What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-03-06 compared with 2024-03-12 · 89 added, 56 removed, 595 unchanged (20% of the section changed)

14 unchanged sentences

We have audited the accompanying consolidated balance sheets of Black Diamond Therapeutics, Inc.

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiary (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

15 unchanged sentences

As discussed in Note 1 to the consolidated financial statements, the Company will require additional financing to fund future operations.

Management’s evaluation of the events and conditions and plans to mitigate this matter are also described in Note 1.

Management’s evaluation of the events and conditions and management’s plans to mitigate these matters are also described in Note 1.

/s/ PricewaterhouseCoopers LLP

13 unchanged sentences

Right-of-use assets 19,009 21,980

Other non-current assets 249

Total assets $ 122,640

16 unchanged sentences

Additional paid-in capital 570,361

Accumulated other comprehensive (loss) income ( 27 ) ( 1,824 )

Accumulated other comprehensive income (loss) 24 ( 27 )

Accumulated deficit ( 487,107 )

14 unchanged sentences

Other income (expense) 6,923 2,094

Gain on sale of IP — 2,232

Total other income (expense), net 9,105 4,018

Equity in (losses) of unconsolidated entities — ( 2,250 )

Net loss $ ( 69,676 ) $ ( 82,442 )

17 unchanged sentences

(Accretion) amortization on investments ( 3,782 ) ( 1,174 )

Noncash rent expense 2,814 2,730

Non-cash rent expense 2,971 2,814

Loss on disposal of property and equipment — 358

Gain on sale of property and equipment ( 94 ) —

Gain on sale of IP — ( 2,232 )

Equity in losses of unconsolidated entities — 2,250

Changes in operating assets and liabilities:

15 unchanged sentences

Net cash provided by financing activities 25,547 71,932

Net increase (decrease) in cash and cash equivalents 21,561 ( 31,539 )

Net (decrease) increase in cash and cash equivalents ( 19,788 ) 21,561

Cash, cash equivalents and restricted cash, beginning of year 57,044 35,483

3 unchanged sentences

Cash, cash equivalents and restricted cash, end of year $ 37,256 $ 57,044

Supplemental disclosure of non-cash investing and financing activities:

Right-of-use assets obtained in exchange for operating lease obligation $ — $ ( 181 )

Equity method investment acquired for non-cash consideration $ — $ 18

The accompanying notes are an integral part of these consolidated financial statements.

7 unchanged sentences

BALANCE - December 31, 2022 36,434,297 $ 5 $ 452,503 $ ( 1,824 ) $ ( 334,989 ) $ 115,695

Issuance of common stock 15,000,000 2 71,998 — — 72,000

Exercise of common stock options 5,370 — 20 — — 20

3 unchanged sentences

Stock-based compensation 64,470 — 9,604 — — 9,604

Unrealized (loss) gains on investments — — — ( 1,410 ) — ( 1,410 )

Unrealized gains (loss) on investments — — — 1,797 — 1,797

Net loss — — — — ( 82,442 ) ( 82,442 )

6 unchanged sentences

Stock-based compensation 37,407 — 10,627 — — 10,627

Unrealized (loss) gains on investments — — — 1,797 — 1,797

Unrealized gains (loss) on investments — — — 51 — 51

Net loss — — — — ( 69,676 ) ( 69,676 )

6 unchanged sentences

Black Diamond Therapeutics, Inc.

(the Company) is a clinical-stage oncology company focused on the development of MasterKey therapies to treat patients with genetically defined tumors.

(the Company) is a clinical-stage oncology company developing MasterKey therapies that target families of oncogenic mutations in patients with cancer.

The Company was originally organized as a limited liability company in December 2014 under the name ASET Therapeutics LLC.

11 unchanged sentences

The Shelf Registration Statement became effective on November 22, 2022.

As of December 31, 2023, no sales have been made pursuant to the ATM Program.

As of December 31, 2024, the Company sold 4,490,853 shares of its common stock pursuant to the ATM Program, resulting in gross proceeds to the Company of approximately $ 25.0 million ($ 24.5 million net of offering costs).

On July 5, 2023, the Company completed an underwritten public offering (the Follow-on Offering) of 15,000,000 shares of the Company’s common stock at a price to the public of $ 5.00 per share.

The aggregate net proceeds from the Follow-on Offering totaled approximately $ 71.9 million, after deducting underwriting discounts and commissions, as well as other offering expenses.

The aggregate net proceeds from the Follow-on Offering totaled approximately $ 71.9 million, after deducting underwriting discounts and commissions.

The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business.

102 unchanged sentences

Segment information

The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions.

The Company manages its operations as a single operating segment and single reportable segment for the purposes of assessing performance and making operating decisions.

The Company’s singular focus is the development of selective medicines for patients with genetically defined cancers driven by oncogenes activated by allosteric mutations.

69 unchanged sentences

When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease.

Recently adopted accounting pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss.

The standard also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources.

Additionally, ASU 2023-07 requires all segment disclosures to be provided on an annual and interim basis.

The Company adopted ASU 2023-07 for its annual reporting period ending on December 31, 2024 and applied the amendments retrospectively.

See Note 14 for the required segment disclosures.

Recently issued accounting pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which is intended to enhance transparency into the nature and function of expenses.

The amendments require that on an annual and interim basis, entities disclose disaggregated operating expense information about specific categories, including purchases of inventory, employee compensation, depreciation, amortization and depletion.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

The Company will evaluate the impact of the guidance on its financial statements in advance of the adoption date.

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

4 unchanged sentences

The adoption is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280) (ASU 2023-07) which requires enhanced disclosure of (1) significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, (2) the amount and description of the composition of other segment items which reconcile to segment profit or loss, and (3) the title and position of the entity’s CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and allocating resources.

The amendments also expand the interim segment disclosure requirements.

This new guidance is effective for the Company for annual periods beginning October 1, 2024 and interim periods beginning October 1, 2025.

Early adoption is permitted.

The amendments in this ASU apply retrospectively to all prior periods presented in the financial statements.

The Company is in the process of assessing the impact on its financial statements from the adoption of the new guidance and the period in which the new guidance will be adopted.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (ASU 2023-06).

17 unchanged sentences

Corporate bonds — 30,308 — 30,308

Government agencies — 39,102 — 39,102

Total $ 30,803 $ 75,179 $ — $ 105,982

16 unchanged sentences

Corporate bonds 30,326 — ( 18 ) 30,308

Government agencies 40,125 — ( 1,023 ) 39,102

Total $ 75,206 $ 4 $ ( 31 ) $ 75,179

As of December 31, 2024, all marketable securities held by the Company had remaining contractual maturities of one year or less.

As of December 31, 2022, the marketable securities held by the Company in a loss position had remaining contractual maturities of one year or less, except for U.S.

government agencies, corporate bonds, and commercial paper with a fair value of $ 13,687 that had maturities of one to three years.

As of December 31, 2023, all marketable securities held by the Company had remaining contractual maturities of one year or less.

As of December 31, 2024 and 2023, the Company reviewed its investment portfolio to assess the unrealized losses on its available-for-sale investments.

4 unchanged sentences

Property and equipment, net consisted of the following:

Laboratory equipment $ — $ 770

Furniture and fixtures $ 17 $ 17

Computer and office equipment — 38

Leasehold improvements 2,512 2,512

4 unchanged sentences

EQUITY METHOD INVESTMENT

In December 2022, the Company received 9,000,000 shares of common stock in a newly formed antibody-focused precision oncology company, Launchpad Therapeutics, Inc.

(Launchpad), in exchange for contributing early discovery-stage antibody programs and granting Launchpad a license to use its MAP drug discovery engine to discover, develop and commercialize large molecule therapeutics.

As of the transaction date and as of December 31, 2023, the Company has a 39.1 % voting interest in Launchpad and one seat on Launchpad’s board of directors which provide the Company with significant influence over Launchpad.

The remaining voting interest in Launchpad is held by Versant Ventures and New Enterprise Associates (NEA), who are shareholders of the Company.

The Company accounted for the transaction under the equity method and recorded the carrying value of the Company’s investment in Launchpad common shares of $ 2,250 in equity method investments in the consolidated balance sheets.

The contributed in-process research and development (IPR&D) had zero basis on the Company’s books prior to the transaction, therefore the Company recognized a gain on sale of IPR&D of $ 2,232 in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022.

The Company also recognized a loss from investments in equity method investee of $ 1,540 in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2022, associated with the Company’s proportionate share of Launchpad’s losses.

The assets contributed by the Company were principally IPR&D and were not deemed a business by Launchpad, therefore the Company determined its remaining basis difference of $ 710 was substantially related to IPR&D and immediately expensed it.

As of December 31, 2022, the carrying value of the investment in Launchpad was reduced to zero .

Since the Company has no obligation to provide financing support to Launchpad, the Company is not required to record further losses exceeding the carrying value of the investment.

The Company also determined that its investment in Launchpad is not material or significant to its operations or financial position.

As of December 31, 2023, the carrying value of the investment in Launchpad was zero .

In December 2022, the Company received 9,000,000 shares of common stock in a newly formed antibody-focused precision oncology company, Revelio Therapeutics, Inc.

(Revelio) (formerly known as Launchpad Therapeutics, Inc.), in exchange for contributing early discovery-stage antibody programs and granting Revelio a license to use its MAP drug discovery engine to discover, develop and commercialize large molecule therapeutics.

As of December 31, 2024 and 2023, the Company had a voting interest in Revelio of 20.8 % and 39.1 %, respectively, and one seat on Revelio’s Board of Directors, which provide the Company with significant influence over Revelio.

Other investors in Revelio include Versant Ventures and New Enterprise Associates (NEA), who are shareholders of the Company.

The Company accounted for the transaction under the equity method.

As of the year ended December 31, 2024 and 2023, the carrying value of the investment in Revelio was zero .

Since the Company has no obligation to provide financing support to Revelio, the Company is not required to record further losses exceeding the carrying value of the investment.

The Company also determined that its investment in Revelio is not material or significant to its operations or financial position.

ACCRUED EXPENSES

7 unchanged sentences

2020 Stock Option and Incentive Plan

The 2020 Stock Option and Incentive Plan (the 2020 Plan) was approved by the Company’s board of directors on December 5, 2019, and the Company’s stockholders on January 14, 2020 and became effective on the date immediately prior to the date on which the registration statement for the Company’s IPO was declared effective.

The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights to the Company’s officers, employees, directors and consultants.

5 unchanged sentences

A total of 326,364 shares of common stock were initially reserved for issuance under this plan, which was cumulatively increased on January 1, 2021 and each January 1 thereafter by 1 % of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or such lesser number of shares determined by the Company’s board of directors or compensation committee of the board of directors.

As of December 31, 2023, 1,176,627 shares remained available for issuance under the 2020 Plan.

The number of authorized shares reserved for issuance under the 2020 Plan was increased by 326,364 shares effective as of January 1, 2024.

As of December 31, 2024, 1,388,889 shares remained available for issuance under the 2020 ESPP.

The number of authorized shares reserved for issuance under the 2020 ESPP was increased by 326,364 shares effective as of January 1, 2025.

Option valuation

19 unchanged sentences

Under terms of the restricted stock agreements covering the common stock, shares of restricted common stock are subject to a vesting schedule.

The majority of restricted stock vests over a three-year period during which time all unvested stock will immediately be forfeited to the Company if the relationship between the recipient and the Company ceases.

Subject to the continued employment (or other engagement of the recipient by the Company as described in the restricted stock agreements), all shares of restricted common stock become fully vested within three years of the vesting commencement date.

The majority of restricted stock vests over a one-year period during which time all unvested stock will immediately be forfeited to the Company if the relationship between the recipient and the Company ceases.

The following table summarizes restricted stock activity:

Unvested restricted common stock as of December 31, 2023 20,799 $ 2.41

Granted 540,000 $ 3.66

Vested ( 19,449 ) $ 2.40

3 unchanged sentences

The Company had 19,000 performance restricted stock units outstanding at the beginning of the year ended December 31, 2024.

For the year ended December 31, 2023, the Company granted no performance restricted stock units to its employees, released 27,475 performance restricted stock units due to the achievement of certain clinical development and/or financing milestones, had 193,000 performance restricted stock units expire, and had no performance restricted stock units forfeited.

As of December 31, 2023, the Company had 19,000 performance restricted stock units outstanding.

For the year ended December 31, 2024, the Company granted no performance restricted stock units to its employees, released no performance restricted stock units due to the achievement of certain clinical development and/or financing milestones, had no performance restricted stock units expire, and had 19,000 performance restricted stock units forfeited.

As of December 31, 2024, the Company had no performance restricted stock units outstanding.

Recognition of stock-based compensation expense associated with performance restricted stock units commences when the performance conditions are considered probable of achievement, using management’s best estimates, which consider the inherent risk and uncertainty regarding the future outcomes of the milestones.

As of December 31, 2023 and 2022, for performance-based restricted stock units that were outstanding, the achievement of milestones was considered probable for no shares and 3,063 shares, respectively.

During the year ended December 31, 2023, two milestones for outstanding performance restricted stock units were achieved and the Company recognized stock-based compensation expense related to these milestones of $ 52 .

The milestones that had not been met were considered not probable, and therefore no expense has been recognized related to these awards in the years ended December 31, 2023 and 2022.

As of December 31, 2024 there were no performance-based restricted stock units outstanding.

As of December 31, 2023, for performance-based restricted stock units that were outstanding, the achievement of milestones was considered probable for no shares and therefore no expense was recognized related to these awards in the year ended December 31, 2023.

Stock-based compensation expense

73 unchanged sentences

There are currently no pending tax examinations.

As of December 31, 2023 and 2022, the Company’s tax years are still open under statute from 2020 to the present.

The Company’s foreign subsidiary has incurred losses since inception and the Company had no undistributed earnings as of December 31, 2023.

The Company’s tax returns are generally open under statute from 2021 to the present.

The Company’s tax attributes related to years prior to 2021 can still be adjusted under audit.

NET LOSS PER SHARE

12 unchanged sentences

Unvested performance restricted stock units

19,000 239,475

Warrants to purchase shares of common stock 10,757

12 unchanged sentences

The Company was not relieved of its primary obligation under the Cambridge office lease as a result of the sublease.

In December 2020, the Company entered into an eleven-year agreement with an option to extend for five additional years to lease approximately 18,120 square feet of office and laboratory space in New York, NY.

In December 2020, the Company entered into an eleven-year agreement to lease approximately 18,120 square feet of office and laboratory space in New York, NY.

The Company has an option to extend the lease for five additional years.

The lease commenced August 26, 2021 and the related lease balance was recognized on the consolidated balance sheet.

Additionally, on June 19, 2024, the Company entered into a sublease for its office and laboratory space in New York, NY.

The sublease terminates on June 30, 2026, with the option to extend to June 30, 2027.

Sublease income is recognized on a straight-line basis over the term of the sublease agreement.

The Company was not relieved of its primary obligation under the New York lease as a result of the sublease.

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating lease for the years ended December 31, 2024 and 2023:

39 unchanged sentences

During the years ended December 31, 2024 and 2023, the Company contributed $ 783 and $ 916 , respectively, to the 401(k) Plan.

SEGMENT REPORTING

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources to an individual segment and in assessing performance.

The Company operates as a single reporting segment, focused on the development of MasterKey therapies that target families of oncogenic mutations in patients with cancer.

The accounting policies of the single operating segment are identical to those described in Note 2.

The Company’s measure of segment profit or loss is net loss.

The CODM is the chief executive officer (CEO).

The CODM manages and allocates resources to the operations of the Company on a total company basis.

Managing and allocating resources on a consolidated basis enables the CEO to assess the overall level of resources available and how to best deploy these resources across functions and development projects that are in line with the Company’s strategic goals.

Consistent with this decision-making process, the CEO uses consolidated financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets.

Segment net loss is used to monitor budget versus actual results and in assessing performance of the segment.

The following table is a reconciliation of the significant expense categories to segment net loss regularly provided to the CODM when managing the Company’s single reporting segment:

Year Ended December 31,

(in thousands)

Program expenses:

BDTX-1535 research and development expenses $ 24,378 $ 21,141

BDTX-4933 research and development expenses 4,613 6,342

Other research programs and development expenses 1

Non-program expenses 2

14,670 16,789

Personnel-related expenses 21,978 24,668

Other segment items 3

Segment net loss $ ( 69,676 ) $ ( 82,442 )

( 1) Includes cross-program consulting expenses;

(2) Includes facilities, information technology, legal, intellectual property, and other general and administrative expense;

(3) Includes stock-based compensation expense, depreciation, sublease income, investment accretion, interest income, and other (income) expense.

RESTRUCTURING

In October 2024, the Company implemented a corporate restructuring plan to prioritize the Company’s resources on advancing and optimizing development plans for its lead program BDTX-1535, strengthen operational efficiencies, and extend its cash runway (the Restructuring Plan).

The Restructuring Plan included deprioritizing the Company’s development candidate BDTX-4933, a reduction in force, and certain other measures to streamline its general and administrative, operating and capital expenditures.

The reduction in force included a reduction of approximately half of the Company’s workforce.

During the twelve months ended December 31, 2024, the Company recorded $ 2,945 of expense in connection with the reduction in force, primarily consisting of severance payments and other employee termination-related expenses.

The reduction in force was substantially complete by the end of 2024 and the Company expects that substantially all of the accrued restructuring charges as of December 31, 2024 will be paid in cash by September 30, 2025.

The following table summarizes activity related to the restructuring accrual:

Restructuring Accrual

(in thousands)

Balance as of January 1, 2024 $ —

Restructuring expenses incurred 2,945

Cash paid ( 1,796 )

Balance as of December 31, 2024 $ 1,149

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk