What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-13 compared with 2024-03-27 · 310 added, 176 removed, 370 unchanged (57% of the section changed)

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INDEX TO FINANCIAL STATEMENTS FOR CELLECTAR BIOSCIENCES, INC.

Report of Independent Registered Public Accounting Firm (Baker Tilly US, LLP, Madison, Wisconsin , PCAOB ID No.

Report of Independent Registered Public Accounting Firm ( Deloitte & Touche LLP , Morristown, New Jersey , PCAOB ID No.

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Stockholders’ (Deficit) Equity for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Cellectar Biosciences, Inc.

Opinion on the Consolidated Financial Statements

To the shareholders and the Board of Directors of Cellectar Biosciences, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Cellectar Biosciences, Inc.

and Subsidiary (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, 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 as of December 31, 2023 and 2022, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

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

As discussed in Note 1 of the consolidated financial statements, the Company has recurring losses from operations, an accumulated deficit, expects to incur losses for the foreseeable future and requires additional working capital.

These are the reasons that raise substantial doubt about the Company’s ability to continue as a going concern.

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, statements of convertible preferred stock and stockholders’ equity (deficit), and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the 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 two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

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

As discussed in Note 1 to the financial statements, the Company has incurred significant losses and negative cash flows from operations and has limited capital resources to fund its ongoing operations that raise 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 contain any adjustments that might result from the outcome of this uncertainty.

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

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits.

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.

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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 consolidated financial statements are free of material misstatement, whether due to error or fraud.

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.

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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 consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

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

Accounting for the Preferred Stock and Warrants in connection with the September 2023 Private Placement

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 judgments.

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

Initial Accounting for the Warrant Exercise Inducement Transaction — Refer to “Note 6.

Stockholders’ Equity” to the financial statements

Critical Audit Matter Description

As described in Note 6 to the consolidated financial statements, the Company issued shares of Series E-1 preferred stock, along with Tranche A warrants and Tranche B warrants to purchase Series E-3 and E-4 preferred stock, respectively.

The Series E-1 was classified as mezzanine equity at its issuance date, upon requisite shareholder approval this was determined to be classified as permanent equity in the fourth quarter of 2023, and the warrants issued by the Company are classified as liabilities and are recorded at fair value at each reporting period.

The principal considerations for our determination that the accounting for these instruments constituted a critical audit matter included the significant complexity of the relevant accounting guidance as well as the extent of management judgments and certain assumptions involved in the application of that guidance.

In addition, gathering certain audit evidence of the Company’s valuation of the warrant liability was especially challenging as the fair value is based on the selection of fair value methodologies as well as various inputs, significant assumptions and estimation uncertainty used in that fair value determination.

Lastly, the audit effort included the use of firm personnel with relevant expertise to assist in auditing this transaction and the related valuation.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical audit matter included:

● Assessing the design and implementation of management’s controls over the accounting for these instruments, which included controls over the proper selection of fair value methodologies and assumptions used to determine fair value of warrant liability.

● Reading the agreements and comparing the relevant terms to management’s analysis of the transactions.

● Utilizing the assistance of firm personnel having expertise in the accounting for these instruments, we evaluated management’s conclusions regarding the balance sheet classification and fair value determination of the two separate freestanding instruments included in the capital raise, the Series E preferred stock and the Tranche A and Tranche B warrants.

● Involving firm valuation specialists in evaluating the Company’s determination of fair value, including the appropriateness of the fair value methodologies.

● Testing the Company’s determination of fair value for the transaction, as well as the respective relative fair value allocations.

Our testing included assessing the reasonableness of certain assumptions used by the Company, as well as the completeness and accuracy of the data and estimates utilized.

● Performing a sensitivity analysis to evaluate the reasonableness management’s assumptions.

● Assessing the required financial statement disclosures related to the transaction.

/s/ Baker Tilly US, LLP

We have served as the Company's auditor since 2016.

Madison, Wisconsin

On July 21, 2024, the Company, entered into a warrant exercise inducement (the “Inducement”) with certain holders of its September 2023 Tranche B warrants, pursuant to which the holders agreed to exercise the warrants to purchase 1,610 shares of the Company’s Series E-4 Convertible Voting Preferred Stock (the “Series E-4 preferred stock”) which were convertible to 6,739,919 shares of the Company’s common stock in the aggregate, at a reduced, as-converted common stock price of $2.52 per share, in exchange for the Company’s issuance of new warrants (the “Inducement Warrants”), with varying termination dates and exercise prices.

The Company received gross proceeds of $19.4 million and net proceeds of $17.5 million.

As included in Note 6 to the financial statements, the Inducement Warrants were comprised of three separate tranches, each with a unique exercise price contractual term.

Due to a cash settlement feature included in the Inducement Warrants that requires cash settlement in the event of a fundamental transaction that is outside the Company’s control resulting in a form of settlement inconsistent with that which would be received by other security holders, the warrants do not qualify under the equity classification guidance.

As a result, and in accordance with the guidance in ASC 815, the Inducement Warrants issued in July 2024 were deemed to be liabilities and are adjusted to fair value each reporting period.

We identified the assessment of the initial accounting for the warrant exercise inducement transaction as a critical audit matter because of the complexity in applying the accounting framework and the significant judgments made by management in the determination of the classification and valuation of the Inducement Warrants.

This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s classification, as well as the valuation of the Inducement Warrants.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the classification and valuation of the Inducement Warrants included the following, among others:

● We read the agreements associated with the Inducement Warrants and tested the accuracy and completeness of the significant terms identified by management for the purpose of determining the appropriate accounting treatment and classification of the Inducement Warrants.

● With the assistance of professionals in our firm having expertise in the accounting treatment for financial instruments, we evaluated the Company’s conclusions regarding the accounting treatment applied to the Inducement Warrants.

● With the assistance of our fair value specialists, we evaluated management’s valuation of the Inducement Warrants by:

o Evaluating management’s use of the Monte Carlo simulation methodology

o Testing the significant valuation assumptions, including the expected volatility, the risk-free interest rate, expected life and dividend yield

o Independently calculating a fair value estimate for the Inducement Warrants and comparing our estimates to management’s estimates

/s/ Deloitte & Touche LLP

Morristown, New Jersey

March 12, 2025

We have served as the Company’s auditor since 2024.

