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What changed 10-K

Item 9A. Controls and Procedures

2025-03-13 compared with 2024-03-28 · 160 added, 116 removed, 690 unchanged (29% of the section changed)

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Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.

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, 2023.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, 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.

Our management, with the participation of our Chief Executive Officer and Interim 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.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our Chief Executive Officer and Interim Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management's Report on Internal Control Over Financial Reporting

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Other Information.

During the three month period ended December 31, 2023 , none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted , terminated or modified a Rule 10b5-1 trading arrangement or any “non-Rule 10b5-1 trading agreement” (as defined in Item 408(c) of Regulation S-K).

(b) The following table describes contracts, instructions or written plans for the sale or purchase of our securities adopted by our directors and certain officers during the fourth quarter of 2024, each of which is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c), referred to as Rule 10b5-1 trading plans.

Nature of Trading Arrangement

Duration of Trading Arrangement

Aggregate Number of Securities

Paul Peter Tak , M.D., Ph.D., FMedSci ( Chief Executive Officer, President and Director )

Adoption ( November 19, 2024 )

Trading plan intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c)

Earlier of (i) 466 days and (ii) the completed sale of the maximum aggregate number of securities under the plan

Up to 868,783 shares

Charles Schoch ( Interim Chief Financial Officer, Treasurer and Secretary )

Adoption ( November 15, 2024 )

Trading plan intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c)

Earlier of (i) 379 days and (ii) the completed sale of the maximum aggregate number of securities under the plan

Up to 20,000 shares

Francesca Barone , M.D., Ph.D.

( Chief Scientific Officer )

Adoption ( November 22, 2024 )

Trading plan intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c)

Earlier of (i) 372 days and (ii) the completed sale of the maximum aggregate number of securities under the plan

Up to 38,646 shares

Garrett Nichols , M.D., M.S.

( Chief Medical Officer )

Adoption ( November 22, 2024 )

Trading plan intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c)

Earlier of (i) 372 days and (ii) the completed sale of the maximum aggregate number of securities under the plan

Up to 49,848 shares

Seshu Tyagarajan , Ph.D.

RAC ( Chief Technical Development Director )

Adoption ( November 15, 2024 )

Trading plan intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c)

Earlier of (i) 470 days and (ii) the completed sale of the maximum aggregate number of securities under the plan

Up to 61,278 shares

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .

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(incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 30, 2021)

Amendment to the Amended and Restated Bylaws of Candel Therapeutics, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the SEC on May 30, 2024)

Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1/A (File No.

333- 257444) filed with the SEC on July 16, 2021)

Description of Securities (incorporated by reference to Exhibit 4.2 to the Registrant's Annual Report on Form 10-K filed with the SEC on March 29, 2022)

Description of Securities

Investors’ Rights Agreement (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1/A (File No.

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333- 257444) filed with the SEC on June 25, 2021)

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 13, 2024)

2015 Stock Plan, as amended, and forms of award agreements thereunder (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-1/A (File No.

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Exclusive Patent License Agreement by and between Advantagene, Inc.

and Mass General Brigham (formerly known as The Brigham and Women’s Hospital, Inc.) dated September 15, 2020 (incorporated

by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1/A (File No.

and Mass General Brigham (formerly known as The Brigham and Women’s Hospital, Inc.) dated September 15, 2020 (incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1/A (File No.

333- 257444) filed with the SEC on July 16, 2021)

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Consulting by and between Candel Therapeutics, Inc.

Amello, dated as of January 12, 2024

Amello, dated as of January 12, 2024 (incorporated by reference to Exhibit 10.19 to the Registrant's Annual Report on Form 10-K filed with the SEC on March 28, 2024)

Candel Therapeutics, Inc.

