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Item 7. Management’s Discussion and Analysis

2025-02-24 compared with 2024-02-20 · 146 added, 194 removed, 215 unchanged (61% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.

As a result of many factors, including those factors set forth in “Item 1A.

Risk Factors” of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

The following discussion and analysis of our financial condition and results of operations is for the year ended December 31, 2024 compared with the year ended December 31, 2023.

This comparison should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.

This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” included in Part I, Item 1A or in other parts of this Annual Report on Form 10-K.

For a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2023 compared to December 31, 2022, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 20, 2024.

The Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, describes principal factors affecting the results of our operations, financial condition and liquidity, as well as our critical accounting policies and estimates that require significant judgment and thus have the most significant potential impact on our Consolidated Financial Statements.

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Company Overview

We are a biopharmaceutical company focused on the discovery, development, and commercialization of patient-, physician-, caregiver- and societal-friendly medicinal therapies intended to improve quality of life, increase potential duration of life, and resolve serious unmet medical needs.

Our pipeline of product candidates is designed with the goal to become the patient-friendly, new-era standard-of-care medicines, in the therapeutic area of oncology.

Our current lead development candidate is ivonescimab, a novel, potential first-in-class bispecific antibody intending to combine the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects of an anti-VEGF compound into a single molecule.

On December 5, 2022, we entered into a Collaboration and License Agreement (the “License Agreement”) with Akeso, Inc.

and its affiliates (“Akeso”) pursuant to which the Company has in-licensed ivonescimab.

Through the License Agreement, we obtained the rights to develop and commercialize ivonescimab in the United States, Canada, Europe, and Japan (the “Licensed Territory”).

Summit Therapeutics Inc.

("we", "Summit" or the "Company") is a biopharmaceutical company focused on the discovery, development, and commercialization of patient-, physician-, caregiver- and societal-friendly medicinal therapies intended to improve quality of life, increase potential duration of life, and resolve serious unmet medical needs.

The Company's pipeline of product candidates is designed with the goal to become the patient-friendly, new-era standard-of-care medicines, in the therapeutic area of oncology.

The Company's current lead development candidate is ivonescimab, a novel, potential first-in-class bispecific antibody intending to combine the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects of an anti-VEGF compound into a single molecule.

On December 5, 2022, the Company entered into a Collaboration and License Agreement (the “License Agreement”) with Akeso, Inc.

and its affiliates (collectively, “Akeso”) pursuant to which the Company has in-licensed intellectual property related to ivonescimab.

Through the License Agreement, the Company obtained the rights to

develop and commercialize ivonescimab in the United States, Canada, Europe, and Japan.

The License Agreement and transaction closed in January 2023 following customary waiting periods.

Our operations will be focused on the development of ivonescimab and other future activities, as the Company determines.

We have begun our development for ivonescimab in non-small cell lung cancer (“NSCLC”), specifically launching Phase III clinical trials in the following indications:

On June 3, 2024, the Company entered into an amendment to the License Agreement with Akeso to expand its territories covered under the License Agreement to also include the Latin America, Middle East and Africa regions (collectively, and as expanded, the "Licensed Territory").

The Company’s operations are focused on the development of ivonescimab and other future activities, as the Company determines.

The Company has begun its development for ivonescimab in non-small cell lung cancer (“NSCLC”), specifically launching Phase III clinical trials in the following proposed indications:

(a) ivonescimab combined with chemotherapy in patients with epidermal growth factor receptor (“EGFR”)-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with a third-generation EGFR tyrosine kinase inhibitor (“TKI”) (“HARMONi”);

b) ivonescimab combined with chemotherapy in first-line metastatic squamous NSCLC patients (“HARMONi-3”)

As of the date of these financial statements, both studies are enrolling patients.

The entry into the License Agreement with Akeso represents a significant change in our strategy and its future operations will be focused on the development of ivonescimab and other future activities as the Company determines.

Our portfolio includes ridinilazole, a product candidate for treating patients suffering from Clostridioides difficile infection, also known as C.

difficile infection, or CDI.

All prior development and marketing activities related to ridinilazole have been terminated.

Our anti-infectives portfolio includes SMT-738, the first of a novel class of precision antibiotics for combating multidrug resistant infections, specifically carbapenem-resistant Enterobacteriaceae (“CRE”) infections.

We will continue to pursue partnerships for further development of SMT-738.

(b) ivonescimab combined with chemotherapy in first-line metastatic NSCLC patients (“HARMONi-3”)

In addition, the Company has begun to activate clinical trial sites in the United States for a Phase III clinical study in the following proposed indication:

In October 2024, the Company completed enrollment in its HARMONi clinical trial.

The Company expects to disclose topline results from HARMONi in mid-2025, depending upon maturation of the data per the protocol.

Key Components of our Results of Operations

Revenue consists of amounts received from the license and commercialization agreement with Eurofarma Laboratórios S.A.

(“Eurofarma”).

We have not generated any revenue from product sales.

Under the terms of the license and commercialization agreement with Eurofarma, we received an upfront payment of $2.5 million in December 2017.

In February 2020, we achieved the first enrollment milestone and received $1.0 million.

