Protara Therapeutics, Inc.

1. Organization and Nature of the Business

Overview

Protara Therapeutics, Inc., and its consolidated subsidiaries, or Protara or the Company, is a clinical-stage biopharmaceutical company committed to advancing transformative therapies for the treatment of cancer and rare diseases. Protara’s portfolio includes two development programs utilizing TARA-002, an investigational cell therapy in development for the treatment of non-muscle invasive bladder cancer, or NMIBC, and lymphatic malformations, or LMs. Additionally, the Company’s portfolio includes Intravenous, or IV, Choline Chloride, an investigational phospholipid substrate replacement therapy in development for patients receiving parenteral support, or PS.

Liquidity and Capital Resources

The Company is in the business of developing biopharmaceuticals and has no current or near-term revenues. The Company has incurred substantial clinical and other costs in its drug development efforts. The Company will need to raise additional capital in order to fully realize management’s plans.

The Company believes that its current financial resources are sufficient to satisfy the Company’s estimated liquidity needs for at least 12 months from the date of issuance of these consolidated financial statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in the accompanying consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Significant items subject to such estimates include but are not limited to research and development accruals as well as contingencies.

On an ongoing basis, the Company’s management evaluates its estimates based on historical and anticipated results, trends, and various other assumptions believed to be reasonable. Actual results could differ from those estimates. The results of any changes in accounting estimates are reflected in the financial statements of the period in which the change becomes evident.

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid instruments with an original maturity of three months or less when acquired to be cash equivalents. Cash and cash equivalents may be held in depository, money market accounts and/or U.S. Treasury securities, and are reported at fair value.

The Company’s restricted cash balances consist of cash deposits to collateralize letter of credit obligations.

The following table provides a reconciliation of cash and cash equivalents, and restricted cash in the consolidated balance sheets to the total amount shown in the consolidated statements of cash flows:

Fair Value Measurements

Accounting Standards Codification, or ASC, 820 provides the framework for measuring fair value and establishes a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

Fair value is defined as the exchange price, or an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, the three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

The carrying amounts of cash and cash equivalents, prepaid expenses and accounts payable approximate their fair values due to the short-term nature of these instruments.

Marketable Debt Securities

The Company classifies investments in marketable debt securities with remaining maturities when purchased of greater than three months as current. Investments with a remaining maturity date greater than one year are classified as non-current. The Company classifies all marketable debt securities as available-for-sale. The cost of securities sold is based on the specific identification method. Interest earned on securities that are classified as available-for-sale are included in interest and investment income (expense).

The Company records investments at fair value with unrealized gains and losses recorded as a component of other comprehensive income (loss) in the consolidated statements of operations and comprehensive loss until realized. Realized gains and losses are reflected in interest and investment income (expense) in the consolidated statements of operations and comprehensive loss and are determined using the specific identification method with transactions recorded on a settlement date basis. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. To determine whether an other-than-temporary impairment exists, the Company considers whether it has the ability and intent to hold the investment until a market price recovery, and whether evidence indicating the recoverability of the cost of the investment outweighs evidence to the contrary. The Company has the ability to hold such securities with an unrealized loss until its forecasted recovery. The Company determined that there was no material change in the credit risk of these investments.

The Company periodically evaluates the need for an allowance for credit losses. This evaluation includes consideration of several qualitative and quantitative factors, including whether it plans to sell the security, whether it is more likely than not it will be required to sell any marketable debt securities before recovery of its amortized cost basis, and if the entity has the ability and intent to hold the security to maturity, and the portion of any unrealized loss that is the result of a credit loss. Factors considered in making these evaluations include quoted market prices, recent financial results, operating trends, and implied values from any recent transactions or offers of investee securities, credit quality of debt instrument issuers, expected cash flows from securities, other publicly available information that may affect the value of the marketable debt security, duration and severity of decline in value and the Company’s strategy and intentions for holding the marketable debt security.

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, restricted cash and investments in marketable debt securities.

The Company invests its excess cash primarily in money market funds and high quality investment grade marketable debt securities of governments and/or corporations. The Company has adopted an investment policy that includes guidelines relative to credit quality, diversification and maturities to preserve principal and liquidity.

Property and Equipment, net

Property and equipment, including leasehold improvements, are recorded at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Depreciation begins at the time the asset is placed in service. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset. Repairs and maintenance costs are expensed as incurred, whereas major improvements are capitalized as additions to property and equipment.

The estimated useful lives for significant property and equipment categories are as follows:

Leases

The Company enters into contracts in the normal course of business and assesses whether any such contracts contain a lease. The Company determines if an arrangement is a lease at inception if it conveys the right to control the identified asset for a period of time in exchange for consideration. Under ASC 842, lease expense is recognized as a single lease cost on a straight-line basis over the lease term. The lease term consist of non-cancelable periods and may include options to extend or terminate the lease term, when it is reasonably certain such options will be exercised.

Leases classified as operating leases are included in operating lease right-of-use, or ROU, assets, current operating lease liabilities and noncurrent operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment and finance lease obligations, in our consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term. Lease liabilities represent the present value of future lease payments, discounted using an incremental borrowing rate, which is a management estimate based on the information available at the commencement date of a lease arrangement. ROU assets and lease liabilities are recognized at the lease commencement date.

The Company has elected to account for the lease and non-lease components for leases as a single component for classes of all underlying assets and allocate all the contract consideration to the lease component only. Lease cost for operating leases is recognized on a straight-line basis over the lease term and is included in operating expenses on the consolidated statements of operations and comprehensive loss. Variable lease payments are included in lease operating expenses.

The Company recognizes costs associated with lease arrangements having an initial term of 12 months or less, or short-term leases, on a straight-line basis over the lease term; such short-term leases are not recorded on the balance sheet.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable or that the useful life is shorter than originally estimated. When such events occur, the Company compares the carrying amounts of the asset or asset group to the undiscounted expected future cash flows. If this comparison indicates that the asset or asset group is impaired, the amount of impairment is measured as the difference between the carrying value and fair value of the asset or asset group. If the useful life is shorter than originally estimated, the Company will amortize the remaining carrying value over the new shorter useful life. To date, no such impairment loss has been recognized.

