Zentalis Pharmaceuticals, Inc.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Zentalis Pharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Zentalis Pharmaceuticals, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

/s/Ernst & Young LLP

We have served as the Company’s auditor since 2019.

San Diego, California

March 26, 2026

Consolidated Balance Sheets

(In thousands, except share amounts and par value)

Consolidated Statements of Operations

(In thousands, except per share amounts)

Consolidated Statements of Comprehensive Loss

(In thousands)

Consolidated Statements of Stockholders' Equity

(In thousands, except per unit amounts)

Consolidated Statements of Cash Flows

(in thousands)

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Statements of Cash Flows for the periods presented:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Business

Organization

Zentalis Pharmaceuticals, Inc. (“Zentalis,” “We” or the “Company”) is a clinical-stage biopharmaceutical company developing azenosertib (ZN-c3), an investigational potentially first-in-class and best-in-class WEE1 inhibitor for patients with Cyclin E1-positive platinum-resistant ovarian cancer ("Cyclin E1-positive PROC"). The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. All of the Company’s tangible assets are held in the United States.

Liquidity

Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statements issuance date. The Company determined that there are no conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date that the audited consolidated financial statements for the year ended December 31, 2025 are issued.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and include our wholly-owned subsidiaries and Kalyra Pharmaceuticals, Inc. ("Kalyra"), a variable interest entity (“VIE”) for which we were the primary beneficiary until Kalyra was dissolved in January 2024. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year's presentation. Following the dissolution of Kalyra, we no longer have an interest in any VIEs.

We evaluate our ownership, contractual and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether we are the primary beneficiary of the VIE. In determining whether we are the primary beneficiary of a VIE and therefore required to consolidate the VIE, we apply a qualitative approach that determines whether we have both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of, or the rights to receive benefits from, the VIE that could potentially be significant to that VIE.

We will continuously assess whether we are the primary beneficiary of a VIE, as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of such VIE. During the periods presented, we have not provided any other material financial or other support to our VIE that we were not contractually required to provide.

Noncontrolling Interests

Noncontrolling interests represent interests held by third parties in our consolidated subsidiaries. We reflect noncontrolling interest attributable to the other owners in a separate line in our consolidated statements of operations and a separate line within stockholders' equity in our consolidated balance sheets.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates.

Cash and Cash Equivalents

Cash equivalents are comprised of short-term, highly-liquid investments with maturities of ninety days or less at the date of purchase. As of December 31, 2025 and 2024, our cash equivalents consisted of money market funds.

Marketable Debt Securities

Marketable debt securities are investments with original maturities of more than ninety days from the date of purchase that we have the ability to liquidate to fund current operations. Accordingly, those investments with contractual maturities of greater than one year from the date of purchase are classified as short-term investments on the accompanying consolidated balance sheets. Marketable debt securities are considered available-for-sale and are carried at fair value with unrealized gains and losses recorded in other comprehensive income (loss) and included as a separate component of stockholders' equity. The cost of marketable debt securities is adjusted for amortization of premiums or accretion of discounts to maturity, and such amortization or accretion is included in investment and other income, net through an allowance account. We use the specific identification method for calculating realized gains and losses on marketable securities sold. Realized gains and losses on marketable securities, if any, are included in investment and other income, net in the consolidated statements of operations.

Investments in Equity Securities

We carry investments of less than twenty percent ownership in equity securities at fair value and record the changes in fair value in the consolidated statement of operations as a component of Investment and other income, net. We account for our equity investments in publicly traded companies at their listed stock price. As of December 31, 2025, we no longer hold any equity investments.

Contracts Receivable

Our contracts receivable balance represents the amounts we are contractually allowed to bill our customers and that are due to us unconditionally for goods we have delivered, services we have performed or milestones achieved. When we bill our customers with payment terms based on the passage of time, we consider the contracts receivable to be unconditional.

Restricted Cash

Under the terms of our office leases, we are required to maintain a letter of credit as a security deposit during the term of such leases. At December 31, 2025 and 2024, restricted cash of $2.6 million was pledged as collateral for the letters of credit.

Fair Value of Financial Instruments

The authoritative guidance defines fair value and requires us to establish a framework for measuring fair value and disclosure about fair value measurements using a three-tier approach. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Our financial instruments include cash equivalents, marketable securities, prepaid expenses and other assets, accounts payable and accrued expenses. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.

The fair value of marketable securities is determined using proprietary valuation models and analytical tools, which utilize market pricing or prices for similar instruments that are both objective and publicly available, such as matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities and bids and offers.

The carrying amount of cash equivalents, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective values because of the short-term nature of those instruments.

Concentrations of Credit Risk and Sources of Supply

We are subject to credit risk from our portfolios of cash equivalents and marketable securities. We maintain our cash and cash equivalent and marketable securities balances with major commercial banks. Deposits held with the financial institutions exceed the amount of insurance provided on such deposits. We are exposed to credit risk in the event of a default by the financial institutions holding our cash and cash equivalents and marketable securities to the extent recorded on the consolidated balance sheets. We have also established guidelines to limit our exposure to credit risk by diversifying our marketable securities portfolio and placing them in investments with maturities that maintain safety and liquidity.

