Black Diamond Therapeutics, Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosure About Market Risk We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. 131 Table of Contents Item 8. Consolidated Financial Statements and Supplementary Data BLACK DIAMOND THERAPEUTICS, INC. Index to Consolidated Financial Statements Page No. Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 133 Consolidated Balance Sheets 134 Consolidated Statements of Operations and Comprehensive Loss 135 Consolidated Statements of Cash Flows 136 Consolidated Statements of Stockholders' Equity 137 132 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Black Diamond Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Black Diamond Therapeutics, Inc. 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. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Emphasis of Matter 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 management’s plans to mitigate these matters are also described in Note 1. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts March 6, 2025 We have served as the Company’s auditor since 2019. 133 Table of Contents Black Diamond Therapeutics, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 36,437 $ 56,221 Investments 62,138 75,179 Prepaid expenses and other current assets 2,601 2,634 Total current assets 101,176 134,034 Property and equipment, net 1,387 1,730 Restricted cash 819 823 Right-of-use assets 19,009 21,980 Other non-current assets 249 — Total assets $ 122,640 $ 158,567 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 4,007 $ 2,324 Accrued expenses and other current liabilities 16,566 17,322 Total current liabilities 20,573 19,646 Non-current operating lease liability 18,782 22,185 Total liabilities 39,355 41,831 Commitments and contingencies (Note 12) — — Stockholders' equity: Preferred stock, $ 0.0001 par value; 10,000,000 shares and 10,000,000 shares authorized at December 31, 2024 and 2023, respectively; no shares issued or outstanding at December 31, 2024 and 2023 — — Common stock; $ 0.0001 par value; 500,000,000 shares authorized at December 31, 2024 and 500,000,000 shares authorized at December 31, 2023; 56,644,655 shares issued and outstanding at December 31, 2024 and 51,645,557 shares issued and outstanding at December 31, 2023 7 7 Additional paid-in capital 570,361 534,187 Accumulated other comprehensive income (loss) 24 ( 27 ) Accumulated deficit ( 487,107 ) ( 417,431 ) Total stockholders' equity 83,285 116,736 Total liabilities and stockholders' equity $ 122,640 $ 158,567 The accompanying notes are an integral part of these consolidated financial statements. 134 Table of Contents Black Diamond Therapeutics, Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share data) Year Ended December 31, 2024 2023 Operating expenses: Research and development $ 51,312 $ 59,350 General and administrative 27,469 27,110 Total operating expenses 78,781 86,460 Loss from operations ( 78,781 ) ( 86,460 ) Other income (expense): Interest income 2,182 1,924 Other income (expense) 6,923 2,094 Total other income (expense), net 9,105 4,018 Net loss $ ( 69,676 ) $ ( 82,442 ) Net loss per share, basic and diluted $ ( 1.27 ) $ ( 1.88 ) Weighted average common shares outstanding, basic and diluted 55,028,371 43,954,649 Comprehensive loss: Net loss $ ( 69,676 ) $ ( 82,442 ) Other comprehensive (loss) income: Change in unrealized (loss) gain on investments, net 51 1,797 Comprehensive loss $ ( 69,625 ) $ ( 80,645 ) The accompanying notes are an integral part of these consolidated financial statements. 135 Table of Contents Black Diamond Therapeutics, Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 69,676 ) $ ( 82,442 ) Adjustment to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 10,627 9,604 Depreciation expense 343 437 (Accretion) amortization on investments ( 3,782 ) ( 1,174 ) Non-cash rent expense 2,971 2,814 Loss on disposal of property and equipment — 358 Gain on sale of property and equipment ( 94 ) — Changes in operating assets and liabilities: Prepaid expenses and other current assets 33 2,265 Other non-current assets ( 249 ) — Accounts payable 1,683 597 Accrued expenses and other current liabilities ( 756 ) 3,938 Non-current operating lease liability ( 3,403 ) ( 3,114 ) Net cash used in operating activities ( 62,303 ) ( 66,717 ) Cash flows from investing activities: Purchases of equipment — ( 33 ) Proceeds from disposal of equipment 94 95 Proceeds from sales and maturities of investments 139,750 78,171 Purchases of investments ( 122,876 ) ( 61,887 ) Net cash provided by investing activities 16,968 16,346 Cash flows from financing activities: Proceeds from exercise of common stock options and ESPP 1,053 82 Proceeds from issuance of common stock, net of issuance costs 24,494 71,850 Net cash provided by financing activities 25,547 71,932 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 Cash, cash equivalents and restricted cash, end of year $ 37,256 $ 57,044 Cash and cash equivalents, end of year $ 36,437 $ 56,221 Restricted cash, end of year 819 823 Cash, cash equivalents and restricted cash, end of year $ 37,256 $ 57,044 The accompanying notes are an integral part of these consolidated financial statements. 