What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-14 compared with 2024-11-14 · 204 added, 268 removed, 331 unchanged (59% of the section changed)

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(In thousands, except share data and par value)

SEPTEMBER 30, DECEMBER 31,

MARCH 31, DECEMBER 31,

Current assets:

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Total current liabilities 43,639 40,730

Long-term debt, including final payment fee — 206,968

Long-term debt, net

Non-current portion of operating lease liability

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Preferred stock, $ 0.0001 par value;

15,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

no shares issued or outstanding as of September 30, 2024 and December 31, 2023.

15,000,000 shares authorized as of March 31, 2025 and December 31, 2024;

no shares issued or outstanding as of March 31, 2025 and December 31, 2024.

Common stock, $ 0.0001 par value;

120,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

14,475,904 and 47,369,511 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.

120,000,000 shares authorized as of March 31, 2025 and December 31, 2024;

14,475,904 shares issued and outstanding as of March 31, 2025 and December 31, 2024.

Additional paid-in-capital 243,885 239,715

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THREE MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

License fee revenue $ — $ 119 $ 100 $ 166

Total revenue — 119 100 166

Operating expenses:

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Other income (expense):

Gain related to transaction with Acquirer

— — 2,021,498 —

Interest expense ( 2,689 ) ( 8,130 )

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Other income (expense), net ( 50 ) ( 59 )

Total other income (expense) 2,933 ( 5,960 ) 2,016,959 ( 16,818 )

Income (loss) before income tax expense ( 43,864 ) ( 51,787 ) 1,735,439 ( 147,750 )

Provision for income taxes — 2 2 7

Net income (loss) $ ( 43,864 ) $ ( 51,789 ) $ 1,735,437 $ ( 147,757 )

Earnings (loss) per share

$ ( 2.84 ) $ ( 4.39 ) $ 119.04 $ ( 13.19 )

$ ( 2.84 ) $ ( 4.39 ) $ 117.09 $ ( 13.19 )

Shares used in computing earnings (loss) per share

15,468 11,788 14,578 11,201

Total other expense

( 410 ) ( 4,885 )

Loss before income tax expense ( 43,311 ) ( 78,710 )

Provision for income taxes — —

Net loss $ ( 43,311 ) $ ( 78,710 )

Net loss per share, basic and diluted $ ( 2.80 ) $ ( 5.77 )

Shares used in computing net loss per share, basic and diluted 15,468 13,639

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

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Stock-based compensation expense — — 2,450 — 2,450

Issuance of shares upon exercise of stock options 1,865 — 40,378 — 40,378

Issuance of warrants in connection with 2025 Loan Agreement — — 1,720 — 1,720

Net loss — — — ( 43,311 ) ( 43,311 )

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14,476 $ 1 $ 243,885 $ ( 149,443 ) $ 94,443

Stock-based compensation expense — — 46,174 — 46,174

Issuance of shares upon exercise of stock options 1,584 — 31,300 — 31,300

Issuance of shares upon exercise of warrants 2,746 — — — —

Acquisition of Former Parent’s common stock, stock options, and warrants by the Acquirer

( 53,564 ) ( 5 ) ( 563,754 ) ( 1,179,970 ) ( 1,743,729 )

Issuance of shares in Distribution 14,476 1 16,041 — 16,042

— — — 1,858,011 1,858,011

Balance as of June 30, 2024

14,476 $ 1 $ 233,768 $ ( 14,403 ) $ 219,366

Stock-based compensation expense — — 2,965 — 2,965

Net loss — — — ( 43,864 ) ( 43,864 )

Balance as of September 30, 2024

14,476 $ 1 $ 236,733 $ ( 58,267 ) $ 178,467

(Shares) Common Stock

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49,234 $ 5 $ 704,007 $ ( 692,444 ) $ 11,568

Stock-based compensation expense — — 6,253 — 6,253

Issuance of shares upon exercise of stock options 72 — 854 — 854

Net loss — — — ( 47,052 ) ( 47,052 )

Balance as of June 30, 2023

43,667 $ 4 $ 443,525 $ ( 468,341 ) $ ( 24,812 )

Stock-based compensation expense — — 6,530 — 6,530

Issuance of shares upon exercise of stock options 2 — 21 — 21

Issuance of common stock and pre-funded warrants in private placement, net of issuance costs 3,621 1 199,644 — 199,645

Net loss — — — ( 51,789 ) ( 51,789 )

Balance as of September 30, 2023

47,290 $ 5 $ 649,720 $ ( 520,130 ) $ 129,595

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

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(In thousands)

NINE MONTHS ENDED

SEPTEMBER 30,

THREE MONTHS ENDED

Cash flows from operating activities

Net income (loss)

$ ( 43,311 ) $ ( 78,710 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

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

Depreciation and amortization 675 360

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Non-cash lease expense 434 465

Loss on disposal of fixed assets 12 3

Non-cash gain on transaction with Acquirer

( 1,998,809 ) —

Changes in operating assets and liabilities:

Accounts receivable 183 —

Other receivables

Receivables from related parties 23 —

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Operating lease liability ( 171 ) ( 495 )

Deferred revenue, current portion — ( 166 )

Net cash used in operating activities ( 35,895 ) ( 63,050 )

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Cash flows from financing activities

Proceeds from issuance of common stock and pre-funded warrants in private placement

Issuance costs associated with issuance of common stock and pre-funded warrants in private placement — ( 130 )

Proceeds from the issuance of debt 99,965 —

Payment of fees associated with debt ( 125 ) —

Proceeds from the exercise of stock options — 38,728

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Cash and cash equivalents at end of period $ 216,520 $ 252,483

Supplemental disclosure of cash flow information

Cash paid for interest $ 1,299 $ 6,892

Cash paid for income taxes $ — $ —

Supplemental schedule of non-cash investing and financing activities

Fair value of warrants issued to lender in conjunction with 2025 Loan (as defined in Note 3) $ 1,720 $ —

Payable for purchase of fixed assets $ — $ 307

Issuance costs associated with the issuance of common stock and pre-funded warrants in private placement in accounts payable

Receivable for proceeds from the exercise of stock options $ — $ 1,650

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

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Inhibrx Biosciences, Inc., or the Company, or Inhibrx Biosciences, is a clinical-stage biopharmaceutical company focused on developing a broad pipeline of novel biologic therapeutic candidates.

The Company combines target biology with protein engineering, technologies, and research and development to design therapeutic candidates.

The Company’s current pipeline is focused on oncology.

Inhibrx Biosciences, Inc., or the Company, or Inhibrx, is a clinical-stage biopharmaceutical company with a pipeline of novel biologic therapeutic candidates, developed using its proprietary modular protein engineering platforms.

The Company leverages its innovative protein engineering technologies and deep understanding of target biology to create therapeutic candidates with attributes and mechanisms it believes to be superior to current approaches and applicable to a range of challenging, validated targets with high potential.

Basis of Presentation

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Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted.

Accordingly, the accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the related notes thereto for the fiscal year ended December 31, 2023, which are included in Exhibit 99.1 to our Registration Statement on Form 10, as amended (File No.

001-42031), which was filed with and declared effective by the SEC on May 24, 2024, or the Form 10.

Accordingly, the accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the related notes thereto for the fiscal year ended December 31, 2024, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2025.

Separation and Distribution

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In connection with the foregoing transactions, each Former Parent stockholder received:

(i) $ 30.00 per share in cash, (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone, and (iii) one SEC-registered, publicly listed, share of Inhibrx Biosciences

for every four shares of the Former Parent’s common stock held.

four shares of the Former Parent’s common stock held.

The Acquirer retained an equity interest in the Company of 8 % upon the Distribution.

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and (iii) the size of the Company’s operations relative to the 101 Business.

As a reverse spin-off, the Company considers Inhibrx Biosciences as the accounting spinnor of the Former Parent, and the accounting successor to the Former Parent.

As a reverse spin-off, the Company considers Inhibrx as the accounting spinnor of the Former Parent, and the accounting successor to the Former Parent.

Therefore, for periods prior to the spin-off, the Company’s financial statements are the historical financial statements of the Former Parent.

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In accordance with this guidance, the disposal of the 101 Business has been accounted for as a dividend-in-kind, with a gain recognized for the difference between the fair value and carrying value of the disposed assets.

The Company recorded a gain on the transaction of $ 2.0 billion during the nine months ended September 30, 2024, which consists of the following components (in thousands):

NINE MONTHS ENDED

SEPTEMBER 30, 2024

Merger consideration for common stock, warrants, and stock options $ 1,727,687

Book value of Amended 2020 Loans assumed by Acquirer 211,315

Book value of net assets and liabilities related to INBRX-101 assumed by Acquirer 14,496

Transaction costs paid by Acquirer 68,000

Total gain recognized $ 2,021,498

The gain related to the Merger consideration payable to shareholders of $ 1.7 billion was recorded, net of consideration allocated to the shares issued to Acquirer, through a reduction to retained earnings of $ 1.2 billion, representing the amount of retained earnings available at the closing of the Merger, with the remaining amount of $ 563.8 million recorded through additional paid-in capital.

As of September 30, 2024, the Company had an accumulated deficit of $ 58.3 million and cash and cash equivalents of $ 196.3 million.

From its inception and through September 30, 2024, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, pre-commercialization activities, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these unaudited condensed consolidated financial statements are issued.

As of March 31, 2025, the Company had an accumulated deficit of $ 149.4 million and cash and cash equivalents of $ 216.5 million.

From its inception and through March 31, 2025, the Company has devoted substantially all of its efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of its therapeutic candidates, pre-commercialization activities, organizing and staffing the Company, establishing its intellectual property portfolio and raising capital to support and expand these activities.

The Company believes that its existing cash and cash equivalents will be sufficient to fund the Company’s operations for at least 12 months from the date these consolidated financial statements are issued.

The Company plans to finance its future cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses, strategic transactions and other similar arrangements.

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If the Company raises capital through additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures.

To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreements, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company.

To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreements, it may have to relinquish

valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company.

There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future.

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The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes.

The Company’s most significant estimates relate to evaluation of whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, the incremental borrowing rate estimated in relation to the Company’s operating lease, and valuation allowances for the Company’s deferred tax assets.

The Company’s most significant estimates relate to evaluation of whether revenue recognition criteria have been met, accounting for development work and preclinical studies and clinical trials, determining the assumptions used in measuring stock-based compensation, the fair value of warrants, and the incremental borrowing rate estimated in relation to the Company’s operating lease.

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

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The Company maintains deposits in federally insured financial institutions in excess of federally insured limits by the Federal Deposit Insurance Corporation, or the FDIC, of up to $250,000.

The Company’s cash management and investment policy limits investment instruments to investment-grade securities

with the objective to preserve capital and to maintain liquidity until the funds can be used in operations.

The Company’s cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds can be used in operations.

The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial condition of the depository institutions in which those deposits are held.

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In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

During the nine months ended September 30, 2023, the Company’s investments in debt securities consisted of U.S.

Treasury Bills, which were classified as Level 1 in the fair value hierarchy.

Due to the short-term nature of these securities which were classified as cash equivalents, the amortized value approximated fair value and the Company did not remeasure these instruments at fair value.

As of September 30, 2024 and December 31, 2023, the Company held no investments in debt securities.

The Company’s long-term debt outstanding as of December 31, 2023 was classified as Level 2 in the fair value hierarchy.

As of September 30, 2024 and December 31, 2023, the Company had no financial instruments measured at fair value on a recurring basis.

Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

As of March 31, 2025 and December 31, 2024, the Company held $ 211.3 million and $ 149.0 million, respectively, of money market mutual funds or equivalents, which are classified as Level 1 in the fair value hierarchy.

The Company’s long-term outstanding debt as of March 31, 2025, which approximates fair value, is classified as Level 2 in the fair value hierarchy.

Accrued Research and Development and Clinical Trial Costs

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A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding during the same period.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive common shares outstanding during the same period.

The Company excludes common stock equivalents from the calculation of diluted net earnings (loss) per share when the effect is anti-dilutive.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common stock outstanding during the same period.

