You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes included elsewhere in this Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans, strategies, objectives, expectations and intentions for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Form 10-Q, our actual results could differ materially from the results described in or implied by these forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.” Overview PepGen Inc., also referred to as “PepGen,” “we,” “our” or “us”, is a clinical-stage biotechnology company advancing the next-generation of oligonucleotide therapies with the goal of transforming the treatment of severe neuromuscular and neurological diseases. Our proprietary Enhanced Delivery Oligonucleotide, or EDO, platform is founded on over a decade of research and development and leverages cell-penetrating peptides, or CPPs, to improve the uptake and activity of conjugated oligonucleotide therapeutics. Using these EDO peptides, our goal is to develop a research and development pipeline of oligonucleotide therapeutic candidates that are designed to target the root cause of serious diseases. We are developing PGN-EDODM1 for the treatment of DM1 and are utilizing what we believe to be a unique mechanism of action and a different delivery approach compared to other approaches in more advanced stages of clinical development. We have conducted extensive preclinical studies of our product candidate, and these preclinical data form the basis of our clinical development plan for PGN-EDODM1. Our clinical development program for PGN-EDODM1 includes three studies, FREEDOM-DM1, or FREEDOM, a multinational, randomized, double-blind, placebo-controlled Phase 1 single ascending dose, or SAD, study, FREEDOM2-DM1, or FREEDOM2, a multinational, randomized, double blind, placebo-controlled Phase 2 MAD study and FREEDOM-OLE, which is an open label extension study open to participants who meet its eligibility criteria and have completed either the FREEDOM or FREEDOM2 studies. In the FREEDOM study, we enrolled adult participants with DM1 in multiple geographies including the U.S. and Canada, to evaluate the safety and tolerability of PGN-EDODM1, as well as oligonucleotide muscle concentrations, splicing correction and functional outcome measures at day 28 and at week 16 following a single dose of PGN-EDODM1. We announced data from the three cohorts in the FREEDOM study (5 mg/kg, 10 mg/kg and 15 mg/kg) in 2025, highlighting that PGN-EDODM1 was generally well tolerated at all doses, with all drug-related adverse events mild or moderate in severity and a dose dependent mean splicing correction of 12.3%, 29.1% and 53.7% in the single 5 mg/kg, 10 mg/kg and 15 mg/kg cohorts, respectively. The safety data from the FREEDOM study informed the design of FREEDOM2, which has received regulatory clearance in Canada, the United Kingdom, South Korea, Australia, and New Zealand. The FREEDOM2 study remains on partial clinical hold in the U.S. and we continue to work with the FDA to address questions raised by the FDA as quickly as possible. FREEDOM2 is a Phase 2 randomized, double-blind, placebo-controlled MAD study of PGN-EDODM1 in DM1 patients. FREEDOM2 is designed to assess PGN-EDODM1’s safety and tolerability, splicing correction and functional outcome measures in DM1 patients. We reported topline results from the 5 mg/kg cohort in the FREEDOM2 study where PGN-EDODM1 was generally well-tolerated, with no serious adverse events (SAEs), all related treatment emergent adverse events (TEAEs) reported as mild, all non-related TEAEs reported as mild or moderate, and no signs of cumulative toxicity. Such results also demonstrated a mean splicing correction of 7.3%, compared to 6.8% in placebo-treated patients. However, excluding one outlier patient, patients showed a mean splicing correction of 22.9% as the outlier patient exhibited a worsening in splicing correction (70.8%), reducing the overall group mean to 7.3%. Middle finger vHOT in the treatment group in this cohort showed a positive trend of improvement versus a worsening observed in the placebo group with both returning to baseline at the last assessment. The FREEDOM2 study has completed enrollment of the 10 mg/kg dose cohort with seven of eight patients having completed dosing, and we expect to report data from this cohort in November, 2026. Furthermore, based on the review of available safety data from the 10 mg/kg dose cohort of the FREEEDOM2 study, an independent Data and Safety Monitoring Board, or DSMB, recommended advancing the FREEDOM2 trial into the third and highest dose cohort at 12.5 mg/kg; results from the 12.5 mg/kg cohort of FREEDOM2 are expected in the first half of 2027. The DSMB also approved dose escalation in the open-label extension study, or OLE, from 5 mg/kg to 10 mg/kg dosing. The FDA has granted both orphan drug designation and Fast Track designation for PGN-EDODM1 for the treatment of DM1 and the EMA has also granted orphan medicinal product designation to PGN-EDODM1. Initial Public Offering, ATM Program, Follow-on Offerings and Liquidity In May 2022, we closed our initial public offering, or IPO, in which we sold an aggregate of 9,000,000 shares of common stock at a public offering price of $12.00 per share for gross proceeds of $108.0 million. In connection with the IPO, we granted the 17 underwriters a 30-day option to purchase 1,350,000 additional shares of common stock, which they exercised in part to purchase 1,238,951 additional shares of common stock for gross proceeds of $14.9 million. We received approximately $122.9 million in gross proceeds and $110.2 million in net proceeds in the IPO, after deducting underwriters’ fees and offering expenses. Immediately prior to consummation of the IPO, all 12,546,805 outstanding shares of our redeemable convertible preferred stock, and 35,529 preferred stock warrants that were exercised on May 4, 2022, converted into 12,359,856 shares of our common stock. On February 5, 2024, we issued and sold 1,000,000 shares of common stock at a purchase price of $10.00 per share under our at-the-market offering program, or ATM program, pursuant to an At-the-Market Equity Offering Sales Agreement, or Sales Agreement, with Stifel, Nicolaus & Company, Incorporated, or Stifel, resulting in net proceeds of $9.9 million. On February 9, 2024, we issued and sold 7,530,000 shares of common stock at a purchase price of $10.635 per share, which was the closing sale price of our common stock on the Nasdaq Global Select Market on February 6, 2024, in an underwritten follow-on offering, or the 2024 Offering. The 2024 Offering resulted in net proceeds of $76.4 million after deducting underwriters' fees of $3.7 million. Net proceeds from the ATM program and 2024 Offering, after deducting underwriters’ fees and costs of the offerings, were $86.3 million. During the six months ended June 30, 2026, the Company sold 237,500 shares of common stock under the Sales Agreement resulting in net proceeds of $1.5 million. On September 26, 2025, we issued and sold 31,250,000 shares of common stock at a purchase price of $3.20 per share in an underwritten public offering, or the 2025 Offering. Pursuant to the underwriting agreement, we granted underwriters a 30-day option to purchase up to an additional 4,687,500 shares of common stock at a price of $3.20 per share which was exercised in full on September 25, 2025. The 2025 Offering resulted in net proceeds of $107.6 million after deducting underwriters' fees of $6.9 million and offering expenses of $0.5 million. Since our inception, we have not generated any revenue from product sales or other sources and have incurred significant operating losses and negative cash flows from our operations. Our primary uses of cash to date have been to fund our research and development activities, business planning, establishing and maintaining our intellectual property portfolio, acquiring and developing product and technology rights, hiring personnel, leasing premises and associated capital expenditures, raising capital, and providing general and administrative support for these operations. To date, we have funded our operations primarily through private placements of our convertible preferred stock and proceeds from our IPO, the ATM program, the 2024 Offering, and the 2025 Offering. We have incurred operating losses in each year since our inception. Our net losses were $35.6 million and $53.3 million for the six months ended June 30, 2026 and June 30, 2025, respectively. As of June 30, 2026, we had cash, cash equivalents, and marketable securities of $117.2 million. As of June 30, 2026, we had an accumulated deficit of $396.7 million. Notwithstanding our decision to cease our research and development efforts in DMD, which we announced on May 28, 2025, we expect our expenses and operating losses will continue as we conduct our ongoing preclinical studies and current and planned clinical trials of PGN-EDODM1, continue our research and development activities, utilize third parties to manufacture our product candidates and related raw materials, hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company, including audit, legal, regulatory, and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs. In addition, we have several development, regulatory and commercial milestone payment obligations under our licensing arrangements. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies, current and planned clinical trials, manufacturing campaigns and our expenditures on other research and development activities. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our currently planned operations into the fourth quarter of 2027. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which will not be for at least the next several years, if ever. 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. 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 equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. 