CYPHERPUNK TECHNOLOGIES INC. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities and Exchange Act of 1934 is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our President and Chief Executive Officer, who is also serving as our Chief Financial Officer and therefore currently serves as both our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. As of December 31, 2021, our management, with the participation of our Chief Executive Officer, who is also serving as our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our principal executive officer and principal financial and accounting officer has concluded based upon the evaluation described above that, as of December 31, 2021, our disclosure controls and procedures were effective at the reasonable assurance level. Management’s Report on Internal Control Over Financial Reporting This Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including the individuals serving as our principal executive officer and 48 Table of Contents principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013 Framework). Based on this assessment, our management concluded that, as of December 31, 2021, our internal control over financial reporting was effective based on those criteria. Attestation Report on Internal Control Over Financial Reporting This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to the deferral allowed under the JOBS Act for emerging growth companies. Changes in Internal Control Over Financial Reporting There were no changes to our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ​ Item 9B. Other Information . Not applicable. ​ Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections Not applicable PART III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this Item is set forth in our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2021, and is incorporated into this Annual Report on Form 10-K by reference. ​ Item 11. Executive Compensation. The information required by this Item is set forth in our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2021, and is incorporated into this Annual Report on Form 10-K by reference. ​ Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item is set forth in our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2021, and is incorporated into this Annual Report on Form 10-K by reference. ​ Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item is set forth in our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2021, and is incorporated into this Annual Report on Form 10-K by reference. ​ Item 14. Principal Accounting Fees and Services. The information required by this Item is set forth in our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of December 31, 2021, and is incorporated into this Annual Report on Form 10-K by reference. ​ 49 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules. (a)(1) Financial Statements The financial statements listed below are filed as part of this Annual Report on Form 10-K. ​ Report of Independent Registered Public Accounting Firm (PCAOB ID Number 274 ) F-1 Consolidated Balance Sheets as of December 31, 2021 and 2020 F-2 Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020 F-3 Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2021 and 2020 F-4 Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficiency) for the Years Ended December 31, 2021 and 2020 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020 F-7 Notes to Consolidated Financial Statements F-8 ​ (a)(2) Financial Statement Schedules All financial schedules have been omitted because the required information is either presented in the Consolidated Financial Statements or the Notes thereto or is not applicable or required. (a)(3) Exhibits The exhibits required by Item 601 of Regulation S-K and Item 15(b) of this Annual Report on Form 10-K are listed in the Exhibit Index immediately preceding the exhibits and are incorporated herein by reference. ​ 50 Table of Contents ​ ​ ​ ​ ​ EXHIBIT INDEX Exhibit No. Description ​ ​ ​ 3.1 ​ Fourth Amended and Restated Certificate of Incorporation of Leap Therapeutics, Inc. (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K, as filed on September 10, 2020). 3.2 ​ Amended and Restated By-laws of Leap Therapeutics, Inc. (incorporated by reference to Exhibit 3.4 to the Company’s registration statement on Form S-4, as filed on September 26, 2016 and attached as Annex D to the prospectus which forms part of such registration statement). 4.1 ​ Form of Common Stock Certificate of the Registrant (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Company’s registration statement on Form S-4, as filed on November 16, 2016). 4.2 ​ Registration Rights Agreement, by and among Leap and certain stockholders, dated as of January 23, 2017 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, as filed on January 26, 2017). 4.3 ​ Registration Rights Agreement dated as of July 10, 2019, by and between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, as filed on July 11, 2019). 4.4 ​ Registration Rights Agreement dated as of January 3, 2020, by and between the Company and the persons listed on the attached Schedule A thereto (incorporated by reference to Exhibit 10.4 to the Company ’ s Current Report on Form 8-K, as filed on January 7, 2020). 4.5 ​ Registration Rights Agreement dated as of January 3, 2020, by and between the Company and the persons listed on the attached Schedule A thereto (incorporated by reference to Exhibit 10.5 to the Company ’ s Current Report on Form 8-K, as filed on January 7, 2020). 4.6 ​ Form of Warrant, dated as of November 14, 2017 by and among Leap Therapeutics, Inc. and the Holders identified on the schedule thereto (incorporated by reference to Exhibit 4.1 to the Company ’ s Current Report on Form 8-K, as filed on November 17, 2017). 4.7 ​ Form of Warrant, dated as of February 5, 2019 by and between Leap Therapeutics, Inc. and each of the purchasers in the Registrant ’ s 2019 Public Offering (incorporated by reference to Exhibit 4.1 to the Company ’ s Current Report on Form 8-K, as filed on February 1, 2019). 4.8 ​ Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Company ’ s Current Report on Form 8-K, as filed on January 7, 2020). 4.9 ​ Form of Series A Coverage Warrant (incorporated by reference to Exhibit 4.2 to the Company ’ s Current Report on Form 8-K, as filed on January 7, 2020). 4.10 ​ Form of Series B Coverage Warrant (incorporated by reference to Exhibit 4.3 to the Company ’ s Current Report on Form 8-K, as filed on January 7, 2020). 4.11 ​ Amendment No. 2 to Warrant, by and among Macrocure, the Registrant and certain warrant holders, dated as of January 23, 2017 (incorporated by reference to Exhibit 4.4 to the Company ’ s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed on March 31, 2017). 4.12 ​ Description of the Registrant ’ s Securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.6 to the Company ’ s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed on March 16, 2020). 10.1** ​ Exclusive Option and License Agreement dated as of January 3, 2020, by and between the Company and BeiGene, Ltd. (incorporated by reference to Exhibit 10.1 to the Company ’ s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as filed on May 14, 2020). 10.2** ​ License Agreement, between Eli Lilly and Company and Dekkun Corporation, effective as of January 3, 2011 (incorporated by reference to Exhibit 10.4 to the Company ’ s registration statement on Form S-4, as filed on September 26, 2016). 10.3** ​ License Agreement, by and between Lonza Sales AG and Healthcare Pharmaceuticals, Inc., dated as of May 28, 2015 (incorporated by reference to Exhibit 10.5 to the Company’s registration statement on Form S-4, as filed on September 26, 2016). 10.4 ​ Royalty Agreement, between Leap Therapeutics, Inc. and Leap Shareholder Royalty Vehicle, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed on January 26, 2017). 10.5 ​ Letter Agreement, between Leap Shareholder Royalty Vehicle, Inc. and certain Leap stockholders (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, as filed on January 26, 2017). 51 Table of Contents 10.6 ​ Form of Purchase Agreement, dated as of November 14, 2017, by and among Leap Therapeutics, Inc. and the purchasers identified on the schedule thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed on November 17, 2017). 10.7 ​ Purchase Agreement dated as of July 11, 2019, by and between the Company and Lincoln Park Capital Fund, LLC (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed on July 11, 2019). 10.8 ​ Purchase Agreement dated as of July 10, 2019, by and between the Company and Lincoln Park Capital Fund, LLC (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, as filed on July 11, 2019). 10.9 ​ Securities Purchase Agreement, dated January 3, 2020, by and among the Company and the institutional investors named therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed on January 7, 2020). 10.10 ​ Form of Indemnification Agreement (filed as Exhibit 10.10 to Amendment No. 1 to the Registrant’s registration statement on Form S-4, as filed on November 2, 2016). 10.11 Ù ​ Macrocure 2013 Share Incentive Plan (filed as Exhibit 10.4 to the Company’s registration statement on Form S-8, as filed on January 27, 2017). 10.12 Ù ​ Amendment No. 1 to Macrocure 2013 Share Incentive Plan (filed as Exhibit 10.5 to the Company’s registration statement on Form S-8, as filed on January 27, 2017). 10.13 Ù ​ Summary Translation of Macrocure 2008 Stock Option Plan stockholders (filed as Exhibit 10.3 to the Registrant’s registration statement on Form S-8, as filed on January 27, 2017). 10.14 Ù ​ Employment Agreement, by and between the Company and Douglas E. Onsi, dated as of April 10, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A, as filed on April 15, 2020). 10.15 Ù ​ Executive Employment Agreement and accompanying Employee Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement, by and between Leap and Christopher K. Mirabelli, dated as of August 29, 2016 (incorporated by reference to Exhibit 10.7 to the Company’s registration statement on Form S-4, as filed on September 26, 2016). 10.16 Ù ​ Executive Employment Agreement and accompanying Employee Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement, by and between Leap and Augustine Lawlor, dated as of August 29, 2016 (incorporated by reference to Exhibit 10.9 to the Company’s registration statement on Form S-4 , as filed on September 26, 2016). 10.17 Ù ​ Employment Agreement, by and between the Company and Christine Granfield, dated as of August 16, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, as filed on November 12, 2020). 10.18 Ù ​ Employment Agreement, by and between the Company and Cynthia Sirard, dated as of April 10, 2020 (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed on March 12, 2021). 10.19 Ù ​ Employment Agreement, by and between the Company and John Mark O’ Mahony, dated as of April 10, 2020 (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed on March 12, 2021). 10.20 Ù ​ Amended and Restated 2012 Equity Incentive Plan of the Registrant (incorporated by reference to Exhibit 10.1 to the Company ’ s registration statement on Form S-8, as filed on January 27, 2017). 10.21 Ù ​ Form of Stock Option Grant Notice and Stock Option Agreement under the Registrant ’ s Amended and Restated 2012 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to the Company ’ s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed on March 31, 2017). 10.22 Ù ​ 2016 Equity Incentive Plan of Leap Therapeutics, Inc. (incorporated by reference to Exhibit 10.2 to the Company ’ s registration statement on Form S-8, as filed on January 27, 2017). 10.23 Ù ​ Form of Stock Option Grant Notice and Stock Option Agreement under Leap ’ s 2016 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.3 to the Company ’ s registration statement on Form S-4, as filed on November 2, 2016). 10.24 Ù ​ First Amendment to the 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company ’ s registration statement on Form S-8, as filed on June 11, 2019). 10.25 ​ Lease, dated November 13, 2018, by and between the Company and Bulfinch Square Limited Partnership (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, as filed on November 19, 2018). 10.26 ​ First Amendment to Lease by and between Bulfinch Square Limited Partnership and Leap Therapeutics, Inc., dated as of August 17, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, as filed on November 12, 2021). 52 Table of Contents 10.27* ​ Second Amendment to Lease by and between Bulfinch Square Limited Partnership and Leap Therapeutics, Inc. dated as of October 1, 2021. 21.1* ​ Subsidiaries of Leap Therapeutics, Inc. 23.1* ​ Consent of EisnerAmper LLP related to Leap Therapeutics, Inc. financial statements. 31.1* ​ Certification of Principal Executive and Principal Financial Officer Required Under Rule 13a- 14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. 32.1* + ​ Principal Executive and Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ​ 53 Table of Contents 101* ​ The following materials from Leap Therapeutics, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at December 31, 2021 and 2020, (ii) Consolidated Statements of Operations for the year ended December 31, 2021 and December 31, 2020, (iii) Consolidated Statements of Shareholders’ Equity (Deficit) at December 31, 2021 and December 31, 2020 (iv) Consolidated Statements of Cash Flows for the year ended December 31, 2021 and December 31, 2020, and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text. ​ 104 ​ Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *Exhibits filed herewith Ù Indicates management contract or compensation plan ** Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10). + This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of the Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filing. ​ 54 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ ​ ​ LEAP THERAPEUTICS, INC. ​ ​ ​ March 11, 2022 ​ By: ​ /s/ DOUGLAS E. ONSI ​ ​ Name: Douglas E. Onsi ​ ​ Title: President, Chief Executive Officer and Chief Financial Officer ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. NAME TITLE DATE ​ ​ ​ ​ ​ ​ ​ Chief Executive Officer, President, Chief ​ ​ /s/ DOUGLAS E. ONSI ​ Financial Officer and Director (Principal ​ March 11, 2022 Douglas E. Onsi ​ Executive Officer and Principal Financial Officer) ​ ​ ​ ​ ​ ​ ​ /s/ CHRISTOPHER K. MIRABELLI, PH.D. ​ Chairman of the Board of Directors ​ March 11, 2022 Christopher K. Mirabelli, Ph.D. ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ MONICA M. BERTAGNOLLI, M.D. ​ Director ​ March 11, 2022 Monica M. Bertagnolli, M.D. ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ JAMES CAVANAUGH, PH.D. ​ Director ​ March 11, 2022 James Cavanaugh, Ph.D. ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ THOMAS DIETZ, PH.D. ​ Director ​ March 11, 2022 Thomas Dietz, Ph.D. ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ WILLIAM LI, M.D. ​ Director ​ March 11, 2022 William Li, M.D. ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ JOSEPH LOSCALZO, M.D., PH.D. ​ Director ​ March 11, 2022 Joseph Loscalzo, M.D., Ph.D. ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ NISSIM MASHIACH ​ Director ​ March 11, 2022 Nissim Mashiach ​ ​ ​ ​ ​ ​ ​ 55 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ ​ Page ​ ​ Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets as of December 31, 2021 and 2020 F-2 Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020 F-3 Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2021 and 2020 F-4 Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficiency) for the Years Ended December 31, 2021 and 2020 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020 F-7 Notes to Consolidated Financial Statements F-8 ​ ​ ​ ​ ​ Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Leap Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Leap Therapeutics, Inc. and Subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity (deficiency), and cash flows for each of the years then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ EisnerAmper LLP We have served as the Company’s auditor since 2014. EISNERAMPER LLP Philadelphia, Pennsylvania March 11, 2022 ​ ​ F-1 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2020 Assets ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 114,916 ​ $ 52,071 Research and development incentive receivable ​ 1,189 ​ 73 Prepaid expenses and other current assets ​ 769 ​ 130 Total current assets ​ 116,874 ​ 52,274 ​ ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 36 ​ 65 Right of use assets, net ​ 459 ​ 528 Deferred tax assets ​ ​ 159 ​ ​ 179 Deferred costs ​ ​ — ​ ​ 345 Other long term assets ​ ​ 90 ​ ​ — Deposits ​ ​ 293 ​ ​ 980 Total assets ​ $ 117,911 ​ $ 54,371 Liabilities and Stockholders’ Equity ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 4,189 ​ $ 2,717 Accrued expenses ​ 5,366 ​ 2,747 Deferred revenue - current portion ​ — ​ 1,500 Lease liability - current portion ​ 432 ​ 408 Total current liabilities ​ ​ 9,987 ​ ​ 7,372 ​ ​ ​ ​ ​ ​ ​ Non current liabilities: ​ ​ ​ ​ ​ ​ Restricted stock liability ​ ​ — ​ ​ 204 Lease liability, net of current portion ​ 37 ​ 144 Total liabilities ​ ​ 10,024 ​ ​ 7,720 ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ Common stock, $ 0.001 par value; 240,000,000 shares authorized; 88,318,454 and 59,657,742 shares issued and outstanding as of December 31, 2021 and 2020, respectively ​ 88 ​ 60 Additional paid-in capital ​ 371,638 ​ 270,155 Accumulated other comprehensive loss ​ ​ ( 267 ) ​ ​ ( 579 ) Accumulated deficit ​ ​ ( 263,572 ) ​ ​ ( 222,985 ) Total stockholders’ equity ​ ​ 107,887 ​ ​ 46,651 Total liabilities and stockholders’ equity ​ $ 117,911 ​ $ 54,371 ​ See notes to consolidated financial statements ​ F-2 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ 2021 2020 ​ ​ ​ ​ ​ ​ ​ License revenue ​ $ 1,500 ​ $ 1,500 Operating expenses: ​ ​ ​ ​ ​ ​ Research and development ​ ​ 32,160 ​ ​ 20,423 General and administrative ​ 10,766 ​ 9,616 Total operating expenses ​ 42,926 ​ 30,039 Loss from operations ​ ( 41,426 ) ​ ( 28,539 ) Interest income ​ 9 ​ 93 Interest expense ​ ​ ( 41 ) ​ ​ ( 39 ) Australian research and development incentives ​ 1,226 ​ 231 Foreign currency gains(losses) ​ ​ ( 379 ) ​ ​ 738 Loss before income taxes ​ ( 40,611 ) ​ ( 27,516 ) Income taxes ​ ​ 24 ​ ​ 2 Net loss ​ ​ ( 40,587 ) ​ ​ ( 27,514 ) Dividend attributable to down round feature of warrants ​ ​ — ​ ​ ( 303 ) Dividend attributable to Series A & B convertible preferred stock ​ ​ — ​ ​ ( 372 ) Series A & B convertible preferred stock - beneficial conversion feature ​ ​ — ​ ​ ( 9,399 ) Net loss attributable to common stockholders ​ $ ( 40,587 ) ​ $ ( 37,588 ) ​ ​ ​ ​ ​ ​ ​ Net loss per share ​ ​ ​ ​ ​ ​ Basic ​ $ ( 0.47 ) ​ $ ( 0.63 ) Diluted ​ $ ( 0.47 ) ​ $ ( 0.63 ) ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding ​ ​ ​ ​ ​ ​ Basic ​ ​ 85,825,283 ​ ​ 59,327,713 Diluted ​ ​ 85,825,283 ​ ​ 59,327,713 ​ See notes to consolidated financial statements ​ ​ F-3 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 2020 Net loss ​ $ ( 40,587 ) ​ $ ( 27,514 ) Other comprehensive income (loss): ​ ​ ​ ​ Foreign currency translation adjustments ​ 312 ​ ( 655 ) Comprehensive loss ​ $ ( 40,275 ) ​ $ ( 28,169 ) ​ See notes to consolidated financial statements ​ ​ F-4 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY FOR THE YEAR ENDED DECEMBER 31, 2020 (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Series A ​ Series B ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Convertible Preferred Stock, ​ Convertible Preferred Stock, ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Amount Shares Amount Shares Amount Capital Income (Loss) Deficit Equity (Deficiency) Balances at December 31, 2019 — ​ $ — — ​ $ — ​ 24,194,877 ​ $ 24 ​ $ 193,319 ​ $ 76 ​ $ ( 195,168 ) ​ $ ( 1,749 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of Series A & B Convertible Preferred Stock, net of underwriting discounts 1,421,801 ​ 14,062 1,137,442 ​ 11,260 ​ — ​ — ​ — ​ — ​ — ​ — Series A & B Convertible Preferred Stock discount - benefical conversion feature — ​ ( 5,226 ) — ​ ( 4,173 ) ​ — ​ — ​ 9,399 ​ — ​ — ​ 9,399 Series A & B Convertible Preferred Stock accrued dividends — ​ 207 — ​ 165 ​ — ​ — ​ ( 372 ) ​ — ​ — ​ ( 372 ) Conversion of Series A & B Convertible Preferred Stock dividends to prefunded warrants and common stock — ​ ( 207 ) — ​ ( 165 ) ​ 156,713 ​ 1 ​ 371 ​ — ​ — ​ 372 Conversion of Series A Convertible Preferred Stock to prefunded warrants ( 1,421,801 ) ​ ( 8,836 ) — ​ — ​ — ​ — ​ 8,836 ​ — ​ — ​ 8,836 Conversion of Series B Convertible Preferred Stock to common stock — ​ — ( 1,137,442 ) ​ ( 7,087 ) ​ 11,374,420 ​ 11 ​ 7,076 ​ — ​ — ​ 7,087 Issuance of common stock in connection with June 2020 Public Offering, net of issuance costs of $ 3,472 ​ ​ ​ ​ ​ ​ ​ 23,625,000 ​ 24 ​ 48,252 ​ — ​ — ​ 48,276 Issuance of common stock upon exercise of stock options — ​ — — ​ — ​ 32,778 ​ — ​ 51 ​ — ​ — ​ 51 Issuance of common stock upon exercise of warrants — ​ — — ​ — ​ 273,954 ​ — ​ 348 ​ — ​ — ​ 348 Dividend attributable to the down round feature of 2017 Warrants — ​ — — ​ — ​ — ​ — ​ 303 ​ — ​ ( 303 ) ​ — Foreign currency translation adjustment — ​ — — ​ — ​ — ​ — ​ — ​ ( 655 ) ​ — ​ ( 655 ) Stock-based compensation — ​ — — ​ — ​ — ​ — ​ 2,572 ​ — ​ — ​ 2,572 Net loss — ​ — — ​ — ​ — ​ — ​ — ​ — ​ ( 27,514 ) ​ ( 27,514 ) Balances at December 31, 2020 — ​ $ — — ​ $ — ​ 59,657,742 ​ $ 60 ​ $ 270,155 ​ $ ( 579 ) ​ $ ( 222,985 ) ​ $ 46,651 ​ See notes to consolidated financial statements F-5 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE YEAR ENDED DECEMBER 31, 2021 (In thousands, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders' ​ Shares Amount Capital Loss Deficit Equity Balances at December 31, 2020 ​ 59,657,742 ​ $ 60 ​ $ 270,155 ​ $ ( 579 ) ​ $ ( 222,985 ) ​ $ 46,651 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of common stock upon exercise of warrants ​ 530,643 ​ ​ ​ ​ ​ 993 ​ ​ — ​ ​ — ​ ​ 993 Issuance of common stock upon exercise of prefunded warrants ​ 559,705 ​ ​ 1 ​ ​ ( 1 ) ​ ​ ​ ​ ​ ​ ​ ​ — Issuance of common stock upon exercise of stock options ​ 2,292 ​ ​ — ​ ​ 4 ​ ​ — ​ ​ — ​ ​ 4 Issuance of common stock in connection with September 2021 Public Offering, net of issuance costs of $ 6,733 ​ 27,568,072 ​ ​ 27 ​ ​ 96,801 ​ ​ ​ ​ ​ ​ ​ ​ 96,828 Foreign currency translation adjustment — ​ — ​ — ​ 312 ​ — ​ 312 Stock-based compensation — ​ — ​ 3,686 ​ — ​ — ​ 3,686 Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 40,587 ) ​ ​ ( 40,587 ) Balances at December 31, 2021 ​ 88,318,454 ​ $ 88 ​ $ 371,638 ​ $ ( 267 ) ​ $ ( 263,572 ) ​ $ 107,887 ​ See notes to consolidated financial statements ​ F-6 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 2020 Cash flows from operating activities: ​ ​ Net loss ​ $ ( 40,587 ) ​ $ ( 27,514 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Depreciation expense ​ 29 ​ 34 Amortization of contract asset ​ ​ 135 ​ ​ 135 Change in right-of-use asset ​ ​ 392 ​ ​ 499 Stock-based compensation expense ​ ​ 3,686 ​ ​ 2,572 Foreign currency (gain) loss ​ 379 ​ ( 738 ) Change in fair value of restricted stock liability ​ ( 204 ) ​ 45 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Prepaid expenses and other assets ​ ( 639 ) ​ 774 Deferred tax assets ​ 11 ​ ( 36 ) Research and development incentive receivable ​ ​ ( 1,159 ) ​ ​ 117 Contract acquisition costs ​ — ​ ( 270 ) Deferred offering costs ​ ​ 209 ​ ​ — Accounts payable and accrued expenses ​ ​ 3,900 ​ ​ ( 2,601 ) Deferred revenue ​ ( 1,500 ) ​ 1,500 Lease liability ​ ​ ( 406 ) ​ ​ ( 474 ) Other assets ​ ​ 597 ​ ​ — Net cash used in operating activities ​ ( 35,157 ) ​ ( 25,957 ) Cash flows from investing activities: ​ ​ ​ ​ Purchases of property and equipment ​ — ​ — Proceeds from sale of property and equipment ​ ​ — ​ ​ 25 Net cash provided by investing activities ​ — ​ 25 Cash flows from financing activities: ​ ​ ​ ​ Proceeds from issuance of common stock and prefunded warrants, net of offering costs - September 2021 Public Offering ​ ​ 97,222 ​ ​ ​ Proceeds from issuance of common stock - June 2020 Public Offering ​ — ​ 48,518 Proceeds from the issuance of Series A convertible preferred stock ​ — ​ 14,986 Proceeds from the issuance of Series B convertible preferred stock ​ ​ — ​ ​ 12,000 Proceeds from the exercise of common stock warrants ​ 993 ​ 348 Proceeds from the exercise of stock options ​ 4 ​ 51 Payment of deferred offering costs ​ ( 184 ) ​ ( 1,906 ) Net cash provided by financing activities ​ ​ 98,035 ​ ​ 73,997 Effect of exchange rate changes on cash and cash equivalents ​ ( 33 ) ​ 115 Net increase in cash and cash equivalents ​ 62,845 ​ 48,180 Cash and cash equivalents at beginning of year ​ 52,071 ​ 3,891 Cash and cash equivalents at end of year ​ $ 114,916 ​ $ 52,071 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of non-cash financing activities: ​ ​ ​ ​ Offering costs in accounts payable and accrued expense - September 2021 Public Offering ​ $ 210 ​ $ — Remeasurement of right-of-use asset and lease liability ​ $ 323 ​ $ — Dividend attributable to down round feature of warrants ​ $ — ​ $ 303 Conversion of Series A convertible preferred stock to prefunded warrants ​ $ — ​ $ 8,836 Conversion of Series B convertible preferred stock to common stock ​ $ — ​ $ 7,087 Beneficial conversion feature from Series A convertible preferred stock ​ $ — ​ $ 5,226 Beneficial conversion feature from Series B convertible preferred stock ​ $ — ​ $ 4,173 ​ See notes to consolidated financial statements ​ ​ F-7 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except share and per share amounts) 1. Nature of Business, Basis of Presentation and Liquidity Nature of Business Leap Therapeutics, Inc. was incorporated in the state of Delaware on January 3, 2011. During 2015, HealthCare Pharmaceuticals Pty Ltd. (“HCP Australia”) was formed and is a wholly owned subsidiary of the Company. On December 10, 2015, the Company entered into a merger agreement with GITR Inc. (“GITR”), an entity under common control, whereby a wholly owned subsidiary was merged with GITR and the surviving name of the wholly owned subsidiary was GITR Inc. On August 29, 2016, the Company entered into a merger agreement with Macrocure Ltd. (“Macrocure”), a publicly held, clinical-stage biotechnology company based in Petach Tikva, Israel. In connection with the merger, the Company applied to be listed on the Nasdaq Global Market. Nasdaq approved the listing, and trading in the Company’s common stock commenced on January 24, 2017, under the trading symbol “LPTX.” On February 1, 2017, Macrocure’s name was changed to Leap Therapeutics Ltd. In 2020, Leap Therapeutics Ltd. was dissolved. On December 15, 2021, Leap Securities Corp. was formed and is a wholly owned subsidiary of the Company. The Company is a biopharmaceutical company acquiring and developing novel therapeutics at the leading edge of cancer biology. The Company’s approach is designed to target compelling tumor-promoting and immuno-oncology pathways to generate durable clinical benefit and enhanced outcomes for patients. The Company’s programs are monoclonal antibodies that target key cellular pathways that enable cancer to grow and spread and specific mechanisms that activate the body’s immune system to identify and attack cancer. Basis of Presentation The accompanying consolidated financial statements of the Company include the accounts of its wholly owned subsidiaries and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Liquidity Since inception, the Company has been engaged in organizational activities, including raising capital, and research and development activities. The Company does not yet have a product that has been approved by the Food and Drug Administration (the “FDA”), has not generated any product sales revenues and has not yet achieved profitable operations, nor has it ever generated positive cash flows from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, the Company’s future operations are dependent on the success of the Company’s efforts to raise additional capital, its research and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of the Company’s products. In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. As of December 31, 2021, the Company had cash and cash equivalents of $ 114,916 . Additionally, the Company had an accumulated deficit of $ 263,572 at December 31, 2021, and during the year ended December 31, 2021, the Company incurred a net loss of $ 40,587 . The Company expects to continue to generate operating losses for the foreseeable future. ​ F-8 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 1. Nature of Business, Basis of Presentation and Liquidity (continued) The Company believes that its cash and cash equivalents of $ 114,916 as of December 31, 2021, will be sufficient to fund its operating expenses for at least 12 months from the issuance of these financial statements. In addition, the Company will likely seek additional funding through public or private equity financings or government programs and will seek funding or development program cost-sharing through collaboration agreements or licenses with larger pharmaceutical or biotechnology companies. If the Company does not obtain additional funding or development program cost-sharing, or exceeds its current spending forecasts or fails to receive the research and development tax incentive payment, the Company has the ability and would be forced to: delay, reduce or eliminate certain clinical trials or research and development programs, reduce or eliminate discretionary operating expenses, and delay company and pipeline expansion, any of which could adversely affect its business prospects. The inability to obtain funding, as and when needed, could have a negative impact on the Company’s financial condition and ability to pursue its business strategies. ​ 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation. Use of Estimates The presentation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Research and Development Expense Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including noncash share-based compensation and costs for third-party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. These estimates include the level of services performed by the third parties, patient enrollment in clinical trials, administrative costs incurred by the third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, the Company may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered. ​ F-9 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies (continued) Research and development incentive income and receivable The Company recognizes other income from Australian research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The research and development incentive is one of the key elements of the Australian Government’s support for Australia’s innovation system and is supported by legislative law primarily in the form of the Australian Income Tax Assessment Act 1997 as long as eligibility criteria are met. Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the research and development incentive regime described above. At each period end management estimates the refundable tax offset available to the Company based on available information at the time. This estimate is also reviewed by external tax advisors on an annual basis. Under the program, a percentage of eligible research and development expenses incurred by the Company through its subsidiary in Australia are reimbursed. This percentage was 43.5 % for the years ended December 31, 2021 and 2020. The research and development incentive receivable represents an amount due in connection with the above program. The Company has recorded a research and development incentive receivable of $ 1,189 and $ 73 as of December 31, 2021 and 2020, respectively, in the consolidated balance sheets and other income from Australian research and development incentives of $ 1,226 and $ 231 , in the consolidated statements of operations for the years ended December 31, 2021 and 2020, respectively, related to refundable research and development incentive program payments in Australia. The following table shows the change in the research and development incentive receivable from January 1, 2020 to December 31, 2021: ​ ​ ​ ​ ​ Balance at January 1, 2020 $ 185 Australian research and development incentive income, net ​ 231 Cash received for 2019 eligible expenses ​ ( 331 ) Foreign currency translation ​ ​ ( 12 ) Balance at December 31, 2020 ​ 73 Australian research and development incentive income, net ​ ​ 1,226 Cash received for 2020 eligible expenses ​ ( 111 ) Foreign currency translation ​ 1 Balance at December 31, 2021 ​ $ 1,189 ​ Concentration of Credit Risk Financial instruments which potentially subject the Company to credit risk consist principally of cash and cash equivalents. All cash and cash equivalents are held in United States financial institutions and money market funds. At times, the Company may maintain cash balances in excess of the federally insured amount. ​ F-10 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies (continued) Income Taxes The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company follows accounting guidance concerning provisions for uncertainty in income tax positions. This guidance clarifies the accounting for income taxes by prescribing a minimum probability threshold that an uncertain tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company recognizes accrued interest and penalties associated with uncertain tax position as part of the income tax provision. There were no uncertain tax positions or income tax related interest and penalties recorded for the years ended December 31, 2021 and 2020. The income tax returns of the Company for the year ended December 31, 2018 and subsequent years are subject to examination by the Internal Revenue Service and other taxing authorities, generally for three years after the return is filed. Foreign Currency Translation The financial statements of the Company’s foreign subsidiary are measured using the local currency as the functional currency. Assets and liabilities of this subsidiary are translated into U.S. dollars at exchange rates as of the consolidated balance sheet date. Equity is translated at historical exchange rates. Revenues and expenses are translated into U.S. dollars at average rates of exchange in effect during the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders’ deficiency. Foreign currency transaction gains and losses are included in the results of operations. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful life of each asset. Computer equipment is depreciated over three years . Laboratory equipment , office equipment and furniture and fixtures are depreciated over five years . Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations. Expenditures for repairs and maintenance are charged to expense as incurred. ​ F-11 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies (continued) Impairment of Long-Lived Assets Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value. The Company did not record any impairment losses on long-lived assets during 2020 and 2019. Deferred Costs The Company capitalizes certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity financings as deferred costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity (deficiency) as a reduction of additional paid-in capital generated as a result of the offering. The Company also capitalizes certain contract acquisition costs. During the year ended December 31, 2020, the Company incurred contract acquisition costs which were capitalized under ASC 340-40 as incremental costs of obtaining the contract with BeiGene. This cost is amortized on a straight-line basis over the performance period of the research and development services. As of December 31, 2020 there was $ 345 , of deferred costs. As of December 31, 2021, the Company did no t have any deferred costs. Deposits Deposits as of December 31, 2021 and 2020 included $ 293 and $ 980 , respectively, of deposits made by the Company with certain service providers that are to be applied to future payments due under the service agreements or returned to the Company if not utilized. Warrants The Company will recognize on a prospective basis the value of the effect of the down round feature in the warrants to purchase shares of common stock that were issued in a private placement in November 2017 (the “2017 Warrants”) when it is triggered (i.e., when the exercise price is adjusted downward). This value is measured as the difference between (1) the financial instrument’s fair value (without the down round feature) using the pre-trigger exercise price and (2) the financial instrument’s fair value (with the down round feature) using the reduced exercise price. The value of the effect of the down round feature will be treated as a dividend and a reduction to income available to common stockholders in the basic EPS calculation. In connection with the private placement of common stock completed in January 2020 (the “January 2020 Private Placement”), when the 2017 Warrants were repriced from $ 1.75 to $ 1.055 as a result of a down round, the Company recorded a dividend of $ 303 during the year ended December 31, 2020. F-12 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies (continued) Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1—Quoted prices in active markets for identical assets or liabilities. ● Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. ● Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. During the years presented, the Company has not changed the manner in which it values assets and liabilities that are measured at fair value using Level 3 inputs. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the years ended December 31, 2021 and 2020. ​ F-13 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies (continued) A summary of the assets and liabilities carried at fair value in accordance with the hierarchy defined above is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Level 1 Level 2 Level 3 December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ $ 112,726 ​ $ 112,726 ​ $ — ​ $ — Total assets ​ $ 112,726 ​ $ 112,726 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ Assets: ​ ​ ​ ​ Cash equivalents ​ $ 51,116 ​ $ 51,116 ​ $ — ​ $ — Total assets ​ $ 51,116 ​ $ 51,116 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ Restricted stock liability ​ $ 204 ​ $ 204 ​ $ — ​ $ — Total liabilities ​ $ 204 ​ $ 204 ​ $ — ​ $ — ​ Cash equivalents of $ 112,726 and $ 51,116 as of December 31, 2021 and 2020, respectively, consisted of overnight investments and money market funds and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The carrying value of the research and development incentive receivable, accounts payable and accrued expenses approximate their fair value due to the short-term nature of these assets and liabilities. Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Most leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. The Company has determined that the rate implicit in the lease is not determinable and the Company does not have borrowings with similar terms and collateral. Therefore, the Company considered a variety of factors, including observable debt yields from comparable companies and the volatility in the debt market for securities with similar terms, in determining that 8 % was reasonable to use as the incremental borrowing rate for purposes of the calculation of lease liabilities. In accordance with the guidance in ASC 842 “Leases”, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components. ​ F-14 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies (continued) Although separation of lease and non-lease components is required, certain practical expedients are available. Entities may elect the practical expedient to not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. The Company has elected to account for the lease and non-lease components of each of its operating leases as a single lease component and allocate all of the contract consideration to the lease component only. The lease component results in an operating right-of-use asset being recorded on the consolidated balance sheets and amortized such that lease expense is recorded on a straight line basis over the term of the lease. Segment Information The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s singular focus is developing novel, targeted drugs for the treatment of cancer. Substantially all of the Company’s tangible assets are held in the United States. Patent Costs All patent related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses. Stock-Based Compensation The Company measures all stock options and other stock-based awards granted to employees, consultants and nonemployees based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. Generally, the Company issues stock options with only service-based vesting conditions and records the expense for these awards using the straight-line method. Stock-based compensation is classified in the accompanying consolidated statements of operations based on the function to which the related services are provided. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options granted to employees has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to nonemployees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield of zero is based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. ​ F-15 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies (continued) Revenue Recognition The Company records revenue in accordance with Accounting Standards Codification, or ASC, Topic 606, Revenue From Contracts with Customers. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. License revenue. The Company’s performance obligations under its license agreements may include providing intellectual property licenses, performing technology transfer, performing research and development consulting services and notifying the customer of any enhancements to licensed technology or new technology that it discovers, among others. The Company determined that its performance obligations under its license agreements as evaluated at contract inception were not distinct and represented a single performance obligation. Upfront payments are amortized to revenue on a straight line basis over the performance period. Upfront payment contract liabilities resulting from the Company’s license agreements do not represent a financing component as the payment is not financing the transfer of goods or services, and the technology underlying the licenses granted reflects research and development expenses already incurred by the Company. Generally, all amounts received or due other than sales-based milestones and royalties are classified as license revenues. Sales-based milestones and royalties under the Company’s license agreements will be recognized as royalty revenue in the period the related sale occurred. The Company generally invoices its licensees upon the completion of the effort or achievement of a milestone, based on the terms of each agreement. Deferred revenue arises from amounts received in advance of the culmination of the earnings process and is recognized as revenue in future periods as performance obligations are satisfied. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Research and Development Services. The promises under the Company’s license agreements may include research and development services to be performed by the Company on behalf of the customer. Payments or reimbursements resulting from the Company’s research and development efforts are recognized as the services are performed and presented on a gross basis because the Company is the principal for such efforts. Customer Options. If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options that are not determined to be material rights are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights, or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until (1) the option is exercised and the additional goods or services are transferred or (2) the option expires. F-16 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies (continued) Milestone Payments. At the inception of each arrangement that includes research or development milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Royalties. For arrangements that include sales-based royalties, including milestone payments upon first commercial sales and milestone payments based on a level of sales, which are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements. Collaborative Arrangements The Company analyzes its collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808). This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and which elements of the collaboration are more reflective of a vendor-customer relationship and therefore within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to ASC 606. Amounts that are owed to collaboration partners are recognized as an offset to collaboration revenues as such amounts are incurred by the collaboration partner. Where amounts owed to a collaboration partner exceed the Company’s collaboration revenues in each quarterly period, such amounts are classified as research and development expense. Reimbursements from and payments to the customer that are the result of a collaborative relationship with a partner, instead of a customer relationship, such as co-development activities, are recorded as a reduction to research and development expense. For those elements of the arrangement that are accounted for pursuant to ASC 606, the Company applies the five-step model described above under ASC 606. See Note 3 for a complete discussion of the revenue recognition for the Company’s license agreement. F-17 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 2. Summary of Significant Accounting Policies (continued) Net Loss per Share Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares outstanding during the period and, if dilutive, the weighted average number of potential shares of common stock, including the assumed exercise of stock options and warrants. Subsequent Events The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) and are early adopted by the Company or adopted as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements or disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes, or ASC 740, which simplifies the accounting for income taxes. The new standard was effective in the first quarter of fiscal 2021. The Company adopted ASC 740 effective in the first quarter of fiscal 2021 and the Company’s adoption of this standard did not have an effect on the Company’s consolidated financial statements. In May 2021, FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. FASB issued this update to clarify the accounting by issuers for modifications or exchanges of equity-classified warrants. The updated guidance is effective for the Company for annual periods beginning after December 15, 2021, including interim periods within those fiscal years. The Company is evaluating the impact of the adoption of this update on its consolidated financial statements and disclosures. In August 2020, FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options, or ASC 470 and Derivatives and Hedging—Contracts in Entity’s Own Equity, or ASC 815. FASB issued this update to simplify the accounting for certain financial instruments with characteristics of liabilities and equity. The updated guidance is effective for the Company for annual periods beginning after December 15, 2021, including interim periods within those fiscal years. The Company is evaluating the impact of the adoption of this update on its consolidated financial statements and disclosures. ​ ​ 3. BeiGene Exclusive Option and License Agreement Terms of Agreement On January 3, 2020, the Company entered into an exclusive option and license agreement (the “BeiGene Agreement”) with BeiGene, Ltd. (“BeiGene”) for the clinical development and commercialization of DKN-01, in Asia (excluding Japan), Australia, and New Zealand. The Company retains exclusive rights for the development, manufacturing, and commercialization of DKN-01 for the rest of the world. Pursuant to the BeiGene Agreement, the Company received an upfront cash payment of $ 3,000 from BeiGene in exchange for granting BeiGene an option to an exclusive license to develop and commercialize DKN-01 in Asia (excluding Japan), Australia, and F-18 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) New Zealand. The Company is eligible to receive up to $ 132,000 in future option exercise and milestone payments, based upon the achievement of certain development, regulatory, and sales milestones, as well as tiered royalties on any product sales of DKN-01 in the licensed territory. The Company is responsible for conducting development activities prior to the exercise of the option. After the option is exercised, BeiGene is solely responsible for the development and commercialization of DKN-01 in the licensed territory. The BeiGene Agreement continues in effect until the earlier of: (i) 120 days after the end of the option period, if BeiGene has not exercised the option by such date; and (ii) on a country-by country and Licensed Product-by-Licensed Product (as defined in the BeiGene Agreement) basis, the expiration of the Royalty Term (as defined in the BeiGene Agreement) applicable to such licensed product in such country. At any time, BeiGene may terminate the BeiGene Agreement by providing at least 60 days written notice of termination to the Company. Upon termination of the License Agreement, all rights granted by the Company to BeiGene terminate. ​ F-19 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 3. BeiGene Exclusive Option and License Agreement (continued) Revenue Recognition The Company evaluated the BeiGene Agreement to determine whether it is a collaborative arrangement for purposes of ASC 808. The Company concluded that because both parties were active participants and were exposed to the risks and rewards of the BeiGene Agreement, that such activities are under the scope of ASC 808. The Company concluded that BeiGene was a customer with regard to the combined license and research and development activities and as such the contract should be evaluated under ASC 606. In determining the appropriate amount of revenue to be recognized under ASC 606 as the Company fulfills its obligations under the Agreement, the Company performs the following steps: (i) identifies the promised goods or services in the contract; (ii) determines whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measures the transaction price, including any constraints on variable consideration; (iv) allocates the transaction price to the performance obligations; and (v) recognizes revenue when (or as) the Company satisfies each performance obligation. The Company identified the following material promises under the BeiGene Agreement: (1) option to an exclusive license to develop and commercialize DKN-01 in Asia (excluding Japan), Australia, and New Zealand, (2) participation in a joint development committee, (3) technology transfer services and (4) pre-option research and development services. The Company determined that the option to an exclusive license in the territory does not represent a material right. Additionally, the Company determined that the participation in the joint development committee, research and development services and technology transfer services are not distinct from each other, as each has limited value without the other. As such, for the purposes of ASC 606, the Company determined that these four material promises, described above, should be combined into a single performance obligation. ​ F-20 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 3. BeiGene Exclusive Option and License Agreement (Continued) The Company determined the transaction price is equal to the up-front fee of $ 3,000 . The transaction price was fully allocated to the single performance obligation and is recognized as revenue on a straight-line basis over the performance period of the research and development services. During each the years ended December 31, 2021 and 2020, the Company recognized $ 1,500 of license revenue related to the up-front fee received from BeiGene. Cost of Contract