What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2026-03-16 compared with 2025-03-06 · 196 added, 118 removed, 566 unchanged (36% of the section changed)

6 unchanged sentences

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income ( Loss )

Consolidated Statements of Cash Flows

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Black Diamond Therapeutics, Inc.

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”).

and its subsidiary (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income (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, 2025 and 2024, 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.

13 unchanged sentences

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.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accrued Research and Development Costs Related to Contract Research Organization Activities

As described in Notes 2 and 7 to the consolidated financial statements, research and development costs are expensed as incurred.

As disclosed by management, these costs include expenses incurred under agreements with contract research organizations (CROs) that are primarily engaged in the oversight and conduct of the Company’s drug discovery efforts, preclinical studies, and clinical trials.

When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company is required to make estimates of outstanding obligations to those third parties as of the end of the reporting period.

The accrual estimates are based on a number of factors, including the Company’s knowledge of the progress towards completion of the research and development activities, invoicing to date under the contracts, communication from the research institution or other companies of any actual costs incurred during the period that have not yet been invoiced, and the costs included in the contracts.

The Company recorded $7.9 million of accrued research and development costs as of December 31, 2025, a significant portion of which relates to accrued research and development costs related to CRO activities.

The principal consideration for our determination that performing procedures relating to accrued research and development costs related to CRO activities is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s accrued research and development costs related to CRO activities.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

The procedures included, among others (i) evaluating the appropriateness of the method used by management to calculate the accrued research and development costs related to CRO activities;

and (ii) testing the accrued research and development costs on a sample basis by obtaining and inspecting source documents, such as contracts, purchase orders, invoices and payments, and recalculating the accrued research and development costs.

/s/ PricewaterhouseCoopers LLP

38 unchanged sentences

Black Diamond Therapeutics, Inc.

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except share and per share data)

Year Ended December 31,

License revenue $ 70,000

Operating expenses:

1 unchanged sentence

General and administrative 16,572 27,469

Impairment of right-of-use assets and property and equipment 7,348 —

Total operating expenses 57,478 78,781

Loss from operations ( 78,781 ) ( 86,460 )

Income (loss) from operations 12,522 ( 78,781 )

Other income (expense):

2 unchanged sentences

Total other income (expense), net 9,845 9,105

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 )

Net income (loss) $ 22,367 $ ( 69,676 )

Net income (loss) per share - basic $ 0.39 $ ( 1.27 )

Net income (loss) per share - diluted $ 0.39 $ ( 1.27 )

Weighted average common shares outstanding - basic 56,868,111 55,028,371

Weighted average common shares outstanding - diluted 57,562,746 55,028,371

Comprehensive income (loss):

Net income (loss) $ 22,367 $ ( 69,676 )

Other comprehensive (loss) income:

Change in unrealized (loss) gain on investments, net 77 51

Comprehensive loss $ ( 69,625 ) $ ( 80,645 )

Comprehensive income (loss) $ 22,444 $ ( 69,625 )

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

4 unchanged sentences

Cash flows from operating activities:

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

Adjustment to reconcile net loss to net cash used in operating activities:

Net income (loss) $ 22,367 $ ( 69,676 )

Adjustment to reconcile net income (loss) to net cash used in operating activities:

Stock-based compensation expense 6,628 10,627

2 unchanged sentences

Non-cash rent expense 3,054 2,971

Loss on disposal of property and equipment — 358

Gain on sale of investments ( 74 ) —

Impairment of right-of-use assets and property and equipment 7,348 —

Gain on sale of property and equipment ( 27 ) ( 94 )

5 unchanged sentences

Non-current operating lease liability ( 3,713 ) ( 3,403 )

Net cash used in operating activities ( 62,303 ) ( 66,717 )

Net cash provided by (used in) operating activities 29,614 ( 62,303 )

Cash flows from investing activities:

Purchases of equipment — ( 33 )

Proceeds from disposal of equipment 27 94

1 unchanged sentence

Purchases of investments ( 164,026 ) ( 122,876 )

Net cash provided by investing activities 16,968 16,346

Net cash provided by (used in) investing activities ( 44,905 ) 16,968

Cash flows from financing activities:

Proceeds from exercise of common stock options and ESPP 1,053 82

Proceeds from exercise of common stock options and ESPP, net of restricted stock surrendered for taxes ( 146 ) 1,053

