The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Financial Statements and the related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many important factors, including those set forth in Part II. Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in, or implied by, these forward-looking statements. As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to “we,” “us,” “our,” the “Company” and “Precision” refer to Precision BioSciences, Inc. Overview We are a clinical stage gene editing company dedicated to improving life by developing in vivo therapies for genetic and infectious diseases with the application of our wholly-owned proprietary ARCUS genome editing platform. The foundation of ARCUS is a natural homing endonuclease which allows us to replicate precise gene editing as it evolved in nature for sophisticated gene edits, including gene insertion, excision, and elimination. ARCUS is also unique in its relatively small size which potentially allows delivery to a wider range of cells and tissues using viral and non-viral gene delivery methods. Wholly-Owned Portfolio PBGENE-HBV is our wholly owned in vivo gene editing program under investigation in a global clinical trial, ELIMINATE-B, which is designed to be a potentially curative treatment for chronic hepatitis B infection. PBGENE-HBV targets and eliminates covalently closed circular DNA (“cccDNA”), the sole source of viral replication, leading to sustained loss of pre-genomic RNA (“pgRNA”), the precursor for hepatitis B virus (“HBV”) DNA. PBGENE-HBV is the first and only in vivo gene elimination approach to prospectively employ repeat administrations of lipid nanoparticle (“LNP”) in chronic hepatitis B with the goal of complete viral cure. On May 27, 2026, we presented new and late-breaking clinical data from the ongoing ELIMINATE-B study at the European Association for the Study of the Liver (“EASL”) Congress 2026 in Barcelona, Spain. The data cut on May 4, 2026 was based on 38 doses administered across 16 patients in five cohorts. Liver biopsy data demonstrated a 1-log (10-fold) reduction in cccDNA-derived transcripts in one patient after only two administrations of PBGENE-HBV at 0.4 mg/kg, with less than 1% of cccDNA remaining post-treatment. Further biopsy analysis of a second patient, who received three doses at the same dose level and schedule, demonstrated that repeat administrations of PBGENE-HBV cumulatively increase the anti-cccDNA effect in the liver. Together, the biopsy data delivered proof that a gene editor can directly target and eliminate cccDNA in chronic hepatitis B patients. Following treatment with PBGENE-HBV, pgRNA became durably undetectable in 100% of patients who had detectable pgRNA prior to treatment. Importantly, the loss of pgRNA was ongoing for up to six months as of the data cut-off. This sustained loss of pgRNA demonstrates the durability of PBGENE-HBV's elimination mechanism designed to directly target and eradicate cccDNA. Substantial S-antigen declines were observed in 100% of patients treated, and durability was demonstrated in patients across all dose levels being investigated ranging from 0.2mg/kg to 0.8mg/kg. Additionally, the first patient dosed in the ELIMINATE-B trial continued to demonstrate substantial reductions more than one year after dosing. No dose-limiting toxicities have been observed in 16 patients across five cohorts. The etiology of LNP-related hypotension observed during dose escalation was identified and ameliorated through straightforward mitigation measures such as a longer infusion time and a short course of steroids at the time of infusion. Since the data update, we have opened new trial sites and continue enrolling additional patients, expanding cohorts 4 (0.4 mg/kg) and 5 (0.65 mg/kg), while collecting additional biopsies and blood biomarker data to further assess viral elimination. The current and future datasets are expected to inform selection of the optimal dosing schedule for Part 2 expansion. We continue our work with global investigators for next phase study design and expect to provide additional updates on the ELIMINATE-B trial progress by the end of 2026. 22 Table of Contents PBGENE-DMD is our wholly-owned development candidate for Duchenne muscular dystrophy, or DMD. PBGENE-DMD is designed to durably improve function for approximately 60% of patients with DMD. By employing two complementary ARCUS nucleases in a single adeno-associated virus (“AAV”), PBGENE-DMD excises exons 45-55 of the dystrophin gene, restoring expression of a near full-length dystrophin protein. We presented new preclinical data at the American Society of Gene & Cell Therapy (“ASGCT”) 2026 Annual Meeting in Boston, Massachusetts. The new data showed that treatment with PBGENE-DMD in early-juvenile mice resulted in significantly higher efficacy across key skeletal and respiratory muscles than treatment in late-juvenile mice over a comparable timeframe. This new data further supports evaluating PBGENE-DMD in younger DMD patient populations, including the 2- to 3-year-old patients, who are a key demographic of the ongoing Phase 1/2 FUNCTION-DMD trial evaluating PBGENE-DMD in boys ages 2 to 7. We continue to advance the Phase 1/2 FUNCTION-DMD clinical trial, with two clinical trial sites now active: Arkansas Children's Hospital and Washington University School of Medicine, both recognized centers of excellence for DMD care. The study is actively recruiting patients with initial safety data expected for year-end 2026. Partnered In Vivo Gene Editing