18 Components of Results of Operations Operating Expenses Research and Development To date, our research and development expenses have primarily consisted of external and internal costs associated with our research and development activities, including our discovery and research efforts, the development of our proprietary EDO platform, and the preclinical and clinical development of our product candidates. Our research and development expenses include: •external expenses, including expenses incurred under arrangements with third parties, such as clinical research organizations, or CROs, contract development manufacturing organizations, or CDMOs, consultants and our scientific advisors; •personnel-related costs, including salaries, cash incentive compensation, payroll taxes, employee benefits, and stock-based compensation; •costs for laboratory supplies and materials and reagents for chemical synthesis of product candidates; and •facility costs, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other 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 activities are recorded as prepaid expenses until the goods or services are received. The following table (in thousands) summarizes our research and development expenses for the three and six months ended June 30, 2026 and June 30, 2025. The direct external development program expenses reflect external costs attributable to our clinical development candidates and preclinical candidates selected for further development. Our internal resources, personnel and infrastructure are not directly tied to any one research or drug discovery program and are deployed across multiple programs. As such, we do not track internal expenses on a program-specific basis. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 External expenses: PGN-EDODM1 $ 5,783 $ 4,688 $ 11,779 $ 16,396 PGN-EDO51 12 4,582 32 7,998 Other programs and unallocated expenses 136 65 222 435 Total external expense 5,931 9,335 12,033 24,829 Internal expenses: Personnel-related (including stock-based compensation) 4,735 5,841 9,850 13,312 Facilities and related costs 1,207 1,318 2,417 2,581 Other 649 1,897 1,227 3,047 Total research and development expenses $ 12,522 $ 18,391 $ 25,527 $ 43,769 The Phase 1 FREEDOM clinical trial of our investigational drug candidate, PGN-EDODM1, has completed and we continue to conduct the ongoing Phase 2 FREEDOM2 and Open Label Extension clinical trials. On May 28, 2025, we announced that we decided to voluntarily discontinue development of PGN-EDO51 and have recently substantially completed the wind-down of DMD-related research and development activities. Research and development expenses for our lead program can be variable quarter-over-quarter due to the timing of manufacturing campaigns, which are accounted for under the percentage of completion method. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for our remaining clinical stage product candidate or any new product candidates we develop. The timelines and costs associated with research and development activities are uncertain and can vary significantly for our product candidate and development program due to the inherently unpredictable nature of preclinical and clinical development. We previously announced our decision to focus our development efforts on PGN-EDODM1, and to cease development of our DMD-related programs, and may make further determinations as to which programs in our research and development pipeline to pursue and how much funding to direct to each program. We will need to raise substantial additional capital in the future. Our future development costs may vary significantly based on factors such as: •the status of clinical trials, the timing and costs, if any, associated with resolving clinical or partial clinical holds, animal and other preclinical studies and IND- or clinical trial application, or CTA-enabling studies; 19 •per patient trial costs; •the number of trials required for approval; •the number of sites included in the trials; •the countries in which the trials are conducted; •the length of time required to enroll eligible patients; •the number of patients that participate in the trials; •the number of doses that patients receive; •the drop-out or discontinuation rates of patients; •the duration of patient participation in the trials and follow-up; •the cost and timing of manufacturing our product candidates and the cost and timing of our manufacturing campaigns; •the efficacy and safety profile of our product candidates; and •maintaining a continued acceptable safety profile of our products if any receive regulatory approval. General and Administrative General and administrative expenses consist primarily of personnel-related costs, including salaries, cash incentive compensation, payroll taxes, employee benefits, and stock-based compensation charges for those individuals in executive, finance, facility operations, and other administrative functions. Other significant costs include legal fees relating to intellectual property and corporate matters, professional fees for audit, accounting and consulting services, and insurance costs. Other general and administrative expenses will remain consistent to support our public company operating expenses associated with audit, legal, regulatory, and tax-related services associated with maintaining compliance with our exchange listing and SEC requirements, director and officer insurance premiums, and investor relations. Other Income (Expense), Net Interest Income Interest income consists of interest earned on our cash equivalents and marketable securities. Other Income (expense) Components of other income (expense) relate to realized and unrealized gains and losses on currency revaluation. Income Taxes We record tax expense for state taxes on interest income generated from the Company's cash equivalents and marketable securities. We have not recorded a U.S. provision for federal or state income taxes as we have no revenue and have incurred losses since inception. Results of Operations Comparison of the Three Months Ended June 30, 2026 and June 30, 2025 The following table summarizes our results of operations for the three months ended June 30, 2026 and June 30, 2025 (in thousands): 20 Three Months Ended June 30, Period-to- 2026 2025 Period Change Operating expenses: Research and development $ 12,522 $ 18,391 $ (5,869 ) General and administrative 6,417 5,541 876 Total operating expenses $ 18,939 $ 23,932 $ (4,993 ) Operating loss $ (18,939 ) $ (23,932 ) $ 4,993 Other income (expense), net: Interest income 1,093 842 251 Other (expense) income, net 50 3 47 Total other income, net 1,143 845 $ 298 Net loss before income tax $ (17,796 ) $ (23,087 ) $ 5,291 Income tax expense (16 ) — (16 ) Net loss $ (17,812 ) $ (23,087 ) $ 5,275 Research and Development Expenses Research and development expenses decreased by $5.9 million from $18.4 million for the three months ended June 30, 2025, to $12.5 million for the three months ended June 30, 2026. This was primarily attributable to a $2.3 million decrease in clinical trial expense as, prior to the discontinuation of our DMD program in late May 2025, we had two programs in clinical trials during part of the second quarter of the prior year. Additionally, there was a $0.7 million charge taken during the second quarter in the prior year for estimated wind-down costs for the two clinical trials for PGN-EDO51. The decrease was additionally driven by a $2.2 million decrease in manufacturing costs related to the timing of manufacturing campaigns, a $1.1 million decrease in personnel-related costs, and a $0.7 million decrease related to a non-cash charge taken during the prior year associated with the impairment of unused lab equipment. These decreases are partially offset by a $0.4 million increase in consulting expense. General and Administrative Expenses General and administrative expenses increased by $0.9 million from $5.5 million for the three months ended June 30, 2025, to $6.4 million for the three months ended June 30, 2026. The increase was primarily driven by an increase of $0.7 million in personnel-related costs, including $0.6 million in stock-based compensation expense. Other Income (Expense), Net Other income (expense), net was $1.1 million for the three months ended June 30, 2026 and $0.8 million for the three months ended June 30, 2025. Interest income is earned on the Company's cash equivalents and marketable securities. Income Tax Expense Income tax expense was $16,000 for the three months ended June 30, 2026 for state taxes on interest income generated from the Company's cash equivalents and marketable securities. Income tax expense was nil for the three months ended June 30, 2025. Comparison of the Six Months Ended June 30, 2026 and June 30, 2025 The following table summarizes our results of operations for the six months ended June 30, 2026 and June 30, 2025 (in thousands): 21 Six Months Ended June 30, Period-to- 2026 2025 Period Change Operating expenses: Research and development $ 25,527 $ 43,769 $ (18,242 ) General and administrative 12,355 11,484 871 Total operating expenses $ 37,882 $ 55,253 $ (17,371 ) Operating loss $ (37,882 ) $ (55,253 ) $ 17,371 Other income (expense), net: Interest income 2,343 1,964 379 Other expense (income), net (5 ) - (5 ) Total other income, net $ 2,338 $ 1,964 $ 374 Net loss before income tax $ (35,544 ) $ (53,289 ) $ 17,745 Income tax expense (31 ) — (31 ) Net loss $ (35,575 ) $ (53,289 ) $ 17,714 Research and Development Expenses Research and development expenses decreased by $18.2 million from $43.8 million for the six months ended June 30, 2025, to $25.5 million for the six months ended June 30, 2026. This was primarily attributable to a $11.9 million decrease in manufacturing costs related to the timing of manufacturing campaigns, a $3.5 million decrease in personnel-related costs and a $0.7 million decrease related to a non-cash charge taken during