Segment Information

In accordance with ASC 280, operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker, or CODM, or decision-making group in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating and reporting segment. See Note 16, Segment Information for further information.

Research and Development

Research and development expenses consist primarily of third-party costs incurred to develop drug candidates, personnel-related expenses, including salaries, benefits, travel and stock-based compensation expense, depreciation and other allocated overhead costs, which include rent and maintenance of facilities and other supplies. Research and development costs are expensed as incurred.

Before a drug candidate receives regulatory approval, the Company records upfront and milestone payments made to third parties under licensing arrangements as expense provided that there is no alternative future use of the rights in other research and development projects.

Nonrefundable advance payments to vendors for goods or services that will be used or received in future research and development activities are deferred and recognized as expense in the period in which the related goods are delivered or services are performed. Where milestone payments are due to third parties under research and development collaboration arrangements or other contractual agreements, the milestone payment obligations are expensed when the milestone conditions are met and the amount of payment is reasonably estimable.

Once a drug candidate receives regulatory approval, the Company records any milestone payments in identifiable intangible assets, less accumulated amortization and, unless the asset is determined to have an indefinite life, the Company amortizes the payments on a straight-line basis over the remaining agreement term or the expected product life cycle, whichever is shorter.

Certain third-party costs are included as a component of research and development expense. These expenses include fees paid to contract research organizations, or CROs, and other clinical trial costs, contractual services costs and costs for supply of its drug candidates. Depending upon the timing of payments to the service providers, the Company recognizes prepaid expenses or accrued expenses related to these costs. These accrued or prepaid expenses are based on management’s estimates of the work performed under service agreements, milestones achieved and experience with similar contracts in conjunction with known variable factors such as enrolled patients and site activity. The Company monitors each of these factors and adjusts estimates accordingly.

Patent Costs

All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses.

Interest and Investment Income (Expense)

Interest and investment income (expense) consist primarily of interest income, accretion income earned and amortization expense incurred and realized gains or losses related to our marketable debt securities, interest income related to cash and cash equivalents and restricted cash and dividend income related to money market funds.

Stock-Based Compensation

The Company’s stock-based compensation programs provide for stock awards including stock options, restricted stock units, or RSUs, and an employee stock purchase program, or ESPP. The Company accounts for stock-based compensation using the fair value method.

The Company measures all stock options and other stock-based awards granted to employees, directors, and consultants based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. The Company recognizes forfeitures at the time forfeitures occur.

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility for the Company’s common stock is determined based on a weighting of its own historical volatility and the historical volatility of a peer-group of similar public companies. The expected term of options granted to employees is calculated using the simplified method, which represents the average of the contractual term of the option and the weighted-average vesting period of the option. The simplified method is used as the Company does not have sufficient appropriate exercise data on which to base its own estimate. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The risk-free interest rate is based upon the U.S. Treasury yield curve commensurate with the expected term at the time of grant or remeasurement.

The stock-based compensation expense associated with purchase rights under the ESPP is measured at fair-value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period. The Black-Scholes option pricing assumptions are similar to those used for stock options with the exception of the expected term of purchase rights for the ESPP which is based on the duration of an offering period.

The fair values of RSUs are based on the fair market value of the Company’s common stock on the date of the grant.

RSUs were historically granted to directors pursuant to the Company’s equity plan. Settlement for these RSUs is deferred until the earliest to occur of: (i) the director’s termination of service, (ii) death, (iii) disability or (iv) a change in control of the Company. In the event of a change in control of the Company, the RSUs will vest in full.

The fair value of all stock-based awards is recognized as stock-based compensation expense on a straight-line basis over the vesting period, which is typically three years for RSUs and one or four years for stock options.

The Company classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same way the payroll costs or service payments are classified for the related stock-based award recipients.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The measurement of net deferred tax assets is reduced by the amount of any tax benefit that, based on available evidence, is not expected to be realized, and a corresponding valuation allowance is established. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for unrecognized tax benefits is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense in the consolidated statements of operations and comprehensive loss.

Net Income (Loss) Per Share Attributable to Common Stockholders

Basic net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The weighted-average number of shares of common stock outstanding during the period includes any contingently issuable shares for which there is no circumstance under which those shares would not be issued and shares issuable upon the exercise of warrants to purchase common stock for no or nominal consideration.

Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period plus the common equivalent shares for the period including any dilutive effect from unvested RSUs, outstanding stock options, potential shares issuable under the ESPP, and potential shares issuable upon conversion of preferred stock or exercise of outstanding warrants to purchase common stock.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. Finally, the Company determines if the warrants meet the definition of a derivative based on their contractual terms. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and at each balance sheet date thereafter. Changes in the estimated fair value of liability-classified warrants are recognized as a non-cash gain or loss on the consolidated statements of operations and comprehensive loss. The Company also evaluates if changes in contractual terms or other considerations would result in the reclassification of outstanding warrants from liabilities to stockholders’ equity (or vice versa).

The fair market value of the warrants may be estimated using a Black-Scholes option-pricing model or potentially more complex valuation models depending on the nature of the contractual terms.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update, or ASU, 2023-09 –Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The Company adopted ASU 2023-09 for the year ended December 31, 2025 retrospectively to all periods presented in the consolidated financial statements. The adoption of this ASU had no material impact on the Company’s consolidated financial position, results of operations, or cash flows. Additional required disclosure has been included within Note 13.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03 –Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures, which enhances the disclosures for various types of expenses. The standard is effective for public companies for annual periods beginning after December 15, 2026. Early adoption is available. The Company is still evaluating the full extent of the potential impact of the adoption of ASU 2024-03.