Acquisition The Company incurred contract acquisition costs of $ 270 which were capitalized under ASC 340-40 as incremental costs of obtaining the contract with BeiGene. This cost is amortized on a straight-line basis over the performance period of the research and development services. The total amount of amortization expense during each of the years ended December 31, 2021 and 2020 was $ 135 . Royalties As the license is deemed to be the predominant item to which sales-based royalties relate, the Company will recognize revenue when the related sales occur. No royalty revenue was recognized during the years ended December 31, 2021 and 2020. The following table presents a summary of the activity in the Company’s contract liabilities, related to the upfront cash payment received of $ 3,000 , from January 1, 2020 through December 31, 2021 (in thousands): ​ ​ ​ ​ ​ Balance at January 1, 2020 $ — Additions ​ 3,000 Deductions ​ ​ ( 1,500 ) Balance at December 31, 2020 ​ ​ 1,500 Deductions ​ ​ ( 1,500 ) Balance at December 31, 2021 ​ $ — ​ ​ 4. Property and Equipment, Net ​ Property and equipment, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2020 Computer office equipment ​ $ 51 ​ $ 51 Leasehold improvements ​ ​ 69 ​ ​ 69 Lab equipment ​ 76 ​ 76 Furnitures and fixtures ​ 30 ​ 30 ​ ​ 226 ​ 226 Less: accumulated depreciation ​ ( 190 ) ​ ( 161 ) Property and equipment, net ​ $ 36 ​ $ 65 ​ Depreciation expense was $ 29 and $ 34 for the years ended December 31, 2021 and 2020, respectively. ​ F-21 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 5. Accrued Expenses Accrued expenses consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2021 2020 Clinical trials ​ $ 2,499 ​ $ 795 Professional fees ​ 181 ​ 255 Payroll and related expenses ​ 2,686 ​ 1,697 Accrued expenses ​ $ 5,366 ​ $ 2,747 ​ ​ 6. Leases The Company has operating leases for real estate in the United States and does not have any finance leases. The Company’s leases may contain options to renew and extend lease terms and options to terminate leases early. Reflected in the right-of-use asset and lease liability on the Company’s consolidated balance sheets are the periods provided by renewal and extension options that the Company is reasonably certain to exercise, as well as the periods provided by termination options that the Company is reasonably certain to not exercise. The Company has existing leases that include variable lease and non-lease components that are not included in the right-of-use asset and lease liability and are reflected as an expense in the period incurred. Such payments primarily include common area maintenance charges and increases in rent payments that are driven by factors such as future changes in an index (e.g., the Consumer Price Index). In calculating the present value of future lease payments, the Company utilized its incremental borrowing rate based on the remaining lease term at the date of adoption. The Company has elected to account for each lease component and its associated non-lease components as a single lease component and has allocated all of the contract consideration across lease components only. This will potentially result in the initial and subsequent measurement of the balances of the right-of-use asset and lease liability for leases being greater than if the policy election was not applied. The Company has existing net leases in which the non-lease components (e.g. common area maintenance, maintenance, consumables, etc.) are paid separately from rent based on actual costs incurred and therefore are not included in the right-of-use asset and lease liability and are reflected as an expense in the period incurred. As of December 31, 2021, a right-of-use asset of $ 459 and lease liability of $ 469 are reflected on the consolidated balance sheets. The Company recorded rent expense of $ 423 and $ 549 , respectively, during the years ended December 31, 2021 and 2020. ​ Future lease payments under non-cancelable operating leases as of December 31, 2021 are detailed as follows: ​ ​ ​ ​ ​ Future Operating Lease Payments 2022 442 2023 ​ 37 Total Lease Payments ​ 479 Less: imputed interest ​ ( 10 ) Total operating lease liabilities $ 469 ​ ​ ​ F-22 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 7. Warrants As of December 31, 2021, outstanding warrants to purchase common stock, all of which are classified as equity warrants, consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 ​ ​ Number of Shares ​ ​ ​ ​ Description Issuable Exercise Price Expiration Date January 23, 2017 Warrants 54,516 ​ $ 0.01 ​ Upon M&A Event 2017 Warrants ​ 2,502,382 ​ $ 1.055 ​ November 2024 2019 Warrants ​ 7,008,257 ​ $ 1.95 ​ February 2026 March 2020 ​ 14,413,902 ​ $ 0.001 ​ No Expiry March 2020 ​ 25,945,035 ​ $ 2.11 ​ Jan - March 2027 June 2020 1,690,137 ​ $ 0.001 ​ No Expiry September 2021 8,771,928 ​ $ 0.001 ​ No Expiry ​ ​ 60,386,157 ​ ​ ​ ​ ​ ​ 2017 Warrants The 2017 Warrants contain full ratchet anti-dilution protection provisions. The Company will recognize on a prospective basis the value of the effect of the down round feature in the warrant when it is triggered (i.e., when the exercise price is adjusted downward). This value is measured as the difference between (1) the financial instrument’s fair value (without the down round feature) using the pre-trigger exercise price and (2) the financial instrument’s fair value (with the down round feature) using the reduced exercise price. The value of the effect of the down round feature will be treated as a dividend and a reduction to income available to common shareholders in the basic EPS calculation. In connection with the January 2020 Private Placement, when the 2017 Warrants were repriced from $ 1.75 to $ 1.055 , the Company recorded a dividend of $ 303 during the year ended December 31, 2020. During the year ended December 31, 2021, 47,458 of the 2017 Warrants were exercised for cash resulting in gross proceeds to the Company of $ 50 and during the year ended December 31, 2020, 208,254 of the 2017 Warrants were exercised for cash resulting in gross proceeds to the Company of $ 220 . ​ 2019 Warrants On February 5, 2019, in connection with the 2019 Public Offering, the Company issued immediately exercisable warrants (the “2019 Warrants”) to purchase 7,557,142 shares of common stock to investors. The 2019 Warrants have an exercise price of $ 1.95 per share and expire on February 5, 2026. The 2019 Warrants qualify for equity classification. During the year ended December 31, 2021, 483,185 of the 2019 Warrants were exercised for cash resulting in gross proceeds to the Company of $ 943 and during the year ended December 31, 2020, 65,700 of the 2019 Warrants were exercised for cash resulting in gross proceeds to the Company of $ 128 . March 2020 Warrants On January 3, 2020, the Company entered into a Securities Purchase Agreement with investors, pursuant to which the Company issued and sold 1,421,801 shares of its Series A Preferred Stock, at a purchase price of $ 10.54 per share, 1,137,442 shares of its Series B Preferred Stock at a purchase price of $ 10.55 per share, and one (1) share of the Company’s Special Voting Stock entitling the purchaser of Series A Preferred Stock to elect one member of the Company’s board of directors. F-23 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 7. Warrants (continued) On March 5, 2020, the Company’s stockholders approved the conversion of the Series A Preferred Stock into a pre-funded warrant to purchase 14,413,902 shares of common stock at an exercise price of $ 0.001 (the “March 2020 Pre-funded Warrants”) and the conversion of the Series B Preferred Stock into 11,531,133 shares of common stock. Each investor also received a warrant to purchase an equal number of shares of common stock at an exercise price of $ 2.11 per share (the “Coverage Warrants”). The March 2020 Pre-funded Warrants and the Coverage Warrants qualify for equity classification. June 2020 Warrants On June 22, 2020, the Company completed a Public Offering (“the 2020 Public Offering”) whereby the Company issued 20,250,000 shares of its common stock, at $ 2.00 per share and, in lieu of common stock, offered pre-funded warrants (the “June 2020 Pre-funded Warrants”) to purchase up to 2,250,000 shares of its common stock to certain investors. The June 2020 Pre-funded Warrants have an exercise price of $ 0.001 per share and qualify for equity classification. During the year ended December 31, 2021, 559,863 of the June 2020 Pre-Funded Warrants were exercised on cashless basis resulting in the issuance of 559,705 shares of common stock. September 2021 Warrants On September 24, 2021, the Company completed a public offering (the “2021 Public Offering”) whereby the Company issued 27,568,072 shares of its common stock, at $ 2.85 per share and, in lieu of common stock, offered pre-funded warrants (the “September 2021 Pre-funded Warrants”) to purchase up to 8,771,928 shares of its common stock to certain investors. The September 2021 Pre-funded Warrants have an exercise price of $ 0.001 per share and qualify for equity classification. ​ F-24 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 8. Common Stock Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to the preferential dividend rights of the preferred stockholders. Through December 31, 2021, no dividends have been declared for shares of common stock. January 2020 Private Placement On January 3, 2020, the Company issued and sold 1,421,801 shares of its Series A Preferred Stock at a purchase price of $ 10.54 per share, 1,137,442 shares of its Series B Preferred Stock at a purchase price of $ 10.55 per share, and one (1) share of its Special Voting Stock, entitling the purchaser of Series A Preferred Stock to elect one member of the Company’s board of directors, for aggregate net proceeds to the Company of approximately $ 25,322 . On March 5, 2020, the Company’s stockholders approved the conversion of the Series A Preferred Stock into a pre-funded warrant to purchase 14,413,902 shares of common stock at an exercise price of $ 0.001 per share and the conversion of the Series B Preferred Stock into 11,531,133 shares of its common stock, par value $ 0.001 per share. Each investor also received the Coverage Warrants to purchase an equal number of shares at an exercise price of $ 2.11 per share. In connection with the January 2020 Private Placement, Series A Preferred Stock holders and Series B Preferred Stock holders were entitled to cash dividends at a fixed cumulative percentage of 8 % per annum plus any dividends declared on outstanding common stock on an as-converted basis, effective on the issuance date of the Series A Preferred Stock and Series B Preferred Stock. The cash dividends were converted to shares of common stock upon the conversion of the Series A Preferred Stock to pre-funded warrants and Series B Preferred Stock to common stock. During the year ended December 31, 2020, the Company recorded $ 372 of Series A Preferred Stock and Series B Preferred Stock dividends, which qualify as cumulative dividends, and in the calculation of EPS are subtracted from net income in arriving at income attributable to common stockholders. F-25 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 8. Common Stock (continued) The Company determined that the embedded conversion features of the Series A Preferred Stock and Series B Preferred Stock to receive the Coverage Warrants each met the definition of a contingent beneficial conversion feature and should be accounted for separately as a derivative. The recognition of the beneficial conversion feature occurred upon the conversion of the Series A Preferred Stock into the March 2020 Pre-funded warrants and Series B Preferred Stock into common stock and the issuance of the Coverage Warrants. The Company measured the contingent beneficial conversion features’ intrinsic values on January 3, 2020 and determined that the beneficial conversion features were valued at $ 5,226 for Series A and $ 4,173 for Series B, respectively. Upon conversion, the discount originated by the contingent beneficial conversion feature, at its intrinsic value for Series A Preferred Stock and Series B Preferred Stock, was immediately recognized as a dividend. The dividend is reflected as an adjustment to basic and diluted net loss per share attributable to common stockholders. Public Offering of Common Stock—June 2020 On June 22, 2020, the Company completed the 2020 Public Offering, whereby the Company issued 20,250,000 shares of its common stock at $ 2.00 per share and, in lieu of common stock, issued certain investors 2,250,000 of its June 2020 Pre-funded Warrants. The June 2020 Pre-funded Warrants have an exercise price of $ 0.001 per share and qualify for equity classification. The underwriters exercised their right to purchase 3,375,000 additional shares of the Company’s common stock at the public offering price per share of common stock, less underwriting discounts and commissions. The aggregate net proceeds received by the Company from the 2020 Public Offering were approximately $ 48,276 , net of underwriting discounts and commissions and offering expenses payable by the Company. Public Offering of Common Stock - September 2021 On September 24, 2021, the Company completed the 2021 Public Offering, whereby the Company issued 22,828,072 shares of its common stock at $ 2.85 per share and, in lieu of common stock, issued certain investors 8,771,928 of its September 2021 Pre-funded Warrants. The September 2021 Pre-funded Warrants have an exercise price of $ 0.001 per share and qualify for equity classification. The underwriters exercised their right to purchase 4,740,000 additional shares of the Company's common stock at the public offering price per share of common stock, less underwriting discounts and commissions. The aggregate net proceeds received by the Company from the 2021 Public Offering were approximately $ 96,828 net of underwriting discounts and commissions and offering expenses payable by the Company. 9. Stock-Based Compensation Equity Incentive Plans In September 2012, the Company adopted the 2012 Equity Incentive Plan, as amended, which provides designated employees of the Company and its affiliates, certain consultants and advisors who perform services for the Company and its affiliates, and nonemployee members of the Board of Directors of the Company and its affiliates with the opportunity to receive grants of incentive stock options, nonqualified stock options and stock awards. On January 20, 2017, the Company’s stockholders approved the 2016 Equity Incentive Plan (the “2016 Plan”). Beginning on January 1, 2018, the number of shares of common stock authorized for issuance pursuant to the 2016 Plan was increased each January 1 by an amount equal to four percent ( 4 %) of the Company’s outstanding common stock as of the end of the immediately preceding calendar year or such other amount as determined by the compensation committee of the Company’s board of directors. During the year ended December 31, 2019, the compensation committee of the board of directors authorized an additional 3,000,000 shares of common stock to be added to the shares authorized for issuance under the 2016 Plan. F-26 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 9. Stock-Based Compensation (continued) As of December 31, 2021, there were 409,896 shares available for grant under the Company’s Equity Incentive Plans. A summary of stock option activity under the Company’s Equity Incentive Plans is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Average Weighted Aggregate ​ ​ ​ Exercise Price Average Remaining Intrinsic ​ ​ Options Per Share ​ Life in Years ​ Value Outstanding at December 31, 2019 ​ 4,024,566 ​ $ 7.48 ​ 7.98 ​ $ 2 Granted 2,662,500 ​ $ 2.10 ​ Exercised ( 32,778 ) ​ $ 1.53 ​ ​ ​ ​ Forfeited ​ ( 260,435 ) ​ $ 6.95 ​ ​ ​ ​ ​ Outstanding at December 31, 2020 6,393,853 ​ $ 5.29 7.96 ​ $ 1,961 Granted 2,482,650 ​ $ 2.19 ​ Exercised ( 2,292 ) ​ $ 1.55 ​ ​ ​ ​ Forfeited ​ ( 348,593 ) ​ $ 3.17 ​ ​ ​ ​ ​ Outstanding at December 31, 2021 ​ 8,525,618 ​ $ 4.48 ​ 7.58 ​ $ 7,673 Options exercisable at December 31, 2021 5,421,641 ​ $ 5.83 6.89 ​ $ 4,074 Options vested and expected to vest at December 31, 2021 8,525,618 ​ $ 4.48 7.58 ​ $ 7,673 ​ The grant date fair value of the options granted during the years ended December 31, 2021 and 2020 was estimated at the date of grant using the Black-Scholes option valuation model. The expected life was estimated using the “simplified” method as defined by the SEC’s Staff Accounting Bulletin 107, Share-Based Payment. The expected volatility was based on the historical volatility of comparable public companies from a representative peer group selected based on industry and market capitalization data. The risk-free interest rate was based on the continuous rates provided by the U.S. Treasury with a term approximating the expected life of the option. The expected dividend yield was 0 % because the Company does not expect to pay any dividends for the foreseeable future. The Company elected the straight-line attribution method in recognizing the grant date fair value of options issued over the requisite service periods of the awards, which are generally the vesting periods. ​ The weighted average grant date fair value for the stock options granted during the years ended December 31, 2021 and 2020 was $ 1.37 and $ 1.33 per share, respectively. ​ The assumptions that the Company used to determine the grant-date fair value of stock options granted to employees and directors during the years ended December 31, 2021 and 2020 were as follows, presented on a weighted average basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 2020 ​ Expected volatility 67.64 % 66.94 % Weighted average risk-free interest rate 0.82 % 0.66 % Expected dividend yield ​ 0.00 % 0.00 % Expected term (in years) ​ 6.82 ​ 6.85 ​ ​ ​ F-27 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 9. Stock-Based Compensation (continued) Stock options generally vest over a three or four year period, as determined by the compensation committee of the board of directors at the time of grant. The options expire ten years from the grant date. As of December 31, 2021, there was approximately $ 3,921 of unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a remaining weighted-average period of approximately 1.93 years. ​ Restricted Stock Units ​ During the year ended December 31, 2020, the Company issued 92,500 restricted stock units (“RSUs”) to employees under the 2016 Plan. Upon vesting of the RSUs, the Company had the option to settle the award by either issuing shares of the Company’s common stock or paying an amount of cash equal to the fair value of the Company’s common stock on the settlement date. In January 2021, the Company cash settled 92,500 RSUs. As of December 31, 2020, these RSUs were classified as restricted stock liability in the consolidated balance sheets of $ 204 , as they contained a cash settlement option. ​ During the years ended December 31, 2021 and 2020, the Company granted 275,000 and 660,606 , respectively, RSUs to executive officers that will cliff vest and will be settled after three years of continuous service, or upon a change of control of the Company, whichever is earlier, pursuant to the 2016 Plan. During the years ended December 31, 2021 and 2020, the Company recognized $ 530 and $ 248 , respectively, of stock based compensation expense related to these equity classified RSUs, as they do not contain a cash settlement option. ​ The following table presents RSU activity under the 2016 Plan as of December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Number of Average ​ Shares Fair Value Outstanding at December 31, 2019 90,500 ​ $ 1.76 Awarded ​ 753,106 ​ $ 1.49 Settled in cash ​ ( 90,500 ) ​ $ 1.76 Outstanding at December 31, 2020 ​ 753,106 ​ $ 1.52 Awarded 275,000 ​ $ 2.57 Settled in cash ( 92,500 ) ​ $ 1.97 Outstanding at December 31, 2021 935,606 ​ $ 1.76 ​ As of December 31, 2021, there were 935,606 shares outstanding covered by RSUs that were vested and expected to vest with a weighted average grant date fair value of $ 1.76 per share and an aggregate grant date fair value of $ 1,645 . As of December 31, 2021, there was approximately $ 865 of unrecognized compensation costs related to RSUs granted to employees, which are expected to be recognized as expense over a remaining weighted average period of 1.69 years. ​ The Company recognized stock-based compensation expense related to the issuance of stock option awards and RSUs to employees and non-employees in the consolidated statements of operations during the years ended December 31, 2021 and 2020 as follows: ​ F-28 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 9. Stock-Based Compensation (continued) Stock Based Compensation Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2021 2020 Research and development $ 1,641 ​ $ 1,172 General and administrative ​ 2,045 ​ 1,604 Total ​ $ 3,686 ​ $ 2,776 ​ ​ 10. Income Taxes During