What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-16 compared with 2025-03-26 · 78 added, 76 removed, 175 unchanged (47% of the section changed)

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“Risk Factors” and under “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report.

We are a biopharmaceutical company developing biomarker-targeted antibody therapies designed to treat patients with cancer by inhibiting fundamental tumor-promoting pathways, targeting cancer-specific cell surface molecules, and harnessing the immune system to attack cancer cells.

Our strategy is to identify, acquire, and develop molecules that will rapidly translate into high impact therapeutics that generate durable clinical benefit and enhanced patient outcomes.

Our lead clinical stage program is sirexatamab (DKN-01), a monoclonal antibody that inhibits Dickkopf-related protein 1, or DKK1.

We are currently studying sirexatamab in multiple ongoing clinical trials in patients with esophagogastric cancer, gynecologic cancers, or colorectal cancer.

We also have a preclinical antibody program FL-501.

We intend to apply our extensive experience identifying and developing transformational products to build a pipeline of programs that have the potential to change the practice of cancer medicine.

We have devoted substantially all of our resources to development efforts relating to our product candidates, including manufacturing and conducting clinical trials of our product candidates, providing general and administrative support for these operations and protecting our intellectual property.

We are a privacy technology company implementing a digital asset treasury strategy anchored by Zcash and, through our subsidiary Leap, are developing novel therapies for patients with cancer.

We have historically devoted substantially all of our resources to development efforts relating to our product candidates, including manufacturing and conducting clinical trials of our product candidates, providing general and administrative support for these operations and protecting our intellectual property.

We do not have any products approved for sale and have not generated any revenue from product sales.

We have funded our operations primarily through proceeds from our sales of common stock and preferred stock and proceeds from the issuance of notes payable.

We have incurred net losses in each year since our inception in 2011.

Our net loss was $67.6 million for the year ended December 31, 2024 and $81.4 million for the year ended December 31, 2023.

During the year ended December 31, 2025, we initiated a strategy to deploy a portion of our capital raised that is not required to provide working capital for our ongoing operations to accumulate digital assets.

Zcash is a protocol and blockchain network of connected devices all over the world, working together to validate transactions and maintain the Zcash ledger.

ZEC is the monetary unit, or coin, of Zcash.

Zcash allows for greater privacy, providing users with options for fully shielded transactions in which the sender, recipient, and amount are encrypted.

We renamed our company “Cypherpunk Technologies Inc.” to reflect the strategic focus on acquiring ZEC, participating in the development of Zcash, and the values of privacy and liberty.

Our ongoing research and development operations are conducted under a wholly-owned subsidiary named “Leap Therapeutics, Inc.”

We have incurred net operating losses every year since our inception in 2011.

During the year ended December 31, 2025, we had a net operating loss of $41.1 million.

During the year ended December 31, 2024, our net operating loss was $70.1 million.

As of December 31, 2025, we had an accumulated deficit of approximately $462.5 million.

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We expect to continue to incur significant expenses and have operating losses for at least the next several years as we:

● add operational, financial and management information systems and personnel, including personnel to support our digital asset treasury, privacy technology, and product development efforts;

● continue the development of our product candidates, sirexatamab and FL-501;

● seek to obtain regulatory approvals for our product candidates;

● outsource the manufacturing of our product candidates for clinical trials and any indications for which we receive regulatory approval;

● contract with third parties for the sales, marketing and distribution of sirexatamab for any indications for which we receive regulatory approval;

● maintain, expand and protect our intellectual property portfolio;

● continue our research and development efforts;

● add operational, financial and management information systems and personnel, including personnel to support our product development efforts;

● operate as a public company.

We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty.

We do not expect to generate revenue from therapeutic drug product sales unless and until we successfully complete development and obtain marketing approval for one or more of our product candidates, which we expect will take a number of years and is subject to significant uncertainty.

Accordingly, we will need to raise additional capital prior to the commercialization of sirexatamab or any other product candidate.

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However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.

Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our product candidates, and could force us to significantly limit or reduce the scope of our business, operations and activities, or to sell ourselves or engage in some other strategic transaction at an unfavorable price and on other unfavorable terms, or to discontinue our business and operations entirely, wind-up and liquidate.

As of December 31, 2025, we had cash and cash equivalents of $14.0 million.