Diluted net loss per share is computed by dividing net loss by the weighted average number of common and common stock equivalents outstanding during the same period.

The Company excludes common stock equivalents from the calculation of diluted net loss per share when the effect is anti-dilutive.

The weighted average number of shares of common stock used in the basic and diluted net income (loss) per common stock calculations includes the weighted-average pre-funded warrants outstanding during the period as they are exercisable at any time for nominal cash consideration.

During the nine months ended September 30, 2024, outstanding shares during the period consist both of shares of the Former Parent and of the Company.

For purposes of computing earnings (loss) per share only, for all periods presented in its condensed consolidated statements of operations, the Company adjusted all outstanding shares of the Former Parent, including potentially dilutive securities, by the four-to-one distribution ratio used in the Distribution.

In periods in which the Company has net income, the Company applies the treasury stock method to determine the dilutive effect of potentially dilutive securities.

Potentially dilutive securities included in the diluted earnings per share are as follows (in thousands):

NINE MONTHS ENDED SEPTEMBER 30, 2024

Outstanding stock options 242

Warrants to purchase common stock 1

During the three months ended March 31, 2024, outstanding shares during the period consist of shares of the Former Parent.

For purposes of computing net loss per share only, for all periods presented in its condensed consolidated statements of operations, the Company adjusted all outstanding shares of the Former Parent, including potentially dilutive securities, by the four-to-one distribution ratio used in the Distribution.

In periods in which the Company has a net loss, basic loss per share and diluted loss per share are identical since the effect of potentially dilutive common shares is anti-dilutive and therefore excluded.

Accordingly, for the three months ended September 30, 2024 and the three and nine months ended September 30, 2023, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Accordingly, for the three months ended March 31, 2025 and the three months ended March 31, 2024, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.

Potentially dilutive securities not included in the calculation of diluted loss per share are as follows (in thousands):

AS OF SEPTEMBER 30,

AS OF MARCH 31,

Outstanding stock options 3,422 1,511

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Segment Information

The Company operates under one segment which develops biologic therapeutic candidates.

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

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

The Company views its operations and manages its business as one operating and reportable segment as the Company has devoted substantially all of its resources to drug discovery and development activities through conducting preclinical studies and clinical trials associated with its programs, all of which aim to discover and develop biologic therapeutic candidates.

The CODM assesses performance for the biologic therapeutic segment and decides how to allocate resources based on the consolidated net income (loss) as reported on its consolidated income statement.

The accounting policies of the reportable segment are the same as those described in the summary of significant accounting policies.

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

The segment depreciation expense, interest expense, interest income, and segment asset additions are consistent with consolidated amounts reported within the consolidated statement of cash flows given the Company's operations are aggregated within a single reportable segment.

The Company has incurred operating losses since its inception and expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances its therapeutic candidates through all stages of development and clinical trials and, ultimately, seeks regulatory approval.

The CODM uses net loss and the components of operating expense to assess the Company’s operating results and performance and make operating decisions regarding the allocation of resources to best support the long-term growth of the Company’s overall business.

The table below summarizes the significant segment expenses which are regularly reported to and reviewed by the CODM for the purposes of making decisions regarding the allocation of resources and are reconciled to consolidated net loss for the three months ended March 31, 2025 and March 31, 2024 (in thousands):

THREE MONTHS ENDED

Segment net loss

Research and development expense

Clinical trials $ ( 13,265 ) $ ( 19,778 )

Personnel ( 9,326 ) ( 13,238 )

Contract manufacturing ( 8,550 ) ( 25,202 )

Equipment, depreciation, and facility ( 2,583 ) ( 1,920 )

Other research and development ( 3,153 ) ( 3,713 )

Total research and development expense

( 36,877 ) ( 63,851 )

General and administrative expense

Personnel ( 3,777 ) ( 5,004 )

Other general and administrative ( 2,247 ) ( 4,970 )

Total general and administrative expense

( 6,024 ) ( 9,974 )

Other expense

( 410 ) ( 4,885 )

Segment and consolidated net loss $ ( 43,311 ) $ ( 78,710 )

Recent Accounting Pronouncements

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Recently Issued but Not Yet Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating this ASU to determine its impact on the Company’s consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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Prepaid expense and other current assets were comprised of the following (in thousands):

SEPTEMBER 30, 2024 DECEMBER 31, 2023

Clinical trials (1)

$ 4,435 $ 5,409

MARCH 31, 2025 DECEMBER 31, 2024

Clinical drug substance and product manufacturing (1)

Licenses 1,092 728

$ 1,889 $ 1,998

Software licenses

Clinical trials (2)

Outside research and development services (3)

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Prepaid expense and other current assets $ 6,652 $ 7,382

(1) Relates primarily to the Company’s prepayments to third-party CROs for management of clinical trials and prepayments for drug supply to be used in combination with the Company’s therapeutics.

See “Accrued Research and Development Clinical Trial Costs” in Note 1 for further discussion of the components of research and development.

(1) Relates primarily to the Company’s usage of third-party CDMOs for clinical and development efforts.

See “Accrued Research and Development Clinical Trial Costs” in Note 1 for further discussion of the components of research and development.

(2) Relates primarily to the Company’s prepayments to third-party CROs for management of clinical trials and prepayments for drug supply to be used in combination with the Company’s therapeutics.

See “Accrued Research and Development Clinical Trial Costs” in Note 1 for further discussion of the components of research and development.

(3) Relates to the Company’s usage of third-parties for other research and development efforts.

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Property and equipment, net were comprised of the following (in thousands):

SEPTEMBER 30, 2024 DECEMBER 31, 2023

MARCH 31, 2025 DECEMBER 31, 2024

Machinery and equipment $ 9,758 $ 9,758

Furniture, fixtures, and other 556 540

Leasehold improvements 795 441

Computer software 3,984 3,984

Leasehold improvements 795 795

Furniture, fixtures, and other 556 556

Construction in process 21 —

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Property and equipment, net $ 5,546 $ 6,200

(1) As of December 31, 2023, consists of renovations to the Company’s office space and software not yet placed in service.

Depreciation and amortization expense for the three and nine months ended September 30, 2024 and September 30, 2023 consisted of the following (in thousands):

Depreciation and amortization expense for the three and three months ended March 31, 2025 and March 31, 2024 consisted of the following (in thousands):

THREE MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

Research and development $ 588 $ 256

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Accrued expenses were comprised of the following (in thousands):

SEPTEMBER 30, 2024 DECEMBER 31, 2023

MARCH 31, 2025 DECEMBER 31, 2024

Clinical trials (1)

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Clinical drug substance and product manufacturing (2)

Other outside research and development (3)

Compensation-related 2,718 7,726

Professional fees 1,883 780

Interest expense 857 —

Professional fees 614 629

Other outside research and development (3)

Other 380 465

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Prior to the Separation, the outstanding term loans were to mature on January 1, 2027, or the Amended Maturity Date.

Under the Amended 2020 Loan Agreement, and through the Separation, the repayment schedule provided for interest-only payments through February 1, 2025, followed by 23 months of principal and interest payments.

Upon the Amended Maturity Date, a final payment of 9.0 % of the original principal amount would be due to Oxford.

This final payment of $ 18.0 million was being accreted over the life of the Amended 2020 Loan Agreement using the effective interest method.

The Company had the option to prepay the outstanding balance of the term loans in full prior to the Amended Maturity Date, subject to a prepayment fee ranging from 1.0 % to 3.0 %, depending upon the timing of the prepayment.

In connection with the Separation, the Company’s outstanding debt was assumed by the Acquirer.

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The Company did not make any payment upon the extinguishment of the debt and did not incur any prepayment penalties.

Upon the Acquirer’s assumption of the outstanding debt, the Company recorded a gain of $ 211.3 million, the net carrying amount of the Amended 2020 Loans upon extinguishment, within the gain related to transaction with Acquirer in its condensed consolidated statements of operations.

Interest Expense

Prior to the Separation, interest expense was calculated using the effective interest method and was inclusive of non-cash amortization of the debt discount and accretion of the final payment.

During the nine months ended September 30, 2024, interest expense was $ 13.5 million, $ 2.1 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

During the three months ended September 30, 2023, interest expense was $ 8.1 million, $ 1.2 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

During the nine months ended September 30, 2023, interest expense was $ 23.6 million, $ 3.7 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

The Company did not incur any interest expense during the three months ended September 30, 2024.

During the three months ended March 31, 2024, interest expense was $ 8.1 million, $ 1.2 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

2025 Loan Agreement

On January 13, 2025, the Company entered into a Loan and Security Agreement, or the 2025 Loan Agreement, with Oxford, pursuant to which it received $ 100.0 million in gross proceeds.

The 2025 Loan Agreement provides for an additional tranche of $ 50.0 million to be funded upon the Company's request and at the Oxford’s sole discretion.

The outstanding term loan will mature on January 1, 2030, or the Maturity Date, and bears interest at (1) 5.61 % plus (2) the greater of (i) the 1-Month Term Secured Overnight Financing Right as published by the CME Group or (ii)

The repayment schedule provides for interest-only payments through February 1, 2028, with principal payments beginning on March 1, 2028.

The interest-only period is followed by 23 months of equal payments of principal plus interest.

Upon the earliest to occur of (i) the Maturity Date, (ii) the acceleration of any term loan under the Term Loan Facility, or (iii) prepayment of any term loan under the Term Loan Facility, the Company will be required to make a final payment of 9.0 % of the total principal amount.

This final payment of $ 9.0 million will be accreted over the life of the 2025 Loan Agreement using the effective interest method.

The Company has the option to prepay the outstanding balance of the term loan in full prior to the Maturity Date, subject to a prepayment fee ranging from 2.0 % to 5.0 %, depending on the timing of the prepayment.

As of March 31, 2025, the Company’s outstanding debt balance under the 2025 Loan Agreement consisted of the following (in thousands):

MARCH 31, 2025

Term loan $ 109,000

debt discount ( 10,347 )

Long-term debt, including debt discount and final payment fee $ 98,653

The Company’s interest-only period will continue through February 2028, with principal payments beginning in March 2028.

Future principal payments and final fee payments will be made as follows (in thousands):

MARCH 31, 2025

2028 (10 months)

Thereafter 13,348

Total future minimum payments 109,000

unamortized debt discount ( 10,347 )

Total debt $ 98,653

The Company’s obligations under the 2025 Loan Agreement are secured by a first priority perfected lien on, and security interest in, substantially all present and future assets of the Company, subject to certain exceptions.

The 2025 Loan Agreement includes customary events of default, including instances of a material adverse change in the Company’s operations, that may require prepayment of the outstanding term loans.

As of March 31, 2025 the Company is in compliance with all covenants under the 2025 Loan Agreement and has not received any notification or indication from Oxford of an intent to declare the loan due prior to maturity.

Concurrently with the debt issuance in January 2025, the Company issued to Oxford warrants to purchase shares of the Company’s common stock equal to 2.0 % of the funded amount, or $ 2.0 million, or the 2025 Oxford Warrants.

Upon issuance, the warrants were exercisable for 140,741 shares of common stock at an exercise price of $ 14.21 per share.

The 2025 Oxford Warrants are immediately exercisable, and the exercise period will expire 10 years from the date of issuance.

Upon issuance, the warrants were classified as equity and recorded at their fair value of $ 1.7 million as additional paid-in-capital and as a debt discount which will be accreted over the life of the 2025 Loan Agreement using the effective interest method.

See Note 4 for further discussion of these warrants.

Interest Expense

Interest expense is calculated using the effective interest method and is inclusive of non-cash amortization of the debt discount and accretion of the final payment at an effective interest rate of 12.9 %.

During the three months ended March 31, 2025, interest expense was $ 2.7 million, $ 0.5 million of which related to non-cash amortization of the debt discount and accretion of the final payment.

STOCKHOLDERS’ EQUITY

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Following the Distribution and as of May 29, 2024, the Company had 14,475,904 shares of common stock outstanding.

The Company issued one SEC-registered, publicly listed, share of Inhibrx Biosciences for every four shares of the Former Parent’s common stock held, resulting in 13,316,140 shares of common stock issued to common stockholders of the Former Parent.

The Company issued one SEC-registered, publicly listed, share of Inhibrx for every four shares of the Former Parent’s common stock held, resulting in 13,316,140 shares of common stock issued to common stockholders of the Former Parent.

Upon the Distribution, the Former Parent retained an equity interest in the Company of 8 %, or 1,157,926 shares.

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The purchase price of the pre-funded warrants was $ 19.3499 per pre-funded warrant, with an exercise price of $ 0.0001 per share.

The Company received gross proceeds of approximately $ 200.0 million from the Private Placement, before deducting $ 0.4 million of offering expenses payable by the Company.

The pre-funded warrants were equity-classified and carried at the instruments’ fair value upon issuance.

The pre-funded warrants were exercisable upon issuance pursuant to certain beneficial ownership limitations as defined in the Purchase Agreement and will expire when exercised in full.

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The Company has evaluated the amendment and accounted for this as a modification to the original Purchase Agreement.

As part of the Separation and Distribution, each holder of outstanding pre-funded warrants received (i) $ 30.00 per pre-funded warrant in cash, less the applicable exercise price per share, (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone, and (iii) one pre-funded warrant of Inhibrx Biosciences for every four of the Former Parent’s pre-funded warrants held.

Following the Separation and Distribution and as of September 30, 2024, pre-funded warrants to purchase 991,849 shares of the Company’s common stock are outstanding at an exercise price of $ 0.0001 per share.

As part of the Separation and Distribution, each holder of outstanding pre-funded warrants received (i) $ 30.00 per pre-funded warrant in cash, less the applicable exercise price per share, (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone, and (iii) one pre-funded warrant of Inhibrx for every four of the Former Parent’s pre-funded warrants held.

Following the Separation and Distribution, pre-funded warrants to purchase 991,849 shares of the Company’s common stock are outstanding at an exercise price of $ 0.0001 per share.

The pre-funded warrants are exercisable upon issuance pursuant to certain beneficial ownership limitations as defined in the Purchase Agreement, as amended, and will expire when exercised in full.

Warrants Issued in Connection with Amended 2020 Loan Agreement

Prior to the Separation and Distribution, the following equity-classified warrants issued to Oxford in connection with the Amended 2020 Loan Agreement, or the Oxford Warrants, were outstanding, in addition to the pre-funded warrants discussed above:

Warrants Expiration Date Shares of Common Stock Issuable Upon

Exercise of Warrants Exercise Price

2020 Oxford Warrants July 15, 2030 7,354 $ 17.00

2022 Oxford Warrants February 18, 2032 40,000 $ 45.00

As part of the Separation and Distribution, each holder of eligible outstanding warrants received (i) $ 30.00 per warrant in cash, less the applicable exercise price per share (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone, and (iii) one SEC-registered, publicly listed, share of Inhibrx Biosciences for every four of the Former Parent’s warrants held.

Oxford Warrants

Amended 2020 Loan Agreement

In connection with the Amended 2020 Loan Agreement, the Company issued equity-classified warrants to Oxford, or the 2020 Oxford Warrants, in two tranches:

(i) 7,354 warrants with an exercise price of $ 17.00 , and (ii) 40,000 warrants with an exercise price of $ 45.00 .

As part of the Separation and Distribution, each holder of eligible outstanding warrants received (i) $ 30.00 per warrant in cash, less the applicable exercise price per share (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone, and (iii) one SEC-registered, publicly listed, share of Inhibrx for every four of the Former Parent’s warrants held.

All outstanding warrants with an exercise price which exceeded the total consideration of $ 35.00 were canceled upon the Merger for no consideration.

As of September 30, 2024, no Oxford Warrants were outstanding.

Following the Separation, no 2020 Oxford Warrants were outstanding.

2025 Loan Agreement

In connection with the 2025 Loan Agreement, the Company issued warrants to Oxford, or the 2025 Oxford Warrants.

The Company issued warrants to purchase 140,741 shares of the Company’s common stock at an exercise price of $ 14.21 per share.

The 2025 Oxford Warrants are exercisable upon issuance and will expire on January 13, 2035.

The 2025 Oxford Warrants are equity-classified and carried at the instruments’ fair value upon classification into equity, with no subsequent remeasurements.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of September 30, 2024 for the Company and December 31, 2023 for the Former Parent consisted of the following (in thousands):

SEPTEMBER 30, 2024 DECEMBER 31, 2023

Common stock reserved for future issuance as of March 31, 2025 for the Company and December 31, 2024 for the Former Parent consisted of the following (in thousands):

MARCH 31, 2025 DECEMBER 31, 2024

Options to purchase common stock issued and outstanding 3,422 3,660

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The options were subject to four-year vesting with a one-year cliff and had a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2017 Plan for the nine months ended September 30, 2024 is as follows (in thousands, except for per share data and years):

Number of Shares Weighted Average Exercise Price

Outstanding as of December 31, 2023

6,494 $ 23.22

Exercised ( 3,449 ) $ 21.11

Forfeited ( 9 ) $ 32.03

Settled in connection with the Merger ( 2,884 ) $ 24.75

Canceled in connection with the Merger ( 152 ) $ 41.56

Outstanding as of September 30, 2024

Vested and exercisable as of September 30, 2024

The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2024 and September 30, 2023 was $ 65.3 million and $ 1.3 million, respectively.

Aggregate intrinsic value of stock options exercised and outstanding was calculated using the fair value of common stock on the date of exercise and the fair value of common stock as of September 30, 2024, respectively.

The total fair value of stock options vested during the nine months ended September 30, 2024 and September 30, 2023 was $ 42.5 million and $ 19.0 million, respectively.

Following the Merger and as of May 30, 2024, no stock options remained outstanding under the 2017 Plan.

The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2024 was $ 25.5 million.

Aggregate intrinsic value of stock options exercised was calculated using the fair value of common stock on the date of exercise.

The total fair value of stock options vested during the three months ended March 31, 2024 was $ 8.3 million.

Following the Merger, there was no activity under the 2017 Plan and no stock options remained outstanding under the 2017 Plan.

Settlement of Stock Options Upon Merger

All outstanding options with an exercise price less than or equal to the total consideration of $ 35.00 vested immediately upon the Merger and were settled for the consideration of:

(i) $ 30.00 per share in cash, less the applicable exercise price of their stock option and (ii) one contingent value right per share, representing the right to

receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone.

In connection with the acceleration of the eligible stock options, the Company recognized $ 39.3 million in stock compensation expense.

(i) $ 30.00 per share in cash, less the applicable exercise price of their stock option and (ii) one contingent value right per share, representing the right to receive a contingent payment of $ 5.00 in cash upon the achievement of a regulatory milestone.

All outstanding options with an exercise price which exceeded the total consideration of $ 35.00 were canceled upon the Merger for no consideration.

In connection with the cancellation of all unvested options with an exercise price above $ 35.00 , the Company recognized all remaining stock compensation expense of $ 1.8 million.

Stock-Based Compensation Expense

The weighted-average assumptions used by the Company to estimate the fair value of stock option grants using the Black-Scholes option pricing model, as well as the resulting weighted-average fair value, for the nine months ended September 30, 2023 were as follows:

NINE MONTHS ENDED

SEPTEMBER 30, 2023

Risk-free interest rate 3.76 %

Expected volatility 84.33 %

Expected dividend yield — %

Expected term (in years) 6.08

Weighted average fair value $ 16.89

The Company did not grant any stock options under the 2017 Plan during the nine months ended September 30, 2024.

The Company did no t grant any stock options under the 2017 Plan during the three months ended March 31, 2025 or March 31, 2024.

Stock-based compensation expense for stock options under the 2017 Plan consisted of the following (in thousands):

THREE MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

THREE MONTHS ENDED MARCH 31, 2024

Research and development $ 4,192

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Total stock-based compensation expense $ 6,397

As of September 30, 2024, the Company had no remaining unrecognized stock-based compensation expense related to its stock options under the 2017 Plan following the termination of the plan subsequent to the Merger.

No expense was recognized under the 2017 Plan during the three months ended March 31, 2025.

As of March 31, 2025, the Company had no remaining unrecognized stock-based compensation expense related to its stock options under the 2017 Plan following the termination of the plan subsequent to the Merger.

In connection with the Separation, the Company adopted the 2024 Omnibus Incentive Plan, or the 2024 Plan, which provides for the issuance of incentive stock options, restricted and unrestricted stock awards, and other stock-based awards.

As of September 30, 2024, an aggregate of 4.0 million shares of common stock were authorized for issuance under the 2024 Plan, of which 0.4 million remained available for issuance.

As of March 31, 2025, an aggregate of 4.0 million shares of common stock were authorized for issuance under the 2024 Plan, of which 0.6 million remained available for issuance.

Stock Option Activity

The Company recognizes compensation costs related to stock-based awards, including stock options, based on the estimated fair value of the awards on the date of grant.

The Company grants options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant.

The options are subject to four-year vesting with a one-year cliff and have a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2024 Plan for the nine months ended September 30, 2024 is as follows (in thousands, except for per share data and years):

The Company grants stock options with an exercise price equal to the fair market value of the Company’s stock on the date of the option grant.

The stock options are generally subject to four-year vesting with a one-year cliff, or one-year vesting.

All options have a contractual term of 10 years.

A summary of the Company’s stock option activity under its 2024 Plan for the three months ended March 31, 2025 is as follows (in thousands, except for per share data and years):

Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term

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Outstanding as of December 31, 2024

3,660 $ 15.84

Granted 21 $ 14.03

Forfeited ( 259 ) $ 15.86

Outstanding as of September 30, 2024

Outstanding as of March 31, 2025

3,422 $ 15.83 9.1 $ 13

Vested and exercisable as of September 30, 2024

No stock options were exercised or vested during the nine months ended September 30, 2024.

Vested and exercisable as of March 31, 2025

50 $ 15.86 1.5 $ —

No stock options were exercised during the three months ended March 31, 2025.

The total fair value of stock options vested during the three months ended March 31, 2025 was $ 0.3 million.

The Company expects all outstanding stock options to vest.

There was no activity under the 2024 Plan during the nine months ended September 30, 2023.

Prior to the Merger, there was no activity under the 2024 Plan.

Stock-Based Compensation Expense

NINE MONTHS ENDED

SEPTEMBER 30, 2024

THREE MONTHS ENDED

MARCH 31, 2025

Risk-free interest rate 4.13 %

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Stock-based compensation expense for stock options under the 2024 Plan consisted of the following (in thousands):

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30, 2024

THREE MONTHS ENDED

MARCH 31, 2025

Research and development $ 1,256

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Total stock-based compensation expense $ 2,450

There was no expense incurred under the 2024 Plan during the three or nine months ended September 30, 2023.

As of September 30, 2024, the Company had $ 39.3 million of total unrecognized stock-based compensation expense related to its stock options, which is expected to be recognized over a weighted-average period of 3.6 years.

There was no expense incurred under the 2024 Plan during the three months ended March 31, 2024.

As of March 31, 2025, the Company had $ 30.9 million of total unrecognized stock-based compensation expense related to its stock options, which is expected to be recognized over a weighted-average period of 3.2 years.

LICENSE REVENUES

The following table summarizes the total revenue recorded in the Company’s condensed consolidated statements of operations (in thousands):

THREE MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

License fee revenue

Regeneron Pharmaceuticals, Inc.

$ — $ — $ 100 $ —

Total license fee revenue $ — $ 119 $ 100 $ 166

The Company did not earn any revenue during the three months ended March 31, 2025 or March 31, 2024.

License and Collaboration Agreements

In June 2020, the Company entered into an Option and License Agreement with bluebird bio, Inc., or bluebird, pursuant to which the Company granted to bluebird exclusive worldwide rights to develop binders and cell therapy products containing single domain antibodies, or sdAbs, directed to specified targets, consisting of two initial programs and up to an additional 8 programs.

The Company retained all rights to the specific sdAbs outside of the cell therapy field.

In November 2021, this agreement was assigned to 2seventy bio, Inc., or 2seventy, in connection with bluebird’s internal restructuring and subsequent spin-out of 2seventy, and subsequently in April 2024, this agreement, or the 2020 Regeneron Agreement, was assigned to Regeneron Pharmaceuticals, Inc., or Regeneron, in connection with the divestiture of 2seventy’s oncology and autoimmune pipeline to Regeneron.

In June 2022, 2seventy selected a third program and paid a non-refundable upfront option fee of $ 0.2 million in exchange for a development license.

The Company granted an option in which Regeneron may acquire an exclusive license with respect to all binders and cell therapy products developed under this agreement, which entitles the Company to additional fees upon exercise of the option.

In connection with each program for which Regeneron exercises its option, Regeneron will be required to pay the Company a one-time, non-refundable, non-creditable fee in the low-single-digit millions.

The Company is also entitled to receive certain developmental milestone payments of up to an aggregate of $ 51.5 million per therapeutic, as well as percentage tiered royalties on future product sales with rates in the mid-single digits.

Due to the uncertainty in the achievement of the developmental milestones and future sales, the variable consideration associated with the future milestone payments has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant reversal of previously recognized revenue will not occur.

Scithera License Agreement

On March 31, 2025, the Company entered into a License and Assignment Agreement, or the Scithera License Agreement, with Scithera, Inc., or Scithera, a newly formed biotechnology company that focuses on antibody-based molecules.

Pursuant to the Scithera License Agreement, the Company licensed to Scithera the right to use certain assets in the Company’s antibody library to research, develop, and commercialize antibody-based molecules to certain targets.

Additionally, the Company assigned to Scithera its agreement with NorthStar Medical Technologies, LLC for the development of radiopharmaceuticals for the treatment of cancer.

The Company also agreed to make available to Scithera certain research materials useful for identifying, generating, and developing antibodies from antibody libraries to enable Scithera’s use of the assets licensed under the Scithera License Agreement.

Contingent upon Scithera’s achievement of specified funding events, Scithera is required to pay the Company $ 1.3 million as a non-refundable payment.

In addition, Scithera may make additional future milestone payments of up to an aggregate of $ 41.25 million upon the achievement of certain milestone events, and potential royalty payments on net sales in the low- to mid-single digits.

As of the effective date of the agreement, the Company identified one performance obligation, which was the transfer of licenses to Scithera for the specified assets and all related materials and know-how.

As of March 31, 2025, the Company determined all consideration under the agreement is variable consideration associated with the achievement of specified funding events or development milestones, and as a result, has been fully constrained (excluded) from the transaction price until such time that the Company concludes that it is probable that a significant

reversal of previously recognized revenue will not occur.

These estimates will be re-assessed at each reporting period.

In June 2022, pursuant to the terms regarding the addition of new programs in the 2020 Regeneron Agreement, the Company received a $ 0.2 million upfront option fee related to the selection of a third program and transferred the related know-how and development license.

The Company recognized the $ 0.2 million of revenue at the point in time in which the program was added and the program term began.

In May 2024, pursuant to the option extension terms in the 2020 Regeneron Agreement, Regeneron requested to extend the option term for this program by an additional six months in exchange for an option extension fee of $ 0.1 million.

The Company recognized the $ 0.1 million of revenue related to this extension at the point in time in which the extension was granted.

During the nine months ended September 30, 2024, the Company recognized $ 0.1 million of revenue related to this agreement.

The Company did no t recognize any revenue under this agreement during the three months ended September 30, 2024 or the three and nine months ended September 30, 2023.

The Company did not recognize any revenue under the Scithera License Agreement during the three months ended March 31, 2025.

RELATED PARTY TRANSACTIONS

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The Former Parent pays the Company for any such services received by the Former Parent or other Sanofi entities, as applicable, at agreed amounts as set forth in the Transition Services Agreement.

During the three and nine months ended September 30, 2024, the Company billed the Former Parent for $ 0.1 million and $ 0.2 million, respectively, for services performed under the Transition Services Agreement.

The Company recognized this amount as other income.

The Company has received $ 0.1 million, and the remaining balance of $ 0.1 million is recorded as receivables from related parties in the Company’s condensed consolidated balance sheets as of September 30, 2024.

Additionally, the Transition Services Agreement requires the Former Parent to reimburse the Company for certain severance payments made by the Company to certain Company employees whose employment was terminated as a result of the Merger.

During the three and nine months ended September 30, 2024, the Company billed the Former Parent for $ 1.0 million of severance payments to former employees.

The Company has received $ 0.4 million, and the remaining balance of $ 0.6 million is recorded as receivables from related parties in the Company’s condensed consolidated balance sheets as of September 30, 2024.

Pharmacovigilance Agreement

In connection with the Separation, the Company entered into a Pharmacovigilance Agreement with the Former Parent, pursuant to which the parties agreed to implement processes and procedures for sharing information as required for each party’s compliance with its regulatory and pharmacovigilance responsibilities.

During the three months ended March 31, 2025, the Company did not bill the Former Parent for any services performed under the Transition Services Agreement.

During the three months ended March 31, 2025, the Company received payments of approximately $ 23,000 of previously billed services and as of March 31, 2025, has no remaining receivables from related parties under the agreement.

COMMITMENTS AND CONTINGENCIES

Operating Leases

In September 2017, the Company entered into a seven-year lease agreement as its sole location in La Jolla, California.

The lease expires in June 2025 with an option to extend the lease an additional five years , which is not included in the right-of-use asset and lease liabilities.

The lease contained an initial base rent of approximately $ 0.1 million per month with 2 % annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which to be determined annually.

In May 2019, the Company executed an amendment to its lease agreement to expand its facilities and began occupying this space in January 2020.

The amended lease terminates coterminously with the initial lease agreement and contains an initial base rent of approximately $ 30,000 per month with 2 % annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which is to be determined annually.

The operating right-of-use asset and operating lease liability as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

SEPTEMBER 30, 2024 DECEMBER 31, 2023

In September 2017, the Company entered into a seven-year lease agreement as its sole location in La Jolla, California, which contains an initial base rent of approximately $ 0.1 million per month with 2 % annual escalations.

In May 2019, the Company executed an amendment to its lease agreement to expand its facilities and began occupying this space in January 2020, which contains an initial base rent of approximately $ 30,000 per month with 2 % annual escalations.

Payments under each of the lease agreements include base rent plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which to be determined annually.

In November 2024, the Company entered into a new lease agreement for its existing facilities, or the 2024 Lease Agreement, for the period following the expiration of its two existing leases in June 2025 through June 2028, with an option to extend the lease an additional three years , which is not included in the right-of-use asset and lease liabilities.

This agreement did not include any additional square footage.

The 2024 Lease Agreement contains initial base rent of approximately $ 0.2 million per month with 3 % annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which is to be determined annually.

The 2024 Lease Agreement also provided for four months of base rent abatement of $ 0.2 million per month for the period of October 2024 through January 2025.

The Company determined the 2024 Lease Agreement contains a lease which should be accounted for as a single modified contract with its existing lease agreements.

As a result, the Company remeasured the operating lease liability, resulting in an increase to its operating lease liability and right-of-use asset of $ 6.3 million as of the lease’s commencement date, which was determined to be the effective date of the 2024 Lease Agreement.

The Company utilized an estimated incremental fully collateralized borrowing rate of 10.2 % in its present value calculation as the 2024 Lease Agreement, which does not have a stated rate and did not have a readily determinable implicit rate.

The estimated rate was determined using the rate of the 2025 Loan Agreement with Oxford entered into in January 2025.

The operating right-of-use asset and operating lease liability as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

MARCH 31, 2025 DECEMBER 31, 2024

Operating right-of-use asset

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Total operating lease liability $ 7,877 $ 8,048

During each of the three months ended September 30, 2024 and September 30, 2023, the Company recognized operating lease expense of $ 0.9 million.

During the nine months ended September 30, 2024 and September 30, 2023, the Company recognized operating lease expense of $ 2.5 million and $ 2.6 million, respectively.

During the three months ended September 30, 2024 and September 30, 2023, the Company paid $ 0.4 million and $ 0.5 million in cash for amounts included in the measurement of the operating lease liability, respectively.

During the nine months ended September 30, 2024 and September 30, 2023, the Company paid $ 1.5 million and $ 1.6 million in cash for amounts included in the measurement of the operating lease liability, respectively.

As of September 30, 2024 and December 31, 2023, the Company’s operating lease had a remaining term of 0.8 years and 1.5 years, respectively.

During the three months ended March 31, 2025 and March 31, 2024, the Company recognized operating lease expense of $ 0.9 million and $ 0.8 million, respectively.

During the three months ended March 31, 2025 and March 31, 2024, the Company paid $ 0.4 million and $ 0.6 million in cash for amounts included in the measurement of the operating lease liability, respectively.

As of March 31, 2025 and December 31, 2024, the Company’s operating lease had a remaining term of 3.25 years and 3.5 years, respectively.

The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease.

The Company determined a weighted-average discount rate of 8.2 % as of September 30, 2024 and December 31, 2023.

The Company determined a weighted-average discount rate of 10.2 % as of March 31, 2025 and December 31, 2024.

Future minimum rental commitments for the Company’s operating leases reconciled to the operating lease liability are as follows (in thousands):

SEPTEMBER 30, 2024

2024 (three months)

MARCH 31, 2025

2025 (nine months) $ 1,967

Total future minimum lease payments 9,255

imputed interest ( 1,378 )

Total operating lease liability

current portion of operating lease liability ( 1,973 )

COMMITMENTS AND CONTINGENCIES

Other than as described below, the Company is not party to any material legal proceedings.

Non-current portion of operating lease liability $ 5,904

The Company is not party to any material legal proceedings.

From time to time, it may be involved in legal proceedings or subject to claims incident to the ordinary course of business.

Regardless of the outcome, such proceedings or claims can have an adverse impact on the Company because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

I-Mab Biopharma Litigation

On March 1, 2022, I-Mab Biopharma filed a lawsuit against the Former Parent and Brendan Eckelman, the Company’s co-founder and Chief Scientific Officer, in the United States District Court for the District of Delaware, C.A.

22-00276-CJB, asserting claims for misappropriation of trade secrets related to Dr.

Eckelman’s service as an expert witness for Tracon Pharmaceuticals, Inc., or Tracon, in Tracon’s arbitration against I-Mab Biopharma.

I-Mab Biopharma sought royalty damages and alternative damages in the form of unjust enrichment.

As of September 30, 2024, the Company did not expect an adverse outcome in the trial scheduled for October 2024, or any damages to be awarded, and thus has not recorded a liability on its books as of September 30, 2024.

See Note 10 for further discussion of the trial subsequent to the period.

SUBSEQUENT EVENTS

I-Mab Biopharma Litigation

On November 4, 2024, the Company announced a legal victory in the trade secrets case discussed in Note 9 brought by I-Mab Biopharma in the United States District Court for the District of Delaware.

The jury found in favor of the Company, rejecting all allegations of misappropriation before it.

I-Mab Biopharma had initiated the lawsuit on March 1, 2022, alleging that the Company and its Chief Scientific Officer, Brendan Eckelman, Ph.D., improperly accessed and used proprietary information related to several of I-Mab Biopharma’s research projects during a prior arbitration proceeding involving I-Mab Biopharma, for which Dr.

Eckelman served as an expert witness.

However, the jury found no basis for these claims in finding in favor of the Company, and thus the Company is not liable for any damages in this matter.

Certain matters remain before the Court.

Operating Lease

On November 12, 2024, the Company entered into a three-year lease agreement for its sole location in La Jolla, California, which the Company currently occupies under two existing lease agreements expiring June 30, 2025.

The new lease term begins on July 1, 2025 and expires on June 30, 2028 with an option to extend the lease an additional three years .

The lease contains an initial base rent of $ 0.2 million per month with 3 % annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property, the latter of which is to be determined annually.

In addition, the lease provides for a four-month rent abatement period of approximately $ 0.7 million.

This abatement will be applied to the existing lease agreements beginning in the fourth quarter of 2024.

Regardless of the outcome, such

proceedings or claims can have an adverse impact on the Company because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.

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

What changed 10-Q

Item 1. Financial Statements