What changed in this filing

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Item 1. Financial Statements

2025-05-12 compared with 2024-11-14 · 198 added, 178 removed, 170 unchanged (69% of the section changed)

1 unchanged sentence

ARRIVENT BIOPHARMA, INC.

BALANCE SHEETS

CONDENSED BALANCE SHEETS

(in thousands, except share and per share data)

September 30,

Current assets:

Cash and cash equivalents

Short-term investments

Prepaid expenses and other current assets

Total current assets

Long-term investments

Right of use assets – operating leases

Deferred offering costs

Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Commitments and contingencies (Note 7)

Liabilities and Stockholders’ Equity

Current liabilities:

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Total liabilities

Commitments and contingencies (Note 7)

Series A convertible preferred stock $ 0.0001 par value, 150,000,000 shares authorized;

150,000,000 shares issued and outstanding at December 31, 2023

Series B convertible preferred stock $ 0.0001 par value, 147,619,034 shares authorized;

147,619,034 shares issued and outstanding at December 31, 2023

Stockholders’ equity (deficit):

Stockholders’ equity:

Preferred stock $ 0.0001 par value, 10,000,000 shares authorized;

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Common stock $ 0.0001 par value, 200,000,000 shares authorized;

33,694,355 and 2,745,480 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

34,040,996 and 33,706,765 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity (deficit)

Total liabilities, convertible preferred stock and stockholders’ equity

See accompanying notes to unaudited interim financial statements.

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of the unaudited interim financial statements.

ARRIVENT BIOPHARMA, INC.

STATEMENTS OF OPERATIONS

CONDENSED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

Three Months Ended

Nine Months Ended

September 30,

Operating expenses:

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Operating loss

Interest income

Interest and investment income

Unrealized gain on marketable securities

Total other comprehensive gain

Total comprehensive loss

Share information:

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Weighted-average shares of common stock outstanding, basic and diluted

See accompanying notes to unaudited interim financial statements.

The accompanying notes are an integral part of the unaudited interim financial statements.

ARRIVENT BIOPHARMA, INC.

STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

CONDENSED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share and per share data)

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convertible preferred stock

Subscriptions

Other Comprehensive

Balance January 1, 2025

Issuance of common stock in initial public offering, net of issuance costs of $ 18,032

Conversion of convertible preferred stock into common stock

( 150,000,000 )

( 147,619,034 )

Issuance of common stock, net of issuance costs of $ 858

Exercise of stock options

Stock-based compensation expense

Unrealized gain on marketable securities

Balance March 31, 2025

Exercise of stock options

Stock-based compensation expense

Balance, June 30, 2024

Exercise of stock options

Stock-based compensation expense

Balance, September 30, 2024

See accompanying notes to unaudited interim financial statements.

The accompanying notes are an integral part of the unaudited interim financial statements.

ARRIVENT BIOPHARMA, INC.

STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

CONDENSED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share and per share data)

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convertible preferred stock

Subscriptions

Other Comprehensive

Balance January 1, 2024

Issuance of Series B convertible preferred stock at $ 1.05 per share, net of issuance costs of $ 57

Issuance of common stock in initial public offering, net of issuance costs of $ 18,032

Conversion of convertible preferred stock into common stock

( 150,000,000 )

( 147,619,034 )

Exercise of stock options

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Balance March 31, 2024

Issuance costs of Series B convertible preferred stock

Repurchase of common stock

Exercise of stock options

Stock-based compensation expense

Balance, June 30, 2023

Exercise of stock options

Stock-based compensation expense

Balance, September 30, 2023

See accompanying notes to unaudited interim financial statements.

The accompanying notes are an integral part of the unaudited interim financial statements.

ARRIVENT BIOPHARMA, INC.

STATEMENTS OF CASH FLOWS

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

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Cash flows from investing activities:

Purchase of short-term investments

Net cash used in investing activities

Purchase of short-term and long-term investments

Maturity of short-term and long-term investments

Net cash provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock in an initial public offering, net of issuance costs

Proceeds from issuance of common stock in an initial public offering and ATM facility, net of issuance costs

Proceeds from the exercise of stock options

Proceeds from the sale of Series B convertible preferred stock, net of issuance costs

Payment of deferred offering costs

Payment of deferred financing costs

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of the period

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year

Supplemental disclosures of non-cash financing and investing activities

Deferred offering costs in accounts payable

Deferred offering costs transferred to additional paid-in-capital

See accompanying notes to unaudited interim financial statements.

