The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and 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 filed with the Securities and Exchange Commission, or the SEC, on March 27, 2026. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us” and “our” refer to Instil Bio, Inc. and our consolidated subsidiaries. Forward-Looking Statements The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, expectations regarding collaborations and clinical trials, future financial position, future revenues, projected costs, prospects, and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q and in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements. Overview We are a biotechnology company focused on identifying and advancing innovative therapeutic opportunities. In January 2026, we announced that our wholly owned subsidiary, Axion Bio, Inc., or Axion Bio, was discontinuing development of AXN-2510, our former lead product candidate. We are actively seeking to in-license or acquire and develop additional novel therapeutic candidates in diseases with significant unmet medical need. Since inception, we have had significant operating losses. Our net loss was $4.3 million for the three months ended June 30, 2026 and $8.5 million for the six months ended June 30, 2026. As of June 30, 2026, we had an accumulated deficit of $735.0 million. As of June 30, 2026, we had cash, cash equivalents, restricted cash, and marketable securities of $69.9 million, which consists of $5.5 million in cash and cash equivalents, $0.3 million in restricted cash, and $64.1 million in marketable securities. We expect to continue to incur net losses for the foreseeable future. Components of Operating Results Operating Expenses In-Process Research and Development In-process research and development, or IPR&D, expenses include IPR&D acquired as part of in-license payments made to ImmuneOnco for which there is no alternative future use, and are expensed as incurred. Research and Development Research and development expenses consist primarily of research and development, manufacturing, monitoring and other services payments and, to a lesser extent, salaries, benefits and other personnel-related costs, 22 including stock-based compensation, professional service fees, and facility and other related costs. In addition, research and development expense is presented net of reimbursements from reimbursable tax and expenditure credits and grants from the UK government. We expect our future research and development expenses to change in line with our potential business development activities and any nonclinical and clinical development activities. Our expenditures on any future nonclinical and clinical development programs are subject to numerous uncertainties in timing and cost to completion. The duration, costs and timing of clinical trials and development of product candidates will depend on a variety of factors, including: •the scope, rate of progress and expenses of clinical trials and other research and development activities; •potential safety monitoring and other studies requested by regulatory agencies; •significant and changing government regulation; and •the timing and receipt of regulatory approvals, if any. The process of conducting the necessary clinical research to obtain regulatory approval from the U.S. Food and Drug Administration, or FDA, Medicines and Healthcare Products Regulatory Agency, or MHRA, European Medicines Agency, or EMA, and comparable foreign authorities is costly and time consuming and the successful development of product candidates is highly uncertain. The risks and uncertainties associated with our research and development projects are discussed more fully in the section of this Quarterly Report titled “Risk Factors.” As a result of these risks and uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects, or if, when or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any product candidates. General and Administrative General and administrative expenses consist primarily of compensation and personnel-related expenses, including stock-based compensation, for our personnel in executive, finance and other administrative functions. General and administrative expenses also include professional fees paid for accounting, auditing, legal, tax and consulting services, insurance costs, recruiting costs, travel expenses, facility and other related costs, depreciation, and other general and administrative costs. We expect to continue to incur expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, director and officer insurance expenses, and any investor relations related expenses, as well as other administrative and professional services. Restructuring and Impairment Charges, Net Restructuring and impairment charges, net for the three months ended June 30, 2026 consisted primarily of an impairment loss recognized upon reclassifying the Tarzana facility to held and used, partially offset by a reversal of previously recognized cost to sell. Restructuring and impairment charges, net for the three months ended June 30, 2025 consisted primarily of contract terminations costs. Restructuring and impairment charges, net for the six months ended June 30, 2026 consisted primarily of a net remeasurement loss recognized upon reclassifying the Tarzana facility to held and used and employee termination costs, partially offset by a reversal of previously recognized cost to sell. Restructuring and impairment charges, net for the six months ended June 30, 2025 consisted primarily of impairment charges and related estimated cost to sell recognized in connection with classifying our Tarzana facility as held for sale, as well as contract terminations costs. In January 2023, the Board of Directors approved a restructuring plan, and we announced the consolidation of the ITIL-306 Phase 1 clinical trial, which included contract terminations. In January 2024, we decided to initiate closure of our UK manufacturing and clinical operations related to our past development of our CoStAR-TIL technology, and in September 2024 we decided to close most of our 23 remaining Manchester, UK operations related to our past development of our CoStAR-TIL technology, which resulted in the elimination of the majority of the remaining UK workforce, with the remaining reduction substantially completed by the end of 2024. Collectively, the restructuring events from 2023 and 2024 are referred to as the “Plan.” In March 2025, the Board of Directors approved a plan to sell our Tarzana facility, and we listed our Tarzana facility for sale. At such time, we reclassified the facility as a long-lived asset held for sale and incurred impairment charges related thereto, which we refer to as the 2025 Tarzana Charges. In May 2026, the Board of Directors approved discontinuing our plan to actively market the Tarzana facility for sale, and the Tarzana facility was reclassified from held for sale to held and used. In connection with the reclassification, we recognized an impairment charge to reduce the carrying value of the Tarzana facility to the lower of its adjusted carrying amount and fair value, which we refer to as the 2026 Tarzana Charges. In January 2026, Axion Bio discontinued development of AXN-2510 and terminated certain employees associated with this program, or the 2026 Employee Terminations. As a result of the 2026 Employee Terminations and the 2026 Tarzana Charges we incurred restructuring and impairment charges, net of $0.2 million and $1.2 million during the three and six months ended June 30, 2026, respectively. Interest Income Interest income consists of interest income from funds held in our cash and cash equivalent accounts, restricted cash and marketable securities. Interest Expense Interest expense consists of interest expense on our debt and amortization of loan origination costs. Other Rental Income Other rental income consists of rental income related to the Tarzana facility. Gain on Contract Termination Gain on contract termination consists of a payment received pursuant to the termination agreement between ImmuneOnco Biopharmaceuticals (Shanghai) Inc., or ImmuneOnco, and Axion Bio related to discontinuing development of AXN-2510. Other (Expense) Income, Net Other (expense) income, net consists primarily of foreign exchange remeasurement gain or loss and other expenses and income. 24 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, Change 2026 2025 $ Operating expenses: In-process research and development $ — $ 10,000 $ (10,000) Research and development 270 6,743 (6,473) General and administrative 5,130 6,157 (1,027) Restructuring and impairment charges, net 181 540 (359) Total operating expenses 5,581 23,440 (17,859) Loss from operations (5,581) (23,440) 17,859 Interest income 632 1,044 (412) Interest expense (1,582) (1,582) — Other rental income 2,242 2,242 — Other (expense) income, net (10) 342 (352) Net loss $ (4,299) $ (21,394) $ 17,095 In-process Research and Development Expenses In-process research and development expenses were nil and $10.0 million for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $10.0 million was due to the fact that there was no in-license payments for the three months ended June 30, 2026 and a $10.0 million in-license payment to ImmuneOnco pursuant to the license and collaboration agreement between Axion Bio and ImmuneOnco, or the IO Collaboration Agreement, for three months ended June 30, 2025. Research and Development Expenses Research and development expenses were $0.3 million and $6.7 million for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $6.4 million was due to: •$5.0 million decrease in costs related to research and clinical development activities primarily due to discontinuing development of AXN-2510; •$0.8 million decrease in consulting and professional services fees; and •$0.6 million decrease in employee-related costs from reduced headcount, consisting primarily of a $0.5 million decrease in wages and benefits, $0.1 million decrease in stock-based compensation expense. 25 The following table shows our research and development expenses by program for the three months ended June 30, 2026 and 2025 (in thousands): Three months ended June 30, 2026 2025 In-process research and development: AXN-2510 $ — $ 10,000 Research and development: AXN-2510 269 6,597 Other program expenses (1) 1 146 Total research and development expenses 270 6,743 Total research and development by program $ 270 $ 16,743 _____________________________________________________________ (1) Other program expenses consist of costs related to our past development of our CoStAR-TIL technology. General and Administrative Expenses General and administrative expenses were $5.1 million and $6.2 million for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $1.1 million was primarily due to: •$0.7 million decrease in costs primarily from stock-based compensation expense; and •$0.4 million decrease in facility and other office expenses. Restructuring and Impairment Charges, Net Restructuring and impairment charges, net were $0.2 million and $0.5 million for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $0.3 million was due to: •$0.5 million decrease in costs resulting from a termination of a contract; partially offset by •$0.2 million increase in impairment costs attributable to a $8.1 million impairment loss recognized on the Tarzana facility due to reclassifying the Tarzana facility to held and used, partially offset by a $7.9 million reversal of previously recognized estimated cost to sell. Interest Income, Interest Expense, Other Rental Income and Other Income (Expense), Net Interest income, interest expense, other rental income and other income (expense), net was $1.3 million and $2.0 million of income for the three months ended June 30, 2026 and 2025, respectively. The net decrease of $0.7 million was primarily due to: •$0.4 million decrease in interest income related to our investments; and •$0.3 million decrease in gain on foreign currency transactions. 26 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, Change 2026 2025 $ Operating expenses: In-process research and development $ — $ 10,000 $ (10,000) Research and development 939 12,114 (11,175) General and administrative 10,479 15,266 (4,787) Restructuring and impairment charges, net 1,173 16,622 (15,449) Total operating expenses 12,591 54,002 (41,411) Loss from operations (12,591) (54,002) 41,411 Interest income 1,310 2,219 (909) Interest expense (3,134) (2,680) (454) Other rental income 4,484 4,484 — Gain on contract termination 1,620 — 1,620 Other (expense) income, net (192) 385 (577) Net loss $ (8,503) $ (49,594) $ 41,091 In-process Research and Development Expenses In-process research and development expenses were nil and $10.0 million for the six months ended June 30, 2026 and 2025, respectively. The net decrease of $10.0 million was due to the fact that there was no in-license payment in the six months ended June 30, 2026 and a $10.0 million in-license payment to ImmuneOnco pursuant to the IO Collaboration Agreement in the six months ended June 30, 2025. Research and Development Expenses Research and development expenses were $0.9 million and $12.1 million for the six months ended June 30, 2026 and 2025, respectively. The net decrease in research and development expenses of $11.2 million was primarily due to: •$8.7 million decrease in costs related to research and clinical development activities primarily due to discontinuing development of AXN-2510; •$1.8 million decrease in costs from reduced headcount, consisting primarily of a $1.0 million decrease in wages and benefits, a $0.7 million decrease in stock-based compensation expense, and a $0.1 million decrease for other employee-related expenses in relation to our research and development personnel; and •$0.7 million decrease in consulting and professional service costs. 27 The following table shows our research and development expenses by program for the six months ended June 30, 2026 and 2025 (in thousands): Six Months Ended June 30, 2026 2025 In-process research and development: AXN-2510 $ — $ 10,000 Research and development: AXN-2510 928 11,312 Other program expenses (1) 11 802 Total research and development expenses 939 12,114 Total research and development by program $ 939 $ 22,114 ______________________________________________________________ (1) Other program expenses consist of costs related to our past development of our CoStAR-TIL technology. General and Administrative Expenses General and administrative expenses were $10.5 million and $15.3 million for the six months ended June 30, 2026 and 2025, respectively. The net decrease of $4.8 million was primarily due to: •$3.0 million decrease in costs from reduced headcount, mainly consisting of a decrease in stock-based compensation expense of $2.6 million, a decrease in wages of $0.3 million, and a decrease in other employee-related expenses of $0.1 million; •$1.0 million decrease in depreciation and facility costs; and •$0.8 million decrease in consulting and professional services costs. Restructuring and Impairment Charges, Net Restructuring and impairment charges, net were $1.2 million and $16.6 million for the six months ended June 30, 2026 and 2025, respectively. The net change of $15.4 million was primarily due to: •$16.4 million decrease related to a $0.2 million impairment recognized in 2026 upon reclassifying the Tarzana facility from held for sale to held and used, consisting of a $8.1 million impairment loss partially offset by a $7.9 million reversal of estimated cost to sell, compared to a $16.6 million impairment charge and related estimated cost to sell recognized on the Tarzana facility in 2025, consisting of a $8.7 million impairment loss and $7.9 million related to the estimated cost to sell; partially offset by •$1.0 million increase in severance payments and benefits continuation costs. Interest Income, Interest Expense, Other Rental Income, Gain on Contract Termination, and Other Income (Expense), Net Interest income, interest expense, other rental income, gain on contract termination and other income (expense), net were $4.1 million and $4.4 million of income for the six months ended June 30, 2026 and 2025, respectively. The net decrease of $0.3 million was primarily due to: •$0.9 million decrease in interest income related to our investments; •$0.6 million increase in foreign currency transaction losses; and •$0.4 million increase of interest expense from our note payable; partially offset by •$1.6 million increase in gain on contract termination. 28 Liquidity and Capital Resources Sources of Liquidity Since our inception, we have not generated any revenue from product sales and we have incurred significant operating losses. We do not have any products that have achieved regulatory marketing approval and we do not expect to generate revenue from commercial sales of any product candidate for at least several years, if ever. Prior to our initial public offering, or IPO, we funded our operations primarily through the issuance and sale of convertible preferred stock. From our inception through March 2021, prior to our IPO, we raised net cash proceeds of $380.1 million from the issuance and sale of our convertible preferred stock. In the first quarter of 2021, we raised net proceeds of $339.0 million in our IPO, pursuant to which we sold an aggregate of 920,000 shares of common stock. In June 2022, our wholly owned subsidiaries, Complex Therapeutics Mezzanine LLC and Complex Therapeutics LLC, entered into a mortgage construction loan and mezzanine construction loan, or together, the Construction Loans, secured by Complex Therapeutics LLC’s Tarzana, California land and building. Construction of the Tarzana facility was subsequently completed and in 2024 the facility was leased to AstraZeneca Pharmaceuticals LP, or Tenant. The initial base rent under the lease to Tenant was approximately $0.4 million per month (approximately $7.5 million annually) and the base rent escalates by 3% per annum. On December 20, 2024, or the Closing Date, Complex Therapeutics LLC entered into a Term Loan Agreement and related loan documents with Midland National Life Insurance Company, or Midland, pursuant to which Midland loaned Complex Therapeutics LLC a term loan in the principal amount of $85.6 million, or the 2024 Loan, to refinance the Construction Loans secured by the Tarzana facility. Substantially all of the 2024 Loan proceeds were used to repay in full the Construction Loans. On November 13, 2024, we filed a shelf registration statement on Form S-3 with the SEC, which the SEC declared effective on November 21, 2024. Pursuant to our shelf registration statement we may, from time to time, sell up to an aggregate of $200 million of our common stock, preferred stock, debt securities or warrants. In March 2025, we entered into an Open Market Sale AgreementSM, with Jefferies LLC, or Jefferies, as sales agent, under which we may offer and sell, from time to time, shares of our common stock, through Jefferies, with an aggregate offering price of up to $100 million by methods deemed to be an “at the market offering,” or the ATM Program. As of June 30, 2026, we have sold an aggregate of 185,837 shares of our common stock under the ATM Program for net proceeds of $6.6 million after deducting commissions and expenses of approximately $0.3 million. The remaining availability under the ATM Program as of June 30, 2026 was approximately $93.1 million. As of June 30, 2026, we had cash, cash equivalents, restricted cash, and marketable securities of $69.9 million, which consisted of $5.5 million in cash and cash equivalents, $0.3 million in restricted cash, and $64.1 million in marketable securities. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Future Funding Requirements In December 2024, Complex Therapeutics LLC entered into the 2024 Loan to refinance the Construction Loans secured by the Tarzana facility. As of June 30, 2026, the outstanding principal amount under the 2024 Loan was $85.6 million and unamortized debt issuance costs were $0.4 million. The 2024 Loan bears interest at a fixed rate of 6.35% per annum, with interest-only payments during the term of the 2024 Loan and the principal balance due in full at maturity. The 2024 Loan may be prepaid in whole but not in part. There is no prepayment fee due if the 2024 Loan is prepaid after the 12-month anniversary of the Closing Date. The 2024 Loan has a term of two years with a one-year extension option. The extension option is subject to certain conditions being met, including: (a) no potential default or event of default, (b) payment of a 0.35% extension fee and the costs and expenses of Midland 29 incurred in connection with the extension, (c) replenishing of all reserve funds as reasonably determined by Midland, and (d) compliance with minimum debt yield and debt service coverage ratio requirements. We expect Complex Therapeutics LLC to meet all requirements necessary to exercise the extension to extend the maturity by one year to January 2028, and we expect that written notice to extend the loan will be provided as early as the 2024 Loan permits, which is no sooner than one hundred twenty days from its maturity date and no later than thirty days before its maturity date. Based on our current operating plan, we believe our existing cash, cash equivalents, restricted cash and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements beyond 2027. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We evaluated our ability to continue as a going concern for the twelve months following the issuance of the condensed consolidated financial statements. As discussed above and in Note 10 to the accompanying condensed consolidated financial statements, the 2024 Loan is due in January 2027, for total principal of $85.6 million, which is in excess of cash, cash equivalents, and marketable securities on hand as of June 30, 2026, which we concluded is an indicator of substantial doubt about our ability to continue as a going concern. We plan to exercise our contractual right to extend the maturity of the 2024 Loan to January 2028. In addition, we may seek to refinance or restructure the 2024 Loan, sell the Tarzana facility to repay the 2024 Loan, or seek additional financing in the form of equity or debt instruments. There can be no assurance that new financing or other forms of funding will be available on favorable terms or at all. We concluded that management’s plans, including Complex Therapeutics LLC’s contractual right to exercise the extension option to January 2028, which is within Complex Therapeutics LLC’s control, alleviate the conditions that raise substantial doubt about our ability to continue as a going concern. We use our cash to fund operations, primarily to fund our business development, research and development expenditures and related personnel costs. We expect our expenses to continue to be significant as we invest in research and development activities, particularly if we in-license or acquire product candidates, advance one or more product candidates into later stages of development and conduct clinical trials, seek regulatory approvals for and commercialize any product candidates that successfully complete clinical trials, hire personnel and invest in and grow our business, expand and protect our intellectual property portfolio, and operate as a public company. Because of the numerous risks and uncertainties associated with acquiring product candidates, and the research, development and commercialization of product candidates, we are unable to estimate the exact timing and amount of our funding requirements. Our future operating expenditures will depend on many factors, including: •the extent to which we acquire or in-license other companies’ product candidates and technologies; •the scope, rate of progress, costs and results of future clinical and preclinical development activities; •the costs, timing and outcome of regulatory review of any product candidates, and the number of trials required for regulatory approval; •the cost of manufacturing any product candidates, as well as any products we successfully commercialize; •the cost of commercialization activities of any product candidates, if approved for sale, including marketing, sales and distribution costs; •the timing, receipt and amount of sales of any product candidates, if approved; •our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such arrangements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; •any product liability or other lawsuits or claims; •the expenses needed to attract, hire and retain skilled personnel; 30 •our investments in our operational, financial and management information systems; •the costs associated with operating as a public company; •the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing any intellectual property portfolio we may acquire; •costs related to the Tarzana facility; and •any delays or issues resulting from the impact of adverse geopolitical and economic conditions. Until we can generate substantial revenue from sales of a product candidate, if that occurs, we plan to fund our operations through equity offerings, debt financings, leasing income, or other capital sources. This may include strategic collaborations or other arrangements with third parties. Additional funds may not be available to us on acceptable terms or at all. If we raise additional funds by issuing equity or convertible debt securities, our stockholders will suffer dilution, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders of our equity securities receive any distribution of our corporate assets. If we raise funds through collaborations or other similar arrangements with third parties, we may have to relinquish valuable rights to technologies, future revenue streams, product candidates or research programs or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Our ability to raise additional funds may be adversely impacted by worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from, among other things, heightened inflation, fluctuations in interest rates, military conflicts, including in Ukraine and the Middle East, tariffs and recent and potential trade wars. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations. See “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. Cash Flows The following table sets forth the significant sources and uses of cash for the periods set forth below (in thousands): Six Months Ended June 30, 2026 2025 Net cash provided by (used in): Cash used in operating activities $ (5,979) $ (18,986) Cash provided by investing activities 4,974 9,211 Cash provided by financing activities — 6,914 Net decrease in cash, cash equivalents, and restricted cash $ (1,005) $ (2,861) Cash Flows from Operating Activities Cash used in operating activities for the six months ended June 30, 2026 was $6.0 million, which consisted of the net loss of $8.5 million, $0.8 million net change to our net operating assets and liabilities, and $3.3 million in non-cash charges and other adjustments to reconcile net loss to net cash used in operating activities. The non-cash charges primarily consisted of impairment of property, plant and equipment and estimated cost to sell, net of $0.2 million, stock-based compensation expense of $2.0 million, non-cash interest expense of $0.4 million, accretion on invested securities of $0.3 million, depreciation expense of $0.3 million, non-cash lease expense of $0.1 million, and foreign exchange remeasurement of $0.1 million. The net change in our operating assets and liabilities was primarily due to a decrease of approximately $1.6 million in accrued expenses and other current liabilities, an increase of $0.6 million in accrued rent receivable, and an increase of $0.2 million in operating lease liabilities, partially offset by a 31 decrease of $1.4 million in prepaid expenses and other current assets and a decrease of $0.2 million in other long-term assets. Cash used in operating activities for the six months ended June 30, 2025 was $19.0 million, which consisted of the net loss of $49.6 million and a $1.4 million net change to our net operating assets and liabilities, partially offset by $32.0 million in non-cash charges and other adjustments to reconcile net loss to net cash used in operating activities. The non-cash charges primarily consisted of impairment of property, plant and equipment and estimated cost to sell, net of $16.6 million, in-process research and development expenses of $10.0 million, stock-based compensation expense of $5.3 million, depreciation expense of $0.5 million, and non-cash interest expense of $0.4 million, partially offset by a change in foreign exchange remeasurement of $0.6 million and accretion on invested securities of $0.2 million. The net change in our operating assets and liabilities was primarily due to an decrease of $3.2 million in accrued expenses and other current liabilities, an increase of $2.7 million in accrued rent receivable, an decrease of $1.5 million in operating lease liabilities, and a decrease of $0.1 million in accounts payable, partially offset by a decrease of $5.8 million in prepaid expenses and other current assets and a decrease of $0.3 million in other long-term assets. Cash Flows from Investing Activities Cash provided by investing activities for the six months ended June 30, 2026 was $5.0 million, consisting of $5.0 million of cash provided by marketable securities investments. Cash provided by investing activities for the six months ended June 30, 2025 was $9.2 million, consisting primarily of $8.8 million of cash provided by marketable securities investments and $0.4 million of cash received from the sale of held for sale assets in the UK. Cash Flows from Financing Activities Cash provided by financing activities for the six months ended June 30, 2026 was nil. Cash provided by financing activities for the six months ended June 30, 2025 was $6.9 million, and primarily consisted of net proceeds from our ATM Program of $6.6 million and net proceeds from the exercise of stock options of $0.5 million, partially offset by loan agreement closing costs of $0.2 million. Critical Accounting Policies and Estimates This management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. For a description of critical accounting policies that require significant judgments and estimates during the preparation of our financial statements, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and Note 2 to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2025 and Note 2 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Recent Accounting Pronouncements Information regarding recent accounting pronouncements applicable to us is included in Note 2 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. 32 Emerging Growth Company Status and Smaller Reporting Company Status We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. In addition, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to avail ourselves of this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. We will remain an emerging growth company until the earliest of (i) December 31, 2026, (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 in Rule 12b-2 under the Exchange Act. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250.0 million or (ii) our annual revenue was less than $100.0 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700.0 million. 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.