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FL-501 program

FL-101 program

In-process research and development acquired from Flame

Total research and development expenses

Australian research and development incentives

The successful development of our clinical product candidates is highly uncertain.

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In general, the annual use limitation equals the aggregate value of our stock at the time of the ownership change multiplied by a specified tax-exempt interest rate.

As a result of the ownership changes, we are limited to a $0.0 million annual limitation on our ability to utilize our NOL’s and R&D credits recognized prior to the Flame merger.

Due to this limitation, approximately $210.7 million of the federal NOL’s and $7.8 million of federal R&D credits will expire unutilized.

Additionally, approximately $192.2 million and $1.8 million, respectively, of state NOL’s and R&D tax credits will expire unutilized.

As a result, we have reduced our deferred tax assets related to the federal and state NOL’s and R&D credits which are offset by the corresponding decrease in the valuation allowance.

As a result of the latest ownership change, we are limited to an $0.9 million annual limitation on our ability to utilize our NOL’s and R&D credits recognized prior to October 8, 2025.

Due to this limitation, approximately $3.5 million of federal R&D tax credits will expire unutilized.

As a result, we have reduced our deferred tax assets related to the federal R&D credits which are offset by the corresponding decrease in the valuation allowance.

As of December 31, 2025, we also had federal and state R&D tax credits of $0.1 million and $0.5 million, respectively, which begin to expire in 2043 and 2038, respectively, for federal and state tax purposes.

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While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements appearing elsewhere in this report, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations.

Accrued Research and Development Expenses

Research and Development Expenses

As part of the process of preparing consolidated financial statements, we are required to account for research and development expenses.

This process involves communicating with our applicable personnel and service providers to identify services that have been performed on our behalf and the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost.

The majority of our service providers invoice us monthly for services performed.

We accrue for our research and development expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known to us.

We periodically confirm the accuracy of the data that we use to accrue for research and development expenses with selected service providers and make adjustments, if necessary.

To date, we have not adjusted our accruals at any particular balance sheet date by any material amount.

Examples of accrued research and development expenses include:

Examples of research and development expenses include:

● fees paid to CROs for management of our clinical trial activities;

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Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones.

If we do not accurately identify costs that we have incurred, our actual expenses could differ from our accruals.

Digital Assets

We hold digital assets in the form of Zcash with Gemini, a third-party custodian (“Gemini”).

The contractual arrangement represents our enforceable contractual right to receive digital assets from the custodian on demand and is accounted for as a hybrid instrument under ASC 815, Derivatives and Hedging (“ASC 815”).

The host contract represents a non-interest bearing receivable collectible on demand and is recorded at the transaction price, representing the fair value of the digital assets at the time of acquisition.

The hybrid instrument contains an embedded derivative that is required to be bifurcated because the embedded exposure to changes in the fair value of the underlying digital assets is not clearly and closely related to the economic characteristics of the host receivable.

The embedded derivative is subsequently measured at the fair value each reporting period, with changes in fair value recorded as an unrealized gain (loss) on change in fair value of embedded derivative in the Consolidated Statement of Operations.

The embedded derivative component is measured at fair value at each reporting date, using observable prices in the principal market in accordance with ASC 815-15 and ASC 820, Fair Value Measurement (“ASC 820”).

Where quoted prices are directly available in active markets, the embedded derivatives are classified as Level 1 within the fair value hierarchy;

if observable market prices are not available, we would utilize other relevant inputs and valuation techniques, which may result in Level 2 or Level 3 classification.

We have exercised judgment in determining the principal market, fair value hierarchy, and bifurcation of embedded derivatives.

There is diversity in industry practice regarding the measurement and recognition of digital assets.

We continually evaluate the principal market and the reliability of inputs to ensure that fair value measurements reflect current market conditions.

Stock-Based Compensation

We have issued options to purchase our common stock.

We have issued stock options to purchase our common stock and restricted stock units (“RSUs”).

We account for stock based compensation in accordance with ASC 718, Compensation—Stock Compensation.

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As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.

We expense the fair value of employee RSUs over the associated employee service period on a straight-line basis.

Stock-based compensation expense is determined based on the fair value of the award at the grant date and is adjusted each period to reflect actual forfeitures.

Results of Operations

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General and administrative

Restructuring charges

Total operating expenses

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Interest income

Interest expense

Australian research and development incentives

Foreign currency losses

Change in fair value of Series X preferred stock warrant liability

Loss before income taxes

Change in fair value of embedded derivative

Foreign currency gain (loss)

Income (loss) before income taxes

Provision for income taxes

Net income (loss)

Dividend attributable to down round feature of warrants

Net loss attributable to common stockholders

Net income (loss) attributable to common stockholders

Research and Development Expenses

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FL-501 program

FL-101 program

In-process research and development acquired from Flame

Total research and development expenses

Research and development expenses were $25.7 million for the year ended December 31, 2025, compared to $57.2 million for the year ended December 31, 2024.

The decrease of $16.0 million in research and development expenses was primarily due to $29.6 million of in-process research and development (“IPR&D”) acquired in the Flame merger which we expensed during the year ended December 31, 2023, as we concluded that the IPR&D acquired did not have an alternative future use.

This decrease was partially offset by an increase of $8.8 million in clinical trial costs due to due to patient enrollment, the duration of patients on study, the enhancement of correlative studies, the increase in site activity associated with Part C of the DisTinGuish study, and the expansion of the size of Part B of the DeFianCe study.

There was also an increase of $2.8 million in manufacturing costs related to clinical trial material due to timing of manufacturing campaigns, an increase of $1.6 million in payroll and other related expenses due to an increase in headcount of our research and development full-time employees, an increase of $0.2 million in stock based compensation expense due to new stock options granted to employees during the year ended December 31, 2024 and an increase of $0.2 million in consulting fees associated with research and development activities.

The decrease of $31.5 million in research and development expenses during the year ended December 31, 2025 as compared to the same period in 2024, was primarily due to a decrease of $13.8 million in clinical trial costs and a decrease of $6.8 million in manufacturing costs, due to the completion of our clinical trials during the year ended December 31, 2025.

There was also a decrease of $8.4 million in payroll and other related expenses due to a decrease in headcount of our R&D full-time employees due to a reduction in force, a decrease of $1.8 million in stock based compensation expense as there were no stock options granted during the year ended December 31, 2025 to R&D employees and a decrease of $0.7 million in consulting fees related to research and development activities.

General and Administrative Expenses

General and administrative expenses were $10.9 million for the year ended December 31, 2025, compared to $12.8 million for the year ended December 31, 2024.

The decrease of $1.0 million was primarily attributable to a $1.3 million decrease in professional fees due to lower finance and legal costs associated with our business development activities during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This decrease was partially offset by an increase of $0.2 million in stock-based compensation expense due to new stock options granted to employees during the year ended December 31, 2024 and an increase of $0.1 million in payroll and other related expenses.

The decrease of $1.9 million in general and administrative expenses during the year ended December 31, 2025 as compared to the same period in 2024, was primarily due to a $2.6 million decrease in payroll and other related expenses due to a decrease in incentive based compensation expense for our general and administrative employees and a decrease in headcount of our general and administrative employees due to a reduction in force.

This decrease was partially offset by an increase of $0.6

million in stock based compensation expense due to RSUs granted to general and administrative employees during the year ended December 31, 2025, and an increase of $0.1 million in professional fees.

Interest Income

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Australian Research and Development Incentives

We recorded R&D incentive income of $1.1 million for the year ended December 31, 2023, based upon the applicable percentage of eligible research and development activities under the Australian Incentive Program, net of our Australian tax liability, which expenses included the cost of manufacturing of clinical trial material.

We did not recognize any R&D incentive income during the year ended December 31, 2024.

We perform certain supporting research and development activity outside of Australia when there are no Australian facilities that support the activity (“Overseas research and development activities”).

In October 2017, the Commonwealth of Australia issued us a favorable ruling on our Overseas research and development activities, considering such activities to be eligible research and development activities under the Australian Incentive Program.

During the year ended December 31, 2023, we received $2.3 million of research and development tax incentive payments from the Commonwealth of Australia as a result of the 2022 research and development activities.

During the year ended December 31, 2024, we did not receive any research and development tax incentive payments from the Commonwealth of Australia as a result of the 2023 research and development activities.

We expect to receive $0.8 million of research and development tax incentive payments during the year ended December 31, 2025 for research and development activities performed during 2023.