In December 2025, the FASB issued ASU 2025-11 –Interim Reporting (Topic 270) – Narrow-Scope Improvements, which improves the guidance inInterim Reporting (Topic 270) by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The standard is effective for public companies for annual periods beginning after December 15, 2027. Early adoption is available. The Company is still evaluating the full extent of the potential impact of the adoption of ASU 2025-11.

Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were available to be issued. Other than as described in Note 11, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

3. Fair Value of Financial Instruments

The tables below present information about the Company’s financial instruments that are measured and carried at fair value on a recurring basis as of December 31, 2025 and 2024 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value, as described under Note 2, Summary of Significant Accounting Policies.

Money market funds and U.S. Treasury securities are classified as Level 1 within the fair value hierarchy, because they are valued using quoted prices in active markets. Corporate and agency bonds classified as Level 2 within the fair value hierarchy are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. Prices of these securities are obtained through independent, third-party pricing services and include market quotations that may include both observable and unobservable inputs. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. There were no transfers of financial instruments among Level 1, Level 2, and Level 3 during the period presented.

4. Marketable Debt Securities

Marketable debt securities, all of which were classified as available-for-sale, consist of the following:

The Company has recorded the securities at fair value in its consolidated balance sheets and unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss). For the years ended December 31, 2025 and 2024 realized gains were $9 and $0, respectively. Gains are included in interest and investment income (expense) within the consolidated statements of operations and comprehensive loss.

The remaining maturities of all debt securities held at December 31, 2025 were less than five years. There were no sales of securities in the periods presented.

Credit Losses

Securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of the excess, if any, is caused by expected credit losses.

As of December 31, 2025, marketable debt securities in a loss position consist of the following:

As of December 31, 2024, no securities were held in a loss position. As of December 31, 2025 and 2024, it was determined that there were no expected credit losses.

Interest and Investment Income (Expense)

Interest and investment income (expense) consist of the following:

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

6. Property and Equipment, net

Property and equipment, net consist of the following:

Depreciation expense was $362 and $332 for the years ended December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, $218 and $144 was included in research and development expense and general and administrative expense, respectively, within the consolidated statements of operations and comprehensive loss. During the year ended December 31, 2024, $202 and $130 was included in research and development expense and general and administrative expense, respectively, within the consolidated statements of operations and comprehensive loss. As of December 31, 2025 and 2024, substantially 100% of the Company’s total property and equipment, net was attributable to the U.S.

7. Other Assets

Other assets consist of the following:

8. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

9. Leases

Operating leases

In December 2020, the Company entered into an agreement to lease approximately 10,000 square feet of office space in New York, New York, or the Office Lease, which commenced in April 2021. The Office Lease has a term of approximately seven years and contains provisions for a free-rent period, annual rent increases and an allowance for tenant improvements. The Company has an option to extend the term by five years, however, the Company determined at the lease commencement date that it was not reasonably certain to exercise the renewal option and such renewal was excluded from the operating lease ROU asset and operating lease liability recorded for this lease.

The Company is responsible for real estate taxes, maintenance and other operating expenses applicable to the leased premises which are recognized as variable lease expense in the period when incurred. In conjunction with the Office Lease, the Company established a letter of credit of approximately $745 secured by cash balances included in restricted cash, non-current, within the consolidated balance sheets.

In June 2021, the Company amended the existing lease agreement with its contract development and manufacturing organization, or CDMO, establishing a term of eight-years from the amendment date.

Leases classified as operating leases are included in operating lease ROU assets, operating lease liabilities and operating lease liabilities, non-current in the Company’s consolidated balance sheets. The Office Lease and the CDMO leased spaces are included in operating lease ROU assets and operating lease liabilities within the consolidated balance sheets. The Office Lease and the CDMO leased spaces are located within the U.S. Cash paid for operating lease liabilities was $1,395 and $1,327 during the years ended December 31, 2025 and 2024, respectively.

Lease expense consist of the following:

Variable lease expense was $124 and $99 for the years ended December 31, 2025 and 2024, respectively.

The weighted average discount rate and weighted-average remaining lease term for operating leases were:

As of December 31, 2025, the expected annual minimum lease payments of the Company’s operating lease liabilities were as follows:

10. Commitments and Contingencies

Employment Agreements

Executive Employment Agreements

The Company’s executive officers have entered into at-will employment agreements.

Collaborations and License Agreements

Choline License Agreement

On September 27, 2017, the Company entered into a license agreement, or the Choline License Agreement, with Alan L. Buchman, or Dr. Buchman. Pursuant to the Choline License Agreement, the Company received from Dr. Buchman the license rights in and to the “Licensed Orphan Designations”, the “Licensed IND”, “Existing Study Data” and the “Licensed Know-How” for one or more of the licensed indications.

Certain milestone and royalty payments may also be payable to Dr. Buchman. Regardless of whether development or commercialization is undertaken by the Company under the Choline License Agreement, during the term of the Choline License Agreement, the Company shall pay Dr. Buchman a minimum annual royalty that ranges from $25 to $75. The Company will also pay Dr. Buchman up to $775 in additional milestone payments upon the achievement of various regulatory approval milestones. Further, the Company has an obligation to pay Dr. Buchman sales royalties based on aggregate net sales of IV Choline Chloride in each calendar quarter, with tiered royalty rates ranging from 5.0% to 10.5% of net sales. In the event of development or commercialization activity by any sublicensees, the Company also agreed to pay Dr. Buchman a royalty in the mid-single digit percentage of: (i) net cash receipts, after payment of taxes, received by the Company from sublicensees for their sales of licensed products and (ii) any other consideration received by the Company from such sublicensees; in each case, including a fair monetary value for any transaction that is not a bona fide arms-length transaction or that is for consideration other than monetary. Further, in the event of a sale or transfer of a priority review voucher regarding the license product, regardless of whether any development or commercialization activity is undertaken by the Company or the Company’s sublicensees, the Company agreed to pay Dr. Buchman a milestone payment representing the mid-single digit percentage of: (i) net cash receipts, after payment of taxes and (ii) any other consideration; in each case, received by the Company, the Company’s affiliates, or the Company’s sublicensees, including a fair monetary value for any transaction that is not a bona fide arms-length transaction or that is for consideration other than monetary.