CELLECTAR BIOSCIENCES, INC.

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Total current assets

Fixed assets, net

Right-of-use asset, net

Long-term assets

Property, plant & equipment, net

Operating lease right-of-use asset

Other long-term assets

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

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Warrant liability

Lease liability

Lease liability, current

Total current liabilities

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COMMITMENTS AND CONTINGENCIES (Note 10)

STOCKHOLDERS’ (DEFICIT) EQUITY:

Series D preferred stock, 111.11 shares authorized;

MEZZANINE EQUITY:

Series D convertible preferred stock, 111.11 shares authorized;

111.11 shares issued and outstanding as of December 31, 2024 and 2023

STOCKHOLDERS’ (DEFICIT) EQUITY:

Series E-2 preferred stock, 1,225.00 shares authorized;

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TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

See report of independent registered public accounting firm and accompanying notes to the consolidated financial statements.

See accompanying notes to the consolidated financial statements.

CELLECTAR BIOSCIENCES, INC.

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Year Ended December 31,

COSTS AND EXPENSES:

OPERATING EXPENSES:

Research and development

General and administrative

Total costs and expenses

Total operating expenses

LOSS FROM OPERATIONS

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Warrant issuance expense

Gain on valuation of warrants

Interest income, net

Total other income, net

( 7,743,284 )

Gain (loss) on valuation of warrants

( 3,787,114 )

Interest income

Total other income (expense), net

( 3,869,967 )

LOSS BEFORE INCOME TAXES

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( 42,830,610 )

INCOME TAX BENEFIT

INCOME TAX PROVISION (BENEFIT)

( 44,581,446 )

( 42,770,610 )

BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER COMMON SHARE

SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER COMMON SHARE

See report of independent registered public accounting firm and accompanying notes to the consolidated financial statements.

NET LOSS PER SHARE — BASIC

NET LOSS PER SHARE — DILUTED

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING — BASIC

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING — DILUTED

See accompanying notes to the consolidated financial statements.

CELLECTAR BIOSCIENCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Series D Preferred Stock

Preferred Stock

Stockholders’

Paid-In Capital

(Deficit) Equity

Additional Paid-In

Total Stockholders’

Equity (Deficit)

Balance at December 31, 2022

( 159,990,407 )

Issuance of common stock, pre-funded warrants and warrants, net of issuance costs

Stock-based compensation

Retired shares

Exercise of warrants for common stock

Issuance of Series E-2 preferred stock, net of issuance costs

Conversion of preferred stock to common stock

( 13,142,368 )

Reclassification of pre-funded warrants to liability

( 3,239,112 )

( 42,770,610 )

Balance at December 31, 2023

( 202,761,017 )

( 15,158,968 )

Stock-based compensation

Exercise of warrants into common stock

Issuance of preferred stock, net of issuance costs (Note 6)

Conversion of preferred stock to common stock

Exercise of pre-funded warrants into common shares

Exercise of warrants for preferred stock, net of issuance costs (Note 2)

Conversion of Series E-3 preferred stock into common stock

( 47,577,000 )

Stock awards (Note 7)

Exercise of warrants for common stock

Conversion of Series E-2 preferred stock into common stock

( 4,156,854 )

Issuance of E-4 preferred stock net of issuance costs

Conversion of Series E-4 preferred stock into common stock

( 15,914,632 )

BALANCE AT DECEMBER 31, 2023

Stock option exercise into common stock

Retired shares

( 44,581,446 )

See report of independent registered public accounting firm and accompanying notes to the consolidated financial statements.

Balance at December 31, 2024

( 247,342,463 )

See accompanying notes to the consolidated financial statements.

CELLECTAR BIOSCIENCES, INC.

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Stock-based compensation

Loss on disposal of asset

Costs to issue warrants

Gain on valuation of warrants

Loss on disposal of assets

Warrant issuance expense

Change in fair value of warrants

( 13,794,683 )

Noncash lease expense

Prepaid expenses and other current assets

Change in operating lease right-of-use asset

Prepaid expenses and other assets

Accounts payable and accrued liabilities

( 1,593,305 )

Lease liability

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CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of fixed assets

Purchases of property, plant & equipment

Cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of preferred stock and warrants, net of issuance costs

Proceeds from issuance of stock and warrants, net of issuance costs

Proceeds from exercise of warrants

Cash provided by financing activities

DECREASE IN CASH AND CASH EQUIVALENTS

( 10,301,370 )

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

( 10,301,370 )

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CASH AND CASH EQUIVALENTS AT END OF PERIOD

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION

Conversion of preferred stock to common stock

Conversion of mezzanine equity to permanent equity (Note 6)

See report of independent registered public accounting firm and accompanying notes to the consolidated financial statements.

Settlement of warrants to equity

See accompanying notes to the consolidated financial statements.

CELLECTAR BIOSCIENCES, INC.

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(Cellectar or the Company) is a late-stage clinical biopharmaceutical company focused on the discovery, development and commercialization of drugs for the treatment of cancer, leveraging our proprietary phospholipid drug conjugate™ (PDC™) delivery platform that specifically targets cancer cells and delivers improved efficacy and better safety as a result of fewer off-target effects.

The Company has incurred losses since inception in devoting substantially all of its efforts toward research and development and has an accumulated deficit of approximately $ 217,483,000 as of December 31, 2023.

During the year ended December 31, 2023, the Company generated a net loss of approximately $ 37,983,000 and the Company expects that it will continue to generate operating losses for the foreseeable future.

The Company believes that its cash balance as of December 31, 2023, when combined with funds generated by the exercise of warrants in January 2024 (see Note 13), is adequate to fund its basic budgeted operations into the fourth quarter of 2024.

The Company’s ability to execute its current operating plan depends on its ability to obtain additional funding via the sale of equity and/or debt securities, a strategic transaction or other source of capital.

The Company plans to continue actively pursuing financing alternatives, however, there can be no assurance that it will obtain the necessary funding, raising substantial doubt about the Company’s ability to continue as a going concern within one year of the date these financial statements are issued.

