Starling Oncology, Inc.

Previous wording

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of Starling Oncology, Inc. ("STLN") along with its consolidating subsidiaries (the "Company"). The discussion should be read together with the unaudited condensed consolidated financial statements and the related notes that are included elsewhere in this Quarterly Report on Form 10-Q. The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such statements are based upon current expectations, as well as management's beliefs and assumptions and involve a high degree of risk and uncertainty. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Statements that include the words "believes," "anticipates," "plans," "expects." "intends," and similar expressions that convey uncertainty of future events or outcomes are forward-looking statements. Our actual results could differ materially from those discussed or suggested in the forward-looking statements herein. Factors that could cause or contribute to such differences include those described under the heading "Risk Factors" (Item 1A) in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission on March 12, 2026. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements in this document are based on information available to us as of the filing date of this Quarterly Report on Form 10-Q and we assume no obligation to update any forward-looking statements, except as required by law.

Current wording

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of Starling Oncology, Inc. along with its consolidated subsidiaries. The discussion should be read together with the unaudited condensed consolidated financial statements and the related notes that are included elsewhere in this Quarterly Report on Form 10-Q. The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such statements are based upon current expectations, as well as management's beliefs and assumptions and involve a high degree of risk and uncertainty. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Statements that include the words "believes," "anticipates," "plans," "expects." "intends," and similar expressions that convey uncertainty of future events or outcomes are forward-looking statements. Our actual results could differ materially from those discussed or suggested in the forward-looking statements herein. Factors that could cause or contribute to such differences include those described under the heading "Risk Factors" (Item 1A) in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission on March 12, 2026. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements in this document are based on information available to us as of the filing date of this Quarterly Report on Form 10-Q and we assume no obligation to update any forward-looking statements, except as required by law.

Previous wording

Unless the context dictates otherwise, references in this Report on Form 10-Q to the “Company,” “we,” “us,” “our,” and similar words are references to Starling Oncology, Inc., a Delaware corporation (“STLN”), and its consolidated subsidiaries and affiliated entities, as appropriate, including its consolidated variable interest entities (“VIEs”). All dollar values are expressed in thousands, unless otherwise noted.

Current wording

Unless the context dictates otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us,” “our,” and similar words are references to Starling Oncology, Inc., a Delaware corporation (“STLN”), and its consolidated subsidiaries and affiliated entities, as appropriate, including its consolidated variable interest entities (“VIEs”). All dollar values are expressed in thousands, unless otherwise noted.

Previous wording

The Company is a leading value-based oncology company that manages community-based oncology practices for the Company and for independent oncology practices that together serve patients across 17 markets andfive states throughout the United States. As of June 30, 2026, we operate 65 community-based oncology practices, staffed with 125 oncologists and advanced practice providers employed by our affiliated physician-owned professional corporations, referred to as the "Starling PCs." In addition to our Starling-affiliated providers, we also manage a network of 791 providers in Florida under the Florida Oncology Network brand and 11 network providers in California. Collectively across the provider base, as of June 30, 2026, we manage a population of approximately 2.1 million patients under value-based agreements. The Company's mission is to heal and empower cancer patients through compassion, innovation, and state-of-the-art medical care..

Current wording

The Company is a leading value-based oncology company that manages community-based oncology practices for the Company and for independent oncology practices that together serve patients across 17 markets andfive states throughout the United States. As of September 30, 2026, we operate 67 community-based oncology practices, staffed with 125 oncologists and advanced practice providers employed by our affiliated physician-owned professional corporations, referred to as the "Starling PCs." In addition to our Starling-affiliated providers, we also manage a network of providers in Florida under the Florida Oncology Network brand along with network providers in California. Collectively across the provider base, as of September 30, 2026, we manage a population of approximately 2.2 million patients under value-based agreements. The Company's mission is to heal and empower cancer patients through compassion, innovation, and state-of-the-art medical care..

Previous wording

The following table sets forth our Condensed Consolidated Statements of Operations data expressed as a percentage of total revenues for the periods indicated. The Company’s management is not aware of material events or uncertainties that would cause the financial information below to not be indicative of future operating results or results of future financial condition, although past results should not be relied upon as an indication of future performance or future financial condition.

Current wording

The following table sets forth our Condensed Consolidated Statements of Operations data expressed as a percentage of total revenues for the periods indicated.

Previous wording

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

Current wording

Comparison of the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

The increase in patient services revenue for the three and six months ended June 30, 2026 compared to the same periods in the prior year was primarily due to a 48% and 51% increase in capitated revenue, respectively, partially offset by a 17% and 13% decrease, respectively in fee-for-service revenue for the prior year three and six month periods. The increase in capitated revenue was driven by momentum in new markets in addition to the impact of our investments in referral relationship management and our ramp up in new capitated contracts.