In September 2021, we achieved the second enrollment milestone and received $1.3 million.

The terms of the contract have been assessed under ASC 606 and currently only the upfront payment and the first two milestone payments are included in the transaction price.

These payments were initially reported as deferred revenue in the balance sheet and were recognized as revenue ratably over the determined performance period.

There was no revenue recognized for the year ended December 31, 2023.

Revenue recognized during the year ended December 31, 2022 related to the upfront payment and the first two enrollment milestones earned in accordance with our revenue

recognition policy.

The revenue was recognized ratably over the determined performance period to reflect the transfer of control to the customer occurring over the time period that the research and development services were provided.

This output method is, in management’s judgment, the best measure of progress towards satisfying the performance period.

Other Operating Income

Other operating income includes income received and recognized from grants and clinical trial support from government entities, philanthropic, non-government and not-for-profit organizations.

In September 2017, we were awarded a contract from the Biomedical Advanced Research and Development Authority (“BARDA”), part of the Office of the Assistant Secretary for Preparedness and Response at the United States Department of Health and Human Services, to fund, in part, the clinical and regulatory development of ridinilazole for the treatment of infections caused by C.

The contract provides for a cost-sharing arrangement under which BARDA funded a specified portion of estimated costs for the continued clinical and regulatory development of ridinilazole for CDI.

Under this cost sharing arrangement, we were responsible for a portion of the costs associated with each segment of work, including any costs in excess of the estimated amounts.

The awarded contract, as amended in 2019 and 2020, provided for total award up to $72.5 million, and total amount of committed funding to $62.4 million.

As of December 31, 2023, based on translation of historical foreign currency amounts in the period, the Company has recognized $59.2 million of cumulative income since contract inception.

The remaining federal government funding is dependent on BARDA in its sole discretion exercising the final independent option work segment, upon the achievement by the Company of certain agreed-upon milestones for ridinilazole.

This option work segment was never exercised by BARDA.

The contract ran through April 2022 and was extended through December 2022 as a no cost contract, solely to close out open activities.

As of December 31, 2023, based on translation of historical foreign currency amounts in the period, an aggregate of $59.2 million of cumulative income has been recognized since contract inception.

As a result of our decision to not pursue further internal clinical development of ridinilazole and seek partners or a divestiture related to ridinilazole as a path forward for the clinical development of the asset, we recognized the remainder of the deferred income for BARDA during the third quarter of 2022.

We have also received income from research and development (“R&D”) tax credits, which consist of the R&D tax credit received in the United Kingdom (“U.K.”).

We benefit from two U.K.

research and development tax credit cash rebate regimes:

Small and Medium Enterprise Program (“SME Program”) and the Research and Development Expenditure Credit Program (“RDEC Program”).

Qualifying expenditures largely comprise employment costs for research staff, consumables, a proportion of relevant, permitted sub-contract costs and certain internal overhead costs incurred as part of research projects for which we do not receive income.

Tax credits related to the SME Program and RDEC Program are recorded as other operating income in the consolidated statements of operations and other comprehensive loss.

Under both schemes, we receive cash payments that are not dependent on our pre-tax net income levels.

Based on criteria established by His Majesty’s Revenue and Customs (“HMRC”), a portion of expenditures being carried out in relation to our pipeline research and development, clinical trials management and third-party manufacturing development activities are eligible for the SME regime and we expect such elements of research and development expenditure incurred in our UK entities will also continue to be eligible for the SME regime for future periods.

In May 2021, we started development of a new preclinical candidate, SMT-738, for development in the fight against multi-drug resistant infections, specifically Carbapenem-resistant Enterobacteriaceae (“CRE”) infections.

Simultaneously, we received an award from the Trustees of Boston University under the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator program (“CARB-X”) to progress this candidate through preclinical development and Phase Ia clinical trials.

The award committed initial funding of up to $4.1 million with the possibility of up to another $3.7 million based on the achievement of future milestones.

As of December 31, 2023, based on translation of historical foreign currency amounts in the period, $2.9 million of cumulative income has been recognized since contract inception.

During the quarter ended September 30, 2022, CARB-X announced changes to its funding arrangements and terms and conditions.

As a result, the current arrangement concluded as of June 30, 2022, however we have the ability to recognize reimbursements for any milestone payments related to work incurred subsequent to this date in accordance with this agreement.

Operating expenses

The majority of our operating expenses since inception have consisted of research and development activities and general and administrative costs.

Research and Development Expenses

Research and Development and Acquired in-process research and development Expenses

Research and development expenses consist of all costs associated with our research and development activities.

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General and administrative expenses

General and administrative expenses consist primarily of salaries and benefits related to our executive, finance, business development, human resources and other support functions.

Other general and administrative expenses include stock-based compensation expenses, market research costs, facility-related costs, consulting costs and expenses associated with the requirements of being a publicly traded company in the United States, including insurance, legal, audit and taxation services fees.

General and administrative expenses consist primarily of salaries and benefits related to our executive, finance, business development, human resources, legal and other support functions.

Other general and administrative expenses include stock-

based compensation expenses, market research costs, facility-related costs, consulting costs and expenses associated with the requirements of being a publicly traded company in the United States, including insurance, legal, audit and taxation services fees.

We anticipate that our general and administrative expenses will continue to increase in the future as we increase our headcount to support our planned clinical trials of ivonescimab, continued research and development and potential commercialization of our product candidates.

We also anticipate continued accounting, audit, regulatory, compliance, insurance and investor and public relations expenses associated with being a publicly traded company in the United States.

Other expense, net

Other expense, net primarily consists of foreign currency net gains and losses, cash and imputed interest expense incurred related to our promissory notes to related parties and investment income related to investments in money market funds and U.S.

Other operating (expense) income, net

Other operating (expense) income, net consists primarily of research and development ("R&D") tax credits received in the United Kingdom (“U.K.”).

We benefit from two U.K.

research and development tax credit cash rebate regimes:

Small and Medium Enterprise Program (“SME Program”) and the Research and Development Expenditure Credit Program (“RDEC Program”).

Under both schemes, we receive cash payments that are not dependent on our pre-tax net income levels.

Based on criteria established by His Majesty’s Revenue and Customs (“HMRC”), a portion of expenditures being carried out in relation to our pipeline research and development, clinical trials management and third-party manufacturing development activities are eligible for the SME regime tax credits and amounts recognized from grants and clinical trial support from government entities, philanthropic, non-government and not-for-profit organizations.

Other income, net

Other expense, net primarily consists of foreign currency net gains and losses and investment income related to investments in money market funds and U.S.

treasury securities.

Imputed interest is calculated as the difference between the expected interest payable and the deemed market rate of interest and is recorded as a debt discount at inception of the note payable with a credit to additional paid-in capital for notes payable to related parties.

The debt discount is amortized to interest expense using an effective interest rate method.

All highly liquid investments with a maturity date of 90 days or less at the date of purchase are considered to be cash equivalents and the related investment income is recognized in net loss.

The appropriate classification of investments in securities is determined by the Company at the time of purchase.

Interest expense

Interest expense consists of cash and imputed interest expense incurred related to our promissory notes to related parties.

The debt discount is amortized to interest expense using an effective interest rate method.

tax resident trading entity, we are subject to U.S.

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Results of Operations

For a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2023 compared to December 31, 2022, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, which was

filed with the SEC on February 20, 2024, and is available on the SEC's website at www.sec.gov and our Investor Relations website at www.smmttx.com/investor-information.

Amounts reported in millions within this Annual Report on Form 10-K are computed based on the amounts in thousands, and therefore, the sum of components may not equal the total amount reported in millions due to rounding.

Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

(in millions) Year Ended

December 31, 2023 December 31, 2022 $ Change

Revenue $ — $ 0.7 $ (0.7)

(in millions) Year Ended December 31,

2024 2023 $ Change

Operating expenses:

Research and development $ 150.8 $ 59.4 $ 91.4

In-process research and development 520.9 — 520.9

Acquired in-process research and development

15.0 520.9 (505.9)

General and administrative 60.5 30.3 30.2

Impairment of intangible assets — 8.5 (8.5)

Total operating expenses 226.3 610.6 (384.3)

Other operating income 1.0 14.4 (13.4)

Other operating income, net 0.3 1.0 (0.7)

Operating loss (226.0) (609.6) 383.6

Other expense, net (5.3) (6.7) 1.4

Loss before income taxes (614.9) (78.8) (536.1)

Other income, net

13.4 11.2 2.2

Interest expense (8.7) (16.5) 7.8

Net loss $ (221.3) $ (614.9) $ 393.6

Revenue for the year ended December 31, 2022 relates to revenue from our license and commercialization agreement with Eurofarma Laboratórios S.A.

for ridinilazole, the Company’s product candidate for treating patients suffering from Clostridioides difficile infection, also known as C.

difficile infection .

This revenue was recognized ratably over the determined performance period that the research and development services were provided.

The decrease for the year ended December 31, 2023 compared to the same period in the prior year is attributed to the total milestones received of $4.8 million being fully recognized ratably over the determined performance period, which ended during 2022.

We are currently not anticipating receipt of additional milestone payments under this agreement given Company’s determination that it would seek partners or a divestiture of ridinilazole as the path forward for the clinical development of the asset.

Operating Expenses

Research and Development Expenses

The table below summarizes our research and development expenses by category for the year ended December 31, 2023 and 2022, respectively.

(in millions) Year Ended

December 31, 2023 December 31, 2022 $ Change

Oncology $ 31.0 $ — $ 31.0

Research and Development and Acquired in-process research and development Expenses

The table below summarizes our research and development and acquired in-process research and development expenses by category for the year ended December 31, 2024 and 2023, respectively.

(in millions) Year Ended December 31,

2024 2023 $ Change

Oncology clinical trial related costs $ 100.9 $ 35.2 $ 65.7

Acquired in-process research and development 15.0 520.9 (505.9)

Anti-infectives (1)

0.3 (1.5) 1.8

Compensation related costs, excluding stock-based compensation 33.6 21.3 12.3

Stock-based compensation 16.0 4.4 11.6

Other research and development costs 4.2 2.8 1.4

Total $ 165.8 $ 580.3 $ (414.5)

(1) Anti-infectives includes the Company’s antibiotic pipeline research activities and ridinilazole or CDI program activities (collectively, “Anti-infectives).

The entry into the License Agreement with Akeso, Inc., effective in January 2023, represents a significant change in our strategy from anti-infectives to the therapeutic area of oncology.

We have invested our resources in the clinical development of ivonescimab during the year ended December 31, 2023.

Oncology expenses represent our investment in the clinical development of ivonescimab, known as SMT112 in the United States, Canada, Europe, and Japan.

On May 3, 2023 we announced plans to initiate Phase III clinical studies for ivonescimab in non-small cell lung cancer (“NSCLC”) and on May 9, 2023, we announced that the first United States-based patient had been enrolled in the Phase III HARMONi study.

We have commenced enrollment in our second Phase III HARMONi-3 clinical trial.

We are continuing to focus our efforts on patient enrollment in both the Phase III HARMONi and Phase III HARMONi-3 studies.

With this shift in focus from anti-infectives to oncology, total research and development expenses increased by $7.4 million during the year ended December 31, 2023, compared to the same period in the prior year, primarily due to our investment in oncology expenses of $31.0 million, and an increase in compensation related expenses of $5.0 million to support the clinical development of ivonescimab as we hire experts in the oncology field, partially offset by a decrease of $30.1 million related to discontinuing the development activities related to ridinilazole and SMT-738.

We invested our resources in the clinical development of ivonescimab during the years ended December 31, 2024 and 2023.

Oncology clinical trial related costs represent our investment in the clinical development of ivonescimab, known as SMT112 in the Licensed Territory.

Research and development expenses (excluding acquired in progress research and development noted below) increased by $91.4 million during the year ended December 31, 2024, compared to the same period in the prior year.

This increase was primarily due to our continued investment in oncology clinical trial related costs for ivonescimab, known as SMT112 in the Licensed Territory, resulting in an increase of $65.7 million and an increase in compensation and stock-based compensation related expenses of $23.9 million in the year ended December 31, 2024, to support the clinical development of ivonescimab as we continue to hire additional clinical resources in the oncology field, coupled with acceleration charges related to the achievement of certain market conditions on performance stock option awards.

We expect oncology-related research and development costs to continue to increase as we progress with the development of ivonescimab.

The Company recorded a net benefit related to its anti-infectives programs during the year ended December 31, 2023 due to completing financial close-out activities with the lead contract research organization for our ridinilazole clinical trials, thus resulting in a true-up of the estimated anti-infectives research and development expenses during the second quarter of 2023.

In-process research and development

The table below summarizes our in-process research and development expenses by category for the year ended December 31, 2023 and 2022, respectively.

(in millions) 2023 2022

Upfront milestone payments $ 520.8 $ —

Direct transaction costs 0.1 —

Total $ 520.9 $ —

Our investment in ivonescimab totaled $520.9 million for the year ended December 31, 2023 and primarily relates to our upfront milestone payments pursuant to the License Agreement with Akeso.

The License Agreement was executed in January 2023, and both Akeso and Summit entered into the Common Stock Issuance Agreement (“Issuance Agreement”).

In June 2024, we entered into a second amendment (the "Second Amendment") to the License Agreement with Akeso to expand the Licensed Territory to include Latin America, Middle East and Africa regions.

Considered an extension of the original License Agreement, we agreed to make an upfront payment to Akeso in the amount of $15.0 million for these expanded territories which we paid in the third quarter of 2024.

This was recorded in our consolidated statement of operations and comprehensive loss as acquired in process research and development expenses for the year ended December 31, 2024.

Our investment in ivonescimab included $520.9 million for the year ended December 31, 2023 related to our upfront milestone payments pursuant to the License Agreement with Akeso.

The License Agreement closed in January 2023, and both Akeso and Summit entered into the Common Stock Issuance Agreement (“Issuance Agreement”).

Pursuant to the License Agreement and Issuance Agreement, Akeso elected to receive 10 million shares of our common stock in lieu of $25.1 million cash and was paid $274.9 million in cash as the initial upfront payment.

The remaining $200.0 million upfront payment was paid on March 6, 2023.

In-process research and development expense comprised of the $474.9 million paid in cash, the fair value of the 10 million shares of common stock on the date of closing the transaction of $45.9 million, and $0.1 million of direct transactions costs incurred.

Acquired in-process research and development expense comprised of the $474.9 million paid in cash, the fair value of the 10 million shares of common stock on the date of closing the transaction of $45.9 million, and $0.1 million of direct transactions costs incurred.

General and Administrative Expenses

The table below summarizes our general and administrative expenses by category for the year ended December 31, 2024 and 2023, respectively.

(in millions) Year Ended

December 31, 2023 December 31, 2022 $ Change

(in millions) Year Ended December 31,

2024 2023 $ Change

Compensation related costs, excluding stock-based compensation $ 14.7 $ 10.1 $ 4.6

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Legal fees and professional services

4.8 6.9 (2.1)

Other general and administrative expenses 6.0 3.6 2.4

Total $ 60.5 $ 30.3 $ 30.2

General and administrative expenses increased by $3.6 million for the year ended December 31, 2023, compared to the same period in the prior year, primarily due to an increase of $2.1 million in stock-based compensation as the Company is focused on building its executive management team to continue supporting the growth of the Company, and an increase of $1.4 million in legal and professional services related to corporate projects and transactions.

We expect general and administrative expenses to continue to increase in the coming quarters as we scale our infrastructure and management to support development of ivonescimab.

(1) Note management has updated this category to include general and administrative consulting expenses and has reclassified these expenses in the prior period for consistency.

Expenses of $1.8 million for the year ended December 31, 2022, were previously recorded in compensation related costs.

Impairment of Intangible Assets

In December 2017, we expanded our activities in the field of infectious diseases with the acquisition of Discuva Limited, a privately held United Kingdom-based company.

Through this acquisition, we obtained a bacterial genetics platform and a suite of software-based technologies (collectively termed our “Discuva Platform”), which facilitates the discovery and development of new mechanism antibiotics.

In conjunction with the significant change in the Company’s strategy and shift in focus to the therapeutic area of oncology, the Company determined that it will cease further investment in the Discuva Platform and evaluate further options for the use of the Discuva Platform.

Management also concluded that this indicated the carrying amount of the acquired Discuva Platform intangible asset may not be recoverable and performed an assessment to calculate the fair value of the asset using a probability-weighted approach which was compared to the carrying value of the asset.

An impairment charge of $8.5 million which represented the carrying value of the Discuva Platform was recognized for the year ended December 31, 2022.

This impairment charge is presented as impairment of intangible assets in the consolidated statements of operations and comprehensive loss.

Other Operating Income

The table below summarizes our other operating income by category for the year ended December 31, 2023 and 2022, respectively:

(in millions) Year Ended

December 31, 2023 December 31, 2022 $ Change

Funding income from BARDA $ — $ 8.1 $ (8.1)

General and administrative expenses increased by $30.2 million for the year ended December 31, 2024, compared to the same period in the prior year, primarily due to an increase of $25.3 million in stock-based compensation related to an increase in equity award grants and the acceleration charges related to the achievement of certain market conditions on performance stock option awards.

Additionally, compensation-related costs, excluding stock-based compensation increased by $4.6 million, for the year ended December 31, 2024, compared to the same period in the prior year, as the Company is focused on building its executive management team to continue supporting its growth.

We expect general and administrative expenses to continue to increase as we scale our infrastructure and management to support development of ivonescimab.

Other Operating (Expense) Income, net

The table below summarizes our other operating (expense) income by category for the year ended December 31, 2024 and 2023, respectively:

(in millions) Year Ended December 31,

2024 2023 $ Change

Research and development tax credits $ 0.3 $ 1.0 $ (0.7)

Grant income from CARB-X — 1.8 (1.8)

Total $ 0.3 $ 1.0 $ (0.7)

Funding income from BARDA decreased by $8.1 million for the year ended December 31, 2023, compared to the same periods in the prior year, due to management’s decision to terminate all prior development and marketing activities related to ridinilazole.

research and development tax credits decreased by $3.5 million for the year ended December 31, 2023, compared to the same period in the prior year, due to a decrease in clinical and manufacturing activity spend associated with the ridinilazole Phase III clinical program, which resulted in a decrease in tax credits claimed in the U.K., coupled with a decrease in eligible expenses claimed due to recent changes in U.K.

tax legislation.

Grant income received from CARB-X decreased by $1.8 million for the year ended December 31, 2023, compared to the same period in the prior year due to the CARB-X arrangement for our preclinical candidate SMT-738 concluding in 2022.

We do not expect further income under this arrangement.

Other (Expense) Income, Net

research and development tax credits decreased by $0.7 million for the year ended December 31, 2024, compared to the same period in the prior year, as management updated its estimates for qualifying expenditures relating to ivonescimab, which resulted in a decrease in tax credits claimed.

Other Income (Expense), Net

The table below summarizes our other income (expense), net by category for the year ended December 31, 2024 and 2023, respectively.

(in millions) Year Ended

December 31, 2023 December 31, 2022 $ Change

Foreign currency gains (losses)

(in millions) Year Ended December 31,

2024 2023 $ Change

Foreign currency (losses) gains

$ (0.1) $ 0.6 $ (0.7)

Interest expense on promissory notes payable to related parties (16.5) (4.4) (12.1)

Interest income 10.5 1.5 9.0

Investment income

13.5 10.5 3.0

Reclassification of cumulative currency translation gain

Other expense (0.3) 0.3 (0.6)

Other expense, net

Total $ 13.4 $ 11.2 $ 2.2

Other (expense) income, net primarily decreased by $1.4 million for the year ended December 31, 2023, compared to the same period in the prior year, primarily due to favorable changes in foreign currency gains of $4.7 million, an increase of $9.0 million in interest income related to investments in money market funds and U.S.

government securities, and an increase of $0.4 million related to the reclassification of cumulative foreign currency translation gains from accumulated other comprehensive loss due to the dissolution of certain dormant entities, partially offset by an increase of $12.1 million in interest expense on promissory notes to related parties, where amounts recognized in 2023 related to the $520 million promissory notes issued to our Chief Executive Officers.

Other income (expense), net increased by $2.2 million for the year ended December 31, 2024, compared to the same period in the prior year, primarily due to an increase of $3.0 million in interest income due to the higher short-term investments balance, partially offset by unfavorable changes in foreign currency losses of $0.7 million.

Interest Expense

Interest expense on promissory notes payable to related parties decreased to $8.7 million for the year ending December 31, 2024, from $16.5 million during the year ending December 31, 2023, due to full payment of promissory note in October 2024.

Liquidity and Capital Resources

Sources of Liquidity

To date, we have financed our operations primarily through issuances of our common stock, issuance of debt, receipt of payments to us under license, collaboration, and commercialization arrangements, for example, our license and commercialization agreement with Eurofarma Laboratórios SA, or Eurofarma, development funding and other assistance from government entities, philanthropic, non-government and not-for-profit organizations for our product candidates.

In particular, we have received funding from BARDA, CARB-X, Innovate UK, Wellcome Trust and a number of not-for-profit organizations.

To date, we have financed our operations primarily through issuances of our common stock, including our most recent private placement issued in September 2024 for gross proceeds of $235.0 million and the raise of $44.2 million gross proceeds from our ATM Agreement during 2024, issuance of debt, and receipt of payments to us under license and collaboration arrangements.

We have devoted substantially all of our efforts to research and development, including clinical trials.

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In addition, our expenses will increase if and as we:

• Invest in clinical development of ivonescimab in our Licensed Territory;

• invest in clinical development of ivonescimab in the Licensed Territory;

• conduct research and continue development of additional product candidates;

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

We have evaluated whether our cash, cash equivalents, short-term investments and U.K.

research and development tax credits provide sufficient cash to fund our operating cash needs for the next twelve months from the date of issuance of these annual financials.

We are investing in the clinical development of ivonescimab, including our ongoing clinical trials.

In addition, we have a $100 million promissory note payable to a related party (refer to Note 18 in the consolidated financials included in this Annual Report further details) that matures on April 1, 2025.

Based upon our cash and cash equivalents and short-term investments as of December 31, 2023, we expect to be able to operate into the first quarter of 2025.

In order to further fund our operating cash needs and repay this promissory note, we intend to raise additional capital.

As of the date of the issuance of these financial statements the additional capital has not been secured.

As a result, these conditions raise substantial doubt about our ability to continue as a going concern.

In addition to the payments already made to Akeso, under the License Agreement there are additional potential milestone payments of $4.5 billion, as Akeso will be eligible to receive regulatory milestones of up to $1.05 billion and commercial milestones of up to $3.45 billion.

We have evaluated whether our cash, cash equivalents and short-term investments provide sufficient cash to fund our operating cash needs for the next 12 months from the date of issuance of these annual financials.

We concluded that our cash, cash equivalents and short-term investments as of December 31, 2024 will fund our operating cash needs for at least the next 12 months from the date of issuance of these financial statements.

From time to time, we may raise additional equity or debt capital through both registered offerings off of a shelf registration, including “at-the-market” offerings, and private offerings of securities.

On February 20, 2024, we filed a shelf registration statement on Form S-3 with the SEC, which the SEC declared effective on February 27, 2024.

Through our shelf registration statement we may, from time to time, sell up to an aggregate of $450 million of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units.

Of the $450 million of liquidity available to us under this shelf registration statement, on May 13, 2024, we had established an at-the-market offering program with J.P.

Morgan Securities LLC, as sales agent, in the amount of up to $90 million, of which $45.8 million remains available for sale as of December 31, 2024.

If we require or elect to seek additional capital through debt or equity financing in the future, we may not be able to raise capital on terms acceptable to us or at all.

To the extent we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities will result in dilution to our stockholders.

If we are required and unable to raise additional capital when desired, our business, operating results and financial condition may be adversely affected.

As of the date of this report, additional capital has not been secured.

In addition to the payments already made to Akeso, under the License Agreement and Second Amendment, there are additional potential milestone payments of $4.56 billion, as Akeso will be eligible to receive regulatory milestones of up to $1.05 billion and commercial milestones of up to $3.51 billion.

In addition, Akeso will be eligible to receive low double-digit royalties on net sales.

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• the costs, timing and outcome of clinical trials required for clinical development of ivonescimab;

• the costs, timing and outcome of activities related to development, validation, manufacturing and establishment of supply chain for ivonescimab;

• the number and development requirements of other future product candidates that we pursue;

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• the costs and timing of commercialization activities, including product sales, marketing, distribution and manufacturing, for any of our product candidates that receive marketing approval;

• the extent to which we become liable for milestone payments under our Licensing Agreement for ivonescimab;

• the extent to which we become liable for milestone payments under the License Agreement and Second Amendment for ivonescimab;

• subject to receipt of marketing approval, revenue received from commercial sales of any product candidates;

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To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders.

Additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as

incurring additional debt, making capital expenditures or declaring dividends or other distributions.

Additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends or other distributions.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

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The following table summarizes the results of our cash flows for the years ended December 31, 2024 and 2023.

(in millions) Year Ended December 31, 2023 Year Ended December 31, 2022

(in millions) Year Ended December 31,

Net cash used in operating activities $ (142.1) $ (76.8)

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Operating Activities

Net cash used in operating activities for the year ended December 31, 2023 was $76.8 million and resulted from a net loss of $614.9 million, which included an adjustment of $475.0 million in cash payments related to investing activities for the purchase of in-process research and development from Akeso under the terms of the License Agreement and the associated direct transaction costs and non-cash charges of $65.5 million and a net increase in working capital of $2.4 million.

Non-cash charges primarily include a $45.9 million expense for the issuance of shares in lieu of cash for the Akeso upfront payment, $14.1 million of stock-based compensation, $6.3 million related to non-cash interest expense, $1.9 million related to amortization of right-of-use assets, and a $0.5 million impairment charge, partially offset by $1.9 million related to amortization of discount on short-term investments and $0.8 million in a net unrealized foreign exchange gain.

Net cash used in operating activities for the year ended December 31, 2024 was $142.1 million and primarily resulted from a net loss of $221.3 million, which included an adjustment of $15.0 million in cash payments related to investing activities for the purchase of in-process research and development from Akeso under the terms of the License Agreement and the associated direct transaction costs, non-cash charges of $48.7 million and a net increase in working capital of $15.5 million.

Non-cash charges primarily include $51.0 million of stock-based compensation, partially offset by $2.6 million related to the amortization of discount on short-term investments.

The net increase in working capital is primarily due to an $11.9 million increase in accrued liabilities and other current liabilities, a $6.6 million increase in accrued compensation, a $2.5 million decrease in other assets, and a $2.0 million increase in accounts payable, partially offset by a $7.9 million increase in prepaid expenses and other current assets.

Net cash used in operating activities for the year ended December 31, 2023 was $76.8 million and resulted from a net loss of $614.9 million, which included an adjustment of $475.0 million in cash payments related to investing activities for the purchase of in-process research and development from Akeso under the terms of the License Agreement and the associated direct transaction costs and non-cash charges of $63.6 million and a net decrease in working capital of $0.5 million.

Non-cash charges primarily include a $45.9 million expense for the issuance of shares in lieu of cash for the Akeso upfront payment, $14.1 million of stock-based compensation, $6.3 million related to non-cash interest expense, and a $0.5 million impairment charge, partially offset by $1.9 million related to amortization of discount on short-term investments and $0.8 million in a net unrealized foreign exchange gain.

The net increase in working capital is primarily due to a $3.7 million increase in other long-term assets, a $2.4 million decrease in accrued liabilities, and a $0.4 million decrease in lease liabilities, partially offset by a $4.2 million decrease in the research and development tax credit receivable and a $2.3 million increase in accounts payable.

Net cash used in operating activities for the year ended December 31, 2022 was $41.6 million and resulted from a net loss of $78.8 million, which included non-cash charges of $28.6 million and a $8.6 million net decrease in working capital.

Non-cash charges primarily include $11.9 million of stock-based compensation, a $8.5 million impairment charge, $4.3 million related to non-cash interest expense, a $2.6 million unrealized foreign currency exchange loss, and $1.3 million in amortization of right-of-use assets, partially offset by a $1.3 million gain on remeasurement of an assumed contingent liability.

The net decrease in working capital primarily includes an $8.4 million decrease in research and development tax credit receivable, a $5.1 million decrease in prepaid expenses, a $4.8 million increase in accrued liabilities, and a $1.6 million increase in accrued compensation, partially offset by a $7.3 million decrease in deferred revenue and income, a $4.1 million decrease in accounts payable, and a $1.1 million decrease in lease liabilities.

Investing Activities

Net cash used in investing activities for the years ended December 31, 2024 was $205.3 million and was primarily due to $190.2 million of net purchases of short-term investments and $15.0 million of cash payments made to Akeso pursuant to the License Agreement.

Net cash used in investing activities for the years ended December 31, 2023 was $587.8 million and was primarily due to $475.0 million of cash payments made to Akeso pursuant to the License Agreement and $112.9 million of net purchases of short-term investments.

Net cash used in investing activities for the year ended December 31, 2022 was for the purchase of property and equipment.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2023 was $86.5 million and was primarily due to net proceeds received of $104.1 million (net of paid issuance costs) related to the issuance of common stock from the 2023 Rights Offering and net of the extinguishment of $395.3 million of principal and accrued interest due and payable by us under

the $400 million Duggan Promissory Note in satisfaction of the subscription price for the shares subscribed by Mr.

Net cash provided by financing activities for the year ended December 31, 2024 was $381.2 million and was primarily due to $434.9 million of proceeds from various private placements, $43.0 million net proceeds from our current ATM Agreement, and proceeds received of $2.7 million related to employee stock awards, partially offset by a $100.0 million early principal payment on promissory notes payable to a related party.