During the years ended December 31, 2025 and 2024, the Company recorded research and development expense of $75 and $52, respectively, in connection with the Choline License Agreement.

License Agreement

On December 22, 2017, the Company entered into an agreement, or the Feinstein Agreement, with The Feinstein Institute for Medical Research, or the Feinstein Institute, a not-for-profit corporation with 50 research labs and 2,500 clinical research studies. Pursuant to the Feinstein Agreement, the Company acquired an exclusive license relating to treatment of fatty liver diseases in humans for which Choline may be an effective therapeutic. In consideration for the rights and license granted, the Feinstein Institute would receive a royalty of one percent (1%) of the first one hundred million dollars ($100,000) of net sales of IV Choline Chloride and a royalty of one and one-half percent (1.5%) of all net sales thereafter. In addition, the Company would pay the Feinstein Institute twelve and one-half percent (12.5%) of net proceeds resulting from agreements entered within two years from the effective date, and seven and one-half percent (7.5%) of net proceeds resulting from agreements entered into thereafter. Pursuant to the Feinstein Agreement additional payments would be due to the Feinstein Institute for license maintenance payments and for meeting milestone events. Pursuant to the Feinstein Agreement, upon the achievement of certain future NDA milestones, the Company would be obligated to remit an aggregate of $275.

During each of the years ended December 31, 2025 and 2024, the Company recorded research and development expense of $15 in connection with the Feinstein Agreement.

Sponsored Research and License Agreement

On November 28, 2018, the Company entered into a sponsored research and license agreement, or the Iowa Agreement, with the University of Iowa. Pursuant to the Iowa Agreement, the University of Iowa, which is engaged in clinical research to improve the diagnosis and treatment of lymphangioma using a pharmaceutical product (OK-432), would assist the Company in collecting case reports, forms, source data, and safety data available to the University of Iowa in support of the development of the Company’s proprietary Streptococcus Pyogenes investigational product, TARA-002 for the LMs indication. During the term of the services, the Company would generally pay the University of Iowa thirty thousand dollars ($30) per year to fund the project, plus additional amounts upon the realization of certain milestones. More specifically, upon an approval of TARA-002 by the Food and Drug Administration, or the FDA, the Company would pay up to $1,750 to the University of Iowa for meeting these milestones. Furthermore, the Company would pay the University of Iowa royalties of up to 1.75% for net sales ranging from $0 - $25,000, 2.25% for net sales ranging from $25,000 to $50,000, and 2.50% for net sales in excess of $50,000. Pursuant to the Iowa Agreement, the University of Iowa would be entitled to additional payments for the Company achieving annual net sales of product according to the milestones. For annual net sales of product up to $25,000: $62; for annual net sales of product of up to $50,000: $62; and for annual net sales of product of up to $100,000: $125.

There wereno research and development expenses recognized, pursuant to the Iowa Agreement, during the years ended December 31, 2025 and 2024.

Chugai Agreement

On June 17, 2019, the Company entered into an agreement, or the Chugai Pharmaceutical Agreement, with Chugai Pharmaceutical Co., LTD, or Chugai Pharmaceutical, a drug manufacturing firm with offices and operations in Japan. Pursuant to the Chugai Pharmaceutical Agreement, Chugai Pharmaceutical would help the Company in its goals to develop and commercialize a therapeutic product, or the New Product, which is comparable to the Chugai Pharmaceutical existing therapeutic product, or the Existing Product. In addition, the Company would be entitled to the use of Chugai Pharmaceutical materials and technical support as necessary. On July 14, 2020, the Company and Chugai Pharmaceutical entered into an amendment, or the Chugai Amendment, to the Chugai Pharmaceutical Agreement, with an effective date of June 30, 2020. The Chugai Amendment extended the date through which Chugai Pharmaceutical will exclusively provide the Existing Product and materials to the Company from June 30, 2020 to June 30, 2021, extended the date through which Chugai Pharmaceutical will not provide materials or technical support to any third-party for the purpose of development and commercialization in a given area from the fifth anniversary to the eleventh anniversary of the original effective date, and provides for further such extensions on the occurrence of certain events and milestones. The amendment further provides that, in addition to the designated fee provided upon the initial indication approval in the Chugai Pharmaceutical Agreement, the Company will pay Chugai Pharmaceutical a designated fee for each additional indication approval. The Company is obligated to Chugai Pharmaceutical for certain payments upon the completion of agreed upon milestones. As consideration for Chugai Pharmaceutical’s performance under the Chugai Pharmaceutical Agreement, the Company agreed to pay Chugai Pharmaceutical a payment in the low, single-digit millions related to such initial indication approval, which payment will be made in two installments with an initial payment in July 2020, and the remaining majority of the payment payable upon FDA approval of the New Product.

There wereno research and development expenses recognized, pursuant to the Chugai Pharmaceutical Agreement, during the years ended December 31, 2025 and 2024.

Contingencies

From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. Management is of the opinion that the ultimate outcome of these matters would not have a material adverse impact on the financial position of the Company or the results of its operations.

In the normal course of business, the Company enters into contracts in which it makes representations and warranties regarding the performance of its services and that its services will not infringe on third-party intellectual rights. There have been no significant events related to such representations and warranties in which the Company believes the outcome could result in losses or penalties in the future.

11. Stockholders’ Equity

Common Stock

As of December 31, 2025, the Company had 100,000,000 shares of common stock authorized for issuance, $0.001 par value per share, of which 53,587,260 and 35,044,772 shares were issued and outstanding as of December 31, 2025 and 2024, respectively.

The holders of the Company’s common stock are entitled toone vote per share.

Preferred Stock

As of December 31, 2025 and 2024, the Company had 10,000,000 shares of preferred stock authorized for issuance, $0.001 par value per share, of which 8,028 shares of Series 1 Convertible Preferred Stock are authorized for issuance. As of December 31, 2025 and 2024,5,615 and 7,991 shares were issued and outstanding, respectively.

Description of Series 1 Convertible Preferred Stock

Each share of Series 1 Convertible Preferred Stock is convertible into approximately 1,000 shares of the Company’s common stock, at a conversion price initially equal to approximately $7.01 per common share, subject to adjustment for any stock splits, stock dividends and similar events, at any time at the option of the holder, provided that any conversion of Series 1 Convertible Preferred Stock by a holder into shares of the Company’s common stock would be prohibited if, as a result of such conversion, the holder, together with its affiliates and any other person or entity whose beneficial ownership of the Company’s common stock would be aggregated with such holder’s for purposes of Section 13(d) of the Exchange Act would beneficially own more than 9.99% of the total number of shares of the Company’s common stock issued and outstanding after giving effect to such conversion. Upon written notice to the Company, the holder may from time to time increase or decrease such limitation to any other percentage not in excess of 19.99% specified in such notice. In addition, upon the occurrence of certain transactions that involve the merger or consolidation of the Company, an exchange or tender offer, a sale of all or substantially all of the assets of the Company or a reclassification of its common stock, each share of Series 1 Convertible Preferred Stock will be convertible into the kind and amount of securities, cash and/or other property that the holder of a number of shares of common stock issuable upon conversion of one share of Series 1 Convertible Preferred Stock would receive in connection with such transaction.

The terms of the Series 1 Convertible Preferred Stock provide that, in the event of a fundamental transaction (as such term is described in the certificate of designation of preferences, rights and limitations of series 1 convertible non-voting preferred stock), each share of Series 1 Convertible Preferred Stock outstanding will thereafter be convertible into the kind and amount of securities, cash and/or other property which a holder of the number of shares of common stock of the Company issuable upon conversion of one share of Series 1 Convertible Preferred Stock immediately prior to such fundamental transaction would have been entitled to receive pursuant to such fundamental transaction, provided that, if the value of the aggregate of such securities, cash and/or other property which the holder of one share of Series 1 Convertible Preferred Stock would be entitled to upon conversion thereof would be less than the stated value, then each outstanding share of Series 1 Convertible Preferred Stock will instead be convertible into such kind of securities, cash and/or other property with an aggregate value equal to the stated value.

Each share of Series 1 Convertible Preferred Stock is entitled to a preference of $10.00 per share upon liquidation of the Company, and thereafter will share ratably in any distributions or payments on an as-converted basis with the holders of common stock.

The holders of Series 1 Convertible Preferred Stock are not entitled to vote.*** ***

During the year ended December 31, 2025,2,376 shares of Series 1 Convertible Preferred Stock were converted into 2,376,244 shares of common stock.

April 2024*** Private Placement***

On April 5, 2024, the Company entered into a subscription agreement with certain purchasers, or the Purchasers, pursuant to which the Company agreed to sell and issue to the Purchasers, in a private placement, or the April 2024 Private Placement, an aggregate of 9,143,380 shares of the Company’s common stock, or the April 2024 Shares, and, for certain purchasers, pre-funded warrants, or the April 2024 Pre-Funded Warrants, to purchase an aggregate of 1,700,000 shares of the Company’s common stock. In each case, the April 2024 Shares or April 2024 Pre-Funded Warrants were issued with warrants, or the April 2024 Common Warrants, to purchase an aggregate of up to 10,843,380 shares of the Company’s common stock. Each April 2024 Share, along with its attached April 2024 Common Warrant, had a purchase price of $4.15, and each April 2024 Pre-Funded Warrant, along with its attached April 2024 Common Warrant, had a purchase price of $4.149. The closing date of the April 2024 Private Placement was April 10, 2024. The April 2024 Private Placement resulted in gross proceeds of approximately $44,998 and net proceeds of approximately $41,964, reflecting approximately $3,034 of placement agent’s fees, legal costs and other expenses connected with the transaction.

The April 2024 Pre-Funded Warrants are exercisable at any time, at an exercise price of $0.001 per share. The April 2024 Common Warrants are exercisable on or prior to the earlier of: (i) April 10, 2027 or (ii) 90 days after the public announcement that the Company has demonstrated a six-month complete response rate of minimum 42% from at least 25 Bacillus Calmette-Guérin, or BCG,-Unresponsive patients in the ADVANCED-2 (Cohort B) clinical trial, at an exercise price of $5.25 per share.

The April 2024 Pre-Funded Warrants and the April 2024 Common Warrants are exercisable so long as the aggregate number of shares of the Company’s common stock beneficially owned by the holder (together with its affiliates) would not exceed 9.99%, or for certain holders,4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of such April 2024 Pre-Funded Warrant or April 2024 Common Warrant, as applicable. Such percentage may be increased or decreased to any number not in excess of 19.99% at the holder’s election upon notice to the Company, any such increase shall not take effect until the sixty-first day after notice to the Company.

Both the April 2024 Pre-Funded Warrants and the April 2024 Common Warrants contain standard adjustments to the exercise price, inclusive of stock splits, stock dividends and pro rata distributions and contain customary terms regarding the treatment of such April 2024 Pre-Funded Warrants or April 2024 Common Warrants in the event of a fundamental transaction, which include but are not limited to a merger or consolidation involving the Company, a sale of all or substantially all of the assets of the Company or a business combination resulting in any person acquiring more than 50% of the outstanding shares of common stock of the Company.

The Company concluded that the April 2024 Pre-Funded Warrants and April 2024 Common Warrants met the requirements to be classified in stockholders’ equity.

The fair market value of the April 2024 Pre-Funded Warrants was estimated as the difference between the share price of our stock on the agreement date and the exercise price of the April 2024 Pre-Funded Warrant.

