What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-06 · 132 added, 82 removed, 453 unchanged (32% of the section changed)

19 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

19 unchanged sentences

$ 0.0001 par value;

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

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

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

Common stock:

$ 0.0001 par value;

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

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

62,580,031 and 49,038,582 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses:

11 unchanged sentences

Other comprehensive loss:

Unrealized gain (loss) on marketable securities

Unrealized gain on marketable securities

Cumulative foreign currency translation adjustment

4 unchanged sentences

(in thousands, except share data)

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Comprehensive

11 unchanged sentences

Balance at June 30, 2024

Six Months Ended June 30, 2023

Common stock issued on exercise of stock options

Stock-based compensation expense

Unrealized gain on marketable securities

Foreign currency translation adjustment

Balance at September 30, 2024

Nine Months Ended September 30, 2023

Comprehensive

11 unchanged sentences

Balance at June 30, 2023

Common stock issued on exercise of stock options

Stock-based compensation expense

Unrealized gain on marketable securities

Foreign currency translation adjustment

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

Balance at September 30, 2023

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

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

19 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, net (includes $ 1,794 in aggregate gross proceeds from related parties for the nine months ended September 30, 2024)

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

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

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

1 unchanged sentence

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of the period

6 unchanged sentences

Corvus is a clinical-stage biopharmaceutical company.

The Company’s operations are located in Burlingame, California.

The Company’s operations are located in Burlingame, California, as of the filing of this Quarterly Report on Form 10-Q.

In February 2025, the Company’s operations will be relocated to South San Francisco, California.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Corvus Biopharmaceuticals, Ltd.

18 unchanged sentences

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 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.

4 unchanged sentences

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 $ 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 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.

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

The Company intends to raise additional capital through private and public equity offerings, 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 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 or its ability to fund its obligations on a timely basis or at all.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 384.9 million as of September 30, 2024.

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 September 30, 2024, the Company had cash, cash equivalents and marketable securities of $ 41.7 million.

On October 29, 2024, the Company received approximately $ 5.9 million in cash from the early exercise of 1,677,220 common stock warrants.

Management believes that the Company’s cash, cash equivalents and marketable securities will be sufficient to fund the Company’s planned operations for a period of at least 12 months from the date these condensed 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, the potential exercise of common warrants outstanding with an exercise price of $ 3.50 per share 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.

8 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 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 condensed consolidated results of operations for the three and nine months ended September 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.

19 unchanged sentences

government agency securities, which can be subject to certain credit risks.

However, the Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer, and monitoring the ongoing creditworthiness of the financial institutions and issuers.

However, the Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer, and monitoring the ongoing creditworthiness

of the financial institutions and issuers.

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

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.

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.

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.

9 unchanged sentences

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 six months ended June 30, 2024 from those discussed in our Form 10-K.

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

Recent Accounting Pronouncements

10 unchanged sentences

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

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expense.

This update requires entities to disaggregate operating expenses into specific categories, such as salaries and wages, depreciation, and amortization, to provide enhanced transparency into the nature and function of expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

ASU 2024-03 may be applied retrospectively or prospectively.

The Company is currently evaluating the impact of ASU 2024-03 on its financial statement presentation and disclosures.

Net Loss per Share

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

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.

Weighted average common shares outstanding for the three and nine months ended September 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

Nine Months Ended

September 30,

Common warrants (1)

Outstanding options

(1) Based on the treasury stock method, such common warrants that are in-the-money should be included in the calculation of diluted earnings per share (“EPS”) if the impact is not anti-dilutive.

Therefore, as the Company was in a net loss position for the three and nine months ended September 30, 2024 and other expense from the revaluation of the common warrants was $ 32.8 million and $ 31.0 million for the three and nine months ended September 30, 2024, respectively, the impact of including the common warrants in calculating diluted EPS would be antidilutive and the Company has excluded the common warrants from the calculation of diluted net loss per share.

Fair Value Measurements

1 unchanged sentence

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

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

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.

8 unchanged sentences

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

The following tables present information as of September 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):

September 30, 2024

Fair Value Measured Using

5 unchanged sentences

Marketable securities

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

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

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

September 30, 2024

Treasury securities

4 unchanged sentences

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

The following tables present information as of September 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):

September 30, 2024

Fair Value Measured Using

1 unchanged sentence

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):

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

Warrant liability balance as of December 31, 2023

1 unchanged sentence

Change in fair value

Warrant liability balance as of June 30, 2024

Warrant liability balance as of September 30, 2024

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

1 unchanged sentence

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:

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 September 30, 2024 were as follows:

September 30,

Risk-free interest rate

4 unchanged sentences

(“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 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.

As of September 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 $ 0.7 million and $ 1.0 million as loss from equity method investment in the condensed consolidated statement of operations for the three and nine months ended September 30, 2024, respectively.

Summary Financial Information

1 unchanged sentence

Balance Sheet Data

June 30, 2024

September 30, 2024

December 31, 2023

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Statement of Operations Data

21 unchanged sentences

Pursuant to this agreement, the Company made a one-time cash payment to Vernalis in the amount of $ 1.0 million, which was recorded as research and development expense as technological feasibility of the asset had not been established and there was no alternative future use.

The Company is also required to make cash milestone payments to Vernalis upon the successful completion of clinical and regulatory milestones for licensed products depending on the indications for which such licensed products are developed and upon achievement of certain sales milestones.

The Company is also required to make cash

milestone payments to Vernalis upon the successful completion of clinical and regulatory milestones for licensed products depending on the indications for which such licensed products are developed and upon achievement of certain sales milestones.

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 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.

During the nine months ended September 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 September 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.

13 unchanged sentences

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

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.

During the nine months ended September 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 September 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.

2 unchanged sentences

The license agreement is terminable at will by the Company upon providing 30 days written notice to Monash, or by either party for material breaches by the other party.

In addition, Monash may terminate the entire agreement or convert the license to a non-exclusive license if the Company has materially breached its obligation to use commercially reasonable efforts to develop and commercialize a licensed product, subject to a specified notice and cure mechanism.

In addition, Monash may terminate

the entire agreement or convert the license to a non-exclusive license if the Company has materially breached its obligation to use commercially reasonable efforts to develop and commercialize a licensed product, subject to a specified notice and cure mechanism.

Balance Sheet Components (in thousands)

September 30,

Prepaid and Other Current Assets

13 unchanged sentences

Accrued legal and accounting

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.

During the three months ended September 30, 2024 and 2023, the Company recorded approximately $ 20,000 and $ 30,000 in depreciation expense, respectively, and during the nine months ended September 30, 2024 and 2023, the Company recorded approximately $ 65,000 and $ 123,000 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.

2 unchanged sentences

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.

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 September 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).

1 unchanged sentence

The common warrants are exercisable at any time after the date of issuance and will expire on June 30, 2025.

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.

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 $ 32.8 million and $ 31.0 million to other income in its condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2024, respectively.

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.

As of September 30, 2024, none of the common warrants have been exercised and the Company’s warrant liability was $ 40.0 million.

In the three months ended September 30, 2024, the Company recorded a loss from the change in fair value of warrant liability of $ 32.8 million.

Included in this $ 32.8 million loss from the change in fair value of warrant liability is an out of period adjustment for a $ 2.6 million gain from the change in fair value of warrant liability related to the three months ended June 30, 2024.

The Company has concluded that the out of period adjustment is not material to the condensed consolidated financial statements for the three and six months ended June 30, 2024 or for the three months ended September 30, 2024.

As of September 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 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.

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

On August 6, 2024, the Company entered into an open market sale agreement (the “2024 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 $ 100.0 million, 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 2024 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.

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.

Jefferies is entitled to compensation for its services up to 3.0 % of the gross proceeds of any shares of common stock sold through Jefferies under the 2024 Sales Agreement.

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

As of September 30, 2024, $ 100.0 million remained available for sale under the 2024 Sales Agreement.

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

September 30,

Pre-funded warrants

10 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 June 30, 2024

Balance at September 30, 2024

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Research and development

General and administrative

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.

During the nine months ended September 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 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):

As of September 30, 2024 and December 31, 2023, the right-of-use asset under operating lease was $ 0.3 million and $ 1.1 million, respectively.

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

Three Months Ended

Six Months Ended

Nine Months Ended

Statements of operations and

September 30,

comprehensive loss location

11 unchanged sentences

Discount rate

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

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

Year Ended December 31 (in thousands)

6 unchanged sentences

imputed interest

On October 22, 2024, the Company entered into a sub-sublease agreement (the “Lease”) with NewLimit, Inc.

(the “Sublandlord”), pursuant to which the Company will lease approximately 20,916 square feet of office space located at 901 Gateway Boulevard, South San Francisco, California 94080 (the “Premises”).

The Lease has a term of three years commencing on February 1, 2025 (the “Commencement Date”) with an option to extend the term of the Lease for an additional two years .

The Company’s obligation for the payment of base rent (“Monthly Base Rent”) for the Premises begins on the Commencement Date and will initially be $ 33,833.33 per month, up to Monthly Base Rent of $ 47,200.00 during the third year of the Lease.

In addition to base rent, the Company is obligated under the Lease to pay its proportionate share of taxes, insurance and operating expenses.

Within five business days of the later of the full execution and delivery of the Lease and the Company’s receipt of a copy of the fully executed Consent, the Company will pay Sublandlord $ 231,234.99 in prepaid rent, which shall be applied to the Monthly Base Rent and the Company’s proportionate share of additional expenses for the first three months of the term of the Lease.

Commitments and Contingencies

32 unchanged sentences

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.

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.

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 nine months ended September 30, 2024 and 2023, the Company billed Angel for approximately $ 44,000 and $ 59,000 , respectively, in third-party party costs.

As of September 30, 2024 and December 31, 2023, the Company had approximately $ 70,000 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 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.

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

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

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

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

In July 2021, Linda S.

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

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.

During the nine months ended September 30, 2024 and 2023, the Company recorded approximately $ 273,000 and $ 226,000 , respectively, in clinical trial expenses under its agreements with ICON.

Subsequent Event

On October 29, 2024, the Company received approximately $ 5.9 million in cash from the early exercise of 1,677,220 common stock warrants.

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