We rely on third-party manufacturers for the supply of raw materials, active drug substance and finished drug product.

Property and Equipment, Net

Property and equipment are recorded at cost, less accumulated depreciation and amortization. Equipment is depreciated using the straight-line method over its estimated useful life ranging from three tofive years and leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset or the lease term, whichever is shorter. Repair and maintenance costs are expensed as incurred.

Leases

We have entered into operating leases for real estate. We determine if an arrangement is a lease at inception and evaluate each lease agreement to determine whether the lease is an operating or finance lease. For leases where we are the lessee, right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Liabilities from operating leases are included inaccrued expenses and long-term lease liabilities on our consolidated balance sheet. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any prepaid lease payments, lease incentives received, and costs which will be incurred in exiting a lease. Our leases often include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that we will exercise that option. As of December 31, 2025, it is not reasonably certain that these options will be exercised and they are not included within the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components which are accounted for as a single lease component for all of our leases.

Impairment of Long-Lived Assets

We account for long-lived assets in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate that their carrying value may not be recoverable. See Note 10 regarding impairment test performed for our operating lease right-of-use asset associated with our San Diego lease.

Goodwill

Our goodwill, which has an indefinite useful life, represents the excess of the cost over the fair value of net assets acquired from its business combination. The determination of the value of goodwill and intangible assets arising from business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired, including capitalized in-process research and development (“IPR&D”).

Goodwill is reviewed for impairment at least annually, or more frequently if an event occurs indicating the potential for impairment. During the impairment review process, we consider qualitative factors to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than the carrying amount, including goodwill. If we determine that it is not more-likely-than-not that the fair value of our reporting unit is less than the carrying amount, then no additional assessment is deemed necessary. Otherwise, we proceed to compare the estimated fair values of the reporting units with the carrying values, including goodwill. If the carrying amounts of the reporting units exceed the fair values, we record an impairment loss based on the difference.

During the fourth quarter ended December 31, 2024, we concluded the sustained decrease in the Company’s stock price and overall market capitalization during the quarter was an indication that the fair value of a reporting unit might be less than its carrying amount and that a goodwill test was required. As a result, the Company performed a quantitative test over the reporting unit, noting that the fair value of the reporting unit was less than the carrying value, which resulted in an impairment of goodwill of $3.7 million.

In performing a quantitative test for impairment of goodwill, we primarily use the market approach method of valuation that includes the guideline public company method to determine the fair value of the reporting unit. In order to further validate the reasonableness of the fair value concluded for our reporting unit, a reconciliation to market capitalization was performed by estimating a reasonable implied control premium and other market factors.

Equity Method Accounting

We held significant influence, but not a controlling interest, in our former affiliate Zentera Therapeutics, Inc. ("Zentera"). From the deconsolidation of Zentera during July 2021 until the termination of our collaboration with and divestiture of our ownership position in Zentera during the six-months ended June 30, 2023, this investment was accounted for using the equity method. Our share of earnings or losses of the investment entity were reported on the consolidated statement of operations, with a corresponding increase or decrease to the equity investment carried on the statement of financial position. This information was generally not received sufficiently timely for us to record our portion of earnings or loss in the current financial statements, and therefore we reported our portion of earnings or loss on a one quarter lag. The maximum exposure to loss as a result of our investment in Zentera was directly associated with the carrying amount of the equity method investment on our consolidated balance sheet.

Revenue Recognition and Collaborative Arrangements

The Company generates revenues from payments received under collaborative, intellectual property licensing and sale agreements.

At contract execution, we analyze our collaborative arrangements and license agreements to assess whether both parties are active participants in the activities and are exposed to significant risks and rewards and therefore are within the scope of ASC 808, Collaborative arrangements (“ASC 808”). ASC 808 does not address the recognition and measurement of payments from collaborative arrangements and instead refers companies to use other authoritative accounting literature. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, we first determine which elements of the collaboration reflect a vendor-customer relationship and therefore are within the scope of ASC 606, Revenue from Contracts with Customers. When we determine elements of a collaboration agreement do not reflect a vendor-customer relationship, we consistently apply a reasonable and rational policy election we made by analogizing to authoritative accounting literature. We evaluate the income statement classification for presentation of amounts due from or owed to other participants in a collaboration arrangement based on the nature of each separate activity.

To determine revenue recognition for contracts with customers, we perform the following five steps: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligations.

From time to time we amend our agreements. When this occurs, we are required to assess (1) if the additional goods or services are distinct from the other performance obligations in the previous agreement(s) and (2) if the goods or services are transferred at a stand-alone selling price. If we conclude the goods and/or services in the amendment are distinct from the performance obligations in the original agreement and at a stand-alone selling price, we account for the amendment as a separate agreement. If we conclude the goods and/or services are not distinct and are sold at a stand-alone selling price, we then assess whether the remaining goods or services are distinct from those already provided. If the goods and/or services are distinct from what we have already provided, then we treat the amendment as a termination of the existing contract and allocate the total remaining transaction price from the original agreement and the additional transaction price from the amendment to the remaining goods and/or services. If the goods and/or services are not distinct from what we have already provided, we update the transaction price and allocate it to the remaining performance obligations and adjust revenue previously recognized based on an updated measure of progress for the partially satisfied performance obligations.

