1. NATURE OF BUSINESS

Description of the Business

Tectonic Therapeutic, Inc. (the “Company” or “Tectonic”) is a clinical-stage biotechnology company focused on the discovery and development of therapeutic proteins and antibodies that modulate the activity of G-protein coupled receptors (“GPCRs”). Leveraging its proprietary technology platform called GEODe™ (GPCRs Engineered for Optimal Discovery), Tectonic is focused on developing biologic medicines that overcome the existing challenges of GPCR-targeted drug discovery and harness the human body to modify the course of disease. Tectonic focuses on areas of significant unmet medical need, often where therapeutic options are poor or nonexistent, as these are areas where new medicines have the potential to improve patient quality of life.

Risks and Uncertainties

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive pre-clinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance reporting capabilities.

The Company’s proprietary GEODe™ platform is currently in development. There can be no assurance that current and future research and development activities will be successfully completed, that adequate protection for owned intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies.

Liquidity and Capital Resources

Since inception, the Company has incurred recurring losses and negative cash flows from operations, and expects such losses to continue in the future as it conducts research and development activities and continues to develop its product candidates. The Company generated net losses of $22.3 million and $47.5 million for the three and six months ended June 30, 2026, respectively, and had an accumulated deficit of $270.3 million as of June 30, 2026. The Company has financed its operations primarily through the sale and issuance of common stock, convertible equity instruments, and proceeds from prior corporate transactions. The Company has devoted substantially all of its financial resources and efforts to business planning, conducting research and development, recruiting management and technical staff, and raising capital. The Company also has an effective shelf registration statement on Form S-3 filed with the SEC, which may be used to offer from time to time any combination of common stock, preferred stock, debt securities, and warrants up to an aggregate amount of $400 million. Of this amount, the Company has an at the market offering program (the “ATM”) pursuant to which it may sell up to $100 million of common stock. During the six months ended June 30, 2026, the Company sold 432,306 shares of its common stock under the ATM at an average price per share of $30.89 for gross proceeds of $13.4 million and net proceeds of $13.1 million after deducting commissions and offering expenses of $0.3 million. During the three months ended June 30, 2026, the Company sold 389,806 shares of its common stock under the ATM at an average price per share of $30.75 for gross proceeds of $12.0 million and net proceeds of $11.7 million after deducting commissions and offering expenses of $0.3 million.