On June 15, 2026, the Company announced the implementation of a plan to reduce its workforce by approximately 50% to streamline operations and preserve cash. The Company’s board of directors approved this strategic restructuring, effective June 14, 2026, in order to preserve shareholder capital as the Company awaits additional durability data and meetings with the FDA in connection with the Company’s LEGEND pivotal cohort. The Company has retained personnel and resources required to meet its key strategic goals and milestones, including completion of the LEGEND Cohort 1; enrolling the detalimogene plus surfactant cohort; meeting with the FDA and planning for BLA initiation in the fourth quarter of calendar year 2026; and completing necessary pre-commercial activities required to support the commercial launch of detalimogene in 2027, if approved. The Company currently estimates it will incur restructuring costs of approximately $5.6 million to $6.1 million, consisting primarily of employee severance, benefits, and other related costs, as well as approximately $5.0 million to $5.5 million in non-cash stock-based compensation expense primarily associated with accelerated vesting of stock options.

The estimated charges that the Company expects to incur as a result of the restructuring are subject to several assumptions, and actual results may differ materially from these estimates. The Company may incur additional costs due to events associated with or resulting from the strategic restructuring and workforce reduction.

Employees impacted by the restructuring obtained involuntary termination benefits that are provided pursuant to a one-time benefit arrangement. For employees who were notified of their termination in June 2026 and have no requirement to provide future service, the Company recognized the liability for the termination benefits in full for the period ended July 31, 2026. For employees who are required to render services beyond a minimum retention period to receive their one-time termination benefits, the Company will recognize termination benefits ratably over their future service periods. The service periods began in June 2026 and end at various periods through October 2026. As of July 31, 2026, the Company has incurred approximately $5.2 million in employee termination benefits expense and $3.4 million in non-cash stock-based compensation expense primarily associated with accelerated vesting of stock options. The Company expects to continue to incur expenses through October 2026 related to employees who have future service period requirements.

In connection with the strategic restructuring, the Company approved retention incentives intended to retain key employees through specified clinical and regulatory objectives. As further described below, these retention incentives are separate from one-time termination benefits and include performance-based cash retention awards and performance-based equity retention awards, each of which requires continued employment and is contingent on the achievement of specified milestones.

On June 14, 2026, the Company’s board of directors approved performance-based cash retention awards for certain executive employees and the non-executive employees of the Company. Subject to remaining actively employed and in good standing with the Company, aggregate cash retention awards of approximately $1.6 million will be paid upon the achievement of two milestones: (i) completion of the pre-BLA meeting with the FDA relating to detalimogene on or prior to December 31, 2026, and (ii) confirmation from the FDA that the Company’s filing of the BLA with the FDA with respect to detalimogene has been completed and accepted by the FDA, provided that such confirmation is received by the Company from the FDA no later than September 30, 2027. No expense has been recognized as of July 31, 2026 for these awards.

On June 16, 2026, the compensation committee of the board of directors approved the issuance of performance-based equity retention awards under the 2023 Plan to certain executive employees and non-executive employees, to be issued in the form of performance-based non-qualified stock options and performance-based restricted share units. Subject to the applicable recipient remaining actively employed and in good standing with the Company, the awards will vest, if at all, based upon the achievement of two milestones: (i) confirmation from the FDA that the Company’s BLA filing with respect to detalimogene has been completed and accepted by the FDA, provided that such confirmation is received by September 30, 2027, and (ii) FDA regulatory approval with respect to detalimogene, provided that such regulatory approval is received by December 31, 2028.

The Company estimates that it will incur up to approximately $2.8 million in non-cash stock-based compensation expense in connection with the vesting of performance-based equity retention awards, with approximately $1.4

million of non-cash stock-based compensation expense recognized upon vesting for each milestone. No expense has been recognized as of July 31, 2026 for these awards.

The Company records restructuring charges and a restructuring liability within the “employee compensation and related benefits” accrued expenses (Note 6) when the criteria for recognition are met. Of the $5.2 million in employee termination benefit expense recognized, $3.3 million was recognized as general and administrative expenses and $1.9 million was recognized as research and development expenses. The following table summarizes termination benefit expenses recognized and paid during the period:


	Nine Months Ended
	July 31, 2026
Accrued employee termination benefits beginning balance		-
Employee termination benefit expense incurred during the period		5,150
Amounts paid or otherwise settled during the period		(491	)
Accrued employee termination benefits as of period end		4,659

Non-cash stock-based compensation expense associated with accelerated vesting of stock options and, if achieved, vesting of performance-based equity retention awards is recognized in stock-based compensation expense and does not result in a cash restructuring liability.