extended pursuant to amendments executed in the ordinary course of business, including an amendment entered into in December 2025 that extended the term through December 31, 2026.

Laboratory Equipment Leases

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

Lease Balances, Costs, and Future Minimum Payments

The following table summarizes the components of lease costs for thethree and six months ended June 30, 2026 and 2025:

The following table summarizes the weighted average lease term and discount rates as of June 30, 2026:

The discount rate for leases was estimated based upon market rates of collateralized loan obligations on comparable terms at the time of lease inception.

Future commitments due under these lease agreements as of June 30, 2026 are as follows:

9. License agreements

Harvard Agreement

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

The Company is responsible for payment of(1) annual maintenance fees ranging from the low five digits to the low six digits during the term of the License Agreement (through the first commercial sale of a royalty-bearing product); (2)milestone payments payable upon regulatory approval and the achievement of specified clinical and commercial milestones for licensed products or know-how enabled products; (3)royalty payments as a percentage in the low single digits of the annual net sales that the Company generates from products that utilize the license technology (“Licensed Products”) and royalty payments as a percentage in the low single digits of the annual net sales that the Company generates from know-how enabled product licenses (“Know-How Enabled Products”) and (4) a percentage between 10-20% of all non-royalty income received by the Company under sublicenses, strategic partnerships and know-how enabled product licenses that utilize the license technology. Subsequent to the first commercial sale of a royalty-bearing product, annual maintenance fees will increase to a low six digits for the remainder of the term of the License Agreement. The royalty term from sales of Licensed Products will terminate on a country-by-country and product-by-product basis on the earlier of (i) the expiration of the patent rights covering the product, expected to be no earlier than May 2041, and (ii) the termination of the License Agreement. The royalty term from sales of Know-How Enabled Products will terminate on the earlier of (i) ten years after the first commercial sale of the first Know-How Enabled Product and (ii) twelve years after the first commercial sale of the first Licensed Product. The Company incurred expense of $0.1 million related to the License Agreement during each of the three and six month periods ended June 30, 2026 and 2025.

10. COMMITMENTS AND CONTINGENCIES

Commitments

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

The Company is also party to lease commitments, as described in Note 8, Leases, and milestone, royalty and maintenance based commitments, as described in Note 9, License Agreements.

Contingencies

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

In the normal course of operations, the Company may become involved in various legal proceedings. As of June 30, 2026, the Company has not recorded accruals for probable losses related to any existing or pending litigation as the Company’s management has determined that there are no matters where a potential loss is probable and reasonably estimable. The Company does not believe that any existing or pending claims would have a material impact on the Company’s condensed consolidated financial statements.

11. RELATED PARTY TRANSACTIONS

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

Scientific Advisory Board Member

One of the Company’s co-founders and former director is a member of the Company’s Scientific Advisory Board and meets the criteria of a related party. The Company incurred expense of $0.1 million for advisory services provided in each of the three and six month periods ended June 30, 2026 and 2025. There wereno amounts due to this related party as of June 30, 2026 or December 31, 2025. In May 2026, the Company terminated its agreement with this related party and does not expect to incur further expense under the arrangement.

License Agreement

Harvard meets the criteria of a related party resulting from the Company’s co-founders’ employment as professors in the Harvard Department of Molecular Pharmacology. Core intellectual property utilized by the Company is licensed from Harvard under the License Agreement described in Note 9, License Agreements.

The Company incurred expense of $0.1 million related to the License Agreement during each of the three and six month periods ended June 30, 2026 and 2025. No amounts were due to Harvard related to the License Agreementas of June 30, 2026 or December 31, 2025.

12. SEGMENT INFORMATION

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

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

No segment asset information is presented because the CODM focuses on cash and expense impact; segment assets are monitored at the same level as the condensed consolidated balance sheet.

The following table presents the segment net loss and significant segment expenses for thethree and six months ended June 30, 2026 and 2025:

1 Other segment expenses include expenses not captured in the primary categories above, such as stock-based compensation, depreciation and amortization, interest income and interest expense.