Current wording

The change in patient services revenue for the three and nine months ended September 30, 2026 compared to the same periods in the prior year was primarily due to a 40% and 47% increase in capitated revenue, respectively, partially offset by a 21% and 16% decrease in fee-for-service revenue, respectively. The increase in capitated revenue was driven by momentum in new markets in addition to the impact of our investments in referral relationship management and our ramp up in new capitated contracts.

Previous wording

The increase in specialty pharmacy revenue for three and six months ended June 30, 2026 as compared to the same periods in the prior year was primarily driven by continued strength in prescription fill volumes as the Company continues to bring new capitated lives onto the platform, along with the ongoing ramp of our Florida delegated arrangements.

Current wording

The increase in specialty pharmacy revenue for three and nine months ended September 30, 2026 as compared to the same periods in the prior year was primarily driven by continued strength in prescription fill volumes as the Company continues to bring new capitated lives onto the platform, along with the ongoing ramp of our Florida delegated arrangements.

Previous wording

The increase in clinical trials and other revenue, compared to the three and six months ended June 30, 2025, was due to the profit sharing agreement as described in Note 1 of the financial statements.

Current wording

The change in clinical trials & other revenue for the three and nine months ended September 30, 2026, compared to the same periods in the prior year was due to the profit sharing arrangement with Helios described in Note 1 of the condensed consolidated financial statements.

Previous wording

The increase in patient services cost for the three months ended June 30, 2026 as compared to the same quarter prior year was primarily due to a 17.3% increase in clinical payroll costs as the Company adjusts physician compensation to better match performance and volume, primarily offset by 11.7% decrease in IV drug costs as the Company leverages it's rebate programs with its primary vendor. The increase in patient service costs for the six months ended June 30, 2026 as compared to the same period prior year was primarily due to increases in clinical payroll costs, partially offset by a decrease in IV drug costs.

Current wording

The increase in patient services cost for the three months ended September 30, 2026 as compared to the prior year period was primarily due to a 16.3% increase in clinical payroll costs as the Company adjusts physician compensation to better match performance and volume and a 424.3% increase in network medical expense, partially offset by a 20.5% decrease in IV drug costs as the Company leverages its rebate programs with its primary drug distributor. The increase in patient services costs for the nine months ended September 30, 2026 as compared to the prior year period was primarily due to increases in clinical payroll costs, partially offset by a decrease in IV drug costs.

Previous wording

The increase in specialty pharmacy cost for the three months ended June 30, 2026 was primarily due to a 88.3% increase in the number of prescriptions filled offset by a 19.6% decrease in the average cost of the prescriptions filled, as compared to the three months ended June 30, 2025. The increase in specialty pharmacy cost for the six months ended June 30, 2026 was primarily due to a 94.5% increase in the number of prescriptions filled, partially offset by a 16.3% decrease in the average cost of the prescriptions filled, as compared to the six months ended June 30, 2025.

Current wording

The increase in specialty pharmacy cost for the three months ended September 30, 2026 was primarily due to a 54.1% increase in the number of prescriptions filled offset by a 14.8% decrease in the average cost of the prescriptions filled, as compared to the three months ended September 30, 2025. The increase in specialty pharmacy cost for the nine months ended September 30, 2026 was primarily due to a 77.5% increase in the number of prescriptions filled, partially offset by a 15.5% decrease in the average cost of the prescriptions filled, as compared to the nine months ended September 30, 2025.

Previous wording

Selling, general and administrative ("SG&A") expenses for the three and six months ended June 30, 2026 increased 11.3 and 11.2%, respectively, compared to the same periods in the prior year primarily due to the scaling of our business. As a percentage of revenue, SG&A decreased 390 basis points for the three months ended June 30, 2026 as compared to the same period in the prior year which reflected the operating leverage built into the model as the Company's continues to scale, along with cost discipline.

Current wording

Selling, general and administrative ("SG&A") expenses for the three and nine months ended September 30, 2026 increased 27.2% and 16.4%, respectively, compared to the same periods in the prior year primarily due to the scaling of our business. As a percentage of revenue, SG&A increased 0.4% and decreased 2.6% for the three and nine months ended September 30, 2026 as compared to the same period in the prior year, respectively, which reflected the operating leverage built into the model as the Company's continues to scale, along with cost discipline. The decrease for the nine months is due to the renegotiation and reduction of certain fixed corporate spend not integral to the business growth.

Previous wording

The decrease in interest expense for the three and six months ended June 30, 2026 compared to the prior year periods was primarily the result of a prepayment and debt conversion related to the Senior Secured Convertible Note in which the Company recognized a loss of extinguishment of debt of $2,900 during the first quarter of 2025. The decrease in the principal balance of the Senior Secured Convertible Notes decreased the Company's interest payments for the remainder of 2025 and continuing into 2026.

Current wording

The decrease in interest expense for the three and nine months ended September 30, 2026 compared to the prior year periods was primarily the result of a prepayment and debt conversion related to the Senior Secured Convertible Note during the first quarter of 2025. The decrease in the principal balance of the Senior Secured Convertible Notes decreased the Company's interest payments for the remainder of 2025 and continuing into 2026. Additionally, the decrease is due to the payoff of the Senior Secured Convertible Notes in July 2026 and lower debt amortization related to the Senior Secured Term Loan.

Previous wording

The change in the fair value of liabilities was primarily due to the change in the fair value of conversion option derivative liabilities due to stock price fluctuations, term, risk-free rates and volatility for the three and six months ended June 30, 2026, as compared to the prior year period.

Current wording

The change in the fair value of liabilities was primarily due to the change in the fair value of liability classified warrants and conversion option derivative liabilities due to stock price fluctuations, term, risk-free rates and volatility for the three and nine months ended September 30, 2026, as compared to the prior year period.

Previous wording

(1)During the six months ended June 30, 2026, non-cash addbacks was primarily comprised of non-cash rent expense. During the three months ended June 30, 2025, non-cash addbacks was primarily comprised of the write-off of the net assets of the Clinical Trials segment of $2,398.

Current wording

(1)During the three months ended September 30, 2026, non-cash addbacks was primarily comprised of non-cash rent expense. During the three months ended September 30, 2025, non-cash addbacks was primarily comprised of certain expenses incurred through our shared services agreement with Helios of $318, offset by non-cash rent expense of $154.

Previous wording

(3)Consulting fees were comprised of a subset of the Company’s total consulting fees primarily related to re-branding, and related to certain non-recurring advisory projects during the six months ended June 30, 2026 and 2025

Current wording

(3)Consulting fees were comprised of a subset of the Company’s total consulting fees primarily related to certain non-recurring advisory projects during the three months ended September 30, 2026 and 2025. Certain amounts for the three months ended September 30, 2026 were reclassified to infrastructure and workforce costs. See footnote 4.

Previous wording

(4)Infrastructure and workforce costs were primarily comprised of recruiting expenses to build out corporate infrastructure of $305 and $150, severance expenses resulting from cost rationalization programs of $15 and $49, stop-loss contract timing of approximately $0 and $1,099, and reversal of settlements of $165 and $487 during the three months ended June 30, 2026 and 2025, respectively.

Current wording

(4)Infrastructure and workforce costs were primarily comprised of recruiting and signing bonus expenses to build out corporate infrastructure of $278 and $207, rebranding expenses of $2,202 and $0, severance expenses resulting from cost rationalization programs of $165 and $40, stop-loss contract timing of approximately $0 and $62, and non-recurring legal fees related to infrastructure build-out and settlements of $654 and $551 during the three months ended September 30, 2026 and 2025, respectively.

Previous wording

(1)During the three months ended June 30, 2026, non-cash addbacks was primarily comprised of non-cash rent expense. During the three months ended June 30, 2025, non-cash addbacks was primarily comprised of the write-off of the net assets of the Clinical Trials segment of $2,398.

Current wording

(1)During the nine months ended September 30, 2026, non-cash addbacks was primarily comprised of a reversal of non-cash rent expense offset by a loss on disposal of fixed assets. During the nine months ended September 30, 2025, non-cash addbacks was primarily comprised of the write-off of the net assets of the Clinical Trials segment of $2,716, offset by non-cash rent expense of $492.

Previous wording

(3)Consulting fees were comprised of a subset of the Company’s total consulting fees primarily related to re-branding, and related to certain non-recurring advisory projects during the three months ended June 30, 2026 and 2025.

Current wording

(3)Consulting fees were comprised of a subset of the Company’s total consulting fees primarily related to certain non-recurring advisory projects during the nine months ended September 30, 2026 and 2025

Previous wording

(4) Infrastructure and workforce costs were primarily comprised of recruiting expenses to build out corporate infrastructure of $476 and $150, severance expenses resulting from cost rationalization programs of $257 and $49, stop-loss contract timing of approximately $1 and $1,099, and legal costs related to infrastructure build out and settlements of $172 and $487, partially offset by EOM/CMS performance period non-recurring addback of $818 during the six months ended June 30, 2026 and 2025, respectively.

Current wording

(4) Infrastructure and workforce costs were primarily comprised of recruiting expenses to build out corporate infrastructure of $754 and $634, severance expenses resulting from cost rationalization programs of $421 and $229, stop-loss contract timing of approximately $0 and $1,160, and non-recurring legal costs related to infrastructure build out and settlements of $826 and $1,820, partially offset by EOM/CMS performance period non-recurring addback of $988 and $0 during the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. In connection with the preparation of the condensed consolidated financial statements for the three months ended June 30, 2026, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to its ability to continue as a going concern within one year after the date of the issuance of such financial statements.

Current wording

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. In connection with the preparation of the condensed consolidated financial statements as of September 30, 2026, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to its ability to continue as a going concern within one year after the date of the issuance of such financial statements. The Company had cash and cash equivalents of $36,895 and an accumulated deficit of $299,448 at September 30, 2026, and a net loss of $28,029 and net cash provided by operations of $19,867 for the nine months ended September 30, 2026.

Previous wording

Significant changes impacting net cash and cash equivalents provided by (used in) operating activities for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 were as follows:

Current wording

Significant changes impacting net cash and cash equivalents provided by (used in) operating activities for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 were as follows:

Previous wording

•Cash used by inventory decreased $2,611 due to a decrease in quarterly drug buy-ins at period end for participation in rebate programs with our primary supplier; and

Current wording

•Cash used by inventory increased $10,913 due to our quarterly drug-buy in with our primary drug distributor for rebate incentives.

Previous wording

•Cash provided by accounts payable and accrued expenses increased by $10,713 primarily due to cash management initiatives with our primary vendors.

Current wording

•Cash provided by accounts payable and accrued expenses increased by $34,426 primarily due to the quarterly drug-buy in with our primarily drug distributor for rebate incentives.

Previous wording

Net cash used in investing activities increased $540 for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 primarily due to the increase in purchases of property and equipment of $414 as compared to same period in the prior year.

Current wording

Net cash used in investing activities increased $1,198 for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 primarily due to the increase in purchases of property and equipment of $1,072.

Previous wording

Net cash used in financing activities decreased $2,531 for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to principal payments on the convertible note of $20,000, offset by proceeds from the private placement offering of $15,359 and proceeds from option exercises of $2,340 during the six months ended June 30, 2025.

Current wording

Net cash used in financing activities decreased $21,148 for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to proceeds from the senior secured term loan of $75,000 in the current period, partially offset by an increase in principal payments of $65,889 and the absence of prior year proceeds from the private placement and at-the-market offering of $15,359 and $9,952.

Previous wording

Our significant accounting policies are more fully described in the notes to our unaudited condensed consolidated financial statements elsewhere in this Quarterly Report on Form 10-Q. We believe that the following accounting policies reflects the most critical judgments and estimation uncertainty used in the preparation of our Condensed Consolidated Financial Results.

Current wording

Our significant accounting policies are more fully described in the notes to our unaudited condensed consolidated financial statements elsewhere in this Quarterly Report on Form 10-Q. We believe that the following accounting policies reflect the most critical judgments and estimation uncertainty used in the preparation of our condensed consolidated financial statements.

Previous wording

The Company presents the condensed consolidated financial statements by segment in accordance with the relevant accounting literature to provide investors with transparency into how the chief operating decision maker, or “CODM” manages the business. The Company's CODM is our Chief Executive Officer. The CODM reviews financial information and allocates resources across three operating segments: specialty pharmacy, patient care, and clinical trials and other.

Current wording

The Company presents the condensed consolidated financial statements by segment in accordance with the relevant accounting literature to provide investors with transparency into how the chief operating decision maker, or “CODM” manages the business. The Company's CODM is our Chief Executive Officer. The CODM reviews financial information and allocates resources across three operating segments: patient services, specialty pharmacy, and clinical trials and other.

Previous wording

Dispensed prescriptions that are filled and delivered to the patient are considered a distinct performance obligation. The transaction price for the prescriptions is based on fee schedules set by PBMs and other third-party payors. The fee schedule is often subject to direct and indirect remuneration fees applied by PBMs ("DIR fees"), which are based primarily on pre-established metrics. DIR fees may be assessed in periods after payments are received against future payments. The Company estimates DIR fees to arrive at the transaction price for prescriptions. Revenue is recognized based on the transaction at the time the patient takes possession of the oral drug.

Current wording

Dispensed prescriptions that are filled and delivered to the patient are considered a distinct performance obligation. The transaction price for the prescriptions is based on fee schedules set by PBMs and other third-party payors. The fee schedule is often subject to direct and indirect remuneration fees applied by PBMs ("DIR fees"), which are based primarily on pre-established metrics. DIR fees may be assessed in periods after payments are received against future payments. The Company estimates DIR fees to arrive at the transaction price for prescriptions. Revenue is recognized based on the transaction price at the time the patient takes possession of the oral drug.