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

Going Concern — As an emerging growth company, the Company has, by design, incurred significant recurring losses and used net cash in its operations since its inception as it devotes substantially all of its efforts towards researching, developing and seeking approval for its product candidates to be commercialized in the marketplace.

As a result of these efforts, the Company had an accumulated deficit of approximately $ 247,342,000 as of December 31, 2024, and incurred a net loss of approximately $ 44,581,000 during the year ended December 31, 2024.

The Company expects it will continue to generate significant losses and use net cash for the foreseeable future, until such time that one or more of its product candidates are approved and successfully commercialized in the marketplace.

While management believes one or more of the Company’s product candidates will be approved and successfully commercialized in the marketplace, no assurance can be provided any products will be approved or commercialized in a profitable manner.

To fund its research, development, and approval efforts, the Company has been heavily dependent on funding from private investors and public stockholders since its inception through the issuance of securities, such as common stock, convertible preferred stock, and warrants (collectively referred to as outside capital).

The Company expects to remain heavily dependent on outside capital to fund the Company’s operations for the foreseeable future until such time that one or more of its product candidates are approved and successfully commercialized in the marketplace.

While management believes additional outside capital will be secured as needed, no assurance can be provided that additional outside capital will be secured or secured on terms that are acceptable to the Company.

As of the date the accompanying consolidated financial statements were issued (the “issuance date”), the Company’s available liquidity to fund the Company’s operations over the next twelve months beyond the issuance date was limited to approximately $ 14.9 million of unrestricted cash and cash equivalents.

Absent further action taken by management to increase its liquidity the Company may be unable to fund its operations under normal course beyond the fourth quarter of 2025.

To improve the Company’s liquidity, management plans to secure additional outside capital via the sale of equity and/or debt securities or execute a strategic transaction.

Management also plans to preserve liquidity, as needed, by implementing temporary cost saving measures.

While management believes their plans will be successful, no assurance can be provided such plans will be effectively implemented over the next twelve months beyond the issuance date.

In the event management’s plans are not effectively implemented, the Company will be required to seek other alternatives which may include, among others, the sale of assets, discontinuance of certain operations, a wind-down of operations and return of capital to stockholders, and/or filing for bankruptcy protection.

These uncertainties raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared on the basis that the Company will continue to operate as a going concern, which contemplates it will be able to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable future.

Accordingly, the accompanying consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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All inter-company accounts and transactions have been eliminated in consolidation.

The Company consists of one reportable segment.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the U.S.

requires management to make estimates and judgments that may affect the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities.

On an on-going basis, management evaluates its estimates including those related to potential accrued liabilities, valuation of warrant and equity-based instruments, and share-based compensation.

On an on-going basis, management evaluates its estimates including those related to

potential accrued liabilities, valuation of warrant and equity-based instruments, and share-based compensation.

Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

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Cash and Cash Equivalents — All short-term investments purchased with original maturities of three months or less are considered to be cash equivalents.

Fixed Assets — Property and equipment are stated at cost.

Property, Plant & Equipment — Property, plant & equipment are stated at cost.

Depreciation on property and equipment is provided using the straight-line method over the estimated useful lives of the assets ( 3 to 10 years ).

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Such analyses necessarily involve judgement.

The Company did not experience any events or changes in circumstances that indicate the carrying amount of the assets may not be recoverable as of December 31, 2023.

There were no fixed asset impairment charges recorded during the years ended December 31, 2023 or 2022.

The Company recorded disposal charges of approximately $ 146,000 and $ 0 during the years ended December 31, 2024 and 2023, respectively.

Right-of-Use Asset and Lease Liability — The Company accounts for all material leases in accordance with FASB Accounting Standards Codification (ASC) Topic 842, Leases .

ROU assets are amortized over their estimated useful life, which represents the full term of the lease.

ROU assets are recognized over their estimated useful life, which represents the full term of the lease.

Stock-Based Compensation — The Company uses the Black-Scholes option-pricing model to calculate the grant-date fair value of stock option awards.

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Research and Development — Research and development costs are expensed as incurred.

The Company recognizes revenue and cost reimbursements from government grants when it is probable that the Company will comply with the conditions attached to the grant arrangement and the grant proceeds will be received.

The Company recognizes cost reimbursements from government grants when it is probable that the Company will comply with the conditions attached to the grant arrangement and the grant proceeds will be received.

Government grants are recognized on a systematic basis over the periods in which the Company recognizes the related costs for which the government grant is intended to compensate.

Specifically, when government grants are related to reimbursements for cost of revenues or operating expenses, the government grants are recognized as a reduction of the related expense.

Specifically, when government grants are related to reimbursements for operating expenses, the government grants are recognized as a reduction of the related expense.

Income Taxes — Income taxes are accounted for using the liability method of accounting.

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Fair Value of Financial Instruments The guidance under FASB ASC Topic 825, Financial Instruments , requires disclosure of the fair value of certain financial instruments.

Financial instruments in the accompanying consolidated financial statements consist of cash equivalents, prepaid expenses and other assets, accounts payable, warrant liabilities and long-term obligations.

The carrying amount of cash equivalents, prepaid expenses, other current assets and accounts payable approximate their fair value as a result of their short-term nature.

See Note 11 regarding long-term obligations .

Financial instruments in the accompanying consolidated financial statements consist of cash equivalents, prepaid expenses and other assets, accounts payable, accrued liabilities, warrant liabilities and long-term obligations.

The carrying amount of cash equivalents, prepaid expenses, other current assets, accounts payable and accrued liabilities approximate their fair value as a result of their short-term nature.

Warrants — The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

The assessment considers whether the warrants are freestanding

financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

Valuation changes, as well as the cost to issue the warrants, are included in Other (Expense) Income in the accompanying Consolidated Statements of Operations.

If these instruments are initially classified as liabilities and subsequently meet the requirements for equity classification, the Company reclassifies the fair value to equity.

Preferred Stock — The Company accounts for preferred stock based upon their specific terms and the authoritative guidance in ASC 480 and ASC 815, including whether they are freestanding instruments, whether any redemption or conversion aspects exist and how they are required to be settled (particularly if there is a cash settlement aspect), whether they contain characteristics that are predominantly debt-like or equity-like, whether they have embedded derivatives, and if they have redemption features.

For equity-classified warrants, the fair value is not remeasured.

