Celcuity Inc. 10-Q

ITEM 1. Financial Statements Celcuity Inc. Condensed Balance Sheets (in thousands, except share and per share amounts) March 31, 2025 December 31, 2024 (unaudited) Assets Current Assets: Cash and cash equivalents $ 16,478 $ 22,515 Investments 189,213 212,589 Other current assets 11,906 9,467 Total current assets 217,597 244,571 Property and equipment, net 358 336 Operating lease right-of-use assets 172 216 Total Assets $ 218,127 $ 245,123 Liabilities and Stockholders’ Equity: Current Liabilities: Accounts payable $ 9,932 $ 9,366 Operating lease liabilities 169 172 Accrued expenses 22,818 22,185 Total current liabilities 32,919 31,723 Operating lease liabilities 13 54 Note payable, non-current 98,527 97,727 Total Liabilities 131,459 129,504 Commitments and Contingencies (Note 5) - - Stockholders’ Equity: Preferred stock, $ 0.001 par value: 2,500,000 shares authorized; 317,577 shares issued and outstanding as of each of March 31, 2025 and December 31, 2024 - - Common stock, $ 0.001 par value: 95,000,000 shares authorized; 37,839,392 and 37,143,242 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively 38 37 Additional paid-in capital 395,482 387,437 Accumulated deficit ( 308,852 ) ( 271,855 ) Total Stockholders’ Equity 86,668 115,619 Total Liabilities and Stockholders’ Equity $ 218,127 $ 245,123 See accompanying notes to the condensed financial statements. 3 Celcuity Inc. Condensed Statements of Operations (in thousands, except share and per share amounts) (unaudited) Three Months Ended March 31, 2025 2024 Operating expenses: Research and development $ 32,227 $ 20,647 General and administrative 3,906 1,846 Total operating expenses 36,133 22,493 Loss from operations ( 36,133 ) ( 22,493 ) Other (expense) income Interest expense ( 3,183 ) ( 1,401 ) Interest income 2,319 2,282 Other (expense) income, net ( 864 ) 881 Net loss before income taxes ( 36,997 ) ( 21,612 ) Income tax benefits - - Net loss $ ( 36,997 ) $ ( 21,612 ) Net loss per share, basic and diluted $ ( 0.86 ) $ ( 0.64 ) Weighted average common shares outstanding, basic and diluted 43,052,757 33,612,054 See accompanying notes to the condensed financial statements. 4 Celcuity Inc. Condensed Statements of Changes in Stockholders’ Equity Three Months Ended March 31, 2025 (in thousands, except share amounts) Shares Amount Shares Amount Capital Deficit Total Common Stock Preferred Stock Additional Paid-In Accumulated Shares Amount Shares Amount Capital Deficit Total Balance at December 31, 2024 37,143,242 $ 37 317,577 $ - $ 387,437 $ ( 271,855 ) $ 115,619 Stock-based compensation - - - - 2,444 - 2,444 Exercise of common stock warrants 695,650 1 - - 5,599 - 5,600 Exercise of common stock options, net of shares withheld for exercise price 500 - - - 2 - 2 Net loss - - - - - ( 36,997 ) ( 36,997 ) Balance at March 31, 2025 (unaudited) 37,839,392 $ 38 317,577 $ - $ 395,482 $ ( 308,852 ) $ 86,668 See accompanying notes to the condensed financial statements. 5 Celcuity Inc. Condensed Statements of Changes in Stockholders’ Equity Three Months Ended March 31, 2024 (in thousands, except share amounts) Common Stock Preferred Stock Additional Paid-In Accumulated Shares Amount Shares Amount Capital Deficit Total Balance at December 31, 2023 25,506,012 $ 26 854,134 $ 1 $ 299,819 $ ( 160,076 ) $ 139,770 Balance 25,506,012 $ 26 854,134 $ 1 $ 299,819 $ ( 160,076 ) $ 139,770 Stock-based compensation - - - - 1,331 - 1,331 Exercise of common stock warrants, net of shares withheld for exercise price 1,742,763 2 - - 14,007 - 14,009 Exercise of common stock options, net of shares withheld for exercise price 36,550 - - - 239 - 239 Conversion of preferred to common stock 3,488,570 3 ( 348,857 ) - ( 3 ) - - Net loss - - - - - ( 21,612 ) ( 21,612 ) Balance at March 31, 2024 (unaudited) 30,773,895 $ 31 505,277 $ 1 $ 315,393 $ ( 181,688 ) $ 133,737 Balance 30,773,895 $ 31 505,277 $ 1 $ 315,393 $ ( 181,688 ) $ 133,737 See accompanying notes to the condensed financial statements. 6 Celcuity Inc. Condensed Statements of Cash Flows (in thousands) (unaudited) 2025 2024 Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 36,997 ) $ ( 21,612 ) Adjustments to reconcile net loss to net cash used for operations: Depreciation 37 30 Stock-based compensation 2,444 1,331 Amortization of debt issuance costs and discount 551 65 Payment-in-Kind interest 249 466 Non-cash operating lease, net ( 1 ) 1 Change in accrued interest income ( 946 ) ( 154 ) Changes in operating assets and liabilities: - Other current assets ( 2,436 ) 269 Accounts payable 613 238 Accrued expenses 633 2,298 Net cash used for operating activities ( 35,853 ) ( 17,068 ) Cash flows from investing activities: Proceeds from maturities of investments 66,808 125,061 Purchases of investments ( 42,486 ) ( 121,435 ) Purchases of property and equipment ( 60 ) ( 90 ) Net cash provided by investing activities 24,262 3,536 Cash flows from financing activities: Proceeds from exercise of common stock warrants 5,600 14,009 Proceeds from exercise of employee stock options - 131 Payments for secondary registration statement costs ( 46 ) ( 56 ) Net cash provided by financing activities 5,554 14,084 Net change in cash and cash equivalents ( 6,037 ) 552 Cash and cash equivalents: Beginning of period 22,515 30,663 End of period $ 16,478 $ 31,215 Supplemental disclosure of cash flow information: Interest paid $ 2,383 $ 870 Supplemental disclosures of non-cash investing and financing activities: Deferred financing costs and offering and registration statement costs included in accounts payable $ - $ 13 Property and equipment included in accounts payable - 19 Property and equipment included in accrued expenses - 12 Exercise of stock options pending receipt of cash proceeds 2 108 See accompanying notes to the condensed financial statements 7 CELCUITY INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited) (For the Three Months Ended March 31, 2025 and 2024) 1. Organization Nature of Business Celcuity Inc., a Delaware corporation (the “Company”), is a clinical-stage biotechnology company focused on the development of targeted therapies for the treatment of multiple solid tumor indications. The Company’s lead therapeutic candidate is gedatolisib, a kinase inhibitor of the phosphatidylinositol 3-kinase (“PI3K”), serine/threonine-protein kinase protein kinase B (“AKT”), mechanistic target of rapamycin (“mTOR”) pathway that binds to all class I PI3K isoforms and the mTOR complexes, mTORC1 and mTORC2. By targeting all class I PI3K isoforms and mTORC1/2, gedatolisib induces comprehensive inhibition of the PI3K/AKT/mTOR (“PAM”) pathway. Gedatolisib’s mechanism of action and pharmacokinetic properties are differentiated from other currently approved and investigational therapies that target PI3K or mTOR alone or together. A Phase 3 clinical trial, VIKTORIA-1, evaluating gedatolisib in combination with fulvestrant with or without palbociclib in patients with HR+/HER2- advanced breast cancer is currently enrolling patients. Site selection activities for a Phase 3 clinical trial, VIKTORIA-2, evaluating gedatolisib in combination with a CDK4/6 inhibitor and fulvestrant as first-line treatment for patients with HR+/HER2- advanced breast cancer, are completed and site activities have begun. The first patient is expected to be dosed in the second quarter of 2025. A Phase 1b/2 clinical trial, CELC-G-201, evaluating gedatolisib in combination with darolutamide in patients with metastatic castration resistant prostate cancer, is currently underway. The Company was co-founded in 2012 by Brian F. Sullivan and Dr. Lance G. Laing and is based in Minnesota. The Company has not generated any revenues to date. 2. Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements Basis of Presentation The accompanying unaudited condensed financial statements include the accounts of the Company and have been prepared in accordance with Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, as permitted by Article 10, the unaudited condensed financial statements do not include all of the information required by accounting principles generally accepted in the United States (“U.S. GAAP”). The balance sheet at December 31, 2024 was derived from the audited financial statements at that date and does not include all the disclosures required by U.S. GAAP. In the opinion of management, all adjustments which are of a normal recurring nature and necessary for a fair presentation have been reflected in the financial statements. These unaudited condensed financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2024 and the related footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected during the remainder of the current year or for any other future period. Accounting Estimates Management uses estimates and assumptions in preparing these unaudited condensed financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates and the difference could be material. Significant items subject to such estimates and assumptions include the valuation of stock-based compensation and prepaid or accrued clinical trial costs. Risks and Uncertainties The Company is subject to risks common to companies in the development stage including, but not limited to, the clinical and commercial success of its initial drug product, gedatolisib, the regulatory approval of gedatolisib, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and consumers, and significant competition. 8 Clinical Trial Costs The Company relies on third parties to conduct certain aspects of clinical studies and to formulate and manufacture our drug product. While there are alternative vendors that can perform these functions, any disruption or delay by the Company’s current third parties in carrying out their contractual duties could delay the clinical trials. The Company records prepaid assets or accrued expenses for prepaid or estimated clinical trial costs conducted by third-party service providers, which includes the conduct of preclinical studies and clinical trials. These costs can be a significant component of the Company’s research and development expenses. The Company primarily relies on a compilation of progress reports from third-party service providers, including the respective invoicing, to record actual expenses, along with determining changes to prepaid assets and accrued liabilities. To date, the Company believes utilization of third-party reports most accurately reflects expenses incurred. With the ongoing VIKTORIA-1 Phase 3 clinical trial and the CELC-G-201 Phase 1b/2 clinical trial, and the commencement of the VIKTORIA-2 Phase 3 clinical trial, the Company’s estimated expenses in future periods and actual services performed may vary from these estimates, and these estimates may become more significant. Changes in these estimates that result in material changes to the Company’s prepaid assets or accrued expenses could materially affect the Company’s results of operations and financial position. 3. Net Loss Per Common Share Basic and diluted net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period. For all periods presented, the common shares underlying the preferred stock, options, warrants, and restricted stock have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted-average shares outstanding used to calculate both basic and diluted loss per common share are the same. The following table summarizes the potentially-dilutive shares excluded from the diluted weighted-average shares outstanding: Schedule of Potentially-Dilutive Shares Excluded from Diluted Weighted-Average Shares Outstanding 2025 2024 March 31, 2025 2024 Preferred stock on an as-if-converted to common stock basis 3,175,770 5,052,770 Options to purchase common stock 4,847,454 3,049,387 Warrants to purchase common stock 4,825,502 5,517,725 Restricted common stock 1,079 1,958 Total 12,849,805 13,621,840 Anti-dilutive securities excluded from diluted weighted- average shares outstanding 12,849,805 13,621,840 Pre-funded warrant shares of 5,747,787 are included in the computation of basic and diluted net loss per share for each of the three months ended March 31, 2025 and 2024, as the pre-funded warrants are exercisable for nominal consideration. 4. Investments Debt securities for which the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and reported at historical cost adjusted for amortization of premiums and accretion of discounts. Expected credit losses, if any, are recorded through the establishment of an allowance for credit losses. All of the Company’s held-to-maturity investment securities are U.S. Treasury and agencies securities that are guaranteed or otherwise supported by the United States government and have no history of credit losses. Accordingly, the Company does not expect to incur any credit losses on held-to-maturity investment securities and has no allowance for credit losses recorded for these securities. 9 The following tables summarize the Company’s held-to-maturity investment securities at amortized cost as of March 31, 2025 and December 31, 2024: Schedule of Investment Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value March 31, 2025 (in thousands) Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value U.S. Treasury Bills $ 189,213 $ 25 $ - $ 189,238 Total $ 189,213 $ 25 $ - $ 189,238 Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value December 31, 2024 (in thousands) Amortized Cost, as Adjusted Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value U.S. Treasury Bills $ 212,589 $ 82 $ - $ 212,671 Total $ 212,589 $ 82 $ - $ 212,671 The fair value of the Company’s held-to-maturity debt securities is determined based upon inputs, other than the quoted prices in active markets, that are observable either directly or indirectly and are classified as Level 2 fair value instruments. 5. Commitments Operating and Finance Leases The Company leases its corporate space in Minneapolis, Minnesota, with an operating lease in place through April 30, 2026. The lease provides for monthly rent, real estate taxes, and operating expenses. Rent expense is recorded on a straight-line basis over the lease term. Clinical Research Studies The Company enters into contracts in the normal course of business to conduct research and development programs internally and through third parties that include, among others, arrangements with vendors, consultants, contract manufacturing organizations, and contract research organizations. The Company has a license agreement in place with Pfizer Inc. (“Pfizer”) to research, develop, manufacture and commercialize gedatolisib. In conjunction with the license agreement, the Company completed a Phase 1b clinical trial – B2151009 related to gedatolisib. These patients subsequently transitioned to an Expanded Access study – CELC-G-001. Contracts related to the Expanded Access study are generally based on time and material. In addition, contracts related to the Company’s Phase 3 clinical studies (VIKTORIA-1 and VIKTORIA-2) and the Phase 1b/2 clinical trial (CELC-G-201) are generally cancelable with reasonable notice within 120 days and the Company’s obligations under these contracts are primarily based on services performed through termination dates plus certain cancelation charges, if any, as defined in each of the respective agreements. In addition, these agreements may, from time to time, be subject to amendments as a result of any change orders executed by the parties. As of March 31, 2025, the Company had six material non-cancelable contractual commitments with respect to these arrangements, which totaled approximately $ 6.9 million. 6. Stockholders’ Equity Capital Stock At December 31, 2024, the Company’s authorized capital stock consisted of 95,000,000 shares of common stock, of which 37,143,242 shares were outstanding, and 2,500,000 shares of preferred stock, including 1,850,000 shares designated as Series A Preferred Stock, of which 317,577 shares were outstanding. In March 2025, an investor exercised 695,650 warrants at an exercise price of $ 8.05 , which generated approximately $ 5.6 million in cash. The warrants were issued pursuant to a private placement that closed on December 9, 2022. At March 31, 2025, the Company’s authorized capital stock consisted of 95,000,000 shares of common stock, of which 37,839,392 shares were outstanding, and 2,500,000 shares of preferred stock, including 1,850,000 shares designated as Series A Preferred Stock, of which 317,577 shares were outstanding. As of March 31, 2025, no dividends have been declared on the Company’s capital stock. 10 7. Stock-Based Compensation The following table summarizes the activity for all stock options outstanding for the three months ended March 31: Schedule of Stock Options Activity 2025 2024 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Options outstanding at beginning of year 4,306,977 $ 10.42 2,815,392 $ 7.95 Granted 650,603 10.54 285,795 15.29 Exercised ( 500 ) 5.10 ( 36,550 ) 6.55 Forfeited ( 109,626 ) 12.00 ( 15,250 ) 9.05 Balance at March 31 4,847,454 $ 10.40 3,049,387 $ 8.65 Options exercisable at March 31: 2,170,729 $ 7.58 1,569,614 $ 6.55 Weighted Average Grant Date Fair Value for options granted during the period: $ 7.43 $ 10.53 The following table summarizes additional information about stock options outstanding and exercisable at March 31, 2025. The stock-based compensation expense disclosed in the following paragraphs is shown in thousands. Schedule of Stock Options Outstanding and Exercisable Options Outstanding Options Exercisable Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Aggregate Intrinsic Value (in 000’s) Options Exercisable Weighted Average Exercise Price Aggregate Intrinsic Value (in 000’s) 4,847,454 7.94 $ 10.40 $ 6,952 2,170,729 $ 7.58 $ 6,396 The Company recognized stock-based compensation expense for stock options of $ 2,260 and $ 1,290 for the three months ended March 31, 2025 and 2024, respectively. In January 2025, May 2022, December 2021 and May 2020, the Company modified previously granted stock option awards to certain employees. The total incremental compensation expense recognized as a result of the modifications was $ 141 and $ 45 for the three months ended March 31, 2025 and 2024, respectively. The effect of these modifications on stock-based compensation over the remaining service periods will be $ 416 . 11 The Black-Scholes option-pricing model was used to estimate the fair value of equity-based awards with the following weighted-average assumptions for the three months ended March 31: Schedule of Assumptions for Fair Value of Equity-based Awards 2025 2024 Risk-free interest rate 4.03 % - 4.65 % 3.94 % - 4.33 % Expected volatility 76.2 to 77.3 % 76.1 % Expected life (years) 5.01 to 6.42 5.25 to 6.08 Expected dividend yield 0 % 0 % The inputs for the Black-Scholes valuation model require management’s significant assumptions. Prior to the Company’s initial public offering, the price per share of common stock was determined by the Company’s board based on recent prices of common stock sold in private offerings. Subsequent to the initial public offering, the price per share of common stock is determined by using the closing market price on the Nasdaq Capital Market on the grant date. The risk-free interest rates are based on the rate for U.S. Treasury securities at the date of grant with maturity dates approximately equal to the expected life at the grant date. The expected life is based on the simplified method for the time-based awards, in accordance with SEC Staff Accounting Bulletin Nos. 107 and 110. The expected volatility is estimated based on historical volatility information of peer companies that are publicly available in combination with the Company’s calculated volatility since being publicly traded for the time-based awards. All assumptions used to calculate the grant date fair value of non-employee options are generally consistent with the assumptions used for options granted to employees. In the event the Company terminates any of its consulting agreements, the unvested options issued in connection with the agreements would also be cancelled. The Company had 1,079 and 1,958 shares of restricted stock outstanding as of March 31, 2025 and 2024, respectively, and no shares of restricted stock vested during the three months ended March 31, 2025 and 2024. The Company recognized stock-based compensation expense for restricted stock of $ 4 and $ 5 for the three months ended March 31, 2025 and 2024, respectively. The Company initially reserved a maximum of 750,000 shares of common stock for issuance under the 2017 Amended and Restated Stock Incentive Plan (the “2017 Plan”). The number of shares reserved for issuance was automatically increased by 371,432 and 255,060 shares on January 1, 2025 and 2024, respectively, and will increase automatically on January 1 of each year through 2027 by the number of shares equal to 1.0% of the aggregate number of outstanding shares of Company common stock as of the immediately preceding December 31. However, the Company’s board may reduce the amount of the increase in any particular year. At each of the Annual Meetings held on May 12, 2021 and May 12, 2022, the stockholders approved a 500,000 share increase each year to the number of shares reserved for issuance under the 2017 Plan. At each of the Annual Meetings held on May 11, 2023 and May 9, 2024, the stockholders approved a 1,500,000 share increase each year to the number of shares reserved for issuance under the 2017 Plan. The total remaining shares available for grant under the Company’s 2017 Plan as of March 31, 2025 was 1,007,905 . Total unrecognized compensation cost related to stock options and restricted stock is estimated to be recognized at March 31, 2025: Schedule of Unrecognized Compensation Cost (in thousands) 2025 $ 6,418 2026 7,443 2027 6,142 2028 2,769 2029 166 Total estimated compensation cost to be recognized $ 22,938 12 The Company recognized stock-based compensation expense related to its employee stock purchase plan of $ 180 and $ 36 for the three months ended March 31, 2025 and 2024, respectively. The Company initially reserved a total of 100,000 shares for issuance under the employee stock purchase plan. The number of shares reserved for issuance was automatically increased by 185,716 and 127,530 shares on January 1, 2025 and 2024, respectively, and will increase automatically on each subsequent January 1 by the number of shares equal to 0.5% of the total outstanding number of shares of Company common stock as of the immediately preceding December 31. However, the Company’s board may reduce the amount of the increase in any particular year. The total remaining shares available for issuance under the employee stock purchase plan as of March 31, 2025 was 546,666 . The Company recognized total stock-based compensation expense as follows for the three months ended March 31: Schedule of Stock-based Compensation Expenses 2025 2024 Three Months Ended March 31, (in thousands) 2025 2024 Stock-based compensation expense in operating expenses: Research and development $ 1,505 $ 832 General and administrative 939 499 Total $ 2,444 $ 1,331 8. Debt On May 30, 2024, the Company entered into an Amended and Restated Loan and Security Agreement (the “A&R Loan Agreement”) with Innovatus Life Sciences Lending Fund I, LP, a Delaware limited partnership (“Innovatus”), as collateral agent, and the Lenders including Innovatus in its capacity as a Lender and Oxford Finance LLC (“Oxford”), pursuant to which Innovatus and Oxford, as Lenders, have agreed to make certain term loans (“Term Loans”) to the Company in the aggregate principal amount of up to $ 180 million. The A&R Loan Agreement amends and restates, in its entirety, that certain Loan and Security Agreement, dated April 8, 2021, as amended, between the Company and Innovatus, as collateral agent, and the Lenders named therein (the “Prior Loan Agreement”). Funding of the first $ 100 million under the A&R Loan Agreement occurred on May 30, 2024, including tranche payments of $ 16.8 million (the “Term A Loan”) and $ 21.5 million (the “Term B Loan”) reflecting repayment of the principal amount of loans under the Prior Loan Agreement plus accrued payment-in-kind interest, in addition to $ 61.7 million of new borrowings (the “Term C Loan”). The Company will be eligible to draw on a fourth tranche of $ 30 million (the “Term D Loan”) and fifth tranche of $ 50 million (the “Term E Loan”), in each case upon achievement of certain clinical trial milestones and satisfaction of certain financial covenants determined on a pro forma as-funded basis. The Lenders may, in their sole discretion upon the Company’s request, make additional term loans to the Company of $ 45 million (the “Term F Loan”). Funding of these additional tranches is also subject to other customary conditions and limits on when the Company can request funding for such tranches. Costs associated with the new borrowings were approximately $ 2.4 million. Pursuant to the A&R Loan Agreement, the Company is entitled to make interest-only payments for thirty-six months, or up to forty-eight months if certain conditions are met. The Term Loans will mature on May 1, 2029 and will bear interest at a rate equal to the sum of (a) the greater of (i) the Prime Rate (as defined in the A&R Loan Agreement) or (ii) 7.75%, plus (b) 2.85%, provided that 1.0% of such interest will be payable in-kind by adding an amount equal to such 1.0% of the outstanding principal amount to the then outstanding principal balance on a monthly basis through May 31, 2027. The A&R Loan Agreement is secured by all assets of the Company. Proceeds will be used for working capital purposes and to fund the Company’s general business requirements, including the Phase 3 VIKTORIA-2 clinical trial. The A&R Loan Agreement contains customary representations and warranties and covenants, subject to customary carve-outs, and includes financial covenants related to liquidity and other financial measures. Innovatus has the right, at its election and until August 9, 2025, to convert up to 20 % of the outstanding principal of the Term A Loan into shares of the Company’s common stock at a price per share of $ 10.00 . Innovatus will continue to have the right to exercise a previously disclosed warrant granted to it under the Prior Loan Agreement to purchase 26,042 shares of common stock at a price per share of $ 14.40 through April 8, 2031. 13 The A&R Loan Agreement contains a Final Fee, which is equal to 4.5 % of the initial funding of the agreement and is due on the earliest to occur of (a) the Maturity Date, (b) the acceleration of any Term Loan, and (c) the prepayment of the Term Loans. There is also a contingent non-utilization fee for both the Term D and Term E Loans. If the Company achieves the Term D Milestone and (i) fails to draw the full amount of the Term D Loan during the Term D Draw Period and (ii) fails to notify Collateral Agent, at any time before the date that is four weeks after the Company’s achievement of the Term D Milestone, of the Company’s intent not to draw the full amount of the Term D Loan, a non-utilization fee of $ 0.9 million, with respect to the Term D Loan shall become due and payable on the earliest of (i) the termination of the Term D Draw Period, (ii) the Maturity Date, (iii) the acceleration of any Term Loan, and (iv) the prepayment in whole of the Term Loans. If the Company achieves the Term E Milestone and (i) fails to draw the full amount of the Term E Loan during the Term E Draw Period and (ii) fails to notify Collateral Agent, at any time before the date that is four weeks after the Company’s achievement of the Term E Milestone, of the Company’s intent not to draw the full amount of the Term E Loan, a non-utilization fee of $ 1.5 million, with respect to the Term E Loan shall become due and payable on the earliest of (i) the termination of the Term E Draw Period, (ii) the Maturity Date, (iii) the acceleration of any Term Loan, and (iv) the prepayment in whole of the Term Loans. After the 18-month anniversary of the Effective Date, the Company shall have the option to prepay all, but not less than all, of the Term Loans advanced by the Lenders under the A&R Loan Agreement, provided the Company (i) provides written notice to Collateral Agent of its election to prepay the Term Loans at least seven Business Days prior to such prepayment, and (ii) pays to Lenders on the date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (B) the Final Fee, (C) the Prepayment Fee, plus (D) all other outstanding Obligations that are due and payable, including, without limitation, Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts. At May 30, 2024, the Company recognized the Final Fee of $ 4.5 million as additional debt principal and a corresponding debt discount to be amortized over the life of the loan. In connection with the funding of each of the Term C Loan, the Term D Loan, the Term E Loan and the Term F Loan, the Company agreed to issue to Innovatus and Oxford warrants to purchase that number of shares of the Company’s common stock equal to 2.5 % of the principal amount of the applicable Term Loan divided by the exercise price, which shall, with respect to the Term C Loan, be equal to the lower of (i) the volume weighted average closing price of the Company’s common stock for the five-trading day period ending on the last trading day immediately preceding the execution of the A&R Loan Agreement or (ii) the closing price on the last trading day immediately preceding the execution of the A&R Loan Agreement. Accordingly, on May 30, 2024, the Company issued 103,876 warrants with an exercise price of $ 14.84 per share. The relative fair value of the warrants was approximately $ 1.2 million. For the additional Term Loans, the exercise price will be based on the lower of (i) the exercise price for the Warrants issued pursuant to the Term C Loan or (ii) the volume weighted average closing price of the Company’s common stock for the five-trading day period ending on the last trading day immediately preceding the applicable Term Loan funding. The Warrants may be exercised on a cashless basis and are exercisable through the tenth anniversary of the applicable funding date. The number of shares of common stock for which each Warrant is exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in such Warrant. On May 13, 2025, the Company entered into the First Amendment (the “First Amendment”) to the A&R Loan Agreement, pursuant to which the Company agreed to (i) pay Oxford an amendment fee of $40,000 on the effective date of the First Amendment, (ii) extend to March 9, 2026 the expiration date of Innovatus’ right to convert up to 20% of the outstanding principal of the Term A Loan into shares of the Company’s common stock at a price per share of $10.00, (iii) extend the expiration date of the Term D Draw Period to the earlier of (x) August 31, 2025 and (y) the occurrence of an Event of Default (as defined in the A&R Loan Agreement), (iv) update the liquidity covenant to increase the Minimum Liquidity Percentage (as defined in the First Amendment) to 50% if the Company fails to achieve the Term D Milestone prior to June 1, 2025 and to decrease the Minimum Liquidity Percentage back to 30% if the Company subsequently achieves the Term D Milestone prior to the end of the Term D Draw Period, and (v) release Innovatus and the Lenders from any and all claims arising out of or related to the A&R Loan Agreement, the First Amendment and related documentation. The Company evaluated the change of terms under ASC 470-50, “Debt – Modification and Extinguishment”, and concluded the change in terms did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not an extinguishment of the debt. Long-term debt consisted of the following at March 31, 2025 and December 31, 2024: Schedule of Long-term Debt (in thousands) March 31, 2025 December 31, 2024 Note payable $ 100,000 $ 100,000 Add: Final fee 4,500 4,500 Add: PIK interest (added to principal) 842 593 Less: unamortized debt issuance costs ( 1,374 ) ( 1,614 ) Less: unamortized debt discount ( 5,441 ) ( 5,752 ) Total long-term debt $ 98,527 $ 97,727 Future principal payments, including the incurred PIK interest and Final Fee, are as follows: Schedule of Long Term Debt Future Principal Payments (in thousands) Years Ending December 31, 2027 $ 30,691 2028 52,613 2029 22,038 Total $ 105,342 14