ACET 10-K & 10-Q changes, risk factors and insider trading

We are an early clinical stage biopharmaceutical company. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we will continue to incur significant research and development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred net losses since our inception. To date, we have financed our operations primarily with proceeds from our license and collaboration agreements and the issuance and sale of our capital stock, including most recently: (i) net proceeds of approximately $19.3 million, after deducting sales agent commissions, but before deducting any expenses related to such sales, from sales of our common stock under our “at-the-market” program in January 2024 and; (ii) net proceeds of approximately $91.7 million, after deducting the underwriting discount and commissions and other estimated offering expenses, from the sale of our common stock and pre-funded warrants in an underwritten public offering in January 2024.2024; and (iii) net proceeds of approximately $74.8 million, after deducting the underwriting discount and commissions and other estimated offering expenses, from the sale of our common stock and pre-funded warrants in an underwritten registered direct offering in October 2025. For the year ended December 31, 2024,2025, we recorded net loss of $117.1$116.8 million. As of December 31, 2024,2025, we had an accumulated deficit of $497.9$614.7 million.

We expect to incur significant expenditures for the foreseeable future, and we expect these expenditures to increase as we continue our research and development of, and seek regulatory approvals for, product candidates based on our gamma delta T cell platform, including ADI-001prula-cel and ADI-270.ADI-212. Even if we succeed in commercializing one or more of our product candidates, we will continue to incur substantial research and development and other expenditures to develop and market additional product candidates. WeIn mayaddition, encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The sizecertain of our futureexisting netlicense lossesand willcollaboration depend,agreements require cash payments upon the achievement of milestone events, royalties and profit-sharing, or other cash payments. These payment obligations, in part, on the rate of future growth of our expenses and our abilityaddition to generateany revenue.payment Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital. Further, even if we do achieve profitability,obligations we may nothave beunder ablefuture toarrangements sustainwith orthird increaseparties, profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product candidates or even continue our operations, any of which couldmay have a materialsubstantial adverse effectimpact on our business, financial condition, results of operations,condition and prospects and cause investors to lose all or part of their investments.profitability.

Our business is highly dependent on the success of ADI-001 and ADI-270.prula-cel. If we are unable to obtain regulatory approval for ADI-001 and ADI-270prula-cel in one or more indications and effectively commercialize thesethis product candidatescandidate for the treatment of patients in indications for which we receive approval (if any), our business would be significantly harmed.

Our preclinical results or clinical results to date may not predict results for our planned or ongoing trials or any future studies of ADI-001,prula-cel, ADI-270ADI-212, or any other allogeneic gamma delta T cell product candidate.candidates. Because of the lack of evaluation of allogeneic products and gamma delta T cell therapy products in the clinic to date, any such product’s failure, or the failure of other allogeneic T cell therapies or gamma delta T cell therapies, may significantly influence physicians’ and regulators’ opinions in regards to the viability of our entire pipeline of allogeneic T cell therapies, which could have a material adverse effect on our reputation. If our gamma delta T cell therapy is viewed as less safe or effective than autologous therapies or other allogeneic T cell therapies, our ability to develop other allogeneic gamma delta T cell therapies may be significantly harmed.

All of our product candidates, including ADI-001prula-cel and ADI-270,ADI-212, will require additional clinical and non-clinical development, regulatory review and approval in multiple jurisdictions, substantial investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales. In addition, because ADI-001prula-cel is our most advanced product candidate, and because our other product candidates are based on similar technology, if ADI-001prula-cel encounters safety or efficacy problems, manufacturing problems, developmental delays, regulatory issues or other problems, our development plans and business would be significantly harmed, which could have a material adverse effect on our business, reputation and prospects.

The success of our business, including our ability to obtain financing and generate any revenue in the future, will primarily depend on the positive efficacy and safety profile and durability of our product candidates in our clinical trials, regulatory approval, successful development and commercialization of our novel product candidates, and our ability to build out our manufacturing capabilities, any of which may never occur. We have not yet succeeded and may not succeed in demonstrating efficacy and safety or durability for any of our product candidates in clinical trials or in obtaining marketing approval thereafter. Given our early stage of development, it may be several years, if at all, before we have demonstrated the safety and efficacy of a product candidate sufficient to warrant approval for commercialization. If we are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize our product candidates, we may not be able to generate sufficient revenue to continue our business, which could have a material adverse effect on our results of operations and prospects.

In addition, the clinical study requirements of the FDA, the European Medicines Agency (EMA) and other regulatory agencies and the criteria these regulators use to determine the safety and efficacy of a product candidate are determined according to the type, complexity, novelty and intended use and market of the potential products. The regulatory approval process for novel product candidates such as ours can be more complex and consequently more expensive and take longer than for other, better known or extensively studied pharmaceutical or other product candidates. Allogeneic gamma delta T cell therapies are novel therapies, with no immunotherapiesT cell therapies licensed to date in the United States or the European Union to treat autoimmune diseases. Approvals by the EMA and FDA for existing autologous CAR T cell therapies, such as Kymriah® and Yescarta®, as well as other pathways to approval, may not be indicative of what these regulators may require for approval of our therapies. Also, while we expect reduced variability in our product candidates compared to autologous products, we do not have significant clinical data supporting any benefit of lower variability. More generally, approvals by any regulatory agency may not be indicative of what any other regulatory agencyagencies may require for approval or what such regulatory agencies may require for approval in connection with new product candidates.

Undesirable or unacceptable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA, the EMA or other comparable foreign regulatory authorities. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Approved autologous CAR T-cell therapies and those under development have shown frequent rates of cytokine release syndrome and neurotoxicity, and adverse events have resulted in the death of patients. Additionally, in November 2023, the FDA announced an investigation into reports of T-cell malignancies in patients who had received B-cell maturation (BCMA)-directed or CD19-directed autologous CAR T cell immunotherapies. In January 2024, the FDA determined that new boxed warning language related to T-cell malignancies should be included in the labeling for all BCMA- and CD19-directed genetically modified autologous T cell immunotherapies. While we believe our gamma delta T cell approach may lessen such results, similar or other adverse events for our allogeneic gamma delta T cell product candidates may occur and could result in increased government regulation, unfavorable public perception and publicity, potential impacts on enrollment in our clinical trials, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are approved, and a decrease in demand for any such product candidates .candidates. In addition, while we anticipate our focus on gamma delta T cells may lessen the likelihood of graft versus host disease relative to therapies relying on unrelated alpha beta T cells, similar or other adverse events for our allogeneic gamma delta T cell product candidates may occur.

In addition to side effects and adverse events caused by any product candidates we may develop, the conditioning, administration process or related procedures that may be used with our product candidates may also cause adverse side effects. A T cell therapy patient is generally administered cytotoxic drugs to remove stem cells from the bone marrow to create sufficient space in the bone marrow for the modified stem cells to engraft and produce new cells. This procedure causes side effects and, among other potential risks, can transiently compromise the patient’s immune system, known as neutropenia, and reduce blood clotting, known as thrombocytopenia. If we are unable to demonstrate that such adverse events were caused by the conditioning regimens used, administration process or related procedure, or were otherwise unrelated to the therapy candidate being studied, the FDA, the EMA or other regulatory authorities could order us to cease further development of, or deny approval of, any product candidates we may develop for any or all target indications. Even if we are able to demonstrate that adverse events are not related to our product candidate, such occurrences could affect patient recruitment, the ability of enrolled patients to complete the clinical trial or the commercial viability of any product candidates that obtain regulatory approval.

If we are required by the FDA to obtain approval of a companion diagnostic in connection with approval of any of our product candidates, including in connection with our gamma delta T cell therapy targeting CD70,candidates and we do not obtain, or face delays in obtaining, FDA approval of such companion diagnostic, we will not be able to commercialize such product candidate and our ability to generate revenue will be materially impaired.

Companion diagnostics are developed in conjunction with clinical programs for the associated product and are subject to regulation as medical devices by the FDA and comparable foreign regulatory authorities, and the FDA has generally required premarket approval of companion diagnostics for cancer therapies.authorities. In January 2024, FDA announced its intention to initiate the reclassification process for most in vitro diagnostics, including companion diagnostics. Further, FDA indicated that in addition to the reclassification process, FDA will continue taking a risk-based approach in the initial classification of individual in vitro diagnostics to determine whether a new test may be classified into class II through the de novo classification process. In so doing, FDA indicated that it may regulate most future companion diagnostics as class II devices. The approval or clearance of a companion diagnostic as part of the therapeutic product’s further labeling limits the use of the therapeutic product to only those patients who express the specific characteristic that the companion diagnostic was developed to detect.

If the FDA or a comparable foreign regulatory authority requires approval or clearance of a companion diagnostic for any of our product candidates, whether before or after the product candidate obtains regulatory approval, we and/or third-party collaborators may encounter difficulties in developing and obtaining approval or clearance for these companion diagnostics. Any delay or failure by us or third party collaborators to develop or obtain regulatory approval or clearance of a companion diagnostic could delay or prevent approval or continued marketing of the relevant product. We or our collaborators may also experience delays in developing a sustainable, reproducible and scalable manufacturing process for the companion diagnostic or in transferring that process to commercial partners or negotiating insurance reimbursement plans, allany of which may prevent us from completing our clinical trials oror, if approved, commercializing our product candidates, if approved,candidates on a timely or profitable basis, if at all.

There is typically an extremely high rate of attrition from the failure of product candidates proceeding through clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy, insufficient durability of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials. Most product candidates that commence clinical trials are never approved as products.approved.

In addition, for the ongoing Phase 1 study of ADI-001prula-cel and any future clinical trials that may be completed, we cannot guarantee that the FDA or foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit marketing applications for our product candidates for approval.candidates. To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, approval of our product candidates may be significantly delayed, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates. Any of the foregoing could have a material adverse effect on our business, prospects and financial condition.

We may not be able to file IND applicationsapplications, or comparable regulatory submissions outside the United States, to commence additional clinical trials on the timelines we expect, and even if we are able to, the FDA or analogous regulatory authorities may not permit us to proceed.

InWe December 2023, the IND for our lead product candidate, ADI-001, to treat patients with LN was cleared by the FDA. In the second quarter of 2024, wehave received clearance for our IND for ADI-001 to include SLE, SSc and AAV. In October 2024, we received clearance for our IND amendmentINDs to evaluate ADI-001prula-cel in IIMclinical andtrials SPSin asa partnumber of the ongoing Phase 1 trial in autoimmune diseases.indications. Our pipeline also includes ADI-270,ADI-212, an optimized next-generation gene-edited and armored gamma delta CAR T cell productclinical candidate targeting CD70+prostate cancers.specific Inmembrane Juneantigen 2024,(PSMA). ourWe expect to submit a regulatory filing for ADI-212, such as an IND application or comparable regulatory submission outside the United States, for ADI-270the treatment of metastatic castration-resistant prostate cancer (mCRPC) in RCC was cleared by the FDA.third quarter of 2026. We also have several additional internal gamma delta T cell therapy programs in preclinical development. We previously announced our planaim to filesubmit onea new regulatory submission, such as an IND application or equivalent every 12-18 months. We may not be able to make these filings on the timelines we expect, which may cause delays in commencing additional clinical trials. Even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND application or clinical trial application, we cannot guarantee that such regulatory authorities will not change their requirements in the future. Moreover, we cannot be sure that submission of an IND application for any of our other product candidates will result in the FDA allowing trials to begin, or that, once begun, issues will not arise that result in a decision by us, by independent institutional review boards (IRBs) or independent ethics committees, or by the FDA, the EMA or other regulatory authorities to suspend or terminate clinical trials. For example, we may experience manufacturing delays or other delays with IND-enabling studies or the FDA, the EMA or other regulatory authorities may require additional preclinical studies that we did not anticipate. Moreover, we cannot be assured that submission of an IND application will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that result in a decision by us, by IRBs, or independent ethics committees or by the FDA, the EMA or other regulatory authorities to suspend or terminate clinical trials, including as a result of a clinical hold. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND application or clinical trial application, we cannot guarantee that such regulatory authorities will not change their requirements in the future. The inability to initiate clinical trials any of our product candidates on the timeline we currently anticipatedanticipate or at all could have a material adverse effect on our business, results of operations and prospects.

Clinical testing is expensive, time consuming and subject to uncertainty. We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all. Even if these trials begin as planned, issues may arise that could suspendresult in the suspension, or terminatetermination, or clinical hold of such clinical trials. A failure of one or more clinical studies can occur at any stage of testing, and our ongoing or future clinical studies may not be successful. EventsFactors that may prevent successful or timely completion of clinical development include:

delays in recruiting suitableeligible patients to participate in our clinical studies;

delays in having patients’ complete participation in a study or failure to return for post-treatment follow-up;

OurTimelines timing offor filing INDs for our product candidates isare dependent on further preclinical and manufacturing success, which we work on with various third parties. We cannot be sure that we will be able to submit our INDs in a timely manner, if at all, or that submission of an IND application or IND amendment will result in the FDA allowing testing and clinical trials to begin, or that, once begun, issues will not arise that suspendresult in the suspension, termination, or terminateclinical hold of such clinical trials.

In our current and planned clinical trials of our product candidates, we have contracted with and expect to continue to contract with academic medical centers and hospitals experienced in the assessment and management of toxicities arising during clinical trials. Nonetheless, these centers and hospitals may have difficulty observing patients and treating toxicities, which may be more challenging due to personnel changes, inexperience, shift changes, house staff coverage or related issues. ThisAny such difficulties could lead to more severe or prolonged toxicities or even patient deaths, which could result in us or the FDA delaying, suspendingsuspending, terminating, or terminatingissuing a clinical hold on one or more of our clinical trials, and which could jeopardize regulatory approval. Medicines used at centers to help manage adverse side effects of ADI-001prula-cel andor ADI-270our other product candidates may not adequately control the side effects and/or may have a detrimental impact on the efficacy of the treatment. Use of these medicines may increase with new physicians and centers administering our product candidates, any of which could have a material adverse effect on our ability to obtain regulatory approval and commercialize on the timelines anticipated or at all, which could have a material adverse effect on our business and results of operations.

the patient eligibility criteria and exclusion criteria defined in the protocol;

In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition willmay reduce the number and types of patients available to us because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number of qualified clinical investigators is limited, some of our clinical trial sites are also being used by some of our competitors, which may reduce the number of patients who are available for our clinical trials in that clinical trial site.

Human clinical trials are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. Because our gamma delta T cell product candidates are based on newnovel technologies and will require the creation of inventory of mass-produced, “off-the-shelf” products, we expect that we will require extensive research and development and have substantial manufacturing and processing costs. In addition, costs to treat patients with autoimmune diseases and cancer and to treat potential side effects that may result from our product candidates can be significant. Accordingly, our clinical trial costs are likely to be significantly higher than for more conventional therapeutic technologies or drug products, which is expected to have a material adverse effect on our financial position and ability to achieve profitability.

As a result, because we have limited financial and managerial resources, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. For example, in November 2023, we announced that we paused preclinical development of ADI-925 to prioritize corporate resources on ADI-270. In January 2024, we announced we had deprioritized enrollment of large B cell lymphoma patients in our Phase 1 clinical trial of ADI-001prula-cel in non-Hodgkin's lymphoma and in September 2024 we announced a strategic prioritization to focus ADI-001prula-cel development resources on autoimmune indications. DueIn July 2025, we also announced that we discontinued the development of ADI-270 for patients with metastatic/advanced clear renal cell carcinoma to thisprioritize prioritization,corporate patientresources enrollmenton inprula-cel theand Phase 1 clinical study of ADI-001 in mantle cell lymphoma has been closed.ADI-212. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. Failure to allocate resources or capitalize on strategies in a successful manner will have an adverse impact on our business, financial condition and results of operations.

We are currently conducting research and development activities outside of the United States, including in China, and plan to continue to globally develop our product candidates. Accordingly, we expect that our development programs will be subject to additional risks related to operating in foreign countries, including but not limited to:

economic weakness, including inflation, or political instability and/or armed conflicts in particular foreign economiescountries and markets;

Furthermore, conducting clinical trials in countries outside the United States presents additional risks, including political and economic risks that are not present in the United States,risks, such as armed conflict and economic embargoes or boycotts. We currently conduct and plan in the future to initiate clinical trials of ADI-001prula-cel at sites outside of the United States, which may be located in countries involved in or impacted by political unrest and conflicts. For example, while we currently do not expect armed conflicts, such as the conflicts between Russia and Ukraine or Israel and Hamas, or related developments to have a significant impact on our ability to obtain results from our clinical trials, further escalation (whether in these countries or surrounding areas) may adversely affect our ability to adequately conduct certain clinical trials and maintain compliance with relevant protocols due to, among other reasons, the prioritization of hospital resources away from clinical trials, reallocation or evacuation of site staff and subjects, or as a result of government-imposed curfews, warfare, violence, or other governmental action or other events that restrict movement. These developments may also result in our inability to access sites for monitoring or to obtain data from affected sites or patients going forward. We could also experience disruptions in our supply chain or limits to our ability to provide sufficient investigational materials in such countries and surrounding regions. Clinical trial sites may suspend or terminate the trials being conducted and patients could be forced to evacuate or choose to relocate, making them unavailable for initial or further participation in such trials. Alternative sites in these areas may not be available and we may need to find other countries to conduct the relevant trials. Furthermore, military action may prevent the FDA or other regulatory agencies from inspecting clinical sites in these countries. Such interruptions may delay our plans for clinical development and approvals for our product candidates.

The FDA often approves new therapies initially only for use in patients who are currently not adequately treated with currently approved therapies. We expect to initially seek approval of ADI-001prula-cel and our other product candidates in this setting. Subsequently, for those products that prove to be sufficiently beneficial, if any, we would expect to seek approval in earlier lines of treatment and potentially as a first line therapy. There is no guarantee that our product candidates, even if approved, would be approved for earlier lines of therapy, and, prior to any such approvals, we willmay have to conduct additional clinical trials, including potentially comparative trials against approved therapies. We are also targeting a similar patient population as autologous CAR T-cell product candidates, including approved autologous CAR T-cell products. Our therapies may not be as safe and effective as autologous CAR T-cell therapies and may only be approved for patients who are ineligible for autologous CAR T-cell therapy.

One of our core strategies is to pursue clinical development of additional product candidates beyond ADI-001.prula-cel. Our pipeline also includes ADI-270,ADI-212, an optimized next-generation gene-edited and armored gamma delta CAR T-cell productclinical candidate targeting CD70+ cancers, which has initiated clinical development. In addition, we have several additional internal gamma delta T cell therapy programs in preclinical development.PSMA. We plan to submit one new IND to the FDA every 12-18 months.months, including a regulatory filing for ADI-212 for the treatment of mCRPC in the third quarter of 2026. Developing, obtaining regulatory approval for and commercializing additional gamma delta T cell product candidates will require substantial additional funding and is prone to the risks of failure inherent in medical product development. We cannot provide you any assurance that we will be able to successfully advance any of these additional product candidates through the development process.

If we are unable or decide not to establish internal sales, marketing and distribution capabilities, we will pursue collaborative arrangements with third parties regarding the sales and marketing of our products; however, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that it will have effective sales forces. Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the marketing and sales efforts of such third parties and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates.

There can be no assurance that we will be able to develop in-house sales and distribution capabilities or establish or maintain relationships with third-party collaborators to commercialize any product that receives regulatory approval in the United States or overseas. If we are unable to successfully market and distribute our products, either on our own or in collaboration with third parties, our business, results of operations and prospects could be materially adversely affected.

The biopharmaceutical industry is characterized by intense competition and rapid innovation. Our competitors may be able to develop other compoundscompounds, drugs, or drugsbiological products that are able to achieve similar or better results. Our potential competitors include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies and universities and other research institutions. Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations and well-established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products.

Although we have commenced manufacturing operations at our manufacturing facility, we currently depend on the ability of our third-party suppliers and manufacturers with whom we contract to perform adequately, particularly with respect to the timely production and delivery of our product candidates, including ADI-001.prula-cel. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

Our product candidates and any products that we may develop may compete with other companies’ product candidates and approved products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.

Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, scientific and medical personnel. The loss of the services of any of our executive officers, other key employees and other scientific and medical advisors, and our inability to find suitable replacements could result in delays in product development and harm our business. Although we announced a workforce reduction in July 2025, we expect that we will have a need to recruit and hire qualified personnel as we advance our programs and expand operations. Our recent workforce reduction could impede future recruiting and hiring efforts. Failure to successfully recruit and retain personnel could impact our anticipated development plans and timelines.

We expect to spend a substantial amount of capital infor the clinical development of our product candidates, including the ongoing and future clinical trials for ADI-001,prula-cel theand ongoing clinical trialpreparations for ADI-270a inregulatory RCC and IND-enabling activitiesfiling for our additional internal gamma delta T cell therapy programs in preclinical development.ADI-212. We will need substantial additional financing to develop our products and implement our operating plans. In particular, we will require substantial additional financing to enable commercial production of our products and initiate and complete registration trials for multiple products. Further, if approved, we will require significant additional amounts in order to launch and commercialize our product candidates.

We cannot be certain that additional funding will be available on acceptable terms, or at all. We have no committed source of additional capital and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of our product candidates or other research and development initiatives. OurIn addition, certain of our license and collaboration agreements mayrequire alsous beto terminatedmake ifcash payments upon the achievement of certain milestone events. In the event we are unable to meet the payment obligations under these agreements, the agreements may be terminated in accordance with the terms of such agreements. WeFurther, we could be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to our product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves. Additionally, United States and global economic uncertainty, higher interest rates and diminished credit availability may limit our ability to incur indebtedness on favorable terms. Furthermore, the impact of geopolitical tension, such as a deterioration in the bilateral relationship between the United States and China, an escalation in conflict between Russia and Ukraine or the ongoing armed conflict in Israel and the Gaza strip, including any resulting sanctions, export controls or other restrictive actions, also could lead to disruption, instability and volatility in the global markets, which may have an impact on our ability to obtain additional funding.

As our development and commercialization plans and strategies develop, and as we have transitioned into operating as a public company, we have rapidly expanded our employee base and expect to continue to add managerial, operational, sales, research and development, marketing, financial and other personnel.base. Current and future growth imposes significant added responsibilities on members of management, including:

The pharmaceutical industry in China is subject to comprehensive government regulation and supervision, encompassing the development, approval, registration, manufacturing, packaging, licensing and marketing of new drugs. For example, under the People's Republic of China (PRC) law, before we or our subsidiaries commence a clinical trial with Shanghai Adicet Biotechnology Co., Ltd., our variable interest entity (theShanghai Adicet VIE), an approval or filing, as the case may be, needs to be obtained in advance for any projects in respect of human genetic resources in order to collect any biological samples that contain the genetic material of Chinese human subjects. Any failure to obtain such approval or filing could cause such projects to be suspended by governing authorities, and may result in fines. Investigator-initiated trials cannot be implemented in a medical and healthcare institution without first being approved by such medical and healthcare institutions. Such medical and healthcare institutions shall file such approval to the medical and healthcare authority which issues its operating license for record. Furthermore, under relevant PRC laws, a license for use of laboratory animals is required for performing experimentation on animals. Any failure to fully comply with such requirements may result in the invalidation of our experimental data. In recent years, the regulatory framework in China regarding the pharmaceutical industry has undergone significant changes, and we expect that it will continue to undergo significant changes. Any such changes or amendments may result in increased compliance costs on our business or cause delays in or prevent the successful development or commercialization of our product candidates in China and reduce the current benefits we believe are available to us from developing and manufacturing drugs in China. PRC authorities have become increasingly vigilant in enforcing laws in the pharmaceutical industry and any failure by us or our partners to maintain compliance with applicable laws and regulations or obtain and maintain required licenses and permits may result in the suspension or termination of our business activities in China. We believe our strategy and approach are aligned with the PRC government’s regulatory policies, but we cannot ensure that our strategy and approach will continue to be aligned.

In addition, the Foreign Investment Law in China grants foreign invested entities the same treatment as PRC domestic entities, except for those foreign invested entities that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list” published by the Ministry of Commerce, and the National Development and Reform Commission (2024 Negative List). We and our PRC subsidiary,subsidiaries, Adicet (Shanghai) Biotechnology Co., Ltd. (Adicet Shanghai), and Shanghai Adicet, each a wholly foreign-owned enterprise (WFOE), are currently considered to be a foreign invested entity in China.

The 2024 Negative List provides that foreign investment is prohibited in the development and application of human stem cell or gene diagnostic and therapeutic technologies. AsTo of October 2024,date, there has been no official interpretation of the scope of “human stem cell or gene diagnostic and therapeutic technologies” and the application of this regulation remains unclear. If discovering and developing our allogeneic gamma delta T cell therapies are deemed by relevant PRC regulatory agencies as falling into the category of “human stem cell or gene diagnostic and therapeutic technologies,” Adicet Shanghai and Shanghai Adicet would be prohibited from engaging in the research or development of such technologies. To comply with the PRC laws and regulations, we conduct our research and development activities in PRC through the Adicet VIE. It is also noted that in September 2024, Ministry of Commerce, National Healthcare Commission and National Medical Products Administration of PRC jointly announce a pilot policy (2024 Pilot Policy) to allow foreign invested entities in Free Trade Zone of Beijing, Shanghai, Guangdong and Hainan to develop human stem cell or gene diagnostic and therapeutic technologies.technologies, However,pursuant to which Shanghai Adicet, whose registered address is within the applicationterritory of 2024Free PilotTrade PolicyZone remainsof unclear.Shanghai, conduct our research and development activities in PRC.

In May 2024, we formed Adicet Shanghai, located in Shanghai, PRC, as a wholly owned subsidiary of Adicet Therapeutics. Through Adicet Shanghai, we operate our business in PRC pursuant to a series of contractual arrangements between Adicet Shanghai and theShanghai Adicet VIE,Adicet, and the AdicetShanghai VIE’sAdicet's shareholders, which enable us to (i) direct the activities of theShanghai Adicet VIE that most significantly impact theShanghai Adicet VIE’sAdicet’s economic performance, (ii) receive substantially all of the economic benefits of theShanghai Adicet VIE and its subsidiary, and (iii) have an exclusive option to purchase all or part of the equity interests and assets in theShanghai Adicet VIE,Adicet, when and to the extent permitted by PRC laws. As a result of these contractual arrangements, Adicet Therapeutics is considered the primary beneficiary of theShanghai Adicet VIE and theShanghai Adicet VIE’sAdicet’s subsidiaries (if any) for accounting purposes and is able to consolidate the financial results of theShanghai Adicet VIE in the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. Investors in our common stock do not hold any ownership interest, directly or indirectly, in theShanghai Adicet VIE in China, and we merely have a contractual relationship with the operating entity in China.

Our PRC legal counsel based on its understanding of the relevant laws and regulations, is of the opinion that (i) the ownership structure of Adicet Shanghai and theShanghai Adicet VIE are in compliance with applicable PRC laws or regulations and (ii) such contractual arrangements constitute valid, legal and binding obligations enforceable against each party of such agreements in accordance with the terms of each agreement, and will not result in any violation of PRC laws or regulations currently in effect. However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRC legal counsel.

Our lead product candidate, ADI-001,prula-cel, a first-in-class allogeneic gamma delta T cell therapy expressing a CAR targeting CD20, is being developed for the potential treatment of autoimmune diseases. We are also pursuing ADI-270,ADI-212, ana next-generation gene-edited and armored gamma delta CAR T cell productclinical candidate designed to addresstarget prostate-specific membrane antigen (PSMA). ADI-212 is engineered to express a novel CAR binder designed to support enhanced tolerability and tumor-specific recognition. It integrates membrane-tethered IL-12 armoring and CRISPR/Cas9 mediated disruption of subunit 12 of the mediator complex (MED12) to enhance potency in solid tumors and to deliver multiple CD70+anti-tumor solidmechanisms of action to the tumor andmicroenvironment. hematologicalWe malignanciesaim indications,to withsubmit renala cellnew carcinomaregulatory (RCC)submission, such as the initial indication. Our pipeline has several additional internal gamma delta T cell therapy programs in discovery and preclinical development for both hematological malignancies and solid tumors. We expect to continue to develop product candidates in autoimmune diseases and cancer based on our gamma delta T cell platform using either previously validated antigens or those that we identify and target using CAR and other technology. We plan to file one newan Investigational New Drug (IND) application or equivalent every 12-18 months.

In December 2023, the U.S. Food and Drug Administration (FDA) cleared our IND application for ADI-001prula-cel in lupus nephritis (LN). In August 2024, we expanded our ADI-001prula-cel autoimmune clinical development program to include systemic lupus erythematosus (SLE), systemic sclerosis (SSc) and anti-neutrophil cytoplasmic autoantibody associated vasculitis (AAV). In September 2024, we activated sites for our Phase 1 clinical trial of ADI-001prula-cel in autoimmune diseases and opened enrollment for patients with LN. In October 2024, we received clearance for our IND amendment to evaluate ADI-001prula-cel in idiopathic inflammatory myopathies (IIM) and stiff person syndrome (SPS) as part of our Phase 1 clinical trial in autoimmune diseases. We expect to initiate enrollment for patients with SLE, SSc, IIM and SPS in the second quarter of 2025, and for patients with AAV in the second half of 2025. We believe the favorable safety profile, cellular kinetics and B cell depletion in peripheral blood and secondary lymphoid tissue demonstrated with ADI-001prula-cel clinical experience to date is favorable for development in autoimmune diseases. We believe the potential market opportunity for ADI-001prula-cel in B cell mediated autoimmune diseases is substantial based on the prevalence in the U.S., EU5, China and Japan of greater than 1.7 million patients with autoimmune diseases where CAR-T cell therapy has demonstrated clinical proof-of-concept, including SLE (which includes LN), SSc, IIM and SPS. In June 2024, the FDA granted Fast Track Designation to ADI-001prula-cel for the potential treatment of relapsed/refractory class III or class IV LN. In February 2025, the FDA granted Fast Track Designation to ADI-001prula-cel for the potential treatment of adult patients with refractory SLE with extrarenal involvement and for SSc. In NovemberApril 2024,2025, we dosedexpanded ourenrollment firstto LNinclude patient,patients andwith inSLE February 2025, reported that we have dosed a total of three LN patients, infor our Phase 1 clinical trial ofevaluating ADI-001prula-cel in autoimmune diseases.diseases and in July 2025, we reported that the first SSc patient has been dosed in the second cohort of the Phase 1 clinical trial. In October 2025, we announced positive preliminary results from seven SLE and LN patients dosed in our ongoing Phase 1 trial of prula-cel in autoimmune diseases as of the August 31, 2025 data cut-off date. We plan to reportmeet preliminarywith the FDA in the second quarter of 2026 to inform potential pivotal trial design. Subject to regulatory clearance to proceed, we expect to initiate a potential pivotal study in LN or LN and SLE patients in the second half of 2026. In November 2025, we reached alignment with the FDA to allow LN and SLE patients to be dosed with prula-cel in the outpatient setting in ongoing and future clinical datatrials. fromPhase 1 enrollment is ongoing and we expect to provide a clinical update for this trial in LN, SLE and SSc patients in the first half of 2025,2026, andwith dataa forplan otherto autoimmuneprovide diseasesan additional update in the second half of 2025,2026. subjectWe toalso reported in October 2025 that the first patient was dosed in a Phase 1 clinical trial of prula-cel in patients with treatment-refractory rheumatoid arthritis (RA). The study sitewill initiationevaluate andtwo patientconditioning enrollment.regimens:

Adequate funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. If we are unable to raise additional funds when needed, we may be required to delay, reduce,reduce or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to other rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves. If we are required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders, which could materially affect our business and financial condition.

Interest expense consists primarily of theinterest non-cashon amortizationfinance oflease costs incurred in connection with the Loan Agreement (as defined in our Liquidity and Capital Resources section below).liabilities.

Other expense, net primarily consists of state franchise and capital taxes not related to income.income and losses on disposal of fixed assets.

Research and development expenses decreased by $6.7$0.2 million, or 6%,less than 1%, during the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The decrease in research and development expenses was primarily due to a $7.7$5.1 million decrease in payroll and personnel expenses related to CDMOs.lower headcount and a $0.7 million decrease in lab supplies and materials. This decrease was partially offset by a $0.6net $5.6 million increase in labcontracted expensesresearch asand welldevelopment ascosts aprimarily $0.5related millionto increaseCRO incosts professionalassociated fees.with autoimmune studies.

General and administrative expenses increaseddecreased by $1.8$5.3 million, or 7%,19%, during the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increasedecrease in general and administrative expenses was primarily due to a $0.9 million increase in professional fees for the period. There was also a $0.4 million increasedecrease in payroll and personnel expenses,expenses whichprimarily includesrelated anto increasea decrease in salaries and benefits of $0.5 million and stock-based compensation of $0.4$3.6 million, partiallya offsetdecrease byin recruiting and employee travel expenses of $0.3 million, decreases in rent, office related expenses and allocated facility expense of $1.5 million and a decrease of $0.3$0.2 million inrelated recruitingto fees.corporate Theinsurance increaseand property taxes. This decrease was alsopartially dueoffset toby a $0.3 million increase in depreciationprofessional expense as well as a $0.2 million increase in allocated facility expense for the period.fees.

Interest income increaseddecreased by $0.7$4.9 million, or 7%,46%, during the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increasedecrease was primarily due to higher cash balances, investments in treasury securities, and higherlower interest rates and lower cash balances for the period.

Other expense, net decreasedincreased by $0.4$0.2 million, or 62%,98%, during the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. This was primarily due to a decreaseloss inon franchisedisposal taxesof and realized lossesassets related to foreignfurniture exchangeand rates.equipment located in 1200 Bridge Parkway, due to expiration of lease in June 2025.

As of December 31, 2024,2025, we had cash, cash equivalents, and short-term investments of $176.3$158.5 million. We believe that our cash, cash equivalents and short-term investments will be sufficient for us to fund our operations for at least twelve months from the issuance date of our consolidated financial statements as of, and for the year ended,ended December 31, 20242025 included elsewhere in this Annual Report on Form 10-K. We have based these estimates on assumptions that may prove to be wrong, and we could deplete our available capital resources sooner than we expect. Because of the risks and uncertainties associated with research, development, and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.

Net cash used in operating activities was $92.4$94.6 million for the year ended December 31, 2024.2025. Cash used in operating activities consisted of net loss offset by non-cash adjustments of $30.3$20.1 million and a net decreaseincrease in operating assets and liabilities of $5.5$1.5 million. Non-cash items primarily included stock-based compensation expense of $22.2$14.3 million, depreciation and amortization of $6.5$6.4 million and non-cash lease expense of $3.2$3.4 million. The net decreaseincrease in assets and liabilities was primarily due to aan decreaseincrease of $3.7 million in operating lease liability, a decrease of $2.0$1.9 million in accrued and other current and non-current liabilitiesliabilities, andan a decreaseincrease of $1.3$1.7 million in prepaid expenses and other current assets. The decrease was partially offset byassets, an increase in accounts payable of $1.1$1.0 million and an increase of $0.3 million in other non-current assetsassets. The increase was partially offset by a decrease of $0.4$3.4 million.million in operating lease liability.

Net cash used in operating activities was $93.7$92.4 million for the year ended December 31, 2023.2024. Cash used in operating activities consisted of net loss offset by non-cash adjustments of $48.7$30.3 million and a net increasedecrease in operating assets and liabilities of $0.3$5.5 million. Non-cash items primarily included goodwill impairment of $19.5 million, stock-based compensation expense of $20.3$22.2 million, depreciation and amortization of $6.1$6.5 million and non-cash lease expense of $2.8$3.2 million. The net increasedecrease in assets and liabilities was primarily due to ana increasedecrease of $0.9$3.7 million in operating lease liability, a decrease of $2.0 million in accrued expenses and other current and non-current liabilities, and a decrease of $1.3 million in prepaid expenses and other current assetsassets. The decrease was partially offset by an increase in accounts payable of $1.1 million and an increase of $0.4 million in other non-current assets accounts. There was also an increase in accrued and other current and non-current liabilities of $0.8$0.4 million. The increase was partially offset by a decrease in accounts payable of $1.7 million.

Investing in our common stock involves a high degree of risk. Careful consideration should be given to the following risk factors, in addition to the other information set forth in this Quarterly Report on Form 10-Q for the quarter ended MarchJune 31,30, 2026, our Annual Report on Form 10-K for the year ended December 31, 2025, and in other documents that we file with the U.S. Securities and Exchange Commission (SEC), in evaluating us and our business. If any of the following risks and uncertainties actually occurs, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks described below are not intended to be exhaustive and are not the only risks facing us. New risk factors can emerge from time to time, and it is not possible to predict the impact that any factor or combination of factors may have on our business, prospects, financial condition and results of operations.

We are an early clinical stage biopharmaceutical company. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we will continue to incur significant research and development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred net losses since our inception. To date, we have financed our operations primarily with proceeds from our license and collaboration agreements and the issuance and sale of our capital stock, including most recently: (i) net proceeds of approximately $19.3 million, after deducting sales agent commissions, but before deducting any expenses related to such sales, from sales of our common stock under our “at-the-market” program in January 2024; (ii) net proceeds of approximately $91.7 million, after deducting the underwriting discount and commissions and other estimated offering expenses, from the sale of our common stock and pre-funded warrants in an underwritten public offering in January 2024; and (iii) net proceeds of approximately $74.8 million, after deducting the underwriting discount and commissions and other estimated offering expenses, from the sale of our common stock and pre-funded warrants in an underwritten registered direct offering in October 2025. For the three months ended MarchJune 31,30, 2026, we recorded net loss of $20.2$21.4 million. As of MarchJune 31,30, 2026, we had an accumulated deficit of $634.9$656.3 million.

As of the date of this Quarterly Report on Form 10-Q, we believe that with $137.6$118.2 million in cash, cash equivalents and short-term investments in treasury securities as of MarchJune 31,30, 2026, we are capitalized into the second half of 2027. However, changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. We may require additional capital for the further development and commercialization of our product candidates, including funding our internal manufacturing capabilities and may need to raise additional funds sooner if we choose to expand more rapidly than we presently anticipate.

In July 2025, we implemented our workforce reduction plan. In connection with the workforce reduction plan, we expect to incurincurred costs of approximately $2.3 million, which arewere primarily one-time severance benefits. We may not realize, in full or in part, the anticipated benefits, savings and improvements in our cost structure from our restructuring efforts due to unforeseen difficulties, delays or unexpected costs. If we are unable to realize the expected operational efficiencies and cost savings from the restructuring, our operating results and financial condition would be adversely affected. Furthermore, our workforce reduction plan may be disruptive to our operations. For example, headcount reductions could yield unanticipated consequences, such as increased difficulties in implementing our business strategy, including retention of remaining employees.

The collection and use of personal health data in the European Economic Area (EEA) is governed by the General Data Protection Regulation (EU GDPR) and the United Kingdom’s General Data Protection Regulation (“UK GDPR”,GDPR, together with the EU GDPR, “GDPR”). The GDPR applies to any company established in the EEA and to companies established outside the EEA that process personal data in connection with the offering of goods or services to data subjects in the EEA or the monitoring of the behavior of data subjects in the EEA. The GDPR enhances data protection obligations for controllers of personal data, including stringent requirements relating to ensuring an appropriate legal basis or condition applies to the processing of personal data, stricter requirements relating to obtaining consent from data subjects, stricter requirements around the collection of sensitive data (such as health data), expanded disclosures about how personal data is used, requirements to conduct data protection impact assessments for “high risk” processing, limitations on retention of personal data, mandatory data breach notification and “privacy by design” requirements, implementing safeguards to protect the security and confidentiality of personal data and creates direct obligations on service providers acting as processors. The GDPR also imposes strict rules on the transfer of personal data outside of the EEA to countries that do not ensure an adequate level of protection, like the United States.

Although the EU GDPR and the UK GDPR currently impose substantially similar obligations, it is possible that over time the UK GDPR could become less aligned with the GDPR. On June 19, 2025, the UK Government adopted the Data (Use and Access) Act 2025 (the “DUAA”). This may lead to additional compliance costs and could increase our overall risk. This lack of clarity on future UK laws and regulations and their interaction with EU laws and regulations could add legal risk, uncertainty, complexity and cost to our handling of EU personal information and our privacy and data security compliance programs and could require us to implement different compliance measures for the UK and the EU. Non-compliance with the UK GDPR may result in monetary penalties of up to £17.5 million or 4% of worldwide revenue, whichever is higher. Although the UK is regarded as a third country under the EU GDPR, the European Commission issued a decision recognizing the UK as providing adequate protection under the EU GDPR and, therefore, transfers of personal data originating in the EU to the UK remain unrestricted (“UK Adequacy Decision”). In December 2025, the European Commission adopted a decision to extend the validity of the UK adequacy decision for six years until December 2031, determining that the UK continues to offer a level of data protection that is “essentially equivalent” to the EU standards. Like the EU GDPR, the UK GDPR restricts personal data transfers outside the United Kingdom to countries not regarded by the United Kingdom as providing adequate protection. The UK government has confirmed that personal data transfers from the United Kingdom to the EEA remain free flowing.

Our financial performance may be significantly affected by our Regeneron collaboration that we have entered into to develop next-generation engineered immune-cell therapeutics with fully human CARs and TCRs directed to disease-specific cell surface antigens in order to enable the precise engagement and killing of tumor cells. Under the Regeneron Agreement, Regeneron paid us a non-refundable upfront payment of $25.0 million and an aggregate of $20.0 million of additional payments for research funding as of MarchJune 31,30, 2026, and we will collaborate with Regeneron to identify and validate targets and develop a pipeline of engineered immune-cell therapeutics for selected targets. Regeneron has the option to obtain development and commercial rights for a certain number of the product candidates developed by the parties, subject to an option payment for each product candidate. On January 28, 2022, we received a payment of $20.0 million from Regeneron for exercise of its option to license exclusive rights to ADI-002, and we completed the transfer of the associated license rights to Regeneron in the first quarter of 2022. If Regeneron exercises its option on a given product candidate, we then have an option to participate in the development and commercialization for such product. If we do not exercise our option, we will be entitled to royalties on any future sales of such products by Regeneron. We did not exercise our option to participate in the development and commercialization of ADI-002. In addition to developing CARs and TCRs for use in novel immune-cell therapies as part of the collaboration, Regeneron will have the right to use these CARs and TCRs in our other antibody programs outside of the collaboration. Regeneron will also be entitled to royalties on any future sales of products developed and commercialized by us under the agreement. If Regeneron were to terminate our collaboration agreement with us, we may not have the resources or skills to replace those of our collaborator, which could require us to seek additional funding or another collaboration that might not be available on favorable terms or at all, and could cause significant delays in development and/or commercialization efforts and result in substantial additional costs to us. Termination of such collaboration agreement or the loss of rights provided to us under such agreement may create substantial new and additional risks to the successful development and commercialization of our products and could materially harm our financial condition and operating results.

In October 2025, we announced positive preliminary results from seven SLE and LN patients dosed in our ongoing Phase 1 trial of prula-cel in autoimmune diseases as of the August 31, 2025 data cut-off date. We plan to meet with the FDA in the second quarter of 2026 to inform potential pivotal trial design. Subject to regulatory clearance to proceed, we expect to initiate start up activities forprovide a potential pivotal program in LN or LN and SLE patients in the second half of 2026. We plan to provide acomprehensive clinical update for this trial in LN and SLE patients in mid-2026,the third quarter of 2026, including data from at least 2022 patients with LN and SLE (16 LN/ 6 SLE), with a minimum of six months offollow-up, followincluding up,13 patients with anat additionalleast update12 months of follow-up. Based on recent interactions with the FDA, we are advancing a potential pivotal trial design in LN and supporting planned start-up activities for a pivotal program anticipated to commence in the second half of 2026.2026, Wesubject expectto regulatory clearance. The Company plans to provide amore clinicaldetails updateon the potential pivotal trial design in patientsthe withthird SScquarter of 2026. In addition, in the second half of 2026.2026 we expect to report data evaluating prula-cel in patients with SSc.

We are advancing ADI-212, a next-generation gene-edited and armored clinical candidate designed to target prostate-specific membrane antigen. ADI-212 is engineered to express a novel CAR binder designed to support enhanced tolerability and tumor-specific recognition. It integrates membrane-tethered IL-12 (mbIL-12) armoring and CRISPR/Cas9 mediated disruption of subunit 12 of the mediator complex (MED12) to enhance potency in solid tumors and deliver multiple anti-tumor mechanisms of action within the tumor microenvironment. We expect to submit a regulatory filing for a clinical trial of ADI-212 for the treatment of metastatic castration-resistant prostate cancer (mCRPC) in the third quarter of 2026. Subject to regulatory clearance to proceed with a clinical trial, we plan to initiate patient enrollment in the fourth quarter of 2026. We believe the potential market opportunity for ADI-212 in mCRPC is significant based on the prevalence in the U.S., EU5, China and Japan of approximately 75,000 patients with second or third line advanced disease.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Research and development expenses decreased by $5.3$10.0 million, or 23%,35%, during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. The decrease in research and development expenses was primarily due to a $3.6$4.0 million decrease related to lower CRO expenses due to no new enrollment of patients, a $2.8 million decrease in payroll and personnel expenses due to lower headcount, a $1.4$2.3 million decrease in allocated facility-related expenses, a $0.8 million decrease in expenses related to lab supplies and materials, a $0.5 million decrease related to lower CRO expenses and a $0.2$0.1 million decrease in allocated facility-related expenses. The decrease was partially offset by a $0.4 million increase in professional fees.

General and administrative expenses decreased by $3.0$0.1 million, or 42%,3%, during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. The decrease in general and administrative expenses was due to a decrease in payroll and personnel related expenses of $1.4$0.9 million primarily related to a decrease in stock-based compensation and lower headcount, a $1.0 million decrease in allocated facility-related expensesheadcount and a $0.6$0.4 million decrease in professional fees. The decrease was partially offset by a $1.2 million increase in allocated facility-related expenses.

Interest income decreased by $0.3$0.2 million, or 20%16% during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025, which was primarily due to lower interest rates and lower cash balances for the period.

Other expense, net decreased by less than $0.1$0.2 million, or 158%,73%, during the three months ended MarchJune 31,30, 2026 as compared to the same period in 2025. This was due to a decrease in state franchise taxes and realized losses relatedfrom todisposals foreignof exchangeproperty rates.and equipment recognized in 2025.

In January 2024, we raised aggregate net proceeds of approximately $19.3 million through the JonesTrading ATM Program. In March 2024, we terminated the JonesTrading ATM Program and entered into the Jefferies ATM Program. As of MarchJune 31,30, 2026, no shares of common stock have been sold through the Jefferies ATM Program.

As of MarchJune 31,30, 2026, we had cash, cash equivalents and short-term investments of $137.6$118.2 million and restricted cash of $2.9 million held in cash collateral accounts. We expect that our cash, cash equivalents and short-term investments will be sufficient to fund our forecasted operating expenses, capital expenditure requirements and debt service payments for at least the next twelve months from the issuance of our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

We have incurred losses since inception and have incurred losses of $20.2$41.6 million and $28.2$59.4 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $634.9$656.3 million.

As of MarchJune 31,30, 2026, we had cash, cash equivalents, and short-term investments in treasury securities of $137.6$118.2 million. We believe that our cash, cash equivalents and short-term investments in treasury securities will be sufficient for us to fund our operations for at least twelve months from the issuance date of our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We have based these estimates on assumptions that may prove to be wrong, and we could deplete our available capital resources sooner than we expect. Because of the risks and uncertainties associated with research, development, and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.

Net cash used in operating activities was $21.5$41.3 million for the threesix months ended MarchJune 31,30, 2026. Cash used in operating activities consisted of net loss partially offset by non-cash adjustments of $2.6$5.4 million, and a net decrease in operating assets and liabilities of $3.8$5.1 million. Non-cash items primarily included depreciation and amortization of $1.3$2.5 million, stock-based compensation expense of $1.3$2.7 million, non-cash lease expense of $0.7$1.5 million and a net amortization of premiums and accretion discounts on investments of $0.8$1.4 million. The net change in assets and liabilities was primarily due to a decrease in accounts payable of $1.8$1.1 million, a net decrease in accrued and other current and non-current liabilities of $1.1$1.9 million, a decrease in operating lease liability of $0.8$1.9 million andmillion, a decrease in prepaid expenses of $0.1$0.2 million offsetand bya an increasedecrease in other current assets of less than $0.1 million.

Net cash used in operating activities was $25.4$52.0 million for the threesix months ended MarchJune 31,30, 2025. Cash used in operating activities consisted of net loss partially offset by non-cash adjustments of $4.5$50.4 millionmillion, and a net decrease in operating assets and liabilities of $1.7$1.6 million. Non-cash items primarily included depreciation and amortization of $1.7$3.3 million, stock-based compensation expense of $3.2$6.1 million, and non-cash lease expense of $0.8 million and a net amortization of premiums and accretion discounts on investments of $1.2$1.7 million. The net change in assets and liabilities was primarily due to a net decrease in accrued and other current and non-current liabilities of $2.2$0.6 million and a decrease in operating lease liability of $1.0$1.9 million. The decrease in operating assets and liabilities was partiallymillion, offset by a $0.8 millionan increase in prepaid expenses and other current assets andof a$1.1 $0.6 million increase in accounts payable.million.

Net cash provided by investing activities was $18.9$35.5 million for the threesix months ended MarchJune 31,30, 2026, which consisted of $39.0$80.0 million related to maturities of short-term treasury securities, net of $20.1$44.2 million of purchases of short-term treasury securities and less than $0.1$0.2 million of purchases of lab equipment and leasehold improvements for our Good Manufacturing Practice (GMP) cell processing suite at 1000 Bridge Parkway.

Net cash usedprovided inby investing activities was $2.9$30.1 million for the threesix months ended MarchJune 31,30, 2025, which consisted of $34.4 million of purchases of short-term treasury securities and $1.5 million of purchases of lab equipment and leasehold improvements for our Good Manufacturing Practice (GMP) cell processing suite at 1000 Bridge Parkway. We received $33.0$66.0 million related to the maturities of short-term treasury securities.

Net cash used by financing activities was less than $0.1 million for the threesix months ended MarchJune 31,30, 20262026, andwhich Marchwas 31,primarily 2025related andto consistednet proceeds from the issuance of $0.1common millionstock in connection with our employee stock purchase plan. This was partially offset by cash paid for taxes withheld on the net share settlement of equity awards and issuance costs related to exchange of common stock for bothpre-funded years.warrant.