For warrants that are liability-classified, changes in fair value, as well as the cost to issue the warrants, are included in Other Income (Expense) in the accompanying Consolidated Statements of Operations.

If these instruments are initially classified as either liabilities or equity and a subsequent assessment determines that the classification has changed, the Company reflects that change in the financial statements.

Preferred Stock — The Company accounts for preferred stock based upon their specific terms and the authoritative guidance in ASC 480 and ASC 815, including whether they are freestanding instruments, whether any redemption or conversion aspects exist and how they are required to be settled (for example, if there are features that may require cash settlement), contain characteristics that are predominantly debt-like or equity-like, have embedded derivatives, and if they have redemption features.

Based upon analysis of these criteria, the preferred stock will be classified as either debt, temporary (or “mezzanine”) equity, or permanent equity.

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At times, such amounts may exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits.

As of December 31, 2023, uninsured cash balances totaled approximately $ 9,123,000 .

Recently Adopted Accounting Pronouncements — For the fiscal year beginning January 1, 2022, management adopted ASU 2021-10, Government Assistance (Topic 832), which aims to provide increased transparency by requiring business entities to disclose

information about certain type of government assistance they receive in the notes to the financial statements.

As of December 31, 2024 and 2023, uninsured cash balances totaled approximately $ 22,837,000 and $ 9,123,000 , respectively.

Government Assistance — For the fiscal year beginning January 1, 2022, management adopted ASU 2021-10, Government Assistance (Topic 832), which aims to provide increased transparency by requiring business entities to disclose information about certain types of government assistance they receive in the notes to the financial statements.

Reimbursements of eligible expenditures pursuant to government assistance programs are recorded as reductions of operating costs when there is reasonable assurance that the Company will comply with the conditions attached to the grant arrangement and when the reimbursement has been claimed.

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The Company currently has a cancer treatment research award through the National Cancer Institute (NCI) totaling approximately $ 2.0 million over a period of approximately three years.

In September 2022, the Company was awarded $ 1.98 million in additional grant funding to expand our ongoing Phase 1 study of iopofosine I 131 in children and adolescents with inoperable relapsed or refractory high-grade gliomas (HGGs).

In September 2022, the Company was awarded $ 1.98 million in additional grant funding to expand the Company’s ongoing Phase 1 study of iopofosine I 131 in children and adolescents with inoperable relapsed or refractory high-grade gliomas (HGGs).

The grant was awarded by the NCI based upon the initial signals of efficacy in the Phase 1 study, which is an international, open-label, dose escalation, safety study.

The funding allows for an expansion from Part 1a into the Part 1b portion of our ongoing Phase 1 pediatric study.

The funding allows for an expansion from Part 1a into the Part 1b portion of the ongoing Phase 1 pediatric study.

During the twelve months ended December 31, 2024, the Company received approximately $ 602,000 in NCI grant funding under the grants described above, all of which was reported as a reduction of research and development (R&D) expenses.

During the twelve months ended December 31, 2023, the Company received approximately $ 1,759,000 in NCI grant funding under the grants described above, all of which was reported as a reduction of research and development (R&D) expenses.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (ASU 2023-09), which is intended to enhance the transparency and decision usefulness of income tax disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted — In December 2023, the FASB issued Accounting Standards Update (ASU) No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures.

Public business entities are required to adopt this standard for annual fiscal periods beginning after December 15, 2024, and early adoption is permitted.

The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements and related disclosures.

The Company evaluates all Accounting Standards Updates (ASUs) issued by the FASB for consideration of their applicability to our consolidated financial statements.

We have assessed all ASUs issued but not yet adopted and concluded that those not disclosed are not relevant to the Company or are not expected to have a material impact.

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.

The amendments in ASU 2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with

early adoption permitted.

The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

The Company evaluates all ASUs issued by the FASB for consideration of their applicability to the financial statements.

The Company has assessed all ASUs issued but not yet adopted and concluded that those not disclosed are not relevant to the Company or are not expected to have a material impact.

Recently Adopted Accounting Pronouncements — In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280).

The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements.

The Company adopted this ASU retrospectively.

In accordance with Fair Value Measurements and Disclosures Topic of the FASB ASC 820, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value:

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The carrying amounts reported for other current financial assets and liabilities approximate fair value because of their short-term nature.

In September 2023 the Company issued warrants to purchase shares of preferred stock which, on an as-converted basis, represent an aggregate of 21,025,641 shares of common stock (the September 2023 Warrants) (see Note 6).

The fair value of the September 2023 Warrants was determined using a probability-weighted expected return method (PWERM) with a scenario-based Monte Carlo simulation and Black-Scholes model.

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period, pursuant to the policy described in Note 2.

This determination requires significant judgments be made.

The following table summarizes the conclusions reached as of December 31, 2024 and 2023 for financial instruments measured at fair value on a recurring basis.

December 31, 2024

Cash and cash equivalents

Warrant liability

Total liabilities

December 31, 2023

Cash and cash equivalents

Warrant liability

Total liabilities

July 2024 Warrants

As part of the July 2024 inducement financing the Company issued Tranche A, B, and C warrants (the Inducement Warrants) to purchase shares of common stock (see Note 2).

The fair value of the Inducement Warrants was determined using a probability-weighted expected return method (PWERM) with a scenario-based Monte Carlo simulation and Black-Scholes model.

The PWERM is a scenario-based methodology that estimates the fair value of the Company’s different classes of equity based upon an analysis of future values for the Company, assuming various outcomes.

Under both models, assumptions and estimates are used to value the warrants.

The Company assesses these assumptions and estimates on a quarterly basis as additional information that impacts the assumptions is obtained.

The quantitative elements associated with the inputs impacting the fair value measurement of the Inducement Warrants include the value per share of the underlying common stock, the timing, form and overall value of the expected exits for the stockholders, the risk-free interest rate, the expected dividend yield and the expected volatility of the Company’s shares.

The risk-free interest rate is determined by reference to the U.S.

Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants.

The Company estimated a 0 % dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared cash dividends.

Expected volatility was determined based upon the historical volatility of the Company’s common stock.

The Inducement Warrants are classified within the Level 3 hierarchy because of the nature of these inputs and the valuation technique utilized, and had a fair value of $ 12,000,000 and $ 1,200,000 as of July 21, 2024, the date of issuance, and December 31, 2024, respectively, which is included in the warrant liability caption on the accompanying balance sheets.

The following table summarizes the modified option-pricing assumptions used on December 31, 2024, and July 21, 2024:

Risk-free interest rate

Expected life (years)

September 2023 Warrants

As part of the September 2023 financing the Company issued Tranche A and Tranche B warrants (the 2023 Warrants) to purchase shares of preferred stock which, on an as-converted basis, represented an aggregate of 21,025,641 shares of common stock.

The fair value of the Tranche A and B warrants was determined using a probability-weighted expected return method (PWERM) with a scenario-based Monte Carlo simulation and Black-Scholes model.

Under both models, assumptions and estimates are used to value the preferred stock warrants.

The Company assesses these assumptions and estimates on a quarterly basis as additional information that impacts the assumptions is obtained.

The quantitative elements associated with the inputs

impacting the fair value measurement of the September 2023 Warrants include the value per share of the underlying common stock, the timing, form and overall value of the expected exits for the stockholders, the risk-free interest rate, the expected dividend yield and the expected volatility of the Company’s shares.

The quantitative elements associated with the inputs impacting the fair value measurement of the 2023 Warrants include the value per share of the underlying common stock, the timing, form and overall value of the expected exits for the stockholders, the risk-free interest rate, the expected dividend yield and the expected volatility of the Company’s shares.

The risk-free interest rate is determined by reference to the U.S.

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Expected volatility was determined based upon the historical volatility of the Company’s common stock.

As previously described, all of the Tranche A warrants were exercised in January 2024.

Additionally, in July 2024, the holders of the Tranche B warrants exercised all but 105.00 of the Tranche B warrants outstanding.

As a result, those warrants were marked-to-market on July 21, 2024, the date of the exercise and subsequent settlement.

The 2023 Warrants are classified within the Level 3 hierarchy because of the nature of these inputs and the valuation technique utilized, and had a fair value of $ 26,000 and $ 4,200,000 as of December 31, 2024 and December 31, 2023, respectively, which is included in the warrant liability caption on the accompanying balance sheets.

They continue to be classified as a liability due to a cash settlement feature in the agreement.

The following table summarizes the modified option-pricing assumptions used on December 31, 2024 and December 31, 2023:

Risk-free interest rate

Expected life (years)

At the time the Tranche A warrants were exercised, their fair value, calculated as the difference between the common stock conversion rate in the Series E-3 preferred stock and the trading price of the stock when the warrants were exercised, was determined to be $ 4,800,000 .

At the time the Tranche B warrants were exercised, their fair value, calculated as the difference between the common stock conversion rate in the Series E-4 preferred stock, as adjusted by the inducement offering terms, and the trading price of the stock when the warrants were exercised, was determined to be $ 2,610,000 .

Due to the settlement of these warrants, the corresponding liability was reclassified to equity in accordance with ASC 815.

October 2022 Warrants

In October 2022 the Company issued a total of 5,151,098 common warrants that are immediately exercisable with a five-year life and a strike price of $ 1.96 for shares of common stock (the 2022 Common Warrants), and 1,875,941 pre-funded warrants (the 2022 Pre-Funded Warrants) to acquire shares of common stock (see Note 6).

The 2022 Pre-Funded Warrants were all exercised prior to December 31, 2024.

The fair value of the 2022 Common Warrants was determined by utilizing a Black-Scholes option-pricing model.

The quantitative elements associated with the inputs impacting the fair value measurement of the 2022 Common Warrants include the value per share of the underlying common stock, the risk-free interest rate, the expected dividend yield and the expected volatility of the Company’s shares.

The risk-free interest rate is determined by reference to the U.S.

Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants.

The Company estimated a 0 % dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared cash dividends.

Expected volatility was determined based upon the historical volatility of the Company’s common stock.

These warrants are classified within the Level 3 hierarchy because of the nature of these inputs and the valuation technique utilized.

The Warrant Liability of $ 3,700,000 presented on the accompanying balance sheet as of December 31, 2023, consists entirely of the estimated value of the September 2023 Warrants.

The following table summarizes the modified option-pricing assumptions used on September 8, 2023, which was the date of issuance, and December 31, 2023:

The following table summarizes the assumptions used at each financial reporting date:

Risk-free interest rate

Expected life (years)

The following table summarizes the changes in the fair market value of the warrants which are classified within the Level 3 fair value hierarchy from September 8, 2023, which was the date of issuance, through December 31, 2023:

Beginning fair value of warrants

Gain from change in fair value

The following table summarizes the changes in the fair market value of the warrants which are classified within the Level 3 fair value hierarchy, inclusive of all Preferred and Common Warrants, excluding the Pre-Funded Common Warrants:

Fair value of Level 3 liabilities as of December 31, 2023

Change in warrant fair value

( 14,778,015 )

December 31, 2023 fair value of warrants

Fixed assets consisted of the following as of December 31:

Issuance of July 2024 Inducement Warrants

Settlement of 2023 Tranche A Warrants to equity

( 4,800,000 )

Settlement of 2023 Tranche B Warrants to equity

( 2,610,000 )

Exercise of October 2022 Warrants

( 1,225,676 )

December 31, 2024, fair value of Level 3 liabilities

PROPERTY, PLANT & EQUIPMENT

Property, plant & equipment consisted of the following as of December 31:

Office and laboratory equipment

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Leasehold improvements

Total fixed assets

Total property, plant & equipment

Less– accumulated depreciation and amortization

Fixed assets, net

( 1,024,000 )

Property, plant & equipment, net

For the years ended December 31, 2024 and 2023, the Company recorded approximately $ 292,000 and $ 192,000 of fixed asset depreciation and amortization expense, respectively.

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Accounts payable and accrued liabilities consist of the following as of December 31:

Incentive compensation

Accounts payable

Incentive compensation

Clinical project costs

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STOCKHOLDERS’ EQUITY

July 2024 Warrant Inducement

On July 21, 2024, the Company, entered into a warrant exercise inducement (the “Inducement”) with certain holders of its September 2023 Tranche B warrants, pursuant to which the holders agreed to exercise the warrants to purchase 1,610 shares of the Company’s Series E-4 Convertible Voting Preferred Stock, par value $ 0.00001 per share (the “Series E-4 preferred stock”) which were convertible to 6,739,919 shares of the Company’s common stock in the aggregate, at a reduced, as-converted common stock price of $ 2.52 per share, in exchange for the Company’s issuance of new warrants (the “Inducement Warrants”), with varying termination dates and exercise prices.

The Company received gross proceeds of $ 19.4 million and net proceeds of $ 17.5 million.

The Inducement Warrants have the following terms:

● The 2024 Tranche A warrants have an exercise price of $ 2.52 and expire at the earlier of (i) ten (10) trading days following the date of the Company’s public announcement that the FDA has assigned a Prescription Drug User Fee Act goal date for review of iopofosine I 131, and (ii) July 21, 2029.

● The 2024 Tranche B warrants have an exercise price of $ 4.00 and expire at the earlier of (i) ten (10) trading days following the date of the Company’s public announcement of its receipt of written approval from the FDA of its New Drug Application for iopofosine I 131, and (ii) July 21, 2029.

● The 2024 Tranche C warrants have an exercise price of $ 5.50 and expire at the earlier of (i) ten (10) trading days following the date of the Company’s public announcement that it has recorded quarterly gross revenues from sales of iopofosine I 131 in the United States in excess of $ 10 million and (ii) July 21, 2029.

Due to a cash settlement feature that requires cash settlement in the event of a fundamental transaction that is outside the Company’s control resulting in a form of settlement inconsistent with that which would be received by other security holders, the warrants do not qualify under the equity classification guidance.

As a result, and in accordance with the guidance in ASC 815, the warrants issued in July 2024 are deemed to be liabilities.

All such liabilities are required to be presented at fair value, with changes reflected in financial results for the period.

See Note 3 for the related valuation.

In accordance with the guidance above, the Company recorded the Inducement Warrants and preferred stock at their respective fair values.

Utilizing valuation techniques described in Note 3, the Company computed the fair value of the Inducement Warrants as $ 12.0 million and recorded the preferred stock at approximately $ 15.9 million, which represented its fair value of $ 17.0 million less allocated issuance costs.

The value of the preferred stock and Inducement Warrants sold exceeded the proceeds received by the Company and the fair value of the Tranche B warrants that were exercised in the transaction, which was approximately $ 2.6 million at the time of exercise.

The value in excess of the net proceeds and the fair value of the Tranche B warrants of approximately $ 7.7 million is reflected in Other Expense.

As of December 31, 2024, all of the Series E-4 preferred stock issued in the July 2024 financing has been converted into 6,739,919 shares of common stock.

September 2023 Private Placement

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and for the Series E-4 preferred stock, $ 4.7775 per share of common stock, or a total of 7,179,487 shares of common stock, in each case subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization.

The warrants are exercisable as follows:

The warrants were exercisable as follows:

● Tranche A warrants, for an aggregate exercise price of $ 44.1 million, exercisable for Series E-3 preferred stock until the earlier of September 6, 2026, or 10 trading days after the Company’s announcement of positive topline data from the Waldenstrom’s macroglobulinemia CLOVER WaM pivotal trial;

● Tranche B warrants, for an aggregate exercise price of $ 34.3 million, exercisable for Series E-4 preferred stock until the earlier of September 6, 2028, or 10 days following the Company’s public announcement of its receipt of written approval from the FDA of its New Drug Application for iopofosine I 131.

The Tranche A and Tranche B warrants do not qualify as derivatives;

however, they do not meet the requirements necessary to be considered indexable in the Company’s stock.

As a result, and in accordance with the guidance in FASB ASC 815, the warrants continue to be deemed liabilities.

As of December 31, 2023, the Tranche A and Tranche B warrants did not qualify as derivatives;

however, they did not meet the requirements necessary to be considered indexable in the Company’s stock.

As a result, and in accordance with the guidance in FASB ASC 815, the warrants were deemed to be liabilities.

As of September 30, 2024, the Tranche B warrants do not qualify as derivatives and meet the requirements necessary to be considered indexable in the Company’s stock.

However, due to a cash settlement feature that requires cash settlement in event of a fundamental transaction that is outside the Company’s control resulting in a form of settlement inconsistent with that which would be received by other security holders, the warrants do not qualify under the equity classification guidance.

As a result, and in accordance with the guidance in ASC 815, the Tranche B warrants continue to be deemed liabilities.

All such liabilities are required to be presented at fair value, with changes reflected in financial results for the period.

As discussed above, the majority of the Tranche B warrants were exercised in July 2024.

See Note 3 for the related valuation.

When issued, the Series E-1 preferred stock had a redemption feature;

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The Series E-1 preferred stock also had a liquidation preference, which was calculated as an amount per share equal to the greater of (i) two times (2X) the Original Per Share Price, together with any declared, unpaid dividends, or (ii) such amount per share as would have been payable had all shares of Series E-1 preferred stock been converted into Common Stock immediately prior to such Liquidation.

While the Series E-1 preferred was outstanding, this resulted in both the Tranche A and Tranche B warrants being considered puttable by virtue of the liquidation preference impacting the disposition of these warrants in the event of a liquidation.

In accordance with the guidance in Accounting Standards Codification section 480, a puttable warrant is deemed to be a liability.

While the Series E - 1 preferred was outstanding, this resulted in both the Tranche A and Tranche B warrants being considered puttable by virtue of the liquidation preference impacting the disposition of these warrants in the

event of a liquidation.

In accordance with the guidance in ASC 480, a puttable warrant is deemed to be a liability.

These features only applied to the Series E-1 preferred stock when it was outstanding;

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The net proceeds from the September 2023 Private Placement were allocated first to the fair value of the Tranche A and Tranche B warrants, which had a fair value upon issuance of $ 4,800,000 , with the remainder, or $ 17,820,000 , allocated to the Series E-1 preferred stock.

Upon stockholder approval of the transaction, the entire amount that had been assigned to mezzanine equity was

reclassified to Series E-2 preferred stock and is a component of permanent equity, as is reflected in the financial statements.

Upon stockholder approval of the transaction, the entire amount that had been assigned to mezzanine equity was reclassified to Series E-2 preferred stock and is a component of permanent equity, as is reflected in the financial statements.

As a result of the stockholder approval, Series E-1 preferred stock was fully extinguished in accordance with the terms of the financing.

The outstanding shares of Series E preferred stock were classified as permanent equity upon issuance.

Series E preferred stock is convertible to common stock at the request of the holder, subject to the holder not exceeding certain beneficial ownership percentages as stipulated in the financing agreement.

Subsequent to the issuance of the Series E-2 preferred stock and prior to December 31, 2023, preferred holders converted 905.24 shares of preferred stock into 9,947,684 shares of common stock at the stated rate of $ 1.82 per common share.

During the twelve months ended December 31, 2024, 284.16 shares of Series E-2 preferred stock were converted into 3,122,637 shares of common stock.

There remain 35.60 shares of Series E-2 preferred stock outstanding as of December 31, 2024.

In January 2024, the Company released topline data from its pivotal, Phase 2b CLOVER WaM trial.

In accordance with the terms of the Tranche A warrant, the warrants’ expiration accelerated to 10 trading days after the topline data release.

Warrant holders exercised the Tranche A warrants in their entirety, resulting in the Company issuing 2,205.00 shares of Series E-3 preferred stock, which were convertible to common stock at the stated rate of $ 3.185 per share, and receiving gross proceeds of $ 44.1 million and net proceeds of $ 42.8 million (see Note 3).

As of December 31, 2024, all of the Series E-3 preferred stock has been converted into 13,846,141 shares of common stock.

October 2022 Public Offering and Private Placement

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The registered direct offering and private placements resulted in total gross proceeds of approximately $ 10.7 million with net proceeds to the Company of approximately $ 9.6 million after deducting estimated offering expenses.

During the twelve months ended December 31, 2023, 355,235 pre-funded warrants were converted into 355,235 shares of common stock.

During the twelve months ended December 31, 2023, 177,877 common warrants were exercised for proceeds of $ 348,638 .

There were no common warrants exercised during the twelve months ended December 31, 2022.

In accordance with the concept of FASB ASC 820 regarding the October 2022 public offering, the Company allocated the value of the proceeds to the common stock, common warrants, and pre-funded warrants utilizing a relative fair value basis.

Using the closing trading price for our stock on October 20, 2022, the Company computed the fair value of the shares sold.

This valuation did not impact the total gross increase to Stockholders’ Equity of $ 10.7 million, but is an internal, proportionate calculation allocating gross proceeds of approximately $ 4.0 million to common stock, $ 4.4 million to common warrants and $ 2.3 million to pre-funded warrants.

2022 Reverse Stock Split

At the annual stockholders’ meeting held on June 24, 2022, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation to effect a reverse split of the Company’s common stock at a ratio between 1 -for-5 to 1 -for-10 in order to satisfy requirements for continued listing of the Company’s common stock on Nasdaq.

The board of directors authorized the 1 -for-10 ratio of the reverse split on June 27, 2022, and effective at the close of business on July 21, 2022, the Company’s certificate of incorporation was amended to effect a 1 -for-10 reverse split of the Company’s common stock (the “Reverse Stock Split”).

The accompanying consolidated financial statements and notes to consolidated financial statements give retroactive effect to the Reverse Stock Split for all periods presented.

Authorized Share Increase

At a special meeting of stockholders held on October 25, 2023, the Company’s stockholders approved an amendment of the Company’s Second Amended and Restated Certificate of Incorporation, as amended, to increase the authorized common stock from 160,000,000 shares to 170,000,000 shares.

Common Stock Warrants

The following table summarizes the outstanding warrants to purchase common stock as of December 31, 2023:

During the twelve months ended December 31, 2024, 1,079,132 pre-funded warrants, which was the entirety of the quantity still outstanding, were converted into 1,079,132 shares of common stock, and 547,177 warrants issued in October 2022 were exercised for net proceeds of approximately $ 1.1 million.

There were no such conversions or exercises in the twelve months ended December 31, 2023.

The following table summarizes information with regard to outstanding warrants to purchase stock as of December 31, 2024:

Number of Common

Shares Issuable

Expiration Date

2023 Tranche A Preferred Warrants

September 8, 2026

2024 Tranche A Warrants

July 21, 2029

2024 Tranche B Warrants

July 21, 2029

2024 Tranche C Warrants

July 21, 2029

2023 Tranche B Preferred Warrants

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October 25, 2027

2022 Pre-Funded Warrants

June 2020 Series H Warrants

May 2019 Series F Warrants

May 2019 Series G Warrants

October 2017 Series D Warrants

October 14, 2024

(1) These warrants are described further under the caption “September 2023 Private Placement” above.

June 2020 Series H Common Warrants

All warrants in the table above are liability-classified.

STOCK-BASED COMPENSATION

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No dividends have been recorded historically.

At the annual meeting of stockholders held on June 23, 2023, the Company’s stockholders approved an increase in the number of shares of common stock available for issuance under our 2021 Stock Incentive Plan by 1,100,000 to 2,368,000 .

At the annual meeting of stockholders held on June 14, 2024, the Company’s stockholders approved an increase in the number of shares of common stock available for issuance under the 2021 Stock Incentive Plan by 7,000,000 to 9,368,900 .

During the twelve months ended December 31, 2024 and 2023, stock options granted were 3,063,500 and 1,617,000 , respectively.

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Total stock-based compensation

In January 2023, the Company granted 609,000 non-statutory stock option awards at an exercise price of $ 1.68 per share to employees.

These grants were contingent upon the approval of the increase in the number of shares available for issuance under the 2021 Plan that was approved by the stockholders at the Annual Meeting of Stockholders held on June 23, 2023.

In accordance with the removal of the contingency, the Company began recognizing the expense for these awards beginning in June 2023.

In December 2023, the Company granted 2,776,000 contingent, non-statutory stock option awards at an exercise price of $ 2.65 per share to our employees and our directors.

Each of these grants is contingent on approval of an increase in the shares available in the 2021 Stock Incentive Plan that is to be voted on by the stockholders at the annual meeting of stockholders expected to be held in June 2024.

