The following discussion and analysis of our financial condition and results of operations and the unaudited interim condensed financial statements and related notes included in this Quarterly Report on Form 10-Q (the Quarterly Report) should be read in conjunction with the audited financial statements and related notes thereto as of and for the year ended December 31, 2025, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 10, 2026 (Annual Report). This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives and expectations for our business. Our actual results and the timing of selected events could differ materially from those described in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections of this Quarterly Report entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors,” under Part II, Item 1A. Overview We are a clinical-stage biotechnology company focused on developing off-the-shelf, allogeneic, natural killer (NK) cell-based therapies for patients suffering from debilitating autoimmune diseases. Our product candidates are derived from donor cells (allogeneic) rather than a patient’s own cells (autologous) and are pre-manufactured, stored frozen and ready to ship to a patient’s treatment location, making them what we believe to be “off-the-shelf.” Our lead product candidate, AlloNK, is a non-genetically modified, cryopreserved NK cell therapy being evaluated in combination with B-cell targeted monoclonal antibodies (mAbs) in three ongoing clinical trials for the treatment of B-cell driven autoimmune diseases, including a Phase 2a basket trial in multiple autoimmune indications including rheumatoid arthritis (RA) and Sjögren’s disease (SjD) and a basket investigator-initiated trial (IIT) in B-cell driven autoimmune indications. In August 2025, we announced that we treated the first patient in our global Phase 2a basket clinical trial for AlloNK in combination with rituximab for refractory RA, Sjögren’s disease, idiopathic inflammatory myopathies and systemic sclerosis (SSc). The protocol for the Phase 2a basket trial allows for continuous enrollment with no stagger within dose levels and no hospitalization or inpatient requirement for patients dosed with AlloNK, and we are currently exploring dose levels of 1 billion cells and 4 billion cells per AlloNK dose in company-sponsored trials. In October 2025, we announced that: •we are prioritizing refractory RA as the lead indication for AlloNK development; •the U.S. Food and Drug Administration (FDA) has granted Fast Track Designation to AlloNK for the treatment of refractory RA in combination with rituximab; •we plan to share initial safety and translational data for over 20 patients treated with AlloNK and mAb across multiple autoimmune diseases in mid-November 2025; •we plan to release clinical response data across dose levels from more than 15 refractory RA patients in the first half of 2026; and •we plan to conduct FDA regulatory interactions in the first half of 2026 to align on the potential pivotal trial design for AlloNK in refractory RA. In November 2025, we announced that 32 patients with autoimmune disease have been treated with AlloNK and mAb across company-sponsored and investigator-initiated trials. Seminal peer-reviewed clinical studies using autologous CD19 chimeric antigen receptor (CAR) T-cell therapy (auto-CAR-T) for the treatment of autoimmune diseases have demonstrated that deep B-cell depletion in the periphery and in the lymphoid tissue can lead to high rates of clinical response and durability after a single cycle of treatment. We have already demonstrated that AlloNK in combination with rituximab was able to drive deep B-cell depletion in the periphery and observed complete responses (CRs) in heavily pre-treated patients naïve to auto-CAR-T in our Phase 1/2 clinical trial in patients with relapsed or refractory B-cell non-Hodgkin lymphoma (B-NHL). We believe the preliminary results from our Phase 1/2 clinical trial evaluating AlloNK in combination with rituximab in patients with B-NHL provide for a readthrough to autoimmune disease because efficacy in both diseases appears to be accomplished with a shared mechanism of action involving B-cell depletion in the periphery and in the lymphoid tissues, followed 23 by an immunological reset and B-cell reconstitution. In July 2025, we completed this trial and decided to discontinue the remaining long term follow up period to focus our resources on pursuing autoimmune indications. Recent Developments On May 8, 2026, we announced positive initial clinical data from ongoing clinical trials evaluating AlloNK in combination with rituximab. As of the April 3, 2026 data cutoff, the initial clinical dataset includes 21 refractory RA patients with at least 12 weeks of follow-up, including 13 patients with six months of follow-up, from our company-sponsored Phase 2a basket trial and an IIT evaluating AlloNK in B-cell driven autoimmune diseases. The broader autoimmune dataset also includes 11 SjD patients and five SSc patients, including seven SjD patients and four SSc patients with at least six months of follow-up. We also announced alignment with the FDA on a single registrational randomized controlled trial design for AlloNK in refractory RA expected to enroll approximately 150 RA patients who have had an inadequate response to two or more biologic or targeted synthetic disease modifying anti-rheumatic drugs (b/tsDMARDs) of distinct classes. Patients are expected to be randomized 2:1 to receive AlloNK plus rituximab or rituximab alone, with ACR50 response at six months as the primary efficacy endpoint. As of April 30, 2026, more than 70 autoimmune patients had initiated treatment with AlloNK across ongoing clinical trials, with more than 40 clinical sites activated globally. All patients have been treated in the outpatient setting, with the majority treated in community rheumatology clinics, providing a strong foundation to support our planned Phase 3 registrational trial in refractory RA. In June 2026, the FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to AlloNK in combination with rituximab for the treatment of refractory RA. RMAT designation provides access to expedited development and review benefits, including early and frequent FDA interactions, and is intended to facilitate efficient development of regenerative medicine therapies for serious conditions. The RMAT designation supports our planned registrational strategy in refractory RA. Summary of Efficacy Data in Refractory RA Patients had longstanding and highly active disease, with mean disease duration of 14.8 years. All patients had high disease activity at baseline and 81% had failed two or more prior b/tsDMARD classes. More than 50% of patients with six months of follow-up achieved an ACR50 response. Patients with only 12 weeks of follow-up demonstrated early improvements across disease activity measures consistent with those observed in patients with six or more months of follow-up. No patient started a new b/tsDMARD following treatment with AlloNK plus rituximab as of the data cutoff. Nineteen of 21 patients demonstrated clinically meaningful reductions from baseline in both CDAI (defined as reductions of at least 12 points) and DAS28-ESR (defined as reductions of at least 1.2 points). Clinically meaningful reductions in CDAI and DAS28-ESR were observed by three months and deepened at six months, with mean reductions from baseline at six months of 37 points in CDAI and 2.8 points in DAS28-ESR. Summary of Safety Data No cytokine release syndrome (CRS) or immune effector cell-associated neurotoxicity syndrome (ICANS) was reported. Additionally, no treatment discontinuations due to adverse events and no serious adverse events related to AlloNK were reported. The most common treatment-emergent adverse events were consistent with those associated with rituximab or cyclophosphamide/fludarabine conditioning. The Grade 3 or higher infection rate was 2% (n=1), which is comparable to serious infection rates reported for approved RA therapies, including rituximab and other biologic or targeted therapies. During the initial 28-day post-treatment period, no patients were hospitalized for infection. Two of 55 autoimmune patients treated with AlloNK plus rituximab were hospitalized for treatment-emergent adverse events during this period: one admission for dehydration in a SjD patient with diarrhea and one admission for diabetic ketoacidosis in a RA patient with insulin-dependent Type 2 diabetes. Neither hospitalization was deemed related to AlloNK. Summary of B-cell depletion and B-cell reconstitution profile Uniform and consistent B-cell depletion in peripheral blood was observed by Day 13 in all 51 patients treated with cyclophosphamide/fludarabine, AlloNK and rituximab who had available samples as of the April 3, 2026 data cutoff. Complete B-cell depletion was observed using a high-sensitivity assay in all 28 RA patients evaluated as of the data cutoff. A predominance of naïve/transitional B cells was observed in all 13 patients treated with AlloNK plus rituximab who had B-cell reconstitution as of the 24 data cutoff date, consistent with the hypothesized B-cell “reset” mechanism. Summary of Efficacy Data in SjD and SSc As of the April 3, 2026 data cutoff, initial clinical data included 11 patients with moderate-to-severe SjD and five patients with moderate-to-severe SSc. Clinical responses observed in these patient populations were consistent with the RA data and support the potential of AlloNK across B-cell driven autoimmune diseases. In SjD, patients demonstrated mean improvements at six months (n=7) of 8.6 points in ClinESSDAI, 6.6 points in ESSDAI and 3.0 points in ESSPRI, with a mean increase of 0.76 mL/min in stimulated salivary flow. All patients were off steroids as of the April 3, 2026 data cutoff. In SSc, patients demonstrated a mean improvement in mRSS of 9.5 points at six months (n=4), with 100% achieving rCRISS25 and 50% achieving rCRISS50 responses among patients with six months of follow-up. No patients were on steroids as of the April 3, 2026 data cutoff. FDA Alignment and Registrational Strategy in Refractory RA Following the recent FDA interaction, we are in the process of initiating a Phase 3 randomized controlled trial evaluating AlloNK in approximately 150 RA patients who have had an inadequate response to two or more b/tsDMARDs of distinct classes. We have alignment with the FDA on our plans to conduct a single registrational trial design. Patients are expected to be randomized 2:1 to receive AlloNK plus rituximab or rituximab alone, with ACR50 response at six months as the primary efficacy endpoint. Rituximab was selected as the active comparator because it is a component of the proposed AlloNK treatment regimen, is approved for the treatment of RA and has demonstrated ACR50 responses at six months in line with other approved RA therapies. Patients randomized to the rituximab-alone control arm who do not respond are expected to have the opportunity to cross over to the AlloNK plus rituximab arm at six months. The proposed AlloNK dosing regimen is expected to include two doses of 4 billion AlloNK cells administered on Days 6 and 20 together with rituximab, following conditioning with low-dose cyclophosphamide and fludarabine on Days 1, 2 and 3. Assuming a favorable risk-benefit profile, we believe our ongoing and planned autoimmune clinical trials, including the planned Phase 3 registrational trial in refractory RA, will generate a safety database of more