Insider Trading Policy

List of Subsidiary (incorporated by reference to Exhibit 21.1 to the Registrant's Annual Report on Form 10-K filed with the SEC on March 29, 2022)

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Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Compensation Recovery Policy

Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 28, 2024)

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

Cover Page Interactive Data File (embedded within the Inline XBRL document)

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

and subsidiary (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

and subsidiary (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended, in conformity with U.S.

generally accepted accounting principles.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company has an accumulated deficit, has incurred operating losses and negative cash flows from operations since inception and expects to continue to incur such losses and negative cash flows into the foreseeable future which raises substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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Current portion of lease liability

Other current liabilities

Warrant liability

Total current liabilities

Deferred revenue

Term loan payable to a bank

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YEAR ENDED DECEMBER 31,

Research and development service revenue, related party

Operating expenses:

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Balance as of December 31, 2022

Options exercised

Treasury stock acquired

Stock-based compensation

Restricted stock unit vesting, net

of shares withheld for taxes

Change in fair value of

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Balance as of December 31, 2023

Issuance of common stock and

accompanying pre-funded warrants

in public offering, net of issuance

costs of $ 6.1 million

Sale of common stock through

at-the-market offerings, net of

issuance costs of $ 0.5 million

Options exercised

Stock-based compensation

Restricted stock unit vesting, net

of shares withheld for taxes

Restricted stock unit vesting

Change in fair value of

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Accrued expenses

Deferred revenue

Deferred income

Lease liability

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Cash Flows from Financing Activities:

Net proceeds from bank term loan

Payments related to tax withholding for vested restricted stock units

Proceeds from issuance of common stock and accompanying pre-funded warrants in public offering, net of issuance costs

Proceeds from sale of common stock through at-the-market offerings, net of issuance costs

Proceeds from option exercises

Net cash (used in) provided by financing activities

Net decrease in cash

Principal payments on term loan

Payments related to tax withholding for vested restricted stock units

Net cash provided by (used in) financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Supplemental cash flow information:

Cash paid for taxes

Cash paid for interest

Supplemental disclosures of non-cash information:

Lease liability arising from obtaining right-of-use assets

Capital expenditures in accounts payable and accrued expenses

Common stock exchange for option exercise

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

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The Company expects to continue to generate operating losses and negative cash flows from operations for the foreseeable future.

On August 5, 2022, the Company filed a shelf registration statement on Form S-3 (as amended to date, the Shelf) with the SEC, which covers the offering, issuance, and sale by us of up to an aggregate of $ 200.0 million of our common stock, preferred stock, debt securities, warrants and/or units of any combination thereof.

On August 5, 2022, the Company filed a shelf registration statement on Form S-3 (as amended to date, the Shelf) with the U.S.

Securities and Exchange Commission (SEC), which covers the offering, issuance, and sale by us of up to an aggregate of $ 200.0 million of our common stock, preferred stock, debt securities, warrants and/or units of any combination thereof.

We simultaneously entered into a sales agreement with Jefferies LLC, as sales agent, to provide for the issuance and sale by us of up to $ 75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf (the ATM Program).

The Shelf was declared effective by the SEC on August 12, 2022.

Subsequent to December 31, 2023 and through March 21, 2024, we have sold and issued 109,485 shares of common stock under the ATM Program, with total net proceeds of $ 0.2 million .

The Company’s cash and cash equivalents were $ 35.4 million as of December 31, 2023.

In accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification, 205-40, Presentation of Financial Statements - Going Concern, management is required to assess the Company’s ability to continue as a going concern for the one-year look forward period following the date that the consolidated financial statements are issued.

The Company's expects to continue to generate operating losses and negative cash flows from operations.

Based on these conditions, the Company has determined that substantial doubt exists regarding its ability to continue as a going concern for the one-year period following the date these consolidated financial statements are issued.

To sustain its future operations beyond such one-year period, the Company will require additional funding.

The Company expects to finance its cash needs through a combination of public or private equity or debt financings, government grants, and other sources, which may include collaborations, strategic alliances and licensing arrangements with third parties.

There is no assurance that the Company will be successful in obtaining sufficient funding on acceptable terms, if at all, and the Company could be forced to delay, reduce, or eliminate some or all of its research, clinical trials, product development or future commercialization efforts, which could materially adversely affect its business prospects or its ability to continue as a going concern.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As of December 31, 2024 , the Company has sold and issued 2,936,057 shares of common stock under the ATM Program, with total net proceeds of $ 15.8 million .

Subsequent to December 31, 2024 and through March 6, 2025, the Company has sold and issued 40,334 additional shares of common stock under the ATM Program, with total net proceeds of $ 0.4 million .

The future viability of the Company is dependent on its ability to raise additional capital to finance its operations.

The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies.

There can be no assurances that additional funding will be available on terms acceptable to the Company, or at all.

The Company believes that existing resources will fund planned operations for at least 12 months from the issuance date of these consolidated financial statements.

Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and that contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

December 2024 Public Offering

On December 16, 2024, the Company completed a public offering of its common stock and, in lieu of common stock to certain investors, pre-funded warrants to purchase shares of its common stock.

The Company issued and sold 12,000,001 shares of common stock, including full exercise of the underwriters’ option to purchase an additional 2,000,000 shares, at a public offering price of $ 6.00 per share.

Additionally, in lieu of common stock to certain investors, the Company issued and sold pre-funded warrants to purchase 3,333,333 shares of its common stock at a public offering price of $ 5.99 per pre-funded warrant, which represents the per share public offering price of each share of common stock less the $ 0.01 per share exercise price for each pre-funded warrant.

The aggregate gross proceeds

before deducting underwriting discounts and commissions, and other estimated offering expenses payable by the Company were approximately $ 92.0 million.

Summary of Significant Accounting Policies

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References to GAAP issued by the FASB in these notes to the financial statements are to the FASB Accounting Standards Codification (ASC).

The Company has reclassified certain amounts relating to its prior period results to conform to its current period presentation.

Principles of Consolidation

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All intercompany transactions and balances have been eliminated.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance.

The Company and the Company's chief operating decision maker, the Company's chief executive officer, views the Company's operations and manages its business as a single operating segment.

The Company only operates in the United States.

Emerging Growth Company

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Shorter of the useful life or remaining lease term

The Company adopted ASC 842 as of January 1, 2022 and elected the transition method under ASU 2016-02 whereby the Company records a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.

The Company also elected to apply the practical expedients intended to ease transition.

Accordingly, the Company has only applied ASC 842 to leases existing as of January 1, 2022.

The Company determines if an arrangement is, or contains, a lease at inception.

Lease right of use assets represent the Company’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.

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Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.

If an impairment review is performed to evaluate a long-lived asset group for recoverability, the

Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value.

If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value.

An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount.

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Long-lived assets consist of fixed assets and operating lease assets.

In the third and fourth quarters of 2023, the Company recorded impairment charges totaling approximately $ 0.4 million related to manufacturing equipment that the Company has determined it does not plan to use for its intended use, and the Company recorded an impairment to reduce the carrying value to its estimated fair value.

During the years ended December 31, 2024 and 2023 , the Company recorded impairment charges totaling approximately $ 41,000 and $ 0.4 million, respectively, related to manufacturing equipment that the Company has determined it does not plan to use for its intended use, and the Company recorded an impairment to reduce the carrying value to its estimated fair value.

The Company has not recorded any other impairment losses on such long-lived assets.

Revenue Recognition

The Company applies Accounting Standards Codification (ASC), Topic 606, Revenue from Contracts with Customers, (ASC 606).

The Company applies ASC Topic 606, Revenue from Contracts with Customers, (ASC 606).

This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments.

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Government grants are recorded as grant income and classified in other income in the consolidated statements of operations.

The Company recognized government grants of zero and $ 48,000 for the years ended December 31, 2023 and 2022 , respectively.

Grant income is recognized as a component of other income/(expense), net in the consolidated statements of operations.

The Company did no t recognize any government grants for the years ended December 31, 2024 and 2023 .

The Company accounts for income taxes using the asset and liability method in accordance with ASC Topic 740, Income Taxes (ASC 740) which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns.

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The provision for income taxes includes the effects of any resulting tax reserves or unrecognized tax benefits that are considered appropriate as well as the related net interest received.

As of December 31, 2024 , the Company did not record any unrecognized benefits from uncertain tax positions in its consolidated financial statements.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period and, if dilutive, the weighted-average number of potential shares of common stock.

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, including the pre-funded warrants given their nominal exercise price.

Diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period, including the pre-funded warrants given their nominal exercise price and, if dilutive, the weighted-average number of potential shares of common stock.

In periods where the Company reports a net loss attributable to common stockholders, diluted net loss per share is the same as basic net loss per share, since dilutive shares of common stock are not assumed to have been issued if their effect is anti-dilutive.

Diluted net loss per share is the same

as basic net loss per share for the years ended December 31, 2023 and 2022 since all potential shares of common stock instruments are anti-dilutive as a result of the loss for such periods.

Diluted net loss per share is the same as basic net loss per share for the years ended December 31, 2024 and 2023 since all potential shares of common stock instruments are anti-dilutive as a result of the loss for such periods.

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting:

Improvements to Reportable Segment Disclosures, which amends guidance in ASC 280, Segment Reporting The amendments in this ASU expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment, among other disclosure requirements.

The ASU’s amendments are effective for public business entities for annual

periods beginning after December 15, 2023.

The Company adopted ASU 2023-07 for the year ended December 31, 2024 (see Note 17).

Recently Issued Accounting Standards

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The Company is currently evaluating the potential impact that ASU 2023-06 may have on its consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting:

Improvements to Reportable Segment Disclosures, which amends guidance in ASC 280, Segment Reporting The amendments in this ASU expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment, among other disclosure requirements.

The ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2023.

Early adoption is permitted.

The Company is currently evaluating the potential impact that the adoption of ASU 2023-07 may have have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which amends the guidance in ASC 740, Income Taxes.

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The Company is currently evaluating the potential impact that ASU 2023-09 may have on its consolidated financial statements and related disclosures.

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

Disaggregation of Income Statement Expenses, which requires additional disclosure in the notes to the financial statements of the nature of certain expenses included in the income statement.

The ASU's amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

Adoption can be either prospectively or retrospectively applie d.

The Company is currently evaluating the potential impact that ASU 2024-03 may have on its consolidated financial statements and related disclosures.

Fair Value of Financial Assets and Liabilities

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Fixed assets, net

Depreciation expense was $ 1.0 million and $ 0.8 million for the years ended December 31, 2023 and 2022 , respectively.

Depreciation expense was $ 1.0 million for each of the years ended December 31, 2024 and 2023 .

Accrued Expenses

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Payroll and employee related expenses

Professional fees

Third-party research and development expenses

Professional fees and other

On February 24, 2022 , the Company entered into a four-year loan and security agreement (the Loan Agreement) with Silicon Valley Bank (SVB) pursuant to which SVB has agreed to provide term loans to the Company in an aggregate principal amount of up to $ 25.0 million.

The Company borrowed $ 20.0 million upon entering into the Loan Agreement.

The Company could have borrowed up to an additional aggregate principal amount not to exceed $ 5.0 million, at any time on or prior to December 31, 2022, upon achievement of all of the following milestones, inclusively:

(a) positive phase 2 clinical activity data from the Company’s CAN-2409 NSCLC clinical trial, (b) dosing of its first patient in its phase 3 CAN-2409 high-grade glioma clinical trial, and (c) receipt on or prior to December 31, 2022, of net cash proceeds in an amount equal to at least $ 75.0 million from the issuance and sale of equity securities to investors acceptable to SVB.

The Company did not borrow any of the additional aggregate principal amount on or prior to December 31, 2022.

The term loan is secured by substantially all of the Company’s properties, rights and assets, except for its intellectual property, which is subject to a negative pledge under the Loan Agreement.

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The term loans mature on January 1, 2026 .

Upon repayment in full of the term loans, the Company will be required to pay a final payment fee equal to 4.50 % of the original principal amount of any funded term

loan being repaid.

Upon repayment in full of the term loans, the Company will be required to pay a final payment fee equal to 4.50 % of the original principal amount of any funded term loan being repaid.

The Loan Agreement permits voluntary prepayment of all, but not less than all, of the SVB term loans, subject to a prepayment premium of 1 % to 3 % based upon the timing of the repayment.

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The lease term ends on August 31, 2026 .

For each of the years ended December 31, 2023 and 2022, the Company recorded $ 0.4 million of operating lease cost and $ 0.1 million of variable lease cost.

For each of the years ended December 31, 2024 and 2023, the Company recorded $ 0.4 million of operating lease cost and $ 0.1 millio n of variable lease cost.

The total lease expense for each of the years ended December 31, 2024 and 2023 was $ 0.5 million .

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Total lease liability

Common Stock and Preferred Stock

Preferred Stock

The Company has authorized 10,000,000 shares of $ 0.01 par value preferred stock at December 31, 2023 and 2022.

The Company has authorized 150,000,000 shares of $ 0.01 par value common stock at December 31, 2023 and 2022 of which 29,213,627 and 29,042,418 were issued as of December 31, 2023 and 2022, respectively.

The Company had 29,091,019 and 28,919,810 outstanding shares as of December 31, 2023 and 2022, respectively.

Common shares are voting and dividends may be paid when, as and if declared by the board of directors.

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Shares available for future grant under stock option plan

Pre-funded warrants

Shelf Registration and At-the-Market Offerings

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The Shelf was declared effective by the SEC on August 12, 2022.

Due to the SEC’s “baby shelf rules,” which prohibit companies with a public float of less than $ 75.0 million from issuing securities under a shelf registration statement in excess of one third of such company’s public float in a 12-month period, the Company is currently only able to issue a limited number of shares which aggregate to no more than one-third of its public float using the Shelf.

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

Subsequent to December 31, 2023 and through March 21, 2024, we have sold and issued 109,485 shares of common stock under the ATM Program, with total net proceeds of $ 0.2 million .

The Company has the following warrants outstanding for the purchase of common stock as of December 31, 2023 and 2022:

As of December 31, 2024 , the Company has sold and issued 2,936,057 shares of common stock under the ATM program, with total net proceeds of $ 15.8 million .

Subsequent to December 31, 2024 and through March 6, 2025, the Company has sold and issued 40,334 additional shares of common stock under the ATM Program, with total net proceeds of $ 0.4 million .

The Company has the following warrants outstanding for the purchase of common stock as of December 31, 2024 and 2023 (except the Pre-Funded Warrants which were only outstanding as of December 31, 2024):

STOCK SUBJECT

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NC Ohio Trust

Pre-Funded Warrants

No expiration

Series B Warrants

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• an additional 918,121 shares vest upon (1) a financing event with a per share price of $ 14.68 , or (2) an average market price (determined over a consecutive 10 -day period) of, $ 14.68 per share.

On June 24, 2021, the Company’s board of directors approved and on July 14, 2021 the stockholders approved, effective upon the closing of the IPO, an amendment to the terms of the Series B Warrants and the Conditional Series B Warrants to extend the expiration date from November 2023 to November 2025 .

On June 24, 2021, the Company’s board of directors approved and on July 14, 2021 the stockholders approved, effective upon the closing of the Company's initial public offering (IPO), an amendment to the terms of the Series B Warrants and the Conditional Series B Warrants to extend the expiration date from November 2023 to November 2025 .

In addition, the exercise period for the Conditional Series B Warrants was amended such that in the event the future financing milestones or certain share price targets described above are achieved, the Conditional Series B Warrants can only be exercised in conjunction with the sale of the Company, on a cash or cashless exercise basis, or otherwise in November 2025 through a cashless exercise.

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The Company remeasures the fair value of the award at each reporting date, as the service date preceded the grant date.

The value of the warrants for 162,740 shares of common stock was $ 0.2 million as of both December 31, 2023 and 2022 , and was recorded as stock compensation expense within research and development expense and a credit to stockholders’ equity in the consolidated financial statements.

The value of the warrants for 162,740 shares of common stock was $ 1.3 million and $ 0.2 million as of December 31, 2024 and 2023, respectively, and was recorded as stock compensation expense within research and development expense and a credit to stockholders’ equity in the consolidated financial statements.

Pre-Funded Warrants

In connection with the public offering on December 16, 2024 (see Note 1), the Company has issued pre-funded warrants to purchase common stock in lieu of common stock.

As the pre-funded warrants are indexed to the Company’s common stock (and otherwise meet the requirements to be classified in equity), the Company recorded the consideration received from the issuance of the pre-funded warrants as additional paid-in capital on the Company’s consolidated balance sheet.

The pre-funded warrants are exercisable at any time.

The holders of Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99 % of the number of shares of the Common Stock outstanding immediately after giving effect to such exercise.

The holders of Pre-Funded Warrants may increase or decrease such percentages not in excess of 19.99 % by providing at least 61 days’ prior notice to the Company.

During the year ended December 31, 2024 , no pre-funded warrants were exercised.

As of December 31, 2024 , there were 3,333,333 pre-funded warrants outstanding.

Stock Options, Restricted Stock and Stock-Based Compensation

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The Company’s 2015 Stock Plan, as amended, (the 2015 Plan) provides for the Company to sell or issue common shares or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the board of directors and consultants of the Company.

The 2015 Plan is administered by the board of directors and exercise prices, vesting and other restrictions are determined at its

The 2015 Plan is

administered by the board of directors and exercise prices, vesting and other restrictions are determined at its discretion.

All stock option grants are non-statutory stock options except option grants to employees intended to qualify as incentive stock options under the Internal Revenue Code of 1986, as amended.

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The shares tendered are recorded as treasury stock within the Company's consolidated financial statements at December 31, 2024.

The fair value of stock options granted was estimated on the grant date using the Black-Scholes option pricing model based on the following assumptions:

The fair value of stock options granted was estimated on the grant date using the Black-Scholes option pricing model based on the following range of assumptions:

YEAR ENDED DECEMBER 31,

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Expected dividend yield

The total intrinsic value of stock options vested during each of the years ended December 31, 2023 and 2022 was zero .

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the common stock as of the end of the period.

The total intrinsic value of stock options exercised during the years ended December 31, 2024 and 2023 was $ 5.7 million and zero , respectively .

Restricted Stock Units

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Unvested at December 31, 2024

The aggregate fair value of restricted stock units that vested during each of the years ended December 31, 2023 and 2022 was $ 0.5 million and zero , respectively .

The aggregate fair value of restricted stock units that vested during the years ended December 31, 2024 and 2023 was $ 16.8 million and $ 0.5 million , respectively.

Stock-Based Compensation

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Mark to market

Equity compensation

State taxes, net of federal benefit

Valuation allowance

On October 4, 2023, the Governor of Massachusetts signed into law a bill that included the adoption of a single sales apportionment factor effective on January 1, 2025.

As required under ASC 740, the Company has accounted for the deferred tax impacts of this tax law change in the period the tax law was enacted, which has the impact of reducing its state deferred tax assets.

The impact of the tax law change is offset by a change in valuation allowance.

Net deferred tax assets as of December 31, 2024 and 2023 consist of the following (in thousands):

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Accrued expenses and other

Deferred revenue

Lease liability

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Net deferred tax assets (liabilities)

As of December 31, 2023 , the Company has gross federal and state net operating loss carryforwards of approximately $ 86.2 million and $ 79.6 million which begin to expire in 2027 and 2032 , respectively.

Additionally, the Company has $ 77.4 million of the federal net operating loss carryforwards that can be carried forward indefinitely.

As of December 31, 2024 , the Company has gross federal and state net operating loss carryforwards of approximately $ 111.6 million and $ 101.9 million, respectively.

The federal net operating loss carryforwards include $ 8.8 million that begins to expire in 2028 and $ 102.8 million that can be carried forward indefinitely.

The state net operating loss carryforwards begin to expire in 2033 .

As of December 31, 2024 , the Company has gross federal and state tax credit carryforwards of approximately $ 5.0 million and $ 2.4 million, respectively, which begin to expire in 2037 and 2031 , respectively.

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Stockholders of the Company own 49.5 % of the voting stock of Ventagen, including 47 % by the Company’s founders who are currently significant stockholders of the Company, and trusts for the benefit of their children.

The Company had completely recognized the $ 1.0 million upfront license fee as research and development service revenue as of December 31, 2022.

The Company recognized the $ 1.0 million upfront license fee as research and development service revenue as of December 31, 2022.

Technology License Agreement

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From time to time, we may become involved in litigation or other legal proceedings.

On December 15, 2022, Periphagen notified us by letter of its claim that we have failed to use commercially reasonable efforts to complete a human proof of concept clinical trial of an NT-3 Asset under an Exclusive License Agreement dated December 9, 2019 between us and Periphagen (the Periphagen License Agreement).

On January 13, 2023, we filed a demand for arbitration against Periphagen with the American Arbitration Association, seeking a declaration that Periphagen’s December 15 letter failed to comply with the dispute and escalation provisions in the Periphagen License Agreement.

On March 10, 2023, Periphagen filed its answer and counterclaims to our demand for arbitration.

In its counterclaims, Periphagen sought a declaration that we have not used commercially reasonable efforts to complete a human proof of concept clinical trial of the NT-3 Asset and a declaration that any further extension of time would not be scientifically or commercially reasonable.

We denied Periphagen’s counterclaims.

On June 7, 2023, the parties entered into an amendment to the Exclusive License Agreement that resolved the dispute and resulted in termination of the arbitration without any financial impact.

Aside from the proceeding with Periphagen, we are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are probable to have a material adverse effect on our business.

W e are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are probable to have a material adverse effect on our business.

Regardless of outcome, litigation can have an adverse impact on our business, financial condition, results of operations and prospects because of defense and settlement costs, diversion of management resources and other factors.

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Net Loss Per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share data):

Basic and diluted net loss per share attributable to common stockholders was computed by dividing net loss by the weighted-average common shares outstanding for the period, including the pre-funded warrants given their nominal exercise price (in thousands, except share and per share data):

YEAR ENDED DECEMBER 31,

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Unvested restricted stock

Segment Reporting

The Company operates in one business segment, which includes all activities related to the discovery, development, and potential commercialization of off-the-shelf viral immunotherapies that help patients fight cancer.

The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (CODM).

The Company’s CODM is its Chief Executive Officer , who reviews and evaluates consolidated net loss for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

In addition to the significant expense categories included within consolidated net loss presented on the Company's consolidated statements of operations, see below for disaggregated amounts that comprise research and development and general and administrative expenses:

YEAR ENDED DECEMBER 31,

Operating expenses:

Research and development:

Employee-related

Clinical development

Facility and equipment costs

Pre-clinical research

Other research and development segment expenses

Total research and development

General and administrative:

Employee-related

Professional and consulting fees

Other general and administrative segment expenses (1)

Total general and administrative

Total operating expenses

Loss from operations

Interest income

Interest expense

Change in fair value of warrant liability

(1) Other general and administrative segment expenses primarily consists of insurance, occupancy, and information technology costs.

Corporate Restructuring

In November 2023, the Company's Board of Directors authorized a restructuring plan to focus on continuation and expansion of development of CAN-3110 as well as the enLIGHTEN TM Discovery Platform, which resulted in a reduction of the Company’s workforce by approximately 45 % .

Each affected employee's separation from the Company occurred in December 2023.

In November 2023, the Company’s board of directors authorized a restructuring plan to focus on key clinical data readouts for CAN-2409 and continuation and expansion of development of CAN-3110 as well as the enLIGHTEN TM Discovery Platform, which resulted in a reduction of the Company’s workforce by approximately 45 % .

Each affected employee’ s separation occurred in December 2023.

As a result, the Company incurred costs of $ 0.7 million related to severance benefits for the affected employees, including severance payments and limited reimbursement of medical insurance premiums.

The restructuring plan is expected to be completed in the first quarter of 2024 once the remaining unpaid severance payments of $ 46,000 are made.

Of the $ 0.7 million in costs recognized related to the restructuring plan, $ 0.5 million and $ 0.2 million have been charged to research and development and general and administrative expenses, respectively, in the accompanying consolidated statement of operations for the year ended December 31, 2023.

The restructuring plan was completed in the first quarter of 2024 when the final severance payments of $ 46,000 were made.

Of the $ 0.7 million in costs recognized related to the restructuring plan, $ 0.5 million and $ 0.2 million were included in research and development and general and administrative expenses, respectively, in the accompanying consolidated statement of operations for the year ended December 31, 2023.

During the year ended December 31, 2023, the Company paid $ 0.7 million in severance benefits to separating employees related to the restructuring plan.

At December 31, 2023, unpaid severance costs of $ 46,000 are included in accrued expenses in the accompanying consolidated balance sheet and are expected to be paid during the first quarter of 2024.

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 .

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Gary Nabel, Ph.D., M.D.

/s/ Estuardo Aguilar-Cordova

March 28, 2024

Estuardo Aguilar-Cordova, M.D.

/s/ Joseph Papa

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.