The accompanying notes are an integral part of the unaudited interim financial statements.

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

ArriVent BioPharma, Inc., a Delaware Corporation (the “Company”), founded on April 14, 2021, is a clinical-stage biopharmaceutical company focused on identifying, licensing and globalizing top biopharma innovations from around the world to deliver important medicines to patients.

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(“Allist”) which granted the Company an exclusive license under certain intellectual property owned or controlled by Allist to develop, manufacture and commercialize any product containing firmonertinib or any of its derivatives as an active ingredient, for all uses, in all countries and territories other than greater China, which includes mainland China, Hong Kong, Macau and Taiwan (See Note 9).

The Company’s lead development candidate, firmonertinib, is a third-generation tyrosine kinase inhibitor currently being evaluated in multiple clinical trials across a range of epidermal growth factor receptor (“EGFR”) mutations in non-small cell lung cancer, many for which there are limited treatment options.

The Company’s lead development candidate, firmonertinib, is a third-generation tyrosine kinase inhibitor currently being evaluated in multiple clinical trials across a range of epidermal growth factor receptor mutations in non-small cell lung cancer, many for which there are limited treatment options.

On January 30, 2024, the Company completed the closing of its initial public offering of 9,722,222 shares of common stock at a price of $ 18.00 per share.

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Development Stage Risks and Liquidity

The Company has incurred losses since inception and has an accumulated deficit of $ 217.7 million as of September 30, 2024.

The Company has incurred losses since inception and has an accumulated deficit of $ 302.7 million as of March 31, 2025.

The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales from its product candidates currently in development.

Management believes that cash and cash equivalents of $ 282.9 million as of September 30, 2024 are sufficient to sustain planned operations through at least twelve months from the issuance date of these financial statements.

The Company expects that its research and development and general and administrative expenses will continue to increase and, as a result, that it will need additional capital to fund its future operating and capital requirements.

There can be no assurance that the Company will be able to raise sufficient additional capital on acceptable terms, if at all.

If such additional financing is not available on satisfactory terms, or is not available in sufficient amounts, or if the Company does not have sufficient authorized shares, the Company may be required to delay, limit, or eliminate the development of business opportunities and its ability to achieve its business objectives, its competitiveness, and its business, financial condition, and results of operations will be materially adversely affected.

The Company could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and it may be required to relinquish rights to some of its technologies or product candidates or otherwise agree to terms unfavorable to it, any of which may have a material adverse effect on the Company's business, operating results and prospects.

The Company believes that the aggregate balance of cash and cash equivalents and marketable securities of $ 205.5 million as of March 31, 2025 are sufficient to sustain planned operations through at least twelve months from the issuance date of these financial statements.

The Company is subject to those risks associated with any specialty biotechnology company that has substantial expenditures for research and development.

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In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants.

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

In addition, geopolitical tensions, volatility of capital markets, and other adverse macroeconomic events, including those due to inflationary pressures, rising interest rates, bank instability and the ability of the U.S.

government to manage federal debt limits, as well as the potential impact of other health crises on the global financial markets may reduce the Company's ability to access capital, which could negatively affect its liquidity and ability to continue as a going concern.

Summary of Significant Accounting Policies

The summary of significant accounting policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 28, 2024 (the “Annual Report”) has not materially changed, except as set forth below.

The summary of significant accounting policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 3, 2025 (the “Annual Report”) has not materially changed.

Interim Financial Statements

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Any references in these notes to applicable guidance are meant to refer to GAAP as found in Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”).

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

In the opinion of management, the accompanying interim financial statements include all the normal and recurring adjustments (which consist primarily of accruals, estimates, and assumptions that impact financial statements) considered necessary to present fairly the Company’s financial position as of September 30, 2024 and its results of operations for the three and nine months ended September 30, 2024 and 2023.

Certain information and disclosures normally included in the annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, have been condensed or omitted.

These interim financial statements should be read in conjunction with the audited financial statements and related notes as of and for the year ended December 31, 2023, which are included in the Annual Report.

The December 31, 2023 balance sheet has been derived from the audited financial statements.

The results of operations for the interim periods are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.

In the opinion of the Company, the accompanying unaudited condensed financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2025, and its results of operations for the three months ended March 31, 2025 and 2024, and cash flows for the three months ended March 31, 2025 and 2024.

The condensed balance sheet at December 31, 2024, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Actual results could differ from such estimates.

Estimates and assumptions are periodically reviewed, and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary.

Significant areas that require management’s estimates include the fair value of the Company’s common stock prior to the completion of the Company’s initial public offering, stock-based compensation expense assumptions and accrued research and development expenses.

Significant areas that require the Company’s estimates include the fair value of the Company’s common stock prior to the completion of the Company’s initial public offering, and accrued research and development expenses.

Fair Value Measurements

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Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

• Level 3 Inputs:

Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

Management believes that the carrying amounts of the Company’s financial instruments, principally cash equivalents and accounts payable, approximate fair value due to the short-term nature of those instruments.

The Company believes that the carrying amounts of the Company’s financial instruments, principally cash equivalents and accounts payable, approximate fair value due to the short-term nature of those instruments.

Net Loss per Share

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Diluted net loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock and stock options, which would result in the issuance of incremental shares of common stock.

For diluted net loss per share, the weighted-

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

average number of shares of common stock is the same for basic net loss per share since when a net loss exists, potentially dilutive securities are not included in the calculation as their impact is anti-dilutive.

For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share since when a net loss exists, potentially dilutive securities are not included in the calculation as their impact is anti-dilutive.

The Company’s convertible preferred stock entitled the holder to participate in dividends and earnings of the Company, and, if the Company had recognized net income, it would have used the two-class method to calculate earnings per share.

The two-class method was not applicable during periods with a net loss, as the holders of the convertible preferred stock had no obligation to fund losses.

The following table sets forth the computation of net loss, basic and diluted (in thousands, except share and per share data):

The following table sets forth the computation of net loss per share, basic and diluted (in thousands, except share and per share data):

Three Months Ended

Nine Months Ended

September 30,

Weighted-average shares of common stock outstanding

Weighted-average shares of common stock subject to repurchase

Weighted-average shares of common stock outstanding, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

Nine Months Ended

September 30,

Series A convertible preferred stock (as converted to common stock)

Series B convertible preferred stock (as converted to common stock)

Stock options

Stock options outstanding have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive.

Stock options outstanding at March 31, 2025 and 2024 were 4,059,300 and 2,547,253 , respectively.

Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This standard includes the requirements that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, the title and position of the chief operating decision maker, and an explanation of how the chief operating decision maker uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

It also requires that a public entity that has a single reportable segment provide all the disclosures required by the guidance and all existing segment disclosures in ASC 280, Segment Reporting .

This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

A public entity should apply the amendments in the guidance retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

segment expense categories identified and disclosed in the period of adoption.

The Company is currently evaluating the impact that this standard may have on its financial statements.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

This standard includes the requirement that public business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate).

It also requires that all entities disclose, on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received) and requires that all entities disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign.

Lastly, this standard eliminates the requirement for all entities to disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or make a statement that an estimate of the range cannot be made.

This standard is effective for the Company for the annual period beginning January 1, 2026.

Early adoption is permitted.

This standard should be applied on a prospective basis.

Retrospective application is permitted.

The Company is currently evaluating the impact that this standard may have on its financial statements.

In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures:

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This standard will be effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively.

The Company is currently evaluating the impact that this standard may have on its financial statements.

The Company is currently evaluating the impact that this standard may have on its year-end financial statements.

Accounting Pronouncements Becoming Effective in 2025

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires enhanced income tax disclosures, including specific categories and

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations.

The requirements of ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently in the process of evaluating the impact of this pronouncement on its related disclosures.

Reverse Stock Split

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All common stock share and per-share amounts presented in the financial statements and related notes have been retroactively adjusted to reflect the reverse stock split.

(g) License and Collaboration Agreements

(h) License and Collaboration Agreements

The Company analyzes its license and collaborative agreements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities.

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If the Company concludes that some or all aspects of the arrangement represent a transaction with a customer, it accounts for those aspects of the arrangement within the scope of ASC 606, Revenue from Contracts with Customers .

None of the license and collaborative agreements discussed in Note 9 represent transactions with customers.

None of the license and collaboration agreements discussed in Note 9 represent transactions with customers.

If the Company concludes that some or all aspects of the arrangement are within the scope of ASC 808 and do not represent a transaction with a customer, it recognizes costs incurred as a component of the related expense in the period incurred.

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Clinical, regulatory, and development milestones are recognized as research and development expense only when such milestones are deemed probable of being achieved.

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

Fair Value Measurements

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands):

September 30, 2024

Current assets:

Cash equivalents - money market funds

March 31, 2025

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Money market funds

Corporate securities

Government securities

Total assets measured at fair value

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

December 31, 2024

Current assets:

Cash equivalents - money market funds

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Money market funds

Corporate securities

Government securities

Total assets measured at fair value

Money market accounts are highly liquid investments.

The pricing information on the Company’s money market account is based on quoted prices in active markets.

Cash balances were $ 5.0 million at March 31, 2025 and December 31, 2024, respectively.

Money market funds are highly liquid investments.

The pricing information on the Company’s money market fund is based on quoted prices in active markets.

This approach results in a classification of these securities as Level 1 of the fair value hierarchy.

The Company’s investment portfolio includes many fixed income securities that do not always trade on a daily basis.

As a result, the pricing services used by the Company applied other available information as applicable through processes such as benchmark yields, benchmarking of like securities, sector groupings and matrix pricing to prepare evaluations.

In addition, model processes were used to assess interest rate impact and develop prepayment scenarios.

These models take into consideration relevant credit information, perceived market movements, sector news and economic events.

The inputs into these models may include benchmark yields, reported trades, broker-dealer quotes, issuer spreads and other relevant data.

As of March 31, 2025, $ 165.7 million of our fixed income securities have maturity dates within the next twelve months, and $ 18.9 million have maturities within the next 12 to 24 months.

All securities are considered available for sale.

Prepaid Expenses and Other Current Assets

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

September 30,

Research and development

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Accrued expenses consisted of the following (in thousands):

September 30,

Research and development

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ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

(7) Commitments and Contingencies

Operating lease expense was less than $ 0.1 million for the three months ended September 30, 2024 and 2023, respectively.

Operating lease expense was $ 0.1 million and less than $ 0.1 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s remaining lease term and discount rate for its operating lease as of September 30, 2024 were 1.25 years and 10.0 %, respectively.

Future maturities of operating lease liabilities were as follows as of September 30, 2024 (in thousands):

Fiscal year ending:

Remainder of 2024

Total future minimum payments

Less imputed interest

Present value of lease liabilities

Cash paid for rent expense recorded during the three months ended September 30, 2024 and 2023 was less than $ 0.1 million.

Cash paid for rent expense recorded during the nine months ended September 30, 2024 and 2023 was $ 0.1 million and less than $ 0.1 million, respectively.

The Company entered into various license and collaboration agreements under which it is obligated to make contingent payments as described in Note 9, License and Collaboration Agreements.

Stock-based Compensation

In June 2021, the Company adopted the 2021 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2021 Plan”), that authorized the Company to grant up to 803,564 shares of common stock.

In 2022, the Company amended the 2021 Plan and increased the total number of shares authorized under the 2021 Plan to 2,748,818 .

In January 2024, the Company adopted the 2024 Employee, Director and Consultant Equity Incentive Plan (the “2024 Plan”) that authorized the Company to grant up to 3,900,000 shares of common stock plus any remaining ungranted or forfeited shares from the 2021 Plan.

As of September 30, 2024, there were 3,758,647 shares available to be granted.

As of March 31, 2025, there were 3,829,956 shares available to be granted.

The Company’s stock options vest based on the terms in the awards agreements and generally vest over four years .

The Company recorded stock-based compensation expense in the following expense categories in its accompanying statements of operations (in thousands):

The Company recorded stock-based compensation expense in the following expense categories in its accompanying statements of operations and comprehensive loss (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Research and development

General and administrative

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

The following is a summary of stock options activity:

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Forfeited/Expired

Outstanding as of September 30, 2024

Exercisable as of September 30, 2024

Vested and expected to vest at September 30, 2024

The weighted-average grant-date fair value of options granted in the first nine months of 2024 and 2023 were $ 8.53 and $ 3.50 per share, respectively.

Outstanding as of March 31, 2025

Exercisable as of March 31, 2025

Vested and expected to vest at March 31, 2025

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

The weighted-average grant-date fair value of options granted in the first three months of 2025 and 2024 were $ 22.04 and $ 6.03 per share, respectively.

The fair value was estimated using the Black-Scholes option-pricing model based on the following assumptions:

Nine Months Ended

September 30,

Three Months Ended

Risk-free interest rate

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93.1 % - 93.2 %

87.0 % - 89.5 %

Expected dividend yield

Estimated fair value of the Company's common stock per share

Unrecognized compensation cost for awards not vested as of September 30, 2024 was $ 10.0 million and will be expensed over a weighted-average period of 2.69 years.

License and Collaborative Agreements

Estimated fair value of the Company's common stock per share (a)

22.03 - 27.56

(a) Subsequent to the Company’s initial public offering on January 24, 2024, the fair value of common stock is based on the closing market price of common stock at the date of grant.

Unrecognized compensation cost for awards not vested as of March 31, 2025 was $ 42.4 million and will be expensed over a weighted-average period of 3.08 years.

License and Collaboration Agreements

In June 2021, the Company entered into a Global Technology Transfer and License Agreement with Allist (“Allist Agreement”).

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Upon execution of the Allist Agreement, the Company paid Allist a non-refundable cash payment of $ 40.0 million and issued 1,276,250 shares of its common stock.

Upon the achievement of certain clinical, regulatory and commercial milestones using the licensed technology, the Company is obligated to make future milestone payments to Allist.

The Company is obligated to make future milestone payments of up to $ 105.0 million in clinical and regulatory milestones and up to $ 655.0 million in sales milestones.

Furthermore royalties, ranging from high single digit percentages to low mid-teen percentage will be payable on net sales of licensed products in licensed territories.

The upfront payment and the fair value of the common stock issued was recorded to research and development expense in 2021.

Upon the achievement of certain clinical, regulatory and commercial milestones using the licensed technology, the Company is obligated to make future milestone payments to Allist of up to $ 105.0 million in clinical and regulatory milestones and up to $ 655.0 million in commercial milestones.

Furthermore, royalties, ranging from high single digit to low mid-teen percentages will be payable to Allist on net sales of licensed products in licensed territories.

In connection with the Allist Agreement, in December 2021, the parties also entered into a Joint Clinical Collaboration Agreement (“Clinical Collaboration”) to define the framework under which the parties will cooperate and share costs related to global clinical studies to be conducted jointly by the Company and Allist.

During the nine months

During the three months ended March 31, 2025 and 2024, the Company incurred $ 0.5 million and $ 0.2 million, respectively, in cost reimbursements to Allist under the Clinical Collaboration which have been recorded as research and development expense.

The Company also received cost reimbursements from Allist of $ 0.4 and $ 0.1 million for the three months ended March 31, 2025 and 2024, respectively, which have been recorded as a reduction of research and development expenses.

During the year ended December 31, 2024, no additional milestones were met or achieved or were probable of achievement.

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

ended September 30, 2024 and 2023, the Company incurred $ 0.5 million and $ 1.4 million, respectively, in cost reimbursements to Allist which have been recorded as research and development expense under the Clinical Collaboration.

The Company also was entitled to cost reimbursement from Allist of $ 0.3 million for each of the nine months ended September 30, 2024 and 2023, which has been recorded as a reduction of research and development expenses.

During the nine months ended September 30, 2024 and 2023, no milestones were met or achieved, or were probable of achievement.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

In June 2024, the Company entered into a collaboration agreement with Jiangsu Alphamab Biopharmaceuticals Co., Ltd.

(“Alphamab”) to discover, develop and commercialize novel antibody drug conjugates (“ADCs”) for the treatment of cancers.

Under the agreement, both companies seek to leverage Alphamab’s proprietary linker-payload platform and glycan-conjugation technology to identify novel ADCs for oncology indications.

The agreement gives the Company exclusive rights to develop and commercialize ADCs globally, except greater China, which includes mainland China, Hong Kong, Macau and Taiwan where Alphamab retains the right to develop and commercialize the ADCs.

The terms of the agreement include combined upfront and potential milestone payments to Alphamab of up to $ 615.5 million in aggregate for the potential programs, based on the achievement of certain regulatory, development, and sales milestones.

In addition, Alphamab is entitled to receive tiered sales royalties from the Company for each ADC product

The upfront payment was recorded to research and development expense during the three-month period ending June 30, 2024.

(“Alphamab”) to discover, develop and commercialize novel antibody drug conjugates (“ADCs”) for the treatment of cancers (“Alphamab Agreement”).

Under the Alphamab Agreement, both companies seek to leverage Alphamab’s proprietary linker-payload platform and glycan-conjugation technology to identify novel ADCs for oncology indications.

The Alphamab Agreement gives the Company exclusive rights to develop and commercialize ADCs globally, except greater China, which includes mainland China, Hong Kong, Macau and Taiwan where Alphamab retains the right to develop and commercialize the ADCs.

The terms of the Alphamab Agreement include combined upfront and potential milestone payments to Alphamab of up to $ 201.5 million based on the achievement of certain regulatory and development milestones, and up to $ 414.0 million based on the achievement of certain commercial milestones.

In addition, Alphamab is entitled to receive tiered sales royalties, ranging from low single digit to mid-single digit percentages, from the Company for net sales of each ADC product.

The upfront payment was recorded to research and development expense during the three-month period ended June 30, 2024.

During the three months ended March 31, 2025, the Company paid $ 0.1 million in cost reimbursements to Alphamab under the Alphamab Agreement which have also been recorded as research and development expense.

Also during the three months ended March 31, 2025, the Company paid $ 1.2 million upon the approval of a target pair selection, which was likewise included in research and development expense.

No milestones have been met or achieved, or are probable of achievement, since the inception of the agreement.

In December 2021, the Company entered into a Research Collaboration Agreement, as amended, effective June 30, 2023 (the “Aarvik Collaboration Agreement”), with Aarvik Pharmaceuticals, Inc.

(“Aarvik”), under which the Company is required to pay Aarvik up to $ 3.1 million on statements of work (“SOWs”) and an initiation fee of $ 0.3 million predefined in the Aarvik Collaboration Agreement.

(“Aarvik”), under which the Company is required to pay Aarvik up to $ 3.1 million on statements of work (“SOWs”) and an initiation fee of $ 0.3 million.

After the completion of the SOWs, the Company has an exclusive option to license the Aarvik intellectual property, and the option to acquire certain of Aarvik’s intellectual property, after which it is the Company’s sole responsibility to research, develop, manufacture and commercialize any applicable compound and product in the field and territory.

If the Company exercises that option, it would be obligated to pay up to $ 18.0 million per product upon the achievement of certain clinical and regulatory milestone events and up to $ 80.0 million per product in commercial milestones.

Additionally, the Company would be obligated to pay Aarvik royalties in the mid-single digits based on net sales of licensed products.

In August 2024, the Company paid $ 1.0 million to exercise that option, and as a result is now obligated to pay up to $ 18.0 million per product upon the achievement of certain clinical and regulatory milestone events and up to $ 80.0 million per product in commercial milestones.

Additionally, the Company is obligated to pay Aarvik royalties in the mid-single digits based on net sales of licensed products.

On August 9, 2024, the Company entered into an amendment and restatement of the Aarvik Collaboration Agreement (the “Amended and Restated Aarvik Collaboration Agreement”).

Under the Amended and Restated Aarvik Collaboration Agreement, Aarvik granted the Company an exclusive option to obtain exclusive rights to certain of Aarvik’s intellectual property for the research, development, manufacture, use, commercialization, or other exploitation of the ADCs related to (i) the two agreed targets to which the compounds being developed under the collaboration bind, which is referred to as the Target Pair, and (ii) the acquisition of exclusive rights to certain intellectual property generated during the collaboration.

The Company has not yet selected the indication or indications that it would pursue in the collaboration and anticipates doing so in connection with the identification of a lead candidate for IND-enabling studies.

Under the Amended and Restated Aarvik Collaboration Agreement, the Company is required to pay Aarvik a collaboration initiation fee and research fees as provided in the SOWs in an aggregate of up to $ 4.7 million (based on estimated research fees).

From inception to date, under the Amended and Restated Aarvik

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

The Company incurred $ 1.7 million and $ 0.4 million in research and development expenses related to the Aarvik SOWs during the three months ended September 30, 2024 and 2023, respectively.

The Company incurred $ 2.7 million and $ 1.1 million in research and development expenses related to the Aarvik SOWs during the nine months ended September 30, 2024 and 2023, respectively.

With the exception of a $ 1.0 million payment to exercise an option which was recorded to research and development expense during the three month period ending September 30, 2024, no milestones have been met or achieved since the inception of the Aarvik Collaboration Agreement.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

Collaboration Agreement, the Company has paid Aarvik a collaboration initiation fee and research fees as provided in the SOWs in an aggregate amount of $ 5.0 million.

The Company incurred $ 0.1 million and $ 0.1 million in research and development expenses related to the Aarvik SOWs during the three months ended March 31, 2025 and 2024, respectively.

With the exception of the option described above, no milestones have been met or achieved, or are probable of achievement, since the inception of the Aarvik Collaboration Agreement.

On January 21, 2025, the Company entered into an Exclusive License Agreement (the “Lepu Biopharma Agreement”) with Lepu Biopharma Co., Ltd.

(“Lepu”), pursuant to which Lepu granted the Company a right to develop and commercialize ARR-217, an antibody drug conjugate for gastrointestinal cancers outside greater China, which is mainland China, Hong Kong, Macau and Taiwan (“Greater China”).

Under the Lepu Biopharma Agreement, Lepu granted to the Company:

(i) an exclusive, royalty-bearing, sublicensable license under certain intellectual property owned or controlled by Lepu, to develop, manufacture and commercialize any product containing ARR-217 for all uses in all countries and territories other than Greater China (the “ArriVent Territory”);

and (ii) a non-exclusive license under certain intellectual property controlled by Lepu to develop, manufacture and commercialize any product containing ARR-217 for use in oncology in the ArriVent Territory.

Under the Lepu Biopharma Agreement, the Company paid Lepu a one-time upfront payment of $ 40 million, and Lepu is eligible to receive near-term milestone payments totaling another $ 7.0 million in cash.

The upfront payment was included in research and development expenses.

Finally, Lepu is eligible to receive payments of up to $ 0.3 billion in development and regulatory milestones, and up to $ 0.89 billion in commercial milestones, and tiered royalties in high single-digit to low-teen percentages on net sales in the ArriVent Territory.

Other than the one-time upfront payment noted above, no milestones have been met or achieved, or are probable of achievement, since the inception of the Lepu Biopharma Agreement.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources in assessing performance.

The Company has one reportable and operating segment:

life science.

The life science segment is engaged in identifying, licensing and globalizing top biopharma innovations from around the world to deliver important medicines to patients.

The Company’s chief operating decision maker (“CODM”) is the chief executive officer.

The accounting policies of the life science segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance for the life science segment based on net loss, which is reported on the condensed statement of operations and comprehensive loss.

The measure of segment assets is reported on the balance sheet as total assets.

All of the Company’s assets are located in the United States.

To date, the Company has not generated any product revenue.

The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval.

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

As such, the CODM uses cash forecast models in deciding how to invest into the life science segment.

Such cash forecast models are reviewed to assess the entity-wide operating results and performance.

Net loss is used to monitor budget versus actual results.

Monitoring budgeted versus actual results is used in assessing performance of the segment, establishing cash forecast models and to optimize the distribution of resources across functions, therapeutic areas and research and development programs.

The table below summarizes the significant expense categories regularly provided to the CODM for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(in thousands)

Operating expenses:

Research and development:

Firmonertinib (excluding personnel-related and other internal costs):

Other Firmonertinib costs

Total Firmonertinib

Research and development:

Discovery-stage programs

Research and development:

Personnel-related and other internal costs

General and administrative:

Personnel-related costs

General and administrative:

Other segment items (a)

(a) Other segment items consists of interest and investment income.

“At-the-Market” Offering

On February 3, 2025, the Company filed an automatic shelf registration statement on Form S-3ASR with the SEC pursuant to which the Company registered for sale an indeterminate amount of any combination of its common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that the Company may determine, which is referred to as the “2025 WKSI Shelf”.

The 2025 WKSI Shelf includes a prospectus covering up to an aggregate of $ 250.0 million of shares of common stock that the Company is able to issue and sell from time to time, through Jefferies LLC (“Jefferies”), acting as its sales agent, pursuant to the Open Market Sale Agreement SM , dated February 3, 2025 (the “Sales Agreement”), for its “at-the-market” equity program.

ARRIVENT BIOPHARMA, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

Under the Sales Agreement, Jefferies may sell shares of the Company’s common stock by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 of the Securities Act of 1933, as amended, subject to the terms of the Sales Agreement.

During the three months ended March 31, 2025, the Company sold 264,458 shares of common stock pursuant to the Sales Agreement for total proceeds of $ 6.5 million, net of fees.

As of March 31, 2025, the Company has approximately $ 242.8 million remaining for future issuances of common stock pursuant to the Sales Agreement.

Subsequent Event

On May 8, 2025, the Company entered into a Loan and Security Agreement with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (the Loan Agreement).

Under the Loan Agreement, the Company has the right to draw down $ 35.0 million at its discretion, and up to an additional $ 40.0 million upon the satisfaction of certain milestones.

No amounts have been drawn on this facility at the date of issuance of these financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements