til-20260630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 001-40215

Instil Bio, Inc.

(Exact name of registrant as specified in its charter)

Delaware

83-2072195

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

3963 Maple Avenue, Suite 350

Dallas, Texas

75219

(Zip Code)

(Address of Principal Executive Offices)

(972) 499-3350

Registrant’s telephone number, including area code

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.000001 par value per share	TIL	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class of Common Stock			Outstanding at
6,781,976 shares of Common Stock, $0.000001 par value per share			August 11, 2026

TABLE OF CONTENTS


			Page
Part I. Financial Information			2
Item 1. Financial Statements (Unaudited)			2
Condensed Consolidated Balance Sheets			2
Condensed Consolidated Statements of Operations and Comprehensive Loss			3
Condensed Consolidated Statements of Stockholders’ Equity			4
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			33
Item 4. Controls and Procedures			33
Part II. Other Information			35
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35
Item 3. Defaults Upon Senior Securities			35
Item 4. Mine Safety Disclosures			35
Item 5. Other Information			35
Item 6. Exhibits			36
Signatures			37

Part I. Financial Information

Item 1. Financial Statements (Unaudited)

INSTIL BIO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(Unaudited)


	June 30, 2026		December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	5,541	$	6,638
Restricted cash	254		166
Marketable securities	64,137		69,491
Prepaid expenses and other current assets	1,673		3,038
Assets held for sale	—		112,096
Total current assets	71,605		191,429
Property, plant and equipment, net	111,778		126
Operating lease right-of-use assets	2,149		238
Accrued rent receivable	8,271		7,664
Other long-term assets	3,909		4,066
Total assets	$	197,712	$	203,523
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	795	$	779
Accrued expenses and other current liabilities	2,510		4,064
Total current liabilities	3,305		4,843
Operating lease liabilities, non-current	1,835		—
Loan payable	85,192		84,806
Other long-term liabilities	—		8
Total liabilities	90,332		89,657
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, par value $0.000001 per share; 10,000,000 shares authorized; zero shares issued and outstanding as of June 30, 2026, and December 31, 2025	—		—
Common stock, par value $0.000001 per share; 300,000,000 shares authorized; 6,781,976 shares issued and outstanding as of June 30, 2026, and December 31, 2025	—		—
Additional paid-in capital	842,958		840,937
Accumulated other comprehensive loss	(587)		(583)
Accumulated deficit	(734,991)		(726,488)
Total stockholders’ equity	107,380		113,866
Total liabilities and stockholders’ equity	$	197,712	$	203,523

The accompanying notes are an integral part of these condensed consolidated financial statements.

INSTIL BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Operating expenses:
In-process research and development	$	—	$	10,000	$	—	$	10,000
Research and development	270		6,743		939		12,114
General and administrative	5,130		6,157		10,479		15,266
Restructuring and impairment charges, net	181		540		1,173		16,622
Total operating expenses	5,581		23,440		12,591		54,002
Loss from operations	(5,581)		(23,440)		(12,591)		(54,002)
Interest income	632		1,044		1,310		2,219
Interest expense	(1,582)		(1,582)		(3,134)		(2,680)
Other rental income	2,242		2,242		4,484		4,484
Gain on contract termination	—		—		1,620		—
Other (expense) income, net	(10)		342		(192)		385
Net loss	(4,299)		(21,394)		(8,503)		(49,594)
Other comprehensive loss:
Foreign currency translation	(13)		(314)		118		(473)
Unrealized loss on available-for-sale securities, net	(42)		(40)		(122)		(104)
Net comprehensive loss	$	(4,354)	$	(21,748)	$	(8,507)	$	(50,171)
Net loss per share:
Basic and Diluted	$	(0.63)	$	(3.24)	$	(1.25)	$	(7.55)
Weighted-average shares used in computing net loss per share:
Basic and Diluted	6,781,976		6,596,975		6,781,976		6,564,994

The accompanying notes are an integral part of these condensed consolidated financial statements.

INSTIL BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount				Loss
Balance - December 31, 2025	6,781,976	$	—	$	840,937	$	(583)	$	(726,488)	$	113,866
Stock-based compensation	—	—		985		—		—		985
Net loss	—	—		—		—		(4,204)		(4,204)
Other comprehensive income	—	—		—		51		—		51
Balance - March 31, 2026	6,781,976	—		841,922		(532)		(730,692)		110,698
Stock-based compensation	—	—		1,036		—		—		1,036
Net loss	—	—		—		—		(4,299)		(4,299)
Other comprehensive loss	—	—		—		(55)		—		(55)
Balance - June 30, 2026	6,781,976	$	—	$	842,958	$	(587)	$	(734,991)	$	107,380

The accompanying notes are an integral part of these condensed consolidated financial statements.

INSTIL BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(in thousands, except share amounts)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount				Loss
Balance - December 31, 2024	6,525,887	$	—	$	824,780	$	(228)	$	(655,116)	$	169,436
Issuance of common stock upon exercise of stock options	33,040	—		404		—		—		404
Stock-based compensation	—	—		3,495		—		—		3,495
Net loss	—	—		—		—		(28,200)		(28,200)
Other comprehensive loss	—	—		—		(223)		—		(223)
Balance - March 31, 2025	6,558,927	—		828,679		(451)		(683,316)		144,912
Issuance of common stock upon exercise of stock options	5,952	—		71		—		—		71
Issuance of common stock in at-the-market offering, net of $0.3 million in issuance costs	185,837	—		6,611		—		—		6,611
Stock-based compensation	—	—		1,824		—		—		1,824
Net loss	—	—		—		—		(21,394)		(21,394)
Other comprehensive loss	—	—		—		(354)		—		(354)
Balance - June 30, 2025	6,750,716	$	—	$	837,185	$	(805)	$	(704,710)	$	131,670

The accompanying notes are an integral part of these condensed consolidated financial statements.

INSTIL BIO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Six Months Ended
	June 30,
	2026		2025
Cash flows from operating activities:
Net loss	$	(8,503)	$	(49,594)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	2,021		5,319
Non-cash lease expense	97		143
Foreign exchange remeasurement loss (gain)	116		(637)
Impairment of property, plant and equipment and estimated cost to sell, net	181		16,569
Depreciation	260		510
Restructuring costs	—		(91)
In-process research and development expenses	—		10,000
Amortization (accretion) on invested securities	258		(181)
Non-cash interest expense	386		405
Loss on disposals of property and equipment	2		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	1,364		5,830
Other long-term assets	160		251
Accrued rent receivable	(607)		(2,693)
Accounts payable	17		(139)
Operating lease liabilities	(151)		(1,510)
Long term liabilities	(8)		—
Accrued expenses and other current liabilities	(1,572)		(3,168)
Net cash used in operating activities	(5,979)		(18,986)
Cash flows from investing activities:
Purchase of marketable securities	(39,826)		(76,907)
Maturities of marketable securities	44,800		85,700
Cash received from held for sale assets	—		418
Net cash provided by investing activities	4,974		9,211
Cash flows from financing activities:
Proceeds from at-the-market offering, net of $0.3 million in issuance costs	—		6,611
Proceeds from exercise of stock options	—		475
Loan agreement closing costs	—		(172)
Net cash provided by financing activities	—		6,914
Net decrease in cash, cash equivalents and restricted cash	(1,005)		(2,861)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(4)		64
Cash, cash equivalents and restricted cash—beginning of period	6,804		10,635
Cash, cash equivalents and restricted cash—end of period	$	5,795	$	7,838
Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,748	$	2,275
Supplemental disclosure of noncash information:
Noncash increase in operating lease ROU assets and lease liabilities resulting from lease modifications	$	2,213	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

INSTIL BIO, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization and Description of Business

Instil Bio, Inc. (the “Company”) is a biotechnology company focused on identifying and advancing innovative therapeutic opportunities.

In January 2026, the Company announced that its wholly owned subsidiary, Axion Bio, Inc. (“Axion Bio”), was discontinuing development of AXN-2510, its former lead product candidate. See Note 14 for further information.

The Company is actively seeking to in-license or acquire and develop additional novel therapeutic candidates in diseases with significant unmet medical need.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2026, the condensed consolidated balance sheets for the six months ended June 30, 2026 and year ended December 31, 2025, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 and 2025, the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2026 and 2025, and the results of its cash flows for the six months ended June 30, 2026 and 2025. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2026 and 2025 are also unaudited. The results for the three and six months ended June 30, 2026 are not necessarily indicative of results to be expected for the year ending December 31, 2026, any other periods, or any future year period. The Company has evaluated subsequent events through the date the condensed consolidated financial statements were issued.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (“SEC”) on March 27, 2026.

Segments

Operating segments are identified as components of an entity for which separate discrete financial information is available and that is regularly reviewed by the chief operating decision-maker, the Company’s Chief Executive Officer, in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined it operates in a single operating segment and has one operating segment. See Note 4 for further information.

Cash, Cash Equivalents, Restricted Cash, and Marketable Securities

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents include amounts invested in money market accounts.

As of June 30, 2026, restricted cash consisted of a cash reserve allocated for future tax payments related to the 2024 Loan (as defined in Note 10) and credit card collateral. As of December 31, 2025, restricted cash consisted solely of a cash reserve allocated to future tax payments related to the 2024 Loan. There was $0.3 million and $0.2 million of restricted cash as of June 30, 2026 and December 31, 2025, respectively, on the Company’s condensed consolidated balance sheets.

The Company’s investments in marketable securities have been classified and accounted for as available-for-sale. The Company classifies its maturities as either short-term or long-term based on each instrument’s underlying contractual maturity date, which are carried at their fair values based on the quoted market prices of the securities. Unrealized gains and losses are reported as accumulated other comprehensive loss. Realized gains and losses on available-for-sale securities are included in net loss in the period earned or incurred. As of June 30, 2026 and December 31, 2025, marketable securities consisted of U.S. Treasury bills.

The Company evaluates its available-for-sale debt securities for expected credit losses on a periodic basis in accordance with Accounting Standards Codification, or ASC, Topic 326. In assessing whether a credit loss exists, the Company considers, among other factors, the credit quality and financial condition of the issuer, payment history, current and forecasted economic conditions, the extent to which fair value is less than amortized cost, and the collectability of contractual cash flows. The Company’s investment portfolio consists primarily of investment-grade debt securities. If the Company determines that a decline in fair value is attributable to credit-related factors, an allowance for credit losses is recorded through earnings for the amount of the credit loss, limited to the difference between the security’s amortized cost basis and fair value. Any portion of an unrealized loss that is not attributable to credit-related factors is recognized in other comprehensive income in the condensed consolidated statements of operations and comprehensive loss. As of June 30, 2026 and December 31, 2025, the Company determined that no allowance for credit losses was required on its investments.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the amounts shown in the condensed consolidated statements of cash flows (in thousands):


	June 30, 2026		December 31, 2025
Cash and cash equivalents	$	5,541	$	6,638
Restricted cash	254		166
Cash, cash equivalents and restricted cash	$	5,795	$	6,804

Going Concern

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. Management evaluated the Company’s ability to continue as a going concern for the twelve months following the issuance of the condensed consolidated financial statements. As disclosed and defined in Note 10, 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 management has concluded is an indicator of substantial doubt about the Company’s ability to continue as a going concern.

The Company plans to cause Complex Therapeutics LLC, a wholly owned subsidiary of the Company, to execute its contractual right to extend the maturity of the 2024 Loan to January 2028. In addition, the Company may seek to cause Complex Therapeutics LLC to refinance or restructure the 2024 Loan, sell the Tarzana facility (the Tarzana facility consists of two buildings (collectively "the building") and the underlying land), 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. The Company 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 the Company’s ability to continue as a going concern.

Assets Held for Sale

The Company classifies long-lived assets or disposal groups to be sold as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the asset or disposal group; the asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets or disposal group; the sale of the asset or disposal group is probable, and transfer of the asset or disposal group is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the asset or disposal group beyond one year, and actions required to complete the plan to sell have been initiated.

The Company initially measures a long-lived asset or disposal group that is held for sale at the lower of its carrying value or fair value less any cost to sell. Fair value is estimated by the Company through evaluations of quoted market prices received for other comparable held for sale assets sold by the Company. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset or disposal group until the date of sale. The Company assesses the fair value of a long-lived asset or disposal group less any cost to sell each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the asset or disposal group, as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale. Upon determining that a long-lived asset or disposal group meets the criteria to be classified as held for sale, the Company ceases depreciation, if any, and reports long-lived assets in the line item “assets held for sale” in its condensed consolidated balance sheets. Refer to Note 3 for further details.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or that the useful life is shorter than originally estimated. Recoverability is generally assessed by comparing the carrying amount of the asset to the future undiscounted net cash flows expected to be generated over its remaining useful life. If such assets are impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. If the useful life is shorter than originally estimated, the Company depreciates or amortizes the remaining carrying value over the revised shorter useful life. See Note 14 for more information.

Research and Development Expenses

Research and development costs are expensed as incurred. Clinical trial and other development costs incurred by third parties are expensed as the contracted work is performed. The Company accrues for costs incurred as the services are being provided by monitoring the status of the trial or project and the invoices received from its external service providers. The Company adjusts its accrual as actual costs become known. Where contingent milestone payments are due to third parties under research and development arrangements or license agreements, the milestone payment obligations are expensed when the milestone results are achieved.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). The amendments in this update require disclosure, in the notes to the financial statements, of specific expense categories present within expense captions presented on the face of the income statement within continuing operations of public business entities. The amendments in this update are effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The

Company is currently evaluating the impact of ASU 2024-03 on its condensed consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging and Revenue from Contracts with Customers - Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”) which applies to all entities that enter into non-exchange-traded contracts with underlyings based on operations or activities specific to one of the parties to the contract. The new guidance excludes from derivative accounting non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company does not expect adoption of ASU 2025-07 to have a material impact on its condensed consolidated financial statements and related disclosures.

In May 2026, the FASB issued ASU 2026-02 “Environmental Credits and Environmental Credit Obligations (Topic 818)” to provide recognition, measurement, presentation, and disclosure guidance for environmental credits and environmental credit obligations. Upon adoption, the Company will be required to account for environmental credits and environmental credit obligations under the new guidance. The standard is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The standard should be adopted on a retrospective basis. The Company is currently evaluating the impact of ASU 2026-02 on its condensed consolidated financial statements and related disclosures.

A variety of proposed or otherwise potential accounting standards are currently being studied by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, the Company has not yet determined the effect, if any, that the implementation of such proposed standards would have on the Company’s condensed consolidated financial statements.

3. Assets Held for Sale

In March 2025, the Company’s board of directors (the “Board of Directors”) approved a plan to sell the Tarzana facility. The Company engaged a broker to facilitate a potential sale of the Tarzana facility and reclassified the Tarzana facility as held for sale in the consolidated balance sheet during the year ended December 31, 2025. The Tarzana facility is currently leased to AstraZeneca Pharmaceuticals LP (“Tenant”) and Tenant has a right of first offer to purchase it. Refer to Note 9.

In May 2026, the Company determined that there had been a change to its plan with respect to the Tarzana facility. As a result, management concluded that the facility no longer met the criteria for classification as held for sale under ASC 360. Consequently, in May 2026, the Tarzana facility was reclassified as held and used and resumed depreciating the asset subject to depreciation prospectively over its remaining estimated useful life. In accordance with ASC 360, a long lived asset that ceases to be classified as held for sale is measured at the lower of (a) its carrying amount before the asset was classified as held for sale, adjusted for depreciation expenses that would have been recognized had the asset been continuously classified as held and used, and (b) its fair value. The Company determined the adjusted carrying amount of the Tarzana facility to be $111.9 million, which includes $3.6 million of depreciation expense, recorded within “restructuring and impairment charges, net”, that would have been recognized had the asset been continuously classified as held and used.

In accordance with ASC 360, the building and land of the Tarzana facility were measured individually when the assets were placed back into use. The Company estimated the fair value of the Tarzana facility, including separate estimates of the fair value of the land and building, using a combination of the income capitalization approach and the sales comparison approach. These valuations represent Level 3 fair value measurements within the fair value hierarchy established by ASC 820, as each relied on significant unobservable inputs. The estimated fair value of the building exceeded its adjusted carrying amount; therefore, the building was recorded at its adjusted carrying amount in accordance with ASC 360. The estimated fair value of the land was below its adjusted carrying amount and was therefore recorded at fair value. These fair value measurements are nonrecurring and were performed solely in connection with the reclassification described above.

The Company recognized a net remeasurement loss of $0.2 million related to the reclassification of the Tarzana facility from held for sale to held and used. The land was recorded at its estimated fair value of $20.4 million at the date of reclassification, while the building was recorded at its adjusted carrying amount of $91.5 million, representing its carrying value prior to classification as held for sale adjusted for depreciation that would have been recognized had the asset remained classified as held and used. The net remeasurement loss consisted of an $8.1 million impairment loss on the Tarzana facility, comprised of a $4.5 million reduction in the carrying value of the land to fair value and a $3.6 million depreciation charge that would have been recognized had the building remained classified as held and used, partially offset by a $7.9 million remeasurement benefit resulting from the reversal of previously recognized estimated cost to sell. The net remeasurement loss was recorded in the condensed consolidated statements of operations and comprehensive loss in the line item “restructuring and impairment charges, net” for the three and six months ended June 30, 2026, under the same line in which the original impairment and estimated cost to sell charges had been recorded.

For the six months ended June 30, 2025, the Company recorded charges related to the Tarzana facility of approximately $16.6 million, consisting of $8.7 million related to impairment and $7.9 million related to the estimated cost to sell. The Company did not record any charges related to the Tarzana facility for the three months ended June 30, 2025. Refer to Note 14.

Following the reclassification, the Company recorded the Tarzana facility under “Property, plant and equipment, net” on the Company’s condensed consolidated balance sheet as of June 30, 2026. In addition, one month of depreciation of $0.2 million on the Tarzana facility was recorded in accumulated depreciation, resulting in a carrying value of $111.7 million on the Company’s condensed consolidated balance sheet as of June 30, 2026. The carrying value of the held for sale Tarzana facility was $112.1 million as of December 31, 2025.

4. Segment Reporting

The Company manages its business activities on a consolidated basis and has one reportable segment relating to the research and development of novel therapies. The Chief Executive Officer, who serves as the Company’s chief operating decision maker (“CODM”), is responsible for the overall supervision, direction, and management of the business and its officers.

The CODM reviews net loss, as reported in the condensed consolidated statements of operations and comprehensive loss, as well as the progress of the Company’s program(s). The CODM does not review assets in evaluating the results of the segment, and therefore, such information is not presented. All long-lived assets owned by the Company are located in the United States. The accounting policies of the segment are the same as those described in Note 2.

The following table is a summary of the segment and consolidated net loss, including significant segment expenses for the three and six months ended June 30, 2026 and 2025 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
In-process research and development	$	—	$	10,000	$	—	$	10,000
AXN-2510	269		6,597		928		11,312
Other program expenses(1)	1		146		11		802
General and administrative(2)	4,881		6,145		10,219		14,756
Restructuring and impairment charges, net	181		540		1,173		16,622
Depreciation	249		12		260		510
Interest income	(632)		(1,044)		(1,310)		(2,219)
Interest expense	1,582		1,582		3,134		2,680
Gain on contract termination	—		—		(1,620)		—
Other income, net	(2,232)		(2,584)		(4,292)		(4,869)
Segment and consolidated net loss	$	4,299	$	21,394	$	8,503	$	49,594

______________________________________________________________

(1) Other program expenses consist of costs related to the Company’s past development of its CoStAR-TIL technology.

(2) Depreciation expense is removed from “General and administrative” and is disclosed separately.

5. Balance Sheet Components

Prepaid and other current assets

Prepaid and other current assets consisted of the following (in thousands):


	June 30, 2026		December 31, 2025
Prepaid general and administrative	$	1,347	$	1,170
Prepaid research and development	61		441
Tax-related receivable	26		848
Prepaid contract research organization expenses	163		431
Other current assets	76		148
Total prepaid and other current assets	$	1,673	$	3,038

Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following (in thousands):


	June 30, 2026		December 31, 2025
Land	$	20,400	$	—
Building	91,515		—
Office furniture and computer equipment	501		509
Total property, plant and equipment, gross	112,416		509
Less: accumulated depreciation	(638)		(383)
Total property, plant and equipment, net	$	111,778	$	126

Depreciation expense was $0.2 million and nominal for the three months ended June 30, 2026 and 2025, respectively, and $0.3 million and $0.5 million for the six months ended June 30, 2026 and 2025, respectively, in the condensed consolidated statements of operations and comprehensive loss. In March 2025, the Tarzana facility was classified as held for sale, and accordingly, depreciation ceased upon such classification.

In May 2026, the Company determined that the Tarzana facility no longer met the criteria for classification as held for sale and reclassified the asset as held and used. Accordingly, the carrying value of the building was adjusted to reflect the depreciation that would have been recognized had the Tarzana facility been continuously classified as held and used, as described in Note 2. Depreciation on the adjusted carrying value resumed prospectively in June 2026 and is reflected in accumulated deprecation above. See Note 2 and Note 14.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	June 30, 2026		December 31, 2025
Accrued compensation and benefits	$	1,275	$	2,517
Accrued operational expenses	320		43
Accrued restructuring costs	155		155
Accrued research, development and clinical trial expenses	367		977
Operating lease liabilities, current	393		372
Total accrued expenses and other current liabilities	$	2,510	$	4,064

6. Fair Value Measurement

The carrying amounts of cash and cash equivalents, receivables, prepaid expenses, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these instruments. Cash and cash equivalents consist primarily of cash and highly liquid investments with original maturities of three months or less at the time of purchase; accordingly, their carrying amounts approximate fair value. Cash and cash equivalents are valued based upon quoted market prices in active markets for identical assets and are therefore classified as Level 1 assets. Money market funds are open-end mutual funds that invest in cash, government securities, and/or repurchase agreements that are collateralized fully. To the extent that these funds are valued based upon the reported net asset value, they are categorized in Level 1 of the fair value hierarchy.

Short-term marketable securities consisted of U.S. Treasury bills that are classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations, alternative pricing sources or U.S. Government Treasury yield of appropriate term.

The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis:


	As of June 30, 2026
	Level 1		Level 2		Level 3		Total
	(In thousands)
Financial Assets
Money market funds	$	2,826	$	—	$	—	$	2,826
U.S. Treasury bills	—		64,137		—		64,137
Total	$	2,826	$	64,137	$	—	$	66,963

	As of December 31, 2025
	Level 1		Level 2		Level 3		Total
	(In thousands)
Financial Assets
Money market funds	$	4,339	$	—	$	—	$	4,339
U.S. Treasury bills	—		69,491		—		69,491
Total	$	4,339	$	69,491	$	—	$	73,830

There were no transfers in or out of Level 1, 2 and 3 measurements for the six months ended June 30, 2026 and the year ended December 31, 2025. As of June 30, 2026 and December 31, 2025, there were no securities within Level 3 of the fair value hierarchy.

As of June 30, 2026 and December 31, 2025, the fair value of the 2024 Loan (as defined in Note 10) was $85.6 million and $85.5 million, respectively. The fair value was determined on the basis of its net present value and is considered Level 2 in the fair value hierarchy.

In May 2026, the Company determined that the Tarzana facility no longer met the criteria for classification as held for sale and reclassified it as held and used. Accordingly, depreciation resumed prospectively based on the adjusted carrying value. Each asset was measured individually at the lower of its carrying amount before the Tarzana facility was classified as held for sale, with the depreciable assets adjusted for depreciation expense that would have been recognized had the Tarzana facility been continuously classified as held and used, or its fair value as of the date of the subsequent decision not to sell. The fair values of these assets are classified as Level 3 in the fair value hierarchy due to a mix of unobservable inputs utilized. As a result, the Company recognized a net remeasurement loss of $0.2 million during the second quarter of 2026, which is reflected in both the three and six months ended June 30, 2026 in the condensed consolidated statements of operations and comprehensive loss within the line item “restructuring and impairment charges, net.” See Note 3 and Note 14.

7. Financial Instruments

Marketable securities classified as available-for-sale on June 30, 2026 and December 31, 2025 consisted of the following (in thousands):


	June 30, 2026
	Maturity	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury bills	Less than one year	$	64,207	$	2	$	(72)	$	64,137


	December 31, 2025
	Maturity	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury bills	Less than one year	$	69,439	$	58	$	(6)	$	69,491

As of June 30, 2026 and December 31, 2025, marketable securities that had contractual maturities less than one year are classified as current because management considers these marketable securities to be available for current operations. The Company does not intend to sell its marketable securities and it is not likely that the Company will be required to sell these securities before recovery of their amortized cost basis. There were $64.1 million and $69.5 million of marketable securities classified as available-for-sale as of June 30, 2026 and December 31, 2025, respectively.

8. License and Collaboration Agreement with ImmuneOnco

On August 1, 2024, Axion Bio entered into a license and collaboration agreement (the “IO Collaboration Agreement”) with ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (“ImmuneOnco”), under which it in-licensed several bispecific antibodies, including AXN-2510 and AXN-27M. As part of the IO Collaboration Agreement, Axion Bio made a $10.0 million upfront payment to ImmuneOnco during the year ended December 31, 2024. This amount was fully expensed as in-process research and development (“IPR&D”) in the same year.

During the year ended December 31, 2024, Axion Bio made a $5.0 million prepayment to ImmuneOnco for development costs, which was fully recognized as research and development expense by March 31, 2025. In April 2025, Axion Bio made a second $5.0 million prepayment to ImmuneOnco for development costs, which was fully recognized as research and development expense by September 30, 2025. In August 2025, Axion Bio made a third

$5.0 million prepayment to ImmuneOnco for development costs, which was fully recognized as research and development expense by March 31, 2026.

In June 2025, Axion Bio achieved Investigational New Drug (IND) clearance in the United States for a Phase 1 trial of AXN-2510 in relapsed/refractory solid tumors. This milestone triggered a $10.0 million development payment to ImmuneOnco, which was paid in July 2025. This amount was fully expensed as IPR&D during the second quarter of 2025.

The expenses recognized in connection with the IO Collaboration Agreement were nil and $14.1 million for the three months ended June 30, 2026 and 2025, respectively, and $0.3 million and $18.4 million for the six months ended June 30, 2026 and 2025, respectively. Of these amounts, $10.0 million for both the three and six months ended June 30, 2025 related to a milestone payment triggered by IND clearance and was recorded as IPR&D expense, with the remainder recorded as a component of research and development expense on the condensed consolidated statements of operations and comprehensive loss.

On January 5, 2026, Axion Bio and ImmuneOnco entered into an agreement terminating the IO Collaboration Agreement. Under the termination agreement, Axion Bio agreed to transfer the rights, title, and interest related to AXN-2510 and AXN-27M to ImmuneOnco, and ImmuneOnco agreed to pay Axion Bio $1.8 million, of which $1.6 million was received during the quarter ended March 31, 2026 and recorded as other income as a gain on contract termination in the condensed consolidated statements of operations and comprehensive loss. The remaining $0.2 million is contingent upon the completion of specified wind-down activities and had not been earned or received as of June 30, 2026.

9. Commitments and Contingencies

Leases

Company as a Lessee: Operating Lease Obligations

The Company currently leases office spaces and laboratory spaces located in Dallas, Texas and Alderley Park in the United Kingdom. During April 2025, the Company terminated its prior lease in Thousand Oaks, California. The Company’s leased facilities have original lease terms ranging from 2 to 5 years that in general require the Company to provide a security deposit. Certain leases provide the right for the Company to renew the lease upon the expiration of the initial lease term, and various leases have scheduled rent increases on an annual basis. The exercise of lease renewal options for the Company’s existing leases is at the Company’s sole discretion, and not included in the measurement of right-of-use asset or lease liability as they are not reasonably certain to be exercised.

The Company’s lease costs consisted of the following (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Operating lease cost	$	144	$	396	$	323	$	818
Variable lease cost	87		463		276		628
Total lease cost	$	231	$	859	$	599	$	1,446

The following table summarizes cash flow information related to the Company’s lease obligations (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Cash paid for operating lease liabilities	$	186	$	398	$	361	$	815

The following table summarizes the Company’s lease assets and liabilities (in thousands):


	June 30, 2026		December 31, 2025
Operating lease right-of-use assets	$	2,149	$	238
Current operating lease liabilities	$	393	$	372
Non-current operating lease liabilities	$	1,835	$	—

The following table summarizes other supplemental information related to the Company’s lease obligations:


	June 30, 2026		December 31, 2025
Weighted-average remaining lease term (in years)	4.68		0.70
Weighted-average discount rate	6.36	%	6.75	%

The Alderley Park leases in the United Kingdom are set to expire in November 2026. On April 2nd, 2026 the Company extended its lease in Dallas to April 2031.

Future minimum lease payments under operating lease liabilities were (in thousands):


	June 30, 2026
2026 (remaining six months)	$	329
2027	514
2028	527
2029	540
2030	553
2031 and thereafter	186
Total future lease payments	2,649
Less: imputed interest	421
Total lease liability balance	2,228
Less: current portion of operating lease liabilities	393
Total operating lease liabilities, non-current	$	1,835

Current operating lease liabilities are recorded in the line item “accrued expenses and other current liabilities” in the condensed consolidated balance sheets.

Company as a Lessor: Tarzana Facility Lease with AstraZeneca

On July 10, 2024, Complex Therapeutics LLC, a wholly owned subsidiary of the Company, entered into a lease with AstraZeneca Pharmaceuticals LP pursuant to which Tenant is leasing the facility located in Tarzana, California (the “Lease”). The Lease has an initial term of approximately 15 years, beginning on July 10, 2024 and ending on July 31, 2039, with Tenant having two consecutive options to extend the term for a five-year period each and a one-time option to terminate the Lease on the tenth anniversary of the commencement of the Lease, which, if exercised, obligates Tenant to pay Complex Therapeutics LLC a termination fee. The initial base rent was approximately $0.6 million per month (approximately $7.5 million annually) and the base rent escalates by 3% per annum. Tenant is also required to pay certain operating expenses and tax expenses as additional rent. There was rent abatement during the first year of the Lease such that Tenant paid no rent or reduced rent during this period. Tenant also has a right of first offer to purchase the premises that are subject to the Lease.

The Lease is classified as an operating lease and revenue is recognized on a straight-line basis and is recorded within the condensed consolidated statements of operations and comprehensive loss in the line item “Other rental income” as this is not a part of the Company’s core operations. Rental income related to the Lease was as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Rental income related to fixed lease income	$	2,242	$	2,242	$	4,484	$	4,484

Approximate future straight-lined contractual lease income to be recognized under the Lease in effect as of June 30, 2026, is as follows (in thousands):


	June 30, 2026
2026 (remaining six months)	$	4,484
2027	8,968
2028	8,968
2029	8,968
2030	8,968
2031 and thereafter	76,974
Total	$	117,330

Differences between rental income earned and amounts due per the Lease are capitalized or charged, as applicable, to accrued rent receivable. As of June 30, 2026 and December 31, 2025, the Company had accrued rent receivable of $8.3 million and $7.7 million, respectively.

Legal Proceedings

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company does not expect that the resolution of these matters will have a material adverse effect on its financial position, results of operations or cash flows.

Indemnifications

The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid. No liability associated with such indemnifications was recorded as of June 30, 2026 and December 31, 2025.

Other Commitments

In the normal course of business, the Company enters into contracts and various purchase agreements and commitments with third-party vendors for clinical research services, products and other services for operating purposes. These agreements generally provide for termination or cancellation at the Company’s option, other than for costs already incurred.

As of June 30, 2026 and December 31, 2025, the Company had $0.2 million in commitments for contract terminations as part of the Plan (see Note 14).

10. Debt

In June 2022, the Company’s wholly owned subsidiaries Complex Therapeutics Mezzanine LLC and Complex Therapeutics LLC entered into a mortgage construction loan and mezzanine construction loan (together, the “Construction Loans”) secured by Complex Therapeutic LLC’s Tarzana, California land and building. The initial principal amount of the Construction Loans was $52.1 million, with additional future principal of up to $32.9 million to fund ongoing construction costs.

On December 20, 2024 (the “Closing Date”), Complex Therapeutics LLC entered into a Term Loan Agreement (the “2024 Loan”) and related loan documents with Midland National Life Insurance Company (“Lender”), pursuant to which Lender loaned Complex Therapeutics LLC a term loan in the principal amount of $85.6 million to refinance the Construction Loans. Substantially all of the 2024 Loan proceeds were used to repay in full the Construction Loans. As of both June 30, 2026 and December 31, 2025, the outstanding principal amount under the 2024 Loan was $85.6 million. Unamortized debt issuance costs were $0.4 million and $0.8 million as of June 30, 2026 and December 31, 2025, respectively.

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 Lender incurred in connection with the extension, (c) replenishing of all reserve funds as reasonably determined by Lender, and (d) compliance with minimum debt yield and debt service coverage ratio requirements. The 2024 Loan bears interest at a fixed rate of 6.35% per annum, with interest-only payments during the term and the principal balance due in full at maturity.

The 2024 Loan may be prepaid in whole but not in part. If the 2024 Loan is prepaid on or prior to the 12-month anniversary of the Closing Date, a prepayment fee is required (other than in connection with a casualty or condemnation event) to make Lender whole for the interest it would have otherwise earned on the 2024 Loan during the first 12 months. There is no prepayment fee due if the 2024 Loan is prepaid after the 12-month anniversary of the Closing Date.

The net carrying amount of the liability component of the 2024 Loan was as follows (in thousands):


	June 30, 2026		December 31, 2025
Principal amount	$	85,600	$	85,600
Unamortized debt issuance cost	(408)		(794)
Net carrying amount	$	85,192	$	84,806

The following table sets forth the interest expense recognized related to the Loan (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Contractual interest expense	$	1,389	$	1,389	$	2,748	$	2,275
Amortization of debt issuance cost	193		193		386		405
Total interest expense related to the 2024 Loan	$	1,582	$	1,582	$	3,134	$	2,680

11. Equity

Common Stock

Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends out of legally available funds when and if declared by the Company’s Board of Directors, subject to the rights of holders of any classes of stock outstanding having priority rights as to dividends. No cash dividends have been declared by the Board of Directors from inception.

As of both June 30, 2026 and December 31, 2025, the Company had 6,781,976 shares of common stock outstanding.

At-the-Market Offering (ATM Program)

In March 2025, the Company entered into an Open Market Sale AgreementSM with Jefferies LLC (“Jefferies”) pursuant to which the Company may, subject to the terms and conditions set forth in the agreement, offer and sell, from time to time, through or to Jefferies, acting as agent or principal, shares of common stock having an aggregate offering price of up to $100.0 million in one or more “at the market offerings” (the “ATM Program”).

As of December 31, 2025, the Company had sold 185,837 shares of common stock under the ATM Program at a weighted-average price of $37.13 per share, 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 both December 31, 2025 and June 30, 2026 is approximately $93.1 million. There were no sales under the ATM Program during the six months ended June 30, 2026.

Preferred Stock

The Company’s current amended and restated certificate of incorporation authorizes the Company to issue up to 10,000,000 shares of preferred stock at $0.000001 par value per share. The Board of Directors is authorized to provide for the issuance of the preferred stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in subsequent resolution or resolutions adopted by the board providing for the issuance of such shares. As of June 30, 2026 and December 31, 2025, there were no shares of preferred stock issued or outstanding.

12. Stock-Based Compensation

2021 Equity Incentive Plan

In March 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which became effective in connection with the Company’s initial public offering (“IPO”). The 2021 Plan was approved by the Board of Directors and stockholders in March 2021. The 2021 Plan is an equity incentive plan pursuant to which the Company may grant the following awards: (i) incentive stock options; (ii) nonstatutory stock options; (iii) stock appreciation rights; (iv) restricted stock awards; (v) restricted stock unit awards; (vi) performance awards; and (vii) other forms of stock awards to employees, directors, and consultants, including employees and consultants of the Company’s affiliates. The 2021 Plan is a successor to the Company’s 2018 Stock Incentive Plan (the “2018 Plan”). Following the effectiveness of the 2021 Plan, no further grants may be made under the 2018 Plan; however, any outstanding equity awards granted under the 2018 Plan will continue to be governed by the terms of the 2018 Plan.

As of June 30, 2026, 926,486 shares of common stock remained available for issuance under the 2021 Plan. During the three and six months ended June 30, 2026, options to purchase 1,250 and 132,033 shares of common stock were forfeited and expired under the 2021 Plan, respectively.

The following table sets forth stock-based compensation included in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Total stock-based compensation expense	$	1,036	$	1,824	$	2,021	$	5,319

As of June 30, 2026, there was $8.3 million of total unrecognized compensation cost related to unvested stock options granted under the 2021 Plan, which is expected to be recognized over a weighted average period of 2.1 years.

Employee Stock Purchase Plan