Zura Bio Ltd

(Dollar figures in tables in thousands, except share and per share data)

1. Organization and Description of Business

Zura Bio Limited, a Cayman Islands exempted company, together with its subsidiaries (collectively, the “Company” or “Zura”), is a clinical-stage biotechnology company developing novel and differentiated medicines for patients with autoimmune and inflammatory diseases, including serious and debilitating conditions with significant unmet medical need. These diseases are often chronic and biologically complex, and many patients do not achieve durable disease control with currently available therapies. The Company’s strategic focus is to identify immune-mediated diseases in which translational and clinical evidence supports the role of specific biological pathways in disease pathogenesis. The Company is currently developing its lead product candidate in ongoing Phase 2 trials while evaluating development opportunities for its clinical-stage assets, focusing on indications with unmet needs and commercial potential.

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result of this election, the Company’s unaudited condensed consolidated financial statements (the “condensed consolidated financial statements”) may not be comparable to companies that comply with public company Financial Accounting Standards Board (“FASB”) standards’ effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of an offering or such earlier time that it is no longer an emerging growth company. The Company will no longer be an emerging growth company effective December 31, 2026.

Liquidity

The Company has incurred operating losses since inception and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. The Company had an accumulated deficit of $275.1 million and $224.5 million as of June 30, 2026 and December 31, 2025, respectively, and a net loss of $26.3 million and $50.5 million for the three and six months ended June 30, 2026, respectively. The Company’s existing sources of liquidity as of June 30, 2026 include $205.1 million in cash and cash equivalents.

The Company has relied primarily on public and private equity financings to fund operations. The Company’s cash requirements include, but are not limited to, clinical development, product candidate manufacturing costs, and working capital requirements. The Company expects that such operating losses and negative cash flows from operations will continue for the foreseeable future but has sufficient liquidity to fund its operations over the next twelve months.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of its consolidated subsidiaries. In comparative periods, where applicable, other shareholders’ interests in the Company’s subsidiaries, Z33 Bio, Inc. (“Z33”) and ZB17 LLC (“ZB17”), are shown in the condensed consolidated financial statements as redeemable noncontrolling interest and noncontrolling interest, respectively. All intercompany balances and transactions have been eliminated in consolidation.

These condensed consolidated financial statements are presented in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with U.S. GAAP. As such, the information included herein should be read in conjunction with the Company’s consolidated financial statements and accompanying notes as of and for the year ended December 31, 2025 (the “audited consolidated financial statements”) that were included in the Company’s Form 10-K filed with the SEC on March 19, 2026 (the “Annual Report”). In management’s opinion, these condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect all adjustments, which include normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2026 and the results of operations for the three and six months ended June 30, 2026 and 2025. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year ending December 31, 2026 or any other future interim or annual period.

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies from those that were disclosed in Note 2, Summary of Significant Accounting Policies, included in the audited consolidated financial statements in the Company’s Annual Report.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the condensed consolidated financial statements relate to and include, but are not limited to, accrued research and development expenses, the fair value of share-based compensation, the fair value of redeemable noncontrolling interest, and the valuation allowance of deferred tax assets resulting from net operating losses.

Risks and Uncertainties

The Company is subject to risks common to early-stage companies in the biotechnology industry, including, but not limited to, development by the Company or its competitors of technological innovations, risks of failure of clinical studies, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and ability to transition from clinical manufacturing to commercial production of products.

The Company’s product candidates will require approvals from the United States Food and Drug Administration (“FDA”) and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any product candidate will receive the necessary approvals. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval for any product candidate, it could have a material adverse impact on the Company.

The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company’s CODM is the Chief Executive Officer. The Company and the CODM view its operations and manage its business inone operating segment, developing novel medicines for immune and inflammatory disorders. The Company has business activities in different regions that are managed on a consolidated basis.

The accounting policies of the Company’s segment are the same as those described within this footnote. The CODM uses net loss, that is reported in the condensed consolidated statements of operations, to assess performance for the Company’s segment and decide how to allocate resources. The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets. The following table represents information provided to the CODM:

*Other segment items include depreciation and amortization, income tax benefit, interest income, and other income net.

