What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-19 compared with 2023-03-28 · 89 added, 84 removed, 600 unchanged (22% of the section changed)

14 unchanged sentences

We have audited the accompanying consolidated balance sheets of Corvus Pharmaceuticals, Inc.

and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, of changes in stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

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

As discussed in Note 1 to the consolidated financial statements, the Company has incurred significant net operating losses and negative cash flows from operations since inception 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 include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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We conducted our audits of these consolidated financial statements 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 audits to obtain reasonable assurance about whether the consolidated 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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We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company will require additional financing to fund future operations.

Management’s plans in regard to this matter are also described in Note 1.

Critical Audit Matters

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290,000,000 shares authorized at December 31, 2023 and December 31, 2022;

46,553,511 shares issued and outstanding at December 31, 2022 and December 31, 2021

49,038,582 and 46,553,511 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

Accumulated deficit

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Gain from sale of property and equipment

Gain on deconsolidation of Angel Pharmaceuticals

Sublease income - related party

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Other comprehensive loss:

Unrealized loss on marketable securities

Unrealized gain (loss) on marketable securities

Cumulative foreign currency translation adjustment

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

(in thousands, except share data)

Comprehensive

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Balance at December 31, 2020

Issuance of common stock in connection with at-the-market offering, net

Common stock issued on exercise of stock options

Stock-based compensation expense

Unrealized loss on marketable securities

Balance at December 31, 2020

Issuance of common stock upon exercise of Exchange Warrants

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Balance at December 31, 2022

Issuance of common stock in connection with at-the-market offering, net

Common stock issued on exercise of stock options

Stock-based compensation expense

Unrealized gain on marketable securities

Foreign currency translation adjustment

Balance at December 31, 2023

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

9 unchanged sentences

Gain from sale of property and equipment

Gain on deconsolidation of Angel Pharmaceuticals

Loss from equity method investment

9 unchanged sentences

Purchases of marketable securities

Sales of marketable securities

Maturities of marketable securities

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Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of the period

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The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturer and contract research organizations, compliance with government regulations and the need to obtain additional financing to fund operations.

Since commencing operations in 2014, the majority of the Company’s efforts have been focused on the research and development of CPI-818, ciforadenant and mupadolimab.

The Company believes that it will continue to expend substantial resources for the foreseeable future as it continues clinical development of, seek regulatory approval for and, if approved, prepare for the commercialization of CPI-818, ciforadenant and mupadolimab, as well as product candidates under the Company’s other development programs.

These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, obtaining regulatory approvals, manufacturing and

supply, sales and marketing and general operations.

Since commencing operations in 2014, the majority of the Company’s efforts have been focused on the research and development of soquelitinib, ciforadenant and mupadolimab.

The Company believes that it will continue to expend substantial resources for the foreseeable future as it continues clinical development of, seek regulatory approval for and, if approved, prepare for the commercialization of soquelitinib, ciforadenant and mupadolimab, as well as product candidates under the Company’s other development programs.

These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, obtaining regulatory approvals,

manufacturing and supply, sales and marketing and general operations.

In addition, other unanticipated costs may arise.

Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, the Company may not be able to accurately estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of CPI-818, ciforadenant and mupadolimab, or any other product candidates.

The Company does not expect its existing capital resources to be sufficient to enable it to fund the completion of its clinical trials and remaining development program of CPI-818, ciforadenant and mupadolimab through commercialization.

In addition, its operating plan may change as a result of many factors.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 307.7 million as of December 31, 2022.

The Company has historically financed its operations primarily through the sale of redeemable convertible preferred stock and common stock.

While the Company has been able to raise multiple rounds of financing, there can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all.

Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.

As of December 31, 2022, the Company had cash, cash equivalents and short-term marketable securities of $ 42.3 million.

Management believes that the Company’s current cash, cash equivalents and short-term marketable securities will be sufficient to fund its planned operations for at least 12 months from the date of the issuance of these financial statements.

The current COVID-19 (coronavirus) pandemic, which is impacting worldwide economic activity, poses risks that the Company or its employees, contractors, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.

The extent to which COVID-19 impacts the Company’s business, including its clinical trials and financial condition, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

As COVID-19 continues to spread around the globe, including the spread of more contagious and virulent variants, we will likely experience disruptions, including delays or difficulties in enrolling patients in our clinical trials, delays or difficulties in clinical site initiation, interruption of key clinical trial activities, delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials and delays in necessary interactions with local regulatory authorities.

COVID-19 may also impact the Company’s ability to raise additional capital on a timely basis or at all, which could negatively impact short-term and long-term liquidity.

Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, the Company may not be able to accurately estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of soquelitinib, ciforadenant and mupadolimab or any other product candidates.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception.

The Company had net losses of $ 27.0 million, $ 41.3 million, and $ 43.2 million for the years ended December 31, 2023, 2022, and 2021, respectively.

The Company used net cash of $ 23.9 million, $ 27.0 million, and $ 36.7 million through its operating activities for the years ended December 31, 2023, 2022, and 2021, respectively.

The Company had an accumulated deficit of $ 334.7 million and $ 307.7 million as of December 31, 2023 and 2022, respectively.

To date, none of the Company’s product candidates have been approved for sale and therefore the Company has not generated any revenue from sales of commercial products.

Management expects operating losses to continue for the foreseeable future.

The Company has funded its operations to date primarily through the sale of redeemable convertible preferred stock and common stock.

As of December 31, 2023, the Company had cash, cash equivalents and marketable securities of $ 27.1 million.

The Company’s cash, cash equivalents and marketable securities are not sufficient to fund the Company’s planned operations for a period of 12 months from the date these consolidated financial statements are issued.

To fund the Company's planned operations, the Company will need to raise additional capital.

The Company intends to raise additional capital through private and public equity offerings, including its “at-the-market” offering program, debt financings, and potential future collaboration, license and development agreements.

However, there can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its operations or on terms acceptable to the Company or at all.

If the Company is unsuccessful in its efforts to raise additional capital or if sufficient funds on acceptable terms are not available when needed, the Company could be required to significantly reduce operating expenses and delay, reduce the scope of or eliminate one or more of its development programs, out-license intellectual property rights to its product candidates and sell unsecured assets, or a combination of the above, any of which may have a material adverse effect on the Company’s business, results of operations, financial condition and/or its ability to fund its obligations on a timely basis or at all.

Failure to manage discretionary spending or raise additional capital, as needed, may adversely impact the Company’s ability to achieve its intended business objectives.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of the issuance of these consolidated financial statements.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

The consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.

Exchange Warrants

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The adoption of the guidance did not have a material impact on its financial statements and related disclosures.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative, which modifies the disclosure or presentation requirements related to variety of FASB Accounting Standard Codification topics.

The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K is effective.

If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the associated amendment will be removed from the Codification and will not become effective for any entities.

We are currently evaluating the effect of adopting this ASU.

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

The ASU is intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve the effectiveness of income tax disclosures.

The ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2024.

Entities are permitted to early adopt the standard “for annual financial statements that have not yet been issued or made available for issuance.” As adoption is either prospectively or retrospectively, the Company will adopt this ASU on a prospective basis.

The Company is currently evaluating the impact of this ASU but does not expect any material impacts upon adoption.

Net Loss per Share

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Net loss - basic and diluted

Weighted average common shares outstanding

weighted average common shares subject to repurchase

Weighted average common shares outstanding used to compute basic and diluted net loss per share

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Marketable securities

As of December 31, 2022, marketable securities had a maximum remaining maturity of twelve months .

As of December 31, 2023, marketable securities had a maximum remaining maturity of eleven months .

As of December 31, 2023 and 2022, the fair value of available for sale marketable securities by type of security were as follows (in thousands):

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In August 2020, the Company established Angel Pharmaceuticals Co.

(“Angel”), a wholly-owned corporate venture in the People’s Republic of China (“China”) designed to develop, manufacture, and commercialize CPI-818, ciforadenant and mupadolimab compounds for distribution within the countries of China, Taiwan, Macao, and Hong Kong (collectively, the “Territories”) based on intellectual property licenses to be contributed to Angel by the Company.

(“Angel”), a wholly-owned corporate venture in the People’s Republic of China (“China”) designed to develop, manufacture, and commercialize soquelitinib, ciforadenant and mupadolimab compounds for distribution within the countries of China, Taiwan, Macao, and Hong Kong (collectively, the “Territories”) based on intellectual property licenses to be contributed to Angel by the Company.

In October 2020, Angel raised financing from third-party investors, the licenses were entered into and the Company’s ownership interest was reduced to 53.2 %.

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Since inception through December 31, 2023, Angel has not recorded any revenue.

The Company evaluates its equity method investment in Angel for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable.

For further discussion of the

Company’s impairment policy, see Note 2.

Summary Financial Information

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Share of loss from investments accounted for using the equity method

(1) The Company’s share of loss is based on net loss beginning October 2020 upon the deconsolidation of Angel Pharmaceuticals .

License and Collaboration Agreements

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The Company’s license agreement with Scripps is terminable by the consent of the parties, at will by the Company upon providing 90 days written notice to Scripps, or by Scripps for certain material breaches, or if the Company undergoes a bankruptcy event.

In addition, Scripps may terminate the license on a product-by-product basis, or the entire agreement, if the Company fails to meet specified diligence obligations related to

the development and commercialization of licensed products.

In addition, Scripps may terminate the license on a

product-by-product basis, or the entire agreement, if the Company fails to meet specified diligence obligations related to the development and commercialization of licensed products.

Scripps may also terminate the agreement after the third anniversary of the effective date of the agreement if it reasonably believes, based on reports the Company provides to Scripps, that the Company has not used commercially reasonable efforts as required under the agreement, subject to a specified notice and cure period.

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The Company is also required to pay to Monash tiered royalties on net sales of licensed products sold by it, its affiliates and its sublicensees at a rate ranging in the low-single digits.

In addition, should the Company sublicense its rights under the agreement, the Company has agreed to pay a percentage of sublicense revenue received at specified rates that are currently at low double digit

percentages and decrease to single digit percentages based on the achievement of development milestones.

In addition, should the Company sublicense its rights under the agreement, the Company has

agreed to pay a percentage of sublicense revenue received at specified rates that are currently at low double digit percentages and decrease to single digit percentages based on the achievement of development milestones.

The term of the Company’s agreement with Monash continues until the expiration of its obligation to pay royalties to Monash thereunder.

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As of December 31, 2023, no dividends on common stock had been declared.

In March 2020, the Company entered into an open market sale agreement (the “2020 Sales Agreement”) with Jefferies LLC (“Jefferies”) to sell shares of the Company’s common stock, from time-to-time, with aggregate gross sales proceeds of up to $ 50,000,000 , through an at-the-market equity offering program under which Jefferies will act as its sales agent.

In November 2021, the Company entered into another Sale Agreement (“2021 Sales Agreement”) with Jefferies to sell shares of our common stock from time-to-time, with aggregate gross sales proceeds of up to $ 40,000,000 .

The issuance and sale of shares of common stock by the Company pursuant to the Sales Agreements are deemed an “at-the-market” offering under the Securities Act of 1933, as amended.

Jefferies is entitled to compensation

for its services equal to up to 3.0 % of the gross proceeds of any shares of common stock sold through Jefferies under the Sales Agreements.

During the year ended December 31, 2022, the Company did not sell any shares of common stock under its at-the-market offering program.

As of December 31, 2022, the Company had sold 6,920,339 shares of common stock for gross proceeds of $ 31.1 million under the 2020 Sales Agreement.

As of December 31, 2022, $ 18.9 million remained for sale under the 2020 Sales Agreement and $ 40.0 million remained for sale under the 2021 Sales Agreement.

On March 28, 2023, the Company entered into an open market sale agreement (the “2023 Sales Agreement”) with Jefferies to sell shares of the Company’s common stock, from time-to-time, with aggregate gross sales proceeds of up to $ 90,000,000 , through an at-the-market equity offering program under which Jefferies will act as its sales agent.

The issuance and sale of shares of common stock by the Company pursuant to the 2023 Sales Agreement are deemed an “at-the-market” offering under the Securities Act of 1933, as amended.

Jefferies is entitled to compensation for its services equal to 3.0 % of the gross proceeds of any shares of common stock sold through Jefferies under the 2023 Sales Agreement.

During the year ended December 31, 2023, the Company sold 2,461,903 shares of common stock under its at-the-market offering program resulting in net proceeds of $ 7.8 million.

As of December 31, 2023, $ 81.9 million remained available for sale under the 2023 Sales Agreement.

The Company has reserved shares of common stock, for issuance as follows:

Exchange warrants

Shares available for future option grants

19 unchanged sentences

( 2,543,500 )

Options exercised

Options forfeited

( 1,054,458 )

Balance at December 31, 2023

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In the table above, aggregate intrinsic value represents the difference between the exercise price of the options to purchase common stock and the fair value of the Company’s common stock of $ 1.76 per share as of December 31, 2023.

The aggregate intrinsic value of stock options exercised in the years ended December 31, 2022, 2021 and 2020, was $ 0.0 million, $ 1.0 million and $ 0.3 million, respectively.

The aggregate intrinsic value of stock options exercised in the years ended December 31, 2023, 2022 and 2021, was less than $ 0.1 million, $ 0.0 million and $ 1.0 million, respectively.

The total fair value of options that vested in the year ended December 31, 2023, 2022 and 2021, was $ 2.1 million, $ 2.8 million, and $ 4.5 million, respectively.

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Risk-free Interest Rate:

The Company based the risk-free interest rate over the expected term of the options based on the constant maturity rate of U.S.

Treasury securities with similar maturities as of the date of the grant.

The Company uses an average historical stock price volatility of a peer group of publicly traded companies to be representative of its expected future stock price volatility.

For purposes of identifying these peer companies, the Company considers the industry, stage of development, size and financial leverage of potential comparable companies.

For each grant, the Company measures historical volatility over a period equivalent to the

expected term.

The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

The risk-free interest rate is estimated based on the U.S.

Treasury securities with maturity dates commensurate with the expected term of the equity award.

The expected volatility in 2023 was determined based on the Company’s historical stock price volatility.

In 2022 and 2021, the Company utilized the average historical stock price volatility of a peer group of publicly traded companies to represent its expected future stock price volatility, due to the insufficient trading history of the Company’s common stock.

For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies.

For each grant, the Company measured historical volatility over a period equivalent to the expected term.

Expected Term:

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Share based Compensation

162(m) covered employees compensation limitation

FIN48 Reserve

Investment in Angel

Gain on transfer of intellectual property

Prior year federal true-up

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The NOLs will begin to expire in 2034, if not utilized.

As of December 31, 2022, the amount of federal NOL carryforwards that does not expire, is $ 155.3 million.

Utilization of the net operating loss carryforwards are subject to various limitations due to the ownership change limitations provided by Internal Revenue Code (IRC) Section 382 and similar state provisions.

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The state research and development tax credits have no expiration date.

In December 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law, significantly reforming the Internal Revenue Code of 1986, as amended (IRC).

The TCJA contained certain provisions that went into effect on January 1, 2022, including a provision impacting Section 174 of the IRC whereby for tax years beginning on or after January 1, 2022, taxpayers are required to capitalize and amortize, rather than deduct, research and development (R&D) expenses.

The R&D expenses under Section 174 must be amortized over five years for research performed in the U.S.

and 15 years for research performed outside the U.S.

The mandatory capitalization requirement did not impact the Company’s net deferred tax assets and 2022 cash tax liabilities.

The Company will continue to monitor the effect of these provisions and is in the process of analyzing the potential impact to its income taxes and financial position in future years.

income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration.

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The Company follows the provisions of ASC 740, Accounting for Income Taxes, and the accounting guidance related to accounting for uncertainty in income taxes.

The Company determines its uncertain tax positions based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be sustained upon examination by the relevant income tax authorities.

The Company determines its uncertain tax positions based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more

likely than not to be sustained upon examination by the relevant income tax authorities.

None of the Company’s unrecognized tax benefits that, if recognized, would affect its effective tax rate.

6 unchanged sentences

In January 2015, the Company signed an initial operating lease, effective February 1, 2015 for 8,138 square feet of office and laboratory space with a one year term.

Between January 2015 and September 2021, the Company entered into a series of lease amendments to increase the amount of leased space to 27,280 square feet and extend the expiration of the lease to February 2025.

The lease agreement includes annual rent escalations.

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Therefore, the non-lease components were not included in the right-of-use asset and liability and are reflected as an expense in the period incurred.

In September 2021, the Company entered into a lease amendment to extend the expiration of its operating lease by two years , from February 2023 to February 2025.

As a result of this lease extension, the Company recorded a $ 2.4 million increase in the operating lease right-of-use asset and a corresponding increase in the operating lease liability

As of December 31, 2023 and 2022, the right-of-use asset under operating lease was $ 1.1 million and $ 2.2 million, respectively.

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Pursuant to the sublease, rent is due monthly and is subject to scheduled annual increases and Angel Pharmaceuticals is responsible for certain operating expenses and taxes throughout the life of the sublease.

The sublease will expire in February 2023 and Angel Pharmaceuticals has no option to extend the sublease term.

The sublease expired in January 2023.

Sublease income is recognized on a straight-line basis as other income in our consolidated statements of operations.

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For further discussion of the Company’s facility lease agreement, see Note 12.

Pursuant to the Company’s license agreements with each of Vernalis and Scripps, it has obligations to make future milestone and royalty payments to these parties, respectively.

Pursuant to the Company’s license agreements with each of Vernalis, Scripps and Monash, it has obligations to make future milestone and royalty payments to these parties, respectively.

However, because these amounts are contingent, they have not been included on the Company’s balance sheet.

For further discussion of the Vernalis and Scripps licensing agreements, see Note 6.

For further discussion of the Vernalis, Scripps and Monash licensing agreements, see Note 6.

Indemnifications

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During the years ended December 31, 2023 and 2022, the Company billed Angel for approximately $ 0.0 million and $ 0.1 million in internal personnel costs, respectively, and $ 0.1 million and $ 1.3 million in third-party costs, respectively.

Of the third-party costs billed to Angel in the years ending December 31, 2022 and 2021, approximately $ 0.5 million and $ 0.6 million, respectively, were associated with clinical drug supply manufactured and expensed in prior years.

The remaining $ 0.8 million and $ 1.0 million in third-party costs were primarily associated with

clinical drug supply passthrough costs incurred during the years ended December 31, 2022 and 2021, respectively, and did not have an impact on the Company’s consolidated statements of operations.

In addition to the provision of clinical supplies to Angel Pharmaceuticals, Angel Pharmaceuticals may provide clinical supplies to the Company on an as needed basis.

These supplies are recorded as research and development expense.

During the year ended December 31, 2022, Angel Pharmaceuticals billed the Company for approximately $ 0.2 million in third-party costs associated with clinical drug supply provided to the Company.

Of the third-party costs billed to Angel in the year ending December 31, 2022, approximately $ 0.5 million were associated with clinical drug supply manufactured and expensed in prior years.

The remaining $ 0.1 million and $ 0.8 million in third-party costs were primarily associated with clinical drug supply passthrough costs incurred during the years ended December 31, 2023 and 2022, respectively, and did not have an impact on the Company’s consolidated statements of operations.

In addition to the provision of clinical supplies to Angel Pharmaceuticals, Angel Pharmaceuticals may provide clinical supplies and research services to the Company on an as needed basis.

These transactions are recorded as research and development expense.

During the years ended December 31, 2023 and 2022, Angel Pharmaceuticals billed the Company for approximately $ 0.2 million and $ 0.2 million, respectively, associated with clinical drug supply and research services provided to the Company.

In August 2021, the Company entered into an agreement to sublease 7,585 square feet of its office and laboratory space in Burlingame, California to Angel Pharmaceuticals.

The sublease will expire in February 2023 and Angel Pharmaceuticals has no option to extend the sublease term.

The sublease expired in January 2023.

Sublease income is recognized on a straight-line basis as other income in our consolidated statements of operations.

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Grais, M.D., J.D., a member of the Company’s Board of Directors, was appointed as a non-executive member of the Board of Directors of ICON plc (“ICON”), effective upon completion of ICON’s acquisition of PRA Health Sciences, Inc.

ICON is a clinical research organization and provides services to support the Company’s clinical trials.

ICON is a clinical research organization and provides services to support the

Company’s clinical trials.

During the years ended December 31, 2023 and 2022, the Company recorded approximately $ 254,000 and $ 429,000 , respectively, in clinical trial expenses under its agreements with ICON.

3 unchanged sentences

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