Septerna, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim condensed financial statements and related notes included elsewhere in this Quarterly Report and audited financial statements and notes thereto as of and for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (“Annual Report”), filed with the SEC on March 9, 2026. This discussion and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans, and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements of our plans, objectives, expectations, intentions, forecasts and projections. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors including, but not limited to, those set forth under the section titled “Risk Factors” and elsewhere in this Quarterly Report and in our other filings with the SEC. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and you should carefully read the section titled “Risk Factors” in this Quarterly Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim condensed financial statements and related notes included elsewhere in this Quarterly Report and audited financial statements and notes thereto as of and for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), filed with the SEC on March 9, 2026. This discussion and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans, and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements of our plans, objectives, expectations, intentions, forecasts and projections. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors including, but not limited to, those set forth under the section titled “Risk Factors” and elsewhere in this Quarterly Report and in our other filings with the SEC. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and you should carefully read the section titled “Risk Factors” in this Quarterly Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Previous wording

On April 13, 2026, we announced the dosing of the first participants in our Phase 1 clinical trial of SEP-479, our oral small molecule PTH1R agonist being developed for the treatment of patients with hypoparathyroidism. The Phase 1 clinical trial is a single-ascending dose (“SAD”) and multiple-ascending dose (“MAD”) clinical trial to evaluate the safety, tolerability, pharmacokinetics (“PK”) and pharmacodynamics (“PD”) of SEP-479 in healthy adult volunteers. The randomized, placebo-controlled Phase 1 clinical trial is expected to enroll up to 150 healthy adult participants. The SAD portion of the clinical trial will evaluate the safety and tolerability of SEP-479 at escalating oral doses. The MAD portion of the clinical trial is designed to evaluate the safety and tolerability of once-daily oral dosing of SEP-479 over multiple days of treatment, with secondary and exploratory endpoints including PK and PD, with the latter assessed by changes in endogenous PTH and serum calcium, as well as other biomarkers. We anticipate reporting data from the trial in late 2026 or early 2027.

Current wording

On April 13, 2026, we announced the dosing of the first participants in our Phase 1 clinical trial of SEP-479, our oral small molecule PTH1R agonist being developed for the treatment of patients with hypoparathyroidism. The Phase 1 clinical trial is a single-ascending dose (“SAD”) and multiple-ascending dose (“MAD”) clinical trial to evaluate the safety, tolerability, pharmacokinetics (“PK”) and pharmacodynamics (“PD”) of SEP-479 in healthy adult volunteers. The randomized, placebo-controlled Phase 1 clinical trial is expected to enroll up to 150 healthy adult participants. The SAD portion of the clinical trial will evaluate the safety and tolerability of SEP-479 at escalating oral doses. The MAD portion of the clinical trial is designed to evaluate the safety and tolerability of once-daily oral dosing of SEP-479 over multiple days of treatment, with secondary and exploratory endpoints including PK and PD, with the latter assessed by changes in endogenous PTH and serum calcium, as well as other biomarkers. Based on pharmacokinetic data from the ongoing Phase 1 clinical trial, the observed terminal half-life of SEP-479 is approximately three to four days, which we anticipate will support once-daily dosing. To fully characterize steady-state pharmacokinetics, dosing for the MAD cohorts will be extended to 14 days. As a result, we expect to report Phase 1 data from both the SAD and MAD cohorts in the first quarter of 2027.

Previous wording

Our net loss was $8.6 million and $21.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $175.9 million. We have incurred net losses in each year since inception, except for the year ended December 31, 2023. We expect to continue to incur net losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing and expenditures of our operational activities.

Current wording

Our net loss was $21.7 million and $46.3 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $188.9 million. We have incurred net losses in each year since inception, except for the year ended December 31, 2023. We expect to continue to incur net losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing and expenditures of our operational activities.

Previous wording

We have historically financed our operations primarily through the issuances of convertible promissory notes and convertible preferred stock, sales of our common stock, and collaboration arrangements with other companies. In March 2026, we entered into an ATM Equity Offering SM Sales Agreement (the “Sales Agreement”) with BofA Securities, Inc., acting as our sales agent and/or principal (the “Sales Agent”) with respect to an “at-the-market offering” program pursuant to which we may, from time to time, at our sole discretion, issue and sell shares of our common stock having an aggregate offering price of up to $150.0 million through the Sales Agent (the “ATM Program”). As of March 31, 2026, we have not sold any shares of our common stock under the ATM Program.

Current wording

We have historically financed our operations primarily through the issuances of convertible promissory notes and convertible preferred stock, sales of our common stock, and collaboration arrangements with other companies. In March 2026, we entered into an ATM Equity Offering SM Sales Agreement (the “Sales Agreement”) with BofA Securities, Inc., acting as our sales agent and/or principal (the “Sales Agent”) with respect to an “at-the-market offering” program pursuant to which we may, from time to time, at our sole discretion, issue and sell shares of our common stock having an aggregate offering price of up to $150.0 million through the Sales Agent (the “ATM Program”).

Previous wording

We believe our cash, cash equivalents, and marketable securities of $522.1 million as of March 31, 2026 will be sufficient to fund our operations and capital expenditure requirements at least into 2029.

Current wording

We believe our cash, cash equivalents, and marketable securities of $516.5 million as of June 30, 2026 will be sufficient to fund our operations and capital expenditure requirements at least into 2029.

Previous wording

We conduct research and manufacturing work outside of the United States, including China, that may be affected by tariffs, including tariffs that have been or may in the future be imposed by the United States or other countries through reciprocal tariffs. While we do not currently believe tariffs will have a material impact on our business or results of operations, we will continue to carefully monitor the situation. Additionally, we continue to actively monitor macroeconomic conditions and market volatility resulting from global and national economic developments, political unrest, inflationary pressures, interest rate fluctuations, disruptions in capital markets, changes in international trade relationships, changes in or the disruptions of U.S. governmental agencies, whether from a future U.S. federal government shutdown or reduced resources, new laws and regulations or amendments to existing laws and regulations in the U.S. and foreign countries, and military conflicts, such as the recent conflict in Iran, as well as ongoing conflicts in Ukraine, and in the Middle East. While we believe such factors have had no significant impact on our business or financial results during the periods presented, future developments and potential impacts on our business are uncertain and cannot be predicted with confidence.

Current wording

We conduct research and manufacturing work outside of the United States, including China, that may be affected by tariffs, including tariffs that have been or may in the future be imposed by the United States or other countries through reciprocal tariffs. While we do not currently believe tariffs will have a material impact on our business or results of operations, we will continue to carefully monitor the situation. Additionally, we continue to actively monitor macroeconomic conditions and market volatility resulting from global and national economic developments, political unrest, inflationary pressures, interest rate fluctuations, disruptions in capital markets, changes in international trade relationships, changes in or the disruptions of U.S. governmental agencies, whether from a future U.S. federal government shutdown or reduced resources, new laws and regulations or amendments to existing laws and regulations in the U.S. and foreign countries, and military conflicts, such as the ongoing conflicts in Iran, Ukraine and the Middle East. While we believe such factors have had no significant impact on our business or financial results during the periods presented, future developments and potential impacts on our business are uncertain and cannot be predicted with confidence.

Previous wording

In May 2025, we entered into a global Collaboration and License Agreement with Novo (the "Novo Collaboration Agreement"). Under the Novo Collaboration Agreement, we and Novo are exclusively collaborating to leverage our proprietary Native Complex Platform® to discover, develop and commercialize multiple potential oral small molecule therapies for metabolic-related diseases based on certain specified molecular targets. The collaboration objective is to discover and develop several novel mono-, dual-, or triple-acting oral small molecule drug candidates directed across five GPCRs, including the GLP-1, GIP, and glucagon receptors (the "Collaboration Targets"). The collaboration includes our most advanced preclinical metabolic program focused on developing an oral small molecule agonist to the GIP receptor. We and Novo have initially commenced four simultaneous research and development programs (each an “R&D Program”) with each pursuing one or more Collaboration Targets from discovery through development candidate selection.

Current wording

In May 2025, we entered into a global Collaboration and License Agreement with Novo (the "Novo Collaboration Agreement"). Under the Novo Collaboration Agreement, we and Novo are exclusively collaborating to leverage our proprietary Native Complex Platform® to discover, develop and commercialize multiple potential oral small molecule therapies for metabolic-related diseases based on certain specified molecular targets. The collaboration objective is to discover and develop several novel mono-, dual-, or triple-acting oral small molecule drug candidates directed across five GPCRs, including the GLP-1, GIP, and glucagon receptors (the "Collaboration Targets"). The collaboration includes our most advanced preclinical metabolic program focused on developing an oral small molecule agonist to the GIP receptor. We and Novo have initially commenced four simultaneous research and development programs (each an “R&D Program”) with each pursuing one or more Collaboration Targets from discovery through development candidate selection. In July 2026, we completed our performance obligations for the first R&D Program and provided Novo with the first development candidate. Novo then exercised its right to commence another R&D Program as one of the four programs that can be pursued simultaneously under the collaboration.

Previous wording

For the three months ended March 31, 2026, our revenue was derived solely from research activities performed for Novo under the Novo Collaboration Agreement. As of March 31, 2026, our accounts receivable was entirely attributed to Novo. See Note 3 to the condensed financial statements in this Quarterly Report for additional information.

Current wording

For the six months ended June 30, 2026, our revenue was derived solely from research activities performed for Novo under the Novo Collaboration Agreement. As of June 30, 2026, our accounts receivable was entirely attributed to Novo. See Note 3 to the unaudited condensed financial statements in this Quarterly Report for additional information.

Previous wording

In connection with the entry into asset purchase agreement with Vertex in September 2023, we also entered into a research service agreement with Vertex (“Vertex Research Service Agreement”) under which we agreed to perform certain exploratory research activities for Vertex. For the three months ended March 31, 2025, our revenue was derived solely from research activities performed for Vertex under the Vertex Research Service Agreement. The Vertex Research Service Agreement expired in September 2025.

Current wording

In connection with the entry into an asset purchase agreement with Vertex in September 2023, we also entered into a research service agreement with Vertex (“Vertex Research Service Agreement”) under which we agreed to perform certain exploratory research activities for Vertex. For the six months ended June 30, 2025, our revenue was derived solely from research activities performed for Vertex under the Vertex Research Service Agreement. The Vertex Research Service Agreement expired in September 2025.

Previous wording

Comparison of the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Our total revenue of $26.5 million for the three months ended March 31, 2026 was generated from research activities performed for Novo, of which $15.7 million was recognized from deferred revenue associated with the upfront payment from Novo, $10.3 million of variable consideration related to estimated research services, and $0.5 million associated with the recognition of revenue for two discovery research milestones deemed probable of achievement as of March 31, 2026. All of our revenue for three months ended March 31, 2025 was generated from research activities performed for Vertex.

Current wording

Our total revenue of $26.7 million for the three months ended June 30, 2026 was generated from research activities performed for Novo, of which $14.6 million was recognized from deferred revenue associated with the upfront payment from Novo, $11.2 million of variable consideration related to estimated research services, and $0.9 million associated with the recognition of revenue for four collaboration target milestones achieved as of June 30, 2026. All of our revenue for the three months ended June 30, 2025 was generated from research activities performed for Vertex.

Previous wording

Research and development expenses were $29.5 million and $19.3 million for the three months ended March 31, 2026 and 2025, respectively. The increase was primarily due to (i) $5.0 million of higher direct costs associated with our clinical, preclinical and research programs, which includes $0.3 million of lower clinical trial expenses, (ii) $4.7 million of higher employee-related costs as a result of increased headcount to support our growing our research and development activities, which includes $1.5 million of higher stock-based compensation expenses as a result of additional new grants during the period, (iii) $0.6 million in other research and development expense and (iv) $0.3 million of higher facility-related and office costs, partially offset by $0.3 million of lower expenses attributable to unallocated external research and development costs. We expect to continue to incur increased research and development expenses as we advance SEP-631, SEP-479, and other programs in our pipeline.

Current wording

Research and development expenses were $64.7 million and $41.5 million for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily due to $14.7 million of higher direct costs associated with our clinical, discovery and preclinical programs, which includes $12.1 million of higher costs associated with our partnered metabolic programs as we commenced our research activities for these programs in July 2025, $1.3 million of higher costs associated with our other preclinical and discovery programs as we continue to advance these programs, and $0.7 million and $0.6 million, respectively, of higher costs associated with the advancement of our SEP-631 and PTH1R programs. The increase was also driven by (i) $8.1 million of higher employee-related costs as a result of increased headcount to support the expansion of our research and development activities, which includes $3.1 million of higher stock-based compensation expenses as a result of additional new equity grants during the period, (ii) $0.9 million in other research and development expense, and (iv) $0.4 million of higher facility-related and office costs, partially offset by $0.9 million of lower unallocated external research and development costs.

Previous wording

General and administrative expenses were $10.3 million and $6.9 million for the three months ended March 31, 2026 and 2025, respectively, primarily due to $3.4 million of higher employee-related costs as a result of increased headcount to support our growing operations. This amount includes $1.9 million of higher stock-based compensation expenses as a result of additional new grants during the period.

Current wording

General and administrative expenses were $8.5 million and $6.9 million for the three months ended June 30, 2026 and 2025, respectively, primarily due to $2.0 million of higher employee-related costs as a result of increased headcount to support the growth of our operations. This amount includes $1.9 million of higher stock-based compensation expenses as a result of additional new grants during the period.

Previous wording

Interest income was $5.0 million and $4.5 million for the three months ended March 31, 2026 and 2025, respectively. The increase was due to higher interest rates and higher balances of cash equivalents and marketable securities.

Current wording

Interest income was $4.8 million and $4.2 million for the three months ended June 30, 2026 and 2025, respectively. Interest income was $9.8 million and $8.6 million for the six months ended June 30, 2026 and 2025, respectively. The increase was due to higher interest rates and higher balances of cash equivalents and marketable securities.

Previous wording

We recorded $0.3 million for provision for income taxes for the three months ended March 31, 2026. We did not record any benefit or provision for income taxes for the three months ended March 31, 2025.

Current wording

We recorded $1.0 million and $1.3 million of provision for income taxes for the three and six months ended June 30, 2026, respectively. We did not record any benefit or provision for income taxes for the three and six months ended June 30, 2025.

Previous wording

Our net losses were $8.6 million and $21.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $175.9 million. We expect to continue to incur net losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing and expenditures of our operational activities.

Current wording

Our net losses were $21.7 million and $46.3 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $188.9 million. We expect to continue to incur net losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing and expenditures of our operational activities.

Previous wording

We have historically financed our operations primarily through the issuances of convertible promissory notes and convertible preferred stock, sales of our common stock, and strategic collaborations with other companies. In March 2026, we entered into the Sales Agreement for a $150.0 million ATM Program. As of March 31, 2026, we have not sold any of our shares of common stock under the Sales Agreement.

Current wording

We have historically financed our operations primarily through the issuances of convertible promissory notes and convertible preferred stock, sales of our common stock, and strategic collaborations with other companies. In March 2026, we entered into the Sales Agreement for the ATM Program under which we may sell shares of our common stock having an aggregate offering price of up to $150.0 million. During the three and six months ended June 30, 2026, we sold 380,172 shares of common stock under the ATM Program at a weighted average price of $36.34 per share, generating net proceeds of $13.8 million. See Note 6 to the unaudited condensed financial statements in this Quarterly Report for additional information.

Previous wording

As of March 31, 2026, we had $522.1 million in cash, cash equivalents, and marketable securities, which, we believe, will be sufficient to fund our operations and capital expenditure requirements at least into 2029.

Current wording

As of June 30, 2026, we had $516.5 million in cash, cash equivalents, and marketable securities, which, we believe, will be sufficient to fund our operations and capital expenditure requirements at least into 2029.

Previous wording

The net cash used in operating activities for the three months ended March 31, 2025 was due to our net loss of $21.5 million and $3.3 million of net change in operating assets and liabilities, partially offset by $1.4 million of non-cash charges for depreciation and amortization, stock-based compensation, non-cash operating lease expense, deferred income tax and accretion of discounts, net, on marketable securities.

Current wording

Net cash used in operating activities of $47.8 million for the six months ended June 30, 2026 was due to our net loss of $21.7 million and $38.0 million of net change in operating assets and liabilities, partially offset by $11.9 million of non-cash charges for depreciation and amortization, stock-based compensation, non-cash operating lease expense and accretion of discounts, net, on marketable securities.

Previous wording

Net cash used in operating activities was $25.6 million and $23.3 million for the three months ended March 31, 2026 and 2025, respectively. The net cash used in operating activities for the three months ended March 31, 2026 was due to our net loss of $8.6 million and $23.2 million of net change in operating assets and liabilities, partially offset by $6.3 million of non-cash charges for depreciation and amortization, stock-based compensation, non-cash operating lease expense and accretion of discounts, net, on marketable securities.

Current wording

Net cash used in operating activities of $43.6 million for the six months ended June 30, 2025 was due to our net loss of $46.3 million and $0.5 million of net change in operating assets and liabilities, partially offset by $3.2 million of non-cash charges for depreciation and amortization, stock-based compensation, non-cash operating lease expense and accretion of discounts, net, on marketable securities.

Previous wording

Net cash used in investing activities of $23.8 million for the three months ended March 31, 2026 was due to $105.2 million of purchases of marketable securities and $0.8 million of purchases of property and equipment, partially offset by the maturity of $82.2 million of marketable securities.

Current wording

Net cash used in investing activities of $5.4 million for the six months ended June 30, 2026 was due to $152.8 million of purchases of marketable securities and $0.8 million of purchases of property and equipment, partially offset by the maturity of $148.2 million of marketable securities.

Previous wording

Net cash used in investing activities of $4.9 million for the three months ended March 31, 2025 was due to $49.7 million of purchases of marketable securities and $0.4 million of purchases of property and equipment, partially offset by the maturity of $45.2 million of marketable securities.

Current wording

Net cash used in investing activities of $5.7 million for the six months ended June 30, 2025 was due to $113.6 million of purchases of marketable securities and $0.4 million of purchases of property and equipment, partially offset by the maturity of $108.3 million of marketable securities.

Previous wording

Net cash provided by financing activities was $0.3 million for the three months ended March 31, 2026. Net cash provided by financing activities for the three months ended March 31, 2026 was due to proceeds from the exercise of stock options.

Current wording

Net cash provided by financing activities of $0.4 million for the six months ended June 30, 2025 was due to proceeds from the exercise of stock options.

Previous wording

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of private and public equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. However, the trading prices for our common stock and for other biopharmaceutical companies have been highly volatile. As a result, we may face difficulties raising capital through sales of our common stock, and such sales may be on unfavorable terms. Similarly, adverse macroeconomic conditions and market volatility resulting from global and national economic developments, concerns regarding a potential global recession, political unrest, military conflicts, such as the recent conflict in Iran and ongoing conflicts in Ukraine and in the Middle East, inflationary pressures, disruptions in capital markets, changes in international trade relationships, changes in or the disruptions of U.S. governmental agencies, whether from a future U.S. federal government shutdown or reduced resources, global health crises, or other factors could materially and adversely affect our ability to consummate an equity or debt financing on favorable terms or at all. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect existing stockholders’ rights as common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Current wording

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of private and public equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. However, the trading prices for our common stock and for other biopharmaceutical companies have been highly volatile. As a result, we may face difficulties raising capital through sales of our common stock, and such sales may be on unfavorable terms. Similarly, adverse macroeconomic conditions and market volatility resulting from global and national economic developments, concerns regarding a potential global recession, political unrest, military conflicts, such as the ongoing conflicts in Iran, Ukraine and the Middle East, inflationary pressures, disruptions in capital markets, changes in international trade relationships, changes in or the disruptions of U.S. governmental agencies, whether from a future U.S. federal government shutdown or reduced resources, global health crises, or other factors could materially and adversely affect our ability to consummate an equity or debt financing on favorable terms or at all. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing stockholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect existing stockholders’ rights as common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Previous wording

Management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Current wording

Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these unaudited condensed financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Previous wording

During the three months ended March 31, 2026, there have been no material changes to our critical accounting policies and estimates as described in our Annual Report.

Current wording

During the six months ended June 30, 2026, there have been no material changes to our critical accounting policies and estimates as described in the 2025 Annual Report.

Previous wording

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 1 to our condensed financial statements included elsewhere in this Quarterly Report.

Current wording

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 1 to our unaudited condensed financial statements included elsewhere in this Quarterly Report.

Previous wording

We qualify as “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), which permits us to take advantage of an extended transition period to comply with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies. We have elected to use this extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. We could be an emerging growth company until the earliest to occur: (i) the last day of the fiscal year in which we have more than $1.235 billion in annual gross revenue; (ii) the date we qualify as a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, with at least $700.0 million of equity securities held by non-affiliates; (iii) the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; or (iv) the last day of the fiscal year ending after the fifth anniversary of our IPO. Even after we no longer qualify as an emerging growth company, we may continue to qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, if either (i) the market value of our stock held by non-affiliates is less than

Current wording

We currently qualify as “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), which permits us to take advantage of an extended transition period to comply with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies. We have elected to use this extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. We could be an emerging growth company until the earliest to occur: (i) the last day of the fiscal year in which we have more than $1.235 billion in annual gross revenue; (ii) the date we qualify as a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, with at least $700.0 million of equity securities held by non-affiliates and we are not eligible to use the requirements for “smaller reporting companies” under the revenue test; (iii) the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; or (iv) the last day of the fiscal year ending after the fifth anniversary of our IPO. Even after we no longer qualify as an emerging growth company, we may continue to qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million.