the prior year associated with the impairment of unused lab equipment. The decrease was additionally driven by a $2.6 million decrease in clinical trial expense as, prior to the discontinuation of our DMD program in late May 2025, we had two programs in clinical trials during the first half of the prior year, and there was a $0.7 million charge taken during the second quarter in the prior year for estimated wind-down costs for the two clinical trials for PGN-EDO51. These decreases are partially offset by a $0.5 million increase in consulting expense. General and Administrative Expenses General and administrative expenses increased by $0.9 million from $11.5 million for the six months ended June 30, 2025, to $12.4 million for the six months ended June 30, 2026. The increase was primarily driven by an increase of $0.5 million in personnel-related costs. Other Income (Expense), Net Other income (expense), net was $2.3 million for the six months ended June 30, 2026 and $2.0 million for the six months ended June 30, 2025. Interest income is earned on the Company's cash equivalents and marketable securities. Income Tax Expense Income tax expense was $31,000 for the six months ended June 30, 2026 for state taxes on interest income generated from the Company's cash equivalents and marketable securities. Income tax expense was nil for the six months ended June 30, 2025. Liquidity and Capital Resources Sources of Liquidity Since our inception in January 2018, we have funded our operations primarily through the sale of our common stock and convertible preferred stock. We received aggregate gross proceeds of $163.9 million from these sales prior to our IPO. Additionally, in May 2022, we received gross proceeds from our IPO of $122.9 million. On June 2, 2023, we filed a shelf registration statement on Form S-3 with the SEC, which covers the offering, issuance and sale of an amount up to $300.0 million in the aggregate of shares of our common stock, preferred stock, debt securities, warrants, and/or units or any combination thereof, which was declared effective on June 16, 2023. On August 8, 2023, we filed a prospectus supplement and entered into the Sales Agreement with Stifel, as sales agent, which provides for the issuance and sale by us of up to $100.0 million of shares of common stock from time to time under the ATM 22 program. On February 5, 2024, we issued and sold 1,000,000 shares of common stock at a purchase price of $10.00 per share under the ATM program, resulting in net proceeds of $9.9 million. During the six months ended June 30, 2026, the Company sold 237,500 shares of common stock under the Sales Agreement resulting in net proceeds of $1.5 million. On February 9, 2024, we issued and sold 7,530,000 shares of common stock in the 2024 Offering at a purchase price of $10.635 per share, resulting in net proceeds of $76.4 million after deducting underwriters’ fees and offering costs of $3.7 million. On June 28, 2024, we filed a second shelf registration statement on Form S-3 with the SEC, which covers the offering, issuance and sale of an amount up to $250.0 million in the aggregate of shares of our common stock, preferred stock, debt securities, warrants, and/or units or any combination thereof, which was declared effective on July 8, 2024. On September 26, 2025, we issued and sold 31,250,000 shares of common stock at a purchase price of $3.20 per share in the 2025 Offering. Underwriters exercised their option to purchase an additional 4,687,500 shares of common stock at a price of $3.20 per share on September 25, 2025. The 2025 Offering resulted in net proceeds of $107.6 million after deducting underwriters' fees of $6.9 million and offering expenses of $0.5 million. On May 18, 2026, we filed a shelf registration statement on Form S-3 with the SEC, which covers the offering, issuance and sale of an amount up to $400.0 million in the aggregate of shares of our common stock, preferred stock, debt securities, warrants, and/or units or any combination thereof, which was declared effective on May 21, 2026. Also on May 16, 2026, we filed a prospectus supplement and entered into the Sales Agreement with Stifel, as sales agent, which provides for the issuance and sale by us of up to $100.0 million of shares of common stock from time to time under the ATM program. Future Funding Requirements As of June 30, 2026, we had cash, cash equivalents, and marketable securities of $117.2 million. We believe that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our currently planned operations into the fourth quarter of 2027. However, our forecast for the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain. Our future capital requirements will depend on many factors, including but not limited to: •the scope, progress, costs and results of preclinical and clinical development for PGN-EDODM1, any additional product candidates we may develop and any new indications we may pursue; •the scope, costs, timing and outcome of regulatory review of PGN-EDODM1, any additional product candidates we may develop and any new indications we may pursue; •the cost and timing of manufacturing activities; •the identification of additional research programs and product candidates; •the costs and scope of the continued development of our EDO platform; •the costs and timing of preparing, filing and prosecuting applications for patents, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, including claims of infringement, misappropriation or other violations of third-party intellectual property; •the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any product candidate that receives marketing approval; •the costs of satisfying any post-marketing requirements; •the revenue, if any, received from commercial sales of our product candidates if marketing approval is received; •the costs of operational, financial and management information systems and associated personnel; •the associated costs in connection with any acquisition of in-licensed products, intellectual property and technologies; and •the ongoing costs of operating as a public company. 23 Until such time, if ever, as we can generate substantial product revenue to support our cost structure, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, potentially including collaborations, licenses, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed 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 funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our drug candidates even if we would otherwise prefer to develop and market such drug candidates ourselves. Cash Flows The following table sets forth a summary of the net cash flow activity for the six months ended June 30, 2026 and June 30, 2025 (in thousands): Six Months Ended June 30, 2026 2025 Net cash (used in) provided by: Operating activities $ (34,232 ) $ (46,531 ) Investing activities (4,975 ) 32,106 Financing activities 1,453 98 Effect of exchange rate changes on cash 4 (22 ) Net decrease in cash, cash equivalents and restricted cash $ (37,750 ) $ (14,349 ) Operating Activities For the six months ended June 30, 2026, net cash used in operating activities was $34.2 million resulting from our net loss of $35.6 million and changes in our operating assets and liabilities of $5.6 million, partially offset by non-cash adjustments of $6.9 million. The net changes in our operating assets and liabilities were primarily due to a decrease of $4.0 million in accrued expenses. The change was further driven by a decrease in operating lease liabilities of $1.6 million. The non-cash adjustments included $6.2 million of stock-based compensation, $0.6 million of depreciation expense, $1.9 million of amortization and interest accretion on our operating lease, and $1.7 million of amortization of discounts on our marketable securities. For the six months ended June 30, 2025, net cash used in operating activities was $46.5 million resulting from our net loss of $53.3 million and changes in our operating assets and liabilities of $1.2 million, partially offset by non-cash adjustments of $7.9 million. The net changes in our operating assets and liabilities were primarily due to a decrease in operating lease liabilities of $1.5 million. The change was further driven by a decrease in accounts payable of $0.9 million, an increase in accrued expenses of $0.5 million and a decrease in prepaids and other current assets of $0.7 million. The non-cash adjustments included $5.8 million of stock-based compensation, $0.7 million of depreciation expense, $1.2 million of amortization of discounts on our marketable securities, and $1.9 million of amortization and interest accretion on our operating lease. Additionally, there was a non-cash adjustment of $0.7 million related to the impairment of unused lab equipment. Investing Activities For the six months ended June 30, 2026, net cash used in investing activities was $5.0 million resulting from $81.9 million in purchases of marketable securities partially offset by $77.0 million in maturities of marketable securities. For the six months ended June 30, 2025, net cash provided by investing activities was $32.1 million resulting from $39.0 million in maturities of marketable securities partially offset by $6.7 million in purchases of marketable securities and $0.2 million in purchases of property and equipment. 24 Financing Activities For the six months ended June 30, 2026, net cash provided by financing activities was $1.5 million resulting primarily from proceeds from the sale of shares of common stock under the Sales Agreement. For the six months ended June 30, 2025, net cash provided by financing activities was $0.1 million of proceeds from the purchase of shares under employee equity plans. Critical Accounting Policies and Estimates There have been no material changes to our critical accounting policies and estimates from those described in our financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2025. 25