The fair market value of the April 2024 Common Warrants at their issuance was estimated using the Black-Scholes option-pricing model. The assumed dividend yield was based upon the Company’s expectation of not paying dividends in the foreseeable future. Expected volatility for the Company’s common stock was determined based on the historical volatility of the Company over the full term of the warrant. The risk-free interest rate was based upon the U.S. Treasury yield curve commensurate with the expected term at the time of grant. The expected term of the April 2024 Common Warrants was calculated utilizing the three-year expiration date, taking into consideration the possibility of an accelerated expiration date pursuant to the terms of the April 2024 Common Warrants.

The estimated fair market values of the April 2024 Shares, April 2024 Pre-Funded Warrants and April 2024 Common Warrants have been recorded in additional paid-in capital.

Through December 31, 2025,725,000 April 2024 Common Warrants have been exercised, andnone have expired. As of December 31, 2025,10,118,380 April 2024 Common Warrants were outstanding.

Subsequent to December 31, 2025,370,000 April 2024 Common Warrants were exercised.

Through December 31, 2025, no April 2024 Pre-Funded Warrants have been exercised. As of December 31, 2025,1,700,000 April 2024 Pre-Funded Warrants were outstanding.

December 2024*** Public Offering***

On December 9, 2024, the Company entered into an underwriting agreement, or the 2024 Underwriting Agreement, with TD Securities (USA) LLC, Cantor Fitzgerald & Co. and LifeSci Capital LLC, as representatives, or the 2024 Representatives, of the several underwriters named therein, or collectively, the 2024 Underwriters, pursuant to which the Company agreed to sell and issue to the 2024 Underwriters an aggregate of 13,690,000 shares, or the December 2024 Shares, of common stock of the Company, par value $0.001 per share and, for certain purchasers, pre-funded warrants, or the December 2024 Pre-Funded Warrants, to purchase an aggregate of 2,325,372 shares of common stock, or collectively the December 2024 Public Offering. The price to the public in the December 2024 Public Offering was $6.25 per December 2024 Share and $6.249 per December 2024 Pre-Funded Warrant, which is the price per share at which the December 2024 Shares were sold to the public in the December 2024 Public Offering, minus the $0.001 exercise price per December 2024 Pre-Funded Warrant. In addition, under the terms of the 2024 Underwriting Agreement the Company granted the 2024 Underwriters the option, for 30 days, to purchase up to an additional 2,402,305 shares of common stock at the public offering price, less underwriting discounts and commissions, or the 2024 Underwriters’ Option.

The December 2024 Public Offering closed on December 11, 2024, resulting in gross proceeds of approximately $100.1 million and net proceeds of approximately $93.4 million, reflecting approximately $6.7 million of underwriters’ fees, legal costs and other expenses connected with the transaction.

The December 2024 Pre-Funded Warrants are exercisable at any time, at an exercise price of $0.001 per share. The December 2024 Pre-Funded Warrants contain standard adjustments to the exercise price, including for stock splits, stock dividends and pro rata distributions and contain customary terms regarding the treatment of such December 2024 Pre-Funded Warrants in the event of a fundamental transaction, which include but are not limited to a merger or consolidation involving the Company, a sale of all or substantially all of the assets of the Company or a business combination resulting in any person acquiring more than 50% of the outstanding shares of common stock of the Company. Additionally, the December 2024 Pre-Funded Warrants include restrictions on exercise in the event the Purchaser’s beneficial ownership of the Company’s common stock would exceed 4.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise.

The Company concluded that the December 2024 Pre-Funded Warrants met the requirements to be classified in stockholders’ equity.

The fair market value of the December 2024 Pre-Funded Warrants has been determined as the spread between the price paid by the 2024 Underwriters and the share price of the Company’s common stock on the agreement date. The estimated fair values of the December 2024 Shares and December 2024 Pre-Funded Warrants have been recorded in additional paid-in capital.

On January 8, 2025, the 2024 Underwriters notified the Company of their determination to exercise the 2024 Underwriters’ Option in part, and purchased an additional 438,738 shares of common stock, at the public offering price less underwriting discounts and commissions. Closing for the partial exercise of the 2024 Underwriters’ Option occurred on January 13, 2025. The transaction costs were charged to additional paid-in capital in the period the 2024 Underwriters’ Option was exercised.

The exercise of the 2024 Underwriters’ Option resulted in gross proceeds of approximately $2.7 million and net proceeds of approximately $2.5 million, reflecting approximately $0.2 million of underwriters’ fees, legal costs and other expenses connected with the transaction.

Through December 31, 2025,625,100 December 2024 Pre-Funded Warrants have been exercised. As of December 31, 2025,1,700,272 December 2024 Pre-Funded Warrants were outstanding.

December 2025*** Public Offering***

On December 4, 2025, the Company entered into an underwriting agreement, or the 2025 Underwriting Agreement, with J.P. Morgan Securities LLC, TD Securities (USA) LLC and Piper Sandler & Co., as representatives, or the 2025 Representatives, of the several underwriters named therein, or collectively, the 2025 Underwriters, pursuant to which the Company agreed to sell and issue to the 2025 Underwriters an aggregate of 13,043,479 shares, or the December 2025 Shares, of common stock of the Company, par value $0.001 per share, or collectively the December 2025 Public Offering. The price to the public in the December 2025 Public Offering was $5.75 per December 2025 Share. In addition, under the terms of the 2025 Underwriting Agreement the Company granted the 2025 Underwriters the option, for 30 days, to purchase up to an additional 1,956,521 shares of common stock at the public offering price, less underwriting discounts and commissions, or the 2025 Underwriters’ Option.

The December 2025 Public Offering closed on December 8, 2025, resulting in gross proceeds of approximately $75.0 million and net proceeds of approximately $69.9 million, reflecting approximately $5.1 million of underwriters’ fees, legal costs and other expenses connected with the transaction.