The remaining R&D incentive receivable has been recorded as “Research and development incentive receivable” in the consolidated balance sheets.

Foreign Currency Losses

We recorded an immaterial amount of foreign currency losses for the years ended December 31, 2024 and 2023.

During the year ended December 31, 2025, we expensed $0.2 million of previously recognized R&D incentive income related to 2023 eligible R&D expenses, due to a reduction to the amount we expect to be refunded, which we determined in connection with the completion of our Australian tax return for that year.

During the year ended December 31, 2024, we did not record any R&D incentive income.

Unrealized Gain on Change in Fair Value of Embedded Derivative

During the year ended December 31, 2025, we recorded a $50.4 million unrealized gain on the change in fair value of embedded derivative.

Foreign Currency Gain (Loss)

We recorded an immaterial amount of foreign currency gains (losses) for the years ended December 31, 2025 and 2024.

The change in foreign currency losses is due to the changes in the Australian dollar exchange rate related to activities of the Australian entity.

Liquidity and Capital Resources

Since our inception, we have been engaged in organizational activities, including raising capital, and research and development activities.

We do not yet have a product that has been approved by the Food and Drug Administration (the “FDA”) and have not yet achieved profitable operations or generated positive cash flows from operations.

There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis.

Further, our future operations are dependent on the success of efforts to raise additional capital, our research and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of our products.

Since our inception, we have been engaged in organizational activities, including raising capital, and research and development activities, and in October 2025, we implemented our digital asset treasury strategy.

We have not yet achieved profitable operations or generated positive cash flows from operations, and we do not yet have a product that has been approved by the Food and Drug Administration (the “FDA”).

There is no assurance that profitable operations from our privacy technology/digital asset treasury strategy or our biotechnology operations, if achieved, could be sustained on a continuing basis.

Further, our future operations are dependent on the success of efforts to raise additional capital, the success of our privacy technology/digital asset treasury strategy, our biotechnology research and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of our products.

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

As of December 31, 2024, we had cash and cash equivalents of $47.2 million.

Additionally, we had an accumulated deficit of $467.4 million at December 31, 2024, and during the year ended December 31, 2024, we incurred a net loss of $67.6 million.

As of December 31, 2025, we had cash and cash equivalents of $14.0 million and ZEC treasury holdings categorized as a digital asset receivable valued at $147.4 million.

Additionally, we had an accumulated deficit of $462.5 million at December 31, 2025, and during the year ended December 31, 2025, we incurred net operating losses of $41.1 million.

We expect to continue to generate operating losses in the foreseeable future.

We believe that our cash and cash equivalents of $14.0 million as of December 31, 2025, will be sufficient to fund our operating expenses for at least the next 12 months from the issuance of this Annual Report on Form 10-K.

In addition, to support our future operations, we will 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 we do not obtain additional funding or development program cost-sharing, we could 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, which could adversely affect our business prospects.

The inability to obtain funding, as and when needed, could have a negative impact on Leap’s financial condition and our ability to pursue our business strategies and could force us to sell ourselves or engage in some other strategic transaction at an unfavorable price and on other unfavorable terms or to discontinue our business and operations entirely, wind-up and liquidate.

In addition, to support our future operations, we will seek additional funding through public or private, equity or debt financings and, for our biotechnology operations, we will seek funding or development program cost-sharing through collaboration agreements or licenses with larger pharmaceutical or biotechnology companies.

If we do not obtain additional funding or development program cost-sharing, we could be forced to eliminate certain programs, reduce or eliminate discretionary operating expenses, and delay company expansion, which could adversely affect our business prospects.

The inability to obtain funding, as and when needed, could have a negative impact on our financial condition and our ability to pursue our business strategies.

The following table summarizes our sources and uses of cash for each of the periods presented:

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Cash used in operating activities

Cash provided by investing activities

Cash provided by (used in) financing activities

Cash used in investing activities

Cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Operating activities.

Net cash used in operating activities for the year ended December 31, 2025 was primarily related to a noncash unrealized gain on the change in fair value of embedded derivative of $50.4 million, and changes in working capital, including a decrease of $10.4 million in accounts payable and accrued expenses and a $0.2 million decrease in lease liabilities.

These changes were partially offset by net income of $4.8 million, and changes in working capital, including a decrease in research and development incentive receivable of $0.1 million, a decrease of $0.1 million in other assets and a decrease of $0.1 million in prepaid expense and other assets.

There was also noncash stock-based compensation expense of $4.9 million, a change in deferred income taxes of $5.1 million and change in a right-of-use asset of $0.2 million.

Net cash used in operating activities for the year ended December 31, 2024 was primarily related to our net loss of $67.6 million and net changes in working capital, including a decrease in lease liabilities of $0.4 million.

These changes were partially offset by an increase in accounts payable and accrued expenses of $0.9 million, an increase in income tax payable of $0.6 million, a decrease of $0.1 million in prepaid expenses and other assets, a decrease of $0.2 million in other assets, noncash stock-based compensation expense of $5.5 million and change in a right-of-use asset of $0.4 million.

Net cash used in operating activities for the year ended December 31, 2023 was primarily related to our net loss of $81.4 million and net changes in working capital, including a decrease in lease liabilities of $0.4 million.

These changes were partially offset by a decrease in research and development incentive receivable of $1.3 million, a decrease of $0.7 million in other assets, an increase in accounts payable and accrued expenses of $0.7 million, a decrease of $0.2 million in prepaid expenses and other assets, noncash IPR&D expense of $29.6 million, noncash stock-based compensation expense of $5.1 million and change in a right-of-use asset of $0.4 million.

Investing Activities.

Net cash provided by investing activities for the year ended December 31, 2023 was related to cash acquired in connection with the acquisition of Flame of $50.4 million and payment of direct and incremental costs of $1.4 million associated with the acquisition of Flame.

Net cash used in investing activities for the year ended December 31, 2025 was related to cash used to purchase ZEC.

There were no investing activities during the year ended December 31, 2024.

Financing Activities.

Net cash used in financing activities for the year ended December 31, 2024 consisted of $40.0 million in gross proceeds from the April 2024 Private Placement and $0.1 million of proceeds upon the exercise of stock options and warrants, partially offset by $2.9

million of offering costs paid.

Net cash used in financing activities for the year ended December 31, 2023 primarily consisted of an immaterial amount paid by the Company for the redemption of 10,000 shares of the warrants issued in connection with a public offering in 2019.

Net cash provided by financing activities during the year ended December 31, 2025, consisted of $57.2 million in net proceeds from the October 2025 Private Placement and $51.5 million in net proceeds through issuance of common stock through ATM sales, partially offset by payment of $0.6 million of deferred offering costs and $0.4 million of principal payments of insurance financing.

Capital Requirements

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our product candidates in development.

We expect our expenses to increase substantially in connection with our ongoing activities.

Our expenses will also increase as we:

● pursue the clinical development of our most advanced product candidate, sirexatamab, and our preclinical product candidate, FL-501;

● maintain, expand and protect our intellectual property portfolio;

● expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company.

● pursue our privacy technology and digital asset treasury strategy;

● pursue the development of our most advanced product candidate, sirexatamab, and our preclinical product candidate, FL-501;

● expand our operational, financial and management systems and increase personnel, including personnel to support our digital asset treasury, privacy technology, and development efforts and our operations as a public company.

Additional funding may not be available at the time needed on commercially reasonable terms, if at all.

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Under the Fourth Amendment, we will continue to pay the current monthly base rent amount of $38,335 contemplated by the 47 Thorndike Street Lease through July 31, 2024, with an increase commencing on August 1, 2024 adjusting the monthly base rent amount to approximately $38,974 through July 31, 2025.

We remain committed to $0.1 million of non-cancellable commitments under manufacturing agreements with vendors to manufacture DKN-01 for use in clinical trials.

On July 1, 2025 we entered into a Fifth Amendment to Lease (“Fifth Amendment”) with Landlord, extending the 47 Thorndike Street Lease as a tenancy-at will (as amended, the “Lease”).

The term of the Lease expires on the last day of any month identified by notice by the Company or Landlord to the other, not less than sixty (60) days in advance.

As of December 31, 2025, the monthly base rent is $19,168.

This description of our contractual obligations does not include potential future milestones or royalties that we may be required to make under license and collaboration agreements due to the uncertainty of events requiring payment under these agreements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis