Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Annual Report on Internal Controls Over Financial Reporting
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, 2024, our internal control over financial reporting was effective.
Attestation Report of the Registered Public Accounting Firm
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm on internal control over financial reporting as we are a “smaller reporting company” and “non-accelerated filer” as defined under SEC rules.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
Insider Trading Arrangements
(a) On December 14, 2024 , Vimal Mehta , Chief Executive Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 2,184 shares of the Company’s common stock to cover taxes due in connection with the vesting of restricted stock units until December 31, 2025 .
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(b) On December 14, 2024 , Richard Steinhart , Chief Executive Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 1,563 shares of the Company’s common stock to cover taxes due in connection with the vesting of restricted stock units until December 31, 2025 .
(c) On December 14, 2024 , Javier Rodriguez , Senior Vice President, Chief Legal Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 1,563 shares of the Company’s common stock to cover taxes due in connection with the vesting of restricted stock units until December 31, 2025 .
(d) On December 14, 2024 , Frank Yocca , Chief Scientific Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 1,563 shares of the Company’s common stock to cover taxes due in connection with the vesting of restricted stock units until December 31, 2025 .
Each of these plans were terminated effective March 17, 2025.
Open Market Sales Agreement Termination
On March 26, 2025, we and Jefferies terminated that certain Open Market Sales Agreement, dated May 10, 2021, as amended on November 1, 2023.
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers, and Corporate Governance.
INFORMATION ABOUT OUR DIRECTORS & EXECUTIVE OFFICERS
The following information with respect to our Board of Directors (the “Board”) and executive officers is presented as of March 28, 2025:
Name
Age
Position at BioXcel
Vimal Mehta, Ph.D.
64
Chief Executive Officer and President, and Director
Richard Steinhart
67
Senior Vice President and Chief Financial Officer
Frank Yocca, Ph.D.
69
Senior Vice President and Chief Scientific Officer
Javier Rodriguez
53
Senior Vice President, Chief Legal Officer and Corporate Secretary
Peter Mueller, Ph.D.
68
Chairman of the Board
June Bray
71
Director
Sandeep Laumas, M.D.
56
Director
Michael Miller
67
Director
Michael Votruba, M.D.
59
Director
David Mack
54
Director
Rajiv Patni, M.D.
59
Director
Business Experience and Background of Directors and Executive Officers
Vimal Mehta, Ph.D. co-founded the Company and has served as a member of our Board since April 2017 and as our Chief Executive Officer and President since May 2017. Dr. Mehta also served as our Corporate Secretary from May 2017 to February 2021. He is also the co-founder of BioXcel Corporation (now BioXcel LLC) and, following its inception in 2005 until March 2023, served as its Chairman of the Board and Chief Executive Officer. Dr. Mehta holds a Ph.D. in Chemistry from the University of Delhi, India and completed a Post-Doctoral Fellowship in Chemistry at the University of Montpellier, France. During the length of his career, Dr. Mehta has garnered a deep understanding of the biopharma and healthcare ecosystem and has been actively involved in diverse global value generating initiatives encompassing corporate strategy and planning, global business development, and corporate fundraising. As our co-founder, he has helped shape our strategic and business trajectory which the Board believes qualifies him to serve as a director of our Company.
Richard I. Steinhart has served as our Senior Vice President and Chief Financial Officer since March 2018. From October 2017 to March 2018, Mr. Steinhart served as our Vice President and Chief Financial Officer. From October 2015 to June 2017, he was Vice President and CFO at Remedy Pharmaceuticals, Inc. From January 2014 to September 2015 Mr. Steinhart worked as a financial and strategic consultant to the biotechnology and medical device industries. From April 2006 through December 2013, Mr. Steinhart was employed by MELA Sciences, Inc., as their Vice President, Finance and Chief Financial Officer, Treasurer and Secretary from April 2006 to April 2012 and as Sr. Vice President, Finance and Chief Financial Officer from April 2012 to December 2013. From May 1992 until joining MELA Sciences, Mr. Steinhart was a Managing Director of Forest Street Capital/SAE Ventures, a boutique investment banking, venture capital, and management consulting firm focused on healthcare and technology companies. Prior to Forest Street Capital/SAE Ventures, he was Vice President and Chief Financial Officer of Emisphere Technologies, Inc. Mr. Steinhart’s other experience includes seven years at CW Group, Inc., a venture capital firm focused on medical technology and biopharmaceutical companies, where he was a General Partner and Chief Financial Officer. Mr. Steinhart is a member of the Board of Directors of Actinium Pharmaceuticals, Inc., a position he assumed in November 2013, and Atossa Genetics, Inc., where he began his service in March 2014. Mr. Steinhart serves as the Chairman of the Audit Committee at Actinium Pharmaceuticals, where he also sits on the Corporate Governance Committees. Mr. Steinhart serves as the Chairman of Atossa Genetics Audit Committee and is a member of its Audit Committee and Compensation Committee. He holds B.B.A. and M.B.A. degrees from Pace University and is a Certified Public Accountant (inactive).
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Frank D. Yocca, Ph.D. has served as our Executive Vice President and Chief Scientific Officer since December 2023. From March 2018 to December 2023, he served as our Senior Vice President and Chief Medical Officer. From June 2017 to March 2018, Dr. Yocca served as our Vice President and Chief Scientific Officer. From April 2015 to April 2017, he was Senior Vice President, CNS R&D of BioXcel. From 2005 to 2015, Dr. Yocca held multiple leadership roles at AstraZeneca plc, including Vice President, Strategy and Externalization, Neuroscience Virtual Innovative Medicine Unit (iMed) (2011-2015), Vice President and Head, Strategy Unit, CNS and Pain Innovative Medicine Unit (iMed) (2010 to 2011) and Vice President and Head, CNS Pain Discovery (2005 to 2010). Prior to this, he was Executive Director at the Bristol Myers Squibb Pharmaceutical Research Institute from 1984 to 2004 where he served concurrent leadership responsibilities within the Neuroscience Clinical Group for Early and Late Clinical Development Studies. Prior to this, Dr. Yocca served as Executive Director, Neuroscience Discovery from 1997 to 2003, where he was a collaborator in the development and implementation of corporate strategic plans and leader for the Neuroscience Biology Department in the discovery of psychiatry and Alzheimer’s clinical candidates. He was a core member of the Abilify Product Development and Commercialization Team from 1999 to 2002 and a core member of the Early and Late Discovery and Development Teams from 1984 to 2001. Dr. Yocca holds a B.S. in biochemistry from Manhattan College and an M.S. in pharmacology and a Ph.D. in neuropharmacology from St. John’s University.
Javier Rodriguez has served as our Senior Vice President and Chief Legal Officer and Corporate Secretary since January 2021. Mr. Rodriguez has over 20 years of extensive strategic and legal experience within the biopharmaceutical industry and has broad leadership experience managing legal, compliance, corporate governance, intellectual property, data privacy, and government affairs professionals. Prior to joining BioXcel Therapeutics, he was Chief Legal Officer at Indivior PLC (LSE: INDV), a global pharmaceuticals company with operations in over 40 countries, from December 2014 to December 2020, where he oversaw all legal affairs, data privacy compliance, and corporate governance matters. Before taking on his role at Indivior, Mr. Rodriguez was General Counsel at Reckitt Benckiser Pharmaceuticals Inc. where he played a key leadership role in negotiating and successfully effectuating the demerger and spin-off of the organization in 2014, which included closing a $750 million secured term loan and $50 million revolving credit facility to fund on-going operations of the demerged entity. Earlier in his career, Mr. Rodriguez held roles of increasing responsibility at Reckitt Benckiser LLC, Bayer Healthcare Pharmaceuticals, Inc. and Berlex, Inc. He began his legal career in 2000 as a litigation associate at Thelen Reid & Priest, LLP in New York City. He holds a B.S. in Civil Engineering from Rutgers University, a M.S.E. in Structural Engineering from the University of Michigan and a J.D. from the University of Pennsylvania.
Peter Mueller, Ph.D. has served as a director of our Company since April 2017 and Chairman of the Board since August 2017. With over 30 years of global pharma and biotech experience, Dr. Mueller is currently the President of the Mueller Health Foundation, a private foundation tackling globally lethal infectious diseases such as tuberculosis by addressing latency and the ever-growing challenges of antimicrobial resistance. From 2014 to 2016, he was President of R&D and Chief Scientific Officer of Axcella Health, a biotechnology company. From 2003 to 2014, Dr. Mueller served as Executive Vice President Global Research and Development & Chief Scientific Officer for Vertex Pharmaceuticals, Incorporated, a biotechnology company. He was involved in the development of Incivek (2011), Kalydeco (2012), and Orkambi (2014). Prior to his tenure at Vertex, he served as Senior Vice President, Research and Development, for Boehringer Ingelheim Pharmaceuticals, Inc. overseeing global research programs (immunology, inflammation, cardiovascular diseases and gene therapy) and the development of all drug candidates of the company’s worldwide portfolio in North and South America, Canada and Japan, beginning in 1997. He was involved in the development of Spiriva, Combivent, Atrovent and Viramune. Dr. Mueller received both an undergraduate degree and a Ph.D. in Chemistry at the Albert Einstein University of Ulm, Germany, where he also holds a Professorship in Theoretical Organic Chemistry. He completed fellowships in Quantum Pharmacology at Oxford University and in Biophysics at Rochester University. He is a member of various scientific and political societies and currently serves on the Board of the US-India Chamber of Commerce Biotech. He also serves as chairman of the Scientific Advisory Board of BioXcel LLC and is an advisor to the University of Iowa Center for Bioanalysis and Bioprocessing. We believe that Dr. Mueller’s extensive experience in the life sciences industry as a scientist and executive qualifies him to serve as a director of our Company.
June Bray has served as a director of our Company since March 2021. She previously served as Senior Vice President, Global Regulatory Affairs and Medical Writing of Allergan, Inc., a pharmaceutical company, from 2008 to 2020, where she was in charge of global regulatory strategies for development projects and lifecycle management for all therapeutic areas. From 2006 to 2008, Ms. Bray was Vice President, Regulatory Affairs at Organon & Co. (prior to its
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merger with Merck & Co.), where she led departments responsible for regulatory activities for development and marketed products and, from 1980 to 2006, Ms. Bray served in various capacities at Berlex Laboratories, Inc., most recently as Vice President, Global Regulatory Affairs for Specialized Therapeutics/Oncology, a position she held from 2003 to 2006. Ms. Bray has served on the Board of Quince Therapeutics, Inc. since June 2022. Ms. Bray holds an M.B.A. from Fairleigh Dickinson University and a B.S. from the University of Rhode Island. We believe that Ms. Bray’s extensive experience in developing global regulatory strategies for product candidates qualifies her to serve as a director of our Company.
Sandeep Laumas, M.D. has served as a director of our Company since September 2017. Since June 2020, Dr. Laumas has served as Chief Business Officer and Chief Financial Officer of Instil Bio Inc. He served as a Director of BioXcel Corporation from May 2013 to August 2017. Dr. Laumas served as a director of 9 Meters BioPharma, Inc. (formerly Innovate Biopharmaceuticals Inc.), a biopharma company, from January 2014 to June 2021, including serving as the Executive Chairman from 2014 to April 2020, and as its Chief Executive Officer from February 2019 to April 2020. Dr. Laumas has served as a director of Unicycive Therapeutics Inc. since January 2018. He began his career at Goldman Sachs & Co. in New York in the Investment Banking Division. Dr. Laumas then joined Balyasny Asset Management in New York and later moved to North Sound Capital as a Managing Director responsible for global healthcare investments. He has been investing in healthcare via investment vehicles, Bearing Circle Capital. Dr. Laumas has served as a director of Parkway Holdings Ltd. (IHH Healthcare) and SRL Ltd. Dr. Laumas received his A.B. in Chemistry from Cornell University in 1990, M.D. from Albany Medical College in 1995 with a research gap year at the Dana-Farber Cancer Institute and completed his medical internship in 1996 from the Yale University School of Medicine. Dr. Laumas has a novel industry perspective, particularly in both public and private investments and financial transactions in the healthcare arena, which we believe qualifies him to serve as a director of our Company.
Michael Miller has served as a director of our Company since June 2022. He has served as an advisor to several biopharmaceutical companies, including Concarlo Therapeutics since June 2022 and Rigel Pharmaceuticals, Inc. since January 2022. Prior to that, he served as Executive Vice President, Commercial of Jazz Pharmaceuticals plc from March 2014 to August 2020. Since May 2018, Mr. Miller has served on the Board of Puma Biotechnology Inc., where he also serves on the Compensation Committee. Mr. Miller received his B.S. from the University of San Francisco and his M.B.A. from San Francisco State University. The Board believes that Mr. Miller’s extensive experience at commercial pharmaceutical and public companies will provide valuable contributions to the Board.
Michal Votruba, M.D., has served as a director of our Company since March 2019. Since 2013, Dr. Votruba has been a Director of the Gradus/RSJ Life Sciences Fund, the largest dedicated fund in Central Europe with a portfolio of companies in Europe and the United States. Dr. Votruba served as a director of Mynd Analytics, Inc., a telebehavioral health services company, from July 2015 to 2019, and served as a director of Telemynd, Inc., successor to Mynd Analytics, since 2019. Since 2010, he has served as a member of the board of PrimeCell Therapeutics as the Director of Global Business Development overseeing the expansion of the largest regenerative medicine company operating in Central Europe. In 2009, the Czech Academy of Sciences solicited Dr. Votruba’s expertise for the first successful privatization project of the Institute of Experimental Medicine in Prague: the newly created protocol established a precedent for future privatization projects in the Czech Republic. Dr. Votruba earned his M.D. from the Medical Faculty of Charles University in Prague in 1989. Shortly thereafter, he emigrated from Czechoslovakia and developed his professional career in Canada and the USA. Since 2005, Dr. Votruba combined his theoretical and clinical experience in the field of Competitive Intelligence serving the global pharmaceutical industry for eight years as an industry analyst advising senior leaders of companies including Amgen, Novartis, Eli Lilly, Allergan, EMD, Serono and Sanofi. Dr. Votruba brings valuable expertise to the Board as a clinical psychiatrist and broad experience in the international marketing of innovative medical technologies.
David Mack has more than 25 years of experience as a lawyer, director, and investor. He served as a director of of our Company since November 2024. He has extensive experience in leading transactions as well as deep knowledge of complex restructuring and litigation. He has previously served (or serves) on the boards of TerraForm Global, Inc. (NSDQ: GLBL), Speedcast International Limited (ASX: SDA) and Intelsat S.A., among others. He started his career in Sydney as a lawyer with Mallesons Stephen Jaques and then worked for Linklaters LLP in London. In 2000, he moved to the US, where he worked at Simpson Thacher & Bartlett, LLP followed by Perry Capital LLC. He has a BA and an LLB (Hons) from the University of Sydney. In connection with his appointment, Mr. Mack was also appointed to the Compensation Committee, effective with his commencement of service, as well as the newly formed Capital Raising
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Committee. We believe that Mr. Mack is qualified to serve as a director of our Company because of his extensive experience working on strategic transactions.
Dr. Rajiv Patni Since September 2024, Dr. Patni has served as the Chief Executive Officer of Judo Bio, a biopharmaceutical development company focused on pioneering oligonucleotide medicines delivered to the kidney. He previously served as Chief Research and Development Officer at Reata Pharmaceuticals, a commercial-stage company acquired by Biogen and he is currently serving as a board member of Quince Therapeutics, Inc. (Nasdaq: QNCX). Previously, Dr. Patni also served as Chief Medical Officer at several public, commercial-stage biopharmaceutical companies - Global Blood Therapeutics, Portola Pharmaceuticals, and Adamas Pharmaceuticals, until their acquisitions by larger companies. Earlier in his career, Dr. Patni held roles of increasing responsibility at Pfizer, Roche, and Actelion. Dr. Patni received his M.D. from the Icahn School of Medicine at Mount Sinai in New York City as part of an accelerated B.S./M.D. program. He completed an internal medicine residency and adult cardiology fellowship at the Albert Einstein College of Medicine, also in New York City, where he continued as an attending physician-scientist before joining the biopharmaceutical industry. We believe that Dr. Patni’s extensive experience in biopharmaceutical product development will provide valuable contributions to the Board.
Board and Committee Information
During fiscal 2024, our Board of Directors met 12 times, the audit committee met four times, the capital raise committee met four times, and the pricing committee met two times. In 2024, each of our incumbent directors attended at least 75% of the meetings of the Board and committees on which he or she then served as a member.
Executive sessions, which are meetings of the non-management members of the Board, are regularly scheduled throughout the year. In addition, at least twice per year, the independent directors meet in a private session that excludes management and any non-independent directors. The Chair of the Board presides at each of these meetings and, in his absence, the non-management and independent directors in attendance, as applicable, determine which member will preside at such session.
Board Leadership Structure
Our Corporate Governance Guidelines provide our Board with flexibility to combine or separate the positions of Chairperson of the Board and Chief Executive Officer in accordance with its determination that utilizing one or the other structure would be in the best interests of the Company and its stockholders. If the Chairperson of the Board is a member of management or does not otherwise qualify as independent, our Corporate Governance Guidelines provide for the appointment by the independent directors of a lead independent director (the “Lead Director”). The Lead Director’s responsibilities include, but are not limited to: presiding over all meetings of the Board at which the Chairperson of the Board is not present, including any executive sessions of the independent directors; approving Board meeting schedules and agendas; and acting as the liaison between the independent directors and the Chief Executive Officer and Chairperson of the Board. Our Corporate Governance Guidelines provide that, at such times as the Chairperson of the Board qualifies as independent, the Chairperson of the Board will serve as Lead Director.
The positions of our Chair of the Board and our Chief Executive Officer are currently served by two separate persons. Dr. Mueller serves as Chairman of the Board, and Dr. Mehta serves as our Chief Executive Officer. In his capacity as the independent Board Chair, Dr. Mueller performs the functions of the Lead Director.
The Board believes that our current leadership structure of Chief Executive Officer and Chair of the Board being held by two separate individuals is in the best interests of the Company and its stockholders and strikes the appropriate balance between the Chief Executive Officer and President’s responsibility for the strategic direction, day-to day-leadership and performance of our Company and the Chair of the Board’s responsibility to guide overall strategic direction of our Company and provide oversight of our corporate governance and guidance to our Chief Executive Officer and President and to set the agenda for and preside over Board meetings. We recognize that different leadership structures may be appropriate for companies in different situations and believe that no one structure is suitable for all companies. Accordingly, the Board will continue to periodically review our leadership structure and make such changes in the future as it deems appropriate and in the best interests of the Company and its stockholders.
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Board Committees
Our Board has three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee, each of which has the composition and the responsibilities described below. In addition, from time to time, special committees may be established under the direction of our Board when necessary to address specific issues. Each of the audit committee, the compensation committee and the nominating and corporate governance committee operates under a written charter which are available in the “Governance - Governance Documents” section of the “Investors” page of our website located at www.bioxceltherapeutics.com .
Nominating and
Corporate
Audit
Compensation
Governance
Committee
Committee
Committee
June Bray
–—
–—
X
Sandeep Laumas, M.D.
Chair
X
X
Peter Mueller, Ph.D.
X
Chair
Chair
Michael Miller
X
–—
–—
Michal Votruba, M.D.
X
–—
–—
David Mack
–—
X
–—
Rajiv Patni
–—
–—
–—
Audit Committee
Our audit committee is responsible for, among other things:
● appointing, approving the compensation of, and assessing the independence of, our registered public accounting firm;
● overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;
● reviewing and discussing our annual and quarterly financial statements and related disclosures with management and our independent registered public accounting firm;
● considering whether to recommend to the Board that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K;
● coordinating our Board’s oversight of our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;
● discussing our risk assessment and risk management policies, and overseeing management of our financial risks, cybersecurity risks, information security risks, and, as necessary or advisable, such other material risks facing the Company;
● meeting independently with our internal auditors, if any, independent registered public accounting firm and management;
● reviewing on a periodic basis our investment policy;
● reviewing and approving or ratifying any related person transactions;
● pre-approving all audit and non-audit services provided to us by our independent auditor (other than those provided pursuant to appropriate preapproval policies established by the committee or exempt from such requirement under SEC rules);
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● establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, and for the confidential and anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and
● preparing the audit committee report required by SEC rules.
The current members of our audit committee are Peter Mueller, Sandeep Laumas, Michael Miller and Michal Votruba, with Dr. Laumas serving as chair. All members of our audit committee meet the requirements for financial literacy under the applicable Nasdaq rules and regulations. Our Board has affirmatively determined that each member of our audit committee qualifies as “independent” under Nasdaq’s additional standards applicable to audit committee members and Rule 10A-3 of the Exchange Act applicable to audit committee members. In addition, our Board has determined that each of Dr. Laumas, Mr. Miller, Dr. Mueller, and Dr. Votruba qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.
Compensation Committee
Our compensation committee is responsible for, among other things:
● reviewing and approving, or recommending for approval by the board of directors, the compensation of our Chief Executive Officer and our other executive officers;
● reviewing and approving or make recommendations to the Board regarding the Company’s incentive compensation plans and equity-based plans and arrangements;
● overseeing and administering our incentive compensation and equity-based plans and arrangement;
● periodically reviewing and making recommendations to our board of directors with respect to director compensation;
● reviewing and discussing annually with management our “Compensation Discussion and Analysis,” to the extent required;
● preparing the annual compensation committee report required by SEC rules, to the extent required;
● reviewing and discussing the results of the most recent stockholder advisory vote on executive compensation, and reviewing and recommending to our board of directors for approval the frequency with which we should conduct such votes, to the extent required; and
● overseeing the Company’s programs and policies as may be applicable, regarding talent management (including retention, development and training) and diversity and inclusion.
The current members of our compensation committee are Peter Mueller, Ph.D., David Mack and Sandeep Laumas, M.D., with Dr. Mueller serving as chair. Our Board has determined that each member of our compensation committee qualifies as “independent” under Nasdaq’s additional standards applicable to compensation committee members and is a “non-employee director” as defined in Section 16b-3 of the Exchange Act.
The compensation committee generally considers the Chief Executive Officer’s recommendations when making decisions regarding the compensation of non-employee directors and executive officers (other than the Chief Executive Officer). Pursuant to the compensation committee’s charter, the compensation committee has the authority to retain or obtain the advice of compensation consultants, legal counsel and other advisors to assist in carrying out its responsibilities. Before selecting any such consultant, counsel or advisor, the compensation committee reviews and considers the independence of such consultant, counsel or advisor in accordance with applicable Nasdaq rules. We must provide appropriate funding for payment of reasonable compensation to any advisor retained by the compensation committee.
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Compensation Consultants
The compensation committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In accordance with this authority, the compensation committee.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee is responsible for, among other things:
● identifying individuals qualified to become members of our Board;
● recommending to our Board the persons to be nominated for election as directors and to each committee of the Board;
● developing and recommending to our Board corporate governance guidelines, and reviewing and recommending to our board of directors proposed changes to our corporate governance guidelines from time to time;
● reviewing and making recommendations to the Board in connection with a director’s notification of a change in employment or other circumstances; and
● overseeing a periodic evaluation of our Board.
The current members of our nominating and corporate governance committee are June Bray, Sandeep Laumas and Peter Mueller, with Peter Mueller serving as chair. Our Board has determined that each of Ms. Bray and Drs. Laumas and Mueller qualifies as “independent” under applicable Nasdaq rules applicable to nominating and corporate governance committee members.
Code of Business Conduct and Ethics
We have adopted a code of business conduct and ethics (the “Code of Conduct”) that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. A copy of our Code of Business Conduct and Ethics is available under the “Governance - Governance Documents” section of the Investors page of our website located at www.bioxceltherapeutics.com , or by writing to our Corporate Secretary at our offices at 555 Long Wharf Drive, New Haven, CT 06511. We intend to make any required disclosures regarding amendments to, or waivers of, provisions of our Code of Conduct on our website rather than by filing a Current Report on Form 8-K.
Insider Trading Policy
We maintain an Insider Trading Compliance Policy governing the purchase, sale, and other disposition of Company securities that is applicable to all of our directors, officers and employees. We believe our Insider Trading Compliance Policy and procedures are reasonably designed to promote compliance with insider trading laws. A copy of our Insider Trading Compliance Policy is filed hereto as Exhibit 19.1.
The policy additionally prohibits our directors, officers and employees from purchasing financial instruments, such as prepaid variable forward contracts, equity swaps, collars, and exchange funds, or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities. All such transactions involving our equity securities, whether such securities were granted as compensation or are otherwise held, directly or indirectly, are prohibited.
Compensation Recovery Policy (Clawback Policy)
In 2023, we adopted a compensation recovery, or “clawback,” policy (the “Clawback Policy”) in accordance with the Nasdaq listing standards and Exchange Act Rule 10D-1. The Clawback Policy provides for the mandatory recovery (subject to limited exceptions) from current and former officers of incentive-based compensation that was erroneously
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received during the three years preceding the date that the Company is required to prepare an accounting restatement. The Clawback Policy is overseen and administered by the Compensation Committee. The full text of the Clawback Policy was included as Exhibit 97 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 22, 2024.
Interested Persons’ Communications with the Board
To help foster input and insight from the Company’s stockholders and other interested parties (collectively, “Interested Parties”), Interested Parties may communicate with, or otherwise make his or her concerns known directly to, the Chairperson of the Board, the lead director, if any, any chairperson of a Board committee, or the non-management or independent members of the Board, by addressing such communications to the intended recipient by name or position in care of: BioXcel Therapeutics, Inc., Attn: Chief Legal Officer, 555 Long Wharf Drive, New Haven, Connecticut 06511. The Chief Legal Officer will forward such communications to the appropriate party.
Item 11. Executive Compensation
The following is a discussion of the compensation arrangements of our named executive officers (“NEOs”). As a smaller reporting company, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to smaller reporting companies.
Our NEOs include our principal executive officer and our two most highly compensated executive officers, other than our principal executive officer, for the fiscal year ended December 31, 2024. These NEOs and their positions are:
● Vimal Mehta, Ph.D., our Chief Executive Officer and President;
● Javier Rodriquez, our Senior Vice President, Chief Legal Officer and Secretary; and
● Richard Steinhart, our Senior Vice President and Chief Financial Officer.
Summary Compensation Table
The following table shows information regarding the compensation of our NEOs for the years presented.
Non-Equity
Stock
Option
Incentive Plan
All Other
Salary
Awards
Awards
Compensation
Compensation
Total
Name and Principal Position
Year
($)
($)(1)
($)(1)
($)
($)(2)
($)
Vimal Mehta, Ph.D.
2024
1,001,570
—
101,250
—
16,425
1,119,245
Chief Executive Officer
2023
1,001,569
1,097,600
2,615,928
—
16,050
4,731,147
Javier Rodriguez
2024
423,833
181,755
398,530
—
8,625
1,012,552
Senior VP and Chief Legal Officer
2023
423,833
191,588
498,272
—
8,250
1,121,943
Richard Steinhart
2024
409,872
181,755
398,339
—
4,128
998,216
SVP and Chief Commercial Officer
(1) The amounts reported represent the grant date fair value of performance-based units, restricted stock units and stock options granted to our NEOs as computed in accordance with Accounting Standards Codification 718, Compensation - Stock Compensation (ASC 718). For all performance-based units, the amounts were calculated based on the probable outcome of the performance condition as of the grant date. The following are the values of the performance-based units as of the grant date assuming attainment of the maximum level of performance: Dr. Mehta ($300,000), Mr. Rodriguez ($84,000) and Mr. Steinhart ($84,000). Note that the amounts reported in these columns reflect the accounting cost for these awards and do not correspond to the actual economic value that may be received by our NEOs from the awards. We provided information regarding the assumptions used to calculate the value of the restricted stock units and stock options in Note 12 to our financial statements included herein.
(2)
The amounts reported for 2024 represent reimbursement for healthcare benefits ($7,800) and ($4,128) for Dr. Mehta and Mr. Steinhart, respectively, and 401(k) matching contributions of ($8,625) for each named executive officer other than Mr. Steinhart. No bonus was paid for the year 2024.
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Narrative to Summary Compensation Table
2024 Salaries
Our NEOs receive a base salary to compensate them for services rendered to the Company. The base salary payable to each NEO is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. The base salaries of our NEOs are reviewed from time to time and adjusted when our Board or compensation committee determines an adjustment is appropriate. The compensation committee determined not to increase the salaries of the NEOs in 2024.
2024 Equity Awards
During 2024, we awarded stock options, time-based restricted stock units and performance-based restricted stock units (“PSUs”) to our NEOs as the long-term incentive component of our executive compensation program. We typically grant equity awards at such times as our Board determines appropriate. The following table sets forth the equity awards we granted to our NEOs during 2024:
2024 Equity Awards Granted (#)
Name
Options
RSUs
PSUs
Vimal Mehta, Ph.D.
6,250
15,625
Javier Rodriguez
1,875
625
4,375
Richard Steinhart
1,875
625
4,375
The options were granted with exercise prices equal to the fair market value of our common stock on the date of grant. The stock options generally vest and becomes exercisable as to 50% of the total number of shares underlying the option on each of the first and second anniversaries of the date of grant and the remaining become fully vested on the second anniversary of the date of the grant, subject, in each case, to the holder’s continued service through the applicable vesting date. The time-based restricted stock units generally vest fully on the first anniversary of the date of the grant, subject, in each case, to the holder’s continued service through the applicable vesting date.
The PSUs granted to Dr. Mehta, Mr. Rodriquez and Mr. Steinhart are eligible to vest within thirty days of the first anniversary of the grant date the participants continued employment with the Company and based on the attainment of the following performance metrics, as determined by the Board: (i) a satisfactory completion of securing at least $25 million of additional funding for the Company (50% of the PSUs); (ii) successfully initiates trials for its Serenity and Tranquility programs and progress towards data readouts for such program trials (25% of the PSUs); (iii) significant progress towards achieving $5 million in IGALMI revenues (15% of the PSUs); and (iv) making progress towards securing a partnership deal (10% of the PSUs). The Board decided to grant PSUs during 2024 in order to further align the interests of Dr. Mehta, Mr. Rodriquez and Mr. Steinhart with the strategic clinical and operational objectives of the Company.
Refer to the “Outstanding Equity Awards at Year End” table below for additional information regarding the equity awards granted to our NEOs during 2024.
2024 Annual Bonuses
We offer our NEOs the opportunity to earn discretionary annual cash bonuses to compensate them for attaining company and individual performance goals. Each NEO’s target bonus opportunity is expressed as a percentage of annual base salary. Pursuant to the Fifth Amendment to the Credit Agreement, we are restricted from paying cash bonuses to our employees or executives during the fiscal years 2024 and 2025 without OFA’s consent or increasing the cash compensation for fiscal year 2025 for certain senior officers of the Company from their compensation for fiscal year 2024.
The performance goals for annual bonuses are reviewed and approved annually by the compensation committee. For 2024, the annual bonus metrics established by the compensation committee were based on the achievement of certain company performance goals, as well as an assessment of individual performance. In early 2025 the Board determined that it would use its discretion to not award annual bonuses for 2024 performance to the NEOs.
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Other Elements of Compensation
Our NEOs are eligible to participate in our employee benefit plans and programs, which generally include medical, dental and vision benefits, and life, short-term, and long-term disability insurance to the same extent as our other full-time employees generally, subject to the terms and eligibility requirements of those plans. During 2024, we reimbursed Dr. Mehta for his healthcare premium payments.
We maintain a 401(k) defined contribution plan (the “401(k) Plan”), for the benefit of our employees who satisfy certain eligibility requirements. Our NEOs are eligible to participate in the 401(k) Plan on the same terms as other full-time employees. In 2024, we matched employee contributions to the 401(k) Plan up to 50% of the first 5% of eligible compensation.
The amounts paid pursuant to these arrangements are set forth in the Summary Compensation Table in the column entitled “All Other Compensation.”
In response to Item 402(x)(1) of Regulation S-K, the Company does not currently grant new awards of stock options, stock appreciation rights, or similar option-like instruments within four business days before or one business day after the release of a Form 10-Q, 10-K, or 8-K that discloses material nonpublic information (MNPI). Accordingly, the Company has no specific policy or practice on the timing of awards of such options in relation to the disclosure of MNPI by the Company.
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Outstanding Equity Awards at Year End
The following table sets forth all outstanding equity awards held by each of the NEOs as of December 31, 2024.
Equity
Incentive
Equity
Plan
Incentive
Awards:
Plan
Market or
Awards:
Payout
Number of
Value of
Market
Unearned
Unearned
Number of
Value of
Shares,
Shares,
Shares or
Shares or
Units of
Units or
Number of
Number of
Units of
Units or
Other
Other
Securities
Securities
Stock
Stock
Rights
Rights
Underlying
Underlying
Option
That
That
That
That
Vesting
Unexercised
Unexercised
Exercise
Option
Have Not
Have Not
Have Not
Have Not
Commencement
Options (#)
Options (#)
Price
Expiration
Vested
Vested
Vested
Vested
Name
Date
Exercisable
Unexercisable
($)
Date
(#)
($)(1)
(#)
($)(1)
Vimal Mehta, Ph.D.
08/23/2017
18,376
—
6.56
08/23/2027
—
—
—
—
05/23/2019
11,732
—
160.64
05/23/2029
—
—
—
—
05/26/2020
(2)
15,625
—
735.84
05/26/2030
—
—
—
—
03/25/2021
(2)
14,647
978
658.72
03/25/2031
—
—
—
—
03/14/2022
(2)
7,170
3,268
244.96
03/14/2032
—
—
—
—
03/14/2022
(4)
—
—
—
—
816
$
4,882
—
—
03/15/2023
(3)
4,588
5,913
313.60
03/14/2033
—
—
—
—
03/15/2023
(5)
—
—
—
—
1,969
$
11,779
—
—
07/22/2024
(7)
—
6,250
19.20
07/22/2034
—
—
—
—
07/22/2024
(6)
—
—
—
—
—
—
15,625
$
93,475
Javier Rodriquez
02/22/2021
(2)
1,917
84
878.40
02/22/2031
—
—
—
—
08/16/2021
(2)
523
103
381.44
08/16/2031
—
—
—
—
03/14/2022
(2)
1,427
659
244.96
03/14/2032
—
—
—
—
03/14/2022
(4)
—
—
—
—
163
$
975
—
—
03/15/2023
(3)
869
1,132
313.60
03/15/2033
—
—
—
—
03/15/2023
(5)
—
—
—
—
317
$
1,896
—
—
07/22/2024
(7)
—
1,875
19.20
07/22/2034
—
—
—
—
07/22/2024
(8)
—
—
—
—
625
$
3,739
—
—
07/22/2024
(6)
—
—
—
—
—
—
4,375
$
26,173
Richard Steinhart
10/02/2017
(2)
5,010
—
88.80
10/02/2027
—
—
—
—
03/12/2018
(2)
2,016
—
176.00
03/12/2028
—
—
—
—
05/26/2020
(2)
3,438
—
735.84
05/25/2030
—
—
—
—
03/25/2021
(2)
1,172
79
658.72
03/25/2031
—
—
—
—
03/14/2022
(3)
1,430
655
244.96
03/14/2032
—
—
—
—
03/14/2022
(4)
—
—
—
—
163
$
975
—
—
03/15/2023
(3)
869
1,132
313.60
03/15/2033
—
—
—
—
03/15/2023
(5)
—
—
—
—
317
$
1,896
—
—
07/22/2024
(7)
—
1,875
19.20
07/22/2034
—
—
—
—
07/22/2024
(8)
—
—
—
—
625
$
3,739
—
—
07/22/2024
(6)
—
—
—
—
—
—
4,375
$
26,173
(1)
The amounts shown are based on the closing price of our common stock on December 31, 2024 of $5.9840 per share. For the restricted stock units in Employee Holdings, the amount shown is based on the fair market value of such awards as of December 31, 2024.
(2)
The unvested portion of the option vests in substantially equal monthly installments until the fourth anniversary of the vesting commencement date.
(3)
The option vests as to 25% of the shares on the first anniversary of the vesting commencement date and in substantially equal monthly installments thereafter until the fourth anniversary of the vesting commencement date.
(4)
The RSUs vest in substantially equal quarterly installments until the fourth anniversary of the vesting commencement date
(5)
The RSUs vest as to 25% of the shares on the first anniversary of the vesting commencement date and in substantially equal quarterly installments thereafter until the fourth anniversary of the vesting commencement date.
(6)
The PSUs are eligible to vest on the first anniversary of the vesting commencement date based on the Board’s determination that certain Company performance metrics have been attained. See “ Equity Compensation ” above for a description of these metrics.
(7)
The option vests as to 50% of the shares on each of the first and second anniversaries of the grant date.
(8)
The RSUs vest on the first anniversary of the grant date.
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Employment Arrangements - 2024
We have entered into employment agreements with each of our NEOs that set forth the terms and conditions of each executive’s employment with us. All descriptions of the employment agreements herein describe the agreements in effect as of December 31, 2024, and do not reflect subsequent amendments.
Each employment agreement establishes an annual base salary and target bonus opportunity for each NEO. The amounts in effect during 2024 are described above under the headings “2024 Salaries” and “2024 Annual Bonuses.” The NEOs are eligible to participate in our employee benefit plans and programs for which the NEO is eligible, subject to the terms and conditions of such plans and programs.
During 2024, in the event that an NEO was terminated by us without cause, or by the executive for good reason, subject to the NEO’s timely execution and non-revocation of a release of claims in our favor, the executive would have been eligible to receive (i) a pro-rated portion of the executive’s annual bonus for the year of termination; (ii) base salary continuation for 24 months for Dr. Mehta, 6 months for Mr. Rodriguez and Mr. Steinhart; and (iii) reimbursement for COBRA premium payments for the applicable severance period. In addition, Dr. Mehta would be entitled to vesting of 50% of any unvested equity awards held by him immediately prior to his termination. The Company must provide an NEO 30 days’ notice in the event we terminate such NEO without cause.
The employment agreements also provide that, in the event an NEO’s employment is terminated by us without cause or by the NEO for good reason, in either case, within 6 months prior to or 12 months after a change in control, then, subject to the NEO’s timely execution and non-revocation of a release of claims in our favor, the NEO will be entitled to a lump sum payment equal to 6 months of base salary (or 24 months of base salary for Dr. Mehta), which payment is in addition to the severance payments and benefits described above.
The employment agreements generally define “cause” as, subject to certain notice and cure rights, the NEO’s (i) material breach or material default of the employment agreement or any other agreement between us and the NEO, or repeated failure to follow the direction of the Company or our Board, as applicable; (ii) gross negligence, willful misfeasance or breach of fiduciary duty to us or our affiliates; (iii) commission of an act or omission involving fraud, embezzlement, misappropriation or dishonesty in connection with NEO’s duties to us or our affiliates, or, for Mr. Rodriguez or Mr. Steinhart, that is otherwise likely to be materially injurious to the business or reputation of the Company or our affiliates; or (iv) conviction of, indictment for, or pleading guilty or nolo contendere to, any felony or other crime involving fraud or moral turpitude.
The employment agreements generally define “good reason” as, subject to certain notice and cure rights, the occurrence of any of the following (without the NEO’s express written consent): (i) a significant reduction of the NEO’s duties, position or responsibilities, or the removal of the NEO from such position, duties or responsibilities; (ii) for Dr. Mehta and Mr. Rodriguez only, the relocation of the NEO by more than 25 miles; or (iii) any action or inaction that constitutes a material breach by us or any of our successors of its obligations to the NEO under the employment agreement (or for Dr. Mehta, any other agreement between us and Dr. Mehta).
The employment agreements also contain covenants prohibiting the NEOs from competing with us or soliciting our suppliers, employees or customers during employment and for a period of one year following termination.
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Non-Employee Director Compensation
The non-employee members of our Board are eligible to receive compensation for their service on our Board. Under our director compensation program, during 2024 each non-employee director was eligible to receive an option to purchase 1,875 shares of common stock upon such director’s initial election or appointment to the Board. Additionally, each non-employee director who has been serving as a non-employee director for at least six months as of the date of any annual meeting of stockholders and will continue to serve as a non-employee director immediately following such meeting, was eligible to receive an option to purchase 1,062 shares of common stock on the date of such annual meeting. The options granted to our non-employee directors have an exercise price equal to the fair market value of our common stock on the date of grant and expire not later than ten years after the date of grant. The stock options granted upon a director’s initial election or appointment vest in three substantially equal annual installments following the date of grant. The stock options granted annually to directors vest in a single installment on the earlier of the day before the next annual meeting or the first anniversary of the date of grant. In addition, all unvested stock options vest in full upon the occurrence of a change in control. For the appointment of David Mack in 2024, we provided a separate grant of RSUs and a separate cash arrangement in lieu of the stock option award and cash payments typically granted to new directors, as described below in the “Director Compensation Table”.
In addition, our non-employee directors were eligible to receive cash retainers for service on our Board and committees of our Board during 2024 as set forth in the table below.
Position
Amount
Base Board Fee
$
60,000
Chair of Board or Lead Independent Director
$
35,000
Chair of Audit Committee
$
20,000
Chair of Compensation Committee
$
15,000
Chair of Nominating and Corporate Governance Committee
$
10,000
Member of Audit Committee (non-Chair)
$
10,000
Member of Compensation Committee (non-Chair)
$
7,500
Member of Nominating and Corporate Governance Committee (non-Chair)
$
5,000
Director fees under the program are payable in arrears in four equal quarterly installments not later than the fifteenth day following the final day of each calendar quarter, provided that the amount of each payment will be prorated for any portion of a quarter that a director is not serving on our board.
We also reimburse all of our non-employee directors for all reasonable and customary business expenses in accordance with company policy.
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Director Compensation Table
The following table sets forth information for the year ended December 31, 2024 regarding the compensation awarded to, earned by or paid to our non-employee directors:
Fees Earned or
Paid in Cash
Option Awards
Stock Awards
Total
Name
($)
($) (1)
($)
($)
Peter Mueller, Ph.D. (2)
$
130,000
$
20,410
(2)
$
—
$
150,410
Sandeep Laumas, M.D. (3)
$
92,500
$
20,410
(3)
$
—
$
112,910
Michal Votruba, M.D. (4)
$
70,000
$
20,410
(4)
$
—
$
90,410
June Bray (5)
$
65,000
$
20,410
(5)
$
—
$
85,410
Michael Miller (6)
$
70,000
$
20,410
(6)
$
—
$
90,410
David Mack (7)
$
30,000
(8)
$
—
(7)
$
185,619
$
215,619
(1)
The amounts reported represent the grant date fair value of stock options granted to our non-employee directors as computed in accordance with ASC 718. Note that the amounts reported in this column reflect the accounting cost for these stock options and do not correspond to the actual economic value that may be received by the recipients from the options. We provide information regarding the assumptions used to calculate the value of the option awards in Note 12 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
(2)
As of December 31, 2024, Dr. Mueller held options to purchase an aggregate of 16,667 shares of our common stock, of which 15,604 shares of common stock were exercisable.
(3)
As of December 31, 2024, Dr. Laumas held options to purchase an aggregate of 14,028 shares of our common stock, of which 12,965 shares of common stock were exercisable.
(4)
As of December 31, 2024, Dr. Votruba held options to purchase an aggregate of 6,265 shares of our common stock, of which 5,202 shares of common stock were exercisable.
(5)
As of December 31, 2024, Ms. Bray held options to purchase an aggregate of 5,013 shares of our common stock, of which 3,950 shares of common stock were exercisable.
(6)
As of December 31, 2024, Mr. Miller held options to purchase an aggregate of 4,001 shares of our common stock, of which 2,938 shares of common stock were exercisable.
(7)
As of December 31, 2024, Mr. Mack held 16,932 unvested restricted stock units.
(8) As of December 31, 2024, Mr. Mack earned $30,000 in board fees for services provided since joining the Board in November 2024.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information relating to the beneficial ownership of our common stock as of March 21, 2025 by:
● each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding shares of common stock;
● each of our directors;
● each of our named executive officers for 2024; and
● all of our current directors and executive officers as a group.
The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC. Under these rules, a person is deemed to be a “beneficial” owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. Except as indicated in the footnotes below, we believe, based on the information furnished to us, that the individuals and entities named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them, subject to any applicable community property laws.
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The percentage of shares beneficially owned is computed on the basis of 5,468,038 shares of our common stock outstanding as of March 21, 2025. Shares of our common stock that a person has the right to acquire within 60 days of March 21, 2025 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise indicated below, the address for each beneficial owner listed is c/o 555 Long Wharf Drive, New Haven, CT 06511.
Number of Shares
Percentage of Shares
Name of Beneficial Owner
Beneficially Owned
Beneficially Owned
Holders of more than 5%:
BioXcel LLC (1)
480,343
8.78
%
Armistice Capital Master Fund Ltd. (2)
1,385,083
9.99
%
Named executive officers and directors:
Vimal Mehta, Ph.D. (1)(3)
573,619
10.3
%
Javier Rodriguez (4)
6,903
*
Richard Steinhart (5)
21,437
*
June Bray (6)
3,950
*
Sandeep Laumas, M.D. (7)
12,965
*
Michael Miller (8)
2,312
*
Peter Mueller, Ph.D. (9)
23,091
*
Michal Votruba, M.D. (10)
16,725
*
David Mack (11)
10,158
*
Rajiv Patni (12)
938
*
All executive officers and directors as a group (11 individuals) (13)
692,185
12.3
%
* Represents less than 1%.
(1)
Based solely on a Schedule 13D filed with the SEC on June 6, 2024. BioXcel LLC and BioXcel Holdings, Inc. have shared voting power and shared dispositive power over 480,343 shares of our common stock. Dr. Mehta and affiliated trusts are significant stockholders of BioXcel Holdings, Inc. BioXcel LLC is majority owned and controlled by BioXcel Holdings, Inc. BioXcel LLC is a subsidiary of BioXcel Holdings, Inc. Mr. Mehta is an executive officer and the sole member of the board of directors of BioXcel Holdings, Inc. and an executive officer and one of two managers on the board of managers of BioXcel LLC and BioXcel Holdings, Inc. As such, each of Mr. Mehta and BioXcel Holdings, Inc. may be deemed to beneficially own the Common Stock held of record by BioXcel LLC. The address of BioXcel LLC and BioXcel Holdings, Inc. is 2614 Boston Post Road Suite 33B, Guilford, CT 06437.
(2)
Based on information known to us, Armistice Capital Master Fund Ltd. owns warrants to purchase 1,385,083 shares of our common stock that are exercisable within 60 days of March 21, 2025. The warrants to purchase shares of common stock are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company (“Master Fund”), and may be deemed to be beneficially owned by: (i) Armistice Capital, LLC (“Armistice Capital”), as the investment manager of Master Fund; and (ii) Steven Boyd, as the Managing Member of Armistice Capital. Armistice Capital has sole voting and dispositive control of the shares reported herein. The address for the stockholder is 510 Madison Avenue, 7th Floor, New York, New York 10022. Warrants held by Armistice Capital are subject to a beneficial ownership limitation of 4.99% or 9.99%, which such limitation restricts the stockholder from exercising that portion of the warrants, as applicable, that would result in the stockholder and its affiliates owning, after exercise, a number of shares of common stock in excess of the beneficial ownership limitation.
(3)
Represents for Dr. Mehta: (i) 4,236 shares of common stock (of which 125 shares are owned jointly with Dr. Mehta’s spouse); (ii) options to purchase 89,050 shares of our common stock that can be exercised within 60 days of March 21, 2025; and (iii) 480,343 shares of common stock held by BioXcel LLC as to which Dr. Mehta may be deemed to have beneficial ownership as described under footnote (1) above.
(4)
Represents for Mr. Steinhart: (i) 1,373 shares of common stock and (ii) options to purchase 20,064 shares of our common stock that can be exercised within 60 days of March 21, 2025.
(5)
Represents for Mr. Rodriguez: (i) 1,591 shares of common stock and (ii) options to purchase 5,312 shares of our common stock that can be exercised within 60 days of March 21, 2025.
(6)
Represents for Ms. Bray: options to purchase 3,950 shares of our common stock that can be exercised within 60 days of March 21, 2025.
(7)
Represents for Dr. Laumas: options to purchase 12,965 shares of our common stock that can be exercised within 60 days of March 21, 2025.
(8)
Represents for Mr. Miller: options to purchase 2,312 shares of our common stock that can be exercised within 60 days of March 21, 2025.
(9)
Represents for Dr. Mueller: (i) 7,487 shares of common stock held by Dr. Mueller (including shares of our common stock held by the Peter Mueller 2018 Irrevocable Family Trust, as to which Dr. Mueller serves as trustee); and (iii) options to purchase 15,604 shares of our common stock that can be exercised within 60 days of March 21, 2025.
(10)
Represents for Dr. Votruba: 11,523 shares of our common stock held by RSJ Investments SICAV a.s. (“RSJ/Gradus”) and over which Dr. Votruba, an asset manager at RSJ/Gradus, has voting and/or dispositive power. Also includes options to purchase 5,202 shares of our common stock that can be exercised within 60 days of March 21, 2025, which options Dr. Votruba was granted in respect of his service on our Board but as to which he assigned to RSJ/Gradus pursuant to the policies of RSJ/Gradus regarding stock ownership by employees.
(11)
Represents for Mr. Mack: 3,386 restricted stock units that vest within 60 days of March 21, 2025.
(12)
Represents for Mr. Patni: options to purchase 938 shares of our common stock that vest within 60 days of March 21, 2025.
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(13)
Includes options to purchase 173,611 shares of our common stock that can be exercised within 60 days of March 21, 2025 and 3,386 RSUs that vest within 60 days of March 21, 2025.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides certain information with respect to the Company’s equity compensation plans in effect as of December 31, 2024:
Number of securities
remaining available
Number of securities
for future issuance
to be issued upon
Weighted-average
under equity
exercise of
exercise price of
compensation plans
outstanding options,
outstanding options,
(excluding securities
warrants and rights
warrants and rights
reflected in column (a)) (4)
Plan Category
(a)
(b)
(c)
Equity compensation plans approved by security holders (1)
407,477
(2)
$
265.36
(3)
117,044
Equity compensation plans not approved by security holders
—
—
—
Total
407,477
$
265.36
117,044
(1)
Consists of the BioXcel Therapeutics, Inc. 2017 Incentive Award Plan (the “2017 Plan”), the BioXcel Therapeutics, Inc. 2020 Incentive Award Plan (the “2020 Plan”) and the BioXcel Therapeutics, Inc. 2020 Employee Stock Purchase Plan (the “2020 ESPP”).
(2)
Includes 119,781 outstanding options to purchase shares under the 2017 Plan, 69,506 performance-based units, 26,898 restricted stock units and 191,292 outstanding options to purchase shares under the 2020 Plan.
(3)
As of December 31, 2024, the weighted-average exercise price of outstanding options under the 2017 Plan was $59.74 and the weighted-average exercise price of outstanding options under the 2020 Plan was $394.11. The weighted average exercise price of outstanding awards does not take into account the shares issuable upon vesting of outstanding performance-based units and restricted stock units which have no exercise price.
(4)
Includes 41,748 shares available for future issuance under the 2020 Plan and 75,296 shares available for issuance under the 2020 ESPP. Following the effective date of the 2020 Plan, we ceased making grants under the 2017 Plan. To the extent outstanding awards under the 2017 Plan are forfeited or lapse unexercised, the shares of common stock subject to such awards will be available for issuance under the 2020 Plan. The 2020 Plan provides for an annual increase to the number of shares available for issuance thereunder on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, by an amount equal to the lesser of (i) 4% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by our board of directors (but no more than 625,000 shares may be issued upon the exercise of incentive stock options). The 2020 ESPP provides for an annual increase to the number of shares available for issuance thereunder on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, by an amount equal to the lesser of (i) 1% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as is determined by our board of directors, provided that no more than 31,250 shares of our common stock may be issued under the component of the 2020 ESPP that is intended to qualified under Section 423 of the Code. As of the date of this proxy statement, we have not commenced offering periods under the 2020 ESPP.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Certain Relationships and Related Transactions
March 2024 Registered Direct Offering
On March 27, 2024, we completed a registered direct offering, which resulted in the issuance and sale of (i) 190,913 shares of our common stock, (ii) pre-funded warrants to purchase up to 347,814 shares of our common stock at an exercise price of $0.016 per share and (iii) accompanying warrants to purchase up to 538,728 shares of our common stock at an exercise price of $51.20 per share. The combined offering price of the common stock and accompanying warrants was $46.416 per share and share underlying each accompanying warrant, and the combined offering price of the Armistice pre-funded warrants and accompanying warrants was $46.40 per share underlying each pre-funded warrant and accompanying warrant. The Armistice pre-funded warrants and the accompanying warrants are exercisable at any time after the date of issuance, however, the accompanying warrants will expire on the fifth anniversary of the date of issuance. A holder of Armistice pre-funded warrants will not be entitled to exercise any portion of such Armistice pre-funded warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the number of shares of
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our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Armistice Pre-Funded Warrants. A holder of Accompanying Warrants will not be entitled to exercise any portion of such Accompanying Warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Accompanying Warrants. In each case, such percentages may be increased by a holder of Armistice Warrants to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from the holder to us. We received net proceeds of approximately $24.9 million from this offering, after deducting offering expenses. The following table sets forth the aggregate number of shares of our common stock and shares of common stock underlying the Armistice Warrants acquired in the offering by holders of more than 5% of our common stock, including entities that became holders of more than 5% of our common stock as a result of the registered direct offering. On November 21, 2024, the exercise price of warrants to purchase 538,728 shares of common stock issued in March 2024 Registered Direct Offering described here was reduced to $9.136 per share.
Shares
Shares
Shares of
Underlying
Underlying
Common
Pre-Funded
Accompanying
Aggregate
Participants
Stock
Warrants
Warrants
Value
Holders of More than 5 % (1)
Armistice Capital Master Fund Ltd.
190,913
347,814
538,728
$
24,999,999.01
(1)
Additional details regarding certain of these stockholders and their equity holdings are provided in this Proxy Statement under the caption “Stock Ownership - Security Ownership of Certain Beneficial Owners and Management.”
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Table of Contents
November 2024 Offering
On November 25, 2024, we completed an offering, which resulted in the issuance and sale to Armistice of (i) 283,854 shares of our common stock, (ii) pre-funded warrants to purchase up to 562,500 shares of our common stock at an exercise price of $0.016 per share and (iii) accompanying warrants to purchase up to 846,355 shares of our common stock at an exercise price of $7.68 per share. The combined offering price of the common stock and accompanying warrants was $7.68 per share and share underlying each accompanying warrant, and the combined offering price of the Armistice pre-funded warrants and accompanying warrants was $7.664 per share underlying each pre-funded warrant and accompanying warrant. The Armistice pre-funded warrants and the accompanying warrants are exercisable at any time after the date of issuance, however, the accompanying warrants will expire on the fifth anniversary of the date of issuance. A holder of Armistice pre-funded warrants will not be entitled to exercise any portion of such Armistice pre-funded warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Armistice pre-funded warrants. A holder of accompanying warrants will not be entitled to exercise any portion of such accompanying warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the accompanying warrants. In each case, such percentages may be increased by a holder of Armistice Warrants to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from the holder to us.
BioXcel LLC
BioXcel LLC owned approximately 8.8% of the shares of our outstanding common stock as of March 21, 2025. BioXcel LLC is the successor in interest to BioXcel Corporation, our former parent. BioXcel LLC is a subsidiary of, and majority owned and controlled by BioXcel Holdings, Inc. Vimal Mehta and affiliated trusts are significant stockholders of BioXcel Holdings, Inc. Dr. Mehta is also an executive officer and the sole member of the board of managers of BioXcel Holdings, Inc. and an executive officer and one of two managers of BioXcel LLC and BioXcel Holdings, Inc.
Amended and Restated Asset Contribution Agreement with BioXcel LLC
We entered into an asset contribution agreement, effective June 30, 2017, with BioXcel LLC (formerly BioXcel Corporation), as amended and restated on November 7, 2017, pursuant to which BioXcel LLC contributed to us, and we acquired from BioXcel LLC, all of BioXcel LLC’s rights, title and interest in and to BXCL501, BXCL701, BXCL502 and BXCL702 (collectively, the “Candidates”) and all of the assets and liabilities associated with the Candidates, in consideration for (i) 592,500 shares of our common stock, (ii) $1 million upon completion of our initial public offering (“IPO”), (iii) $500,000 upon the later of the 12 month anniversary of our IPO and the first dosing of a patient in the bridging bioavailability/bioequivalence study for the BXCL501 program, (iv) $500,000 upon the later of the 12 month anniversary of our IPO and the first dosing of a patient in the Phase 2 Proof of Concept open label monotherapy or combination trial with Keytruda for the BXCL701 program and (v) a one-time payment of $5 million within 60 days after the achievement of $50 million in cumulative net sales of any product or combination of products resulting from the development and commercialization of any one of the Candidates or a product derived therefrom. There were no such payments during the years ended December 31, 2023 or 2024 pursuant to such provisions in the Contribution Agreement.
In addition, pursuant to the Contribution Agreement, BioXcel LLC granted us a first right to negotiate exclusive rights to any additional product candidates in the fields of neuroscience and immuno-oncology (the “Option Field”) that BioXcel LLC may identify on its own, excluding the Candidates, and not in connection with BioXcel LLC’s provision of services to us under the Services Agreement as defined and described below. This first right to negotiate an exclusivity period expired on March 12, 2023.
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Amended and Restated Separation and Shared Services Agreement
We entered into a separation and shared services agreement, dated June 30, 2017, or the Effective Date, with BioXcel LLC (formerly BioXcel Corporation), as amended and restated thereafter, pursuant to which services provided by BioXcel LLC through its subsidiaries in India and the United States will continue indefinitely, as agreed upon by the parties. These services are primarily for drug discovery, chemical, manufacturing and controls cost and general and administrative support. Service charges recorded under this agreement were $1.3 million for each of the years ended December 31, 2024 and 2023.
Under the Services Agreement, the Company has an option, exercisable through December 31, 2024, to enter into a collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing EvolverAI. The Company agreed to pay BioXcel LLC $18,000 per month, prorated for any partial month, as applicable, for the period beginning March 13, 2023 and ending December 31, 2024 as consideration for the option. The parties are obligated to negotiate the collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestones shall not exceed $10 million in the aggregate and not be payable prior to proof of concept in humans and (ii) commercialization milestones shall be based on reaching annual net sales levels, be limited to 3% of the applicable net sales level, and not exceed $30 million in the aggregate.
InveniAI
On September 19, 2023, we, Krishnan Nandabalan, Ph.D., a former member of our Board, InveniAI and Invea Therapeutics, Inc., a wholly-owned subsidiary of BioXcel LLC (“Invea”) and the other parties thereto entered into a non-compete agreement pursuant to which Dr. Nandabalan, InveniAI and Invea agreed not to compete with us and our controlled affiliates in the fields of neuroscience and immuno-oncology for a period of five years from September 19, 2023 and not to solicit employees of the Company or its controlled affiliates for a period of two years from September 19, 2023.
Director and Officer Indemnification and Insurance
We have agreed to indemnify each of our directors and executive officers against certain liabilities, costs and expenses, and have purchased directors’ and officers’ liability insurance.
Director Independence
Under our Corporate Governance Guidelines and Nasdaq rules, a director is independent if he or she does not have a material or other disqualifying relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities as a director. In addition, the director must meet the bright-line tests for independence set forth by the Nasdaq rules.
Our Board has undertaken a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board of Directors has determined that none of Ms. Bray, Mr. Miller, Mr. Mack or Drs. Laumas, Mueller, Patni or Votruba, representing seven of our eight current directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors qualifies as “independent” as that term is defined under the Nasdaq rules. In making these determinations, our Board considered the relationships that each non-employee director has with us and all other facts and circumstances our Board deemed relevant in determining their independence, including the director’s beneficial ownership of our common stock and the relationships of our non-employee directors with certain of our significant stockholders.
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Item 14. Principal Accounting Fees and Services
The Audit Committee retained Ernst & Young LLP to audit the Company’s consolidated financial statements for the years ended December 31, 2024 and December 31, 2023.
The table below sets forth the aggregate fees billed to us for services related to the fiscal year ended December 31, 2024 and 2023 by Ernst & Young LLP.
Year Ended
December 31,
2024
2023
Audit Fees (1)
$
946,270
$
903,500
Audit-Related Fees (2)
—
16,000
Tax Fees
—
—
All Other Fees
—
—
Total
$
946,270
$
919,500
(1)
Audit fees consisted of audit services performed in connection with the audit of the Company’s consolidated financial statements, the reviews of the Company’s interim condensed consolidated financial statements, and related services that are normally provided in connection with registration statements. Included in the 2024 and 2023 audit fees are $155,000 and $105,000, respectively, billed in connection with our follow-on offerings. 2024 and 2023 audit fees also include fees related to the audit and review of the registration statements of the Company’s subsidiary, OnkosXcel Therapeutics LLC, of $0 and $65,000, respectively.
(2)
Audit-related fees consisted of out-of-pocket costs for the annual audit.
Pre-Approval Policies and Procedures
Consistent with SEC policies and guidelines regarding audit independence, the audit committee is responsible for the pre-approval of all audit and permissible non-audit services provided by our independent registered public accounting firm on a case-by-case basis. Our audit committee has established a policy regarding approval of all audit and permissible non-audit services provided by our principal accountants. No non-audit services were performed by our independent registered public accounting firm during the years ended December 31, 2024 and 2023. Our audit committee pre-approves these services by category and service. Our audit committee has pre-approved all of the above-described services.
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Table of Contents
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) The following documents are filed as part of this report:
(1) Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID: 00042)
F-1
Consolidated Balance Sheets as of December 31, 2024 and 2023
F-3
Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023
F-4
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2024 and 2023
F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023
F-6
Notes to C onsolidated Financial Statements
F-7
(2) Financial Statement Schedules:
All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto.
(3) Exhibits.
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
3.1
Amended and Restated Certificate of Incorporation
10-Q
001-38410
3.1
08/10/2021
3.2
Certificate of Amendment to the Amended and Restated Certificate of Incorporation
8-K
001-38410
3.1
06/12/2024
3.3
Certificate of Amendment to the Amended and Restated Certificate of Incorporation
8-K
001-38410
3.1
02/06/2025
3.4
Amended and Restated Bylaws
8-K
001-38410
3.2
03/13/2018
4.1
Description of the Registrant’s Securities Registered Under Section 12 of the Exchange Act
*
4.2
Specimen Stock Certificate evidencing the shares of common stock
S-1/A
333-222990
4.2
02/26/2018
4.3
Form of Amended and Restated Warrant Agreement, dated December 5, 2023
8-K
001-38410
4.1
12/06/2023
4.4
Form of Warrant Agreement, dated December 5, 2023
8-K
001-38410
4.2
12/06/2023
4.5
Form of Amended and Restated Warrant Agreement, dated November 25, 2024
*
4.6
Form of Pre-Funded Warrant, dated March 25, 2024
8-K
001-38410
4.1
03/25/2024
162
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
4.7
Form of Accompanying Warrant, dated March 25, 2024
8-K
001-38410
4.2
03/25/2024
4.8
Form of Fifth Amendment Warrant, dated November 21, 2024
8-K
001-38410
4.1
11/21/2024
4.9
Form of Pre-Funded Warrant, dated November 21, 2024
8-K
001-38410
4.1
11/25/2024
4.10
Form of Warrant, dated November 21, 2024
8-K
001-38410
4.2
11/25/2024
4.11
Form of Amended and Restated Fourth Amendment Warrant, dated November 25, 2024
S-3
333-284224
4.3
01/10/2025
4.12
Second Amended and Restated Registration Rights Agreement, between the Company and the parties thereto, dated March 20, 2024.
10-K
001-38410
4.6
03/22/2024
4.13
Form of Third Amended and Restated Registration Rights Agreement, between the Company and the parties thereto, dated November 25, 2024
8-K
001-38410
4.2
11/21/2024
10.1+
Second Amended and Restated Separation and Shared Services Agreement, dated March 6, 2020 , by and between BioXcel Corporation and BioXcel Therapeutics, Inc.
10-K
001-38410
10.2
03/09/2020
10.2#
F irst Amendment to Second Amended and Restated Separation and Shared Services Agreement, dated March 3, 2021, by and between BioXcel LLC and BioXcel Therapeutics Inc .
10-K
001-38410
10.3
03/12/2021
10.3
Second Amendment to Second Amended and Restated Separation and Shared Services Agreement, dated March 3, 2021, by and between BioXcel LLC and BioXcel Therapeutics Inc.
10-Q
001-38410
10.2
05/09/2022
10.4#
Amended and Restated Asset Contribution Agreement, effective November 7, 2017, by and between BioXcel LLC and BioXcel Therapeutics, Inc.
S-1/A
333-222990
10.2
02/12/2018
163
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
10.5
Lease Agreement, dated as of August 20, 2018, by and between Fusco Harbour Associates, LLC, as Landlord, and BioXcel Therapeutics, Inc., as Tenant
8-K
001-38410
10.1
08/23/2018
10.6
First Amendment, dated August 19, 2020, to Lease Agreement, dated as of August 20, 2018, by and between Fusco Harbour Associates, LLC, as Landlord, and BioXcel Therapeutics, Inc., as Tenant
10-Q
001-38410
10.1
11/12/2020
10.7 @
2017 Equity Incentive Plan
S-1/A
333-222990
10.3
02/12/2018
10.8 @
Form of Incentive Stock Option Agreement under the 2017 Equity Incentive Plan
S-1/A
333-222990
10.4
02/12/2018
10.9 @
Form of Non-Statutory Stock Option Agreement under the 2017 Equity Incentive Plan
S-1/A
333-222990
10.5
02/12/2018
10.10 @
BioXcel Therapeutics, Inc. 2020 Incentive Award Plan and forms of award agreements thereunder
10-Q
001-38410
10.1
08/14/2020
10.11 @
BioXcel Therapeutics, Inc. 2020 Employee Stock Purchase Plan
10-Q
001-38410
10.2
08/14/2020
10.12 @
Form of Indemnification Agreement with directors and executive officers
S-1/A
333-222990
10.6
02/12/2018
10.13 @
Employment Agreement, dated March 7, 2018 by and between BioXcel Therapeutics, Inc. and Vimal Mehta
8-K
001-38410
10.1
03/13/2018
10.13.1 @
Amendment to Employment Agreement, dated January 7, 2025 by and between BioXcel Therapeutics, Inc. and Vimal Mehta
8-K
001-38410
10.1
01/08/2025
10.14 @
Employment Agreement, dated February 12, 2018, by and between BioXcel Therapeutics, Inc. and Frank Yocca
S-1/A
333-222990
10.11
02/12/2018
10.14.1 @
Amendment to Employment Agreement, dated January 7, 2025 by and between BioXcel Therapeutics, Inc. and Frank Yocca
8-K
001-38410
10.3
01/08/2025
164
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
10.15 @
Employment Agreement, effective October 2, 2017, by and between BioXcel Therapeutics, Inc. and Richard Steinhart
S-1/A
333-222990
10.12
02/12/2018
10.15.1 @
Amendment to Employment Agreement, dated January 7, 2025 by and between BioXcel Therapeutics, Inc. and Richard Steinhart
8-K
001-38410
10.2
01/08/2025
10.16 @
Employment Agreement, dated June 1, 2018, by and between BioXcel Therapeutics, Inc. and Dr. Vincent O’Neill, M.D.
8-K
001-38410
10.1
06/07/2018
10.17 @
Employment Agreement between Javier Rodriguez and BioXcel Therapeutics, Inc., dated February 15, 2021.
10-K
001-38410
10.19
03/12/2021
10.18 @
Separation Agreement between Matthew Wiley and BioXcel Therapeutics, Inc., dated October 3, 2024.
8-K
001-38410
10.1
10/09/2024
10.18.1 @
Consulting Agreement between Matthew Wiley and BioXcel Therapeutics, Inc. dated October 8, 2024
10-Q
001-38410
10.2
10/09/2024
10.19@
Employment Agreement BioXcel Therapeutics, Inc. and Vincent O’Neill, M.D. dated July 1, 2022
10-Q
001-38410
10.2
05/08/2023
10.20 @
Non-Employee Director Compensation Program
10-Q
001-38410
10.4
08/11/2022
10.21
BioXcel Trademark License Agreement, between the Company and BioXcel LLC
10-Q
001-38410
10.1
05/09/2022
10.22+&
Credit Agreement and Guaranty, by and among BioXcel Therapeutic, Inc., Oaktree Fund Administration, LLC, the Subsidiary Guarantors from time to time party thereto and the Lenders from time to time party thereto, dated April 19, 2022
10-Q
001-38410
10.1
08/11/2022
10.22.1+&
Waiver and First Amendment to Credit Agreement and Guaranty, by and between the Company, the lenders party thereto and Oaktree Fund Administration LLC dated November 13, 2023.
10-Q
001-38410
10.2
11/14/2023
10.22.2&
Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement dated
8-K
001-38410
10.1
02/08/2024
165
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
December 5, 2023, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
10.22.3&
Third Amendment to Credit Agreement and Guaranty dated February 12, 2024, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
8-K
001-38410
10.1
02/12/2024
10.22.4
Fourth Amendment to Credit Agreement and Guaranty, dated March 20, 2024, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
10-K
001-38410
10.22.4
03/22/2024
10.22.5+&
Fifth Amendment to Credit Agreement and Guaranty, dated November 21, 2024, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
8-K
001-38410
10.1
11/21/2024
10.22.6
Sixth Amendment to Credit Agreement and Guaranty, dated March 4, 2025, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
*
166
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
10.23+&
Commercial Supply Agreement, between ARx, LLC and BioXcel Therapeutics, Inc., dated April 1, 2022
10-Q
001-38410
10.3
08/11/2022
10.23.1+&
Amendment No. 1 to Commercial Supply Agreement, between Arx, LLC and BioXcel Therapeutics, Inc. dated July 11, 2024
10-Q
001-38410
10.1
08/06/2024
10.24@
OnkosXcel Therapeutics, LLC and OnkosXcel Employee Holdings, LLC Management Incentive Plan
8-K
001-38410
10.1
08/19/2022
10.25@
Form of Profits Interest Award Agreement under the Management Incentive Plan
8-K
001-38410
10.2
08/19/2022
10.26@
Form of RSU Agreement pursuant to the OnkosXcel Therapeutics, LLC and OnkosXcel Employee Holdings, LLC Management Incentive Plan.
10-Q
001-38410
10.3
05/08/2023
10.27+
Non-Compete Agreement, by and among the Company, Dr. Krishnan Nandabalan, InveniAI LLC, Invea Therapeutics, Inc. and the other parties thereto, dated September 19, 2023.
8-K
001-38410
10.1
09/25/2023
19.1
Insider Trading Policy
*
21.1
Subsidiaries of BioXcel Therapeutics, Inc.
*
23.1
Consent of Ernst & Young LLP
*
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*
31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*
32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**
167
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**
97.1
Policy for Recovery of Erroneously Awarded Compensation
10-K
001-38410
97.1
03/22/2024
101.INS
Inline eXtensible Business Reporting Language (XBRL) Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
*
101.SCH
Inline XBRL Taxonomy Extension Schema Document
*
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
*
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
*
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
*
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
*
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
@ Indicates a management contract or any compensatory plan, contract or arrangement.
+ Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
# Confidential treatment has been granted for portions omitted from this exhibit and those portions have been separately filed with the Securities and Exchange Commission.
& Annexes, schedules, and certain exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.
* Filed herewith.
** Furnished herewith.
Item 16. Form 10-K Summary
None
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BioXcel Therapeutics, Inc.
Dated: March 28, 2025
By:
/s/ Vimal Mehta
Vimal Mehta, Ph.D.
Chief Executive Officer
(Principal Executive Officer)
Dated: March 28, 2025
By:
/s/ Richard Steinhart
Richard Steinhart
Chief Financial Officer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Vimal Mehta
Vimal Mehta, Ph.D.
Chief Executive Officer and Director (Principal Executive Officer)
March 28, 2025
/s/ Richard Steinhart
Richard Steinhart
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
March 28, 2025
/s/ Peter Mueller
Peter Mueller, Ph.D.
Chairman of the Board of Directors
March 28, 2025
/s/ June Bray
June Bray
Director
March 28, 2025
/s/ Sandeep Laumas
Sandeep Laumas, M.D.
Director
March 28, 2025
/s/ Michael Miller
Michael Miller
Director
March 28, 2025
/s/ Michal Votruba
Michal Votruba
Director
March 28, 2025
/s/ David Mack
David Mack
Director
March 28, 2025
/s/ Rajiv Patni
Rajiv Patni
Director
March 28, 2025
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of BioXcel Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of BioXcel Therapeutics, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders' (deficit) equity and cash flows for the years then ended, and 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 at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.
The Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations, has used significant cash in operations and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s 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 in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the Audit Committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgment. The communication of the critical audit matter 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 disclosure to which it relates.
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As of December 31, 2023, research and development expenses and accrued research and development expenses includes clinical trial expenses and related accrued clinical trial expenses.
Description of the Matter
How We Addressed the Matter in Our Audit
Clinical trial expense and related accrued clinical trial expenses
As discussed in Note 3 to the consolidated financial statements, at the end of the reporting period, the Company estimates the progress toward completion of the research or development objectives, and depending on the amount and timing of payments to the service providers may record net prepaid or accrued expense for associated research and development costs. As of December 31, 2024, research and development expenses and accrued research and development expenses includes clinical trial expenses and related accrued clinical trial expenses.
Auditing the Company’s clinical trial expenses and related accrued clinical trial expenses was complex because the evidence is accumulated from multiple third-party service providers and in certain circumstances, the nature and amount of services that have been rendered during the reporting period does not correspond to the timing and pattern of vendor invoicing.
To test the clinical trial expenses and accrued clinical trial expenses, our audit procedures included, among others, evaluating the significant assumptions used by management to estimate the clinical trial expenses and testing the accuracy and completeness of the underlying data. To test the significant assumptions, we inspected the Company's contracts with third-party service providers, corroborated the progress of clinical trials and other research and development projects with the Company’s internal personnel that oversee these activities, and obtained information directly from third-party service providers which included the third parties’ estimates of clinical trial costs incurred to date. We also examined invoices received from vendors and cash disbursements made to third-party service providers subsequent to December 31, 2024 to assess the completeness of the recorded accruals.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2021.
Stamford, Connecticut
March 28, 2025
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BIOXCEL THERAPEUTICS, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share amounts)
December 31,
December 31,
2024
2023
ASSETS
Current assets
Cash and cash equivalents
$
29,854
$
65,221
Accounts receivable, net
131
71
Inventory
679
1,991
Prepaid expenses
5,290
2,782
Other current assets
1,440
2,078
Total current assets
37,394
72,143
Property and equipment, net
475
784
Operating lease right-of-use assets
382
688
Other assets
87
87
Total assets
$
38,338
$
73,702
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities
Accounts payable
$
15,990
$
13,654
Accrued expenses
5,762
12,424
Due to related parties
107
107
Accrued interest
—
736
Other current liabilities
374
346
Total current liabilities
22,233
27,267
Long-term portion of operating lease liabilities
65
440
Derivative liabilities
6,633
1,905
Long-term debt
102,508
100,598
Total liabilities
131,439
130,210
Commitments and contingencies (Note 18)
Stockholders' (deficit) equity
Preferred stock, $ 0.001 par value, 10,000 shares authorized; no shares issued and outstanding as of December 31, 2024 and December 31, 2023
—
—
Common stock, $ 0.001 par value, 200,000 and 100,000 shares authorized as of December 31, 2024 and December 31, 2023, respectively; 3,102 and 1,871 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively
49
30
Additional paid-in-capital
557,047
534,060
Accumulated deficit
( 650,197 )
( 590,598 )
Total stockholders' (deficit) equity
( 93,101 )
( 56,508 )
Total liabilities and stockholders' (deficit) equity
$
38,338
$
73,702
The accompanying notes are an integral part of these consolidated financial statements.
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BIOXCEL THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share amounts)
Year ended December 31,
2024
2023
Revenues
Product revenue, net
$
2,266
$
1,380
Operating expenses
Cost of goods sold
2,143
1,260
Research and development
30,435
84,326
Selling, general and administrative
34,492
83,413
Restructuring costs
2,441
4,163
Total operating expenses
69,511
173,162
Loss from operations
( 67,245 )
( 171,782 )
Other (income) expense
Interest expense
15,129
13,314
Interest income
( 2,602 )
( 5,649 )
Other (income) expense, net
( 20,173 )
( 394 )
Net loss
$
( 59,599 )
$
( 179,053 )
Basic and diluted net loss per share attributable to common stockholders
$
( 23.51 )
$
( 98.33 )
Weighted average shares outstanding - basic and diluted
2,535
1,821
The accompanying notes are an integral part of these consolidated financial statements.
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BIOXCEL THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
(amounts in thousands)
Additional
Common Stock
Paid in
Accumulated
Shares
Amount
Capital
Deficit
Total
Balance as of January 1, 2023
1,759
$
28
$
488,292
$
( 411,545 )
$
76,775
Issuance of common stock, net of offering costs
88
2
26,219
—
26,221
Stock-based compensation
—
—
18,614
—
18,614
Exercise of stock options
20
—
508
—
508
Repricing of stock purchase warrants
—
—
254
—
254
Issuance of stock purchase warrants
—
—
200
—
200
Vesting of restricted stock units, net of employee tax obligations
4
—
( 27 )
—
( 27 )
Net loss
—
—
—
( 179,053 )
( 179,053 )
Balance as of December 31, 2023
1,871
$
30
$
534,060
$
( 590,598 )
$
( 56,508 )
Issuance of common stock, net of offering costs
1,209
19
9,907
—
9,926
Stock-based compensation
—
—
6,156
—
6,156
Issuance of stock purchase warrants
—
—
2,540
—
2,540
Repricing of stock purchase warrants
—
—
59
—
59
Issuance of pre-funded stock purchase warrants
—
—
4,379
4,379
Vesting of restricted stock units, net of employee tax obligations
22
—
( 54 )
—
( 54 )
Net loss
—
—
—
( 59,599 )
( 59,599 )
Balance as of December 31, 2024
3,102
$
49
$
557,047
$
( 650,197 )
$
( 93,101 )
The accompanying notes are an integral part of these consolidated financial statements.
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BIOXCEL THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
Year ended December 31,
2024
2023
OPERATING CASH FLOW ACTIVITIES:
Net loss
$
( 59,599 )
$
( 179,053 )
Reconciliation of net loss to net cash used in operating activities
Depreciation
309
318
Accretion of debt discount and amortization of financing costs
467
1,373
Change in fair value of derivative liabilities
( 20,180 )
( 438 )
Stock-based compensation expense
6,156
18,614
Payable-in-kind interest on Credit Agreement
6,543
1,872
Loss on disposal of equipment
—
2
Operating lease right-of-use assets
306
288
Changes in operating assets and liabilities
Accounts receivable
( 60 )
177
Inventory
1,312
( 6 )
Prepaid expenses, other current assets and other assets
( 1,872 )
2,888
Accounts payable, accrued expenses, due to related parties, and other current liabilities
( 4,327 )
( 3,219 )
Accrued interest
( 736 )
2,497
Operating lease liabilities
( 346 )
( 319 )
Net cash used in operating activities
( 72,027 )
( 155,006 )
INVESTING CASH FLOW ACTIVITIES:
Purchases of equipment and leasehold improvements
—
( 20 )
Net cash from investing activities
—
( 20 )
FINANCING CASH FLOW ACTIVITIES:
Proceeds from issuance of common stock and warrants
39,688
27,032
Debt Issuance Costs
—
( 180 )
Payment of principal of Long-term debt
( 2,500 )
—
Offering costs for common stock and warrants issuance
( 474 )
( 811 )
Payment of employee tax obligations related to vesting restricted stock units
( 54 )
( 27 )
Exercise of stock options
—
508
Net cash provided by financing activities
36,660
26,522
Net decrease in cash and cash equivalents
$
( 35,367 )
$
( 128,504 )
Cash and cash equivalents, beginning of the period
65,221
193,725
Cash and cash equivalents, end of the period
$
29,854
$
65,221
Supplemental cash flow information:
Issuance of stock purchase warrants
$
2,540
$
200
Repricing of stock purchase warrants
$
59
$
254
Interest paid
$
7,968
$
7,551
Conversion of accrued interest to long-term debt
$
—
$
767
The accompanying notes are an integral part of these consolidated financial statements.
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BIOXCEL THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, except per share amounts and where otherwise noted)
Note 1. Nature of the Business
BioXcel Therapeutics, Inc. (“BTI” or the “Company”) is a biopharmaceutical company utilizing artificial intelligence (“AI”) approaches to develop transformative medicines in neuroscience and immuno-oncology. The Company is focused on utilizing cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives. BTI employs a unique AI platform to reduce therapeutic development costs and potentially accelerate timelines. The Company’s approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indices. BTI management believes this differentiated approach has the potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs.
As used in these consolidated financial statements, unless otherwise specified or the context otherwise requires, the terms “BioXcel LLC” refers to the Company’s former parent and current significant stockholder, BioXcel LLC and, its predecessor, BioXcel Corporation. “OnkosXcel” refers to BTI’s wholly owned subsidiary for its advanced immuno-oncology assets, OnkosXcel Therapeutics, LLC.
On April 6, 2022, BTI announced that the United States (“U.S.”) Food and Drug Administration (“FDA”) approved IGALMI ® (dexmedetomidine or “Dex”) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults. IGALMI ® is approved to be self-administrated by patients under the supervision of a health care provider. On July 6, 2022, BTI announced that IGALMI ® , was commercially available in doses of 120 and 180 micrograms.
The Company’s most advanced clinical development program is BXCL501. In indications other than those approved by the FDA as IGALMI ® , BXCL501 is an investigational proprietary, orally dissolving, film formulation of Dex for the treatment of agitation associated with psychiatric and neurological disorders.
The Company’s advanced immuno-oncology asset, BXCL701, is an investigational, orally administered systemic innate immune activator for the treatment of a rare form of prostate cancer and advanced solid tumors that are refractory or treatment naïve to checkpoint inhibitors.
BTI was incorporated under the laws of the State of Delaware on March 29, 2017. The Company’s principal office is in New Haven, Connecticut.
Note 2. Basis of Presentation
The accompanying consolidated financial statements include those of the Company and its subsidiaries after elimination of all intercompany accounts and transactions and have been prepared in conformity with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”).
As of December 31, 2024, the Company had cash and cash equivalents of $ 29,854 and an accumulated deficit of $ 650,197 . BTI has incurred substantial net losses and negative cash flows from operating activities in nearly every fiscal period since inception and expects this trend to continue for the foreseeable future. The Company recognized net losses of $ 59,599 and $ 179,053 for the years ended December 31, 2024 and 2023, respectively, and had net cash used in operating activities of $ 72,027 and $ 155,006 for the years ended December 31, 2024 and 2023, respectively.
Under ASC Topic 205-40, Presentation of Financial Statements - Going Concern, management is required at each reporting period to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.
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The Company’s history of significant losses, its negative cash flows from operations, potential near-term increased covenant-driven amortization payments under its Credit Agreement, its limited liquidity resources currently on hand, and its dependence on its ability to obtain additional financing to fund its operations after the current resources are exhausted, about which there can be no certainty, have resulted in management’s assessment that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least 12 months from the issuance date of the financial statements included in this Annual Report on Form 10-K.
This going concern evaluation takes into consideration the potential mitigating effect of management’s Reprioritization (as defined in Note 4, Restructuring). When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates the substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (i) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued and (ii) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Generally, to be considered probable of being effectively implemented, the plans need to be approved by the Company’s Board of Directors. The Company’s Reprioritization was approved by the Board of Directors on August 8, 2023; however, such plans, including the additional restructuring actions taken in the second and third quarters of 2024, will not mitigate the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments that may result from the outcome of this uncertainty. The going concern analysis does not consider possible future amendments to or restructuring of the Credit Agreement (as defined in Note 9, Debt and Credit Facilities) or other potential sources of debt or equity capital.
Successful completion of the Company’s development programs and, ultimately, the attainment of profitable operations are dependent upon future events, including obtaining adequate financing to support the Company’s cost structure and operating plan. Management’s plans to improve the Company’s liquidity and reduce its operating expenses and capital requirements include, among other things, pursuing one or more of the following steps to raise additional capital, none of which can be guaranteed or are entirely within the Company’s control:
• raise funding through the sale of the Company’s equity securities;
• raise funding through third-party investments in or other strategic options for OnkosXcel;
• raise funding through debt financing and/or restructuring of its existing OFA Facilities;
• establish collaborations with potential partners to advance the Company’s product pipeline;
• establish collaborations with potential marketing partners;
• reduce overhead and headcount to focus on core priorities; and/or
• any combination of the foregoing.
If the Company is unable to raise capital when needed or on acceptable terms, or if it is unable to procure collaboration arrangements to advance its programs, the Company would be forced to discontinue some of its operations or develop and implement a plan, beyond its Reprioritization initiatives, to further extend payables, reduce overhead, scale back or cease some or all of its revised operating plan until sufficient additional capital is raised to support further operations.
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Note 3. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and notes thereto. Estimates are used in the following areas, among others: revenue recognition, inventory valuation, derivative liabilities, stock-based compensation expense, accrued expenses and income taxes. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates.
Reverse Stock Split
On February 10, 2025, the Company completed a 1-for-16 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each 16 shares of common stock issued and outstanding immediately prior to February 10, 2025 were automatically converted into one of a share of common stock. The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder's percentage interest in the Company's equity, except to the extent that the Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share instead were entitled to receive cash in lieu of such fractional share.
The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock.
All common share and per-share amounts in this Form 10-K have been retroactively restated to reflect the effect of the Reverse Stock Split.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. As of December 31, 2024 and 2023, cash equivalents were comprised primarily of money market funds. Cash and cash equivalents held at financial institutions may at times exceed federally insured amounts. BTI management believes it mitigates such risk by investing in or through major financial institutions.
Accounts Receivable, Net
Accounts receivable arise from sales of IGALMI ® and represent amounts due from distributors. Payment terms generally range from 30 to 75 days from the date of the sale transaction, and accordingly, do not involve a significant financing component. Receivables from product sales are recorded net of allowances which generally include distribution fees, prompt payment discounts, chargebacks, and credit losses. Allowances for distribution fees, prompt payment discounts and chargebacks are based on contractual terms. The Company estimated the current expected credit losses of its accounts receivable by assessing the risk of loss and available relevant information about collectability, existing contractual payment terms, actual payment patterns of its customers, individual customer circumstances, and reasonable and supportable forecast of economic conditions expected to exist throughout the contractual life of the receivable. Based on its assessment, as of December 31, 2024, the Company determined that an allowance for credit losses was not required.
Concentrations of Credit Risk
The Company sells IGALMI ® through a drop-ship program under which orders from hospitals and similar health care institutions are processed through wholesalers, but shipments of the product are sent directly to the individual hospitals and similar health care institutions. BTI also contracts directly with intermediaries such as group purchasing organizations (“GPOs”). All trade accounts receivables are due from the distributor that fulfills orders on behalf of the Company. For the years ended December 31, 2024 and 2023, one customer accounted for approximately 32 % and 39 % of the Company’s net product revenue, respectively.
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Inventory
Inventory is stated at the lower of cost or net realizable value. Cost of inventory is determined on a first-in, first-out basis.
BTI capitalizes inventory costs associated with the Company’s products prior to regulatory approval, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development expense in the Consolidated Statements of Operations.
The Company performs an assessment of the recoverability of capitalized inventory during each reporting period and writes down any excess and obsolete inventories to their estimated realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, will be recorded within Cost of goods sold in the Consolidated Statements of Operations. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected, write-downs of inventory may be required.
Deferred Initial Public Offering Costs
Deferred initial public offering costs of $ 2,570 , consisted of legal, accounting, and other costs that were directly related to the Company’s proposed initial public offering of OnkosXcel. These costs were charged to the Consolidated Statements of Operations during the year ended December 31, 2023 as the initial public offering was delayed for an extended period of time. The costs were recorded as Selling, general and administrative expenses.
Property and Equipment
Property and equipment are recorded at cost and depreciated over the shorter of their remaining lease term or their estimated useful life on a straight-line basis as follows:
Equipment
3 - 5 years
Furniture
7 years
Leasehold improvements
Lesser of life of improvement or lease term
Expenditures for maintenance and repairs which do not improve or extend the useful lives of the respective assets are expensed as incurred. When assets are sold or retired, the related cost and accumulated depreciation are removed from their respective accounts and any resulting gain or loss is included within Other (income) expense, net in the Consolidated Statements of Operations.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated from its use and disposition. Impairment charges are recognized at the amount by which the carrying amount of an asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and the long-term portion of operating lease liabilities in the Consolidated Balance Sheets.
ROU assets represent BTI’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when readily determinable. As BTI’s leases do not provide an implicit rate, it used an incremental
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borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any prepaid lease payments made and is reduced by lease incentives. The Company’s leases may include options to extend the lease; such options are included in determining the lease term when it is reasonably certain that BTI will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.
Debt and Detachable Warrants
Detachable warrants are evaluated for classification as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with equity-classified warrants, the proceeds from the issuance of debt are first allocated to the debt and then the warrants at their estimated fair values. The portion of the proceeds allocated to the warrants are accounted for as paid-in capital and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of any embedded derivatives, are allocated to the debt. Detachable warrants classified as derivative liabilities are accounted for as indicated under “ Derivative Assets and Liabilities ” section of this Note and as a debt discount. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds to interest expense using the effective interest method over the expected term of the debt instrument. The Company considers whether there are any embedded features in debt instruments that require bifurcation and separately accounts for them as derivative financial instruments.
The Company entered into financing arrangements, the terms of which involve significant assumptions and estimates, including future net product sales, in determining interest expense, amortization period of the debt discount, as well as the classification between current and long-term portions. In estimating future net product sales, the Company assesses prevailing market conditions using various external market data against the Company’s anticipated sales and planned commercial activities. Consequently, the Company imputes interest on the carrying value of the debt and records interest expense using an imputed effective interest rate. The Company reassesses the expected payments during each reporting period and accounts for any changes through an adjustment to the effective interest rate on a prospective basis, with a corresponding impact to the classification of the Company’s current and long-term portions of the debt.
Derivative Assets and Liabilities
Derivative assets and liabilities are recorded on the Company`s Consolidated Balance Sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded as other income or expense within Other (income) expense, net in the Consolidated Statements of Operations.
The Company does not use derivative instruments for speculative purposes or to hedge exposures to cash-flow or market risks. Certain financing facilities entered into by the Company include freestanding financial instruments and/or embedded features that require separate accounting as derivative assets and/or liabilities.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.
Revenue Recognition
The Company’s revenues consist of product sales of IGALMI ® .
BTI recognizes revenue when its customers obtain control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition, BTI management performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses if these options provide a material right to the customer and if so, they are considered performance obligations. The exercise of a material right may be accounted for as a contract modification or as a continuation of the contract for accounting purposes.
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The Company assesses whether the goods or services promised within each contract are distinct to identify those that are performance obligations. This assessment involves subjective determinations and requires management to make judgments about the individual promised goods or services and whether such goods and services are separable from the other aspects of the contractual relationship. Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and (ii) the Company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract.
The Company allocates the transaction price (the amount of consideration it expects to be entitled to from a customer in exchange for the promised goods or services) to each performance obligation and recognizes the associated revenue when (or as) each performance obligation is satisfied. The Company’s estimate of the transaction price for each contract includes all variable consideration to which the Company expects to be entitled.
BTI distributes IGALMI ® in the U.S. through arrangements with a distributor, wholesalers, and GPOs. The distributor and wholesalers help process and fulfill orders from hospitals on the Company’s behalf. The Company believes the hospitals are its customers.
The Company recognizes product revenues, net of consideration payable to customers, as well as variable consideration related to certain allowances and accruals that are determined using either the expected value or most likely amount method, depending on the type of the variable consideration, in its consolidated financial statements at the point in time when control transfers to the customer, which is typically when the product has been delivered to the customer’s location. The amount included in the transaction price is constrained to the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company’s only performance obligation identified for IGALMI ® is to deliver the quantity of product ordered to the location specified by the customer’s order. The Company records shipping and handling costs associated with delivery of product to its customers within Selling, general and administrative expenses on its Consolidated Statements of Operations. Under the Company’s current product sales arrangements, BTI does not have contract assets (unbilled receivables), as it generally invoices its customer at the time of revenue recognition.
BTI sells IGALMI ® at wholesale acquisition cost, less any agreed upon discounts and calculates product revenue net of variable consideration and consideration payable to third parties associated with distribution of product. The Company records reserves, based on contractual terms, for the following components of consideration related to product sold during the reporting period. Calculating these amounts involves estimates and judgments, and the Company reviews these estimates quarterly and records any material adjustments in the period they are identified, which affects net product revenue and earnings in the period such variances occur.
Trade Discounts and Allowances
The Company provides the distributor and wholesalers with discounts for prompt payment and pays fees to the distributor, wholesalers and GPOs related to distribution of the product. BTI expects the relevant third parties to earn these discounts and fees, and therefore it deducts such amounts from gross product revenue and accounts receivable at the time it recognizes the related revenue.
Government Rebates
IGALMI ® is eligible for purchase by, or qualifies for reimbursement from, Medicaid and other U.S. government programs that are eligible for rebates on the price they pay for the product. To determine the appropriate amount to reserve for these rebates, BTI applies the applicable government discount to these sales, and estimates the portion of total rebates that it anticipates will be claimed. The Company deducts certain government rebates from gross product
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revenue and accounts receivable at the time it recognizes the related revenue; other government rebates are recognized as an accrued liability at the time BTI recognizes the related revenue.
Chargebacks
BTI provides product discounts to hospitals associated with certain GPOs. The Company estimates the chargebacks that it expects to be obligated to provide based upon the terms of the applicable arrangements. BTI deducts such amounts from gross product revenue and accounts receivable at the time it recognizes the related revenue.
Product Returns
The Company provides contractual return rights to its customers including the right to return product within six months of product expiration and up to 12 months after product expiration, as well as for incorrect shipments, and damaged or defective product, which the Company expects to be rare. Management expects product returns to be minimal, thus BTI recognizes a nominal allowance for product returns at the time of each sale. In the future, if any of these factors and/or the history of product returns changes, the Company will adjust the allowance for product returns.
BTI classifies all fees paid to the distributor, other than those discussed above and those related to warehouse operations, as Selling, general and administrative expenses on its Consolidated Statements of Operations. Fees paid to the distributor for warehouse operations are classified as Cost of goods sold on BTI’s Consolidated Statements of Operations.
Cost of Goods Sold
Cost of goods sold includes the cost of producing and distributing inventories that are related to product revenues during the respective period. Cost of goods sold also includes costs related to excess or obsolete inventory adjustment charges, as well as costs related to warehouse operations paid to distributors.
Stock-Based Compensation
The Company measures and recognizes stock-based compensation expense based on estimated fair value for all share-based awards made to employees, non-employee service providers, and directors, including stock options, BTI restricted stock units (“BTI RSUs”), OnkosXcel profit sharing units (“PSUs”), OnkosXcel restricted stock units (“OnkosXcel RSUs”) and BTI performance stock units (“Performance Units”). The Company’s 2017 Equity Incentive Plan (the “2017 Plan”) became effective in August 2017. The Company’s 2020 Incentive Award Plan (the “2020 Plan”) became effective in May 2020. Following the effective date of the 2020 Plan, the Company ceased granting awards under the 2017 Plan; however, the terms and conditions of the 2017 Plan continue to govern any outstanding awards granted thereunder.
The Company’s stock-based awards are valued at fair value on the date of grant and that fair value is recognized as an expense in the Consolidated Statements of Operations over the requisite service period using the accelerated attribution method. The estimated value of the BTI RSUs and Performance Units is based on the Company’s closing stock price on the grant date. The estimated fair value of OnkosXcel RSUs are based on the OnkosXcel valuation on the grant date. The estimated fair value of stock-options and PSUs was determined using the Black-Scholes pricing model on the date of grant. For awards subject to performance-based vesting conditions, the Company recognizes stock-based compensation expense when the achievement of the performance condition becomes probable.
The Black-Scholes pricing model is affected by the Company’s stock price, as well as assumptions regarding variables including, but not limited to, the strike price of the instrument, the risk-free rate, the expected stock price volatility over the term of the awards and expected term of the awards. The Company has elected to account for forfeitures as they occur, by reversing compensation cost when the award is forfeited.
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Research and Development Costs
Research and development expenses include wages, benefits, non-cash stock-based compensation, facilities, supplies, external services, clinical study, manufacturing costs related to clinical trials and other expenses that are directly related to the Company’s research and development activities. At the end of the reporting period, the Company estimates the progress toward completion of the research or development objectives and, depending on the amount and timing of payments to the service providers may record net prepaid or accrued expense for associated research and development costs. Such estimates are subject to change as additional information becomes available. The Company expenses research and development costs as incurred.
Most of the Company’s service providers invoice BTI monthly in arrears for services performed. The Company estimates its accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to management at that time. BTI management periodically confirms the accuracy of the Company’s estimates with the service providers and makes adjustments if necessary.
Although management does not expect its estimates to be materially different from amounts actually incurred, management’s understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in BTI reporting amounts that are too high or too low in any particular period.
Patent Costs
Costs related to filing and pursuing patent applications are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations and are expensed as incurred since recoverability of such expenditures is uncertain.
Fair Value of Financial Instruments
The Company measures certain financial assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources, or observable inputs, and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances, or unobservable inputs. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Fair value measurements must be classified and disclosed in one of the following three categories:
● Level 1 : Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
● Level 2 : Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.
● Level 3 : Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk in its assessment of fair value.
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Income Taxes
BTI uses an asset and liability approach for financial accounting and reporting of income taxes. Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax basis assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled. Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the rate changes. A valuation allowance is required when it is “more likely than not” that all or a portion of deferred tax assets will not be realized.
U.S. GAAP prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. The Company’s financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts.
The Company does not have any unrecognized tax benefits as of December 31, 2024 and 2023. BTI reviews all tax positions to ensure the tax treatment selected is sustainable based on its technical merits and that the position would be sustained if challenged.
Earnings (Loss) per Share
Earnings (loss) per share (“EPS”) is calculated by dividing net income or loss attributable to common stockholders by the weighted average number of shares of common stock that were outstanding, including pre-funded warrants. Shares of common stock into which the pre-funded warrant may be exercised are considered outstanding for the purposes of computing EPS because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date. Diluted EPS is calculated by adjusting the weighted average number of shares of common stock that were outstanding for the dilutive effect of common stock equivalents. In periods in which a net loss is recorded, no effect is given to potentially dilutive securities, since the effect would be antidilutive.
Segment Information
The Company operates in a single segment. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. To date, the Company’s chief operating decision maker has made such decisions and assessed performance at the Company level as one segment. See Note 19, Segment Information for further information
Recent Accounting Pronouncements
Recently adopted accounting pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment reporting, which requires disclosure of incremental segment information on an annual and interim basis. The standard is effective for years beginning after December 15, 2023, and interim periods beginning after December 15, 2024 and early adoption is permitted. The Company adopted the new standard in fiscal year 2024 for annual and retrospective reporting periods with all interim disclosures to begin in the first quarter of fiscal year 2025. For additional information, see Note 19, Segment Information .
Accounting Pronouncements effective in future periods
In December 2023, the FASB issued ASU 2023-09, Improvements to income tax disclosures, which requires disclosure of disaggregated income taxes paid by jurisdiction, enhances disclosures in the effective tax rate reconciliation and modifies other income tax-related disclosures. The amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the effect of adopting this guidance on its consolidated financial statements.
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Note 4. Restructuring
On August 8, 2023, the Company’s Board of Directors approved a broad-based strategic reprioritization (the “Reprioritization”). The Company took actions to reduce certain operational and workforce expenses that were no longer deemed core to ongoing operations in order to extend its cash runway and drive innovation and growth in high potential clinical development and value creating opportunities. These actions included a shift in commercial strategy for IGALMI ® in the institutional setting, a reduction of in-hospital commercialization expenses, a suspension of programs no longer determined to be core to ongoing operations, and a prioritization of at-home treatment setting opportunities for BXCL501.
As part of this strategy, the Company’s Board of Directors approved a reduction of approximately 60 % of the Company’s workforce. The Company notified impacted employees on August 14, 2023 and recorded total restructuring costs of $ 4,163 for the year ended December 31, 2023. These costs consisted of severance and benefit costs of $ 4,063 and contract termination costs of $ 100 . The Company paid $ 3,998 of severance and benefit costs and $ 100 of contract termination costs in the year ended December 31, 2023. The Reprioritization is substantially complete as of December 31, 2023, and any remaining costs are expected to be paid during the first quarter of 2024.
On May 8, 2024 the Company took additional actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs. As part of these actions, the Company initiated a further reduction of approximately 15 % of the Company’s then current workforce. The Company notified impacted employees on May 8, 2024 and recorded total restructuring costs of $ 856 for the three months ended June 30, 2024. These costs consisted of severance and benefit costs, all of which were paid during the three months ended June 30, 2024.
On September 17, 2024, the Company approved a plan for an additional reduction in its workforce of 15 employees, or approximately 28 % of the Company’s headcount (the “Clinical Prioritization”), in order to extend its cash runway and prioritize investment on the clinical development of its lead neuroscience asset, BXCL501. The Company incurred aggregate charges in connection with the Clinical Prioritization of $ 1,586 which relate primarily to severance and benefits costs. Accordingly, the Company recorded a restructuring charge of $ 1,553 in the third quarter 2024, and $ 33 in the fourth quarter. The Company completed the Clinical Prioritization in October 2024, and paid $ 983 of the related costs during the fourth quarter of 2024 and expects to pay the remaining $ 603 in the first quarter of 2025, which is included in Accrued Expenses on the Consolidated Balance at December 31, 2024.
Note 5. Inventory
Inventory consists of the following:
December 31,
December 31,
2024
2023
Raw materials
$
506
$
935
Work-in-process
—
651
Finished goods
173
405
Total inventory
$
679
$
1,991
The Company recorded inventory write-downs due to excess inventory of $ 1,980 and $ 1,191 for the years ended December 31, 2024 and 2023, respectively.
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Note 6. Property and Equipment, net
Property and equipment, net consists of the following:
December 31,
December 31,
2024
2023
Computers and equipment
$
202
$
202
Furniture
575
575
Leasehold improvements
1,200
1,200
Total property and equipment
$
1,977
$
1,977
Accumulated depreciation
( 1,502 )
( 1,193 )
Total property and equipment, net
$
475
$
784
Depreciation expense was $ 309 and $ 318 for the years ended December 31, 2024 and 2023, respectively .
Note 7. Accrued Expenses
Accrued expenses consist of the following:
December 31, 2024
December 31, 2023
Accrued research and development expenses
$
3,107
$
6,406
Accrued compensation and benefits
35
163
Accrued professional fees
1,604
5,562
Accrued taxes
91
116
Other accrued expenses
322
177
Accrued restructuring costs
603
—
Total accrued expenses
$
5,762
$
12,424
Note 8. Transactions with BioXcel LLC
The Company entered into a Separation and Shared Services Agreement with BioXcel LLC that took effect on June 30, 2017, as amended and restated thereafter (the “Services Agreement”), pursuant to which BioXcel LLC had agreed to provide the Company with certain intellectual property prosecution and management and research and development activities.
Under the Services Agreement, the Company had an option, exercisable until December 31, 2024, to enter into a separate collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing its EvolverAI. We agreed to pay BioXcel LLC $ 18 per month from March 13, 2023, to December 31, 2024 in exchange for this option. This option was not exercised. However, BioXcel LLC continues to perform certain administrative services under the terms of the expired contract. We agreed to negotiate any such collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments shall not exceed $ 10,000 in the aggregate and not be payable prior to proof of concept in humans and (ii) commercialization milestone payments shall be based on reaching annual net sales levels, be limited to 3 % of the applicable net sales level, and not exceed $ 30,000 in the aggregate. We did not exercise our option to renew the agreement for product identification and related services utilizing BioXcel LLC’s EvolverAI. Subsequent to December 31, 2024 no development activity has been carried out by BioXcel LLC and none is contemplated.
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Service charges recorded under the Services Agreement for the years December 31, 2024 and 2023 were as follows:
Year ended December 31,
2024
2023
Research and development
$
938
$
1,075
Selling, general and administrative
392
211
Total
$
1,330
$
1,286
There were no service charges due as of December 31, 2024 and December 31, 2023.
Note 9. Debt and Credit Facilities
Debt, net of unamortized discounts and financing costs, consists of the following:
December 31, 2024
December 31, 2023
Credit Agreement and Guaranty
$
102,319
$
102,319
Payable-in-kind ("PIK") interest
4,403
361
Total long-term debt liability
$
106,722
$
102,680
Unamortized debt premiums, discounts and issuance costs
( 4,214 )
( 2,082 )
Total long-term debt
$
102,508
$
100,598
On April 19, 2022, the Company entered into two strategic financing agreements: (i) a Credit Agreement and Guaranty (the “Credit Agreement”) by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto (the “Lenders”), and Oaktree Fund Administration LLC (“OFA”) as administrative agent, and (ii) a Revenue Interest Financing Agreement (the “RIFA”; and together with the Credit Agreement, the “OFA Facilities”) by and among the Company, the purchasers party thereto (the “RIFA Purchasers”) and OFA as administrative agent. Under the OFA Facilities, the Lenders and the RIFA Purchasers agreed to, in the aggregate between the two OFA Facilities, provide up to $ 260,000 in gross funding to support the Company’s commercial activities of IGALMI ® sublingual film. In addition, the OFA Facilities are intended to support the expansion of clinical development efforts of BXCL501, which includes a Phase 3 program for the acute treatment of agitation in patients with Alzheimer’s disease, and for general corporate purposes. The Lenders and RIFA Purchasers are comprised of affiliates of Oaktree Capital Management, L.P. and Qatar Investment Authority.
Waiver and First Amendment to Credit Agreement and Guaranty
On November 13, 2023, the Company, the lenders party to the Credit Agreement and OFA entered into a Waiver and First Amendment to Credit Agreement and Guaranty (the “First Amendment”) that provided for (i) a waiver and a modification to the covenant in the Credit Agreement regarding investments in OnkosXcel and (ii) an agreement among the parties to further revise key financial terms in the Credit Agreement and terminate the RIFA. Pursuant to the First Amendment, the Lenders agreed to permit the Company to invest up to a maximum of $ 30,000 at any time outstanding in OnkosXcel, increased from $ 25,000 at any time outstanding. The First Amendment also waived any defaults or events of default arising under the Credit Agreement due to a breach prior to the date of the First Amendment of the OnkosXcel investment covenant, or a breach of the Company’s obligation to notify OFA of such default. In connection with the First Amendment, the Company paid the Lenders a fee of $ 180 (representing 0.25 % of the loans outstanding under the Credit Agreement on the date of the First Amendment) and agreed to pay to the Lenders an exit fee equal to 0.25 % of the loans under the Credit Agreement repaid upon maturity or prepayment of the loans.
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Second Amendment to Credit Agreement and Guaranty and Termination of the RIFA
On December 5, 2023, (the “Second Amendment Effective Date”), the Company entered into the Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement (the “Second Amendment”), which further amended the Credit Agreement. On the Second Amendment Effective Date, the Credit Agreement was amended to provide up to $ 202,319 in senior secured term loans, including the initial Tranche A of $ 70,000 , which was funded on April 28, 2022, and related capitalized interest on Tranche A through the Second Amendment Effective Date in the amount of $ 72,319 . In addition, the $ 30,000 in financing previously provided to the Company under the RIFA on July 8, 2022 was converted to a term loan under the Credit Agreement (the “Tranche A-2 Term Loan”). The RIFA and all commitments for potential future funding thereunder were terminated. In addition, pursuant to the Second Amendment, the Lenders agreed to permit the Company to invest up to a maximum of $ 30,865 at any time outstanding in OnkosXcel, increased from $ 30,000 . In connection with the Second Amendment, the Company agreed to pay to the Lenders an exit fee equal to 0.25 % of the loans under the Credit Agreement repaid upon maturity or prepayment of the loans (which exit fee is in addition to, and not in lieu of, the exit fee provided for by the First Amendment). As of September 30, 2024, $ 100,000 in commitments under the Credit Agreement remains unfunded, and Oaktree has an Equity Investment Right (as defined below) to purchase up to $ 5,000 of Common Stock from the Company. The blended effective interest rate on the Tranches A-1 and A-2 as of December 31, 2023 was approximately 13.5 %.
The remaining tranches may be borrowed at the Company’s option prior to December 31, 2024, subject to satisfaction of certain conditions, including regulatory and financial milestones. Tranche B of the Credit Agreement is $ 20,000 and is available upon satisfaction of certain conditions and financial milestones. Tranche C of the Credit Agreement is $ 30,000 and is available upon satisfaction of certain conditions, including receipt of certain regulatory and financial milestones. Tranche D of the Credit Agreement is $ 50,000 and is available upon satisfaction of the Tranche C Term Loans conditions precedent to, and the funding of Tranche C Loans, including specified minimum net sales of the Company attributable to sales of BXCL501 for a trailing twelve consecutive month period, on or before December 31, 2025.
The loans under the Credit Agreement do not amortize and mature on April 19, 2027. The Company may, at its option, no earlier than September 21, 2026 and no later than October 21, 2026, request an extension of the maturity date to April, 19, 2028, provided that the Company satisfies certain conditions including receipt of certain regulatory and financial milestones. Borrowings under the Credit Agreement are issued at a 200 -basis point original issue discount and bear interest at a variable annual rate of TERM SOFR (but not less than 2.5 % or more than 5.5 % ) plus 7.5 % , payable quarterly. The rate resets every three months based on the current Term SOFR rate. Of such interest, above 8 % per annum is, at the Company’s option, payable in kind by capitalizing and adding such interest to the outstanding principal amount of loans from the first payment date on which such interest is owed through March 31, 2025, unless, with respect to any payment date, the Company elects to pay all or a portion of such interest in cash. The Company is required to pay a ticking fee equal to 0.75 % per annum on the undrawn amount of the commitments, payable quarterly commencing 120 days after April 22, 2022 through the termination of the commitments, which is expensed as incurred and recognized as interest expense in the Consolidated Statements of Operations. The Company may voluntarily prepay the Credit Agreement at any time subject to a prepayment fee.
The Company’s obligations under the Credit Agreement are guaranteed by BTI’s existing and subsequently acquired or organized subsidiaries, subject to certain exceptions. BTI’s obligations under the Credit Agreement and the related guarantees thereunder are secured, subject to customary permitted liens and other agreed upon exceptions, by (i) a pledge of all of the equity interests of all of the Company’s existing and any future direct subsidiaries, and (ii) a perfected security interest in all of its and the guarantors’ tangible and intangible assets (except that the guarantees provided by the BXCL701 Subsidiaries (as defined below) are unsecured).
The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions, including specific exceptions with respect to product commercialization and development activities. The Company must also comply with certain financial covenants, including (i) maintenance of cash or permitted cash equivalent investments in accounts controlled by OFA for the Lenders, of at least (a) initially, $ 15,000 , (b) from and after the funding of the Tranche B
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loans, $ 20,000 , and (c) from and after the Company’s satisfaction of the funding conditions for the Tranche C loans, $ 15,000 , provided, that the liquidity covenant applicable at any time will be increased upon certain events related to a sale of OnkosXcel (up to a maximum amount equal to $ 37,500 ), provided that the minimum liquidity amount will in no event exceed 50 % of the aggregate amount of loans outstanding under the Credit Agreement at any time; and (ii) a minimum revenue test, measured quarterly beginning with the Company’s fiscal quarter ending on December 31, 2024 (such six-month period the “Revenue Covenant Measurement Period”), that requires it and its subsidiaries’ consolidated net revenue for the six consecutive month period ending on the last day of each such fiscal quarter to not be less than a minimum revenue amount specified in the Credit Agreement (such testing date, the “Revenue Covenant Measurement Testing Date” and the covenant described in this clause (ii) the “Revenue Covenant”). The Company’s failure to comply with the financial covenants will result in an event of default, subject to certain cure rights with respect to the Revenue Covenant. If, as of a Revenue Covenant Measurement Testing Date, the Company’s revenue for the applicable Revenue Covenant Measurement Period is less than the minimum revenue amount specified for the applicable period then required under the Revenue Covenant, the Company would have a right to cure such shortfall for a total of three fiscal periods by making a revenue cure payment (which would be treated as prepayments of the loans subject to a prepayment fee) to the Lenders in an amount equal to the difference between such minimum required revenue amount and the Company’s actual revenues for such Revenue Covenant Measurement Period, such payment to not be less than $1,000. If paid, the Company will be deemed to have complied with the Revenue Covenant as of such Revenue Covenant Measurement Testing Date. Any such payment will be applied to the prepayment of the loans under the Credit Agreement.
Notwithstanding the foregoing, the Credit Agreement permits OnkosXcel (together with OnkosXcel Employee Holdings, LLC (“Employee Holdings”), a subsidiary of BTI, and their respective subsidiaries, the “BXCL701 Subsidiaries”) to receive third-party investment or transfer all or substantially all of their assets to an unaffiliated third party, in each case subject to terms and conditions set forth in the Credit Agreement, including the escrow of certain proceeds received by BTI and its subsidiaries (other than the BXCL701 Subsidiaries) in respect of these disposition events and, under circumstances set forth in the Credit Agreement, the mandatory prepayment of such escrowed amounts. The Company’s equity interests in the BXCL701 Subsidiaries have been pledged in support of its obligations under the Credit Agreement, and the BXCL701 Subsidiaries have provided direct guarantees of BTI’s obligations under the Credit Agreement on an unsecured basis. However, the pledge, guarantee and other obligations of the BXCL701 Subsidiaries under the Credit Agreement will be released upon certain agreed upon events, including an initial public offering by the BXCL701 Subsidiaries or the ownership by unaffiliated third parties of at least 20 % of the equity interests in the BXCL701 Subsidiaries.
The Credit Agreement contains events of default that are customary for financings of this type relating to, among other things, payment defaults, breach of covenants, breach of representations and warranties, cross default to material indebtedness, bankruptcy-related defaults, judgment defaults, breach of the financial covenants described above, and the occurrence of certain change of control events. In certain circumstances, events of default are subject to customary cure periods. The Credit Agreement also contains certain regulatory-related events of default, which do not have cure periods. Following an event of default and any applicable cure period, the Lenders will have the right upon notice to terminate any undrawn commitments and may accelerate all amounts outstanding under the Credit Agreement, in addition to other remedies available to them as the Company’s secured creditors.
Waiver and Third and Fourth Amendments to Credit Agreement and Guaranty
On February 12, 2024, the Company entered into the Third Amendment to Credit Agreement and Guaranty (the “Third Amendment”), which amended the Credit Agreement. Pursuant to the Third Amendment, the Lenders agreed to waive the covenant that the Company shall not receive a report and opinion from the Company’s independent auditors that contains a “going concern” or like qualification or exception or emphasis of matter of going concern footnote with respect to the Company’s financial statements for the fiscal year ended December 31, 2023 and, as a result, such event shall not be an event of default. As a condition to the effectiveness of the Third Amendment, among other things, the Company shall have received at least $ 40,000 in gross proceeds from a registered public sale of the Company’s common stock, warrants and/or pre-funded warrants on or before February 20, 2024. The Company did not meet this condition and therefore the Third Amendment did not become effective.
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On March 20, 2024 (the “Effective Date”), the Company entered into the Fourth Amendment to the Credit Agreement and Guaranty (the “Fourth Amendment”), which amended the Credit Agreement. Pursuant to the Fourth Amendment, the Lenders agreed to waive the covenant that the Company shall not receive a report and opinion from the Company’s independent registered public accounting firm that contains a “going concern” or similar qualification with respect to the Company’s financial statements for the year ended December 31, 2023. Accordingly, while the Company’s independent registered public accounting firm’s report contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 contains a “going concern” explanatory paragraph, it does not constitute an event of default under the Credit Agreement.
The Fourth Amendment includes a covenant that the Company will receive, (i) after the Effective Date and on or before April 15, 2024, at least $ 25,000 in gross proceeds from the issuance of its common stock, warrants and/or pre-funded warrants, and/or in non-refundable cash consideration from partnering transactions entered into after the Effective Date (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made) and (ii) after the Effective Date and on or before November 30, 2024, at least $ 50,000 (for the avoidance of doubt, inclusive of amounts previously counted toward the preceding clause (i)) in gross proceeds from the issuance of its common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent (as defined in the Credit Agreement) in its sole discretion ) from partnering transactions entered into after the Effective Date. Failure to perform this covenant would constitute (A) a default under the Credit Agreement and (B) an event of default under the Credit Agreement, subject to a cure period, solely in the case of clause (i) of the preceding sentence, until May 15, 2024. For the avoidance of doubt, failure to perform clause (ii) of the preceding sentence would constitute an immediate event of default under the Credit Agreement without any cure or grace period.
In addition, the Fourth Amendment provides that if the Company has not, after the Effective Date and on or before September 30, 2024, received at least $ 40,000 in gross proceeds from the issuance of its common stock, warrants and/or pre-funded warrants, and/or cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the Effective Date, the “Minimum Liquidity Amount” (as defined in the Credit Agreement) that the Company is required to maintain at all times will increase to $ 25,000 from $ 15,000 , unless and until the Company has received, after the Effective Date and on or before November 30, 2024, at least $ 50,000 in gross proceeds from the issuance of the Company’s common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the Effective Date. On March 27, 2024, the Company received $ 25,000 in gross proceeds from the issuance of its common stock, warrants, and pre-funded warrants discussed in Note 11, Common Stock Financing Activities , satisfying the April 15, 2024 covenant requirement of the Fourth Amendment. During the third quarter of 2024, the Company received $ 467 of gross proceeds from the issuance of the Company’s common stock. As of September 30, 2024, the Company had satisfied $ 30,943 of the $ 40,000 required to maintain the Minimum Liquidity Amount and the $ 50,000 gross proceeds requirement. As a result, at September 30, 2024, the Minimum Liquidity Amount increased to $ 25,000 . As of September 30, 2024, we were in compliance with all restrictive and financial covenants under the Credit Agreement.
Waiver and Fifth Amendment to Credit Agreement and Guaranty
On November 21, 2024, the Company entered into the Fifth Amendment to Credit Agreement and Guaranty and First Amendment to Fourth Amendment to Credit Agreement and Guaranty (the “Fifth Amendment”), which amended the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto (the “Lenders”), and Oaktree Fund Administration LLC (“OFA”) as administrative agent (as amended by the Waiver and First Amendment to Credit Agreement and Guaranty, dated as of November 13, 2023, the Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement, dated as of December 5, 2023, the Third Amendment to Credit Agreement, dated as of February 12, 2024, and the Fourth Amendment to Credit Agreement and Guaranty, dated as of March 20, 2024 (the “Fourth Amendment”), the “Existing Credit Agreement”).
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Pursuant to the Fifth Amendment, the Lenders agreed to, among other things, (i) waive the Credit Agreement’s covenant that the report and opinion the Company will receive from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2024 will not contain a “going concern” or similar qualification, (ii) permanently waive the Credit Agreement’s minimum revenue covenant, and (iii) waive the Fourth Amendment’s requirement that the Company raise, after the effective date of the Fourth Amendment and on or before November 30, 2024, at least $ 50,000 in gross cash proceeds from the issuance of its common stock, warrants, and/or pre-funded warrants, and/or in cash and/or non-cash consideration from newly entered-into partnering transactions.
The Fifth Amendment includes a new capital raising covenant requiring that the Company receive (A) after the effective date of the Fifth Amendment and on or prior to November 27, 2024, at least $ 7,000 in gross cash proceeds from the issuance of the Company’s common stock, warrants and/or pre-funded warrants(“Raise 1”), (B) after the effective date of the Fifth Amendment and on or before March 15, 2025 (provided that the Company was required to use its commercially reasonable efforts to satisfy the requirement by February 15, 2025), at least $ 18,000 in net cash proceeds (including the proceeds of Raise 1) from (i) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions entered into after the effective date of the Fifth Amendment (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), (iii) the issuance of the Company’s subordinated debt (subject to terms set forth in the Fifth Amendment), and/or (iv) asset sales permitted pursuant to the Credit Agreement or consented to by the Lenders (such capital raise, “Raise 2”), and (C) after the effective date of the Fifth Amendment and on or prior to the earlier of (x) August 15, 2025 and (y) the date that is 30 days after the final data readout of the SERENITY At-Home Phase 3 trial, at least $ 29,000 in net cash proceeds (including the proceeds from Raise 1 and Raise 2) from the same permitted capital raising activities listed in the preceding clause (B).
In connection with the Fifth Amendment and the required capital raises described in the preceding paragraph, the Lenders agreed to modify the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $ 7,500 (instead of $ 25,000 ) from and after the closing of Raise 1until March 30, 2025. On March 31, 2025, the minimum liquidity amount will increase to $ 10,000 and on September 30, 2025, the minimum liquidity amount will further increase to $ 15,000 .
In connection with the Fifth Amendment, the Company paid a one-time amortization payment of $ 2,500 principal amount, together with accrued and unpaid interest and a portion of the prepayment fee and other fees payable in December 2024.
The Fifth Amendment also modifies the interest rate of the loans provided under the Credit Agreement from a floating rate of Term SOFR plus 7.50 % per annum, to a fixed rate of 13 % per annum, retroactive to and effective as of September 30, 2024. For the quarterly payment dates ending December 31, 2024, March 31, 2025, and June 30, 2025, the Company will have the ability to make interest payments of up to 10 % per annum “in-kind” by capitalizing and adding such interest to the outstanding principal amount of the loans under the Credit Agreement. In addition, pursuant to the Fifth Amendment, the Company will be required to make quarterly amortization payments equal to 5.0 % of the principal amount of funded loans, together with applicable prepayment fees, beginning on March 31, 2026.
On the effective date of the Fifth Amendment and as a condition to effectiveness thereof, the Company’s wholly owned subsidiaries OnkosXcel Therapeutics, LLC and OnkosXcel Employee Holdings, LLC (collectively, “OnkosXcel”), which previously provided unsecured guarantees of the Company’s obligations under the Credit Agreement, granted security interests in substantially all of their assets to support such obligations.
The Fifth Amendment amends the negative covenants under the Credit Agreement to remove flexibility the Company and its subsidiaries previously had thereunder to undertake various transactions, including, without limitation, with respect to potential dispositions of OnkosXcel or out-licenses by OnkosXcel of its intellectual property.
Pursuant to the Fifth Amendment, the Company committed to appoint a new independent board director (subject to customary background checks, applicable law, confirmation of independence and Nasdaq rules), and to provide the independent director with various privileges and committee memberships on the board of directors of the Company
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(including the appointment of such director on committee to be formed to focus on capital raising and evaluate strategic options). The Company also agreed to engage an investment banker reasonably acceptable to OFA and the Lenders to assist the Company and its board of directors with evaluating and exploring strategic options.
The Company also agreed to covenants requiring that the Company’s cash expenditures be monitored by the Lenders according to a board-approved budget provided to the Lenders prior to the signing of the Fifth Amendment, which cash budget will be updated on a bi-weekly basis going forward. The Company will not be permitted to make disbursements for any two-week period in excess of 115 % of the aggregate budgeted amount of disbursements for the applicable period. Finally, pursuant to the Fifth Amendment, the Company is restricted from paying cash bonuses for its employees or executives during the fiscal years 2024 and 2025 without OFA’s consent or increasing the cash compensation for fiscal year 2025 for certain senior officers of the Company from their compensation for fiscal year 2024.
Revenue Interest Financing Agreement
As noted, the RIFA was terminated when the Company entered into the Second Amendment, which amended the Credit Agreement (as amended by the First Amendment). The $ 30,000 Tranche A previously provided to the Company under the RIFA was converted to the Tranche A-2 Term Loan. Prior to termination, the RIFA provided up to $ 120,000 in potential financing in exchange for a capped revenue interest on net sales of IGALMI ® , and other future BXCL501 products, if any, that received regulatory approval for sale. The initial Tranche A of $ 30,000 was funded on July 8, 2022.
Under the terms of the RIFA, the Purchasers were to receive tiered revenue interest payments on U.S. net sales of IGALMI ® , and other future BXCL501 products, if any, that receive regulatory approval for sale, equal to a royalty ranging from 0.375 % to 7.750 % of net sales of IGALMI ® , and other future BXCL501 products, if any, approved for sale in the U.S., subject to a hard cap equal to 1.75 x the total amount funded. The Company would also have been required to make certain additional payments to the Purchasers from time to time to ensure that the aggregate amount of payments received by the Purchasers under the RIFA were at least equal to certain agreed upon minimum levels as of certain specified dates, subject to terms and conditions set forth in the RIFA. Revenue interest payments due under the RIFA were payable quarterly based on net sales.
Warrants and Equity Investment Right
In connection with the closing of the Second Amendment, on the Second Amendment Effective Date, the Company amended and restated the warrants granted to the Lenders on April 19, 2022 to purchase up to 17 shares of the Company’s common stock at an exercise price of $ 320.6 per share (the “Closing Date Warrants”). Pursuant to the amendment and restatement of the Closing Date Warrants, dated December 5, 2023 (the “Amended and Restated Closing Date Warrants”), the exercise price of the Closing Date Warrants has been reduced to $ 58.3232 per share. In addition, the Company granted new warrants to the Lenders to purchase up to 4 shares of the Company’s common stock (the “2023 Warrant Shares”) at an exercise price of $ 58.3232 per share (the “2023 Warrants” and together with the Amended and Restated Closing Date Warrants, the “Warrants”). The Amended and Restated Closing Date Warrants and the 2023 Warrants will expire on April 19, 2029 and may be net exercised at the holders election. In addition, pursuant to the Credit Agreement, the Lenders have the right to purchase shares of the Company’s common stock after the Second Amendment Effective Date, so long as borrowings under the Credit Agreement are outstanding, for a purchase price of $ 5,000 at a price per share equal to a 10 % premium to the volume-weighted average price of the common stock over the 30 trading days prior to the Lenders’ election to proceed with such equity investment (the “Equity Investment Right”). BTI entered into a registration rights agreement (the “Registration Rights Agreement”) with the Lenders and filed a registration statement on Form S-3 to register the shares issuable upon exercise of the Warrants and, if issued, the shares related to the Equity Investment Right, for resale. The maximum shares of the Company’s common stock issuable under the Warrants (including the Closing Date Warrants and the 2023 Warrants) and Lenders’ Equity Investment Right was 366 as of March 31, 2024. On the Second Amendment Effective Date, Company amended and restated its Registration Rights Agreement (the “Amended and Restated Registration Rights Agreement”) with the Lenders, dated April 19, 2022, pursuant to which the Company agreed to register the 2023 Warrant Shares for resale.
As part of the Credit Agreement, OnkosXcel, a wholly owned subsidiary of BTI, granted warrants to the Lenders to purchase 175 individual limited liability company units (which number of units is not in thousands; referred to herein as
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the “OnkosXcel Warrants”). The strike price of the OnkosXcel Warrants is formulaic based on the value of OnkosXcel at the time of exercise and can only be exercised upon occurrence of an equity related liquidity event for OnkosXcel of at least $ 20,000 . The exercise price per unit of the OnkosXcel Warrants will be set upon the earlier of the closing of the next sale (or series of related sales) by OnkosXcel of equity securities of OnkosXcel with aggregate proceeds of not less than $ 20,000 to unrelated third parties (the “Next Equity Financing”) at an exercise price per unit equal to a 10 % premium over the price per unit of the equity securities sold by OnkosXcel in such Next Equity Financing or, in the event of a sale of OnkosXcel prior to the Next Equity Financing or an initial public offering constituting the Next Equity Financing, the lesser of (x) 75 % of the fair value of the consideration to be paid for a unit upon the consummation of such transaction and (y) 150 % of the valuation applicable to the initial profits units issued by OnkosXcel after the closing of the Credit Agreement. The OnkosXcel Warrants are transferable with approval from BTI, which cannot be unreasonably withheld, expire on April 19, 2029, and may be net exercised at the holder’s election.
In connection with the closing of the Fourth Amendment discussed below, the Company granted new warrants to the Lenders to purchase up to 6 shares of its common stock (the “2024 Warrant Shares”) at an exercise price of $ 49.1568 per share (the “2024 Warrants”), which represents a 10 % premium over the arithmetic average of the volume-weighted average price of the Company’s common stock on the Nasdaq Capital Market during the 30 trading days preceding the Effective Date. The 2024 Warrants will expire on April 19, 2029 and may be net exercised at the holder’s election. On the Effective Date, the Company amended and restated its Amended and Restated Registration Rights Agreement (the “Second Amended and Restated Registration Rights Agreement”) with the Lenders, originally dated April 19, 2022. Pursuant to the Second Amended and Restated Registration Rights Agreement, the Company agreed to register the 2024 Warrant Shares for resale.
Fifth Amendment Warrants, Registration Rights Agreement and Equity Investment Right Termination
Prior to the Fifth Amendment, pursuant to the Credit Agreement, the Lenders had the right to purchase shares of our common stock, so long as borrowings under the Credit Agreement are outstanding, for a purchase price of $ 5,000 at a price per share equal to a 10 % premium to the volume-weighted average price of the common stock over the 30 trading days prior to the Lenders’ election to proceed with such equity investment (the “Equity Investment Right”). The Equity investment Right was terminated as part of the Fifth Amendment. We entered into a registration rights agreement with the Lenders (as amended and restated in connection with the Second Amendment, the “Amended and Restated Registration Rights Agreement”) and filed registration statements on Form S-3 to register the shares issuable upon exercise of the Closing Date Warrants, 2023 Warrants and the New Warrants for resale. The maximum shares of our common stock issuable under the Closing Date Warrants, the 2023 Warrants and the Lenders’ Equity Investment Right was 366 . On the Effective Date, we further amended and restated the Amended and Restated Registration Rights Agreement (the “Second Amended and Restated Registration Rights Agreement”) with the Lenders. Pursuant to the Second Amended and Restated Registration Rights Agreement, we agreed to register the 2024 Warrant Shares for resale.
In connection with the closing of the Fifth Amendment, the Company agreed to, substantially concurrently with the closing of Raise 1, grant new warrants to the Lenders to purchase an aggregate of 313 shares of common stock on the closing date of the Fifth Amendment, at an exercise price of $ 0.16 per share (the “New Warrants”). The New Warrants will expire on the seventh anniversary of their issuance.
In addition, the Company agreed to, substantially concurrently with the closing of Raise 1, amend and restate all warrants to purchase stock of the Company issued to the Lenders prior to the effective date of the Fifth Amendment, to revise the exercise price thereunder to an exercise price equal to the lower of (i) the price per share of the common stock of the Company issued in Raise 1 and (ii) arithmetic average of the volume-weighted average price of the Company’s common stock on the Nasdaq Capital Market during the 30 trading days preceding Raise 1 (such existing warrants, as amended and restated, the “Original Warrants”). The Original Warrants provide the Lenders with the right to purchase a total of 28 shares of common stock of the Company, and the exercise prices of $ 58.3232 per share and $ 49.1568 per share were reduced to $ 7.68 per share.
On the date of issuance of the New Warrants, the Company agreed to amend and restate its Second Amended and Restated Registration Rights Agreement with the Lenders, dated March 20, 2024. Pursuant to such amendment and restatement (the “Third Amended and Restated Registration Rights Agreement”), the Company will agree to register the shares of common stock issuable under the New Warrants, in addition to all Original Warrants, for resale.
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As part of entering into the Credit Agreement, OnkosXcel, a wholly owned subsidiary of BTI, granted the OnkosXcel Warrants to the Lenders to purchase 175 individual limited liability company units. The strike price of the OnkosXcel Warrants is formulaic based on the value of OnkosXcel at the time of exercise and can only be exercised upon occurrence of an equity related liquidity event for OnkosXcel of at least $ 20,000 . The exercise price per unit of the OnkosXcel Warrants will be set upon the earlier of the closing of the next sale (or series of related sales) by OnkosXcel of equity securities of OnkosXcel with aggregate proceeds of not less than $ 20,000 to unrelated third parties (the “Next Equity Financing”) at an exercise price per unit equal to a 10 % premium over the price per unit of the equity securities sold by OnkosXcel in such Next Equity Financing or, in the event of a sale of OnkosXcel prior to the Next Equity Financing or an initial public offering constituting the Next Equity Financing, the lesser of (x) 75 % of the fair value of the consideration to be paid for a unit upon the consummation of such transaction and (y) 150 % of the valuation applicable to the initial profits units issued by OnkosXcel after the closing of the Credit Agreement. The OnkosXcel Warrants are transferable with approval from BTI, which cannot be unreasonably withheld, expire on April 19, 2029, and may be net exercised at the holder’s election.
Maturities of long-term debt are expected to be as follows:
December 31, 2024
2025
$
—
2026
$
22,431
2027
$
84,291
Thereafter
$
—
Interest expense was as follows:
Year ended
December 31,
2024
2023
Interest expense
$
14,662
$
11,941
Accretion of debt discount and amortization of financing costs
467
1,373
Total interest expense
$
15,129
$
13,314
Note 10. Derivative Financial Instruments
BTI identified certain freestanding financial instruments and/or embedded features that require separate accounting from the borrowings under the OFA Facilities. This includes the OnkosXcel Warrants and Equity Investment Right held by the Lenders, along with certain put/call options. The OnkosXcel Warrants and Equity Investment Right do not meet certain scope exceptions under U.S. GAAP, primarily because the exercise prices and number of shares of the Company’s common stock issuable under the instruments are variable, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheets. The respective derivative liabilities are recorded at fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Consolidated Statements of Operations. As discussed in Note 9, Debt and Credit Facilities , the Equity Investment Right was terminated on November 25, 2024 in connection with the Fifth Amendment to the Credit Agreement. The Company recorded the termination gain of $ 1,263 within Other (income) expense, net in the Company’s Consolidated Statements of Operations for the carrying value of the Equity Investment Right.
With respect to the Securities Purchase Agreement discussed in Note 11, Common Stock Financing Activities , BTI determined that the Accompanying Warrants fail the equity classification criteria and are therefore classified as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging (“ASC 815”). The Accompanying Warrants failed to meet the requirements to be indexed to equity and equity
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classified, and meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of December 31, 2024. The respective derivative liabilities were recorded at fair value on the date of issuance in the amount of $ 19,347 and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Consolidated Statements of Operations. We value the Accompanying Warrants using the Black-Scholes option pricing model as discussed in Note 14, Fair measurements .
On November 21, 2024, the exercise price of 534 of the Accompanying Warrants was reduced from $ 51.20 to $ 9.136 per share. As a result of the repricing, the Company recorded the increase in fair value of $ 1,000 as an increase to the carrying value of Derivative liabilities, recorded as an increase to their carrying value, and as a loss in Other (income) expense, net, in the Company’s Consolidated Statements of Operations. For the year ended December 31, 2024, the Company recorded total net gains of $ 17,027 , including the $ 1,000 repricing loss, in Other (income) expense, net, in the Company’s Consolidated Statements of Operations. As of December 31, 2024, the fair value of the Accompanying Warrants was $ 2,320 .
On November 25, 2024, as discussed below, the Company issued additional warrants (the “November 2024 Accompanying Warrants”). The November 2024 Accompanying Warrants failed to meet the requirements to be indexed to equity and equity classified, and meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of December 31, 2024. The respective derivative liabilities were recorded at fair value on the date of issuance in the amount of $ 5,562 and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Consolidated Statements of Operations. For the year ended December 31, 2024, the Company recorded total net gains of $ 1,289 in Other (income) expense, net, in the Company’s Consolidated Statements of Operations. As of December 31, 2024, the fair value of the November 2024 Accompanying Warrants was $ 4,273 .
Note 11. Common Stock Financing Activities
In May 2021, the Company entered into an Open Market Sale Agreement (as amended, supplemented and/or restated from time to time, the “Sale Agreement”) with Jefferies LLC (“Jefferies”) pursuant to which the Company could offer and sell shares of its common stock, having an aggregate offering price of up to $ 100,000 , from time to time, through an “at the market offering” program under which Jefferies will act as sale agent. In November 2023, the Company amended the Sale Agreement to increase the size of the “at the market offering" program to $ 150,000 . For the year ended December 31, 2023, the Company sold 88 shares of its common stock for a gross amount of $ 27,032 , incurred issuance costs of $ 811 , and received net proceeds of $ 26,221 . For the year ended December 31, 2024, the Company sold 240 shares of its common stock for a gross amount of $ 7,682 , incurred issuance costs of $ 231 , and received net proceeds of $ 7,451 .
On March 25, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchasers named therein (collectively, the “Purchasers”). Pursuant to the Purchase Agreement, the Company agreed to issue and sell to the Purchasers in a registered direct offering (the “Offering”) under an effective shelf registration statement on Form S-3 (File No. 333-275261) and a related prospectus supplement filed with the Securities and Exchange Commission on March 25, 2024 (the “Prospectus Supplement”) an aggregate of 191 shares (the “Shares”) of common stock, par value $ 0.001 per share, and accompanying warrants (the “Accompanying Warrants”) to purchase up to 191 shares of common stock at a combined offering price of $ 4.416 per Share and Accompanying Warrant and pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 348 shares of common stock and Accompanying Warrants to purchase up to 348 shares of common stock, at a combined offering price of $ 46.40 per share underlying each Pre-Funded Warrant and Accompanying Warrant, which equals the offering price per Share and Accompanying Warrant less the $ 0.016 exercise price per share of the Pre-Funded Warrants. The Pre-Funded Warrants and Accompanying Warrants are not listed on the Nasdaq Capital Market or any other securities exchange or trading system and the Company does not intend to list them. On March 27, 2024, The Company received $ 25,000 of gross proceeds from the Offering, incurred issuance costs of $ 248 , and received net proceeds of $ 24,752 .
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The Pre-Funded Warrants have an exercise price per share of common stock equal to $ 0.016 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Pre-Funded Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The Pre-Funded Warrants are exercisable at any time after the date of issuance. For the year ended December 31, 2024, 348 Pre-Funded Warrants were exercised and the same number of shares of common stock were issued in exchange for $ 6 of proceeds received.
The Accompanying Warrants have an exercise price per share of common stock equal to $ 51.20 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Accompanying Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The Accompanying Warrants will be exercisable at any time after the date of issuance and will expire on the fifth anniversary of the date of issuance. The Accompanying Warrants do not meet certain scope exceptions under U.S. GAAP, primarily because they did not meet the requirements to be indexed to equity and equity classified, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of December 31, 2024.
On November 22, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Canaccord Genuity LLC, as underwriter (the “Underwriter”), in connection with the issuance and sale by the Company in a public offering of (i) 350 shares of the Company’s common stock, and accompanying warrants (the “November 2024 Accompanying Warrants”) to purchase 350 shares of Common Stock, at a combined public offering price of $ 7.68 per share, and, in lieu thereof to certain investors, (ii) pre-funded warrants to purchase 563 shares of Common Stock, and accompanying warrants (the “November 2024 Accompanying Warrants”) to purchase 563 shares of Common Stock, at a combined public offering price of $ 7.664 per pre-funded warrant, which equals the public offering price per share of Common Stock and accompanying warrant less the $ 0.016 exercise price per share of the pre-funded warrants, less underwriting discounts and commissions, pursuant to an effective shelf registration statement on Form S-3 (Registration No. 333-275261) and a related prospectus supplement filed with the Securities and Exchange Commission. For the year ended December 31, 2024, 80 pre-funded warrants were exercised and the same number of shares of common stock were issued in exchange for $ 1 of proceeds received.
Each of the November 2024 Accompanying Warrants in the offering is subject to customary beneficial ownership limitations on exercisability, is exercisable at any time after the date of issuance of such warrant and, in the case of the accompanying warrants, will expire on the fifth anniversary of the date of issuance. Each of the November 2024 Accompanying Warrants will have an exercise price of $ 7.68 per underlying share of Common Stock.
The Company received net proceeds from the offering of approximately $ 6,128 , after deducting underwriting discounts and commissions and offering expenses of $ 871 . The Company intends to use the net proceeds of the offering to fund the SERENITY At-Home trial, prepare for the initiation of the TRANQUILITY In-Care trial, working capital and general corporate purposes.
Note 12. Stock-Based Compensation
2017 Equity Incentive Plan
The Company’s 2017 Plan became effective in August 2017. Following the effective date of the Company's 2020 Plan, the Company ceased granting awards under the 2017 Plan, however, the terms and conditions of the 2017 Plan continue to govern any outstanding awards granted thereunder.
2020 Incentive Award Plan
The Company’s 2020 Plan was approved and became effective at the Company’s 2020 annual meeting of stockholders on May 20, 2020, and unless earlier terminated by the Board of Directors, will remain in effect until March 26, 2030. The 2020 Plan originally authorized for issuance the sum of (i) 57 shares of the Company’s common stock and (ii) 15 shares of the Company’s common stock, which represents the number of shares that remained available for
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issuance under the 2017 Plan immediately prior to the approval of the 2020 Plan by the Company’s stockholders. Any shares of common stock which, immediately prior to the approval of the 2020 Plan by the Company’s stockholders, were subject to awards granted under the 2017 Plan that are forfeited or lapse unexercised and are not issued under the 2017 Plan will increase the number of shares of common stock available for grant under the 2020 Plan. In addition, the number of shares available for issuance under the 2020 Plan will increase on the first day of each calendar year, beginning January 1, 2021 and ending on and including January 1, 2030, by a number of shares equal to the lesser of (A) 4 % of the aggregate number of shares of the Company’s common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares of common stock as determined by the Board of Directors. The shares available for issuance under the 2020 Plan increased by 75 shares and 70 shares on January 1, 2024 and 2023, respectively.
Stock-based awards granted under the 2020 Plan have a term of ten years . The vesting schedule of all awards granted under the 2020 Plan is determined by the Board of Directors, which is generally four years . Stock-based awards granted under the 2020 Plan include stock options, BTI RSUs, and Performance Units.
As of December 31, 2024, there were 42 shares available to be granted under the 2020 Plan.
BTI Restricted stock units
The table below summarizes activity relating to BTI RSUs.
Number of
shares
Outstanding as of January 1, 2024
12
Granted
22
Cancelled
( 1 )
Vested
( 6 )
Outstanding as of December 31, 2024
27
In 2024, the Company granted 22 time-based BTI RSUs to certain employees, executives, and board members. The RSUs granted to employees and executives vest 100 % at the one -year anniversary of the grant date. The weighted average grant date fair value per share for the BTI RSUs granted to employees and executives in 2024 was $ 23.43 . Unrecognized stock-based compensation expense related to these awards was $ 13 as of December 31, 2024. The RSUs granted to board members vest monthly over a 12-month period, beginning in November 2024. The weighted average grant date fair value per share for the BTI RSUs granted to board members was $ 9.12 . Unrecognized stock-based compensation expense related to these awards was $ 185 as of December 31, 2024. Unrecognized stock-based compensation expense related to awards issued prior to 2024 was $ 575 and $ 1,715 as of December 31, 2024 and 2023, respectively.
BTI Performance stock units
The table below summarizes activity relating to Performance Units related to BTI common stock.
Number of
shares
Outstanding as of January 1, 2024
33
Granted
87
Cancelled
( 27 )
Exercised
( 23 )
Outstanding as of December 31, 2024
70
In July 2024, the Company granted 87 Performance Units to employees. The Performance Units vest on the one-year anniversary of the grant date, provided certain performance criteria are met. The weighted average value per share
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of Performance Units granted in 2024 was $ 19.20 . None of the Performance Units had vested as of December 31, 2024. Unrecognized stock-based compensation expense related to these Performance Units expected to vest was zero as of December 31, 2024 since it is uncertain whether any performance criteria will be met.
OnkosXcel Profit sharing units
The table below summarizes activity relating to the PSUs associated with OnkosXcel as described below.
Weighted average
Number of
price per unit
units
(in whole dollars)
Outstanding as of January 1, 2024
1,240
$
5,626
Granted
15
$
10,176
Cancelled
( 89 )
$
5,506
Forfeited
—
$
—
Outstanding as of December 31, 2024
1,166
Vested units as of December 31, 2024
941
$
5,570
During 2024, OnkosXcel Employee Holdings, LLC, a management holding company used to facilitate the grant of equity interests to service providers of OnkosXcel granted 15 individual (not in thousands) time-based PSUs related to OnkosXcel to certain employees of the Company in consideration for services provided to OnkosXcel. The PSUs represent indirect equity interests in OnkosXcel. These PSUs vest ratably over 48 months .
The fair values of the PSUs granted in 2024 was $ 8 per unit, and was estimated at the date of grant using a Black-Scholes option pricing model. The total fair value of the PSUs vested during the year ended December 31, 2024 was $ 1,165 .
2024 grant profit share unit valuation inputs
Expected volatility
97.4
%
Risk-free rate of interest
3.6
%
Expected dividend yield
—
%
Expected term
5.8
years
Unrecognized stock-based compensation expense related to the PSUs was $ 377 as of December 31, 2024.
OnkosXcel restricted stock units
The table below summarizes activity relating to the OnkosXcel RSUs.
Number of
units
Outstanding as of January 1, 2024
225
Granted
—
Vested
( 41 )
Cancelled
( 8 )
Outstanding as of December 31, 2024
176
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As of December 31, 2024, the Company had 176 OnkosXcel Restricted Stock Units outstanding. Unrecognized stock-based compensation expense related to the awards expected to vest was approximately $ 210 as of December 31, 2024.
BTI Stock options
A summary of the Company’s stock option activity for the year ended December 31, 2024, is presented below.
Number of
Weighted average
shares
price per share
Outstanding as of January 1, 2024
311
$
296.36
Granted
40
$
20.00
Forfeited
( 24 )
$
214.56
Cancelled
( 16 )
$
339.74
Exercised
—
$
—
Outstanding as of December 31, 2024
311
$
265.36
Options vested and exercisable as of December 31, 2024
249
$
291.94
As of December 31, 2024, the intrinsic value of options outstanding was $ 0 . The intrinsic value for stock options is calculated based on the difference between the exercise prices of the underlying awards and the quoted stock price of the Company’s common stock as of the reporting date.
The total intrinsic value of stock options exercised for the year ended December 31, 2024 was $ 0 . The total intrinsic value of stock options exercisable as of December 31, 2024 was $ 0 .
The weighted average grant date fair value of options granted during the year ended December 31, 2024 was $ 16.63 .
The weighted average grant date fair value of options vested as of December 31, 2024 was $ 215.98 .
The weighted average remaining contractual life is 4.9 years for options exercisable as of December 31, 2024. The weighted average remaining contractual life was 5.6 years for options outstanding as of December 31, 2024.
Unrecognized compensation expense related to unvested stock option awards as of December 31, 2024, was $ 7,691 and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 0.9 years.
Stock-Based Compensation
The fair value of options granted during the years ended December 31, 2024 and 2023 was estimated using the Black-Scholes pricing model with the following assumptions:
Year ended
Year ended
December 31, 2024
December 31, 2023
Expected term
5.5
years
-
6.1
years
5.5
years
-
6.1
years
Expected stock price volatility
108.0
%
-
112.5
%
96.9
%
-
109.9
%
Risk-free rate of interest
4.0
%
-
4.5
%
3.5
%
-
4.7
%
Expected dividend yield
0.0
%
-
0.0
%
0.0
%
-
0.0
%
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In 2024, the Company continued using the historical volatility of its common stock to estimate volatility. Prior to 2023, volatility was estimated using a combination of the historical volatility of publicly traded peer companies and that of the Company’s common stock. The expected term of the awards is estimated based on the simplified method, which calculates the expected term based upon the midpoint of the term of the award and the vesting period. The Company uses the simplified method because it does not have sufficient option exercise data to provide a reasonable basis upon which to estimate the expected term. The expected dividend yield is zero percent as the Company has no history of paying dividends nor does management expect to pay dividends over the contractual terms of these options. The risk-free interest rates are determined by reference to the U.S. Treasury yield curve in effect at the time of grant, with maturities approximating the expected term of the stock options. The fair value of the underlying common stock is generally determined as the closing price of the Company’s common stock on The Nasdaq Capital Market on the grant date, with consideration of whether there is material nonpublic information that could impact that estimated fair value when it is released.
The Company recognized stock-based compensation expense related to awards issued under the 2017 Plan and the 2020 Plan, as well as the OnkosXcel PSUs and OnkosXcel RSU’s, of $ 6,156 and $ 18,614 for the years ended December 31, 2024 and 2023, respectively, which were comprised as follows:
Year ended December 31,
2024
2023
Research and development
$
2,251
$
6,324
Selling, general and administrative
3,905
12,290
Total
$
6,156
$
18,614
2020 Employee Stock Purchase Plan
The Company’s 2020 Employee Stock Purchase Plan (the “ESPP”) was also approved and became effective at the Company’s 2020 annual meeting of stockholders on May 20, 2020. The ESPP is designed to assist eligible employees of the Company with the opportunity to purchase the Company’s common stock at a discount through accumulated payroll deductions during successive offering periods. The aggregate number of shares that may be issued pursuant to rights granted under the ESPP is 6 shares of common stock. In addition, the number of shares available for issuance under the ESPP will increase on the first day of each calendar year, beginning on January 1, 2021 and ending on and including January 1, 2030, by a number of shares of common stock equal to the lesser of (a) 1 % of the shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board of Directors. The number of shares that may be issued or transferred pursuant to rights granted under the component of the ESPP that is intended to qualify for favorable U.S. federal tax treatment under Section 423 of the Internal Revenue Code (the “Section 423 Component”) shall not exceed 31 shares. The purchase price will be determined by the administrator of the ESPP and, for purposes of the Section 423 Component, shall not be less than 85 % of the fair value of a share on the first trading day or on the last trading day of the applicable offering period, whichever is lower. The shares available for issuance under the ESPP increased by 19 shares and 18 shares on January 1, 2024 and 2023, respectively. To date, no shares have been sold under the ESPP. There were 75 shares available for issuance as of December 31, 2024.
Note 13. Leases
BTI leases office space for its corporate headquarters at 555 Long Wharf Drive, New Haven, Connecticut (the “HQ Lease”) under an operating lease that expires in February 2026. The Company has an option to renew the HQ Lease for one additional five-year term. Payments under the HQ Lease are fixed.
The Company also leases equipment such as copiers and information technology equipment.
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The future minimum annual lease payments under operating leases, as of December 31, 2024, were as follows:
Year ending December 31,
Amount
2025
$
391
2026
65
Thereafter
—
Total lease payments
$
456
Imputed interest
( 17 )
Total lease liability
$
439
Less current portion of lease liability
( 374 )
Long-term portion of operating lease liability
$
65
The current portion of the Company’s operating lease liability of $ 374 , as of December 31, 2024, is included in Other current liabilities on the Consolidated Balance Sheets.
Lease expense was $ 394 and $ 392 for the years ended December 31, 2024 and 2023, respectively.
Lease renewal options are not included in the ROU asset or lease liability.
Note 14. Employee Benefit Plan
The Company maintains a defined contribution retirement plan for its employees that complies with Section 401(k) of the Internal Revenue Code (the “401(K) Plan”). Employees are eligible to participate in the 401(K) Plan and can contribute a portion of their pay into the 401(K) Plan, subject to annual limits established by the U.S. Internal Revenue Service. Participating employees receive an employer matching contribution equal to 50 % of eligible employee contributions on the first 5 % of eligible compensation contributed. Employer contributions to the 401(K) Plan were $ 289 and $ 788 for the years ended December 31, 2024 and 2023, respectively.
Note 15. Fair Value Measurements
The Company groups its assets and liabilities measured at fair value in three levels based on the nature of the inputs and assumptions used to determine fair value. Refer to Note 3, Summary of Significant Accounting Policies, for additional information on the accounting policies related to fair value.
The carrying amounts of Cash and cash equivalents, Accounts receivable, net and Accounts payable approximate fair value due to the short-term nature of these instruments. As of December 31, 2024 and 2023, the Company had $ 29,036 and $ 64,860 , respectively, primarily in money market funds that hold U.S. government cash equivalent instruments (included in Cash and cash equivalents) which were valued based on Level 1 inputs. There were no transfers between levels within the hierarchy during the years ended December 31, 2024 and 2023.
Derivative liabilities measured at fair value on a recurring basis are summarized below.
Year ended
December 31, 2024
Fair Value
Level 1
Level 2
Level 3
Total
Derivative liability - BTI Warrants
$
6,593
$
—
$
6,593
$
—
$
6,593
Derivative liability - OnkosXcel Warrants
40
—
—
40
40
Total derivative liabilities
$
6,633
$
—
$
6,593
$
40
$
6,633
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Year ended
December 31, 2023
Fair Value
Level 1
Level 2
Level 3
Total
Derivative liability - BTI Warrants
$
1,193
$
—
$
—
$
1,193
$
1,193
Derivative liability - OnkosXcel Warrants
712
—
—
712
712
Total derivative liabilities
$
1,905
$
—
$
—
$
1,905
$
1,905
Derivative liabilities are comprised of the OnkosXcel Warrants and Equity Investment Right held by the Lenders. The fair value of the derivative liabilities was determined using Monte Carlo simulation models for the Equity Investment Right, and Binomial Option Pricing and Distribution models for the OnkosXcel Warrants. As discussed in Note 9, Debt and Credit Facilities , the Equity Investment Right was terminated on November 25, 2024 in connection with the Fifth Amendment to the Credit Agreement.
The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2024. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category.
Year ended
December 31,
2024
2023
Derivative liabilities, Balance - January 1
$
1,905
$
2,343
Termination of Derivative liabilities - Equity Investment Right
( 1,263 )
—
Change in fair value
( 602 )
( 438 )
Derivative liabilities, Balance - December 31
$
40
$
1,905
The derivative liabilities were reported at their fair values in the Consolidated Balance Sheets. The changes in the fair value of the derivative liabilities were reported as gains in the Consolidated Statements of Operations as Other (income) expense, net, for the years ended December 31, 2024 and 2023, in the amounts of $ 20,181 and $ 438 , respectively.
Inputs used to calculate the estimated fair value of the Equity Investment Right were as follows:
Equity Investment Right
Strike price relative to volume weighted 30-day average
110.0
%
Volatility (annual)
112.3
%
Probability of exercise
91.0
%
Time period
1.3
years
Estimated premium to 30-day average
24.0
%
Discount rate
4.26
%
The changes in fair value of the Equity Investment Right up to its termination date were recorded in the Consolidated Statements of Operations as Other (income) expense, net. The final carrying value of the Equity Investment Right of $ 1,263 upon derecognition was recorded was recorded as a reduction of derivative liability with the offset recorded as a gain in Other (income) expense, net, in the Consolidated Statements of Operations.
In estimating the fair value of the derivative liability related to the OnkosXcel Warrants, inputs included third-party fair value estimates of OnkosXcel limited liability company units along with the volatility of those units (which was set at 100 % based on the historical volatility of the Company’s stock, along with a peer group of comparable publicly traded companies), and the timing and probability of the relevant capital transactions occurring.
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The estimated fair value of the Credit Agreement as of December 31, 2024, was $ 94,204 . Both observable and unobservable inputs were used to determine the fair value of long-term debt, which was classified within the Level 3 category.
The following table presents the BTI warrants issued by the Company and the corresponding balance sheet classification:
Warrant Recipient
Warrant Type
Issue Date
Exercise Price
Number of Warrants
Classification
Lenders and RIFA Purchasers
Closing Date Warrants
4/19/2022
$
7.68
17
Equity
Lenders and RIFA Purchasers
2023 Warrants
12/5/2023
$
7.68
4
Equity
Lenders and RIFA Purchasers
2024 Warrants
3/20/2024
$
7.68
6
Equity
Lenders and RIFA Purchasers
New Warrants
11/25/2024
$
0.16
313
Equity
Armistice Capital Master Fund Ltd.
Accompanying Warrants
3/25/2024
$
9.136
534
Derivative Liability
Armistice Capital Master Fund Ltd.
Accompanying Warrants
3/25/2024
$
51.20
5
Derivative Liability
Armistice Capital Master Fund Ltd.
November 2024 Accompanying Warrants
11/25/2024
$
7.68
846
Derivative Liability
Heights Capital Management
November 2024 Accompanying Warrants
11/25/2024
$
7.68
27
Derivative Liability
Hudson Bay Capital Management
November 2024 Accompanying Warrants
11/25/2024
$
7.68
27
Derivative Liability
IntraCoastal Capital, LLC
November 2024 Accompanying Warrants
11/25/2024
$
7.68
13
Derivative Liability
Total warrants issued
1,792
The fair value of the Closing Date Warrants, which was a non-recurring fair value, was determined as of the date of issuance using a Black-Scholes pricing model and the fair value of $ 3,245 was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts funded under the OFA Facilities. This non-recurring measurement is classified as Level 2. The inputs used were a strike price of $ 320.64 , the Company’s stock price of $ 238.88 , volatility of 95 %, term of 7 years and risk-free rate of 2.95 %.
As discussed in Note 9, Debt and Credit Facilities, in connection with the closing of the Second Amendment of the Credit Agreement, on the Second Amendment Effective Date, the Company amended and restated the Closing Date Warrants granted to the Lenders to have an exercise price of $ 58.3232 per share.
Using a Black-Scholes pricing model, the Company determined that the Closing Date Warrants’ fair values at the original strike price of $ 320.64 and the amended strike price of $ 58.3232 were $ 548 and $ 802 , respectively, as of the Second Amendment Effective Date. The Closing Date Warrants’ incremental increase in fair value for the repricing of $ 254 , was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts refinanced under the Credit Agreement.
In connection with the Second Amendment, the Company issued 4 “2023 Warrants” at a strike price of $ 58.3232 per share. The fair value of the 2023 Warrants, which is a non-recurring fair value, was determined as of the date of issuance using a Black-Scholes pricing model and the fair value of $ 200 was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts funded under the Credit Agreement. This non-recurring measurement is classified as Level 2. The inputs used were a strike price of $ 58.3232 , the Company’s stock price of $ 59.36 , volatility of 99 %, term of 5.4 years and risk-free rate of 4.14 %.
In connection with the Fourth Amendment, the Company issued 6 “2024 Warrants” at a strike price of $ 49.1568 per share. The fair value of the “2024 Warrants”, which was a non-recurring fair value, was determined as of the date of issuance using a Black-Scholes pricing model and the fair value of $ 224 was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts funded under the OFA Facilities. This non-recurring measurement is classified as Level 2. The inputs used were a strike price of $ 49.1568 , the Company’s stock price of $ 44.48 , volatility of 112.2 %, term of 5 years and risk-free rate of 4.25 %.
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In addition, in connection with the Fifth Amendment of the Credit Agreement, on the Fifth Amendment Effective Date of November 25, 2024, the Company amended and restated the Closing Date Warrants, 2023 Warrants, and 2024 Warrants granted to the Lenders to have an exercise price of $ 7.68 per share.
Using a Black-Scholes pricing model, the Company determined that the Closing Date Warrants, 2023 Warrants, and 2024 Warrants’ fair values at the previously amended strike price of $ 58.3232 and original strike price of $ 49.1568 the amended strike price of $ 7.68 were $ 105 and $ 164 , respectively, as of the Fifth Amendment Effective Date. The Closing Date Warrants, 2023 Warrants, and 2024 Warrants’ incremental increase in fair value for the repricing of $ 59 , was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts refinanced under the Credit Agreement.
The fair value of the Accompanying Warrants at issuance on March 25, 2024 was determined using a Black-Scholes pricing model and the fair value of $ 19,347 was recorded as a derivative liability with the offset recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets. This fair value measurement is classified as Level 2. The valuation inputs used were a strike price of $ 51.20 , the Company’s stock price of $ 44.96 , volatility of 112.2 %, a term of 5 years and a risk-free rate of 4.2 % . On November 25, 2024, 534 of the 539 Accompanying Warrants’ strike price were amended to $ 9.136 , as part of the consideration provided to one of the investors in the November 2024 Equity raise discussed in Note 11, Common Stock Financing Activities. The increase in fair value due to the amended strike price of $ 1,000 was recorded as an increase in the carrying value of the Derivative liability, with the offset recorded as a loss in Other (income) expense, net, in the Company’s Consolidated Statements of Operations. We remeasured the Accompanying Warrants’ fair value at December 31, 2024 of $ 2,320 and recorded a net gain of $ 17,027 , including the repricing loss of $ 1,000 for the year ended December 31, 2024, respectively within Other (income) expense, net in the Company’s Consolidated Statements of Operations. The valuation inputs used as of December 31, 2024 were a strike prices of $ 9.136 and $ 51.20 for 534 and 5 Accompanying Warrants, respectively, the Company’s stock price of $ 5.984 , volatility of 112.3 %, term of 4.2 years and risk-free rate of 4.4 %.
The fair value of the November 2024 Accompanying Warrants at issuance on November 25, 2024 was determined using a Black-Scholes pricing model and the fair value of $ 5,562 was recorded as a derivative liability with the offset recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Condensed Consolidated Balance Sheets. This fair value measurement is classified as Level 2. The valuation inputs used were a strike price of $ 7.68 , the Company’s stock price of $ 7.52 , volatility of 112.5 %, a term of 5 years and a risk-free rate of 4.2 % . We remeasured the fair value at December 31, 2024 of $ 4,273 and recorded an unrealized gain of $ 1,289 for the year ended December 31, 2024, respectively within Other (income) expense, net in the Company’s Consolidated Statements of Operations. The valuation inputs used as of December 31, 2024 were a strike price of $ 7.68 , the Company’s stock price of $ 5.984 , volatility of 112.3 %, term of 4.9 years and risk-free rate of 4.4 %.
Note 16. Income Taxes
The significant components of the Company's net deferred tax assets at December 31, 2024 are shown below. In determining the realizability of the Company's net deferred tax assets, the Company considered numerous factors, including historical profitability, estimated future taxable income, and the industry in which it operates. Based on this
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information the Company has provided a valuation allowance for the full amount of its net deferred tax asset because the Company has determined that it is more likely than not that they will not be realized.
December 31,
December 31,
2024
2023
Deferred tax assets:
Federal net operating losses
$
90,853
$
73,770
State net operating losses
23,152
21,255
Stock options
14,601
13,915
Tax credits
17,188
15,048
Capitalized research & development
44,377
49,603
Accrued expense
202
—
Depreciation
103
73
Lease accounting - liability
115
212
Disallowed charitable contributions
1
Deferred Costs
674
Cancellation of debt
1,483
Valuation allowance
( 192,149 )
( 173,679 )
Total deferred tax assets
$
600
$
197
Deferred tax liabilities:
Debt amendment
$
( 500 )
—
Unrealized loss
—
$
( 12 )
Right-of-use assets
( 100 )
( 185 )
Total deferred tax liabilities
$
( 600 )
$
( 197 )
Net deferred tax asset (liability)
$
—
$
—
The income tax expense/(benefit) for the year ended December 31, 2024 differed from the amounts computed by applying the U.S. federal income tax rate of 21 % to loss before tax benefit as a result of tax credits generated and changes in the Company’s valuation allowance.
A reconciliation between the Company’s effective tax rate and the federal statutory rate are as follows:
2024
2024
2023
2023
Federal statutory rate
( 12,516 )
21.0
%
( 37,601 )
21.0
%
Stock based compensation
381
( 0.6 )
%
( 573 )
0.3
%
Warrant mark-to-market
( 4,238 )
7.1
%
—
—
%
Federal and state credits
( 1,870 )
3.2
%
( 4,082 )
2.3
%
State taxes
( 343 )
0.6
%
( 14,261 )
8.0
%
Other
116
( 0.3 )
%
1,210
( 0.7 )
%
Change in valuation allowance
18,470
( 31.0 )
%
55,307
( 30.9 )
%
—
—
%
—
—
%
At December 31, 2024 the Company had approximately $ 432,634 of gross federal and $ 443,454 of gross state net operating loss carry-forwards. If not utilized, the federal and state net operating loss carry-forwards will begin to expire in 2037. The federal net operating loss of $ 429,988 incurred after December 31, 2017 will carryforward indefinitely. The utilization of such net operating loss carry-forwards and realization of tax benefits in future years depends predominantly upon having taxable income. The Company has approximately $ 15,965 of federal orphan drug credits and research and development credits which will begin to expire in 2037 if not utilized. The Company also has approximately $ 1,548 of state research and development credits which will begin to expire in 2040 if not utilized.
Utilization of the NOL and research tax credit carryforwards may be subject to a substantial annual limitation due to ownership limitations that has occurred or that could occur in the future, as required by section 382 of the Code, as well as similar state and foreign provisions. These ownership changes may limit the amount of the NOL and research credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an
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"ownership change" as defined by Section 382 of the Code results from a transaction or series of transactions over a three year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a by certain stockholders or public groups.
Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax positions taken on their income tax returns. The Company has analyzed its tax positions and has concluded that as of December 31, 2024, there were no uncertain positions. The Company's U.S. federal and state NOLs have occurred since its inception in 2017 and as such, tax years subject to potential tax examination could apply from that date because the utilization of net operating losses from prior years opens the relevant year to audit by the U.S. Internal Revenue Service and/or state taxing authorities. The Company did no t have any unrecognized tax benefits and has no t accrued any interest or penalties for the years ended December 31, 2024 and 2023.
Note 17. Net Loss Per Share
Basic and diluted net loss per share are as follows :
Year ended
December 31,
2024
2023
Net loss (numerator)
$
( 59,599 )
$
( 179,053 )
Weighted average shares (denominator)
2,535
1,821
Basic and diluted net loss per share
$
( 23.51 )
$
( 98.33 )
Potentially dilutive securities outstanding consists of stock options, RSUs and performance units, and BTI warrants. The Company had common stock equivalents outstanding are as follows:
As of
December 31,
2024
2023
Stock options
311
311
Restricted stock units
27
12
Performance stock units
70
31
BTI Warrants
1,792
22
Total common stock equivalents
2,200
376
Note 18. Commitments and Contingencies
From time to time, in the ordinary course of business, the Company may be subject to litigation and regulatory examinations as well as information gathering requests, inquiries and/or investigations. Other than the below, the Company is not currently subject to any matters where it believes there is a reasonable possibility that a material loss may be incurred.
On July 7, 2023, plaintiff Katelyn Martin filed a class action complaint against the Company and certain executives in the United States District Court for the District of Connecticut, captioned Martin v. BioXcel Therapeutics, et al. , 3:23-cv-00915 (D. Conn). The case has since been renamed to Hills et al v. BioXcel Therapeutics, Inc. et al . On October 4, 2023, pursuant to the Private Securities Litigation Reform Act, the court appointed two co-Lead Plaintiffs. The co-Lead Plaintiffs filed an amended complaint on December 5, 2023, alleging violations of Sections 10(b) and 20A of the Securities and Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 promulgated thereunder. On July 11, 2024, the Court dismissed the amended complaint without prejudice and, on August 1, 2024, co-Lead Plaintiffs filed a second amended complaint. The second amended complaint alleges that defendants made false or misleading statements regarding the TRANQUILITY II trial and the development of BXCL501 for an expanded indication related to the
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treatment of certain Alzheimer’s-related agitation. The Company moved to dismiss the second amended complaint on September 6, 2024. On February 24, 2025, while the Company’s motion to dismiss remained pending, Plaintiffs moved for leave to further amend their complaint. The Company filed an opposition to the motion on March 17, 2025. Plaintiffs’ reply is due April 7, 2025.
On November 28, 2023, Plaintiffs Pratheesan Panancherry and Jeffrey Bastress filed a stockholder derivative complaint in the United States District Court for the District of Connecticut purportedly on behalf of the Company and against Vimal Mehta, Richard I. Steinhart, Peter Mueller, June Bray, Sandeep Laumas, Michael Miller, Michal Votruba, and Krishnan Nandabalan as Defendants, and the Company as Nominal Defendant under the caption Panancherry et al v. Mehta et al , 3:23-cv-1554. Following the initial action, Plaintiffs Maria Vomvolakis (3:24-cv-3) and Kelly Fowler (3:24-cv-203) each filed separate stockholder derivative complaints in the District of Connecticut raising similar claims as Panancherry and Bastress, including business torts and violations of the Securities Exchange Act of 1934. The cases have been consolidated under the caption In re BioXcel Therapeutics, Inc. Stockholder Derivative Litigation , 3:23-cv-1554 (D. Conn.). The consolidated action is currently stayed.
On January 11, 2024, Plaintiff Jeremy Smith filed a stockholder derivative complaint in the United States District Court for the District of Delaware purportedly on behalf of the Company and against Vimal Mehta, Peter Mueller, June Bray, Sandeep Laumas, Michael Miller, Michal Votruba, Richard I. Steinhart, Robert Risinger, and Krishnan Nandabalan as Defendants, and the Company as Nominal Defendant under the caption Smith v. Mehta et al, 1:24-cv-00041. Following the initial action, Plaintiff Janice Korff filed a stockholder derivative complaint in the District of Delaware raising similar claims as Smith (1:24-cv-130), including business torts and violations of the Securities Exchange Act of 1934. The cases have been consolidated under the caption In re BioXcel Therapeutics, Inc. Derivative Litigation , 1:24-cv-00041 (D. Del.). The consolidated action is currently stayed.
At this time, the Company does not believe the claims in the above-captioned matters have merit, and intends to vigorously defend against them; however, the potential costs and liabilities associated with this litigation are uncertain.
In April 2022, the Company signed a commercial supply agreement that requires minimum annual payments for the first three years of the agreement that in aggregate total $ 10,000 for the three-year period, of which $ 5,000 was originally due in year ended 2024. On July 11, 2024, the Company entered into an amendment to the commercial supply agreement (the “Product Supply Agreement Amendment”) that reduces the specified minimum annual payment over the next three years starting in the year ended 2024 and, thereafter, for a specified interval, provides for minimum annual payments to the extent that the Company receives approval of a supplemental new drug application (sNDA) or a new drug application (NDA) from the FDA for enumerated indications. The Company’s renegotiated agreement reduced the minimum commitment for 2024 to $ 1,000 and thereafter for the term of the agreement in annual amounts ranging from $ 2,000 to $ 5,000 subject, in certain instances, to the extent that the Company receives approval of an sNDA or NDA from the FDA for enumerated indications. In accordance with the Product Supply Agreement Amendment, the minimum commitments were reduced to $ 1,000 , $ 2,000 and $ 2,000 in the years 2024, 2025, and 2026. In addition, the Company agreed to make a reconciliation payment of $ 1,200 , paid in the third quarter of 2024 for full settlement for amounts due prior to the July 11, 2024 amendment.
Note 19. Segment Information
The Company views its operations and manages its business as one operating and reportable segment, utilizing artificial intelligence (“AI”) to develop transformative medicines in neuroscience and immuno-oncology. We are focused on utilizing cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives. We employ various AI platforms to reduce therapeutic development costs and potentially accelerate development timelines.
Consistent with the operational structure, the Chief Executive Officer, as the chief operating decision maker (“CODM”), reviews weekly cash usage and allocates resources based on consolidated net loss that also is reported on the consolidated statements of operations. The measure of segment assets is reported on the balance sheet as total consolidated assets. The CODM utilizes consolidated net loss by comparing actual results against budgeted amounts on a quarterly basis. As part of this process, consolidated net loss is a critical performance measure used to evaluate the
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Company’s operating performance and guide strategic decisions and resource allocations, including additional investments in research and development and commercialization activities.
The following table provides information about the Company’s one reportable segment and includes the reconciliation to consolidated net loss.
Year ended December 31,
2024
2023
Product revenue, net
$
2,266
$
1,380
Less:
Cost of goods sold
$
2,143
$
1,260
Research and development costs:
Personnel and related costs
$
9,796
$
16,351
Non-cash stock-based compensation
2,251
6,324
Professional fees
5,067
14,590
Clinical trials expense
9,384
35,094
Chemical, manufacturing and controls cost
1,927
8,687
Other expenses
2,010
3,280
Total research and development costs
$
30,435
$
84,326
Commercial costs:
Personnel and related costs
2,516
19,331
Non-cash stock-based compensation
( 401 )
1,081
Professional fees
554
965
Commercial and marketing
1,389
12,485
Travel related expenses
309
2,004
Other expenses
906
2,038
Total commercial costs
$
5,273
$
37,904
Selling, general and administrative costs:
Personnel and related costs
$
5,340
$
7,840
Non-cash stock-based compensation
4,306
11,209
Professional fees
15,583
21,345
Commercial and marketing
—
—
Travel related expenses
446
982
Other expenses
3,544
4,133
Total selling, general and administrative costs
$
29,219
$
45,509
Restructuring costs
2,441
4,163
Total operating expenses
$
69,511
$
173,162
Other (income) expense
Interest expense
15,129
13,314
Interest income
( 2,602 )
( 5,649 )
Other (income) expense, net
( 20,173 )
( 394 )
Segment net loss
$
( 59,599 )
$
( 179,053 )
Adjustments and reconciling items
—
—
Consolidated Net Loss
$
( 59,599 )
$
( 179,053 )
Note 20. Subsequent Events
As discussed in Note 11, Common Stock Financing Activities , in connection with the November 2024 issuance and sale in a public offering of (i) 350 shares of the Company’s common stock, and the November 2024 Accompanying Warrants to purchase 350 shares of Common Stock, and (ii) pre-funded warrants to purchase 563 shares of Common Stock, in February 2025, certain investors exercised the remaining 483 pre-funded warrants to purchase 483 shares of Common Stock.
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On March 3, 2025, the Company entered into the Purchase Agreement with the Purchaser named therein. Pursuant to the Purchase Agreement, the Company agreed to issue and sell to the Purchaser and the Purchaser agreed to buy in a registered direct offering (i) an aggregate of 188 shares (the “Shares”) of common stock, par value $ 0.001 per share and accompanying warrants to purchase up to 188 shares of Common Stock at a combined offering price of $ 3.50 per Share and accompanying warrant, and (ii) the Pre-Funded Warrants to purchase up to 3,812 shares of Common Stock and accompanying warrants to purchase up to 3,812 shares of Common Stock, at a combined offering price of $ 3.499 per share underlying the Pre-Funded Warrants and accompanying warrant, which equals the offering price per Share and accompanying warrant less the $ 0.001 exercise price per share of the Pre-Funded Warrants, pursuant to an effective registration statement on Form S-3 (File No. 333-275261), including the base prospectus included therein, and prospectus supplement filed with the SEC on March 4, 2025. As of March 28, 2025, 1,688 Pre-Funded Warrants were exercised. In the 2025 Offering, the Company also issued to the Purchaser warrants (the “Option Warrants”), to purchase up to 4,000 shares of Common Stock (or pre-funded warrants in lieu thereof) and accompanying warrants to purchase up to 4,000 shares of Common Stock to the Purchaser. The pre-funded warrants and accompanying warrants issuable upon exercise of the Option Warrants will have substantially identical terms as the Pre-Funded Warrants and the accompanying warrants. The exercise price of the Option Warrants is $ 3.50 per underlying share of Common Stock and accompanying warrant to purchase one share of Common Stock, or $ 3.499 per underlying pre-funded warrant to purchase one share of Common Stock and accompanying warrant to purchase one share of Common Stock. The Option Warrants expired on March 18, 2025 without being exercised.
On March 26, 2025, we and Jefferies terminated that certain Open Market Sales Agreement, dated May 10, 2021, as amended on November 1, 2023.
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