What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-13 compared with 2026-05-15 · 95 added, 45 removed, 165 unchanged (46% of the section changed)

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You should read the following discussion and analysis together with our unaudited condensed consolidated financial statements and notes thereto included in “Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q (this “Quarterly Report”) and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025 included in the Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on March 31, 2026 (the “Annual Report”).

1 to the Annual Report on Form 10-K/A, filed with the SEC on April 29, 2026 (together, the “Annual Report”).

In addition to historical information, this Quarterly Report contains forward-looking statements that involve risks, uncertainties, and assumptions.

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Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current and future product candidates.

Our net loss was $6.3 million for the three months ended March 31, 2026, compared to $15.3 million for the three months ended March 31, 2025.

As of March 31, 2026, we had an accumulated deficit of $552.0 million.

We reported net income of $0.5 million and a net loss of $5.9 million for the three and six months ended June 30, 2026, compared to net losses of $18.7 million and $34.0 million for the three and six months ended June 30, 2025.

As of June 30, 2026, we had an accumulated deficit of $551.5 million.

These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations.

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We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

As of March 31, 2026, our cash and cash equivalents totaled approximately $2.0 million.

On May 14, 2026, we entered into a First Amendment (the "Amendment") to that certain License Agreement, dated September 23, 2024 (the "Context License Agreement"), by and between us and Context Therapeutics, Inc., a Delaware corporation ("Context").

Under the terms of the Amendment, and in full consideration for the amended license rights in the Amendment, Context has agreed to pay us:

(i) $4,500,000, payable within five (5) business days of the effective date of the Amendment, and (ii) $2,000,000, payable by August 1, 2026.

As of June 30, 2026, our cash and cash equivalents totaled approximately $1.5 million.

On May 14, 2026, we entered into a First Amendment (the "Context Amendment") to that certain License Agreement, dated September 23, 2024 (the "Context License Agreement"), by and between us and Context Therapeutics, Inc., a Delaware corporation ("Context").

Under the terms of the Context Amendment, and in full consideration for the amended license rights in the Context Amendment, we received $4,500,000 upfront from Context and the additional $2,000,000 that was due by August 1, 2026.

Based on our current operating plan, and along with our history of operating losses, our current cash and cash equivalents are not sufficient to fund our ongoing operations for a period of at least twelve months from the date the condensed consolidated financial statements included in this report are issued, and these circumstances raise substantial doubt about our ability to continue as a going concern.

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In November 2025, we received the first $2.0 million milestone payment under the Context License Agreement.

In addition, Context has funded supplementary preclinical research performed by us to support their pre-IND process, where Context has publicly indicated that it expects to initiate a Phase 1 clinical trial in the third quarter of 2026.

We did not recognize any revenue during the three months ended March 31, 2026 and 2025, related to the Context License Agreement.

In May 2026, in connection with the Context Amendment, we received $4.5 million.

We subsequently received the additional $2.0 million that was due by August 1, 2026.

We recognized $6.5 million in revenue during the three and six months ended June 30, 2026, related to these payments under the Context License Agreement.

We did not recognize any revenue during the three and six months ended June 30, 2025, related to the Context License Agreement.

Operating Expenses

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The capitalized amounts are then expensed as the related goods are delivered and services are performed.

We expect our research and development expenses to decrease in the near term due to completion of our Phase 2 clinical trials and as a result of the March 2026 workforce reduction, cost containment measures and capital preservation initiatives discussed above.

We expect our research and development expenses to decrease in the near term due to cost containment measures and capital preservation initiatives discussed above.

However, research and development could increase upon initiation of new clinical trials, including registrational trials for our lead product candidates.

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Interest income consists primarily of interest earned on our cash and cash equivalent balances.

Gain on Warrant Liability

Gain on warrant liability relates to the changes in the fair value of our liability-classified warrants to purchase common stock.