than 250 patients treated with AlloNK plus rituximab, consisting primarily of RA patients and including patients with other autoimmune diseases, to support a potential biologics license application (BLA) submission for RA. Based on FDA feedback, we believe pooled safety data across autoimmune indications may supplement RA-specific safety data. Subject to final protocol and regulatory considerations, the trial is expected to be conducted globally across more than 80 sites, including approximately 40 sites already active in our ongoing autoimmune clinical program. We are initiating the registrational trial in the second half of 2026 and expect to report primary efficacy data in the second half of 2028, with a potential BLA submission in 2029. Significant opportunity and unmet need in refractory RA RA remains a large and underserved autoimmune disease, particularly among patients who have had an inadequate response to two or more b/tsDMARD classes, also known as difficult-to-treat RA under EULAR guidelines. We estimate that between 150,000 to 200,000 patients in the U.S. have failed two or more b/tsDMARDs, representing approximately 25% of the U.S. b/tsDMARD-treated RA population. Real-world registry analyses and published data suggest that patients in this setting only have an 11% to 19% likelihood of achieving an ACR50 response with currently available therapies. We estimate that within the U.S. RA market (valued at approximately $20 billion per year), about $5 billion annually is spent on patients with an 80–90% chance of not achieving an ACR50 response. Our objective is to develop AlloNK as a deep B-cell depleting therapy in combination with rituximab with the potential to deliver ACR50 responses in at least 50% of refractory RA patients at six months, provide durable clinical benefit, and offer an outpatient treatment profile that can be administered and managed in community rheumatology settings. We expect patients in the rituximab-alone control arm to achieve ACR50 responses of approximately 20% to 25% at six months. Financial Overview We commenced our operations in 2019 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, establishing and engaging in collaborations, conducting research and development, advancing and scaling up product candidate manufacturing, establishing cold chain delivery logistics, establishing and protecting our intellectual property portfolio and providing general and administrative support for these activities. From our inception through June 30, 2026, we have raised aggregate gross proceeds of $8.0 million from the issuance and sale of convertible promissory notes, 25 $70.0 million from our Series A convertible preferred stock financings, $120.0 million from our Series B convertible preferred stock financing and $24.4 million from our SAFEs. Additionally, in July 2024, we closed on our IPO, in which we issued and sold 13,920,000 shares of common stock at a public offering price of $12.00 per share. We also sold an additional 1,000,000 shares of common stock upon the partial exercise of the underwriters’ purchase option. The aggregate net proceeds of the IPO, inclusive of the partial exercise of the underwriters’ purchase option and after deducting underwriting discounts, commissions, and offering expenses, was $162.3 million. In May 2026, we closed on our May 2026 Offering, in which we issued and sold 23,871,526 shares of common stock at a price of $11.52 per share and pre-funded warrants, in lieu of common stock to certain investors, to purchase 2,170,138 shares of common stock at a price of $11.5199 per pre-funded warrant. The net proceeds of the May 2026 Offering, after deducting underwriting discounts, commissions, and offering expenses, was $282.7 million. We have incurred significant operating losses since the commencement of our operations. We have never generated any revenue from product sales and do not expect to generate any revenues from product sales unless and until we successfully complete development of and obtain regulatory approval for our product candidates, which will not be for several years, if ever. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. We have incurred a net loss of $48.5 million and $41.6 million during the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $379.1 million, cash, cash equivalents and investments of $349.4 million. We expect to continue to incur significant losses for the foreseeable future as we advance our current and future product candidates through preclinical and clinical development, continue to build our operations and transition to operating as a public company. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through public or private equity or debt financings or other capital sources, which may include sales of shares of common stock under the Sales Agreement (as defined below) entered into with Leerink Partners LLC in August 2025, or other sources, such as our existing and any future strategic collaborations and other strategic arrangements with third parties. However, we may not be able to raise additional funds or enter into such other arrangements when needed or on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional capital or enter into such arrangements when needed, we could be forced to delay, limit, reduce or terminate our research and development programs or future commercialization efforts, or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves. The manufacturing of our cell therapy products is novel and complex, and we have invested substantial resources to optimize the manufacturing process of our product candidates, including selection and optimization of cord blood units, establishing cold chain supply logistics and leveraging the current Good Manufacturing