On December 11, 2025, the 2025 Underwriters notified the Company of their determination to exercise the 2025 Underwriters’ Option in full, and purchased an additional 1,956,521 shares of common stock, at the public offering price less underwriting discounts and commissions. Closing for the full exercise of the 2025 Underwriters’ Option occurred on December 15, 2025. The exercise of the 2025 Underwriters’ Option resulted in gross proceeds of approximately $11.3 million and net proceeds of approximately $10.5 million, reflecting approximately $0.8 million of underwriters’ fees, legal costs and other expenses connected with the transaction.

12. Stock-Based Compensation

2014 Equity Incentive Plan

On October 3, 2014, the stockholders approved the 2014 Equity Incentive Plan. On June 20, 2017, the Company’s Board of Directors amended the 2014 Equity Incentive Plan, or the Amended and Restated 2014 Plan. On July 31, 2017, the stockholders approved this amendment. On January 1, 2020, Protara Therapeutics, Inc. amended its Amended and Restated 2014 Plan to increase the number of shares of stock available for issuance under the Amended and Restated 2014 Plan to 1,048,300 shares and made conforming changes and updates pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended.

The Amended and Restated 2014 Plan, as amended, provides for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock and stock unit awards, performance units, stock grants and qualified performance-based awards. The Amended and Restated 2014 Plan, as amended, provided that the number of shares reserved and available for issuance would automatically increase each January 1, by four percent of the Company’s common stock on the immediately preceding December 31, adjusted for the number of shares of the Company’s common stock issuable upon conversion of any security that the Company may issue that is convertible into or exchangeable for the Company’s common stock, or such lesser number of shares as determined by the Company’s Board of Directors. Terms of the stock awards, including vesting requirements, are determined by the Board of Directors, subject to the provisions of the Amended and Restated 2014 Plan, as amended. Certain awards provide for accelerated vesting if there is a change in control as defined in the Amended and Restated 2014 Plan, as amended.

On January 1, 2024, pursuant to the annual evergreen feature of the Amended and Restated 2014 Plan, as amended, the number of shares authorized under the Amended and Restated 2014 Plan, as amended, was increased by 911,380 shares to 4,474,683 shares. Following the approval of the Company’s 2024 Equity Incentive Plan, or 2024 EIP, by the stockholders of the Company on June 7, 2024, no additional awards will be made under the Amended and Restated 2014 Plan, as amended.

As of December 31, 2025, there were 3,537,989 shares of common stock subject to outstanding awards under the Amended and Restated 2014 Plan, as amended.

2017 Equity Incentive Plan

On August 10, 2017, ArTara Subsidiary, Inc. (a predecessor of the Company), or Private ArTara, along with its Board of Directors and its stockholders approved the ArTara Therapeutics, Inc. 2017 Equity Incentive Plan to enable Private ArTara and its affiliates to recruit and retain highly qualified personnel and to incentivize personnel for productivity and growth.

The total number of shares authorized under the 2017 Equity Incentive Plan was 2,000,000 for the issuance of stock options, stock appreciation rights, restricted stock and RSUs to among others, members of the Board of Directors, employees, consultants and service providers to the Company and its affiliates. As of January 9, 2020, in connection with the Merger, no additional awards will be made under the 2017 Equity Incentive Plan.

As of December 31, 2025, there were 134,328 shares of common stock subject to outstanding awards under the 2017 Equity Incentive Plan.

2020 Inducement Plan

On March 26, 2020, the Compensation Committee of the Board of Directors, or the Compensation Committee, approved the 2020 Inducement Plan in order to award non-statutory stock options, restricted stock awards, restricted stock unit awards and other stock-based awards to persons not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company. The Compensation Committee also adopted a form of stock option grant notice and stock option agreement and forms of restricted stock unit grant notice and restricted stock unit agreement for use with the 2020 Inducement Plan.

The 2020 Inducement Plan provided for a total of 600,000 shares for the issuance of the Company’s common stock. On March 3, 2025, the Compensation Committee approved a Certificate of First Amendment to the 2020 Inducement Plan, or the Amended 2020 Inducement Plan, to increase the number of shares provided for under the Amended 2020 Inducement Plan by 600,000 shares to 1,200,000 shares.

As of December 31, 2025, there were 1,182,800 shares of common stock subject to outstanding awards and 17,200 shares of common stock available for future issuance under the Amended 2020 Inducement Plan.

2024 Equity Incentive Plan

On June 7, 2024, the stockholders approved the 2024 EIP. The 2024 EIP provided for the grant of 1,500,000 shares of common stock for stock options, stock appreciation rights, restricted stock, RSUs, performance units, performance shares and other stock and cash awards. On June 11, 2025, the stockholders approved an amendment to the 2024 EIP, or the Amended 2024 EIP, increasing the number of shares available for grant under the Amended 2024 EIP by 2,800,000 shares to 4,300,000 shares.

Terms of the stock awards, including vesting requirements, are determined by the Board of Directors, or the Compensation Committee thereof, subject to the provisions of the Amended 2024 EIP.

As of December 31, 2025, there were 1,699,419 shares of common stock subject to outstanding awards and 2,600,581 shares of common stock available for future issuance under the Amended 2024 EIP.

2024 Employee Stock Purchase Plan

On June 7, 2024, the stockholders of the Company approved the 2024 Employee Stock Purchase Plan, or 2024 ESPP. The number of shares authorized under the 2024 ESPP is 1,000,000.

As of December 31, 2025, the number of shares available for issuance under the 2024 ESPP was 1,000,000. During the years ended December 31, 2025 and 2024, no shares were issued under the 2024 ESPP.

Restricted Stock Units

The following table summarizes restricted stock unit activity:

The fair value of RSUs is amortized on a straight-line basis over the requisite service period of the respective awards. As of December 31, 2025, the unamortized value of RSUs was $1,369 and the weighted average remaining amortization period was 1.82 years. As of December 31, 2025 and 2024,289,500 RSUs have vested that have not yet been settled into shares of the Company’s common stock.