Research and development expenses include salaries and benefits, facilities and other overhead expenses, external clinical trial expenses, research-related manufacturing services, contract services and other outside expenses. Research and development expenses are charged to operating expenses as incurred when these expenditures relate to our research and development efforts and have no alternative future uses.

We are obligated to make upfront payments upon execution of certain research and development agreements. Advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities are deferred. Such amounts are recognized as expense as the related goods are delivered or the related services are performed, or such time when we do not expect the goods to be delivered or services to be performed.

Clinical Trial Expenses

We make payments in connection with our clinical trials under contracts with CROs that support conducting and managing clinical trials. The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows. Generally, these agreements set forth the scope of work to be performed at a fixed fee, unit price or on a time and materials basis. A portion of our obligation to make payments under these contracts depends on factors such as the successful enrollment or treatment of patients or the completion of other clinical trial milestones.

Expenses related to clinical trials are accrued based on our estimates and/or representations from service providers regarding work performed, including actual level of patient enrollment, completion of patient studies and progress of the clinical trials. Other incidental costs related to patient enrollment or treatment are accrued when reasonably certain. If the amounts we are obligated to pay under our clinical trial agreements are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we adjust our accruals accordingly. Revisions to our contractual payment obligations are charged to expense in the period in which the facts that give rise to the revision become reasonably certain.

Restructuring Expense

The Company recognizes and measures a liability for one-time employee termination benefits for which no future service is required once the plan of termination meets all of the following criteria and has been communicated to employees: (i) management commits to a plan of termination; (ii) the plan identifies the number of employees to be terminated and their job classifications or functions, locations and the expected completion date; (iii) the plan establishes the terms of the benefit arrangement; and (iv) it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. For one-time termination benefits for which future service is required, a liability is measured at the communication date based on its fair value as of the termination date and recognized ratably over the future service period. The Company recognizes and measures a liability for other related costs in the period in which the liability is incurred.

Share-Based Compensation

We record share-based compensation expense associated with equity instruments in accordance with the authoritative guidance for stock-based compensation. The cost of employee services received in exchange for an award of an equity instrument is measured at the grant date based on the estimated fair value of the award and is recognized as expense on a straight-line basis over the requisite service period of the award. Share-based compensation expense for an award with a performance condition is recognized when the achievement of such performance condition is determined to be probable. If the outcome of such performance condition is not determined to be probable or is not met, no compensation expense is recognized, and any previously recognized compensation expense is reversed. Forfeitures are recognized as a reduction of share-based compensation expense as they occur.

Income Taxes

Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A provision has been made for income taxes due on taxable income and for the deferred taxes on temporary differences. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Realization of the deferred income tax asset is dependent on gathering sufficient taxable income in future years.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the combination of the tax payable for the period and the change during the period in deferred tax assets and liabilities. We follow the accounting guidance on accounting for uncertainty in income taxes. The guidance prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities based on the technical merits of the position.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income is the result of unrealized gains and losses on marketable securities.

Net Loss per Common Share Outstanding

Basic net loss per common share outstanding is computed by dividing net loss, after adjusting for dividends, if declared, by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share outstanding is computed using the weighted-average number of common shares outstanding during the period and, if dilutive, the weighted average number of potential common shares. Potential common shares consist of unvested restricted stock units and common shares issuable upon the exercise of stock options.

Acquisitions and Contingent Consideration

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business.

If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting as indicated in Accounting Standards Update (ASU) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquired entity and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquired entity based on the fair value estimates as of the date of acquisition. In accordance with Accounting Standards Codification (ASC) 805, Business Combinations, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired.

The consideration for the Company’s business acquisitions may include future payments that are contingent upon the occurrence of a particular event or events. The obligations for such contingent consideration payments are recorded at fair value on the acquisition date. The contingent consideration obligations are then evaluated each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in the fair value of deferred and contingent consideration liabilities in the consolidated statements of comprehensive loss. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities. Contingent consideration liabilities expected to be settled 12 months after the balance sheet date are presented in long-term liabilities.

If determined to be an asset acquisition, the Company accounts for the transaction under ASC 805-50, which requires the acquiring entity to recognize assets acquired and liabilities assumed based on the cost to the acquiring entity on a relative fair value basis, which includes transaction costs in addition to consideration given. No gain or loss is recognized as of the date of acquisition unless the fair value of non-cash assets given as consideration differs from the assets’ carrying amounts on the acquiring entity’s books. Consideration transferred that is non-cash will be measured based on either the cost (which shall be measured based on the fair value of the consideration given) or the fair value of the assets acquired and liabilities assumed, whichever is more reliably measurable. Goodwill is not recognized in an asset acquisition and any excess consideration transferred over the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values. If the in-licensed agreement for IPR&D does not meet the definition of a business and the assets have not reached technological feasibility and therefore have no alternative future use, the Company expenses payments made under such license agreements as acquired IPR&D expense in its consolidated statement of comprehensive loss. Contingent consideration payments in asset acquisitions are recognized when the contingency is resolved and the consideration is paid or becomes payable (unless the contingent consideration meets the definition of a derivative, in which case the amount becomes part of the basis in the asset acquired). Upon recognition of the contingent consideration payment, the amount is included in the cost of the acquired asset or group of assets.