R&D Incentive Credits

The Company is eligible to obtain certain R&D incentive credits (the “R&D Credits”), through participation in the United Kingdom’s (“U.K.”) R&D Small and Medium Enterprise and the Research and Development Expenditure Credit tax relief programs.

The R&D Credits are calculated as a percentage of qualifying R&D expenses incurred as part of research projects. The R&D Credits are used as tax credits for the Company with the resulting amount being payable in cash by the U.K. government (tax authority) to the Company. The R&D Credits are subject to future audits by the U.K. tax authority within defined periods.

Although the incentive credits are administered through the local tax authority, the Company has accounted for the incentives outside of the scope of FASB Accounting Standards Codification Topic 740, Income Taxes, since the incentives are not linked to the Company’s taxable income and can be realized regardless of whether the Company has generated taxable income in the respective jurisdictions. The Company accounts for these incentive credits as a government grant which analogizes with International Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance.

In accordance with IAS 20, the Company will recognize the R&D Credits when it has reasonable assurance that the R&D Credits will be received. As the Company has only filedtwo claims under the tax relief programs as of June 30, 2026, it has determined that reasonable assurance will be met upon cash receipt. The Company received the first claim in May 2025. In April 2025, the Company filed a second claim for an R&D Credit for $1.0 million that was received during the three months ended June 30, 2026 and recorded in other income, net within the Company's condensed consolidated statement of operations.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of the Company's Class A ordinary shares (“Class A Ordinary Shares”) and pre-funded warrants outstanding during the period. The pre-funded warrants are included in the computation of basic and diluted net loss per ordinary share as the exercise price is negligible and the pre-funded warrants are fully vested and exercisable. Basic and diluted net loss per share were the same for each period presented as the inclusion of all potentially dilutive securities outstanding would have been anti-dilutive due to the Company’s net loss.

The table below provides potentially dilutive securities not included in the calculation of the diluted net loss per share as of the periods presented because to do so would be anti-dilutive:

Income Taxes

Interim income tax provision is calculated in accordance with ASC Topic 270, Interim Reporting, and ASC Topic 740, Accounting for Income Taxes. At the end of each interim period, the Company estimates the annual effective tax rate and applies that rate to the Company's ordinary year to date earnings. In addition, the tax effects of unusual or infrequently occurring items including changes in judgment about valuation allowances and effects of changes in enacted tax laws are recognized discretely in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including the expected operating income for the year, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current fiscal year. The accounting estimates used to compute income tax benefit may change as new events occur, additional information is obtained, or the tax environment changes.

The benefit for income taxes for the three and six months ended June 30, 2026 was $0.1 million and $0.1 million, respectively, yielding effective tax rates of 0.3% and 0.2%, respectively. The Company didnot record a provision for income taxes for the three and six months ended June 30, 2025, as the Company maintained a full valuation allowance against its net deferred tax assets during those periods.

The effective tax rate for the three and six months ended June 30, 2026 differs from the U.S. federal statutory rate of 21% primarily as a result of (i) no income tax benefit recognized on current-year U.S. operating losses, as the Company continues to maintain a full valuation allowance against its U.S. deferred tax assets based on the weight of available objective evidence, and (ii) an income tax benefit of $0.1 million related to the Company's United Kingdom operations, consisting of tax expense on current and prior year U.K. operating income, partially offset by a discrete tax benefit recognized upon the reversal of the Company's valuation allowance against its U.K. deferred tax assets, as the Company concluded during the three months ended June 30, 2026 that those assets became realizable on a more-likely-than-not basis.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations, or cash flows upon adoption.

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires disclosure in the notes to financial statements of the nature of certain expenses included in the income statement. ASU 2024-03 will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2024-03 and expects to adopt it for the year ending December 31, 2027.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes guidance on the recognition, measurement, and presentation of government grants received by business entities. The amendments in ASU 2025-10 are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The guidance can be applied under a modified prospective approach, a modified retrospective approach, or a full retrospective approach. The Company is currently assessing the impact of the adoption of this guidance on its condensed consolidated financial statements and disclosures.

3. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis. The Company determines fair value based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy. These levels are:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2: Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities 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 related assets or liabilities; and

Level 3: Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

Financial instruments consist of cash and cash equivalents, prepaid and other current assets, and accounts payable and accrued expenses. The carrying values of the Company’s cash, prepaid and other current assets, and accounts payable and accrued expenses approximate their fair value due to the short-term maturity of these instruments.

The following tables presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025, and the fair value hierarchy of the valuation techniques utilized:

There were no transfers into or out of Level 1, Level 2, or Level 3 during the six months ended June 30, 2026.

4. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses is comprised of the following as of June 30, 2026 and December 31, 2025:

5. License Agreements

2023 Lilly License

On April 26, 2023, ZB17 entered into a license agreement with Lilly (the “2023 Lilly License”) for an exclusive license to develop, manufacture and commercialize tibulizumab.

The Company is obligated to make payments to Lilly (a) for 4 development milestone payments up to an aggregate of $155.0 million, and sales milestone payments up to an aggregate of $440.0 million based on respective thresholds of net sales of products developed from tibulizumab; and (b) over a multi-year period (twelve years, or upon the later expiration of regulatory exclusivity of tibulizumab in a country) for an annual earned royalty at a marginal royalty rate in the mid-single digits to low-double digits, with increasing royalty percentage rates depending on net sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of years (collectively, the “2023 Lilly Contingent Payments”). As of June 30, 2026, none of the 2023 Lilly Contingent Payments are due and accordingly will not be recorded in the Company’s financial statements until they are due.

2022 Lilly License

On December 8, 2022, the Company’s consolidated subsidiary, Z33, entered into a license agreement with Lilly pursuant to which Lilly granted Z33 an exclusive (even as to Lilly) license to develop, manufacture, and commercialize torudokimab.

The Company is obligated to make payments to Lilly for (a) 10 commercial, development and regulatory milestone payments up to an aggregate of $155.0 million and sales milestone payments up to an aggregate of $440.0 million based on respective thresholds of net sales of products developed from the licensed compound, if any; and (b) an annual earned royalty at a marginal royalty rate in the mid-single to low-double digits, with increasing royalty percentage rates based on net sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of the year, if any year (collectively, the “2022 Lilly Contingent Payments”). The Company will account for these contingent milestone payments when they become due. As of June 30, 2026, none of the 2022 Lilly Contingent Payments are due and accordingly will not be recorded in the Company’s financial statements until they are due.

Pfizer Agreement

On March 22, 2022, the Company entered into a license agreement and a Series A-1 Subscription and Shareholder’s Agreement (collectively, the “Pfizer Agreement”) with Pfizer. Under the Pfizer Agreement, the Company acquired a license for crebankitug.

The Company is obligated to make payments to Pfizer for (a) 11 remaining future development and regulatory milestone payments aggregating up to $69.0 million and sales milestone payments up to an aggregate of $525.0 million based on respective thresholds of net sales of products (developed from the licensed compound) (the “Products”), if any; and (b) an annual earned royalty at a marginal royalty rate in the mid-single digits to low double digits (less than 20%), based on thresholds of net sales of the Company’s Products, if any (collectively, the “Pfizer Contingent Payments”). As of June 30, 2026, none of the Pfizer Contingent Payments are due and accordingly will not be recorded in the Company’s financial statements until they are due.

Lonza License

In July 2022, the Company entered into a license agreement (the “Lonza License”) with Lonza Sales AG (“Lonza”) for a worldwide non-exclusive license for Lonza’s gene expression system in exchange for varying considerations depending on a number of factors such as whether the Company enters further into manufacturing agreements with Lonza or with a third party, and whether the Company enters into sublicense agreements with third parties (including up to middle six-figure annual payments per sublicense upon commencement of a sublicense, as well as royalties of up to low-single digit percentages of net sales of certain products over a commercially standard double-digit multi-year term). The Lonza License will remain in effect until terminated. The Company is free to terminate the Lonza License at any time upon 60 days’ notice, with or without cause. Lonza may terminate the Lonza License for cause upon a breach by the Company or for other commercially standard reasons.

Pursuant to the terms of the Lonza License, the Company has a license fee of $0.4 million due to Lonza annually in the fourth quarter as a result of manufacturing drug substance with a third party other than Lonza since 2023.

WuXi Biologics License

In July 2023, the Company entered into a cell line license agreement (the “Cell Line License Agreement”) with WuXi Biologics and its Affiliates (“WuXi Biologics”) for certain of WuXi Biologics’s know-how, cell line, and biological materials to manufacture, have manufactured, use, sell and import certain products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”). If the Company manufactures all of its commercial supplies of bulk drug product for WuXi Biologics Licensed Products with a manufacturer other than WuXi Biologics or its affiliates, the Company is required to make royalty payments to WuXi Biologics in an amount equal to a fraction of a single digit percentage of global net sales of WuXi Biologics Licensed Products manufactured by a third-party manufacturer (the “Royalty”). If the Company manufactures part of its commercial supplies of the WuXi Biologics Licensed Products with WuXi Biologics or its affiliates, then the Royalty will be reduced accordingly on a pro rata basis. The Cell Line License Agreement will continue indefinitely unless terminated (a) by the Company upon three months’ prior written notice and its payment of all undisputed amounts due to WuXi Biologics through the effective date of termination, (b) by WuXi Biologics for a material breach by the Company that remains uncured for 30 days after written notice; or (c) by WuXi Biologics if the Company fails to make a payment and such failure continues for 30 days after receiving notice of such failure. As of June 30, 2026, there areno payments currently due under the Cell Line License Agreement.

Athanor Letter Agreement

On December 29, 2025, the Company entered into a letter agreement with Athanor Capital, an exempted company incorporated under the laws of the Cayman Islands with limited liability (“Athanor”) (the “Athanor Agreement”), pursuant to which the Company issued to Athanor 8,657,402 Ordinary Shares (the “Athanor Shares”). Athanor is also entitled to piggyback registration rights pursuant to which Athanor has the right to include Athanor Shares in certain registered offerings by the Company or if the Company proposes to file a registration statement under the Securities Act of 1933, as amended, with respect to the registration of equity securities, as set forth in the Athanor Agreement.

In addition, pursuant to the terms of the Athanor Agreement, the Company agreed to pay Athanor an upfront fee in an amount equal to $7.3 million within thirty days of execution of the Athanor Agreement and a one-time milestone payment in the amount of $25.0 million after the occurrence of the earliest of the following events: (a) the Company or ZB17 undergoes a Change of Control (as defined in the Athanor Agreement), (b) the consummation by the Company or ZB17 of a sale of assets resulting in net proceeds in excess of $500.0 million; or (c) First Indication Regulatory Approval (as defined in the Athanor Agreement). In addition, pursuant to the terms of the Athanor Agreement, the Company agreed to pay an amount equal to 2% of Net Sales (as defined in the Athanor Agreement) for the Product (as defined in the Athanor Agreement) to the extent such Net Sales (collectively, the “Net Sales Payments”) are the subject of a royalty payment under the 2023 Lilly License. The upfront fee was paid as of December 31, 2025.

The Athanor Agreement contains representations, warranties and covenants by the parties in addition to the terms described above and shall remain in effect on a country-by-country basis until the expiration of the obligation to pay the Net Sales Payments.

6. Shareholders’ Equity

The Company has authorized 300,000,000 Class A Ordinary Shares, par value of $0.0001 and 1,000,000 preferred shares, par value of $0.0001.

Shelf Registration and ATM Program

The Company filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which was declared effective on September 17, 2024. Pursuant to the Shelf Registration Statement, the Company may offer and sell ordinary shares, preference shares, debt securities, warrants and or units having an aggregate public offering price of up to $300.0 million. In connection with the filing of the Shelf Registration Statement, the Company also entered into a sales agreement (the “Sales Agreement”) with Leerink Partners LLC (“Leerink Partners”), relating to the sale of the Company’s Class A Ordinary Shares having an aggregate gross sales price of up to $125.0 million, from time to time through Leerink Partners, acting as sales agent (the “ATM”).

During the six months ended June 30, 2026, no Class A Ordinary Shares were sold under the ATM.

As of June 30, 2026, $114.0 million of Class A Ordinary Shares remained available for sale under the Sales Agreement.

February 2026 Equity Offering

In February 2026, the Company entered into an underwriting agreement with Leerink Partners LLC, Piper Sandler & Co. and Cantor Fitzgerald & Co., as representatives of the several underwriters listed therein, pursuant to which the Company issued and sold 21,200,000 Class A Ordinary Shares, par value $0.0001 per share, at a price to the public of $6.25 per share, which included 3,000,000 additional Class A Ordinary Shares sold upon exercise in full by the underwriters of their option to purchase additional shares of stock in the offering, along with pre-funded warrants to purchase 1,800,000 Ordinary Shares at a price to the public of $6.249 per Pre-Funded Warrant, which represents the per share public offering price for the Shares less the $0.001 exercise price of each Pre-Funded Warrant (the “February 2026 Equity Offering”). The net proceeds from the February 2026 Equity Offering were approximately $134.6 million after deducting underwriting discounts and commissions and offering expenses.

Pre-Funded Warrants

In connection with the February 2026 Equity Offering, the Company sold to accredited investors pre-funded warrants to purchase up to 1,800,000 Class A Ordinary Shares at a price of $6.249 per pre-funded warrant for an aggregate purchase price of approximately $11.2 million.

As of June 30, 2026 and December 31, 2025, there was an aggregate 29,295,396 and 27,495,396 pre-funded warrants outstanding, respectively, each with an exercise price of $0.001.

During each of the six months ended June 30, 2026 and 2025, no Class A Ordinary Shares were issued in connection with the exercise of Pre-Funded Warrants.

Each Pre-Funded Warrant is exercisable forone Class A Ordinary Share at any time or times until the Pre-Funded Warrants are exercised in full. A holder of the Pre-Funded Warrants (together with its affiliates and other attribution parties) may not exercise any portion of a Pre-Funded Warrant to the extent that immediately prior to or after giving effect to such exercise the holder would beneficially own more than 4.99% or 9.99%, depending on the holder of the Company’s outstanding Class A Ordinary Shares immediately after exercise, which percentage may be increased or decreased to any other percentage specified not in excess of 19.99% at the holder’s election upon 61 days’ notice to the Company subject to the terms of the Pre-Funded Warrants.

Ordinary Shares Reserved for Issuance

A summary of shares reserved for issuance as of June 30, 2026 is summarized below:

7. Share-based Compensation

On March 16, 2023, the Zura Bio Limited 2023 Equity Incentive Plan (the “Equity Incentive Plan”) was approved, became effective on March 19, 2023, and was amended on June 1, 2023 and June 17, 2026. The Equity Incentive Plan allows for the grant of share options, both incentive and nonqualified share options; stock appreciation rights, alone or in conjunction with other awards; restricted shares awards (“RSAs”) and restricted share units (“RSUs”); incentive bonuses, which may be paid in cash, shares, or a combination thereof; and other share-based awards to employees, officers, non-employee directors and other service providers. The Company has granted share options, RSUs and RSAs that generally vest over four years and expire after 10 years.

The Class A Ordinary Shares issuable under the Equity Incentive Plan are subject to an annual increase on January 1st of each calendar year beginning on January 1, 2024, and ending on and including January 1, 2029, in accordance with the Equity Incentive Plan.

On March 16, 2023, the Zura Bio Limited 2023 Employee Stock Purchase Plan (the “ESPP”) was approved and became effective on March 19, 2023. The ESPP enables eligible employees of the Company and designated affiliates to purchase Class A Ordinary Shares at a discount of 15%. As of June 30, 2026, the Company hasnot activated its ESPP.

The Class A Ordinary Shares reserved for future issuances under the Equity Incentive Plan and the ESPP increased in accordance with the respective plans on January 1, 2026. As of June 30, 2026, a maximum of 20,573,023 Class A Ordinary Shares were authorized for issuance under the Equity Incentive Plan and the ESPP, collectively.

Equity Incentive Plan

Share Options

The fair value of Equity Incentive Plan share options are estimated on the date of grant using the Black-Scholes option pricing model. The Company lacks significant company-specific historical and implied volatility information. Therefore, it estimates its expected share volatility based on the historical volatility of a publicly traded set of peer companies. Due to the lack of historical exercise history, the expected term of the Company’s share options has been determined using the simplified method, averaging the vesting period and the contractual life of the share options granted. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The following weighted-average assumptions were used to estimate the fair value of the share options granted during the six months ended June 30, 2026 and 2025:

The following table summarizes the Company’s share option activity for the six months ended June 30, 2026:

As of June 30, 2026, there was approximately $40.3 million of total unrecognized share-based compensation expense related to options granted to employees, executives, and directors that is expected to be recognized over a weighted average period of 3.1 years.

Included in options outstanding as of June 30, 2026 and December 31, 2025 in the table above are 3,223,440 options and 2,843,814 options, respectively, to purchase Class A Ordinary Shares issued to certain directors, executives, and employees outside of the Equity Incentive Plan.

The weighted average grant date fair value of options granted during the six months ended June 30, 2026 and 2025 was $4.76 and $0.96, respectively.

Market-Based Share Options

On January 21, 2026, the Company granted 505,881 options to purchase Class A Ordinary Shares (the “CEO Option Award”) to the Chief Executive Officer. The CEO Option Award will vest in full on the first date upon which both of the following goals are achieved, subject to the CEO’s continued service through such date: (a) the Company’s completion of an equity raise above a specified amount prior to a specified date, which condition was satisfied by the completion of the February 2026 Equity Offering, and (b) the volume-weighted average price of a Class A ordinary share of the Company equals or exceeds a specified price over a period of 30 consecutive trading days, prior to December 31, 2030. These awards have an exercise price of $6.32 and become exercisable when vested and both conditions are satisfied. These awards expire 10 years from the date of grant. The fair value of these Market-Based Share Options were estimated using a Monte Carlo valuation method.

The following weighted-average assumptions were used at the grant date to determine the fair value of Company’s Market-Based Share Options granted during the six months ended June 30, 2026:

The expense recognized related to Market-Based Share Options was $0.9 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively, and $1.6 million and $0.3 million for the six months ended June 30, 2026 and 2025, respectively.

Restricted Share Units

The following table summarizes the Company’s RSU activity for the six months ended June 30, 2026:

As of June 30, 2026, there was approximately $1.4 million of total unrecognized share-based compensation expense related to RSUs granted to certain employees, executives, and directors under the Company’s Equity Incentive Plan that is expected to be recognized over a weighted average period of 0.9 years.

The expense recognized related to RSUs was $0.2 million and $0.4 million for the three months ended June 30, 2026 and 2025, respectively, and $0.6 million and $0.8 million for the six months ended June 30, 2026 and 2025, respectively.

Restricted Share Awards

The following table summarizes the Company’s RSA activity for the six months ended June 30, 2026:

As of June 30, 2026, there was approximately $0.7 million of total unrecognized share-based compensation expense related to RSAs granted to a certain director under the Company’s Equity Incentive Plan that is expected to be recognized over a weighted average period of 0.7 years.

The expense recognized related to RSAs was $0.3 million and $0.2 million for the three months ended June 30, 2026 and 2025, respectively, and $0.5 million and $0.5 million for the six months ended June 30, 2026 and 2025, respectively.

Share-based Compensation Expense

Share-based compensation expense for all equity arrangements for the three and six months ended June 30, 2026 and 2025 was as follows:

8. Commitments and Contingencies

Litigation

The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims. From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.

9. Defined Contribution Plans

The Company maintains a 401(k) defined contribution retirement plan (the “401(k) Plan”) for all of its U.S. employees. For the 401(k) Plan, the Company makes a matching contribution up to a maximum of 6% of an employee’s annual salary. For U.K. employees, the Company contributes up to 6% of an employee’s annual salary to defined contribution retirement pension plans (the “U.K. Defined Contribution Plan” and, together with the 401(k) Plan, the “Defined Contribution Plans”). Contributions made by the Company vest 100% upon contribution. The expense recorded for the Defined Contribution Plans was $0.2 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively, and $0.4 million and $0.2 million for the six months ended June 30, 2026 and 2025, respectively.