Until such time that the contingent non-statutory stock option awards are approved by stockholders, no expense will be recognized by the Company.

In December 2023, the Company awarded $ 434,132 in cash and 213,532 shares of stock, valued at $ 565,868 , to certain employees as a result of the attainment of milestones established and approved by a committee of the Board of Directors.

Due to the contingent nature of those awards, which were fully vested upon milestone attainment, the expense was recognized by the Company upon grant.

In December 2023, the Company granted 2,776,000 contingent, non-statutory stock option awards at an exercise price of $ 2.63 per share to employees and directors, and in March 2024 the Company granted 200,000 contingent, non-statutory stock option awards at an exercise price of $ 3.63 and $ 3.35 per share to our employees.

Each of these grants was contingent on approval of an increase in the shares available in the 2021 Stock Incentive Plan that was approved by the stockholders at the annual meeting of stockholders held on June 14, 2024.

In accordance with the removal of the contingency, the Company began recognizing the expense for these awards in June 2024.

Assumptions Used in Determining Fair Value

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The number of options vested during the years ended December 31, 2024 and December 31, 2023, was 2,408,864 and 308,136 , respectively.

The number of options unvested at January 1, 2023 and January 1, 2022 was 540,223 and 343,996 , respectively.

The weighted average grant date fair value of options unvested at January 1, 2023 and January 1, 2022 was $ 5.25 and $ 3.20 , respectively.

The number of options unvested at December 31, 2024 and December 31, 2023, was 1,653,921 and 1,837,732 , respectively.

As of December 31, 2024, there was approximately $ 3,608,000 of total unrecognized compensation cost related to unvested stock-based compensation arrangements.

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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 and pre-funded warrants outstanding during the period.

The pre-funded warrants are considered common shares outstanding for the purposes of the basic net loss per share calculation because of the nominal cash consideration and lack of other contingencies for issuance of the underlying common shares.

The pre-funded warrants are considered common shares outstanding for the purposes of the basic net loss per share calculation due to the nominal cash consideration and lack of other contingencies for issuance of the underlying common shares.

Diluted net loss attributable to common stockholders per share is computed by dividing net loss attributable to common stockholders, as adjusted, by the sum of the weighted average number of shares of common stock and the dilutive potential common stock equivalents then outstanding.

Potential common stock equivalents consist of stock options, warrants, and convertible preferred shares.

Since there is a net loss attributable to common stockholders for the years

ended December 31, 2023 and 2022, the inclusion of common stock equivalents in the computation for those periods would be antidilutive.

Accordingly, basic and diluted net loss per share is the same for all periods presented.

In accordance with ASC Topic 260, Earnings per Share, diluted earnings per share are the amount of earnings for the period available to each share of common stock outstanding during the reporting period and to each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares

outstanding during the reporting period.

In the quarters ended June 30, 2024, and September 30, 2024, the common warrants issued in October 2022 were dilutive.

In all other periods presented, all outstanding warrants were antidilutive.

Year ended December 31, 2024

( 44,581,446 )

Dilutive effect of warrant liability

( 7,283,786 )

Net loss allocated to common shares

( 51,865,232 )

Weighted average common shares outstanding - basic

Dilutive effect of warrant liability

Weighted average common shares outstanding - diluted

Net loss per share - diluted

The following potentially dilutive securities have been excluded from the computation of diluted net loss per share since their inclusion would have been antidilutive:

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We do not anticipate that the outcome of such matters and disputes will materially affect the Company’s financial statements.

Workforce Reduction

In December 2024, the Company implemented a workforce reduction plan impacting approximately 60 % of employees.

The total expense charge related to the plan was approximately $ 1,510,000 .

The remaining liability related to the plan as of December 31, 2024 was $ 1,180,000 .

Operating Lease Liability

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Under the terms of the Amended Lease, the Company’s previously paid security deposit of $ 75,000 was reduced to $ 23,566 and the aggregate rent due over the term of the Amended Lease is approximately $ 918,000 , which will be reduced to approximately $ 893,000 after certain rent abatements.

The Company will also be required to pay its proportionate share of certain operating expenses and real estate taxes applicable to the leased premises.

The Company will also be required to pay its proportionate share of certain operating expenses

and real estate taxes applicable to the leased premises.

After certain rent abatements the rent is approximately $ 11,800 per month for the first year and then escalates thereafter by 2 % per year for the duration of the term.

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The Company has not made any matching contributions under this plan.

SUBSEQUENT EVENT

In January 2024, the Company released topline data from its pivotal, Phase 2b CLOVER WaM trial.

In accordance with the terms of the September 2023 financing, the Tranche A warrant expiration accelerated to 10 trading days after the topline data release.

Warrant holders exercised the Tranche A warrants in their entirety, resulting in the Company issuing 2,205 shares of Series E-3 preferred stock, which are convertible to common stock at the stated rate of $ 3.185 per share, and receiving gross proceeds of $ 44.1 million and net proceeds of $ 42.8 million.

Additionally, during January and February 2024, 547,177 warrants issued in October 2022 were exercised for net proceeds of approximately $ 1.1 million.

OPERATING SEGMENT

The Company has one operating and reportable segment focused on utilizing its PDC platform to develop drugs for the treatment of cancer.

The accounting policies of the single operating segment are the same as those of the Company.

The chief operating decision maker is the Company’s president and CEO, who manages the Company’s operations on a consolidated basis, assesses performance for the operating segment and decides how to allocate resources based on consolidated operating expenses, which are reported in the consolidated statements of operations.

The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

Expenditures for additions to long-lived assets, which include purchases of property and equipment, are included in total consolidated assets reviewed by management and are reported on the consolidated statements of cash flows.

Management uses consolidated cash used in operations and budget-to-actual variances for consolidated net loss to assess the performance of the operating segment and evaluate performance and to allocate resources.

The following table presents certain financial data for the Company’s one reportable segment:

Year Ended December 31,

Research and development:

Phase 2 study in WM

Phase 1 study in pediatric tumors

Manufacturing and related costs

Pre-clinical projects costs

General research and development costs

General and administrative

Other segment items

( 7,196,000 )

Segment and consolidated net loss

Other segment items consist of warrant issuance expense, (gain) loss on valuation of warrants, and interest income.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data