Adoption and Pending Adoption of Recent Accounting Pronouncements

The following table provides a brief description of recently issued accounting standards, those adopted in the current period and those not yet adopted:

3. Significant Transactions

Immunome License Agreement

In January 2024, the Company and Immunome, Inc. (“Immunome”) entered into an exclusive, worldwide license agreement under which Immunome licensed from Zentalis ZPC-21 (now known as IM-1021), a preclinical ROR1 antibody-drug conjugate (“ADC”) and proprietary ADC technology platform (the “Immunome License Agreement”). Simultaneously, the Company and Immunome entered into a stock issuance agreement (together with the Immunome License Agreement, the “Immunome License Agreements”). The upfront consideration from Immunome amounted to $40.6 million, which consisted of $15.0 million in cash and approximately 2.3 million shares (quantified using a 30-day volume average price) of Immunome common stock valued at approximately $25.6 million on the date of acquisition and accounted for as marketable equity securities on the consolidated balance sheet. Changes to the fair value of the Immunome stock were recorded as a component of investment and other income, net within the condensed consolidated statement of operations. The Company was eligible to receive up to $275.0 million in development, regulatory and sales milestones as well as tiered royalties on net sales of licensed products. The Immunome License Agreement terminated upon the parties’ entry into the Immunome Purchase Agreement in October 2024, as described below under "Immunome Asset Sale", and the Company was no longer eligible to receive development, regulatory and sales milestones or royalties under this Immunome License Agreement. The Company divested the 2.3 million shares of Immunome common stock acquired through the Immunome License Agreement during the year ended December 31, 2024, resulting in net proceeds of $33.5 million.

The Company determined that the Immunome License Agreements fall within the scope of ASC 606, Revenue from Contracts with Customers (ASC 606) as Immunome has contracted to obtain goods and services that are an output of ordinary activities and is a customer. Furthermore, subsequent to the execution of the Immunome License Agreements, the Company is no longer an active participant in the research and is no longer exposed to the significant risks and rewards of the research. Management of the Company determined there was one combined performance obligation for the Immunome License Agreements and know-how given the deliverables are not distinct. The Company evaluated the performance obligation within the Immunome License Agreements and determined the combined performance obligation was satisfied at a point in time with Immunome as the Immunome License Agreements represents a right to use the functional intellectual property as it exists at the time of the Immunome License Agreements, the customer has significant risk and rewards of ownership of the asset and the customer has accepted the asset with the transfer of know-how within the quarter ended March 31, 2024. In addition, variable consideration consisting of milestone payments was evaluated based on the Company’s analysis that the possibility of achieving any of the milestone payments was remote, and therefore determined to be constrained and excluded from the transaction price.

Immunome Asset Sale

In October 2024, the Company and Immunome entered into an asset purchase agreement, pursuant to which Immunome purchased from the Company ZPC-21 (now known as IM-1021), a preclinical ROR1 ADC, and the Company’s proprietary ADC platform technology (the “Immunome Purchase Agreement”). The assets subject to the Immunome Asset Sale Agreement were previously licensed to Immunome under the Immunome License Agreement. Simultaneously, the Company and Immunome entered into a stock issuance agreement (together with the Immunome Purchase Agreement, the "Immunome Asset Purchase Agreements"). The upfront consideration from Immunome amounted to $30 million, which consisted of 1.8 million shares of Immunome common stock based on the trailing 30-day volume weighted average price of Immunome common stock (valued at approximately $21.9 million based on the closing price of Immunome's common stock on the date of acquisition), and $5.0 million of contingent consideration due upon the achievement of a developmental milestone. The developmental milestone was achieved in December 2024. Pursuant to the terms of the Immunome Stock Agreement, Zentalis was obligated to hold and not sell greater than 50% of the shares until the six-month anniversary in April 2025 of the closing date, subject to certain exceptions. The Immunome License Agreement terminated upon the parties’ entry into the Immunome Purchase Agreement. The Company divested the 1.8 million shares of Immunome common stock acquired through the Immunome Purchase Agreement during the year ended December 31, 2025, resulting in net proceeds of $20.4 million. As of December 31, 2025, the Company no longer holds shares of Immunome common stock.

The Company determined that the Immunome Asset Purchase Agreements fall within the scope of ASC 606, Revenue from Contracts with Customers (ASC 606) as Immunome has contracted to obtain goods and services that are an output of ordinary activities and is a customer. Furthermore, the Immunome Asset Purchase Agreements changes existing enforceable rights and obligations of the Immunome License Agreement and is accounted for as a contract modification. Management of the Company determined there was one combined performance obligation for the Immunome Asset Purchase Agreements. The Company evaluated the performance obligation within the Immunome Purchase Agreements and determined the performance obligation was satisfied at a point in time with Immunome as the Immunome Asset Purchase Agreements represent the transfer of ownership of functional intellectual property as it existed at the time of the Immunome Asset Purchase Agreements within the quarter ended December 31, 2024. In addition, variable consideration consisting of milestone payments was evaluated based on the Company’s analysis that the possibility of achieving the milestone payment was probable. During the twelve months ended December 31, 2024, the Company recognized revenue from milestone payments of $5.0 million.

