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Item 8. Financial Statements and Supplementary Data

2025-02-27 compared with 2024-02-29 · 193 added, 193 removed, 554 unchanged (41% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders of Lisata Therapeutics, Inc.

Board of Directors and Stockholders

Lisata Therapeutics, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Lisata Therapeutics, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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Marketable securities 15,036 27,942

Accounts receivable 900 —

Prepaid and other current assets 2,433 3,389

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Year Ended December 31,

Revenue $ 1,000 $ —

Operating Expenses:

Research and development 11,334 12,734

In-process research and development — 30,393

General and administrative 12,075 12,974

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Cumulative translation adjustment arising during the period ( 40 ) ( 25 )

Total other comprehensive income (loss) ( 13 ) 41

Total other comprehensive loss ( 39 ) ( 13 )

Comprehensive loss ( 20,024 ) ( 20,853 )

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Net proceeds from issuance of common stock 87 — 321 — — — 321 — 321

Issuance of common stock in connection with Merger 3,773 4 26,094 — — — 26,098 — 26,098

Proceeds from option exercises 83 — 155 — — — 155 — 155

Unrealized gain on marketable securities — — — 12 — — 12 — 12

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

Equity-based compensation expense 2,038 2,636

Share-based compensation expense 1,653 2,038

Depreciation and amortization 174 189

Loss from equity method investment 130 —

Loss on disposal of fixed assets — 3

In-process research and development expenses — 30,393

Amortization/accretion on marketable securities ( 455 ) ( 960 )

Changes in operating assets and liabilities:

Accounts receivable ( 900 ) —

Prepaid and other current assets 852 ( 824 )

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Sales of marketable securities 69,051 108,581

Asset acquisition costs, net of cash acquired related to Merger — ( 3,320 )

Purchases of property and equipment — ( 285 )

Investment in Impilo Therapeutics ( 130 ) —

Net cash provided by investing activities 13,233 10,102

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Tax withholding payments on net share settlement equity awards ( 274 ) ( 91 )

Net proceeds from issuance of capital stock 321 43

Net cash provided by (used in) financing activities 385 ( 224 )

Net proceeds from issuance of common stock 68 321

Net cash (used in) provided by financing activities ( 206 ) 385

Effect of exchange rate changes on cash ( 55 ) ( 16 )

Net (decrease) increase in cash and cash equivalents ( 9,561 ) 7,507

Net decrease in cash and cash equivalents ( 6,384 ) ( 9,561 )

Cash and cash equivalents at beginning of year 22,593 32,154

Cash and cash equivalents at end of year $ 16,209 $ 22,593

Supplemental Disclosure of Cash Flow Information:

Issuance of common stock in connection with Merger $ — $ 23,580

Incremental fair value of Cend's fully vested stock options assumed $ — $ 2,136

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – The Business

Note 1 – Description of Business

Lisata Therapeutics, Inc.

(together with its subsidiaries, the “Company”) is a clinical-stage pharmaceutical company dedicated to the discovery, development, and commercialization of innovative therapies for the treatment of solid tumors and other major diseases.

The Company's lead investigational product candidate, LSTA1, is designed to activate a novel uptake pathway that allows co-administered or tethered (i.e., molecularly bound) anti-cancer drugs to target and penetrate solid tumors more effectively.

LSTA1 actuates this active transport system in a tumor-specific manner, resulting in systemically co-administered anti-cancer drugs more efficiently penetrating and accumulating in the tumor, while normal tissues are unlikely to be affected.

LSTA1 also has the potential to modify the tumor microenvironment (“TME”), thereby making tumors more susceptible to immunotherapies and inhibiting the metastasis cascade (i.e., the spread of cancer to other parts of the body).

The Company's investigational product, certepetide (formerly known as LSTA1 or CEND-1), is designed to activate a novel uptake pathway that allows co-administered or tethered (i.e., molecularly bound) anti-cancer drugs to target and penetrate solid tumors more effectively.

Certepetide actuates this active transport system in a tumor-specific manner, resulting in systemically co-administered anti-cancer drugs more efficiently penetrating and accumulating in the tumor, while normal tissues are expected to remain unaffected.

Certepetide has also been shown to modify the tumor microenvironment (“TME”) by reducing T-regulatory cells and augmenting cytotoxic T cells, thereby making tumors more susceptible to immunotherapies while also inhibiting the metastatic cascade (i.e., the spread of cancer to other parts of the body).

The Company and its collaborators have amassed significant non-clinical data demonstrating enhanced delivery of a range of existing and emerging anti-cancer therapies, including chemotherapeutics, immunotherapies, and RNA-based therapeutics.

To date, LSTA1 has also demonstrated favorable safety, tolerability and activity in completed and ongoing clinical trials designed to enhance delivery of standard-of-care chemotherapy for pancreatic cancer.

The Company is exploring the potential of LSTA1 to enable a variety of treatment modalities to treat a range of solid tumors more effectively.

Currently, LSTA1, is the subject of Phase 2a and 2b clinical studies being conducted globally in a variety of solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC), cholangiocarcinoma, head and neck cancer, appendiceal cancer, colon cancer and glioblastoma multiforme in combination with a variety of anti-cancer regimens.

The Company's legacy CD34+ cell therapy technology was the subject of several clinical trials targeting an array of diseases, among them, critical limb ischemia, coronary microvascular dysfunction, and diabetic kidney disease.

Further development of such programs would require significantly larger studies and capital investment and thus, development by Lisata would only be continued if a strategic partner that can contribute the necessary capital for future development is identified.

To date, certepetide has also demonstrated favorable safety, tolerability and activity in completed and ongoing clinical trials designed to enhance delivery of standard-of-care chemotherapy for pancreatic cancer.

The Company is exploring certepetide as a means to enable a variety of treatment modalities to treat a range of solid tumors more effectively.

Currently, certepetide is the subject of several Phase 2 clinical studies being conducted globally in a variety of solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC), cholangiocarcinoma, appendiceal cancer, colon cancer and glioblastoma multiforme in combination with a variety of anti-cancer regimens.

The Company's leadership team has decades of collective biopharmaceutical and pharmaceutical product development experience across a variety of therapeutic categories and at all stages of development from preclinical through to product registration and launch.

