What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-12 · 133 added, 178 removed, 407 unchanged (43% of the section changed)

19 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

14 unchanged sentences

Total current liabilities

Operating lease liability

Total liabilities

3 unchanged sentences

$ 0.0001 par value;

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

10,000,000 shares authorized at March 31, 2025 and December 31, 2024;

0 shares issued and outstanding at each of March 31, 2025 and December 31, 2024

Common stock:

$ 0.0001 par value;

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

290,000,000 shares authorized at March 31, 2025 and December 31, 2024;

68,169,461 and 67,899,779 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Operating expenses:

5 unchanged sentences

Change in fair value of warrant liability

Sublease income - related party

Loss before equity method investment

Loss from equity method investment

Net loss per share, basic and diluted

Shares used to compute net loss per share, basic and diluted

Other comprehensive loss:

Unrealized gain on marketable securities

Income (loss) before equity method investment

Income (loss) from equity method investment

Net income (loss)

Net income (loss) per share, basic

Net loss per share, diluted

Shares used to compute net income (loss) per share, basic

Shares used to compute net loss per share, diluted

Other comprehensive income (loss):

Unrealized loss on marketable securities

Cumulative foreign currency translation adjustment

Comprehensive loss

Comprehensive income (loss)

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

2 unchanged sentences

(in thousands, except share data)

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Comprehensive

1 unchanged sentence

Balance at December 31, 2024

Common stock issued on exercise of stock options

Stock-based compensation expense

2 unchanged sentences

Balance at March 31, 2025

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

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

Three Months Ended March 31, 2024

Comprehensive

1 unchanged sentence

Balance at December 31, 2023

Common stock issued on exercise of stock options

Stock-based compensation expense

Unrealized gain on marketable securities

Foreign currency translation adjustment

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

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

Balance at March 31, 2024

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

2 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

Net income (loss)

Adjustments to reconcile net loss to net cash used in operating activities:

3 unchanged sentences

Change in fair value of warrant liability

Loss from equity method investment

Loss (gain) 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 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

Proceeds from exercise of common stock options

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Net decrease 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, 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 Company’s operations are located in South San Francisco, California.

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

8 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 our redeemable convertible preferred stock were converted into common stock.

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

Follow-on Public Offerings

7 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.

As of March 31, 2025, 5,311,198 of the common warrants have been exercised, resulting in

proceeds of $ 18.6 million, and 11,778,238 common warrants remained outstanding.

During the three months ended March 31, 2025, no common warrants were exercised.

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.

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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 $ 384.9 million as of September 30, 2024.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 381.8 million as of March 31, 2025.

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.

1 unchanged sentence

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.

As of March 31, 2025, the Company had cash, cash equivalents and marketable securities of $ 44.2 million.

On May 7, 2025, the Company received approximately $ 31.3 million in cash from the early exercise of 8,945,175 common stock warrants.

Management believes that the Company’s cash, cash equivalents and marketable securities as of March 31, 2025 with the addition of approximately $ 31.3 million in cash received from the early exercise of common stock warrants on May 7, 2025, 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.

12 unchanged sentences

The condensed consolidated balance sheet as of December 31, 2024 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 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 condensed consolidated results of operations for the three months ended March 31, 2025 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, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2025.

7 unchanged sentences

The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and the foreign currency translation adjustment as applicable.

For equity method investees with a functional currency different than the Company’s reporting currency, the Company follows the guidance under ASC 830-10-15-5, pursuant to which, the foreign currency financial statements of a foreign investee accounted for by the equity method should be translated to the reporting entity's reporting currency.

For equity method investees with a functional currency different than the Company’s reporting currency, the Company follows the guidance under Accounting Standards Codification (“ASC”) 830-10-15-5, pursuant to which, the foreign currency financial statements of a foreign investee accounted for by the equity method should be translated to the reporting entity’s reporting currency.

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

9 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.

1 unchanged sentence

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.

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

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 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 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.

5 unchanged sentences

Significant Accounting Policies

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.

There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2025 from those discussed in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2025.

Recent Accounting Pronouncements

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

In October 2023, the Financial Accounting Standards Board (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.

6 unchanged sentences

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.

The Company adopted ASU 2023-09 in the first quarter of 2025 and the adoption had no material impact to the Company’s consolidated financial statements.

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

3 unchanged sentences

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

Net Loss per Share

The following table shows the calculation of net loss per share (in thousands, except share and per share data):

Net Income (Loss) per Share

The following table shows the calculation of net income (loss) per share (in thousands, except share and per share data):

Three Months Ended

Nine Months Ended

September 30,

Net loss - basic and diluted

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

Net loss per share, basic and diluted

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.

Net income (loss) attributable to common stockholders, basic

Gain from change in fair value of warrant liability

Net loss attributable to common stockholders, diluted

Weighted average common shares and pre-funded warrants outstanding used to compute basic net income (loss) per share

Shares issuable upon the exercise of the common warrants

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

Net income (loss) per share, basic

Net loss per share, diluted

Weighted average common shares outstanding used in the calculation of basic and diluted net income (loss) per share for the three months ended March 31, 2025 includes 4,144,085 shares of common stock issuable upon conversion of pre-funded warrants.

Refer to Note 9, “Warrants” for further details.

Shares issuable upon exercise of common warrants used in the computation of diluted net loss per share were calculated using the treasury stock method.

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

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.

The Company views its operations and manages its business in one operating segment, that of the development and commercialization of drugs and antibodies that target critical elements of the immune system.

The Company’s CODM is made up of the Chief Executive Officer and Chief Financial Officer.

The CODM assesses performance for the segment and decides how to allocate resources based on consolidated net loss that is reported on the consolidated statement of operations and comprehensive loss.

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

Managing and allocating resources on a consolidated basis enables the CODM to assess the overall level of resources available and how to best deploy these resources across functions and programs that are in line with the Company’s long-term company-wide strategic goals.

The following table presents reportable segment net loss (income), including significant expense categories, attributable to the Company’s reportable segment for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended

Compensation and benefits, excluding stock-based compensation

Stock-based compensation

Drug manufacturing

Clinical trials

Outside general and administrative

Facilities and insurance

Other segment items (1)

Total segment expense

Non-operating (income) and expense, net

Net loss (income)

(1) Includes consulting, non-clinical research and laboratory supplies.

Fair Value Measurements

12 unchanged sentences

Financial Assets

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

The following tables present information as of March 31, 2025 and December 31, 2024 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, 2025

Fair Value Measured Using

5 unchanged sentences

Marketable securities

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

As of March 31, 2025, all marketable securities had a maximum remaining maturity of less than thirteen months .

As of March 31, 2025 and December 31, 2024, the fair value of available for sale marketable securities by type of security were as follows (in thousands):

March 31, 2025

Treasury securities

4 unchanged sentences

Financial Liabilities

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

The following tables present information as of March 31, 2025 and December 31, 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):

March 31, 2025

Fair Value Measured Using

Warrant liability

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

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

December 31, 2024

Fair Value Measured Using

Warrant liability

During the three months ended March 31, 2025, the changes in the Company’s warrant liability were as follows (in thousands):

Warrant liability balance as of December 31, 2024

1 unchanged sentence

Change in fair value

Warrant liability balance as of September 30, 2024

Exercise of warrants

Warrant liability balance as of March 31, 2025

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 September 30, 2024 were as follows:

September 30,

The key inputs into valuation models used to estimate the fair value of the warrant liabilities as of March 31, 2025 and December 31, 2024 were as follows:

Risk-free interest rate

3 unchanged sentences

Angel Pharmaceuticals Co.

(“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 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.

(“Angel Pharmaceuticals”) 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 Pharmaceuticals by the Company.

As of March 31, 2025 and December 31, 2024, the Company’s ownership interest in Angel Pharmaceuticals was approximately 49.7 %, excluding 7 % of Angel Pharmaceuticals’ equity reserved for issuance under the Angel

Pharmaceuticals Employee Stock Ownership Plan, and is accounted for as an equity method investment.

The Company recognized its share of income/loss in Angel Pharmaceuticals for the total amount of $ 0.5 million as loss and $0.2 million as income from equity method investment in the condensed consolidated statement of operations for the three months ended March 31, 2025 and 2024, respectively.

Summary Financial Information

1 unchanged sentence

Balance Sheet Data

September 30, 2024

March 31, 2025

December 31, 2024

6 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Statement of Operations Data

4 unchanged sentences

Scripps Licensing Agreement

In December 2014, the Company entered into a license agreement with The Scripps Research Institute (“Scripps”), pursuant to which it was granted a non-exclusive, world-wide license for all fields of use under Scripps’ rights in certain know-how and technology related to a mouse hybridoma clone expressing an anti-human CD73 antibody, and to progeny, mutants or unmodified derivatives of such hybridoma and any antibodies expressed by such hybridoma, from which we developed mupadolimab.

Scripps also granted the Company the right to grant sublicenses in conjunction with other proprietary rights the Company holds, or to others collaborating with or performing services for the Company.

1 unchanged sentence

Upon execution of the agreement, the Company made a one-time cash payment to Scripps of $ 10,000 and is also obligated to pay a minimum annual fee to Scripps of $ 25,000 .

The first minimum annual fee payment is due on each anniversary of the effective date of the agreement and will be due on each subsequent anniversary of the effective date for the term of the agreement.

The first minimum annual fee payment was due on the anniversary of the effective date of the agreement and additional annual fees will be due on each subsequent anniversary of the effective date for the term of the agreement.

The Company is also required to make performance-based cash payments upon successful completion of clinical and sales milestones.

6 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.

Vernalis Licensing Agreement

1 unchanged sentence

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 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.

During the three months ended March 31, 2025 and 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, 2025.

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.

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

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.

During the three months ended March 31, 2025 and 2024, no development or sales milestones were completed or paid to Monash, and the aggregate potential milestones were $ 45.1 million as of March 31, 2025.

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 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.

During the three months ended March 31, 2025 and 2024, the Company recorded approximately $ 22,000 and $ 23,000 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 September 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 March 31, 2025, 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 $ 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 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.

In accordance with accounting guidance discussed in Note 2, “Summary of Significant Accounting Policies,” the Company recorded a decrease in fair value of warrant liability of $ 25.1 million to other income in its condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2025.

As of March 31, 2025, 5,311,198 of the common warrants have been exercised, resulting in proceeds of $ 18.6 million.

As of March 31, 2025, 11,778,238 common warrants were outstanding and the Company’s warrant liability was $ 3.8 million.

During the three months ended March 31, 2025, no common warrants were exercised.

As of March 31, 2025, 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 September 30, 2024, no dividends on common stock had been declared.

As of March 31, 2025, 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.

1 unchanged sentence

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.

During the three months ended March 31, 2025, the Company did not sell any shares of common stock under its at-the-market offering program.

As of March 31, 2025, $ 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

9 unchanged sentences

In connection with the consummation of the IPO in March 2016, the 2016 Equity Incentive Award Plan (the “2016 Plan”) became effective.

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

Under the 2016 Plan, ISOs, NSOs, 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.

10 unchanged sentences

Options forfeited

Balance at September 30, 2024

Balance at March 31, 2025

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 30,

Research and development

General and administrative

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.

During the three months ended March 31, 2025, the Company recorded no income tax expense due to the continued losses.

During the three months ended March 31, 2024, 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.

Facility Lease

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 January 2025.

The lease agreement includes annual rent escalations.

Under the lease and subsequent amendments, the landlord provided approximately $ 1.9 million in free rent and lease incentives.

On October 22, 2024, the Company entered into an operating sub-sublease agreement, pursuant to which the Company sub-leased approximately 20,916 square feet of office and lab space.

The sub-sublease has a term of three years commencing on February 21, 2025 with an option to extend at fair market value for an additional 27 months.

The Company records rent expense on a straight-line basis over the effective term of the lease, including any free rent periods and incentives.

As the interest rate implicit in lease arrangements is typically not readily available, in calculating the present value of the lease payments, the Company has utilized its incremental borrowing rate, which was determined based on the prevailing market rates for collateralized debt with maturity dates commensurate with the term of its lease.

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.

As the interest rate implicit in lease arrangements is typically not readily available, in calculating the present value of the lease payments, the Company has utilized its incremental borrowing rate, which is determined based on the prevailing market rates for collateralized debt with maturity dates commensurate with the term of its lease.

The Company’s obligation for the payment of base rent for the premises begins on the commencement date and will initially be $ 33,833 per month, up to monthly base rent of $ 47,200 during the third year of the sub-sublease.

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

In November 2024, the Company paid the sublandlord $ 231,235 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 sub-sublease.

Although the non-cancellable lease term commenced on February 21, 2025, for purposes of determining the right-of-use asset balance, in accordance with ASC Topic 842, the Company used November 25, 2024 as the commencement date, the date on which the sublandlord granted the Company access to the premises.

The sub-sublease is a net lease, as the non-lease components (i.e., 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 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):

As of March 31, 2025 and December 31, 2024, the right-of-use asset under the operating lease was $ 1.1 million and $ 1.2 million, respectively.

The elements of lease expense under the operating lease for the three months ended March 31, 2025 were as follows (in thousands):

Three Months Ended

Nine Months Ended

Statements of operations and

September 30,

comprehensive loss location

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Discount rate

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

As of March 31, 2025, minimum rental commitments under this lease were as follows (in thousands):

Year Ended December 31 (in thousands)

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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

In August 2015, the Company entered into an agreement for a line of credit of $ 0.1 million for the purpose of issuing its landlord a letter of credit of $ 0.1 million as a security deposit under its facility lease.

The Company pledged money market funds and marketable securities as collateral for the line of credit.

For further discussion of the Company’s facility lease agreement, see Note 13.

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.

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 the respective parties.

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

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

For further discussion of the Vernalis, Scripps and Monash licensing agreements, see Note 7, “License and Collaboration Agreements.”

Indemnifications

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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.

Some of the provisions will limit losses to those arising from

third-party actions.

In some cases, the indemnification will continue after the termination of the agreement.

1 unchanged sentence

The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law.

There have been no claims to date and the Company has a directors and officers insurance policy that may enable it to recover a portion of any amounts paid for future claims.

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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.

(1) Peter Thompson, M.D., a member of the Company’s 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.

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

(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 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 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.

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

The sublease expired in January 2023.

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

During the nine months ended September 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 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.

During the three months ended March 31, 2025 and 2024, the Company recorded approximately $ 94,000 and $ 27,000 , 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.

On May 7, 2025, the Company received approximately $ 31.3 million in cash from the early exercise of 8,945,175 common stock warrants, which included 559,073 common stock warrants exercised by the Company’s Chief Executive Officer.

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