4. Segment Reporting and Disaggregation of Relevant Expense Captions

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The determination of a single business segment is consistent with the consolidated financial information periodically reviewed by the Chief Executive Officer as chief operation decision maker ("CODM") in assessing segment performance and deciding how to allocate resources.

The CODM uses net income or loss to monitor budgets, forecasts and expected cash flows in assessing segment performance and in deciding how to allocate resources. The measure of segment assets is reported on the consolidated balance sheets as total assets.

The following table presents information about reported significant segment expenses and net loss (in thousands):

(1) The Company tracks external development costs by product candidate or development program, but does not allocate personnel costs, general license payments made under our licensing arrangements or other internal costs to specific development programs or product candidates. These costs are included in unallocated research and development expenses and discontinued programs.

(2) Other consists of investment and other income, net, restructuring, goodwill impairment charges, Zentera in-process research and development, Income tax expense (benefit), and loss on equity method investment.

5. Fair Value Measurement

Available-for-sale marketable debt securities consisted of the following (in thousands):

As of December 31, 2025, six of our available-for-sale debt securities with a fair market value of $54.9 million were in a gross unrealized loss position of $11 thousand. Five have been in a gross unrealized loss position of $7 thousand for less than one year, andone has been in a gross unrealized loss position of $4 thousand for more than one year. When evaluating an investment for impairment, we review factors such as the severity of the impairment, changes in underlying credit ratings, forecasted recovery, our intent to sell or the likelihood that we would be required to sell the investment before its anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. Based on our review of these marketable securities, we believe none of the unrealized loss is as a result of a credit loss as of December 31, 2025, because we do not intend to sell these securities, and it is not more-likely-than-not that we will be required to sell these securities before the recovery of their amortized cost basis.

Contractual maturities of available-for-sale debt securities are as follows (in thousands):

Equity investment gains (losses) for the years ended December 31, 2025 and December 31, 2024 are summarized as follows (in thousands):

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. The Company determines the fair value of financial assets and liabilities using three levels of inputs as follows:

Level 1—Inputs which include quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted market prices included in Level 1) that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instrument’s anticipated life.

Level 3—Unobservable inputs for assets or liabilities and include little or no market activity.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company had $0.5 million in contingent consideration liabilities as of December 31, 2025 and 2024 related to the agreement to terminate its Collaboration and License Agreements with Zentera. The contingent consideration balance is limited toone potential milestone payment measured at fair value. The fair value of the contingent consideration is estimated based on the monetary value of the milestone discounted for the probability of achieving the milestone and a present value factor based on the timing of when the milestone is expected to be achieved. The value for the contingent consideration balance is based on significant inputs not observable in the market which represents Level 3 measurement within the fair value hierarchy. This liability existed as of December 31, 2025 and 2024.

The following table summarizes, by major security type, our cash equivalents and available-for-sale marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

The following significant unobservable inputs were used in the valuation of the contingent consideration payable to Zentera as variable consideration for a change in control milestone payment of either zero or $15.0 million pursuant to the termination of our Collaboration and License Agreement at December 31, 2025 and December 31, 2024:

The following table reflects the activity for the Company’s contingent consideration, measured at fair value using Level 3 inputs (in thousands):

There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the years ended December 31, 2025 and December 31, 2024. We had one instrument that was classified within Level 3 as of December 31, 2025 and December 31, 2024. As of December 31, 2025 and December 31, 2024, no material fair value adjustments were required for non-financial assets and liabilities.

6. Prepaid Expenses and Other Assets

Prepaid expenses and other assets consisted of the following (in thousands):

7. Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

Depreciation and amortization expense was approximately $0.7 million, $1.3 million and $1.4 million for the years ended December 31, 2025, 2024 and 2023 respectively.

During the year ended December 31, 2025, management determined that changes in circumstances indicated the carrying value of certain research and development equipment may not be recoverable and recorded an impairment charge of $1.2 million, which is reported in the research and development expense line item of the consolidated statement of operations.

8. Accrued Expenses

Accrued expenses consist of the following (in thousands):

9. Stockholders' Equity

Follow-on Offering of Common Stock

On June 15, 2023, we completed a follow-on offering in which we issued and sold 11,032,656 shares of common stock at a public offering price of $22.66 per share. The total gross proceeds for the offering were approximately $250.0 million, before deducting offering expenses of $14.3 million payable by us.

ATM Offering

In May 2021, the Company entered into a sales agreement, or the Sales Agreement, with SVB Leerink LLC, or SVB Leerink, as sales agent, pursuant to which the Company may, from time to time, issue and sell common stock with an aggregate value of up to $75.0 million in “at-the-market” offerings, or the ATM, under the Company's Registration Statement on Form S-3 (File No. 333-286122) filed with the SEC on March 26, 2025. Sales of common stock pursuant to the Sales Agreement may be made in sales deemed to be an “at the market offering” as defined in Rule 415(a) of the Securities Act, including sales made directly through the Nasdaq Global Market or any other existing trading market for the Company's common stock. In December 2025, the Company sold 3,928,571 shares of common stock under the Sales Agreement at a price of $1.40 per share, raising aggregate gross proceeds of $5.5 million before fees and expenses of $0.1 million. As of December 31, 2025 there was $69.5 million of our common stock remaining available for sale under our ATM.