The Company's goal is to develop and commercialize products that address important unmet medical needs.

Merger with Cend Therapeutics, Inc.

and Name Change

On September 15, 2022, the Company, then operating as Caladrius Biosciences, Inc.

(“Caladrius"), completed its acquisition of Cend Therapeutics, Inc.

(“Cend”), a Delaware corporation (the “Merger”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated as of April 26, 2022, by and among Caladrius, Cend and CS Cedar Merger Sub, Inc.

(“Merger Sub”).

Pursuant to the terms set forth in the Merger Agreement and effective September 15, 2022 (the “Effective Time”):

(i) Merger Sub merged with and into Cend, with Cend surviving as a wholly owned subsidiary of Caladrius, (ii) Caladrius changed its name to Lisata Therapeutics, Inc., and (iii) Caladrius effected a 1:15 reverse stock split of its common stock (“Reverse Stock Split”) prior to the Effective Time.

At the Effective Time, each share of Cend's common stock outstanding immediately prior to the Effective Time was converted into the right to receive shares of Lisata’s common stock based on an exchange ratio of 0.5338 , after taking into account the Reverse Stock Split (the “Exchange Ratio”).

In connection with the Merger close, the Company issued an aggregate of 3,772,768 shares of common stock, based on the Exchange Ratio, to holders of Cend, in exchange for all of the Cend capital stock outstanding immediately prior to the closing of the Merger.

Pursuant to the Merger Agreement, Lisata assumed all of the outstanding and unexercised options to purchase shares of Cend capital stock under the 2016 Equity Incentive Plan (the “Cend Plan”), and, in connection with the Merger, such options were converted into options to purchase shares of Lisata’s common stock based on the Exchange Ratio.

At the closing of the Merger at the Effective Time, the Company assumed Cend's stock options to purchase an aggregate of 1,227,776 shares of the Company's common stock.

Caladrius was considered to be the accounting acquirer based on the terms of the Merger Agreement and certain factors including:

(i) Caladrius owned approximately 52 % of the Company's outstanding shares of common stock immediately following the close of the Merger;

(ii) although both entities contributed to the new management team of Lisata, the Caladrius team provided a vast majority of the individuals on the management team and holds the chief executive officer (“CEO”), chief

medical officer (“CMO”) and other senior management roles;

(iii) Caladrius paid a premium to acquire Cend’s assets;

and (iv) Caladrius was significantly larger than Cend regarding total assets, operations, and research and development activities.

The Merger was accounted for as an asset acquisition as substantially all of the fair value is concentrated in in-process research and development (“IPR&D”).

Cend’s assets (except for cash and working capital) were measured and recognized as an allocation of the transaction price based on their relative fair values as of the transaction date with any value associated with IPR&D with no alternative future use being expensed as reported in the consolidated statement of operations.

Operating results presented in the consolidated statements of operations and comprehensive loss prior to the Merger are solely related to Caladrius Biosciences, Inc.

and subsidiaries.

Reverse Stock Split

On September 14, 2022, in connection with the Merger, the Company implemented the Reverse Stock Split, as authorized at the annual meeting of stockholders on September 13, 2022.

The Reverse Stock Split became effective on September 14, 2022 at 5:00 pm and the Company's common stock began trading on The Nasdaq Capital Market on a post-split basis at the open of business on September 15, 2022.

As of September 14, 2022, every fifteen shares of the Company’s issued and outstanding common stock (and such shares held in treasury) were automatically converted into one share of common stock, without any change in the par value per share.

In addition, proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options, stock appreciation rights, convertible notes and warrants to purchase shares of common stock, the number of shares issuable upon the vesting of all restricted stock awards, and the number of shares of common stock reserved for issuance pursuant to the Company’s equity incentive compensation plans.

Any stockholder who would otherwise be entitled to a fractional share of common stock created as a result of the Reverse Stock Split received a cash payment equal to the product of such resulting fractional interest in one share of common stock multiplied by the closing trading price of the common stock on September 15, 2022.

The Reverse Stock Split was effectuated in order to increase the per share trading price of the Company's common stock to satisfy the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market.

All share and per share amounts of common stock, options and warrants in the accompanying financial statements have been restated for all periods presented to give retroactive effect to the Reverse Stock Split.

Accordingly, the consolidated statements of equity reflect the impact of the Reverse Stock Split by reclassifying from “common stock” to “additional paid-in capital” in an amount equal to the par value of the decreased shares resulting from the Reverse Stock Split.

Basis of Presentation

The accompanying consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Segment Information

The Company operates as one operating segment, the research and development of its investigational drug product.

The Company's Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who manages the business on a consolidated basis.

Note 2 – Summary of Significant Accounting Policies

Use of Estimates

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The Company bases its estimates on historical experience and other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

The Company makes critical estimates and assumptions in determining stock-based awards values and the valuation of the Merger, which was accounted for as an asset acquisition as substantially all of the fair value is concentrated in in-process research and development (“IPR&D”).

The Company makes critical estimates and assumptions in determining stock-based awards values.

Accordingly, actual results could differ from those estimates and assumptions.

Recently issued accounting pronouncements not yet adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid

disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2023-09.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2024-03.

Recently adopted accounting pronouncements

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

Improvements to Reportable Segment Disclosures , requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

These amendments were effective for the Company in 2024 and retrospectively to all prior periods using the significant segment expense categories identified.

The impact of the adoption of the amendments in this update was not material to the Company’s consolidated financial position and results of operations, as the requirements impact only segment reporting disclosures in the footnotes to the Company’s consolidated financial statements.

See Note 12 Segment Information in the accompanying notes to the consolidated financial statements for further detail.

Principles of Consolidation

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The Company’s reporting currency is the U.S.

The functional currency of Lisata Therapeutics Australia Pty Ltd.

which is a foreign subsidiary of the Company is the Australian Dollar.

The functional currency of Lisata Therapeutics Australia Pty Ltd., which is a foreign subsidiary of the Company, is the Australian Dollar.

The assets and liabilities of Lisata Therapeutics Australia Pty Ltd.

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Dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive income (loss) in stockholders' equity.

Note 2 – Summary of Significant Accounting Policies

Cash and Cash Equivalents

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Concentration of Risks

The Company is subject to credit risk from its portfolio of cash, cash equivalents and marketable securities.

The Company is subject to credit risk from its portfolio of cash, cash equivalents, accounts receivable and marketable securities.

Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S.

government, thereby reducing credit risk exposure.

Cash is held at major banks in the United States and may exceed federally insured limits.

The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The goals of the Company's investment policy, in order of priority, are as follows:

safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements, and a competitive after-tax rate of return.

The Company’s accounts receivable balance as of December 31, 2024, is derived from its license agreement dated November 30, 2024, more fully described in Note 17.

The Company had no accounts receivable as of December 31, 2023.

The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements.

Accounts Receivable

Accounts receivable is stated at historical cost, less allowance for credit losses.

The Company records an expense based on a forward-looking current expected credit loss model to maintain its allowance for credit losses, which replaced the

allowance for doubtful accounts.

When determining its allowance for trade accounts receivable, the Company considers the probability of recoverability of accounts receivable based on experience, taking into account current collection trends and general economic factors, including bankruptcy rates.

The Company also considers future economic trends to estimate expected

credit losses over the lifetime of the asset.

Credit risks are assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages.

Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies.

Account balances are written off against the allowance when it is determined that the receivable will not be recovered.

As of December 31, 2024 and 2023, there was no allowance for credit losses.

Marketable Securities

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All of the Company's marketable securities are considered as available-for-sale and carried at estimated fair values and reported in cash equivalents and marketable securities.

Unrealized gains and losses on available-for-sale securities are excluded from net income and reported in accumulated other comprehensive income (loss) as a separate component of stockholders' equity.

Other income (expense), net, includes interest, dividends, amortization of purchase premiums and discounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any.

Unrealized gains and losses on available-for-sale securities, that are not the result of credit losses, are excluded from net income and reported in accumulated other comprehensive income (loss) as a separate component of stockholders' equity.

Other income (expense), net, includes interest, dividends, amortization of purchase premiums and discounts, realized gains and losses on sales of securities and credit losses recognized through an allowance for credit losses, if any.

The cost of securities sold is based on the specific identification method.

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Software 3 years

Leasehold improvements Life of lease

Leasehold improvements Shorter of useful life or lease term

Long-lived Assets

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The Company expenses all share-based payment awards to employees, directors, and consultants, including grants of stock options, warrants, and restricted stock, over the requisite service period based on the grant date fair value of the awards.

Consultant awards are remeasured each reporting period through vesting.

For awards with performance-based vesting criteria, the Company estimates the probability of achievement of the performance criteria and recognizes compensation expense related to those awards expected to vest.

The Company determines the fair value of option awards using the Black-Scholes option-pricing model which uses both historical and current market data to estimate the fair value.

This method incorporates various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield and expected life of the options or

Stock based compensation expense also includes an estimate, which is made at the time of the grant, of the number of awards that are expected to be forfeited.

This method incorporates various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield and expected life of the options or warrants.

Share-based compensation expense also includes an estimate, which is made at the time of the grant, of the number of awards that are expected to be forfeited.

The fair value of the Company’s restricted stock and restricted stock units is based on the closing market price of the Company’s common stock on the date of grant.

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Basic loss per share is based on the weighted effect of all common shares issued and outstanding and is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period.

Diluted loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding.

loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding.

Diluted loss per share is not presented as such potentially dilutive securities are anti-dilutive to losses incurred in all periods presented.

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The Company expenses the costs associated with research and development activities when incurred.

To further drive the Company’s product candidate initiatives, the Company will continue targeting key governmental agencies, congressional committees and not-for-profit organizations to contribute funds for the Company’s research and development programs.

To further drive the Company’s initiatives, the Company will continue targeting key governmental agencies and not-for-profit organizations to contribute funds for the Company’s research and development programs.

The Company accounts for such grants as a deduction to the related expense in research and development operating expenses when earned.

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Intangible Asset

The Company’s intangible asset consists of a single asset, Cend’s license agreement with Qilu Pharmaceutical, Co., Ltd.

(“Qilu”) acquired in the Merger, with a value of $ 0.4 million.

The Company’s intangible asset consists of a single asset, a license agreement with Qilu Pharmaceutical, Co., Ltd.

(“Qilu”) acquired in the Company's acquisition of Cend Therapeutics, Inc (the “Cend Merger”), with a value of $ 0.4 million.

The intangible asset is stated at fair value and is amortized using the straight-line method over its estimated useful life of 5 years.

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The intangible asset is reviewed for potential impairment when events or circumstances indicate that carrying amounts may not be recoverable .

The projected amortization expense is $ 71 thousand per year for the next four years.

The projected amortization expense is $ 71 thousand per year for the next 2.75 years.

Revenue Recognition

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At contract inception, the Company assesses the goods or services promised within each contract and assesses whether each promised good or service is distinct and determines those that are performance obligations.

The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance

obligation is satisfied.

The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Taxes imposed by governmental authorities on the Company's revenue, such as sales taxes and withholding taxes, are excluded from net revenue.

If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license.

If licenses are bundled with other performance obligations, the Company would utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue.

There was no revenue recognized for the years ended December 31, 2023 and 2022.

time, the appropriate method of measuring progress for purposes of recognizing revenue.

The Company recognized revenue of $ 1.0 million and $ 0.0 million for the years ended December 31, 2024 and 2023, respectively.

At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method.

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To date, the Company has not recognized any royalty revenue from any collaborative arrangement.

Note 3 – Merger

The Merger was accounted for as an asset acquisition as substantially all of the fair value was concentrated in IPR&D.

The fair value of total consideration was $ 36.1 million.

The following table is a summary of the purchase price calculation (in thousands except per share data).

Number of common shares of the combined company owned by Cend stockholders 3,772,768

Multiplied by the fair value per share of Lisata common stock on September 15, 2022 $ 6.25

Total $ 23,580

Carrying value of Lisata's cost method investment in Cend 10,000

Incremental fair value of Cend's fully vested stock options 2,136

Lisata transaction costs 382

Total purchase price $ 36,098

The allocation of the purchase price was as follows (amounts in thousands):

Cash and cash equivalents $ 7,062

Net working capital (excluding cash) ( 1,690 )

Other liabilities ( 22 )

Acquired in-process research and development 30,393

Net assets acquired $ 36,098

Note 3 – Available-for-Sale-Securities

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Money market funds 6,614 — — 6,614 4,268 — — 4,268

Agency bonds 613 — — 613 — — — —

Treasury bills 1,496 — — 1,496 — — — —

Municipal debt securities 905 — — 905 622 — — 622

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Estimated fair values of available-for-sale securities are generally based on prices obtained from commercial pricing services.

The following table summarizes the classification of the available-for-sale debt securities on the Company's Consolidated Balance Sheets (in thousands):

The following table summarizes the classification of the available-for-sale securities in the Company's Consolidated Balance Sheets (in thousands):

December 31, 2024 December 31, 2023

Cash and cash equivalents $ 16,715 $ 27,668

Cash equivalents $ 10,613 $ 16,715

Marketable securities 15,036 27,942

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Property and equipment consisted of the following (in thousands):

Furniture and fixtures $ — $ 25

Computer equipment 589 589

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Note 5 – Income (Loss) Per Share

For the years ended December 31, 2023 and 2022, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of loss per share a s they are anti-dilutive in the periods presented.

For the years ended December 31, 2024 and 2023, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share a s they are anti-dilutive in the periods presented.

At December 31, 2024 and 2023, the Company excluded the following potentially dilutive securities (in thousands):

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$ 10,613 $ 15,036 $ — $ 25,649 $ 16,715 $ 27,942 $ — $ 44,657

The carrying values of cash, cash equivalents, accounts payable and accrued expenses approximate fair value at December 31, 2023 and December 31, 2022, due to the short maturity nature of these items.

The carrying values of cash, cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value at December 31, 2024 and December 31, 2023, due to the short maturity nature of these items.

Note 7 – Accrued Liabilities

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Clinical and R&D related liabilities 1,333 1,046

Accounting and consulting 57 66

Accounting & tax consulting liabilities 55 57

Other 164 233

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Note 8 – Operating Leases

The Company adopted ASU No.

2016-02, Leases (Topic 842) on January 1, 2019 and recognized leases with duration greater than 12 months on the balance sheet using the modified retrospective approach.

The Company has an operating lease for one office which expires in 2025.

The Company estimates its incremental borrowing rate at lease commencement to determine the present value of lease payments as most of the Company's leases do not provide an implicit rate of return.

The Company estimates its incremental borrowing rate at lease commencement to determine the present value of lease payments as the Company's lease does not provide an implicit rate of return.

The Company recognizes lease expense on a straight-line basis over the lease term.

For lease agreements entered into or reassessed after the adoption of Topic 842, the Company elected to account for non-lease components associated with its leases and lease

components as a single lease component.

For lease agreements entered into or reassessed after the adoption of ASU No.

2016-02, Leases (Topic 842), the Company elected to

account for non-lease components associated with its leases and lease components as a single lease component.

The Company's lease includes an option for the Company to extend the lease term and/or sub-lease space in whole or in part.

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Total Operating Lease Liabilities $ 137 $ 305

As of December 31, 2023, the weighted average remaining lease term for the Company's operating leases was 1.75 years, and the weighted average discount rate for its operating leases was 9.625 %.

Future minimum lease payments under the lease agreements as of December 31, 2023 were as follows (in thousands):

As of December 31, 2024, the weighted average remaining lease term for the Company's operating lease was 0.75 years, and the weighted average discount rate for the Company's operating lease was 9.625 %.

As of December 31, 2023, the weighted average remaining lease term for the Company's operating leases was 1.75 years, and the weighted average discount rate for the Company's operating leases was 9.625 %.

Future minimum lease payments under the lease agreement as of December 31, 2024 were as follows (in thousands):

Years ended Operating Leases

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Note 9 – Stockholders' Equity

Reverse Stock Split

On September 14, 2022, in connection with the Merger, the Company implemented the Reverse Stock Split, as described in Note 1.

The Company has used long-term incentive plans for the purpose of granting equity awards to employees of the Company, including officers, and nonemployees, including consultants and nonemployee members of the Company's board of directors (collectively, the “Participants”).

The Participants may receive awards as determined by a committee of independent members of the Company's board of directors or, to the extent authorized by such committee with respect to certain Participants, a duly authorized employee (collectively, the “Committee”).

The incentive plan currently used by the Company is the 2018 Equity Incentive Compensation Plan (the “2018 Plan”), as adopted by the stockholders of the Company in June 2018, and subsequently increased by the stockholders of the Company in June 2023 with 400,000 shares authorized for issuance thereunder and in September 2022 with 333,333 shares authorized for issuance thereunder and in June 2021 with 400,000 shares authorized for issuance thereunder and in June of 2020 with 166,667 shares authorized for issuance thereunder, plus any shares awarded under the 2015 Equity Compensation Plan (the “2015 Plan”) or the Amended and Restated 2009 Equity Compensation Plan (the “2009 Plan”) that are not issued due to their subsequent forfeiture, cancellation, or other settlement thereof.

The incentive plan currently used by the Company is the 2018 Equity Incentive Compensation Plan (the “2018 Plan”), as adopted by the stockholders of the Company in June 2018, and subsequently increased by the stockholders of the Company in June 2024 with 600,000 shares authorized for issuance thereunder and in June 2023 with 400,000 shares authorized for issuance thereunder and in September 2022 with 333,333 shares authorized for issuance thereunder and in June 2021 with 400,000 shares authorized for issuance thereunder and in June of 2020 with 166,667 shares authorized for issuance thereunder, plus any shares awarded under the 2015 Equity Compensation Plan (the “2015 Plan”) or the Amended and Restated 2009 Equity Compensation Plan (the “2009 Plan”) that are not issued due to their subsequent forfeiture, cancellation, or other settlement thereof.

Concurrent with the adoption of the 2018 Plan, no future awards will occur under the 2015 Plan or the 2009 Plan.

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All stock options under the 2015 Plan and 2009 Plan were granted and the 2018 Plan are granted at the fair market value of the common stock at the grant date.

Stock options vest either on the date of grant, ratably over a period determined at time of grant (typically over 3 years) or upon the accomplishment of specified business milestones, and generally expire 2 , 3 , or 10 years from the grant date depending on the

status of the recipient as a nonemployee, employee or director of the Company.

Stock options vest either on the date of grant, ratably over a period

determined at time of grant (typically over 3 years) or upon the accomplishment of specified business milestones, and generally expire 2 , 3 , or 10 years from the grant date depending on the status of the recipient as a nonemployee, employee or director of the Company.

As of December 31, 2024 and 2023 there were 744,514 shares and 593,141 shares, respectively available for future grants under the 2018 Plan.

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In June 2023, the Company's stockholders approved an amendment to the Amended 2017 ESPP in order to effect an increase of authorized shares from 33,333 to 68,333 .

In June 2024, the Company's stockholders approved an amendment to the Amended 2017 ESPP in order to effect an increase of authorized shares from 68,333 to 113,333 .

During the year ended December 31, 2024, 23,790 shares were issued under the Amended 2017 ESPP.

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Wainwright & Co., LLC, as sales agent, in connection with an “at the market offering” under which the Company from time to time may offer and sell shares of its common stock, having an aggregate offering price of up to $ 50.0 million.

Subsequent to the filing of the Company's Form 10-K on March 22, 2022, the aggregate market value of its outstanding common stock held by non-affiliates was approximately $ 43.6 million.

Pursuant to General Instruction I.B.6 of Form S-3, since the aggregate market value of the Company's outstanding common stock held by non-affiliates was below $75.0 million at the time of such Form 10-K filing, the aggregate amount of securities that the Company is permitted to offer and sell was reduced to $ 17,698,943 , which was equal to one-third of the aggregate market value of the Company's common stock held by non-affiliates as of September 21, 2022.

As of the date of this filing and so long as the Company’s public float remains below $75.0 million, the Company is subject to limitations pursuant to General Instruction I.B.6 of Form S-3 (the “Baby Shelf Limitation”), which limits the amount the Company can offer to up to one-third of its public float during any trailing 12-month period.

Subsequent to the filing of a prospectus supplement to the Company's Registration Statement on Form S-3 (File No.

333-279034) relating to the at the market offering on August 21, 2024, the aggregate market value of its outstanding common stock held by non-affiliates was approximately $ 29.6 million.

Pursuant to the Baby Shelf Limitation, since the aggregate market value of the Company's outstanding common stock held by non-affiliates was below $ 75.0 million at the time of such prospectus supplement filing, the aggregate amount of securities that the Company is permitted to offer and sell as of the date of this Annual Report on Form 10-K, is $ 9,855,890 , which is equal to one-third of the aggregate market value of our common stock held by non-affiliates as of August 20, 2024.

If the Company’s public float exceeds $75.0 million on a future measurement date, it will no longer be subject to the Baby Shelf Limitation.

During the twelve months ended December 31, 2024, the Company issued 3,779 shares of common stock under the ATM Agreement for net proceeds of $ 10,074 .

Since inception, the Company has issued 64,394 shares of common stock under the ATM Agreement for net proceeds of $ 270,774 .

In connection with the Merger closing on September 15, 2022, the Company issued an aggregate of 3,772,768 shares of common stock, based on the Exchange Ratio, to holders of Cend, in exchange for all of the Cend capital stock outstanding immediately prior to the closing of the Merger.

Since inception through December 31, 2024, the Company has issued 68,173 shares of common stock under the ATM Agreement for net proceeds of $ 280,848 .

Stock Options and Warrants

In connection with the Merger and after giving effect to the Reverse Stock Split, the Company assumed 1,227,776 of Cend's outstanding options.

The options granted under the Cend Plan are exercisable at various dates as determined upon grant and will expire no more than ten years from their original date of grant.

The Cend Plan stock options generally vest over a four-year term.

The following table summarizes the activity for stock options and warrants for the year ended December 31, 2024:

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The fair value of the restricted stock was determined using the Company’s closing stock price on the date of issuance.

The vesting terms of restricted stock issuances are generally between one to four years .

The vesting terms of restricted stock issuances are generally between one and four years .

The following is a summary of the changes in non-vested restricted stock for the year ended December 31, 2024:

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Share-Based Compensation

The Company utilizes share-based compensation in the form of stock options, restricted stock, and restricted stock units.

The Company utilizes share-based compensation in the form of stock options, restricted stock, restricted stock units and warrants.

The following table summarizes the components of share-based compensation expense for the years ended December 31, 2024 and 2023 ($ in thousands):

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The Company modified the exercise period of approximately 186,600 shares of one terminated employee's vested stock options and immediately recognized approximately $ 258 thousand incremental stock-based compensation during the year ended December 31, 2023.

There were no modifications for the year ended December 31, 2024.

Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized at December 31, 2024 were as follows ($ in thousands):

Stock Options Restricted Stock Units Restricted Stock

Stock Options Restricted Stock Units Warrants Restricted Stock

Unrecognized compensation cost $ 228 $ 36 $ — $ 426

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Total fair value of shares vested and the weighted average estimated fair values of shares granted for the years ended December 31, 2024 and 2023 were as follows ($ in thousands):

Stock Options

Year Ended December 31,

Stock Options Warrants

Year Ended December 31, Year Ended December 31,

2024 2023 2024 2023

Total fair value of shares vested $ 204 $ 1,033 $ — $ —

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Valuation Assumptions

The fair value of stock options at the date of grant was estimated using the Black-Scholes option pricing model.

The fair value of stock options and warrants at the date of grant was estimated using the Black-Scholes option pricing model.

The expected volatility is based upon historical volatility of the Company’s stock.

The expected term for the options is based upon observation of actual time elapsed between date of grant and exercise of options for all employees.

The expected term for the warrants is based upon the contractual term of the warrants.

The range of assumptions made in calculating the fair values of stock options was as follows:

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AUS Foreign Rate Differential ( 23 ) ( 22 )

Section 382 NOL Limitation

Sale of New Jersey State NOLs ( 798 ) ( 2,330 )

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Right-of-use asset $ ( 39 ) $ ( 87 )

Cash to accrual — ( 99 )

Deferred tax liabilities ( 39 ) ( 87 )

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The Federal NOL of $ 459 thousand incurred in the post-acquisition period September 15, 2022 to December 31, 2022 is not subject to limitation, and does not expire.

As of December 31, 2023 and 2022, Cend’s wholly owned Australian subsidiary had approximately $ 2.4 million and $ 1.8 million, respectively, of NOLs which will be carried forward and do not expire.

As of December 31, 2024 and 2023, the Company’s wholly owned Australian subsidiary had approximately $ 2.3 million and $ 2.4 million, respectively, of NOLs which will be carried forward and do not expire.

There is a full valuation allowance against the NOLs.

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The gross proceeds from the sale of the $ 2.3 million NJ NOLs related tax benefits (“NJ NOL Tax Benefits”), have been recorded as a benefit from income taxes and the loss on sale of the NJ NOL Tax Benefits of $ 0.1 million recorded in other income (expense) in the consolidated financial statements.

On March 4, 2024, the Company received final approval from the New Jersey Economic Development Authority (“NJEDA”) under the Technology Business Tax Certificate Transfer Program (“Program”) to sell $ 8.9 million of its New Jersey net operating losses (“NJ NOLs”), which were subsequently sold to a qualifying and approved buyer pursuant to the Program for net proceeds of $ 0.7 million.

The sale of NJ NOLs resulted in a $ 0.8 million deferred income tax benefit and a loss on sale of $ 0.1 million recorded in other income (expense) in the consolidated financial statements.

On August 16, 2022, the Inflation Reduction Act was signed into law.

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The Company will continue to monitor the possible future impact of changes in tax legislation.

Note 12 – Segment Information

The Company operates as one operating segment, the research and development of its investigational drug product.

The Company used the management approach to determine its reportable operating segment.

The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer, who reviews financial information presented on a consolidated basis.

The Company is a clinical-stage pharmaceutical company and has limited revenue associated with a license and collaboration agreement.

The CODM uses net loss as a measure of profit and loss, and assesses Company performance through the achievement of its clinical development goals.

The CODM is regularly provided with budgeted and forecasted expense information which is used to determine the Company’s liquidity needs and cash allocation to its development programs.

The CODM uses cash and marketable securities as a measure of segment assets in managing the enterprise.

The Company had revenue of $ 1.0 million during the year ended December 31, 2024, related to its Exclusive License and Collaboration Agreement with Kuva Labs (Note 17) who is based in the United States .

The Company had no revenue during the year ended December 31, 2023.

Depreciation and amortization expense was $ 0.2 million and $ 0.2 million for the years ended December 31, 2024, and 2023, respectively.

Equity method investment expense was $ 0.1 million for the year ended December 31, 2024.

There was no equity method investment expense for the year ended December 31, 2023.

The following table illustrates our segment information for significant operating expenses and includes a reconciliation to net loss for the years ended December 31, 2024 and 2023:

Year Ended December 31,

Revenue $ 1,000 $ —

Operating Expenses:

Research and development by significant expense:

BOLSTER trial 3,581 3,517

ASCEND trial 754 1,155

Chemistry, manufacturing and controls 2,035 2,406

Clinical department 4,304 4,744

Research and development 11,334 12,734

General and administrative by significant expense:

Corporate 3,693 3,856

Investor relations/public relations/communications 1,332 898

Finance 2,265 2,421

Legal 1,284 1,292

Business development 582 1,474

Share based compensation expense 1,383 1,497

General and administrative 12,075 12,974

Operating loss ( 22,409 ) ( 25,708 )

Other income (expense),net 1,626 2,538

Benefit from income taxes ( 798 ) ( 2,330 )

Net loss $ ( 19,985 ) $ ( 20,840 )

Cash and marketable securities $ 31,245 $ 50,535

(1) Included in other are GBM study, FORTIFIDE study and research

oncology expenses

(2) Included in other are facilities expense, human resource

and information technology expenses

Note 13 – Australia Research and Development Tax Incentive

The Company’s Australian subsidiary, which conducts core research and development activities, is eligible to receive a refundable tax incentive between 43.5 % to 48.5 % (depending upon the income tax rate) for qualified research and development activities.

As of December 31, 2023 and 2022, the Company had $ 1.0 million and $ 0.7 million, respectively, recorded as an income tax incentive receivable in prepaid and other current assets in the consolidated balance sheets, as the Company determined that the expenses met the eligibility criteria and the amounts claimed are expected to be received shortly after the related tax returns are filed.

On September 4, 2023 the Company's Australian subsidiary received a $ 0.6 million tax refund from the Australian Taxation Office related to the 2022 tax year.

As of December 31, 2024 and 2023, the Company had $ 0.6 million and $ 1.0 million, respectively, recorded as an

income tax incentive receivable in prepaid and other current assets in the consolidated balance sheets, as the Company determined that the expenses met the eligibility criteria and the amounts claimed are expected to be received shortly after the related tax returns are filed.

On July 26, 2024 the Company's Australian subsidiary received a $ 0.9 million tax refund from the Australian Taxation Office related to the 2023 tax year.

Note 14 – Contingencies

From time to time, the Company is subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business.

While the outcome of pending claims cannot be predicted with certainty, the Company does not

believe that the outcome of any pending claims will have a material adverse effect on the Company's financial condition or operating results.

While the outcome of pending claims cannot be predicted with certainty, the Company does not believe that the outcome of any pending claims will have a material adverse effect on the Company's financial condition or operating results.

The Company has elected to recognize expense for legal fees as incurred when the legal services are provided.

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In May 2022, Cend was served with a complaint filed by Lingmed in the San Diego County Superior Court, alleging claims for breach of contract, fraud and declaratory relief.

Cend’s response to the complaint was filed on June 6, 2022.

Lingmed filed an answer to Cend’s response on July 11, 2022.

At a Case Management Conference held on August 4, 2023, the Court set a trial date in the matter for August 2, 2024.

The Company denies these allegations made by Lingmed and intends to vigorously defend itself.

Cend’s response to the complaint was filed on June 6, 2022 and denied all of Lingmed’s material allegations.

Lingmed filed an answer to Cend’s response on July 11, 2022, denying all of the Company’s material allegations.

On March 25, 2024 the Company entered into a settlement agreement whereby the Company was required to pay Lingmed $ 0.5 million within 30 days of the effective date and the Company effected payment on April 4, 2024.

Lingmed is also entitled to 5.0 % of any future milestone payments received by the Company under the license agreement with Qilu in addition to a sum of $ 250 thousand with respect to the first future milestone received by the Company.

On April 9, 2024, pursuant to the parties’ joint request, the Court entered a dismissal with prejudice of the entire action as to all parties and all claims and the matter was settled.

Note 15 – Technology Transfer Agreement

Impilo Therapeutics

In July 2023, the Company entered into a technology transfer agreement with Impilo Therapeutics, Inc.

(“Impilo”) under which the Company transferred its rights to its tumor penetrating nanocomplex (TPN) platform to Impilo.

In July 2023, the Company entered into a technology transfer agreement with Impilo Therapeutics (“Impilo”) under which the Company transferred its rights to its tumor penetrating nanocomplex (TPN) platform to Impilo.

As consideration for the technology transfer, Impilo issued a total of 766,000 shares of its pre-seed preferred stock to the Company.

On October 3, 2023 in connection with the Sanford Burnham Prebys license agreement (Note 16) Impilo cancelled the original stock certificate for 766,000 shares and reissued 574,500 shares of its pre-seed preferred stock to the Company.

On March 15, 2024, the Company purchased a Simple Agreement for Future Equity ("SAFE") from Impilo for $ 100 thousand.

On July 12, 2024, the Company purchased an additional SAFE from Impilo for $ 30 thousand.

As of December 31, 2024 and December 31, 2023 the Company owned 38.6 % of Impilo.

These investments were expensed under the equity method of accounting for the year ended December 31, 2024 in other expense, net in the accompanying statement of operations.

The SAFE has a valuation cap of $ 30.0 million and an 80 % discount rate.

Note 16 – License Agreements

Sanford Burnham Prebys

In December 2015, Cend entered into a license agreement with Sanford Burnham Prebys (“SBP”) under which Cend was granted an exclusive, worldwide, royalty-bearing license to certain patent rights and know-how controlled by SBP related to the development of LSTA1.

At the time the license agreement was entered into, Cend’s founding shareholder was an executive at SBP.

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As consideration for the license, Cend issued a total of 382,030 shares of common stock, as adjusted for the Reverse Stock Split and Exchange Ratio.

The Company is required to pay an annual license maintenance fee of $ 10,000 increasing to $ 20,000 on year seven of the agreement.

The Company is required to pay an annual license maintenance fee of $ 10 thousand increasing to $ 20 thousand on year seven of the agreement.

The Company could also be required to make milestone payments to SBP upon completion of certain regulatory and commercial milestones.

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The Company has also agreed to pay SBP royalties of 4 % of net sales of products sold by the Company, or through a sublicense, subject to certain reductions.

Additionally, the Company is obligated to pay SBP 25 % of any sublicensing income, which, pursuant to the technology transfer agreement with Impilo, resulted in SBP receiving 191,500 apportioned shares of the Company’s pre-seed preferred stock in Impilo on October 3, 2023.

Additionally, the Company is obligated to pay SBP 25 % of any sublicensing income received, which, pursuant to the technology transfer agreement with Impilo, resulted in SBP receiving 191,500 shares of the Company’s pre-seed preferred stock in Impilo on October 3, 2023.

The agreement will expire upon the later of (i) the final abandonment of all pending patent applications within the licensed patents or (ii) the expiration of the last to expire patent within the licensed patents.

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Upon termination of the agreement for any reason, all rights and obligations of the Company with respect to the patents and patent applications shall terminate and revert to SBP.

In October 2021, Cend entered into a license agreement with SBP under which Cend was granted an exclusive, royalty-bearing license to certain patent rights and know-how controlled by SBP.

The agreement provides Cend with the rights to grant and authorize sublicenses to use, sell, and otherwise exploit the patent rights.

The Company is required to pay an annual license maintenance fee of $ 20,000 , increasing to $ 30,000 on year four of the agreement.

Further, the Company could be required to make milestone payments to SBP upon completion of certain regulatory and commercial milestones.

The aggregate potential milestone payments are approximately $ 23.2 million.

The Company is obligated to pay SBP royalties of 4 % of net sales of products sold by the Company or through a sublicense, subject to certain reductions.

Additionally, the Company is obligated to

pay SBP varying sublicense fees, ranging from 10 % to 25 %, dependent on when the related milestones are reached.

On September 14, 2023, pursuant to the technology transfer agreement with Impilo, the license was assigned in full to Impilo.

SBP did not own shares of the Company’s common stock as of December 31, 2023.

University of California at San Diego

In March 2021, Cend entered into a license agreement with the University of California at San Diego (“UCSD”) under which Cend was granted an exclusive, royalty-bearing license to certain patent rights related to the development of nano-particles to modulate immune response.

The agreement provides the Company with the rights to grant and authorize sublicenses to use, sell and otherwise exploit the patent rights.

The Company could be required to make milestone payments to UCSD upon completion of certain regulatory and commercial milestones.

The aggregate potential milestone payments are approximately $ 1.2 million.

The Company has also agreed to pay UCSD royalties of 1.5 % of net sales of products sold by the Company or through a sublicense, subject to certain reductions.

Additionally, the Company agreed to pay UCSD varying sublicense fees, ranging from 10 % to 20 %, dependent on when the related milestones are reached.

The agreement will expire upon the expiration of the longest-lived patent rights.

The agreement may be terminated in its entirety by the Company at any time by giving UCSD ninety days ’ prior written notice.

The agreement may be terminated in its entirety by UCSD if the Company, at any time, (i) fails to perform or violates any term of the agreement and fails to cure the default within sixty days .

Upon termination of the agreement for any reason, UCSD may terminate a sublicensee but will allow the Company to assign any sublicenses to UCSD provided a) that the sublicensee is in good standing upon termination of the agreement with the Company;

and b) the sublicensee is not currently involved in litigation as an adverse party to UCSD.

On August 2, 2023, pursuant to the technology transfer agreement with Impilo, the license was assigned in full to Impilo.

Massachusetts Institute of Technology

In October 2021, Cend entered into a license agreement with the Massachusetts Institute of Technology ("MIT") under which Cend was granted an exclusive, royalty-bearing license to certain patent rights related to the development of tissue specific delivery of interfering RNA.

The agreement provides the Company with the rights to grant and authorize sublicenses to use, sell, and otherwise exploit the patent rights.

As consideration for the license, Cend issued a total of 43,236 shares of common stock, as adjusted for the Reverse Stock Split and Exchange Ratio.

The Company is required to pay an annual license maintenance fee of $ 20,000 , increasing to $ 25,000 for year two and three of the agreement, increasing to $ 50,000 on year four of the agreement and thereafter until the first commercial sale, and increasing to $ 150,000 each year of the agreement after the first commercial sale.

Further, the Company could be required to make milestone payments to MIT upon completion of certain regulatory and commercial milestones.

The aggregate potential milestone payments are approximately $ 5.0 million.

The Company has also agreed to pay MIT royalties of 2 % of net sales of products sold by the Company or through a sublicense, subject to certain reductions.

Additionally, the Company is obligated to pay MIT varying sublicense fees, ranging from 3 % to 20 %, depending on when the related milestones are reached.

In connection with the close of the Merger, the Company was required to pay MIT a change of control fee of $ 0.3 million.

The agreement expires upon the expiration or abandonment of all valid claims.

The agreement may be earlier terminated in its entirety by the Company at any time by giving MIT six months prior written notice.

The agreement may also be terminated in its entirety by MIT if the Company, at any time, (i) defaults in the payment of any sum when due and fails to make such payment within thirty days after receipt of written notice, or (ii) commits a material breach of its obligations under the agreement (aside from item (i)) and fails to cure that breach within sixty days after receipt of written notice.

Upon termination of the agreement for any reason, the rights and licenses granted to the Company shall terminate and revert to MIT.

Upon termination of the agreement for any reason, MIT may terminate a sublicensee but will allow the Company to assign any sublicenses to MIT provided that the sublicensee is in good standing upon termination of the agreement with the Company.

On June 30, 2023, in accordance with the provisions of the license agreement, the Company provided notice to MIT that the license agreement would terminate effective December 30, 2023.

MIT owned 43,236 shares of the Company’s common stock as of December 31, 2023.

Note 17 – Research Collaboration and License Agreement

Exclusive License and Collaboration Agreement

In February 2021, Cend entered into an Exclusive License and Collaboration Agreement (the “Qilu Agreement”) in which Cend granted an exclusive license to Qilu for the development and commercialization of LSTA1 in the Territory (defined as the Greater Area of China including China, Macau, Hong Kong, and Taiwan).

Under the terms of the agreement, Qilu is solely

responsible for the development of LSTA1 in its Territory.

In consideration for the license, Qilu made an upfront payment of $ 10.0 million to Cend, which was recognized as revenue by Cend prior to the Merger.

In addition, Cend received and recognized as revenue a $ 5.0 million development milestone prior to the Merger.

The Company is eligible to receive additional developmental and commercial milestone payments up to $ 96.0 million and $ 125.0 million, respectively, tiered royalties on net sales ranging from 10 % to 15 %, and tiered sublicensing revenues ranging from 12 % to 35 %.

SBP did no t own shares of the Company’s common stock as of December 31, 2024.

Note 17 – Research Collaboration and License Agreements

Exclusive License and Collaboration Agreement - Qilu Pharmaceuticals

In February 2021, Cend entered into an Exclusive License and Collaboration Agreement (the “Qilu Agreement”) in which Cend granted an exclusive license to Qilu for the development and commercialization of certepetide in the Territory (defined as the Greater Area of China including China, Macau, Hong Kong, and Taiwan).

Under the terms of the agreement, Qilu is solely responsible for the development of certepetide in its Territory.

In consideration for the license, Qilu made an upfront payment of $ 10.0 million to Cend, which was recognized as revenue by Cend prior to the Company's acquisition of Cend on September 15, 2022 (the “Cend Merger”).

In addition, Cend received and recognized as revenue a $ 5.0 million development milestone prior to the Cend Merger.

The Company is eligible to receive additional development and commercial milestone payments up to $ 96.0 million and $ 125.0 million, respectively, tiered royalties on net sales ranging from 10 % to 15 %, and tiered sublicensing revenues ranging from 12 % to 35 %.

On March 25, 2024 the Company entered into a settlement agreement with Lingmed whereby Lingmed is entitled to 5.0 % of any future milestone payments received by the Company under the Qilu Agreement, in addition, Lingmed is also entitled to a sum of $ 250 thousand with respect to the first future milestone received by the Company.

Unless terminated early, the Qilu Agreement will continue in effect until the expiration of all Qilu payment obligations.

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All rights and obligations of Qilu with respect to such licensed patents and patent applications would terminate simultaneously.

Exclusive License and Collaboration Agreement - Kuva Labs

In November 2024, the Company entered into an Exclusive License and Collaboration Agreement in which Lisata granted an exclusive license to Kuva Labs, Inc.

(Kuva) to explore the synergistic potential of Lisata's certepetide, as a targeting and delivery agent for Kuva’s NanoMark™ imaging technology in solid tumors.

Under the Agreement, Kuva will assume full responsibility for research, development, and commercialization costs, while the Company will be responsible for supplying certepetide for additional consideration pursuant to a Clinical Supply Agreement.

In consideration for the license, Kuva will pay the Company $ 1.0 million, which was recognized as revenue upon delivery of the license in November 2024.

The Company is eligible to receive additional development and commercial milestone payments up to $ 1.5 million and $ 17.5 million, respectively, a 5.0 % percent royalty on net sales, and sublicensing revenues of 50 %.

Note 18 – Subsequent Events

Sale of New Jersey Net Operating Losses

On September 24, 2024, the Company received preliminary approval from the New Jersey Economic Development Authority ("NJEDA") to participate in the Technology Business Tax Certificate Transfer Program (the "Program").

The Program permits qualified companies to sell a percentage of their New Jersey net operating losses ("NJ NOLs") to unrelated profitable corporations.

On January 9, 2025, the Company received final approval from the NJEDA, and it subsequently sold a portion of its NJ NOLs to a qualifying and approved buyer pursuant to the Program for net proceeds of $ 0.9 million.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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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 8. Financial Statements and Supplementary Data