Gain (Loss) on Warrant Liability

Gain (loss) on warrant liability relates to the changes in the fair value of our liability-classified warrants to purchase common stock.

Gain on PPAs Liability

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Results of Operations

Comparison of the three months ended March 31, 2026 and 2025

Comparison of the three months ended June 30, 2026 and 2025

Three Months Ended

(in thousands)

Collaboration and other revenue

Operating expenses:

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Total operating expenses

Income (loss) from operations

Other income (expense):

Interest income

Gain (loss) on warrant liability

Other expense

Total other income (expense)

Consolidated net income (loss) and comprehensive income (loss)

Collaboration and other revenue

Collaboration and other revenue was $6.5 million and $0.0 million during the three months ended June 30, 2026 and 2025, respectively.

The $6.5 million increase was due to amounts due under the Context Amendment in the current quarter.

Research and development expense

The following table summarizes our research and development expenses allocated by CAB program for the periods indicated:

Three Months Ended

(in thousands)

External expenses:

BA3182 (CAB EpCAM x CAB CD3)

Other CAB Programs

Total external expenses

Personnel and related

Equity-based compensation

Facilities and other

Total research and development expenses

Research and development expenses were $3.3 million and $13.7 million for the three months ended June 30, 2026 and 2025, respectively.

The decrease of approximately $10.3 million was primarily driven by a $8.8 million decrease in program development costs due to completion of our Phase 2 trials for mecbotamab vedotin, ozuriftamab vedotin, and evalstotug.

The remaining decrease in research and development expense is due to a $2.1 million decrease in personnel related expense, including stock-based compensation, primarily due to our reduction in force in March 2026, and a $0.4 million decrease in facilities and other allocated costs.

This was offset by a $1.0 million increase in related party expense incurred in connection with the Context Amendment in May 2026.

General and administrative expense

General and administrative expenses were $2.9 million and $5.0 million for the three months ended June 30, 2026 and 2025, respectively.

The decrease of approximately $2.0 million was primarily driven by a $1.2 million decrease in personnel related expense, including stock-based compensation, primarily due to our reduction in force in March 2026, a $0.8 million decrease in professional fees primarily related to the Company’s intellectual property portfolio, offset by a $0.4 million increase in advisor fees

related to closing the Context Amendment in May 2026.

The remaining $0.4 million decrease is related to facility and other allocated costs.

Interest income

Interest income was $0.0 million and $0.2 million for the three months ended June 30, 2026 and 2025, respectively.

The decrease of $0.2 million was primarily due to lower cash and cash equivalents compared to the same period in 2025.

Gain (loss) on warrant liability

Gain on warrant liability was $0.2 million for the three months ended June 30, 2026, as compared to a loss on warrant liability of $0.3 million for the three months ended June 30, 2025.

The increase of $0.5 million was due to the change in fair value of the warrants which were issued in December 2024 and are adjusted to fair value at each period, including the impact of an adjustment to the warrant exercise price related to the Share Consolidation which became effective in April 2026.

Comparison of the six months ended June 30, 2026 and 2025

Six Months Ended

(in thousands)

Collaboration and other revenue

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

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Total other income

Consolidated net loss and comprehensive loss

Net loss and comprehensive loss

Collaboration and other revenue

Collaboration and other revenue was $6.5 million and $0.0 million during the six months ended June 30, 2026 and 2025, respectively.

The $6.5 million increase was due to amounts due under the Context Amendment in the current quarter.

Research and development expense

The following table summarizes our research and development expenses allocated by CAB program for the periods indicated:

Three Months Ended

Six Months Ended

(in thousands)

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Total research and development expenses

Research and development expenses were $4.6 million and $12.4 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of approximately $7.8 million was primarily driven by a $6.3 million decrease in program development costs due to completion of our Phase 2 trials for mecbotamab vedotin, ozuriftamab vedotin, and evalstotug, a $2.1 million decrease in personnel related expense, including stock-based compensation, primarily due to our reduction in force in March 2026, and a $0.3 million decrease in facilities and other allocated expense.