Program In partnership with iECURE, ECUR-506 is an ARCUS-mediated in vivo targeted gene insertion program currently in a first-in-human trial, OTC-HOPE, evaluating ECUR-506 as a potential treatment for neonatal-onset ornithine transcarbamylase (“OTC”) deficiency. iECURE previously announced alignment with the U.S. Food and Drug Administration (“FDA”) on key study elements that could support a potential Biologics License Application (“BLA”). The OTC-HOPE study is ongoing in the U.K., the U.S., Australia, and Spain. iECURE presented clinical data at ASGCT in May 2026, including preliminary data from study participants in the first three dose cohorts (n=7) of the ongoing OTC-HOPE study, and demonstrated that 71% of participants experienced no hyperammonemic crises following ECUR-506 administration. In addition, iECURE presented a poster at the Society for Inherited Metabolic Disorders (“SIMD”) Annual Meeting in May 2026 featuring one-year post-treatment data from the first infant dosed in the study who achieved a complete clinical response as defined by study protocol. Non-Core Ex Vivo Programs Imugene continues development of azer-cel in diffuse large B-cell lymphoma and has received written guidance from the FDA regarding the registrational pathway for azer-cel. The guidance provided clear alignment with the FDA across key elements required to support advancement into a pivotal study, including dosing regimen, patient population, endpoints, and manufacturing readiness. Azer-cel data presented at the 2026 American Society of Clinical Oncology Annual Meeting in May 2026 demonstrated that among 24 patients evaluable for response following their first disease assessment at Day 28, response rates ranging from 50%-100% were observed across all six cancer subtypes. Separately, azer-cel is being evaluated by TG Therapeutics (Nasdaq: TGTX) in a Phase 1 trial in progressive multiple sclerosis. We previously announced the achievement of a clinical milestone under our license agreement with TG Therapeutics. As a result, we have earned a cash payment of $7.5 million in proceeds, inclusive of $5.25 million cash and $2.25 million for the purchase of 201,504 shares of our common stock by TG Therapeutics at $11.17 per share. Components of our Results of Operations Revenue To date, we have not generated any revenue from product sales and do not expect to generate any revenue from product sales in the foreseeable future. We record revenue from collaboration agreements, including amounts related to upfront payments, milestone payments, fees for licenses of our intellectual property and research and development funding. Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates. These include the following: 23 Table of Contents •salaries, benefits and other related costs, including share-based compensation expense, for personnel engaged in research and development functions; •expenses incurred under agreements with third parties, including third parties that conduct preclinical research and development activities on our behalf; •costs of manufacturing drug products for use in our preclinical studies, including the costs of contract manufacturing organizations (“CMOs”); •costs of outside consultants; •costs of laboratory supplies and acquiring, developing and manufacturing preclinical study materials; •license payments made for intellectual property used in research and development activities; and •facility-related expenses, which include direct depreciation costs and expenses for rent and maintenance of facilities and other operating costs if specifically identifiable to research activities. We expense research and development costs as incurred. We track external research and development costs by product candidate beginning when it is publicly named as a development program. Internal and external costs that are not identifiable to specific development candidates are included in the platform development expenses category. Research and development activities are central to our business model. We expect that our research and development expenses will increase over the long term and will comprise a larger percentage of our total expenses as we progress development of our product candidates. We cannot determine with certainty the duration and costs of future clinical trials for our product candidates we may develop or if, when or to what extent we will generate revenue from the commercialization and sale of any product candidate for which we obtain marketing approval. We may never succeed in obtaining marketing approval for any product candidate. The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including: •the scope, rate of progress, expense and results of future clinical trials of our product candidates and other research and development activities that we may conduct; •the ability to collaborate and partner with third parties to fund any or all of our programs; •uncertainties in clinical trial design and patient enrollment rates; •the actual probability of success for our product candidates, including their safety and efficacy, early clinical data, competition, manufacturing capability and commercial viability; •significant and changing government regulation and regulatory guidance; •the timing and receipt of any marketing approvals; and •the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to slower than expected patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development. General and Administrative Expenses General and administrative expenses consist primarily of salaries, consulting fees, recruitment-related costs and other employee-related costs, including share-based compensation, for personnel in our executive, finance, business development, operations and administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters; information technology costs; insurance costs; travel expenses; and facility-related expenses, which include direct depreciation costs and expenses for rent and maintenance of facilities and other operating costs that are not specifically attributable to research activities. 24 Table of Contents Change in Equity Method Investment Changes in fair value on our equity method investment represents changes in the investment value of our equity method investee, Elo Life Systems, Inc. (“Elo”). In 2026, Elo is no longer classified as an equity method investment. Any subsequent changes to the investment’s fair value will be recorded through the other fair value adjustments line item. Changes in Other Fair Value Adjustments The change in fair value represents the assessed changes in assets and liabilities carried at fair value. We adjust the carrying value of the ordinary shares issued from Imugene to its fair value each reporting period with any changes in fair value recorded to other income (expense). We adjust the carrying value of the iECURE investment under the iECURE Equity Agreement to its fair value each reporting period with any changes in fair value recorded to other (expense) income. Change in Fair Value of Warrant Liability The change in fair value of warrant liability represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with the March 2024 Public Offering and November 2025 Public Offering. Refer to Note 11, Warrants, in the accompanying notes to the financial statements for more information on the fair value assumptions. Interest Expense Interest expense consists of interest payments incurred and discount amortization on debt outstanding. Interest Income Interest income consists of interest income earned on our cash and cash equivalents. Gain (Loss) on Disposal of Assets Gain (loss) on disposal of assets represents the difference between the sale price and remaining net book value of sold assets at the time of their sale. 25 Table of Contents 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, together with the changes in those items: For the Three Months Ended June 30, (in thousands) 2026 2025 Change Revenue $ — $ 18 $ (18) Operating expenses Research and development 12,394 12,768 (374) General and administrative 6,767 9,127 (2,360) Total operating expenses 19,161 21,895 (2,734) Operating loss (19,161) (21,877) 2,716 Other (expense) income: Loss from equity method investment — (665) 665 Loss on changes in other fair value adjustments (244) (2,464) 2,220 (Loss) gain on change in fair value of warrant liability (13,891) 753 (14,644) Interest expense (300) (358) 58 Interest income 943 1,116 (173) Gain (loss) on disposal of assets 1 (25) 26 Total other expense (13,491) (1,643) (11,848) Net loss $ (32,652) $ (23,520) $ (9,132) Revenue No revenue was recognized for the three months ended June 30, 2026 compared to less than $0.1 million for the three months ended June 30, 2025. Revenue from the prior period was generated from the Novartis Agreement. Research and Development Expenses Due to the pause in development of PBGENE-3243 to prioritize our two lead programs, PBGENE-HBV and PBGENE-DMD, expenses for PBGENE-3243 have been recast for the periods presented below. The amounts previously reporting under “PBGENE-3243 external development costs” are now reported within the “Platform development and early-stage research expense” line item. Three months ended June 30, (in thousands) 2026 2025 Change Direct research and development expenses by product candidate: PBGENE-HBV external development costs $ 2,031 $ 1,378 $ 653 PBGENE-DMD external development costs 4,259 4,163 96 Platform development and early-stage research expenses: Employee-related costs (including share-based compensation) 4,733 4,766 (33) Laboratory supplies and services 309 570 (261) CMOs and outsourced research and development 204 239 (35) Facility-related costs, laboratory equipment, and maintenance 600 807 (207) Depreciation and amortization 229 330 (101) Licensing fees and other research and development costs 29 515 (486) Total research and development expenses $ 12,394 $ 12,768 $ (374) 26 Table of Contents Research and development expenses for the three months ended June 30, 2026 were $12.4 million, compared to $12.8 million for the three months ended June 30, 2025. The decrease of $0.4 million was primarily due to a $1.1 million decrease in platform development and early-stage research expenses, partially offset by a $0.7 million increase in our direct expenses in PBGENE-HBV and PBGENE-DMD as the clinical programs continue to advance globally. The decrease in platform development and early-stage research expenses of $1.1 million was primarily the result of a decrease in licensing fees and other research and development costs as well as reduced lab supply expenses and facility-related costs as a result of reduced headcount. Direct expenses in PBGENE-HBV increased by $0.7 million, driven by translational assay development expenses and an increase in clinical material manufacturing. General and Administrative Expenses General and administrative expenses were $6.8 million for the three months ended June 30, 2026, compared to $9.1 million for the three months ended June 30, 2025. The decrease of approximately $2.3 million was primarily a result of operational discipline and lower employee-related costs. Gain from Equity Method Investment For the three months ended June 30, 2025, the $0.7 million non-cash gain from equity investment was the result of a $2.3 million gain recorded from our proportionate share of Elo’s proceeds from a Series A-2 financing in such period, partially offset by our proportionate share of Elo’s loss. In the three months ended June 30, 2026, Elo was not classified as an equity method investment. There were no changes to the investment value for the three months ended June 30, 2026 and any subsequent changes in the investment’s fair value will be recorded through other fair value adjustments. Loss on Changes in Other Fair Value Adjustments The loss on changes in other fair value adjustments of $0.2 million for the three months ended June 30, 2026 is attributable to the non-cash decrease in fair value on the ordinary shares held for Imugene Limited. The loss on changes in other fair value adjustments of $2.5 million for the three months ended June 30, 2025 was primarily attributable to the non-cash decrease in fair value of the iECURE investment. Loss on Change in Fair Value of Warrant Liability The non-cash loss from change in fair value of the warrant liability was $13.9 million for the three months ended June 30, 2026 compared to a non-cash gain of $0.8 million for the three months ended June 30, 2025 which represents the mark-to-market fair value adjustment to the outstanding warrants issued in connection with the March 2024 Public Offering and November 2025 Public Offering. Interest Expense Interest expense was $0.3 million for the three months ended June 30, 2026 compared to $0.4 million for the three months ended June 30, 2025 primarily driven by declining interest rates on the 2024 Term Loan over the comparison period. Interest Income Interest income was $0.9 million during the three months ended June 30, 2026 compared to $1.1 million during the three months ended June 30, 2025. The decrease of approximately $0.2 million was primarily driven by the Elo note receivable interest accrued for in the prior year as well as declining interest rates which was partially offset by a higher cash balance for the current period. Gain (Loss) on Disposal of Assets Gain on disposal of assets was less than $0.1 million during the three months ended June 30, 2026 compared to the loss on disposal of assets of less than $0.1 million during the three months ended June 30, 2025. 27 Table of Contents 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, together with the changes in those items: For the Six Months Ended June 30, (in thousands) 2026 2025 Change Revenue $ 10,838 $ 47 $ 10,791 Operating expenses Research and development 25,504 26,356 (852) General and administrative 13,570 17,680 (4,110) Total operating expenses 39,074 44,036 (4,962) Operating loss (28,236) (43,989) 15,753 Other (expense) income: Gain from equity method investment — 677 (677) Loss on changes in other fair value adjustments (3,195) (2,415) (780) Loss on change in fair value of warrant liability (20,998) (51) (20,947) Interest expense (611) (712) 101 Interest income 1,942 2,439 (497) Gain (loss) on disposal of assets 5 (34) 39 Total other expense (22,857) (96) (22,761) Net loss $ (51,093) $ (44,085) $ (7,008) Revenue Revenue for the six months ended June 30, 2026 was $10.8 million compared to less than $0.1 million for the six months ended June 30, 2025. Revenue from the prior period was generated from the Novartis Agreement. The increase in revenue was the result of revenue recognized under the TG License Agreement and a legacy ARCUS agriculture gene editing agreement during the six months ended June 30, 2026. Research and Development Expenses Six months ended June 30, (in thousands) 2026 2025 Change Direct research and development expenses by product candidate: PBGENE-HBV external development costs 3,866 2,979 $ 887 PBGENE-DMD external development costs 8,257 6,601 1,656 Platform development and early-stage research expenses: Employee-related costs (including share-based compensation) 9,239 10,066 (827) Laboratory supplies and services 682 1,108 (426) CMOs and outsourced research and development 257 2,348 (2,091) Facility-related costs, laboratory equipment, and maintenance 1,346 1,535 (189) Depreciation and amortization 505 670 (165) Licensing fees and other research and development costs 1,352 1,049 303 Total research and development expenses $ 25,504 $ 26,356 $ (852) Research and development expenses for the six months ended June 30, 2026 were $25.5 million, compared to $26.4 million for the six months ended June 30, 2025. The decrease of $0.9 million was primarily due to a $3.4 million decrease in platform development and early-stage research expenses, partially offset by a $2.5 million increase in our direct expenses in PBGENE-HBV and PBGENE-DMD as the clinical programs continue to advance globally. 28 Table of Contents The decrease in platform development and early-stage research expenses of $3.4 million was primarily the result of paused development of the PBGENE-3243 program as well as a reduction in employee-related costs. Direct expenses in PBGENE-DMD increased by $1.7 million as we initiated Institutional Review Board (“IRB”) activities and clinical trial site activation for the FUNCTION-DMD Phase 1/2 clinical trial, and direct expenses in PBGENE-HBV increased by $0.9 million due to translational assay development expenses and an increase in clinical material manufacturing. General and Administrative Expenses General and administrative expenses were $13.6 million for the six months ended June 30, 2026, compared to 17.7 million for the six months ended June 30, 2025. The decrease of approximately $4.1 million was primarily a result of operational discipline and lower employee-related costs. Gain from Equity Method Investment For the six months ended June 30, 2025, the $0.7 million non-cash gain from equity investment was the result of a $2.3 million gain recorded from our proportionate share of Elo’s proceeds from a Series A-2 financing in such period, partially offset by our proportionate share of Elo’s loss over the period. In the six months ended June 30, 2026, Elo was not classified as an equity method investment. There were no changes to the investment value for the six months ended June 30, 2026 and any subsequent changes in the investment’s fair value will be recorded through other fair value adjustments. Loss on Changes in Other Fair Value Adjustments The non-cash loss on changes in other fair value adjustments was $3.2 million for the six months ended June 30, 2026, which is attributable to the decrease in fair value on the ordinary shares held for Imugene Limited. The non-cash loss on changes in other fair value adjustments was $2.4 million for the six months ended June 30, 2025, which was primarily attributable to the decrease in fair value of the iECURE investment in the prior period. Loss on Change in Fair Value of Warrant Liability The non-cash loss from change in fair value of the warrant liability was $21.0 million for the six months ended June 30, 2026 compared to a non-cash loss of $0.1 million for the six months ended June 30, 2025, which represents the mark-to-market fair value adjustment to the outstanding warrants issued in connection with the March 2024 Public Offering and November 2025 Public Offering. Interest Expense Interest expense was $0.6 million for the six months ended June 30, 2026 compared to $0.7 million for the six months ended June 30, 2025 primarily driven by declining interest rates on the 2024 Term Loan over the comparison period. Interest Income Interest income was $1.9 million during the six months ended June 30, 2026 compared to $2.4 million during the six months ended June 30, 2025. The decrease of approximately $0.5 million was primarily driven by the Elo note receivable interest accrued for in the prior year as well as declining interest rates which was partially offset by a higher cash balance for the current period. Gain (Loss) on Disposal of Assets Gain on disposal of assets was less than $0.1 million during the six months ended June 30, 2026 compared to the loss on disposal of assets of less than $0.1 million during the six months ended June 30, 2025. Liquidity and Capital Resources Since our formation in 2006, we have devoted substantially all of our resources to developing ARCUS, conducting research and development activities, recruiting skilled personnel, developing manufacturing processes, establishing our intellectual property portfolio and providing general and administrative support for these operations. 29 Table of Contents We have incurred significant operating losses since our inception and have not generated any revenue from the sale of products. Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our product candidates or the product candidates of our collaborators or other licensees for which we may receive milestone payments or royalties. As of June 30, 2026, we had an accumulated deficit of $579.3 million. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the development of our product candidates. We expect that our research and development and general and administrative costs will increase over the long term, including in connection with conducting preclinical studies and potential clinical trials for our product candidates, contracting with CROs and CMOs, expanding our intellectual property portfolio and providing general and administrative support for our operations. If we obtain regulatory approval for any of our product candidates, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing and distribution. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. As of June 30, 2026, we had $112.4 million of cash, cash equivalents, and restricted cash under the 2024 Term Loan and compensatory arrangements with certain of our officers, respectively. Refer to Note 4, Commitments and Contingencies, in the accompanying notes to the financial statements for more information on these compensatory arrangements. Pursuant to our July 31, 2024 amended and restated loan and security agreement with Banc of California (the “2024 Loan and Security Agreement”), we are not entitled to borrow any additional amounts under the 2024 Term Loan and are required to maintain an aggregate balance in a cash security account with Banc of California (the “Cash Security Account”) at least equal to the outstanding principal amount of the 2024 Term Loan then outstanding. As described in Part II. Item 1A. “Risk Factors,” we believe that, as of the date of this Quarterly Report on Form 10-Q, existing cash and cash equivalents, continued fiscal and operating discipline, and availability of our at-the-market (“ATM”) facility will be sufficient to fund our operating expenses and capital expenditure requirements through 2028. There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly in light of current global macroeconomic conditions. If we are unable to obtain sufficient financing on a timely basis or on favorable terms, we may be required to significantly delay, alter reduce or eliminate one or more of our research or product development programs and/or commercialization efforts, or to grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves. We may also be otherwise unable to execute our business plan or growth strategy, or capitalize on business opportunities as desired. Any of these events could materially adversely affect our financial condition and business prospects. Because of the numerous risks and uncertainties associated with the development of therapeutic products, we are unable to predict the timing or amount of our future expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenue from product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be required to raise additional capital, potentially on terms that are unfavorable to us, or we may be unable to continue our operations at planned levels and be forced to reduce or terminate operations. Cash Flows Our cash, cash equivalents, and restricted cash totaled $112.4 million and $84.8 million as of June 30, 2026 and June 30, 2025, respectively. The following table summarizes our sources and uses of cash for the periods presented: 30 Table of Contents For the Six Months Ended June 30, (in thousands) 2026 2025 Change Cash flows used in operating activities: Net loss $ (51,093) $ (44,085) $ (7,008) Non-cash adjustments 28,939 8,678 20,261 Changes in operating assets and liabilities (3,225) (3,916) 691 Net cash used in operating activities (25,379) (39,323) 13,944 Net cash used in investing activities (113) (326) 213 Net cash provided by financing activities 745 15,987 (15,242) Decrease in cash, cash equivalents, and restricted cash $ (24,747) $ (23,662) $ (1,085) Cash Used in Operating Activities Our primary use of cash is to fund operating expenses, which consist primarily of research and development and general and administrative costs. Cash used in operating activities during the six months ended June 30, 2026 was $25.4 million compared to $39.3 million during the six months ended June 30, 2025. The $13.9 million decrease in cash used in operating activities was driven by lower operating expenditures compared to the prior period as well as an increase of $20.3 million in non-cash adjustments, partially offset by a $7.0 million increase in net loss and $0.7 million in changes in operating assets and liabilities. The increase in non-cash adjustments was primarily driven by the net change in fair value of warrants during the six months ended June 30, 2026 compared to during the six months ended June 30, 2025. Also contributing to the increase in non-cash adjustments was the change in fair value of the Imugene ordinary shares during the six months ended June 30, 2026 and the gain on equity method investment of the Elo note in six months ended June 30, 2025. Cash Used in Investing Activities Cash used in investing activities primarily relates to cash expenditures to acquire leasehold additions, equipment, software and intangible assets. Net cash used in investing activities during the six months ended June 30, 2026 was $0.1 million, compared to $0.3 million used in investing activities in the six months ended June 30, 2025. The decrease in cash used in investing activities was primarily the result of a $0.2 million decrease in intangible asset purchases during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Cash Provided by Financing Activities Net cash provided by financing activities during the six months ended June 30, 2026 was $0.7 million, compared to $16.0 million during the six months ended June 30, 2025. The $15.3 million decrease in cash provided by financing activities during the six months ended June 30, 2026 was primarily due to $14.8 million in net proceeds from the issuance of common stock through the Company's ATM facility during the six months ended June 30, 2025, whereas there were no proceeds from the issuance of common stock through the Company's ATM facility during the six months ended June 30, 2026. Debt Obligations The stated interest rate under the 2024 Term Loan is equal to the greater of 1.50% below the Prime Rate or 4.5%. As of June 30, 2026, the outstanding principal balance on the 2024 Term Loan was $22.5 million, the stated interest rate was 5.25% and the effective interest rate was 5.43%. Under the terms of the 2024 Loan and Security Agreement, we granted Banc of California a security interest in a cash security account at Banc of California (the “Cash Security Account”). We are required to maintain an aggregate unencumbered balance in the Cash Security Account at least equal to the outstanding principal amount of the 2024 Term Loan then outstanding. 31 Table of Contents Funding Requirements We will continue to have funding requirements in connection with the continuation of our research and development efforts, potential investigational new drug (“IND”) and/or clinical trial application (“CTA”) submissions, potential clinical trials, and expected growth in our in vivo portfolios. We believe that, as of the date of this Quarterly Report on Form 10-Q, existing cash and cash equivalents, continued fiscal and operating discipline, and availability of our ATM facility will be sufficient to fund our operating expenses, including our PBGENE-HBV and PBGENE-DMD data milestones, and capital expenditure requirements through 2028. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, it is difficult to estimate with certainty the amount of our working capital requirements. Our future funding requirements will depend on many factors, including: •the ability to collaborate and partner with third parties to fund any or all of our programs; •the progress, costs and results of our additional research and preclinical development programs including our in vivo pipeline and our planned IND or CTA submissions and potential BLA submissions; •the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; •our ability to establish and maintain strategic collaborations, licensing or other agreements and the financial terms of such agreements; •the scope, progress, results and costs of any product candidates that we may derive from ARCUS or any other product candidates we may develop alone or with collaborators; •the extent to which we in-license or acquire rights to other products, product candidates or technologies; •the costs and timing of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against any intellectual property-related claims; and •the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any product candidates for which we or our collaborators obtain marketing approval. Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through a combination of public or private equity or debt financings, collaboration agreements, other third‑party funding, strategic alliances, licensing arrangements and marketing and/or distribution arrangements. See “Risk Factors–– We will need substantial additional funding, and if we are unable to raise a sufficient amount of capital when needed on acceptable terms, or at all, we may be forced to delay, reduce or eliminate some or all of our research programs, product development activities and commercialization efforts.” in Part II. Item 1A. of this Quarterly Report on Form 10-Q for a further discussion of our ability to generate and obtain adequate amounts of funding in connection with our continuing operations. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our shareholders. Debt financing and preferred 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 other third-party funding, collaboration agreements, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, product development and research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to significantly delay, alter reduce or eliminate one or more of our research or product development programs and/or commercialization efforts, or to grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves. We may also be otherwise unable to execute our business plan, growth strategy, or capitalize on business opportunities as desired. Common Stock Offering In November 2025, we entered into an underwriting agreement relating to the offering, issuance and sale of an aggregate of 10,815,000 shares of our common stock and accompanying one-half warrants to purchase up to an aggregate of 5,407,500 32 Table of Contents shares of our common stock at a combined offering price of $6.14 per share. Additionally, in lieu of common stock to certain investors, pre-funded warrants to purchase up to 1,400,000 shares of common stock and accompanying one-half warrants to purchase up to 700,000 shares of common stock at a combined offering price of $6.139995. Each whole warrant has a five year term and an exercise price of $7.25 per share. The offering was made pursuant to a registration statement on Form S-3. Gross proceeds from the transaction were $75.0 million before deducting underwriting discounts and commissions and offering expenses of approximately $5.0 million. We intend to use the net proceeds of the offering to fund ongoing and planned research and development, and for working capital and other general corporate purposes. Contractual Obligations and Commitments In addition to the contractual obligations and commitments as described elsewhere in this Quarterly Report on Form 10-Q with respect to leases, the 2024 Term Loan, and intellectual property licenses, we also enter into contracts in the normal course of business with CMOs, universities, and other third parties for preclinical research studies, testing, manufacturing services, and other services and products for operating purposes. There have been no material changes to our contractual obligations from those described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We do not have any material capital expenditure commitments as of June 30, 2026. Critical Accounting Policies and Use of Estimates Our critical accounting policies and estimates are described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our Annual Report on Form 10-K. We have reviewed those critical accounting policies and estimates for the six months ended June 30, 2026. There have been no significant changes in our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Smaller Reporting Company Status We are a “smaller reporting company” as defined under applicable regulations promulgated by the SEC. We will continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. As a smaller reporting company, we are able to take advantage of certain exemptions from disclosure requirements, including presenting only the two most recent fiscal years of audited financial statements and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict whether investors will find our common stock less attractive if we rely on the exemptions available to smaller reporting companies. If investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be reduced or more volatile. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.