What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 138 added, 66 removed, 397 unchanged (34% of the section changed)

33 unchanged sentences

Accrued and other liabilities

Warrant liability

Total current liabilities

4 unchanged sentences

$ 0.0001 par value;

10,000,000 shares authorized at March 31, 2024 and December 31, 2023;

0 shares issued and outstanding at March 31, 2024 and December 31, 2023

10,000,000 shares authorized at June 30, 2024 and December 31, 2023;

0 shares issued and outstanding at each of June 30, 2024 and December 31, 2023

Common stock:

$ 0.0001 par value;

290,000,000 shares authorized at March 31, 2024 and December 31, 2023;

49,038,582 shares issued and outstanding at March 31, 2024 and December 31, 2023

290,000,000 shares authorized at June 30, 2024 and December 31, 2023;

62,551,281 and 49,038,582 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Operating expenses:

4 unchanged sentences

Interest income and other expense, net

Change in fair value of warrant liability

Sublease income - related party

Loss before equity method investment

Income (loss) from equity method investment

Loss from equity method investment

Net loss per share, basic and diluted

8 unchanged sentences

(in thousands, except share data)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Comprehensive

5 unchanged sentences

Balance at March 31, 2024

Three Months Ended March 31, 2023

Common stock issued in connection with registered direct offering, net

Pre-funded warrants issued in connection with registered direct offering, net

Stock-based compensation expense

Unrealized loss on marketable securities

Foreign currency translation adjustment

Balance at June 30, 2024

Six Months Ended June 30, 2023

Comprehensive

6 unchanged sentences

Balance at March 31, 2023

Stock-based compensation expense

Unrealized loss on marketable securities

Foreign currency translation adjustment

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

Balance at June 30, 2023

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

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

3 unchanged sentences

Stock-based compensation

Income (loss) from equity method investment

Change in fair value of warrant liability

Loss from equity method investment

Changes in operating assets and liabilities:

12 unchanged sentences

Cash flows from financing activities

Proceeds from issuance of common stock, net (includes $ 1,794 in aggregate gross proceeds from related parties for the six months ended June 30, 2024)

Proceeds from issuance of pre-funded warrants, net (includes $ 1,769 in aggregate gross proceeds from related parties for the six months ended June 30, 2024)

Proceeds from issuance of common warrants (includes $ 1,472 in aggregate gross proceeds from related parties for the six months ended June 30, 2024)

Proceeds from issuance of common stock in connection with at-the-market offering, net

Proceeds from exercise of common stock options

20 unchanged sentences

The Company received aggregate net proceeds of approximately $ 70.6 million, after underwriting discounts, commissions and offering expenses.

Immediately prior to the consummation of the IPO, all outstanding shares of convertible preferred stock were converted into common stock.

Immediately prior to the consummation of the IPO, all outstanding shares of our redeemable convertible preferred stock were converted into common stock.

Follow-on Public Offerings

3 unchanged sentences

The aggregate net proceeds received by the Company from the offering were approximately $ 32.0 million, net of underwriting discounts and commissions and offering expenses.

Registered Direct Offering

On May 6, 2024, the Company completed a registered direct offering which resulted in gross proceeds of approximately $ 30.6 million.

The financing consisted of the sale of 13,512,699 shares of common stock and accompanying common stock warrants to purchase 13,078,509 shares of common stock (or pre-funded warrants in lieu thereof) at a combined offering price of $ 1.7312 per share, and the sale of pre-funded warrants to purchase 4,144,085 shares of common stock and accompanying common warrants to purchase 4,010,927 shares of common stock (or pre-funded warrants in lieu thereof) at a combined offering price of $ 1.7311 per share.

The common warrants have an exercise price of $ 3.50 per share of common stock (or $ 3.4999 per pre-funded warrant in lieu thereof), are exercisable at any time after the date of issuance, subject to certain ownership limitations, and expire on June 30, 2025.

The pre-funded warrants have an exercise price of $ 0.0001 and are exercisable any time after the date of the issuance, subject to certain ownership limitations.

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.

1 unchanged sentence

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.

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 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 and had an accumulated deficit of $ 340.4 million as of March 31, 2024.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 344.7 million as of June 30, 2024.

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

As of March 31, 2024, the Company had cash, cash equivalents and short-term marketable securities of $ 22.1 million.

On May 6, 2024, the Company received gross proceeds of $ 30.6 million in a registered direct offering (see Note 15.

Subsequent Events).

As of June 30, 2024, the Company had cash, cash equivalents and marketable securities of $ 47.2 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 the next 12 months from the date of the issuance of these condensed consolidated financial statements.

13 unchanged sentences

The condensed consolidated balance sheet as of December 31, 2023 was derived from audited financial statements, but does not include all disclosures required by GAAP.

The condensed consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period.

The condensed consolidated results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period.

The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 19, 2024.

21 unchanged sentences

The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities.

The Company is subject to a number of risks similar to other early stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, and protection of proprietary technology.

gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, and protection of proprietary technology.

If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.

1 unchanged sentence

The Company views its operations and manages its business in one operating segment, that of the development of and commercialization of precisely targeted oncology and immune-mediated therapies.

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 included in Accounting Standards Codification (“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, whether the warrants 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.

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

Warrants that meet all of the criteria for equity classification are required to be recorded as a component of additional paid-in capital at the time of issuance, or when the conditions for equity classification are met, and are not remeasured.

Warrants that do not meet the required criteria for equity classification are classified as liabilities.

The Company adjusts such warrants to fair value at each reporting period until the warrants are exercised or expire.

Any change in fair value is recognized in the Company’s statements of operations and comprehensive loss.

Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 to its condensed consolidated financial statements for the year ended December 31, 2023, included in its Annual Report on Form 10-K.

There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2024.

There have been no material changes to the Company’s significant accounting policies during the six months ended June 30, 2024 from those discussed in our Form 10-K.

Recent Accounting Pronouncements

13 unchanged sentences

Three Months Ended

Six Months Ended

Net loss - basic and diluted

1 unchanged sentence

Net loss per share, basic and diluted

Weighted average common shares outstanding for the six months ended June 30, 2024 includes 4,144,085 shares of common stock issuable upon the conversion of pre-funded warrants described in Note 8.

The amounts in the table below were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect:

Three Months Ended

Six Months Ended

Common warrants

Outstanding options

2 unchanged sentences

The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values.

The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs.

The fair value hierarchy prioritizes valuation inputs based on the observable nature of those

The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality.

7 unchanged sentences

These inputs include reported trades of and broker/dealer quotes on the same or similar investments, issuer credit spreads, benchmark investments, prepayment/default projections based on historical data and other observable inputs.

The following tables present information as of March 31, 2024 and December 31, 2023 about the Company’s assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy the Company utilized to determine such fair values (in thousands):

March 31, 2024

Financial Assets

The following tables present information as of June 30, 2024 and December 31, 2023 about the Company’s assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy the Company utilized to determine such fair values (in thousands):

June 30, 2024

Fair Value Measured Using

5 unchanged sentences

Marketable securities

As of March 31, 2024 marketable securities had a maximum remaining maturity of eight months .

As of March 31, 2024 and December 31, 2023, the fair value of available for sale marketable securities by type of security were as follows (in thousands):

March 31, 2024

As of June 30, 2024, all marketable securities had a maximum remaining maturity of less than two years .

As of June 30, 2024 and December 31, 2023, the fair value of available for sale marketable securities by type of security were as follows (in thousands):

June 30, 2024

Treasury securities

3 unchanged sentences

Government agency securities

Financial Liabilities

The following tables present information as of June 30, 2024 about the Company’s liabilities that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy the Company utilized to determine such fair values (in thousands):

June 30, 2024

Fair Value Measured Using

Warrant liability

The Company had no financial liabilities as of December 31, 2023.

During the six months ended June 30, 2024, the changes in the Company’s warrant liability were as follows (in thousands):

Warrant liability balance as of December 31, 2023

Issuance of warrants

Change in fair value

Warrant liability balance as of June 30, 2024

The Company uses the Black-Scholes pricing model to determine the fair value of its warrant liabilities using Level 3 inputs.

Inputs used to determine estimated fair value of the warrant liabilities include the fair value of the underlying stock at the valuation date, the term of the warrants, and the expected volatility of the underlying stock.

The significant unobservable input used in the fair value measurement of the warrant liabilities is the estimated term of the warrants.

The key inputs into valuation models used to estimate the fair value of the warrant liabilities as of May 6, 2024, the issuance date, and as of June 30, 2024 were as follows:

Risk-free interest rate

Expected volatility

Expected term (in years)

Equity Method Investment

1 unchanged sentence

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

As of March 31, 2024 and December 31, 2023, the Company’s ownership interest in Angel was approximately 49.7 %, excluding 7 % of Angel’s equity reserved for issuance under the Angel Employee Stock Ownership Plan, and is accounted for as an equity method investment.

The Company recognized its share of income in Angel for the total amount of $ 0.2 million as income and $ 1.7 million as loss from equity method investment in the condensed consolidated statement of operations for the three months ended March 31, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Company’s ownership interest in Angel was approximately 49.7 %, excluding 7 % of Angel’s equity reserved for issuance under the Angel Employee Stock Ownership Plan, and is accounted for as an equity method investment.

The Company recognized its share of income/loss in Angel for the total amount of $ 0.6 million and $ 0.3 million as loss from equity method investment in the condensed consolidated statement of operations for the three and six months ended June 30, 2024, respectively.

Summary Financial Information

1 unchanged sentence

Balance Sheet Data

March 31, 2024

June 30, 2024

December 31, 2023

6 unchanged sentences

Three Months Ended

Six Months Ended

Statement of Operations Data

17 unchanged sentences

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.

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.

Vernalis Licensing Agreement

3 unchanged sentences

In February 2017, the Company made a milestone payment of $ 3.0 million to Vernalis following the expansion of a cohort of patients with renal cell cancer treated with single agent ciforadenant in the Company’s Phase 1/1b clinical trial.

During the three months ended March 31, 2024, no clinical or regulatory milestones were completed or paid to Vernalis and the aggregate potential milestone payments were approximately $ 220 million for all indications as of March 31, 2024.

During the six months ended June 30, 2024, no clinical or regulatory milestones were completed or paid to Vernalis and the aggregate potential milestone payments were approximately $ 220 million for all indications as of June 30, 2024.

The Company has also agreed to pay Vernalis tiered incremental royalties based on the annual net sales of licensed products containing ciforadenant on a product by product and country by country basis, subject to certain offsets and reductions.

The tiered royalty rates for products containing ciforadenant range from the mid single digits up to the low double digits on a country by country net sales basis.

The royalties on other licensed products that do not include ciforadenant also increase with the amount of net sales on a product-by-product and country by country basis and range from the low single digits up to the mid single digits on a country by country net sales basis.

The royalties on other licensed products that do not include ciforadenant also increase with the amount of net sales on a product-by-product and country by country basis

and range from the low single digits up to the mid single digits on a country by country net sales basis.

The Company is also obligated to pay to Vernalis certain sales milestones as indicated above when worldwide net sales reach specified levels over an agreed upon time period.

11 unchanged sentences

The Company recorded these payments as research and development expenses for the year ended December 31, 2017.

The Company is also obligated to pay an annual license maintenance fee to Monash of $ 25,000 until a certain development milestone is

met with respect to the licensed product, after which no further maintenance fee will be due.

The Company is also obligated to pay an annual license maintenance fee to Monash of $ 25,000 until a certain development milestone is met with respect to the licensed product, after which no further maintenance fee will be due.

The Company is also required to make development and sales milestone payments to Monash with respect to the licensed products.

During the three months ended March 31, 2024 and 2023, no development or sales milestones were completed or paid to Monash and the aggregate potential milestones were $ 45.1 million as of March 31, 2024.

During the six months ended June 30, 2024 and 2023, no development or sales milestones were completed or paid to Monash and the aggregate potential milestones were $ 45.1 million as of June 30, 2024.

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.

19 unchanged sentences

Accrued legal and accounting

During the three months ended March 31, 2024 and 2023, the Company recorded approximately $ 23,000 and $ 57,000 in depreciation expense, respectively.

As of March 31, 2024, the amended and restated certificate of incorporation authorizes the Company to issue 290 million shares of common stock and 10 million shares of preferred stock.

During the three months ended June 30, 2024 and 2023, the Company recorded approximately $ 21,000 and $ 36,000 in depreciation expense, respectively, and during the six months ended June 30, 2024 and 2023, the Company recorded approximately $ 44,000 and $ 93,000 in depreciation expense, respectively.

On May 6, 2024, the company completed a registered direct offering in which the Company sold an aggregate of 13,512,699 shares of common stock and common warrants to purchase up to 13,078,509 shares of common stock (or pre-funded warrants in lieu thereof) at a combined offering price of $ 1.7312 per share and common warrant, and pre-funded warrants to purchase up to 4,144,085 shares of common stock and common warrants to purchase up to 4,010,927 shares of common stock (or pre-funded warrants in lieu thereof), at a combined offering price of $ 1.7311 per share underlying each pre-funded warrant and common warrant, which equals the offering price per share and common warrant less the $ 0.0001 exercise price per share of the pre-funded warrants.

The pre-funded warrants have an exercise price per share of common stock equal to $ 0.0001 per share.

The exercise price and the number of shares of common stock issuable upon exercise of the pre-funded warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock.

The pre-funded warrants are exercisable at any time after the date of issuance.

In accordance with accounting guidance discussed in Note 2, the Company recorded $ 5.0 million to additional paid-in capital upon issuance of the pre-funded warrants on May 6, 2024.

As of June 30, 2024, none of the pre-funded warrants have been exercised.

The common warrants have an exercise price per share of common stock equal to $ 3.50 per share (or $ 3.4999 per pre-funded warrant).

The exercise price and the number of shares of common stock (or pre-funded warrants in lieu thereof) issuable upon exercise of the common warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock.

The common warrants are exercisable at any time after the date of issuance and will expire on June 30,

In accordance with accounting guidance discussed in Note 2, the Company recorded $ 8.9 million to warrant liability upon issuance of the common warrants on May 6, 2024 and recorded a change in fair value of warrant liability of $ 1.8 million to other income in its condensed consolidated statement of operations and comprehensive loss for the three and six months ended June 30, 2024.

The value of the common warrant upon issuance on May 6, 2024 has been included within the cash flows from financing activities.

As of June 30, 2024, none of the common warrants have been exercised and the Company’s warrant liability was $ 7.1 million.

As of June 30, 2024, the amended and restated certificate of incorporation authorizes the Company to issue 290 million shares of common stock and 10 million shares of preferred stock.

Each share of common stock is entitled to one vote.

Common stockholders are entitled to dividends if and when declared by the board of directors.

As of March 31, 2024, no dividends on common stock had been declared.

As of June 30, 2024, no dividends on common stock had been declared.

On March 28, 2023, the Company entered into an open market sale agreement (the “2023 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 $ 90.0 million, through an at-the-market equity offering program under which Jefferies will act as its sales agent.

1 unchanged sentence

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 three months ended March 31, 2024, the Company did not sell any shares of common stock under its at-the-market offering program.

As of March 31, 2024, $ 81.9 million remained available for sale under the 2023 Sales Agreement.

On May 1, 2024, the Company amended the 2023 Sales Agreement to decrease the aggregate gross sales proceeds from $ 90.0 million to $ 8.2 million, which decreased the amount available for sale under the 2023 Sales Agreement from $ 81.9 million to $ 100,000 (see Note 15.

Subsequent Events).

On May 1, 2024, the Company amended the 2023 Sales Agreement to decrease the aggregate gross sales proceeds that may be sold pursuant to the 2023 Sales Agreement from $ 90.0 million to $ 8.2 million, which decreased the amount available for sale to $ 100,000 .

During the six months ended June 30, 2024, the Company did not sell any shares of common stock under its at-the-market offering program.

As of June 30, 2024, $ 100,000 remained available for sale under the 2023 Sales Agreement.

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

Pre-funded warrants

Outstanding common warrants

Shares available for future option grants

8 unchanged sentences

Under the 2016 Plan, incentive stock options, non-statutory stock options, stock purchase rights and other stock-based awards may be granted.

Terms of stock agreements, including vesting requirements, are determined by the board of directors or a committee authorized by the board of directors, subject to the provisions of the 2016 Plan.

Terms of stock agreements, including vesting requirements, are determined by the board of directors or a committee authorized by the board of directors, subject to the

provisions of the 2016 Plan.

In general, awards granted by the Company vest over four years and have a maximum exercise term of 10 years .

7 unchanged sentences

Options granted

Options exercised

Options forfeited

Balance at March 31, 2024

Balance at June 30, 2024

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

Research and development

General and administrative

During the three months ended March 31, 2024 and 2023, the Company recorded no income tax benefits for the net operating losses (NOLs) incurred due to the uncertainty of realizing a benefit from those items.

During the six months ended June 30, 2024 and 2023, the Company recorded no income tax benefits for the net operating losses (NOLs) incurred due to the uncertainty of realizing a benefit from those items.

The Company continues to maintain a full valuation allowance against its net deferred tax assets.

7 unchanged sentences

The Company’s facility lease is a net lease, as the non-lease components (i.e.

common area maintenance) are paid separately from rent based on actual costs incurred.

common area maintenance) are paid separately from rent based on

actual costs incurred.

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.

As of March 31, 2024 and December 31, 2023, the right-of-use asset under operating lease was $ 0.9 million and $ 1.1 million, respectively.

The elements of lease expense for the three months ended March 31, 2024 and 2023 were as follows (in thousands):

As of June 30, 2024 and December 31, 2023, the right-of-use asset under operating lease was $ 0.6 million and $ 1.1 million, respectively.

The elements of lease expense for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended

Six Months Ended

Statements of operations and

12 unchanged sentences

Discount rate

As of March 31, 2024, minimum rental commitments under this lease were as follows (in thousands):

As of June 30, 2024, minimum rental commitments under this lease were as follows (in thousands):

Year Ended December 31 (in thousands)

15 unchanged sentences

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions.

Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party

for losses suffered or incurred by the indemnified party.

Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party.

Some of the provisions will limit losses to those arising from third-party actions.

7 unchanged sentences

Related Party Transactions

On May 6, 2024, the Company closed a registered direct offering which resulted in gross proceeds of approximately $ 30.6 million.

The pre-funded warrants have an exercise price of $ 0.0001 and are exercisable anytime after the date of the issuance, subject to certain ownership limitations.

As part of the registered direct offering, the following number of shares of common stock, pre-funded warrants and common warrants were sold to related parties:

OrbiMed Advisors LLC (1)

Puissance Capital Management (2)

(1) Peter Thompson, M.D., a member of our Board of Directors since November 2014, is a Private Equity Partner at OrbiMed Advisors, LLC.

(2) Ted Wang, Ph.D., a Co-Founder, General Manager and Director of Angel Pharmaceuticals, of which the Company holds a 49.7 % ownership interest, is the founder of Puissance Capital Management.

(3) Richard A.

is the Company’s President, Chief Executive Officer and Chairman of the Board.

(4) William B.

is the Company’s Senior Vice President, Pharmaceutical Development.

The Company holds a 49.7 % ownership in Angel Pharmaceuticals Co.

Ltd., a corporate venture in the People’s Republic of China, and, in connection with intellectual property licensing agreements between the Company and Angel Pharmaceuticals, the Company provides operational support and clinical drug supplies to Angel Pharmaceuticals.

Third-party and internal personnel costs incurred by the Company are billed to Angel Pharmaceuticals in the period incurred and recorded as an offset to expenses.

During the three months ended March 31, 2023, the Company billed Angel for approximately $ 48,000 in third-party party costs and there were transactions during the three months ended March 31, 2024.

As of March 31, 2024 and December 31, 2023, the Company had a approximately $ 26,000 in accounts receivable – related party due from Angel Pharmaceuticals.

party and internal personnel costs incurred by the Company are billed to Angel Pharmaceuticals in the period incurred and recorded as an offset to expenses.

During the six months ended June 30, 2024 and 2023, the Company billed Angel for approximately $ 9,000 and $ 48,000 , respectively, in third-party party costs.

As of June 30, 2024 and December 31, 2023, the Company had approximately $ 35,000 and $ 26,000 , respectively, in accounts receivable – related party due from Angel Pharmaceuticals.

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

These costs are recorded as research and development expense.

During the three months ended March 31, 2023, Angel Pharmaceuticals billed the Company for approximately $ 0.1 million in research services and there were no transactions during the three months ended March 31, 2024.

During the six months ended June 30, 2023, Angel Pharmaceuticals billed the Company for approximately $ 0.2 million in research services and there were no transactions during the six months ended June 30, 2024.

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.

2 unchanged sentences

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

During the three months ended March 31, 2023, the Company recognized approximately $ 0.1 million of sublease income.

During the six months ended June 30, 2023, the Company recognized approximately $ 0.1 million of sublease income.

In July 2021, Linda S.

1 unchanged sentence

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

During the three months ended March 31, 2024 and 2023, the Company recorded approximately $ 27,000 and $ 118,000 , respectively, in clinical trial expenses under its agreements with ICON.

Subsequent Events

On May 6, 2024, the Company closed a registered direct offering which resulted in gross proceeds of approximately $ 30.6 million.

The pre-funded warrants have an exercise price of $ 0.0001 and are exercisable anytime after the date of the issuance, subject to certain ownership limitations.

As part of the registered direct offering, an institutional investor and 10% shareholder affiliated with one of the Company’s directors, the Company’s chief executive officer, an executive officer of the Company and an investment fund controlled by the founder and current board member of Angel Pharmaceuticals purchased a total of 1,464,085 shares of common stock, 1,444,085 pre-funded warrants and 2,814,725 common stock warrants for a total aggregate purchase price of approximately $ 5.0 million.

Amendment to 2023 Sales Agreement

On May 1, 2024, the Company and Jefferies entered into an amendment to the 2023 Sales Agreement pursuant to which the aggregate gross sales proceeds were decreased from $ 90.0 million to $ 8.2 million, which decreased the amount available for sale under the 2023 Sales Agreement from $ 81.9 million to $ 100,000 .

During the six months ended June 30, 2024 and 2023, the Company recorded approximately $ 155,000 and $ 184,000 , respectively, in clinical trial expenses under its agreements with ICON.

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-Q

Item 1. Financial Statements