Practices (cGMP) manufacturing facility of GC Cell Corporation (GC Cell) to expand NK cells and create our product candidates. We also currently operate manufacturing facilities at our leased facility in San Diego, California to support NK and CAR-NK cell production for our pipeline development and clinical trial (and potentially commercial) supply. We also currently rely on other third-parties to ship and store our cord blood units and drug product lots, master and working feeder cell banks, as well as other components used in the manufacturing process for our product candidates, and we expect to continue to do so to meet our preclinical, clinical, and potential commercial activities. We expect that we and GC Cell will be capable of providing and processing sufficient quantities of our product candidates to meet anticipated clinical trial demands cost-effectively. However, any disruption in the supply or manufacture of our product candidates could result in delays in our preclinical studies and clinical trials and increase the costs of our research and development activities. We plan to continue to invest in our manufacturing capability and cryopreservation techniques to continuously improve our production and supply chain capabilities over time. Components of Results of Operations Operating Expenses Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses. 26 Research and Development Our research and development expenses consist primarily of external and internal costs related to the development of product candidates. External costs include: •expenses incurred in connection with research, laboratory consumables and preclinical studies; •expenses incurred in connection with conducting clinical trials including investigator grants and site payments for time and pass-through expenses and expenses incurred under agreements with contract research organizations (CROs) other vendors or central laboratories and service providers engaged to conduct our trials; •the cost of consultants engaged in research and development related services and the cost to manufacture cell therapy product candidates for use in our clinical trials and preclinical studies; •costs related to regulatory compliance; and •the cost of annual license fees. Internal costs include: •personnel-related expenses, including salaries and related benefits, travel and stock-based compensation expenses for personnel engaged in research and development functions; and •facilities, depreciation, and other expenses, which include allocated expenses for rent and maintenance of facilities, insurance and supplies. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. We track outsourced development, outsourced personnel costs and other external research and development costs of specific programs. We do not track our internal research and development costs on a program-by-program basis because these costs are associated with multiple programs and, as such, are not separately classified. Research and development activities are central to our business model. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our development programs. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates. However, we expect that our research and development expenses will increase substantially in connection with our planned preclinical and clinical development activities in the near term and in the future. General and Administrative General and administrative expenses consist of personnel-related expenses, including salaries and related benefits, travel and stock-based compensation expenses for personnel engaged in executive, finance and other administrative functions. Other significant costs include facilities-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services and insurance costs. Additionally, costs include audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs associated with operating as a public company. We expect that our general and administrative expenses will increase substantially for the foreseeable future to support our continued research and development activities, pre-commercial preparation activities for our product candidates, and, if any product candidate receives marketing approval, commercialization activities. Interest Income Interest income consists of interest on our money market funds and investments. 27 Other (Expense) Income, Net Other (expense) income, net consists primarily of interest expense and realized gains/losses on foreign exchange transactions. Income Taxes We are subject to corporate U.S. federal and state income taxation. We estimate our income tax provision, including deferred tax assets and liabilities, based on management’s judgment. We record a valuation allowance to reduce our deferred tax assets to the amounts that are more likely than not to be realized. We consider future taxable income, ongoing tax planning strategies and our historical financial performance in assessing the need for a valuation allowance. If we expect to realize deferred tax assets for which we have previously recorded a valuation allowance, we will reduce the valuation allowance in the period in which such determination is first made. We record liabilities related to uncertain tax positions in accordance with the guidance that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Provision for income taxes consists of U.S. federal and state income taxes in which we conduct business. Since our inception, we have not recorded any income tax benefits for the net losses we have incurred in each year or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss (NOL) carryforwards and tax credits will not be realized. Accordingly, we have recorded a full valuation allowance against our net deferred tax assets at June 30, 2026 and December 31, 2025. On July 4, 2025, the One Big Beautiful Bill Act (the OBBBA) was enacted in the United States. The OBBBA includes corporate provisions that make 100% bonus depreciation permanent, allow for the expensing of domestic research costs, and modifies the business interest expense limitation calculation. These changes were incorporated into our income tax provision for the year ended December 31, 2025, resulting in no impact to our fiscal year 2025 effective tax rate and net deferred tax assets as we maintain a full valuation allowance. Results of Operations Comparison of the Three Months Ended June 30, 2026 and 2025 The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025 (in thousands): THREE MONTHS ENDED JUNE 30, 2026 2025 CHANGE Operating expenses: Research and development 21,925 17,861 4,064 General and administrative 4,965 4,949 16 Total operating expenses 26,890 22,810 4,080 Loss from operations (26,890 ) (22,810 ) (4,080 ) Other income, net: Interest income 1,886 1,561 325 Other expense, net (1 ) (5 ) 4 Total other income, net 1,885 1,556 329 Net loss $ (25,005 ) $ (21,254 ) $ (3,751 ) Unrealized (loss) gain on investments, net (3 ) 2 (5 ) Comprehensive loss $ (25,008 ) $ (21,252 ) $ (3,756 ) Research and Development Expenses. We track outsourced development, outsourced personnel costs and other external research and development costs of specific programs. We do not track our internal research and development costs on a 28 program-by-program basis. The following table summarizes our research and development expenses for the three months ended June 30, 2026 and 2025 (in thousands): THREE MONTHS ENDED JUNE 30, 2026 2025 External research and development expense: AB-101 (AlloNK) $ 11,861 $ 8,686 Other programs 18 — Internal research and development expense: Personnel-related 7,504 6,487 Other 2,542 2,688 Total research and development expense $ 21,925 $ 17,861 Research and development expenses were $21.9 million for the three months ended June 30, 2026, compared to $17.9 million for the three months ended June 30, 2025. The increase of $4.1 million was primarily due to a $3.2 million increase in external research and development expense, and a $0.9 million increase in internal research and development expense. The $3.2 million increase in external research and development expense is primarily due to an increase in AlloNK costs related to product candidate development and ongoing clinical trials exploring AlloNK in autoimmune diseases. The $0.9 million increase in internal research and development expense is primarily due to a $1.0 million increase in personnel-related expenses due to increased headcount, partially offset by a $0.1 million decrease in other operating costs. General and Administrative Expenses. General and administrative expenses were $5.0 million for the three months ended June 30, 2026, compared to $4.9 million for the three months ended June 30, 2025. Changes included a $0.2 million increase in personnel-related costs, offset by a $0.2 million decrease in other operational and legal costs. Other Income, Net. Other income, net was $1.9 million for the three months ended June 30, 2026, compared to other income, net of $1.6 million for the three months ended June 30, 2025. The increase of $0.3 million was primarily due to an increase in interest income due to a higher money market and investment balance in the second quarter of 2026 from the May 2026 Offering. Unrealized (Loss) Gain on Investments, Net. Unrealized loss on investments was $3 thousand for the three months ended June 30, 2026, compared to an unrealized gain of $2 thousand for the three months ended June 30, 2025. The decrease between periods of $5 thousand was due to the change in fair value of investments. Comparison of the Six Months Ended June 30, 2026 and 2025 The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025 (in thousands): SIX MONTHS ENDED JUNE 30, 2026 2025 CHANGE Operating expenses: Research and development 41,237 34,914 6,323 General and administrative 10,083 10,068 15 Total operating expenses 51,320 44,982 6,338 Loss from operations (51,320 ) (44,982 ) (6,338 ) Other income, net: Interest income 2,798 3,425 (627 ) Other income (expense), net 1 (8 ) 9 Total other income, net 2,799 3,417 (618 ) Net loss $ (48,521 ) $ (41,565 ) $ (6,956 ) Unrealized (loss) gain on investments, net (124 ) 131 (255 ) Comprehensive loss $ (48,645 ) $ (41,434 ) $ (7,211 ) Research and Development Expenses. We track outsourced development, outsourced personnel costs and other external research and development costs of specific programs. We do not track our internal research and development costs on a 29 program-by-program basis. The following table summarizes our research and development expenses for the six months ended June 30, 2026 and 2025 (in thousands): SIX MONTHS ENDED JUNE 30, 2026 2025 External research and development expense: AB-101 (AlloNK) $ 21,793 $ 16,342 Other programs 26 — Internal research and development expense: Personnel-related 14,399 12,723 Other 5,019 5,849 Total research and development expense $ 41,237 $ 34,914 Research and development expenses were $41.2 million for the six months ended June 30, 2026, compared to $34.9 million for the six months ended June 30, 2025. The increase of $6.3 million was primarily due to a $5.5 million increase in external research and development expense, and a $0.8 million increase in internal research and development expense. The $5.5 million increase in external research and development expense is primarily due to an increase in AlloNK costs related to product candidate development and ongoing clinical trials exploring AlloNK in autoimmune diseases. The $0.8 million increase in internal research and development expense is primarily due to a $1.6 million increase in personnel-related expenses, partially offset by a decrease of $0.8 million in other operating costs. General and Administrative Expenses. General and administrative expenses were $10.1 million for each of the six months ended June 30, 2026 and 2025. Changes included a $0.3 million increase in personnel-related costs, offset by a $0.3 million decrease in other operational and legal costs. Other Income, Net. Other income, net was $2.8 million for the six months ended June 30, 2026, compared to other income, net of $3.4 million for the six months ended June 30, 2025. The decrease of $0.6 million was primarily due to a decrease in interest income due to overall higher average investment balances during the six months ended June 30, 2025. Unrealized (Loss) Gain on Investments, Net. Unrealized loss on investments was $0.1 million for the six months ended June 30, 2026, compared to an unrealized gain of $0.1 million for the six months ended June 30, 2025. The decrease between periods of $0.3 million was due to the change in fair value of investments. Liquidity and Capital Resources Sources of Liquidity We have incurred net losses and negative cash flows from operations since our inception and expect to continue to incur significant and increasing operating losses for the foreseeable future. We have never generated any revenue from product sales and do not expect to generate any revenues from product sales unless and until we successfully complete development of and obtain regulatory approval for our product candidates, which will not be for several years, if ever. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. From our inception through June 30, 2026, we have raised aggregate gross proceeds of $741.9 million to fund our operations, comprised primarily of proceeds received from the IPO, including proceeds from the underwriters’ partial exercise of their overallotment option, proceeds received from the May 2026 Offering, our issuance of convertible promissory notes, SAFEs, private placements of our convertible preferred stock, and funds received from collaboration arrangements. As of June 30, 2026, we had cash, cash equivalents and investments of $349.4 million, and an accumulated deficit of $379.1 million. Based on our current operating plans, we expect our existing cash, cash equivalents and investments will be sufficient to fund our planned operating expenses and capital expenditure requirements into 2029. Our total future capital requirements will depend on many factors and is subject to the risks and uncertainties set forth in the section titled “Risk Factors.” Public Offering of Common Stock In May 2026, we completed a public offering of common stock, pursuant to which we issued and sold 23,871,526 shares of common stock at a price of $11.52 per share under a shelf registration statement. In addition, we issued pre-funded warrants, in lieu of common stock to certain investors, to purchase 2,170,138 shares of our common stock (Pre-Funded Warrants). The purchase price of the Pre-Funded Warrants was $11.5199 per Pre-Funded Warrant, which equals the per share public offering price for the shares of 30 common stock less the $0.0001 exercise price for each such Pre-Funded Warrant (see Note 8 to our unaudited condensed financial statements appearing elsewhere in this Quarterly Report). Gross proceeds from the public offering and the issuance of the Pre-Funded Warrants were $300.0 million. After giving effect to $17.3 million in costs related to the public offering and the issuance of Pre-Funded Warrants, net proceeds were $282.7 million. At-the-Market Offering Program with Leerink Partners In August 2025, we entered into a sales agreement (the Sales Agreement) with Leerink Partners LLC (the Agent or Leerink Partners), under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $11,950,000 in “at the market” offerings (the ATM Offering Program) through the Agent. Sales of the shares of common stock will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agent. We will pay a commission to the Agent of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement. In May 2026, we suspended the ATM Offering Program, though the Sales Agreement remains in full force and effect. No shares of common stock were sold under the ATM Offering Program during the three and six months ended June 30, 2026. Future Funding Requirements We expect our expenses and capital requirements to increase significantly in connection with our ongoing activities, particularly as we advance our lead product candidates and other development programs, in addition to the costs associated with operating as a public company. Accordingly, beyond the net proceeds raised in the IPO (including the partial exercise of the underwriters’ overallotment option), we will continue to require substantial additional funding to support our continuing operations. Our future capital requirements will depend on many factors, including: •the initiation, type, number, scope, results, costs and timing of, our ongoing and planned clinical trials of AlloNK, preclinical studies, and initiation of clinical trials for future product candidates, including feedback received from regulatory authorities; •the costs and timing of manufacturing for our product candidates, including the costs and timing of maintaining our own manufacturing facility, and commercial scale manufacturing if any product candidate is approved; •the potential expansion of our current development programs to seek new indications or other monoclonal antibodies; •the costs, timing and outcome of regulatory review of current or future product candidates; •the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; •our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; •the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory and commercial personnel; •the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; •the timing and amount of the milestone or other payments we must make to current and future collaborators and licensors; •the costs and timing of establishing or securing sales and marketing capabilities if current or future product candidate is approved in a region where we choose to commercialize the product on our own; •our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; •patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors; •costs associated with any products or technologies that we may in-license or acquire; and •the impact of geopolitical and macroeconomic events, including tariffs, future bank failures, increased geopolitical tensions between the United States and China, the Russia/Ukraine conflict, the conflicts in the Middle East, and global pandemics, on United States and global economic conditions including changes in monetary and fiscal policy, United States political developments and other sources of instability that may impact our ability to access capital on acceptable terms, if at all. 31 Until such time as we can generate substantial revenue from sales of our product candidates, if ever, we expect to finance our cash needs through public or private equity or debt financings or other capital sources, which may include strategic collaborations and other strategic arrangements with third parties. However, we may not be able to raise additional funds or enter into such other arrangements when needed or on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds or enter into such arrangements when needed, we could be forced to delay, limit, reduce or terminate our research and development programs or future commercialization efforts, or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves. Cash Flows Comparison of the Six Months Ended June 30, 2026, and 2025 The following table sets forth a summary of the net cash flow activity for the six months ended June 30, 2026, and 2025 (in thousands): SIX MONTHS ENDED JUNE 30, 2026 2025 Net cash (used in) provided by: Operating activities $ (41,305 ) $ (42,824 ) Investing activities 32,901 31,093 Financing activities 283,157 167 Net increase (decrease) in cash $ 274,753 $ (11,564 ) Operating Activities Net cash used in operating activities for the six months ended June 30, 2026, was $41.3 million, consisting primarily of our net loss incurred during the period of $48.5 million, partially offset by $4.5 million of net non-cash charges and $2.7 million of net changes in operating assets and liabilities. Net non-cash charges consisted of $3.5 million in stock-based compensation expense, $1.3 million in depreciation and amortization expense, partially offset by $0.3 million in accretion of discounts on investments. Changes in operating assets and liabilities included a $1.9 million decrease in prepaid expense and other current assets, a $1.0 million increase in accounts payable, and a $0.2 million change in other net balance sheet assets and liabilities. Net cash used in operating activities for the six months ended June 30, 2025, was $42.8 million, consisting primarily of our net loss incurred during the period of $41.6 million and net changes in operating assets and liabilities of $4.9 million, partially offset by $3.6 million of net non-cash charges. Net non-cash charges consisted of $3.6 million in stock-based compensation expense, $1.2 million in depreciation and amortization expense, partially offset by $1.2 million in accretion of discounts on investments. Changes in operating assets and liabilities included a $3.6 million increase in prepaid expense and other current assets, a $1.5 million decrease in accrued expenses, and a $0.2 million change in other net balance sheet assets and liabilities. Investing Activities Net cash provided by investing activities for the six months ended June 30, 2026, was $32.9 million related to $40.0 million in maturities of investments, partially offset by $6.4 million in purchases of investments and $0.7 million in purchases of property and equipment. Net cash provided by investing activities for the six months ended June 30, 2025, was $31.1 million related to $57.3 million in maturities of investments, partially offset by $24.6 million in purchases of investments and $1.6 million in purchases of property and equipment. Financing Activities Net cash provided by financing activities for the six months ended June 30, 2026, was $283.2 million primarily related to $300.0 million in gross proceeds received from the May 2026 Offering and $0.2 million in cash received for stock option exercises and stock 32 issued in association with our 2024 Employee Stock Purchase Plan (ESPP), partially offset by $16.8 million in issuance costs paid for the May 2026 Offering and $0.2 million in payments to taxing authorities related to net-settlement of vested RSUs. Net cash provided by financing activities for the six months ended June 30, 2025, was $0.2 million primarily related to cash received from stock option exercises and stock issued in association with our 2024 Employee Stock Purchase Plan (ESPP). Contractual Obligations and Commitments In addition to ongoing capital needs to fund our ongoing operations, our material cash requirements include the following contractual and other obligations. We leased certain office space in San Diego, California, under a non-cancelable operating lease, with a term through December 2025 (the Executive Drive Lease). The Executive Drive Lease commenced on December 23, 2019, with a six-year initial term and included aggregate payments to the lessor of approximately $2.8 million. The Executive Drive Lease also provided for rent abatements and scheduled increases in base rent. In connection with the lease, we made a one-time cash security deposit in the amount of $0.4 million, of which $0.2 million was refunded in October 2021 and the remaining $0.2 million was refunded in March 2026. The Executive Drive Lease included a renewal option, which included an option to renew for five additional years. We did not exercise the option and, as such, the Executive Drive Lease terminated in December 2025. In June 2021, we entered into a lease agreement for corporate office and laboratory space in San Diego, California (the Morehouse Lease), which represented a portion of a new facility that was under construction. The Morehouse Lease includes multiple, successive commencement dates. The office and laboratory space commenced in the second quarter of 2022 and the third quarter of 2022 for the cGMP manufacturing center. The Morehouse Lease has an initial term of 88 months and includes aggregate payments to the lessor of approximately $23.2 million with a rent escalation clause, and a tenant improvement allowance of $12.3 million. We are also required to maintain a cash security deposit in the form of an unconditional and irrevocable letter of credit of $0.2 million which must remain in place until the termination of the lease and is considered a non-current asset as of June 30, 2026. These obligations are further described in Note 11 to our audited financial statements appearing in the Annual Report and Note 10 to our unaudited condensed financial statements appearing elsewhere in this Quarterly Report. In August 2022, we entered into a lease agreement to use designated laboratory and vivarium space in San Diego, California (the Explora Lease). The Explora Lease is accounted for as an operating lease and commenced in August 2022. The Explora Lease had an initial term of 36 months with automatic one-year renewals for up to three additional years and includes aggregate payments to the lessor of approximately $0.8 million with a rent escalation clause. We extended the lease through August 2026. On July 22, 2022, we entered into a sublease (the Sublease Agreement) with Origis Operating Services, LLC, (the Sublessee), whereby we agreed to sublease to Sublessee all of the 13,405 rentable square feet of office space currently leased by us under the Executive Drive Lease. The sublease commenced on August 1, 2022, and had a term through December 31, 2025. The aggregate base rent was approximately $2.6 million commencing August 1, 2022. We record sublease income as a reduction of general and administrative expense. Upon execution of the Sublease Agreement, we received a cash security deposit of $0.1 million from the Sublessee which was recorded as other current liabilities in the balance sheet as of December 31, 2025. The security deposit was refunded to the Sublessee in March 2026. In March 2025, we entered into a lease agreement with Eastgate Bend Two for a warehouse and storage facility space in San Diego, California (the Eastgate Lease). The Eastgate Lease is accounted for as an operating lease and commenced on March 1, 2025. The Eastgate Lease has an initial term of 54 months and includes aggregate monthly payments to the lessor of approximately $0.5 million for the 54 month term with scheduled increases in base rent. As of June 30, 2026, we have future minimum obligations under the Company's operating leases of $11.1 million relating to leases we have recognized in the condensed balance sheets, of which $1.7 million is payable before December 31, 2026. Under our collaboration agreements, we have milestone payment obligations that are contingent upon the achievement of specified development, regulatory and commercial sales milestones and are required to make certain royalty payments in connection with the sale of products developed under the agreement (see Note 7 to our unaudited condensed financial statements included elsewhere in this Quarterly Report). As of June 30, 2026, we are unable to estimate the timing or likelihood of achieving the milestones or making future product sales. We enter into contracts in the normal course of business for contract research services, contract manufacturing services, professional services and other services and products for operating purposes. These contracts generally provide for termination after a notice period, and, therefore, are cancelable contracts. 33 Off-Balance Sheet Arrangements We did not have, during the periods presented, and we do not currently have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC. Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and the disclosure of our contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes to our critical accounting estimates from those described in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Significant Estimates and Judgments and our audited financial statements as of and for the year ended December 31, 2025, as included in the Annual Report. Emerging Growth Company and Smaller Reporting Company Status We are an emerging growth company under the Jumpstart Our Business Startups Act (JOBS Act). Under the JOBS Act, we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. However, we may elect to early adopt any new or revised accounting standards whenever such early adoption is permitted for non-public companies. We may take advantage of these exemptions up until the time that we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our IPO, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. We are also a smaller reporting company as defined by Rule 12b-2 of the Exchange Act because both the market value of our stock held by non-affiliates is less than $700 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. 34