Proceeds from issuance of common stock, net of issuance costs — 24,494

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

Net cash provided by (used in) financing activities ( 146 ) 25,547

Net (decrease) increase in cash and cash equivalents ( 15,437 ) ( 19,788 )

22 unchanged sentences

BALANCE - December 31, 2024 56,644,655 $ 7 $ 570,361 $ 24 $ ( 487,107 ) $ 83,285

Issuance of common stock 4,490,853 — 24,494 — — 24,494

Exercise of common stock options 85,274 1 208 — — 209

4 unchanged sentences

Unrealized gains (loss) on investments — — — 77 — 77

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

Net income — — — — 22,367 22,367

BALANCE - December 31, 2025 57,138,057 $ 8 $ 576,842 $ 101 $ ( 464,740 ) $ 112,211

16 unchanged sentences

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.

On March 18, 2025, the Company entered into a global licensing agreement (the Servier Agreement) with Servier Pharmaceuticals LLC (Servier) for BDTX-4933, a small molecule designed by the Company to address unmet medical needs in RAF/RAS-mutant solid tumors, pursuant to which the Company granted to Servier a worldwide license to develop and commercialize BDTX-4933.

Under the terms of the Servier Agreement, Servier will lead the development activities and the worldwide commercialization of BDTX-4933 across multiple indications, including non-small cell lung cancer (NSCLC), with potential applications in other solid tumors.

Under the Servier Agreement, the Company received an upfront payment of $ 70.0 million in March 2025 and will be eligible to receive up to $ 710.0 million in development and commercial sales milestone payments, along with tiered royalties based on global net sales.

The Servier Agreement is discussed in greater detail in Note 15, License Revenue .

On November 14, 2022, the Company filed a shelf registration statement on Form S-3, including a base prospectus and sales agreement prospectus (the Prior Shelf Registration Statement), with the SEC, which covered 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 price of $ 500.0 million.

The Company simultaneously entered into an Open Market Sale Agreement SM (the Sales Agreement) with Jefferies LLC (Jefferies), as sales agent, to provide for the issuance and sale by the Company of up to $ 150.0 million of its common stock, or the Shares, from time to time through Jefferies as its sales agent (the ATM Program).

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

Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, Jefferies may sell the Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act.

The Company may sell the Shares in amounts and at times to be determined by the Company from time to time subject to the terms and conditions of the Sales Agreement, but the Company has no obligation to sell any Shares under the Sales Agreement.

The Company or Jefferies may suspend or terminate the offering of Shares upon notice to the other party and subject to other conditions.

On November 14, 2022, the Company entered into an Open Market Sale Agreement SM (the Sales Agreement) with Jefferies LLC (Jefferies), as sales agent, to provide for the issuance and sale by the Company of up to $ 150.0 million of its common stock, or the Shares, from time to time through Jefferies as its sales agent (the ATM Program).

The Company or Jefferies may suspend or terminate the offering of Shares upon notice to the other party and subject to other conditions As of December 31, 2025, 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).

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.

10 unchanged sentences

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.

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 subsidiary, Black Diamond Therapeutics Security Corporation, after elimination of all significant intercompany accounts and transactions.

Use of estimates

5 unchanged sentences

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 Company continues to monitor the impact of macroeconomic developments and geopolitical developments, including political unrest, new or increased international tariffs and retaliatory tariffs, economic sanctions, high inflation, disruptions in capital markets, changes in or disruptions of U.S.

governmental agencies whether from a continued U.S.

federal government shutdown or reduced resources, new laws and regulations or amendments to existing laws and regulations in the U.S.

and foreign countries, international trade relationships and military conflicts, 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.

2 unchanged sentences

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.

Cash and cash equivalents

40 unchanged sentences

Estimated useful life

Laboratory equipment

Furniture and fixtures

Computer and office equipment

Leasehold improvements Shorter of the useful life or remaining lease term

2 unchanged sentences

Impairment of long-lived assets

Long-lived assets consist of property and equipment.

Long-lived assets consist of property and equipment and right-of-use assets associated with operating leases.

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.

3 unchanged sentences

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.

The Company recorded impairment losses of $ 7,348 on long-lived assets for the year ended December 31, 2025.

Fair value measurements

25 unchanged sentences

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.

Any accrual estimates are based on a number of factors, including the Company’s knowledge of the progress towards completion of the research and development activities, invoicing to date under the contracts, communication from the research institution or other companies of any actual costs incurred during the period that have not yet been invoiced, and the costs included in the contracts.

Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period.

10 unchanged sentences

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 estimates its expected common stock volatility based on its historical common stock volatility for the same time period.

The Company uses the simplified method prescribed by Securities and Exchange Commission Staff Accounting Bulletin No.

4 unchanged sentences

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.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers , (ASC 606).

This standard applies to all contracts with customers, except for contracts that are within the scope of other standards.

Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

The Company enters into licensing agreements with partners under which it may exclusively license rights to research, develop, manufacture, and commercialize product candidates to third parties.

The terms of these arrangements may include payment to the Company of one or more of the following:

(1) non-refundable, upfront fees;

(2) reimbursement of certain costs;

(3) customer option fees for additional goods or services;

(4) milestone payments;

and (5) royalties on net sales of licensed products.

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps:

(i) identification of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations;

and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

As part of the accounting for these arrangements, the Company must use its judgment to determine:

(a) the number of performance obligations based on the determination under step (ii) above;

(b) the transaction price under step (iii) above;

(c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above;

and (d) the contract term and pattern of satisfaction of the performance obligations under step (v) above.

The Company also uses judgment to determine whether milestones or other variable consideration, except for royalties, should be included in the transaction price as described further below.

The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Amounts due to the Company for satisfying the revenue recognition criteria or that are contractually due based upon the terms of the applicable agreement are recorded as a receivable in the Company’s consolidated balance sheet.

Milestone payments

The Company measures the transaction price based on the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised goods and/or services to the customer.

At the inception of an arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount of variable consideration to be included in the transaction price utilizing either the expected value method or the most likely amount method, depending on which method is expected to better predict the amount of consideration to which the Company will be entitled.

Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

With respect to arrangements that include payments for a development or regulatory milestone, the Company evaluates whether the associated event is considered likely of achievement and estimates the amount to be included in the transaction price using the most likely amount method.

Milestone payments that are not within the Company’s control or the control of the counterparty, such as those dependent upon receipt of regulatory approval, are not considered to be likely of achievement until the triggering event occurs.

At the end of each reporting period, the Company re-evaluates the probability of achievement of each milestone and any related constraint and, if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and net income (loss) in the period of adjustment.

See Note 15 to our consolidated financial statements for additional information on the Company’s license revenue.

For arrangements that include sales-based royalties, including milestone payments based upon the achievement of a certain level of product sales, wherein the license is deemed to be the sole or predominant item to which the payments relate, the Company recognizes revenue upon the later of:

(i) when the related sales occur or (ii) when the performance obligation to which some or all of the payment has been allocated has been satisfied (or partially satisfied).

Consideration that would be received for optional goods and/or services is excluded from the transaction price at contract inception.

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.

9 unchanged sentences

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).

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

Improvements to Income Tax Disclosures (ASU 2023-09), which requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold.

ASU 2023-09 became effective for the annual period starting on January 1, 2025.

The adoption of ASU 2023-09, on a prospective basis, resulted in expansion of our income tax footnote disclosures in Note 9, Income Taxes , including a more detailed effective tax rate reconciliation.

On July 4, 2025, the One Big Beautiful Bill Act (OBBB Act) was enacted in the United States.

The OBBB Act includes significant changes to federal tax law and other regulatory provisions that may impact the Company.

The Company evaluated the impact of the enacted tax law and noted there is an immaterial impact on our income tax rate.

Comprehensive income (loss)

Comprehensive income (loss) is composed of net loss and other comprehensive income (loss).

Other comprehensive income (loss) consists of unrealized gains and losses on investments.

7 unchanged sentences

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.

The Company reported a net income and a net loss attributable to common stockholders for the years ended December 31, 2025 and 2024, respectively.

The Company determines if an arrangement is a lease at contract inception.

16 unchanged sentences

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.

In December 2023, the Financial Accounting Standards Board (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 Company adopted ASU 2023-09 for its annual reporting period ending on December 31, 2025 and applied the amendments prospectively.

See Note 9 for the required disclosures.

Recently issued accounting pronouncements

4 unchanged sentences

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):

Improvements to Income Tax Disclosures (ASU 2023-09).

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.