During the year ended December 31, 2025, the Company issued 94,167 shares of the Company’s common stock from the net settlement of 130,411 RSUs. The Company paid $185 in connection with the net share settlement of these RSUs.

Stock Options

The Company determined the fair value of stock options granted utilizing the Black-Scholes valuation model and based upon the assumptions as provided below:

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

The weighted average grant date fair value per share of the options granted during the years ended December 31, 2025 and 2024 was $3.01 and $1.62, respectively. As of December 31, 2025, there was approximately $5,881 of unrecognized stock-based compensation for unvested stock option grants which is expected to be recognized over a weighted average period of 2.44 years. The total unrecognized stock-based compensation cost will be adjusted for actual forfeitures as they occur.

Summary of Stock-Based Compensation Expense

The following tables summarize total stock-based compensation expense recognized:

Stock-based compensation expense was reflected within the consolidated statements of operations and comprehensive loss as:

13. Income Taxes

For financial reporting purposes, income (loss) before taxes includes the following components:

Federal and State income tax expense (benefit) is as follows:

Deferred income taxes, if applicable, are provided for the differences between the basis of assets and liabilities for financial reporting and income tax purposes.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets are as follows:

A reconciliation of the provision for income taxes with the amounts computed by applying the statutory federal income tax to income before provision for income taxes is as follows:

Income taxes paid (net of refunds received) consisted of the following:

For the years ended December 31, 2025 and 2024, the Company’s effective tax rate was 0%, which consisted principally of a federal rate of 21%, the Company’s estimate of state income taxes, primarily driven by changes in tax rate and apportionment changes net of the federal benefit, research and development related tax credits, and the change in the valuation allowance recorded against its deferred tax assets.

As of December 31, 2025 and 2024 for U.S. federal and state income tax reporting purposes, the Company has approximately $300,069 and $244,842, respectively, of unused net operating losses, or NOLs, available for carry forward to future years. As a result of the Tax Cuts and Jobs Act of 2017, or TCJA, for U.S. income tax purposes, NOLs generated in tax years beginning before January 1, 2018 can be carried forward for up to 20 years, but NOLs generated for tax years beginning after December 31, 2017 may be carried forward indefinitely and can be used to offset 80% of taxable income. Of the total federal NOLs carried forward, $600 can be carried forward until 2037; and $177,416 can be carried forward indefinitely. The New York state and city NOLs may be carried forward through the year 2045 and may be applied against future taxable income, while Massachusetts NOLs may be carried forward through the year 2038 to apply against future taxable income. Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes that may have occurred or could occur in the future as the Company continues to issue additional shares of common stock pursuant to its capital raising plans. Based on such limitations, the Company has significant NOLs for which realization of tax benefits is uncertain. The Company has not performed a study to determine whether or not there is such a limitation.

The Company remains subject to examination by tax authorities for all tax years.

Based on a history of cumulative losses at the Company and the results of operations for the years ended December 31, 2025 and 2024, the Company determined that it is more likely than not that it will not realize benefits from the net deferred tax assets. The Company will not record income tax benefits in the financial statements until it is determined that it is more likely than not that the Company will generate sufficient taxable income to realize the deferred income tax assets. As a result of the analysis, the Company determined that a full valuation allowance against the deferred tax assets, net, was required. As of December 31, 2025 and 2024, the Company has recorded a valuation allowance of $83.6 million and $72.5 million, respectively.

In July 2025, U.S. tax legislation known as the “One Big Beautiful Bill Act”, or OBBBA, was signed into law which makes permanent many of the tax provisions enacted in 2017 as part of the TCJA that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, many of which are generally not effective until January 1, 2026. The OBBBA did not have a material effect on the Company’s consolidated financial statements for the year ended December 31, 2025.

As of December 31, 2025 and 2024, management does not believe that the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability of a position on audit in its consolidated financial statements. The Company will continue to evaluate its uncertain tax positions in future periods to determine if measurement and recognition in its consolidated financial statements is necessary. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year.

14. Employee Benefit Plan

The Company maintains a defined contribution benefit plan under section 401(k) of the Internal Revenue Code of 1986, as amended, covering substantially all qualified employees of the Company, or the 401(k) Plan. Under the 401(k) Plan, the Company matches 100% of employee contributions up to 4% of employee compensation. For the years ended December 31, 2025 and 2024, the Company recorded expenses of $342 and $251, respectively, representing employer contributions under the 401(k) Plan.

15. Net Income (Loss) per Common Share

The following table sets forth the computation of the net income (loss) per share attributable to common stockholders, basic and diluted:

Since the Company was in a net loss position for all periods presented, net income (loss) per share attributable to common stockholders was the same, on a basic and diluted basis, as the inclusion of all potential common equivalent shares outstanding would have been anti-dilutive. The Company excluded the following potential shares of common stock, presented based on amounts outstanding at each period end, from the computation of diluted net income (loss) per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Subject to the terms of the 2024 Underwriting Agreement, the 2024 Underwriters’ Option allowed for the purchase of an additional 2,402,305 shares of common stock. On January 8, 2025, the 2024 Underwriters notified the Company of their determination to exercise the 2024 Underwriters’ Option in part, and purchased an additional 438,738 shares of common stock, see Note 11 for further discussion.

16. Segment Information

The Company’s Chief Executive Officer is the CODM. The CODM allocates resources and assesses performance of the Company’s single reportable segment by regularly reviewing the segment net income (loss) that also is reported on the consolidated statements of operations and comprehensive loss as consolidated net income (loss). The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

The following table sets forth information about the Company’ssingle reportable segment and the significant expenses reviewed by the CODM, including a reconciliation to consolidated net income (loss):

Other research and development expenses consist of personnel-related expenses as well as other external research and development expenses that are not directly attributable to a specific program.