This was offset by a $0.9 million increase in development costs for our ongoing Phase 1 trial for our EpCAM program.

Research and development expenses were $7.9 million and $26.0 million for the six months ended June 30, 2026 and 2025, respectively.

The decrease of approximately $18.1 million was primarily driven by a $14.2 million decrease in program development costs due to completion of our Phase 2 trials for mecbotamab vedotin, ozuriftamab vedotin, and evalstotug, a $4.2 million decrease in personnel related expense, including stock-based compensation, primarily due to workforce reductions in March 2025 and March 2026, a lower bonus expense in 2026, and a $0.7 million decrease in facilities and other allocated costs.

This was offset by a $1.0 million increase in related party expense incurred in connection with the Context Amendment in May 2026.

General and administrative expense

General and administrative expenses were $4.7 million and $5.3 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of approximately $0.5 million was primarily driven by a $1.2 million decrease in personnel related expense, including stock-based compensation, primarily due to our reduction in force in March 2026, offset by a $0.6 million increase in consulting and professional fees which was primarily related to the Company's efforts to maintain compliance with Nasdaq listing requirements.

General and administrative expenses were $7.7 million and $10.2 million for the six months ended June 30, 2026 and 2025, respectively.

The decrease of approximately $2.5 million was primarily driven by a $2.3 million decrease in personnel expense, including stock-based compensation, primarily due to workforce reductions in March 2025 and March 2026, and lower bonus expense in 2026, a $0.5 million decrease in professional fees primarily related to the Company’s intellectual property portfolio, and a $0.4 million decrease in facility and other allocated costs.

This was offset by a $0.4 million increase in advisor fees related to closing the Context Amendment in May 2026, and a $0.3 million increase in fees related to the Company’s efforts to maintain compliance with Nasdaq listing requirements including the share consolidation that became effective in April 2026.

Interest income

Interest income was $0.04 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively.

Interest income was $0.1 million and $0.6 million for the six months ended June 30, 2026 and 2025, respectively.

The decrease of $0.5 million was primarily due to lower cash and cash equivalents compared to the same period in 2025.

Gain on warrant liability

Gain on warrant liability was $2.7 million and $1.9 million for the three months ended March 31, 2026 and 2025, respectively.

The increase of $0.8 million was due to the change in fair value of the warrants which were issued in December 2024 and are adjusted to fair value at each period.

Gain on warrant liability was $2.9 million and $1.6 million for the six months ended June 30, 2026 and 2025, respectively.

The increase of $1.3 million was due to the change in fair value of the warrants which were issued in December 2024 and are adjusted to fair value at each period, including the impact of an adjustment to the warrant exercise price related to the share consolidation which became effective in April 2026.

Gain on PPAs liability

Gain on PPAs liability was $0.3 million for the three months ended March 31, 2026 compared to zero for the three months ended March 31, 2025.

Gain on PPAs liability was $0.3 million for the six months ended June 30, 2026 compared to zero for the six months ended June 30, 2025.

The gain of $0.3 million was due to the change in fair value for our pre-paid agreement liability which was initiated in November 2025 and has been fully converted into common stock as of March 2026.

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Since July 2020, we have funded our operations primarily through the issuance of equity.

As of March 31, 2026, we had cash and cash equivalents of $2.0 million.

As of June 30, 2026, we had cash and cash equivalents of $1.5 million.

In November 2025, we entered into Pre-Paid Advance Agreements (the “PPAs”) with each of YA II PN, Ltd., a Cayman Islands exempt limited partnership (“Yorkville”), Anson Investments Master Fund LP and Anson East Master Fund LP (collectively, the “Investors”).

Pursuant to the PPAs, the Investors agreed to advance to us $7.5 million (the “Pre-Paid Advance”).

The Pre-Paid Advance was purchased by the Investors at 95% of the face amount of the Pre-Paid Advance for gross proceeds of approximately

$7.13 million.

The Pre-Paid Advance was purchased by the Investors at 95% of the face amount of the Pre-Paid Advance for gross proceeds of approximately $7.13 million.

The Pre-Paid Advance accrued interest at an annual rate of 4%.

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As consideration for Yorkville’s commitment to purchase the SEPA Shares, we agreed to pay to Yorkville a commitment fee equal to 2.00% of the Commitment Amount, or $300,000, which was satisfied by the issuance to Yorkville of an aggregate of 4,868 shares of common stock (the “Commitment Shares”).

As of March 31, 2026, 48,092 SEPA Shares had been sold under the SEPA, with gross proceeds to the Company totaling approximately $0.4 million.

In December 2024, we closed on an offering (the “December 2024 Offering”) that included warrants to purchase up to 193,581 shares of common stock, which initially had an exercise price of $59.50 per share (the “Warrants”) subject to certain adjustments including for reverse stock splits and share consolidations.

As of June 30, 2026, 48,092 SEPA Shares had been sold under the SEPA, with gross proceeds to the Company totaling approximately $0.4 million.

including for reverse stock splits and share consolidations.

As a result of the April 6, 2026 Share Consolidation and pursuant to the re-pricing mechanism contained in the Warrants, the exercise price of the Warrants was adjusted to $4.35 to match the lowest VWAP of our common stock during the eleven (11) trading days commencing five (5) trading days immediately preceding the Share Consolidation and ending five (5) trading days immediately following the Share Consolidation.

The Warrants became exercisable on June 20, 2025 and will expire five years from the date of initial exercisability.

There were 193,581 Warrants outstanding and exercisable at March 31, 2026.

On May 14, 2026, we entered into the Amendment to the Context License Agreement with Context.

Under the terms of the Amendment, and in full consideration for the amended license rights described below, Context has agreed to pay us:

(i) $4,500,000, payable within five (5) business days of the effective date of the Amendment, and (ii) $2,000,000, payable by August 1, 2026 (together, the "Amendment Pay-Off Amounts").

The Amendment Pay-Off Amounts satisfy in full any and all milestone and royalty payment obligations contemplated by the Context License Agreement.

Among other modifications to the Context License Agreement, under the terms of the Amendment, the license granted to Context under the Context License Agreement is amended to be irrevocable, exclusive, royalty-free, fully paid-up and non-terminable, and any and all diligence obligations with respect to Context are removed.

There were 193,581 Warrants outstanding and exercisable at June 30, 2026.

On May 14, 2026, we entered into the Context Amendment.

Under the terms of the Context Amendment, and in full consideration for the amended license rights described below, we received $4.5 million upfront from Context and the additional $2.0 million that was due by August 1, 2026 (together, the "Amendment Consideration").

The Amendment Consideration satisfies in full any and all milestone and royalty payment obligations contemplated by the Context License Agreement.

Among other modifications to the Context License Agreement, under the terms of the Context Amendment, the license granted to Context under the Context License Agreement is amended to be irrevocable, exclusive, royalty-free, fully paid-up and non-terminable, and any and all diligence obligations with respect to Context are removed.

Future Funding Requirements

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Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control.

For example, market volatility resulting from a variety of causes, including recent and future government shutdowns, tariffs and trade disputes with other countries, inflation, high interest rates, growing recession risks, supply chain disruptions, and geopolitical tensions and disruptions, including the US and EU sanctions on Russian oil and gas, the ongoing conflict between Russia and Ukraine, the wars between Israel and the terrorist groups Hamas and Hezbollah, the current political situation in Venezuela and escalating conflict and tensions with Iran, could adversely impact our ability to access capital as and when needed.

For example, market volatility resulting from a variety of causes, including recent and future government shutdowns, tariffs and trade disputes with other countries, inflation, high interest rates, growing recession risks, supply chain disruptions, and geopolitical tensions and disruptions, including the US and EU sanctions on Russian oil and gas, the ongoing conflict between Russia and Ukraine, the wars between Israel and the terrorist groups Hamas and Hezbollah, geopolitical instability in Venezuela and the conflict in Iran, could adversely impact our ability to access capital as and when needed.

We may choose to raise additional capital through the issuance of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

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The following summarizes our cash flows for the periods indicated:

Three Months Ended

Six Months Ended

(in thousands)

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Cash used in operating activities

Net cash used in operating activities for the three months ended March 31, 2026 was $5.3 million, which consisted of a net loss of $6.3 million, a net change of $2.9 million in our operating assets and liabilities and $1.9 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $3.1

million and an increase in operating lease ROU asset and lease liability of $0.1 million, offset by an increase in prepaid expenses and other assets of $0.2 million.

Net cash used in operating activities for the six months ended June 30, 2026 was $5.7 million, which consisted of a net loss of $5.9 million, a net change of $1.7 million in our operating assets and liabilities and $1.5 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $3.4 million, an increase in operating lease ROU asset and lease liability of $0.1 million, and a decrease in prepaid expenses and other assets of $0.2 million, offset by an increase in accounts receivable of $2.0 million.

The non-cash transactions primarily consisted of $2.9 million related to the change in fair value of the warrant liability and $0.3 million related to the change in fair value of the PPAs liability, offset by $1.6 million of stock-based compensation and non-cash charges of $0.1 million related to depreciation and amortization.

Net cash used in operating activities for the three months ended March 31, 2025 was $16.3 million, which consisted of a net loss of $15.3 million, a net change of $0.9 million in our operating assets and liabilities and $0.1 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $2.1 million, offset by an increase in prepaid expenses and other assets of $3.0 million.

Net cash used in operating activities for the six months ended June 30, 2025 was $30.4 million, which consisted of a net loss of $34.0 million, a net change of $1.9 million in our operating assets and liabilities and $1.7 million of non-cash transactions.

The net change in our operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $2.5 million, offset by an increase in prepaid expenses and other assets of $0.4 million and a net decrease in operating lease right-of-use assets and lease liabilities of $0.3 million.

The non-cash transactions primarily consisted of $3.0 million of stock-based compensation and non-cash charges of $0.3 million related to depreciation and amortization, offset by $1.6 million related to the change in fair value of the warrant liability.

Cash provided by (used in) financing activities

Net cash provided by financing activities was $0.1 million for the three months ended March 31, 2026, consisting primarily of proceeds from issuance of common stock under the SEPA of $0.4 million, offset by the payment of financing costs in connection with the PPAs and SEPA of $0.3 million and the payment of taxes related to the net settlement of restricted stock units of $14 thousand.

Net cash used in financing activities was $0.4 million for the three months ended March 31, 2025, consisting primarily of the payment of financing costs in connection with the December 2024 offering and the payment of taxes related to the net settlement of restricted stock units.

Net cash provided by financing activities was $0.1 million for the six months ended June 30, 2026, consisting primarily of proceeds from issuance of common stock under the SEPA of $0.4 million, offset by the payment of financing costs in connection with the PPAs and SEPA of $0.3 million.

Net cash used in financing activities was $0.4 million for the six months ended June 30, 2025, consisting primarily of the payment of financing costs in connection with the December 2024 offering and the payment of taxes related to the net settlement of restricted stock units, partially offset by the proceeds from the issuance of common stock under the ESPP and the 2020 Plan.

Critical Accounting Policies and Estimates

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For a description of our critical accounting policies, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” contained in our Annual Report.

There have not been any material changes to the critical accounting policies discussed therein during the three months ended March 31, 2026.

There have not been any material changes to the critical accounting policies discussed therein during the six months ended June 30, 2026.

Off-Balance Sheet Arrangements

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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 2. Management’s Discussion and Analysis