136 Table of Contents Black Diamond Therapeutics, Inc. Consolidated Statements of Stockholders' Equity (in thousands, except share data) Common stock Additional paid-in capital Accumulated other comprehensive income (loss) Accumulated deficit Total stockholders’ equity Shares Par Value 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 Vesting of restricted stock units 90,872 — — — — — Surrender of shares for taxes ( 18,457 ) — ( 46 ) — — ( 46 ) Issuance of common stock related to ESPP 69,005 — 108 — — 108 Stock-based compensation 64,470 — 9,604 — — 9,604 Unrealized gains (loss) on investments — — — 1,797 — 1,797 Net loss — — — — ( 82,442 ) ( 82,442 ) BALANCE - December 31, 2023 51,645,557 $ 7 $ 534,187 $ ( 27 ) $ ( 417,431 ) $ 116,736 Issuance of common stock 4,490,853 — 24,494 — — 24,494 Exercise of common stock options 341,983 — 798 — — 798 Vesting of restricted stock units 19,449 — — — — — Surrender of shares for taxes ( 4,696 ) — ( 25 ) — — ( 25 ) Issuance of common stock related to ESPP 114,102 — 280 — — 280 Stock-based compensation 37,407 — 10,627 — — 10,627 Unrealized gains (loss) on investments — — — 51 — 51 Net loss — — — — ( 69,676 ) ( 69,676 ) BALANCE - December 31, 2024 56,644,655 $ 7 $ 570,361 $ 24 $ ( 487,107 ) $ 83,285 The accompanying notes are an integral part of these consolidated financial statements. 137 Table of Contents Black Diamond Therapeutics, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share and per share amounts) 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION Black Diamond Therapeutics, Inc. (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. In September 2016, the Company was converted to a corporation under the laws of the State of Delaware under the name ASET Therapeutics, Inc. The Company changed its name to Black Diamond Therapeutics, Inc. in January 2018. Since its inception, the Company has devoted substantially all of its efforts to raising capital, obtaining financing and incurring research and development costs related to the development and advancement of its product candidates identified by its Mutation-Allostery-Pharmacology (MAP) drug discovery engine. The Company is subject to risks and uncertainties common to clinical-stage companies in the biotechnology industry. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s technology will be obtained, that any products developed will obtain necessary government regulatory approval or that any products, if approved, will be commercially viable. The Company operates in an environment of rapid technological innovation and substantial competition from pharmaceutical and biotechnological companies. In addition, the Company is dependent upon the services of its employees, consultants and service providers. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. On November 14, 2022, the Company filed a shelf registration statement on Form S-3 (the Shelf Registration Statement), with the Securities and Exchange Commission (the SEC), which covers the offering, issuance and sale of the Company’s common stock, preferred stock, debt securities, warrants and/or units of any combination thereof up to a maximum offering price of $ 500 million. The Company simultaneously entered into an Open Market Sale Agreement SM with Jefferies LLC (Jefferies), as sales agent, to provide for the issuance and sale by the Company of up to $ 150 million of its common stock from time to time through Jefferies (the ATM Program). The Shelf Registration Statement became effective on November 22, 2022. 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. 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. Historically, the Company has funded its operations primarily with proceeds from the sale of common stock and preferred stock. The Company has had recurring losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 487.1 million as of December 31, 2024. The Company expects to continue to generate operating losses for the foreseeable future. As of March 6, 2025, the issuance date of the consolidated financial statements, the Company expects that its cash, cash equivalents and investments will be sufficient to fund its currently planned operations for at least the next 12 months from the filing date of these audited consolidated financial statements. 138 Table of Contents The Company will seek additional funding through private or public equity financings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into collaborations or other arrangements. The terms of any financing may adversely affect the holdings or the rights of the Company's stockholders. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, or reduce headcount and general and administrative costs, which could adversely affect its business prospects. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and include the accounts of the Company and its wholly owned subsidiaries, Black Diamond Therapeutics Security Corporation and Black Diamond Therapeutics (Canada), Inc., after elimination of all significant intercompany accounts and transactions. On October 10, 2023, Black Diamond Therapeutics (Canada), Inc. was dissolved by way of voluntary dissolution. Use of estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual of research and development expenses and the valuation of stock-based awards. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions. The Company continues to monitor the impact of global economic developments, political unrest, high inflation, disruptions in capital markets, changes in international trade relationships and military conflicts, and health crises, on all aspects of its business, and has considered the impact of these factors on estimates within its financial statements. The extent to which future developments may impact the Company’s business, results of operations or financial condition are uncertain and cannot be predicted with confidence and there may be changes to estimates in future periods. As of the date of issuance of these consolidated financial statements, the Company has not experienced material business disruptions or incurred impairment losses in the carrying value of its assets as a result of these factors and is not aware of any specific related event or circumstance that would require it to update its estimates. Subsequent events The Company considers events or transactions that occur after the balance sheet date but before the final financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Foreign currency and currency translation The Company’s wholly owned foreign subsidiary, Black Diamond Therapeutics (Canada), was dissolved in October 2023. Prior to dissolution, the functional currency for Black Diamond Therapeutics (Canada), Inc. was the United States Dollar. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in other income (expense), net in the consolidated statements of operations and comprehensive loss, as incurred. 139 Table of Contents Cash and cash equivalents The Company classifies deposits in banks, money market funds and cash invested temporarily in various instruments with maturities of three months or less at the time of purchase as cash and cash equivalents. At December 31, 2024 and 2023, cash and cash equivalents includes cash on deposit at commercial banks and a money market fund that invests in U.S. Government securities. Investments Investments consist of marketable securities with original maturities greater than 90 days. The Company has classified its investments with maturities beyond one year as short-term, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. The Company considers its investment portfolio of marketable securities to be available-for-sale. Accordingly, these investments are recorded at fair value, which is based on quoted market prices. Unrealized gains and losses are reported as the accumulated other comprehensive items in stockholders’ equity. Amortization and accretion of premiums and discounts are recorded in other income (expense). Realized gains or losses on debt securities are included in interest income or interest expense, respectively. If any adjustment to fair value reflects a decline in value of the investment, the Company considers all available evidence to evaluate the extent to which the decline is other than temporary and, if so, marks the investment to market on the Company’s consolidated statements of operations and comprehensive loss. Equity method investment The Company utilizes the equity method to account for an investment when it possesses the ability to exercise significant influence, but not control, over the operating and financial decisions of the investee. Generally, the ability to exercise significant influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is not present. The Company applies the equity method to an investment in common stock of a nonconsolidated entity. In applying the equity method, the Company’s investment was initially recorded at fair value on the consolidated balance sheet. The Company contributed IPR&D in exchange for its investment, so it also recognized a gain on sale of IPR&D in the consolidated statements of operations and comprehensive loss on the transaction date. The Company subsequently adjusted the carrying amount of the investment by the Company’s proportionate share of the net losses of the investee based on the Company’s percentage of common stock ownership during the reporting period. The Company recorded its share of the losses of the investee as losses from investment in equity method investee in the consolidated statements of operations and comprehensive loss. The Company then evaluated whether there was a basis difference between the carrying value and fair value of the Company’s proportionate share of the investee’s underlying net assets. The investee was not deemed a business as defined in ASC 805 – Business Combinations, so the Company immediately expensed the basis difference to the extent it related to IPR&D. The Company is not obligated to make additional capital contributions for its equity method investment and does not have guaranteed obligations or additional financial support requirements to the investee. Therefore, it only recorded losses up to the amount of its total investment. The Company’s share of losses of the equity method investee on a cumulative basis exceeded its total investment amount, so the Company discontinued equity method loss recognition. The Company will resume recording its share of losses in future periods if the investee subsequently reports net income and the Company’s share of the earnings of the equity method investee equals the Company’s share of losses not recognized during the suspended period. 140 Table of Contents Equity method investments are reviewed for indicators of other-than-temporary impairment at each reporting period and are written down to fair value if there is evidence of a loss in value that is other-than-temporary. The Company presents income/losses from equity investments and any impairment related to equity method investments as losses from investments in equity method investees on the consolidated statements of operations and comprehensive loss. The carrying value of the Company’s equity method investment was zero as of December 31, 2024, therefore, an impairment assessment is not required. See Note 6 to our consolidated audited financial statements for additional information on the Company’s equity method investment. Restricted cash In connection with its operating lease commitments, the Company maintains certain balances for security deposits that are classified as restricted cash on the consolidated balance sheets . As of December 31, 2024 and 2023, the Company had $ 819 and $ 823 , respectively, of restricted cash, which has been classified as a non-current asset on the consolidated balance sheet. Concentrations of credit risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company maintains accounts for all cash and cash equivalents at accredited financial institutions, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Property and equipment Property and equipment are recorded at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful life of each asset as follows: Estimated useful life Laboratory equipment 5 years Furniture and fixtures 5 years Computer and office equipment 3 years Leasehold improvements Shorter of the useful life or remaining lease term When assets are retired or otherwise disposed of, the cost of assets disposed of and the related accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations and comprehensive loss in the period of disposal. Expenditures for repairs and maintenance are charged to expense as incurred. Impairment of long-lived assets Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized in loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows. The Company did not record any material impairment losses on long-lived assets during the periods presented. 141 Table of Contents Fair value measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1 — Unadjusted quoted prices in active markets that are accessible to the reporting entity at the measurement date for identical assets and liabilities. • Level 2 — Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following: • quoted prices for similar assets and liabilities in active markets • quoted prices for identical or similar assets or liabilities in markets that are not active • observable inputs other than quoted prices that are used in the valuation of the asset or liabilities (e.g., interest rate and yield curve quotes at commonly quoted intervals) • inputs that are derived principally from or corroborated by observable market data by correlation or other means • Level 3 — Unobservable inputs for the assets or liabilities (i.e., supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). The carrying values of the Company’s prepaid expenses and other current assets, and accounts payable and accrued expenses, approximate their fair values due to the short-term nature of these assets and liabilities. Segment information 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. Research and development costs Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including personnel expenses, stock-based compensation expense, allocated facility-related and depreciation expenses, third-party license fees and external costs of outside vendors engaged to conduct preclinical and clinical development activities. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered. 142 Table of Contents Research contract costs and accruals The Company has entered into various research and development-related contracts with companies both inside and outside of the United States. The related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ materially from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. Patent costs All patent-related costs incurred in connection with filing and prosecuting patent applications to operations are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses. Stock-based compensation The Company measures all stock-based awards granted to employees, non-employees and directors based on the fair value on the date of grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. Generally, the Company issues stock options and restricted stock units with only service-based vesting conditions and records the expense for these awards using the straight-line method. For stock options or restricted stock units issued with performance-based vesting conditions, the stock compensation expense related to these awards is recognized based on the grant date fair value when achievement of the performance condition is deemed probable. The Company would apply the graded-vesting method to all stock-based awards with performance-based vesting conditions or to awards with both service-based and performance based vesting conditions. Forfeitures are accounted for as they occur. The fair value of each stock option grant is estimated on the date of grant using the Black- Scholes option-pricing model. The Company lacks sufficient company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The Company uses the simplified method prescribed by Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment , to calculate the expected term of options granted to employees, non-employees and directors. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The Company classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. 143 Table of Contents Income taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. To date, the Company has not taken any uncertain tax positions or recorded any reserves, interest or penalties. Comprehensive loss Comprehensive loss is composed of net loss and other comprehensive income (loss). Other comprehensive income (loss) consists of unrealized gains and losses on investments. Net income (loss) per share The Company follows the two-class method when computing net income (loss) per share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated, and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common stock. For purposes of this calculation, outstanding options, unvested restricted common stock and shares issuable under the employee stock purchase plan are considered potentially dilutive common stock and are excluded from the computation of net income (loss) per share when their effect is anti-dilutive. The Company reported a net loss attributable to common stockholders for the years ended December 31, 2024 and 2023. 144 Table of Contents Leases The Company determines if an arrangement is a lease at contract inception. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Certain adjustments to the right-of-use asset may be required for items such as incentives received. The Company uses the implicit interest rate when readily determinable and uses the Company’s incremental borrowing rate when the implicit rate is not readily determinable based upon the information available at the commencement date in determining the present value of the lease payments. The lease payments used to determine the Company’s operating lease assets may include lease incentives, stated rent increases and escalation clauses linked to rates of inflation, when determinable, and are recognized in the Company’s operating lease assets in the Company’s consolidated balance sheets. The Company’s operating leases are reflected in the right-of-use operating asset; operating lease liability, current portion; and non-current operating lease liability in the Company’s consolidated balance sheets. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Short-term leases, defined as leases that have a lease term of 12 months or less at the commencement date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease. Variable lease payments are the amounts owed by the Company to a lessor that are not fixed, such as reimbursement for common area maintenance and utilities costs for facility leases and maintenance. Variable lease payments are expensed when incurred. Assumptions made by the Company at the commencement date are re-evaluated upon occurrence of certain events, including a lease modification. A lease modification results in a separate contract when the modification grants the lessee an additional right of use not included in the original lease and when lease payments increase commensurate with the standalone price for the additional right of use. 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. 145 Table of Contents In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) 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 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The standard is effective for annual and interim periods beginning after December 15, 2024. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. The adoption is not expected to have a material impact on the Company’s consolidated financial statements. 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). The standard is effective for annual and interim periods beginning after December 15, 2024. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. The adoption is not expected to have a material impact on the Company’s consolidated financial statements. 3. FAIR VALUE MEASUREMENTS The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values: Fair value measurements at December 31, 2024 using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 35,345 $ — $ — $ 35,345 Investments: Commercial paper — 34,914 — 34,914 Corporate bonds — 27,224 — 27,224 Total $ 35,345 $ 62,138 $ — $ 97,483 Fair value measurements at December 31, 2023 using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 30,803 $ — $ — $ 30,803 Investments: Commercial paper — 44,871 — 44,871 Corporate bonds — 30,308 — 30,308 Total $ 30,803 $ 75,179 $ — $ 105,982 When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure fair value. The valuation technique used to measure fair value for the Company's Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, the Company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument. There were no transfers in or out of Level 3 categories in the periods presented. 146 Table of Contents 4. INVESTMENTS As of December 31, 2024, investments were comprised of the following: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Commercial paper $ 34,900 $ 19 $ ( 5 ) $ 34,914 Corporate bonds 27,214 24 ( 14 ) 27,224 Total $ 62,114 $ 43 $ ( 19 ) $ 62,138 As of December 31, 2023, investments were comprised of the following: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Commercial paper $ 44,880 $ 4 $ ( 13 ) $ 44,871 Corporate bonds 30,326 — ( 18 ) 30,308 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, 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. In assessing the value of these securities, the Company evaluated whether it intended to sell the security and whether it was more likely than not that the Company would be required to sell the security before recovering its amortized cost basis. The Company also determined no portion of the unrealized losses relate to a credit loss. There have been no impairments of the Company’s assets measured and carried at fair value during the years ended December 31, 2024 and 2023. 5. PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following: December 31, 2024 2023 Furniture and fixtures $ 17 $ 17 Leasehold improvements 2,512 2,512 Property and equipment 2,529 2,529 Less: accumulated depreciation ( 1,142 ) ( 799 ) Total Property and Equipment, net $ 1,387 $ 1,730 Depreciation expense for the years ended December 31, 2024 and 2023 was $ 343 and $ 437 , respectively. 147 Table of Contents 6. 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, 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. 7. ACCRUED EXPENSES Accrued expenses and other current liabilities consisted of the following: December 31, 2024 2023 Contracted research services $ 8,226 $ 8,071 Payroll and related expenses 4,373 5,175 Professional and consulting fees 563 963 Current portion of operating lease liability 3,404 3,113 Total accrued expenses and other current liabilities $ 16,566 $ 17,322 8. STOCK-BASED COMPENSATION 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 initial public offering (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. The number of shares initially reserved for issuance under the 2020 Plan was 6,665,891 , which was cumulatively increased on January 1, 2021 and each January 1 thereafter by 4 % 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, 2024, 4,453,331 shares remained available for issuance under the 2020 Plan. The number of authorized shares reserved for issuance under the 2020 Plan was increased by 2,265,786 shares effective as of January 1, 2025. 148 Table of Contents 2020 Employee Stock Purchase Plan The 2020 Employee Stock Purchase Plan (the 2020 ESPP) 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. 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, 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 The assumptions that the Company used to determine the grant-date fair value of options granted were as follows, presented on a weighted-average basis: December 31, 2024 2023 Risk-free interest rate 4.23 % 4.03 % Expected term (in years) 5.9 5.9 Expected volatility 83.2 % 80.1 % Expected dividend yield 0 % 0 % Options The following table summarizes the stock option activity under the Company’s equity awards plans: Options Weighted Average Exercise Price Weighted Average Remaining Life (in Years) Intrinsic Value (in thousands) Outstanding December 31, 2023 8,135,711 $ 7.85 8.0 $ 1,146 Granted 3,604,552 $ 4.95 Exercised ( 341,983 ) $ 2.33 Cancelled or forfeited ( 1,925,440 ) $ 4.89 Expired ( 38,098 ) $ 22.04 Outstanding December 31, 2024 9,434,742 $ 7.48 6.6 $ 313 Options vested or expected to vest at December 31, 2024 9,434,742 $ 7.48 6.6 $ 313 Options exercisable at December 31, 2024 5,206,237 $ 10.24 5.1 $ 157 The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2024 and 2023 was $ 3.45 and $ 2.05 , respectively. The total fair value of options vested during the years ended December 31, 2024 and 2023 was $ 6,409 and $ 8,473 , respectively. 149 Table of Contents Restricted stock 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 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. 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 one year of the vesting commencement date. The following table summarizes restricted stock activity: Number of shares Weighted average grant date fair value Unvested restricted common stock as of December 31, 2023 20,799 $ 2.41 Granted 540,000 $ 3.66 Vested ( 19,449 ) $ 2.40 Cancelled or forfeited ( 1,350 ) $ 2.55 Unvested restricted common stock as of December 31, 2024 540,000 $ 3.66 The aggregate fair value of restricted stock that vested during the years ended December 31, 2024 and 2023 was $ 48 and $ 513 , respectively. 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, 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, 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 The Company recorded stock-based compensation expense in the following award type categories included within its consolidated statements of operations and comprehensive loss: December 31, 2024 2023 Stock options $ 9,940 $ 8,975 Restricted stock units 432 270 Employee Stock Purchase Plan and Other 255 359 $ 10,627 $ 9,604 150 Table of Contents For the years ended December 31, 2024 and 2023, the Company issued 37,407 and 64,470 shares, respectively, of common stock out of the 2020 Plan under the Company’s policy where non-employee directors may elect to receive their compensation in the form of common stock in lieu of cash. The Company recorded stock-based compensation expense related to stock options and restricted stock units in the following expense categories of its consolidated statements of operations and comprehensive loss: December 31, 2024 2023 Research and development $ 2,583 $ 3,050 General and administrative 8,044 6,554 $ 10,627 $ 9,604 As of December 31, 2024, total unrecognized compensation cost related to the unvested stock options was $ 9,253 , which is expected to be recognized over a weighted average period of 2.6 years. As of December 31, 2024, total unrecognized compensation cost related to the unvested restricted stock units was $ 1,562 , which is expected to be recognized over a weighted average period of 0.8 years. Employee stock purchase plan The 2020 ESPP enables eligible employees to purchase shares of the Company's common stock at the end of each six-month offering period at a price equal to 85 % of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower. Eligible employees generally includes all employees. Offering periods begin on the first trading day of January and July of each year and end on the last trading day in June and December of each year. Share purchases are funded through payroll deductions of up to 10 % of an employee’s eligible compensation for each payroll period, up to $ 25 each calendar year. For the years ended December 31, 2024 and 2023, there were 114,102 and 69,005 shares, respectively, issued under the 2020 ESPP. 9. INCOME TAXES Income (loss) before income tax expense consists of the following: December 31, 2024 2023 Domestic $ ( 69,676 ) $ ( 82,639 ) Foreign — 197 Total loss before income taxes $ ( 69,676 ) $ ( 82,442 ) 151 Table of Contents For the years ended December 31, 2024 and 2023, the Company recorded no income tax benefit for the net operating losses incurred each year, due to its uncertainty of realizing a benefit from those items. A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations as of December 31, 2024 and 2023, respectively, is as follows: December 31, 2024 2023 U.S. federal statutory income tax rate 21.0 % 21.0 % State and local taxes, net of federal benefit 0.4 % 5.3 % Permanent differences 0.0 % 0.0 % Stock compensation ( 0.9 ) % ( 1.6 ) % Research and development credits 3.7 % 3.2 % Change in valuation allowance ( 24.2 ) % ( 28.6 ) % Other 0.0 % 0.7 % Effective income tax rate 0.0 % 0.0 % The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets were as follows: Tax year ended December 31, 2024 2023 Deferred tax assets (liabilities): Net operating loss carryforwards $ 78,879 $ 69,194 Research and development tax credits 13,123 10,766 Capitalized R&D 26,181 22,139 Operating lease liabilities 5,498 6,784 Accruals and other 826 1,170 Stock-based compensation 7,723 6,638 Total deferred tax assets 132,230 116,691 Valuation Allowance ( 127,585 ) ( 110,761 ) Subtotal 4,645 5,930 Right-of-use assets ( 4,641 ) ( 5,843 ) Net fixed assets ( 4 ) ( 87 ) Net deferred tax assets $ — $ — As of December 31, 2024, the Company had gross federal net operating loss carryforwards of $ 313,563 , of which $ 2,556 begin to expire in 2036 and the remainder do not expire but are subject to 80% limitation. As of December 31, 2024, the Company had state net operating loss carryforwards of $ 208,250 that begin to expire in 2036. Additionally, the Company had federal research and development tax credit carryforwards of $ 11,950 that expire at various dates through 2036. 152 Table of Contents In assessing the realizability of the net deferred tax asset, the Company considers all relevant positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The realization of the gross deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. Management believes that it is more likely than not that the Company’s deferred income tax assets will not be realized. As such, there is a full valuation allowance against the net deferred tax assets as of December 31, 2024 and 2023. The valuation allowance increased by $ 16,824 during the year ended December 31, 2024 primarily as a result of net operating losses generated during the period. Utilization of the net operating loss carryforwards and research and development tax credit carryforwards may be subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. Further, until a study is completed and any limitation is known, no amounts are being presented as an uncertain tax position. The Company also has not conducted a study of its research and development credit carryforwards, which may result in an adjustment to research and development credit carryforwards. A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheets or statements of operations if an adjustment were required. Further, until a study is completed and any limitation is known, no amounts are being presented as an uncertain tax position. The Company applies the accounting guidance in ASC 740 related to accounting for uncertainty in income taxes. The Company’s reserves related to taxes are based on a determination of whether, and how much of, a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. As of December 31, 2024 and 2023, the Company had no unrecognized tax benefits. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. 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. 153 Table of Contents 10. NET LOSS PER SHARE Net loss per share The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company (in thousands, except share and per share amounts): December 31, 2024 2023 Net loss attributable to common stockholders $ ( 69,676 ) $ ( 82,442 ) Weighted average common shares outstanding, basic and diluted 55,028,371 43,954,649 Net loss per share, basic and diluted $ ( 1.27 ) $ ( 1.88 ) The Company’s unvested restricted common shares at December 31, 2024 and 2023 have been excluded from the computation of basic net loss per share attributable to common stockholders. The Company’s potentially dilutive securities, which include options, unvested restricted stock, shares issuable under the employee stock purchase plan and warrants to purchase common stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: December 31, 2024 2023 Options to purchase common stock 9,434,742 8,135,711 Unvested restricted stock 540,000 20,799 Shares issuable under employee stock purchase plan 27,518 28,780 Unvested performance restricted stock units — 19,000 Warrants to purchase shares of common stock 10,757 10,757 10,013,017 8,215,047 11. LEASES The Company has historically entered into lease arrangements for its facilities. As of December 31, 2024, the Company had two operating leases with required future minimum payments. In applying the transition guidance under ASC 842, the Company determined the classification of these leases to be operating leases and recorded right-of-use assets and lease liabilities as of the effective dates. The Company’s leases generally do not include termination or purchase options. 154 Table of Contents Operating Leases In July 2020, the Company entered into a seven-year agreement with an option to extend for five additional years to lease two floors totaling approximately 25,578 square feet of office space for its principal office, which is located in Cambridge, MA. The lease on the first floor commenced on August 1, 2020 and the lease on the second floor commenced March 9, 2021. The Company recognized the respective lease balances on the consolidated balance sheets when the lease of each floor commenced. Under the terms of the lease, the Company was required to issue a $ 1,168 letter of credit as security for the lease, which was reduced to $ 779 in August 2023 pursuant to the terms of the lease agreement. Additionally, on December 12, 2022, the Company entered into a sublease for one floor of its Cambridge, Massachusetts office space. The sublease terminates on August 31, 2028, which is also the date on which the Company's lease terminates. 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 Cambridge office lease as a result of the sublease. 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: December 31, 2024 2023 Lease Cost Operating lease cost $ 4,217 $ 4,217 Short-term lease cost 60 59 Variable lease cost 915 860 Sublease income ( 3,052 ) ( 1,138 ) Total lease cost $ 2,140 $ 3,998 December 31, Other Operating Lease Information 2024 2023 Cash paid for amounts included in the measurement of lease liability $ 4,359 $ 4,244 Weighted-average remaining lease term 6.0 6.9 Weighted-average discount rate 5.3 % 5.3 % The variable lease costs for the year ended December 31, 2024 include common area maintenance and other operating charges. As the Company’s leases do not provide an implicit rate, the Company utilized its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. 155 Table of Contents Future minimum lease payments under the Company’s operating leases as of December 31, 2024 were as follows: 2025 $ 4,477 2026 4,599 2027 4,724 2028 3,926 2029 2,183 Thereafter 6,141 Total lease payments 26,050 Less: interest ( 3,865 ) Total lease liability $ 22,185 Rent expense for the years ended December 31, 2024 and 2023 was $ 5,275 and $ 5,218 , respectively. 12. COMMITMENTS AND CONTINGENCIES The Company enters into contracts in the normal course of business with contract research organizations (CROs), contract manufacturing organizations (CMOs) and other third parties for preclinical research studies, clinical trials and testing and manufacturing services. These contracts do not contain minimum purchase commitments and are cancelable upon prior written notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including noncancelable obligations of service providers, up to the date of cancellation. License Agreements The Company is party to license agreements, which include contingent payments. These payments will become payable if and when certain development, regulatory and commercial milestones are achieved. As of December 31, 2024, the satisfaction and timing of the contingent payments is uncertain and not reasonably estimable. Indemnification agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any indemnification arrangements that could have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2024 or 2023. Legal proceedings The Company is not currently party to and is not aware of any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to such legal proceedings. 156 Table of Contents 13. BENEFIT PLANS The Company has a tax-qualified 401(k) and Profit Sharing defined contribution plan (the 401(k) Plan). Under the 401(k) Plan, the Company provides an employer safe harbor matching contribution equal to 100 % of a participant’s eligible contributions of up to 6 % of eligible compensation, subject to limits established by the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the Code). All matching contributions are fully vested when made. During the years ended December 31, 2024 and 2023, the Company contributed $ 783 and $ 916 , respectively, to the 401(k) Plan. 14. 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, 2024 2023 (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 2,515 7,916 Non-program expenses 2 14,670 16,789 Personnel-related expenses 21,978 24,668 Other segment items 3 1,522 5,586 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. 157 Table of Contents 15. 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 * * * * * * 158 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.