the year end December 31, 2020, the Company’s Israeli operations were dissolved and as a result, the Company wrote off all existing deferred tax assets related to the Israeli operations which consisted primarily of net operating loss carryforwards. The write off of the deferred tax assets was offset by an equal reduction in the valuation allowance. As of December 31, 2021, the Company had federal and state net operating loss carryforwards of approximately $ 196,224 and $ 177,951 , respectively, which begin to expire in 2030 for federal and state purposes. The Company’s federal net operating losses include $ 114,915 which can be also carried forward indefinitely. The Company may be able to utilize its net operating loss carryforwards to reduce future federal and State income tax liabilities. However, these net operating losses are subject to various limitations under Internal Revenue Code (“IRC”) section 382, which limit the use of net operating loss carryforwards to the extent there has been an ownership change of more than 50 percentage points. In addition, the net operating loss carryforwards are subject to examination by taxing authorities and could be adjusted or disallowed due to such exams. Although the Company has not undergone an IRC section 382 analysis, it is possible that the utilization of the Company’s net operating loss carryforwards may be limited. In addition, the Company has federal and state research and development tax credits of approximately $ 6,166 and $ 1,273 , respectively, that begin to expire in 2030 for federal and state tax purposes. There is no provision for income taxes in the United States because the Company has historically incurred operating losses and maintains a full valuation allowance against its deferred tax assets in these jurisdictions. The deferred tax asset recorded in the consolidated balance sheet relates to its Australian operations. Income (loss) before income taxes consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2021 2020 U.S. ​ $ ( 39,155 ) ​ $ ( 28,699 ) Foreign ​ ( 1,456 ) ​ 1,183 Loss before income taxes ​ $ ( 40,611 ) ​ $ ( 27,516 ) ​ F-29 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 10. Income Taxes (continued) A summary of the Company’s current and deferred expense for income tax is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2021 2020 Current expense (benefit): ​ ​ ​ ​ ​ ​ Federal ​ $ — ​ $ — State ​ — ​ — Foreign ​ ( 37 ) ​ 40 Total current expense (benefit): ​ $ ( 37 ) ​ $ 40 Deferred expense (benefit): ​ ​ ​ ​ ​ ​ Federal ​ $ — ​ $ — State ​ — ​ — Foreign ​ 13 ​ ​ ( 42 ) Total deferred expense (benefit): ​ $ 13 ​ $ ( 42 ) Total income tax expense (benefit): ​ $ ( 24 ) ​ $ ( 2 ) ​ A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2021 2020 Income at US Statutory Rate 21.0 % 21.0 % State Taxes, net of Federal benefit 7.2 % 7.0 % Permanent Differences ( 1.8 ) % ( 1.1 ) % Tax Credits 3.9 % 6.0 % Foreign Rate Differential 0.2 % ( 0.5 ) % Israel DTA write-off ​ 0.0 % ( 70.2 ) % Valuation Allowance ( 30.6 ) % 36.6 % Other 0.1 % 1.2 % ​ 0.0 % 0.0 % ​ F-30 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 10. Income Taxes (continued) The significant components of the Company’s deferred tax assets as of December 31, 2021 and 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2021 2020 Accrued expenses ​ $ 729 ​ $ 455 License Fees ​ ​ 1,004 ​ 1,168 Stock Options ​ ​ 4,671 ​ 3,759 Other ​ ​ 212 ​ 228 State net operating loss carryforwards ​ ​ 11,246 ​ 8,959 State research tax credits ​ ​ 1,006 ​ 625 Federal net operating loss carryforwards ​ ​ 41,207 ​ 33,711 Federal research tax credits ​ ​ 6,166 ​ 4,943 Total deferred tax assets ​ ​ 66,241 ​ ​ 53,848 Valuation allowance ​ ( 66,082 ) ​ ( 53,669 ) Net deferred tax asset (liability) ​ $ 159 ​ $ 179 ​ As of December 31, 2021 and 2020, the Company had provided a full valuation allowance against its net deferred tax assets, except for its Australian deferred tax assets, because realization of any future tax benefit cannot be reasonably assured. The valuation allowance decreased during the year ended December 31, 2020 by $ 10,068 and increased during the year ended December 31, 2021 by $ 12,413 . The Company follows the authoritative guidance on accounting for and disclosure of uncertainty in tax positions, which requires the Company to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon the ultimate settlement with the relevant taxing authority. As of December 31, 2021 the Company has not recorded any uncertain tax positions. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s U.S. federal and state net operating losses have occurred since its inception and as such, tax years subject to potential tax examination could apply from 2010, the earliest year with a net operating loss carryover, because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or state taxing authorities. The Company’s policy is to record interest and penalties related to income taxes as part of the tax provision. There were no interest and penalties pertaining to uncertain tax positions for the years ended December 31, 2021 or 2020. ​ F-31 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 11. Net Loss Per Share Basic and diluted net loss per share for the years ended December 31, 2021 and 2020 was calculated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 2020 Numerator: ​ ​ ​ ​ ​ Net loss ​ $ ( 40,587 ) ​ $ ( 27,514 ) Dividend attributable to down round feature of warrants ​ — ​ ( 303 ) Dividend attributable to Series A & B convertible preferred stock ​ ​ — ​ ​ ( 372 ) Series A & B convertible preferred stock - beneficial conversion feature ​ ​ — ​ ​ ( 9,399 ) Net loss attributable to common stockholders for basic and diluted loss per share ​ $ ( 40,587 ) ​ $ ( 37,588 ) Denominator: ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding - basic and diluted ​ 85,825,283 ​ 59,327,713 Net loss per share attributable to common stockholders - basic and diluted ​ $ ( 0.47 ) ​ $ ( 0.63 ) ​ Included within weighted average common shares outstanding are 24,930,483 common shares issuable upon the exercise of the pre-funded warrants and penny warrants, as the warrants are exercisable at any time for nominal consideration, and as such, the shares are considered outstanding for the purpose of calculating basic and diluted net loss per share attributable to common stockholders. The Company’s potentially dilutive securities include RSUs, stock options and warrants. These securities were excluded from the computations of diluted net loss per share for the years ended December 31, 2021 and 2020, as the effect would be to reduce the net loss per share. The following table includes the potential common shares of common stock, presented based on amounts outstanding at each period end, that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 2020 Restricted stock units to purchase common stock 935,606 ​ 753,106 Options to purchase common stock ​ 8,525,618 ​ 6,393,853 Warrants to purchase common stock ​ 35,455,674 ​ 35,986,317 ​ 44,916,898 ​ 43,133,276 ​ ​ 12. Commitments and Contingencies Manufacturing Agreements— The Company is party to manufacturing agreements with vendors to manufacture DKN-01, its lead product candidate, for use in clinical trials. As of December 31, 2021, noncancelable commitments under these agreements totaled $ 5,680 . License and Service Agreements— On January 3, 2011, the Company entered into a license agreement with Eli Lilly and Company (“Lilly”), a shareholder, to grant a license to the Company for certain intellectual property rights relating to pharmaceutically active compounds that may be useful in the treatment of bone healing, cancer and, potentially, other medical conditions. As defined in the license agreement, the Company would be required to pay royalties to Lilly based upon a percentage in the low single digits of net sales of developed products, if and when achieved. However, there can be no assurance that clinical or commercialization success of developed products will occur, and no royalties have been paid or accrued through December 31, 2021. F-32 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 12. Commitments and Contingencies (continued) License Agreement— On May 28, 2015, the Company entered into a license agreement with Lonza Sales AG (“Lonza”), pursuant to which Lonza granted the Company a world-wide, non-exclusive license for certain intellectual property relating to a gene expression system for manufacturing DKN-01. As defined in the license agreement, the Company would be required to pay royalties to Lonza based on a percentage in the low single digits of net sales of DKN-01, if and when achieved. However, there can be no assurance that clinical or commercialization success will occur, and no royalties have been paid or accrued through December 31, 2021. Legal Proceedings— At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to its legal proceedings. As of the date of this report, the company is not currently a party to any material legal proceedings. ​ F-33 Table of Contents LEAP THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Amounts in thousands, except share and per share amounts) 12. Commitments and Contingencies (continuedJ) Indemnification Agreements— In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2021 and 2020. ​ 13. Defined Contribution Plan The Company has a 401(k) defined contribution plan (the “401(k) Plan”) for substantially all of its employees. Eligible employees may make pretax contributions to the 401(k) Plan up to statutory limits. The Company makes matching employee contributions in cash to the 401(k) Plan at a rate of 100 % of the first 3 % of earnings contributed and 50 % of the next 2 % of earnings contributed. Employees participating in the 401(k) Plan are fully vested in the Company matching contributions, and investments are directed by participants. The Company made matching contributions of $ 247 and $ 195 for the years ended December 31, 2021 and 2020, respectively. ​ 14. Related Party Transactions The Company has a license agreement with a stockholder (See Note 12). ​ 15. Subsequent Events In January 2022, the Company issued 2,575,000 RSUs to employees and 620,000 stock options to employees and directors under the 2016 Plan. The RSUs will cliff vest and be settled after three years of continuous service or upon a change of control of the Company, whichever is earlier. The stock options have a ten year life and generally vest over a period of three years . ​ ​ F-34