FAIR VALUE MEASUREMENTS

6 unchanged sentences

Corporate bonds — 78,745 — 78,745

Government agencies — 14,032 — 14,032

Total $ 19,906 $ 107,662 $ — $ 127,568

17 unchanged sentences

Corporate bonds 78,652 110 ( 17 ) 78,745

Government agencies 14,031 6 ( 5 ) 14,032

Total $ 107,561 $ 124 $ ( 23 ) $ 107,662

5 unchanged sentences

Total $ 62,114 $ 43 $ ( 19 ) $ 62,138

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, 2025, all marketable securities held by the Company had remaining contractual maturities of three years or less.

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

22 unchanged sentences

Accrued expenses and other current liabilities consisted of the following:

Contracted research services $ 8,226 $ 8,071

Accrued research and development costs $ 7,951 $ 8,226

Payroll and related expenses 2,923 4,373

35 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 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 majority of restricted stock vests over a two-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:

5 unchanged sentences

The aggregate fair value of restricted stock that vested during the years ended December 31, 2025 and 2024 was $ 1,793 and $ 48 , 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

18 unchanged sentences

Domestic $ 22,365 $ ( 69,676 )

Foreign — 197

Total loss before income taxes

Total income (loss) before income taxes

$ 22,365 $ ( 69,676 )

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:

For the years ended December 31, 2025 and 2024, the Company recorded no income tax benefit for the net operating income (losses) incurred each year, due to its uncertainty of realizing a benefit from those items.

The reconciliation of income taxes at the federal statutory rate to the reported rate for income taxes pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:

December 31, 2025

federal taxes at statutory rate $ 4,753

State Income taxes, net of federal benefit* —

Federal R&D Tax credits ( 1,266 ) ( 5.6 ) %

Changes in valuation allowances ( 5,566 ) ( 24.6 ) %

Nontaxable or nondeductible expenses

Stock Compensation 2,066

Other Adjustments 4 0.0 %

Total $ — 0.0 %

(*) State taxes in Massachusetts make up the majority (greater than 50 percent) of the tax effect in this category, offset with a valuation allowance.

The reconciliation of income taxes at the federal statutory rate to the reported rate for income taxes for years prior to our adoption of ASU 2023-09 is as follows:

December 31, 2024

federal statutory income tax rate

6 unchanged sentences

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,

Year ended December 31,

Deferred tax assets (liabilities):

4 unchanged sentences

Accruals and other 744 826

Net fixed assets 39 —

Stock-based compensation 7,285 7,723

7 unchanged sentences

As of December 31, 2025, the Company had state net operating loss carryforwards of $ 220,719 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.

Additionally, the Company had federal research and development tax credit carryforwards of $ 13,216 that expire at various dates through 2045 and state research and development credit carryforwards of $ 1,765 that expire at various dates through 2040.

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.

2 unchanged sentences

As such, there is a full valuation allowance against the net deferred tax assets as of December 31, 2025 and 2024.

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.

The valuation allowance decreased by $ 3,362 during the year ended December 31, 2025 primarily as a result of amortization of previously capitalized R&D expenses partially offset by current year net operating loss and federal research and development tax credits.

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.

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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 statute of limitations for assessment by the Internal Revenue Service remains open for all years from 2022 to the present.

The Company’s tax attributes related to years prior to 2022 can still be adjusted under audit.

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):

Net loss attributable to common stockholders $ ( 69,676 )

Weighted average common shares outstanding, basic and diluted 55,028,371

Net loss per share, basic and diluted $ ( 1.27 )

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.

NET INCOME (LOSS) PER SHARE

Net income (loss) per share

We compute basic net income (loss) per common share by dividing net income (loss) by the weighted-average number of common shares outstanding.

We compute diluted net income (loss) per common share by dividing net income (loss) by the weighted-average number of common shares and dilutive potential common share equivalents then outstanding during the period.

Potential common shares consist of shares issuable upon the vesting of restricted stock units and the exercise of stock options (the proceeds of which are then assumed to have been used to repurchase outstanding shares using the treasury stock method).

Because the inclusion of potential common shares would be anti-dilutive for periods presenting a net loss, diluted net loss per common share is the same as basic net loss per common share.

The following table summarizes the computation of basic and diluted net income (loss) per share attributable to common shareholders of the Company (in thousands, except share and per share amounts):

Net income (loss) attributable to common stockholders $ 22,367 $ ( 69,676 )

Weighted average common shares outstanding - basic 56,868,111 55,028,371

Effect of dilutive securities:

Options to purchase common stock 244,635 —

Restricted stock units 450,000 —

Weighted average common shares outstanding - diluted 57,562,746 55,028,371

Net income (loss) per share - basic $ 0.39 $ ( 1.27 )

Net income (loss) per share - diluted $ 0.39 $ ( 1.27 )

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:

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Shares issuable under employee stock purchase plan — 27,518

Unvested performance restricted stock units

Warrants to purchase shares of common stock 10,757

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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.

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.

Further, on December 5, 2025, the Company entered into a sublease for the remaining 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.

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

There was no impairment recognized as a result of the sublease executed in December 2022.

As part of the Company’s evaluation of the December 2025 sublease, it was determined that the estimated undiscounted sublease income exceeded the net book value of the related long-term assets, which includes right-of-use assets and property and equipment associated with the subleased space.

Accordingly, the Company recorded an impairment charge of $ 2,025 related to the right-of-use asset and an impairment charge of $ 580 related to the associated property and equipment.

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.

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

In December 2025, the subtenant did not exercise its option to the sublease, accordingly it will terminate on June 30, 2026.

As part of the Company’s evaluation of the termination of the sublease, it was determined that the undiscounted cash flows projected from an anticipated future sublease exceeded the net book value of the related long-term assets, which includes right-of-use assets and property and equipment associated with the subleased space.

Accordingly, the Company recorded an impairment charge of $ 4,626 related to the right-of-use asset and an impairment charge of $ 117 related to the associated property and equipment.

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, 2025 and 2024:

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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 Company’s measure of segment profit or loss is net income (loss).

The CODM is the chief executive officer (CEO).

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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:

Segment net income (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 income (loss) regularly provided to the CODM when managing the Company’s single reporting segment:

Year Ended December 31,

(in thousands)

License revenue $ 70,000 $ —

Program expenses:

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

Silevertinib (NSCLC) research and development expenses $ 17,469 $ 24,378

Silevertinib (GBM) research and development expenses 138 —

BDTX-4933 research and development expenses 1,018 4,613

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Other segment items 3

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

Segment net income (loss) $ 22,367 $ ( 69,676 )

( 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

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

LICENSE REVENUE

In March 2025, the Company entered into a license agreement with Servier (the Servier Agreement).

Pursuant to the Servier Agreement, the Company granted to Servier a worldwide license to develop and commercialize BDTX-4933.

Under the terms of the Servier Agreement, Servier will lead the development activities and the worldwide commercialization of BDTX-4933 across multiple indications, including NSCLC, with potential applications in other solid tumors.

Under the Servier Agreement, the Company received an upfront payment of $ 70,000 in March 2025 and will be eligible to receive up to $ 710,000 in development and commercial sales milestone payments, along with tiered royalties based on global net sales.

These milestone and royalty payments will become payable to the Company if and when the development and commercial sales milestones are achieved and commercial sales of the licensed product are made.

Unless earlier terminated, the term of the Servier Agreement continues until expiration of the last royalty term for the applicable product in the applicable country.

The Servier Agreement is subject to customary termination provisions, including termination by a party for the other party’s uncured, material breach.

The Servier Agreement also includes customary representations and warranties, covenants and indemnification obligations.

The Company assessed the Servier Agreement in accordance with ASC 606 and concluded that the contract counterparty, Servier, is a customer.

In accordance with ASC 606, the Company determined that there is one performance obligation in the Servier Agreement, consisting of the license of the functional IP rights to BDTX-4933 granted to Servier.

The transaction price was comprised of the fixed consideration of $ 70,000 and was recognized upon transfer of control of the license at a point in time upon contract execution.

The arrangement includes significant variable consideration primarily in the form of development and commercial sales milestone payments and royalty fees.

The development milestone fees are fully constrained at the inception of the contract.

The estimate of variable consideration and the judgments related to the constraints for the development milestones are reassessed each reporting period under the most likely amount method.

As of and for the year ended December 31, 2025, the Company determined the events underlying the milestones were not probable, therefore the variable consideration was fully constrained and no adjustments to the estimates have been made.

The commercial sales milestones and royalty fees are considered variable consideration and will be recognized as revenue as such sales occur.

The commercial sales milestones and royalty fees qualify for the sales and usage-based royalty exception because the license of the functional IP rights to BDTX-4933 is the predominant element of the Servier Agreement and therefore does not require an estimate of the future transaction price.

During the year ended December 31, 2025, the Company recorded $ 70,000 in license revenue pursuant to the Servier Agreement and none in the year ended December 31, 2024.

We anticipate that our net operating losses will cover our annual 2025 tax expense associated with this revenue.

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