Solid Biosciences Inc.

NOTES TO CONDENSED CONSOLID ATED FINANCIAL STATEMENTS

(amounts in thousands, except share and per share data and where otherwise noted)

1. Nature of the Business and Basis of Presentation

Nature of Business

Solid Biosciences Inc. (the “Company”) is a life sciences company focused on advancing a portfolio of current and future gene therapy candidates (collectively “Candidates”), including SGT-003 for the treatment of Duchenne muscular dystrophy (“Duchenne”), SGT-212 for the treatment of Friedreich’s ataxia (“FA”), SGT-501 for the treatment of catecholaminergic polymorphic ventricular tachycardia, SGT-601 for the treatment of TNNT2-mediated dilated cardiomyopathy, and additional assets for the treatment of genetic cardiac and neuromuscular diseases, at different stages of development with varying levels of investment. The Company is advancing its diverse pipeline across rare neuromuscular and cardiac diseases, bringing together experts in science, technology, disease management and care. Patient-focused and founded by those directly impacted by Duchenne, the Company’s mission is to improve the daily lives of patients living with these devastating diseases.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on licenses, protection of proprietary technology, dependence on key personnel, compliance with government regulations, and the need to obtain additional financing to fund operations. Candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance and reporting capabilities.

The Company’s Candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval, or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from, among others, other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, partners, and consultants.

Liquidity

Based upon its current operating plan, the Company expects that its cash, cash equivalents and available-for-sale securities of $348.9 million, excluding restricted cash of $1.3 million, as of September 30, 2026, will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of issuance of these condensed consolidated financial statements. However, the Company has based this estimate on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown to it. As a result, the Company could deplete its capital resources sooner than it currently expects.

Through September 30, 2026, the Company has funded its operations primarily with the proceeds from the sale of redeemable preferred units and member units prior to its initial public offering, as well as the sale of common stock and pre-funded warrants to purchase shares of its common stock in private placements (including the March 2026 Private Placement (as defined below)), the sale of common stock in its initial public offering, follow-on public offerings in March 2021 and February 2025 and under its “at‑the‑market offering” sales agreement, between the Company and Jefferies LLC (the “ATM Sales Agreement”).

The Company expects to continue to generate operating losses for the foreseeable future and to finance its future cash needs through a combination of equity offerings, debt financings, collaborations, strategic partnerships and alliances or licensing arrangements. If the Company is unable to obtain funding, the Company would be forced to delay, reduce or eliminate some or all of its research and development programs, preclinical and clinical testing or commercialization efforts, which could adversely affect its business prospects.

Basis of Presentation

These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) along with the rules and regulations of the Securities and Exchange Commission for interim financial information and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP to constitute a complete set of financial statements. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for a fair statement of the Company’s financial position at September 30, 2026 and its results of operations, changes in stockholders’ equity, and cash flows for the interim periods ended September 30, 2026 and 2025.

These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the operating results to be expected for the year ending December 31, 2026, for any other interim period, or for any other future year.

Significant Judgments and Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments 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. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, estimates related to the recognition of research and development expenses, equity-based compensation, and derivative liabilities. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from the Company’s estimates.

Summary of Significant Accounting Policies

There have been no changes to the significant accounting policies disclosed in the Company's most recent Annual Report on Form 10‑K.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2024‑03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Sub-Topic 220-40): Disaggregation of Income Statement Expenses,” which requires additional disclosure of the nature of expenses included in the income statement. The standard requires disclosures about specific types of expenses included in the expense captions presented in the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU No. 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements”. This ASU clarifies and improves existing interim reporting guidance by consolidating disclosure requirements within Topic 270 and introducing a disclosure principle requiring entities to disclose events and changes occurring after the most recent annual reporting period that are expected to have a material effect on the entity’s financial condition or results of operations. The ASU does not introduce significant changes to recognition or measurement guidance. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect of adopting this ASU on its consolidated financial statements and disclosures.

2. FA212 Asset Acquisition

On September 19, 2024, the Company entered into an asset purchase agreement with FA212 LLC (“FA212”) for the purchase of certain intellectual property, including patents and assigned licenses related to a preclinical drug candidate, which the Company now refers to as SGT-212, assigned manufacturing contracts as well as research and development materials such as manufactured materials and samples.

The Company paid FA212 an upfront payment of $1.0 million in the third quarter of 2024. Additionally, the Company agreed to pay FA212 development milestone payments of up to $34.0 million, cumulative sales milestone payments of up to $21.0 million, and tiered royalties on net sales in the low-single-digits. The Company also assumed from FA212 contingent development milestone payments of up to $4.2 million, regulatory milestone payments of up to $13.0 million, cumulative sales milestone payments of up to $27.5 million, and tiered royalties on worldwide net sales in the mid-single digits payable to the University of Pennsylvania.

Certain development milestone payments to FA212 are payable in either cash, equity, or a combination of both, at the Company's discretion. Such contingent payments were determined to be derivative liabilities and were initially recorded at their fair value of $3.4 million.

The Company determined that the FA212 agreement represented an asset acquisition of in-process research and development assets with no alternative future use and recognized the aggregate acquisition cost of $5.1 million as research and development expense in the third quarter of 2024, which included the upfront payment, initial recognition of the derivative liability, and $0.7 million in transaction costs.

The Company submitted an investigational new drug application (“IND”) for SGT-212 for the treatment of FA to the U.S. Food and Drug Administration (“FDA”), which was cleared in December 2024. Upon clearance of the IND, the first development milestone of $5.0 million became payable to FA212. On February 28, 2025, the Company made the first development milestone payment in the form of 975,496 shares of its common stock. Following the dosing of the first participant in the Phase 1b FALCON clinical trial of SGT-212 in January 2026, a $7.5 million development milestone became payable to FA212. On January 15, 2026, the Company made the second milestone payment in the form of 1,316,899 shares of its common stock. The derivative liability for the final contingent payment was recorded at a fair value of $4.1 million as of September 30, 2026. The derivative liabilities for contingent payments as of December 31, 2025 were recorded at an aggregate fair value of $9.2 million. See Note 4 - Fair Value Measurements.

3. Out-License Agreements

From time to time, the Company enters into non-exclusive license and collaboration agreements for the out-licensing of POLARIS‑101 TM, its proprietary, rationally engineered capsid technology used in SGT-003, to both companies and academic institutions pursuing treatments for rare diseases. These arrangements may entitle the Company to receive non-refundable upfront payments, contingent obligations for potential developmental, regulatory, and commercial performance milestone payments, cost reimbursement arrangements, product supply and royalties based on worldwide sales of licensed products. At September 30, 2026, potential future milestone payments to which the Company may be entitled under these agreements totaled an aggregate of $97.1 million. None of these milestones were assessed to be probable as of September 30, 2026.

4. Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:

As of September 30, 2026 and December 31, 2025, the fair values of the Company’s cash equivalents and available-for-sale securities were determined using Level 2 inputs.

The Company estimated the fair value of the derivative liabilities by using a Monte Carlo simulation forecasting the timing and likelihood of certain development milestone events being achieved and discounting the probability of adjusted payments using an appropriate discount rate based on market interest rates. The main assumptions when determining the fair value of the derivative liabilities are the timing and probability of achieving certain milestones, the estimated volatility of the Company’s common stock, and the discount rate. The estimated fair value presented is not necessarily indicative of an amount that could be realized in a current market exchange. The use of alternative inputs and estimation methodologies could have a material effect on these estimates of fair value.

The significant unobservable inputs used in valuing the developmental milestone derivative liabilities at each measurement date are as follows:

The following table presents a roll forward of activity associated with the Company’s derivative liabilities measured using Level 3 inputs:

The Company recognized a gain of $0.2 million and a loss of $0.9 million for the change in fair value of derivative liabilities during thethree months ended September 30, 2026 and 2025, respectively. During the nine months ended September 30, 2026 and 2025, the Company recognized losses of $2.4 million and $3.4 million, respectively, for the change in fair value of derivative liabilities.

It is the Company’s policy to recognize transfers between levels of the fair value hierarchy, if any, at the end of the reporting period. During the nine months ended September 30, 2026, and the year ended December 31, 2025, there wereno transfers between Level 1, Level 2, and Level 3.

As of September 30, 2026, and December 31, 2025, the Company’s accounts payable, accrued expenses, and other current liabilities approximated their estimated fair values due to the short-term nature of these financial instruments.

5. Available-for-Sale Securities

A summary of the Company's available-for-sale securities is presented below:

The weighted average contractual maturity of the Company’s available-for-sale securities was approximately 0.5 years and 0.6 years as of September 30, 2026, and December 31, 2025, respectively.

6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

8. Stockholders’ Equity

Authorized Shares

On June 10, 2026, at the Company’s 2026 Annual Meeting of Stockholders, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock from 240,000,000 shares to 480,000,000 shares (the “Share Increase Amendment”). The Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware on June 10, 2026 to effect the Share Increase Amendment.

As a result of the Share Increase Amendment, as of September 30, 2026, the Company is authorized to issue 480,000,000 shares of common stock, $0.001 par value per share. The Share Increase Amendment did not otherwise affect the par value, rights, preferences or privileges of the Company’s common stock.

ATM Sales Agreement

On August 6, 2026, the Company filed a prospectus supplement under its universal shelf registration statement on Form S-3 relating to the offer and sale of up to $200.0 million of shares of its common stock pursuant to the ATM Sales Agreement. As of the date of that prospectus supplement, the Company had sold shares for aggregate gross proceeds of approximately $85.0 million under the prior prospectus supplement, and no further sales will be made thereunder. During the three and nine months ended September 30, 2026, the Company sold 2,012,500 and 10,528,487 shares under the ATM Sales Agreement resulting in net proceeds of $15.7 million and $76.5 million, respectively.

Common Stock and Pre-funded Warrants

On February 19, 2025, the Company issued and sold 35,739,810 shares of its common stock at a price per share of $4.03 and, to certain investors in lieu of shares of common stock, pre-funded warrants to purchase 13,888,340 shares of common stock at a price of $4.029 per pre-funded warrant (the “February 2025 Offering”). The Company received approximately $188.0 million of net proceeds from the February 2025 Offering after deducting underwriting discounts and commissions and offering costs.

On March 9, 2026, the Company issued and sold 14,973,257 shares of its common stock at a price of $5.61 per share, and, to certain investors in lieu of shares of common stock, pre-funded warrants to purchase 27,807,482 shares of its common stock at a price of $5.609 per pre-funded warrant (the “March 2026 Private Placement”). The Company received approximately $226.3 million of aggregate net proceeds from the March 2026 Private Placement after deducting offering costs. The Company determined the pre‑funded warrants met the criteria for equity classification.

During the three months ended September 30, 2026, holders exercised pre-funded warrants to purchase 4,311,507 shares of the Company’s common stock on a cashless basis, resulting in the issuance of 4,311,010 shares of common stock. As of September 30, 2026, pre-funded warrants to purchase 40,096,793 shares of common stock remained outstanding.

9. Equity-Based Compensation

Equity-Based Compensation Expense

The Company has classified equity-based compensation expense in its condensed consolidated statements of operations as follows:

Equity Incentive Plans

As of September 30, 2026, the Company’s approved equity incentive plans include: the 2018 Omnibus Incentive Plan (the “2018 Plan”); Amended and Restated 2020 Equity Incentive Plan, as amended (the “2020 Plan”); the Amended and Restated 2021 Employee Stock Purchase Plan; and the 2024 Inducement Stock Incentive Plan (the “2024 Plan”). These plans are administered by the Board of Directors (the “Board”) and permit the granting of stock options, stock appreciation rights, restricted stock, restricted stock units (the “RSUs”), performance awards, and other stock-based or cash-based awards. Upon the adoption of the 2020 Plan, the Company no longer grants new equity awards under its 2018 Plan. Service based awards to employees generally vest over afour-year period with 25% of such awards vesting following twelve months of continued employment or service. The remaining awards vest in either monthly or yearly installments over the following three years. Stock options granted under the Company’s equity incentive plans expire ten years from the date of grant.

Amended and Restated 2020 Equity Incentive Plan

On June 12, 2025 and June 11, 2024, the Company's stockholders approved amendments to the 2020 Plan to increase the number of shares of common stock reserved for issuance under the plan by 9,000,000 shares and 2,000,000 shares, respectively. As of September 30, 2026, there were 5,995,496 stock options outstanding,5,137,502 RSUs outstanding,1,689,025 performance stock units outstanding, and 7,805,480 shares remained available for future issuance under the 2020 Plan.

2024 Inducement Stock Incentive Plan

In March 2024, the Board approved the 2024 Plan, which provides for the reservation of 1,000,000 sharesof common stock for equity granted as an inducement material to the individual’s entering into employment with the Company and in accordance with the requirementsof Nasdaq Stock Market Rule 5635(c)(4). As of September 30, 2026, there were 100,000 stock options outstanding,671,086 RSUs outstanding, and 10,380 shares remained available for future issuance under the 2024 Plan.

Stock Options

The table below summarizes the activity with respect to stock options for thenine months ended September 30, 2026:

The assumptions used in the Black-Scholes option-pricing model for all stock options granted during each period presented are as follows:

The weighted average grant date fair values of stock options granted during thethree months ended September 30, 2026 and 2025 were $7.82 and $5.31, respectively, and the weighted average grant date fair values of stock options granted during the nine months ended September 30, 2026 and 2025 were $5.34 and $4.77, resp ectively.

The Company recognized $2.5 million and $1.6 million of equity-based compensation expense in connection with stock options during thethree months ended September 30, 2026 and 2025, respectively. During the nine months ended September 30, 2026 and 2025, the Company recognized equity-based compensation expense in connection with stock options of $6.8 million and $4.1 million, respectively. As of September 30, 2026, there was $17.6 million of total unrecognized equity-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of 2.6 years.

Restricted Stock Units

The following table summarizes activity with respect to RSUs during thenine months ended September 30, 2026:

The Company recognized $2.6 million and $1.3 million of equity-based compensation expense in connection with RSUs during the three months ended September 30, 2026 and 2025, respectively. During the nine months ended September 30, 2026 and 2025, the Company recognized equity-based compensation expense in connection with RSUs of $7.0 million and $3.4 million, respectively. As of September 30, 2026, there was $28.9 million of total unrecognized equity-based compensation expense related to nonvested RSUs, which is expected to be recognized over a weighted average period of 2.9 years.

Performance Stock Units and Performance Stock Options

In June 2024, the Board approved grants of performance-based restricted stock unit awards (“PSUs” or the “2024 Performance Awards”) to the Company’s executive team. Each PSU represents the contingent right to receive one share of the Company’s common stock. The 2024 Performance Awards provide for the vesting of 25% of the target number of underlying RSUs upon the achievement of each of four independent performance milestones predetermined by the Board (each, a “2024 Performance Milestone” and collectively, the “2024 Performance Milestones”), subject to the grantee’s continued service with the Company (the “Approval Conditions”). The 2024 Performance Milestones are tied to the achievement of certain business objectives and are non-market and non-financial in nature.

In the first quarter of 2026, the Board determined that the first 2024 Performance Milestone had been achieved, and 25% of the target number of shares vested for each executive officer upon such determination. The Board also determined that a second 2024 Performance Milestone had been achieved and that an additional 25% of the target number of shares for the executive officers will vest on the 2027 Evaluation Date, which will occur in the first quarter of 2027, subject to each executive officer’s continued service with the Company on such date. The Board will determine whether the remaining two 2024 Performance Milestones have been achieved on or prior to the 2027 Evaluation Date. The portion of the RSUs allocable to any 2024 Performance Milestone that has not been achieved on or prior to the 2027 Evaluation Date will be cancelled.

In January 2026, the Board approved a grant of PSUs to an additional member of the Company’s executive team. These PSUs are subject to the three then-remaining 2024 Performance Milestones and provide for the vesting of one-third of the target number of underlying RSUs upon the achievement of each such milestone, subject to the Approval Conditions.

In September 2026, the Board approved grants of PSUs and performance-based stock options (“PSOs” and, together with the PSUs, the “2026 Performance Awards”), effective as of October 1, 2026, to the Company’s executive team. Each PSU represents the contingent right to receive one share of the Company’s common stock, and each PSO represents the right to purchase one share of the Company’s common stock at a fixed exercise price, in each case subject to the applicable vesting conditions. The 2026 Performance Awards are subject to two independent performance milestones, predetermined by the Board, that are separate from the 2024 Performance Milestones (each, a “2026 Performance Milestone” and collectively, the “2026 Performance Milestones”). The 2026 Performance Awards provide for the vesting of 50% of the target number of underlying PSUs and PSOs, respectively, upon the achievement of each 2026 Performance Milestone, subject to the grantee’s continued service with the Company through the applicable vesting date. Notwithstanding the achievement of a 2026 Performance Milestone, the portion of the 2026 Performance Awards attributable to such milestone will vest on January 1, 2030 if the milestone is determined to have been achieved at the evaluation date occurring in the first quarter of 2029 or, if not achieved as of such evaluation date, upon a subsequent determination of achievement at the evaluation date occurring in the first quarter of 2030, in each case subject to the grantee’s continued service through the applicable vesting date. The 2026 Performance Milestones are tied to the achievement of certain business objectives and are non-market and non‑financial in nature.

The following table summarizes activity with respect to PSUs during thenine months ended September 30, 2026:

The Company recognized $0.9 million ofequity-based compensation expense in connection with PSUs during the three months ended September 30, 2026 and 2025. During the nine months ended September 30, 2026 and 2025, the Company recognized equity-based compensation expense in connection with PSUs of $2.9 million and $2.7 million, respectively. As of September 30, 2026, there was $1.4 million of unrecognized equity-based compensation expense related to nonvested PSUs based on the achievement of all 2024 Performance Milestones, which are expected to be recognized over a weighted average period of 0.4 years.

10. Commitments and Contingencies

Letter of Credit

The Company had an outstanding letter of credit in the amount of $1.3 million and $2.0 million at September 30, 2026 and December 31, 2025, respectively, which is required as a condition of the Company’s office and laboratory lease.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its executive officers and members of its Board that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as executive officers or directors of the Company. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnification arrangements.

The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of September 30, 2026 and December 31, 2025.

Legal Proceedings

The Company may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities, including claims or disputes related to patents that have been issued or that are pending in the field of research on which the Company is focused. The Company is not aware of any material legal proceedings or claims as of September 30, 2026.

11. Net Loss Per Share

The following table sets forth the computation of the Company’s basic and diluted net loss per share:

Included within the weighted-average shares used to compute basic and diluted net loss per share are shares of common stock issuable upon the exercise of pre-funded warrants. The pre-funded warrants are exercisable at any time for nominal consideration and, as such, the shares underlying the pre-funded warrants are considered outstanding for purposes of calculating basic and diluted net loss per share. During September 2026, pre-funded warrants to purchase 4,311,507 shares of common stock were exercised on a cashless basis, resulting in the issuance of 4,311,010 shares of common stock. As of September 30, 2026 and 2025, pre-funded warrants to purchase 40,096,793 and 16,600,818 shares of common stock, respectively, remained outstanding.

The following table presents the potentially dilutive securities outstanding as of the dates indicated that were excluded from the computation of diluted net loss per share because the effect of including them would have been anti-dilutive due to the Company’s net loss during the periods presented:

12. Segment Reporting

The Company hasone reportable andone operating segment and conducts its business activities on a consolidated basis primarily in North America. The Company’s singular focus is developing treatments through gene therapy and other means for patients with neuromuscular and cardiac diseases. All of the Company’s tangible assets are held in the United States.

The accounting policies of the Company are the same as those described in the summary of significant accounting policies.

The Company’s chief operating decision maker (“CODM”) is itschief executive officer. The CODM assesses performance for the Company and decides how to allocate resources based on net loss as reported on the condensed consolidated statements of operations. The annual budgeting process is the primary mechanism used to make these decisions. This financial information also helps the CODM in making performance assessments using budgeted versus actual results.

The following table presents segment expenses, other segment items, and segment net loss for the periods presented:

The measure of segment assets is reported on the balance sheet as total condensed consolidated assets.