Stock Purchase Agreement

See Note 13 regarding the stock purchase agreement entered into between the Company and Matrix Capital Master Fund, LP (“Matrix”), one of our stockholders during the year ended December 31, 2025.

Share-based Compensation

Effective April 2020, the Company’s Board of Directors adopted, and the Company’s stockholders approved the 2020 Incentive Award Plan (the "2020 Plan"), which allows for grants to selected employees, consultants and non-employee members of the Board of Directors. We currently grant stock options and restricted stock units (“RSUs”), under the 2020 Plan. Awards may be made under the 2020 Plan covering up to the sum of (1)5,600,000 shares of common stock; plus (2) any shares forfeited from the unvested restricted shares of our common stock issued upon conversion of unvested Class B common units during the corporate conversion in conjunction with our initial public offering (up to 1,250,000 shares); plus (3) an annual increase on the first day of each fiscal year beginning with the fiscal year ending December 31, 2021 and continuing to, and including, the fiscal year ending December 31, 2030, equal to the lesser of (a)5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by our Board of Directors.

In July 2022, the Company’s Board of Directors approved the Zentalis Pharmaceuticals, Inc. 2022 Employment Inducement Incentive Award Plan (the “2022 Inducement Plan”), which is used exclusively for the grant of equity awards to new employees as an inducement material to the employees’ entering into employment with the Company. As of December 31, 2025, the Board of Directors reserved 8,775,000 shares of the Company’s common stock for issuance pursuant to awards granted under the 2022 Inducement Plan.

As of December 31, 2025,10,687,087 shares were subject to outstanding awards under the 2020 Plan and 6,062,486 shares were available for future grants of share-based awards under the 2020 Plan. As of December 31, 2025,6,931,460 shares were subject to outstanding awards under the 2022 Inducement Plan and 1,641,290 shares were available for future grants of share-based awards under the 2022 Inducement Plan.

During 2025, we didnot issue any shares of common stock in connection with the exercises of stock options for cash. We did not issue any shares of common stock in connection with grants of restricted stock awards ("RSAs"). We issued 1,137,960 shares of common stock, upon vesting of RSU's.

Total share-based compensation expense related to share-based awards was comprised of the following (in thousands):

Share-based compensation expense by type of share-based award (in thousands):

Total unrecognized estimated compensation cost by type of award and the weighted average requisite service period over which such expense is expected to be recognized (in thousands, unless otherwise noted):

Stock Options: The following table summarizes option activity for the year ended December 31, 2025. The amounts include stock options granted to both employees and non-employees:

The weighted average grant date fair value of stock options granted during the years ended December 31, 2025, 2024 and 2023 was $0.94 per share, $4.51 per share and $15.48, respectively. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was immaterial.

The exercise price of stock options granted is equal to the closing price of the Company's common stock on the date of grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company estimates expected volatility based on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company uses the “simplified method” for estimating the expected term of employee options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has not issued any dividends and does not expect to issue dividends over the life of the options. As a result, the Company has estimated the dividend yield to bezero. The fair value of the stock options granted during the years ended December 31, 2025, 2024 and 2023 was determined with the following assumptions:

Restricted Stock Awards: RSAs are shares of our common stock subject to forfeiture restrictions that lapse based on the awardee's continued employment or service. The shares covered by a RSA cannot be sold, pledged or otherwise disposed of until the awards vest, and any unvested shares will be forfeited following the awardee's termination of service.

There wereno RSAs that vested during the year ended December 31, 2025. As of December 31, 2025, there wereno RSAs outstanding.

The total grant date fair value of RSAs vested during the years ended December 31, 2024 and 2023 was $4 thousand and $0.7 million, respectively. The fair value of RSAs vested during the years ended December 31, 2024 and 2023 was $14 thousand and $2.7 million, respectively.

Restricted Stock Units: An RSU is a promise by us to issue a share of our common stock upon vesting of the unit.

The following table summarizes RSU activity for the year ended December 31, 2025. The amounts include RSUs granted to both employees and non-employees:

The estimated fair value of the RSUs was based on the closing market value of our common stock on the date of grant. The total grant date fair value of RSUs vested during the years ended December 31, 2025, 2024 and 2023 was approximately $11.8 million, $11.8 million and $9.7 million, respectively. The fair value of RSUs vested during the years ended December 31, 2025, 2024 and 2023 was approximately $2.0 million, $4.4 million and $7.7 million, respectively.

Employee Stock Purchase Plan

Effective April 2020, the Company’s Board of Directors adopted, and the Company’s stockholders approved the 2020 Employee Stock Purchase Plan (the “2020 ESPP”), which was subsequently amended and restated effective March 15, 2021 to provide for a share reserve of 2,000,000 shares. As of December 31, 2025,1,628,130 shares were available for issuance under the 2020 ESPP.

The weighted average assumptions used to estimate the fair value of stock purchase rights under the 2020 ESPP are as follows:

Under the terms of the 2020 ESPP, the Company’s employees may elect to have up to 20% of their compensation, up to a maximum of $21,250 per calendar year, withheld to purchase shares of the Company’s common stock for a purchase price equal to 85% of the lower of the fair market value per share (at closing) of the Company’s common stock on (i) the first trading day of asix-month offering period, or (ii) the applicable purchase date, defined as the last trading day of thesix-month offering period.

10. Commitments and Contingencies

Legal Contingencies

From time to time, we may be involved in various disputes, including lawsuits and claims arising in the ordinary course of business, including actions with respect to intellectual property, employment, and contractual matters. Any of these claims could subject us to costly legal expenses. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in a liability and the amounts of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss to the extent necessary to make the consolidated financial statements not misleading. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in our consolidated financial statements. While we do generally believe that we have adequate insurance to cover many different types of liabilities, our insurance carriers may deny coverage, or our policy limits may be inadequate to fully satisfy any damage awards or settlement. If this were to happen, the payment of any such awards could have a material adverse effect on our consolidated results of operations and financial position. Additionally, any such claims, whether or not successful, could damage our reputation and business. We are currently not a party to any legal proceedings that require a loss liability to be recorded.

Operating Leases

In September 2020, we entered into a lease of laboratory and office space in San Diego. This lease was partially terminated and amended during September 2021. This amendment reduced the rentable square feet. The lease commenced in December 2021 and continues through September 2032. The lease also included access to a temporary space of laboratory and office space in San Diego. This lease component commenced in November 2020 and continued through January 2022. The lease is subject to approximately 3.0% annual increases throughout the lease term. We also pay for various operating costs, including utilities and real property taxes. The agreement includestwo options to extend the lease for a period offive years each. When we determined our lease term for our operating lease right-of-use assets and lease liabilities for these leases, we did not include the extension options for this lease.

As a result of certain triggering events associated with the lease of our facility in San Diego, we performed an interim impairment test by comparing the carrying value of the long-lived asset group to its estimated fair value, which was determined based on the income approach using a discounted cash flow model. Estimates and assumptions used in the model included projected cash flows and a discount rate. As a result, we recorded an impairment expense of $3.0 million within our operating expenses against our operating lease right-of-use asset associated with our San Diego lease during the year ended December 31, 2025.

In March 2021, we entered into a lease of office space at 1359 Broadway, Suites 1710 and 1800 in New York, New York. The lease commenced in December 2021 and continues through November 2032. The lease is subject to one increase in per annum rent of approximately 8.1% commencing on thesixth anniversary of the commencement date. We received lease incentives under the agreement, including tenant allowances and free rent periods. We also pay for various operating costs, including utilities and real property taxes. The agreement containsone option to extend the lease for a period offive years. When we determined our lease term for our operating lease right-of-use assets and lease liabilities, we did not include the extension options for the lease.

On March 6, 2023, we entered into a sublease agreement pursuant to which we sublet the office space located at 1359 Broadway, Suites 1710 and 1800 in New York, New York to a subtenant. As a result of certain triggering events, we performed an interim impairment test by comparing the carrying value of the long-lived asset group to its estimated fair value, which was determined based on the income approach using a discounted cash flow model. Estimates and assumptions used in the model included projected cash flows and a discount rate. As a result, we recorded an impairment expense of $5.0 million within our operating expenses against our operating lease right-of-use asset and fixed assets associated with this New York lease during the year ended December 31, 2023. For the years ended December 31, 2025 and 2024, we recorded lease income of $1.4 million relating to this sublease, presented as other income in the statement of operations.

In December 2023, we entered into a lease office space in New York, New York. In June 2024, we entered into an agreement to terminate this lease in exchange for consideration of $0.5 million.

Rent expense recorded by the Company under the leases was approximately $6.8 million, $6.9 million and $6.9 million for the years ended December 31, 2025, 2024 and 2023 respectively. We paid approximately $6.8 million, $6.5 million and $6.4 million of lease payments, respectively, during the years ended December 31, 2025, 2024 and 2023.

The following table presents the weighted average remaining lease term and weighted average discount rates related to our operating leases as of December 31, 2025:

Approximate annual future minimum operating lease payments as of December 31, 2025 are as follows (in thousands):

11. Income Taxes

Zentalis Pharmaceuticals, Inc. is a corporation for tax purposes and is subject to income taxes which have been included in the consolidated financial statements.

The amount of net loss before income taxes and loss on equity method investment for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):

The following table presents the current and deferred income tax provision (benefit) for federal, state and foreign income taxes (in thousands):

The following table is a reconciliation of the expected tax computed at the U.S. statutory federal income tax rate to the total provision for income taxes (in thousands):

(1)State taxes in New York made up the majority (greater than 50%) of the tax effect in this category.

The following table presents the Company's income taxes paid, net of refunds (in thousands):

Deferred income taxes as of each of the following periods reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of our net deferred tax asset or liability are as follows (in thousands):

Realization of a portion of the Company's deferred tax assets is dependent upon the Company generating sufficient taxable income in future years to obtain benefit from the reversal of temporary differences. Management considered all available evidence under existing tax law and anticipated expiration of tax statutes and determined that a valuation allowance of $282.0 million and $247.0 million was required as of December 31, 2025 and 2024, for those deferred tax assets that are not expected to provide future tax benefits. The increase in valuation allowance of $35.0 million was primarily related to net operating loss during the period ended December 31, 2025 offset in part by a decrease in capitalized research and experimental expenditures due to the deduction of current year domestic incurred costs.

At December 31, 2025, we have gross federal and state net operating loss ("NOL") carryforwards of approximately $591.3 million and $336.0 million, respectively. The federal NOL carryforwards generated prior to January 1, 2018 begin to expire in 2035. The federal NOL generated after 2017 of $577.1 million can be carried forward indefinitely and be available to offset up to 80% of future taxable income each year. The state NOL carryforwards begin to expire in 2035.

At December 31, 2025, we have federal research and orphan drug tax credit carryforwards and state research tax credit carryforwards, net of reserves, of approximately $34.0 million and $10.0 million, respectively. The federal credit carryovers begin to expire in 2034, and the state credit carryforwards do not expire and generally can be carried forward indefinitely until utilized, except for $0.4 million which expire in 2032.

Pursuant to Internal Revenue Code ("Code") Sections 382 and 383, annual use of the Company’s federal and California net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company has completed a Code Section 382 analysis through June 30, 2023 regarding the limitation of NOL carryforwards and other tax attributes. The Company experienced ownership changes in 2015, 2019 and 2022. Additionally, several of the subsidiaries experienced an ownership change in 2020 based on the Section 382 rules for the time period prior to when the Company was a consolidated group for tax purposes. The Company’s attributes are subject to annual limitations, and the Company estimates that all tax attributes can be utilized prior to expiration. There is a risk that additional ownership changes may occur in the future. If a future change in ownership occurs, the NOL carryforwards and other tax attributes could be limited or restricted. Additionally, the Company’s NOLs prior to the tax consolidation are also subject to the separate return loss year (“SRLY”) rules. The SRLY rules may limit one member from offsetting taxable income with losses generated from another member prior to joining the consolidated group.

Uncertain Tax Positions

In accordance with authoritative guidance, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

The following table reconciles the beginning and ending amount of unrecognized tax benefits for the fiscal years ended December 31, 2025, 2024 and 2023 (in thousands):

Included in the balance of unrecognized tax benefits at December 31, 2025 is $15.3 million that, if recognized, would not impact the Company's income tax benefit or effective tax rate as long as our deferred tax asset remains subject to a valuation allowance.

The Company recognizes interest and penalties related to unrecognized tax positions within the income tax expense line in the accompanying consolidated statements of operations. There wereno accrued interest and penalties associated with uncertain tax positions as of December 31, 2025 or December 31, 2024.

The Company files federal and state income tax returns in the United States as well as income tax returns in Australia. Due to the Company's unutilized NOLs and credits, all years remain subject to income tax examination by authorities. The Company is not currently under examination by federal, state or foreign jurisdictions.

12. Net Loss Per Common Share

Basic and diluted net loss per common share were calculated as follows (in thousands except per share amounts):

Our potential and dilutive securities, which include outstanding stock options, unvested RSAs and unvested RSUs have been excluded from the computation of diluted net loss per common share as the effect would be anti-dilutive.

The following common stock equivalents have been excluded from the calculations of diluted net loss per common share because their inclusion would be antidilutive (in thousands):

13. Related Party Transaction

On December 15, 2025, the Company entered into a Stock Purchase Agreement (the “Agreement”) with Matrix. Pursuant to the Agreement, the Company agreed to repurchase 7,500,000 shares of the Company’s common stock from Matrix at a price of $1.33 per share, representing a discount from the Company’s closing share price of $1.40 on December 12, 2025 (the “Repurchase”). The Repurchase closed on December 15, 2025. As a result of the purchase of our common shares, we reduced our common stock for the par value of the shares purchased, with the excess purchase price over par value recorded as a reduction of additional paid-in capital.

14. Employee Savings Plan

We have an employee savings plan pursuant to Section 401(k) of the Internal Revenue Code. All employees are eligible to participate provided that they meet the requirements of the plan. The Company began making matching contributions under the plan during 2021. The Company has recorded as expense $1.4 million, $1.7 million and $1.5 million in matching contributions for the years ended December 31, 2025, 2024 and 2023 respectively.

15. Restructuring

On January 28, 2025, the Company announced a corporate restructuring, (the “Restructuring”) to support execution of late-stage development for azenosertib and extend its cash runway beyond a potentially registration-enabling azenosertib data readout from the Company's DENALI Part 2 study. The Restructuring reduced the Company's work force by approximately 40%. The Company has completed all of the activities included in the restructuring plan and all of the costs associated with the restructuring were incurred during the quarter ended March 31, 2025.

In connection with the Restructuring, the Company recorded restructuring charges of $7.8 million which are reported as a separate line item in the accompanying consolidated statement of operations for the year ended December 31, 2025. The following table summarizes the components of the restructuring charges (in thousands):

Employee separation costs consist primarily of salaries and benefits earned during the minimum notification period proscribed by law and severance costs associated with the reduction in the Company’s workforce. Other restructuring charges consist of incremental direct costs associated with the Restructuring.

The following table sets forth activity in the restructuring liability (in thousands):

The Company records restructuring activities in accordance with ASC 420, Exit or Disposal Cost Obligations.