Duggan in the 2023 Rights Offering, $5.0 million received for the issuance of common stock via a private placement to a related party, and $1.2 million received for the exercise of stock option warrants, partially offset by the repayment of $24.7 million related to promissory notes from related parties.

Net cash provided by financing activities for the year ended December 31, 2022 was $620.2 million and primarily resulted from net proceeds of $99.9 million from the rights offering in August 2022, proceeds from promissory notes from related parties of $545.0 million, partially offset by the repayment of a promissory note from a related party of $25.0 million and $0.4 million of net proceeds from the exercise of stock options.

Contractual Obligations and Commitments

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Operating lease obligations $ 8.0 $ 3.8 $ 2.8 $ 1.4 $ —

The table above does not include the lease agreement signed by the Company on January 8, 2024 for executive office space for its new headquarters in Miami, Florida.

The office space is approximately 9,000 square feet.

The term of the lease is 64 months.

Total payments for this office space is approximately $5.1 million over the term of the lease.

The table above excludes payments related to the lease signed in January 2024.

Debt commitments

On December 6, 2022, we entered into a Note Purchase Agreement (the “Note Purchase Agreement”), with Mr.

Robert Duggan and Dr.

Maky Zanganeh, pursuant to which the Company agreed to sell to each of Mr.

Duggan and Dr.

Zanganeh, pursuant to which we agreed to sell to each of Mr.

Duggan and Dr.

Zanganeh unsecured promissory notes in the aggregate amount of $520 million.

Pursuant to the Note Purchase Agreement, the Company issued to Mr.

Pursuant to the Note Purchase Agreement, we issued to Mr.

Duggan and Dr.

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Duggan in the amount of $100 million (the “Duggan September Note” and together with the Duggan February Note and the Zanganeh Note, the “December 2022 Notes”), which was originally due on September 15, 2023.

The maturity dates of the December 2022 Notes could have been extended one or more times at the Company’s election, but in no event to a date later than September 6, 2024.

In addition, if the Company consummates a public offering, then upon the later to occur of (i) five business days after the Company receives the net cash proceeds therefrom or (ii) May 15, 2023, the Duggan February Note and the Zanganeh Note shall be prepaid by an amount equal to the lesser of (a) 100% of the amount of the net proceeds of such offering and (b) the outstanding principal amount on such Notes.

On January 19, 2023, the Company provided notice to extend the term of the Duggan February Note and Duggan September Note to a maturity date of September 6, 2024.

Furthermore, on January 19, 2023, the Company and Mr.

Duggan rectified the Duggan February Note and Duggan September Note in order to correctly reflect the parties’ intent that the Company may only prepay (i) the Duggan February Note following the completion of a public rights offering to be conducted by Summit in the approximate amount of $500 million (the “Rights Offering”), or a similar capital raise, in an amount equal to the lesser of (x) the net proceeds of the Rights Offering or such capital raise or (y) the full amount outstanding of the Duggan February Note, and (ii) the Duggan September Note following the completion of a capital raising transaction subsequent to the Rights Offering in an amount equal to the lesser of (A) the net proceeds of such capital raise or (B) the full amount outstanding of the Duggan September Note.

The maturity dates of the December 2022 Notes could have been extended one or more times at our election, but in no event to a date later than September 6, 2024.

In addition, if we consummated a public offering, then upon the later to occur of (i) five business days after we receive the net cash proceeds therefrom or (ii) May 15, 2023, the Duggan February Note and the Zanganeh Note were to be prepaid by an amount equal to the lesser of (a) 100% of the amount of the net proceeds of such offering and (b) the outstanding principal amount on such Notes.

On January 19, 2023, we provided notice to extend the term of the Duggan February Note and Duggan September Note to a maturity date of September 6, 2024.

Furthermore, on January 19, 2023, we and Mr.

Duggan rectified the Duggan February Note and Duggan September Note in order to correctly reflect the parties’ intent that we may only prepay (i) the Duggan February Note following the completion of a public rights offering to be conducted by us in the approximate amount of $500 million, or a similar capital raise, in an amount equal to the lesser of (x) the net proceeds of the Rights Offering or such capital raise or (y) the full amount outstanding of the Duggan February Note, and (ii) the Duggan September Note following the completion of a capital raising transaction subsequent to the 2023 Rights Offering (as defined in Note 17 Stockholders’ Equity to the consolidated financial statements included under Item 15 Exhibits, Financial Statement Schedules) in an amount equal to the lesser of (A) the net proceeds of such capital raise or (B) the full amount outstanding of the Duggan September Note.

Following the issuance of the two new Promissory Notes (the “Duggan Promissory Notes”), the Duggan February Note and Duggan September Note were marked as “cancelled” on their face and replaced in their entirety by the Duggan Promissory Notes (together with the Zanganeh Note, the “Notes”).

The Notes accrue interest at an initial rate of 7.5%.

All interest on the Notes shall be paid on the date of signing for the period through February 15, 2023.

Such prepaid interest shall be paid in a number of shares of the Company’s common stock, par value $0.01 (“Common Stock”) equal to the dollar amount of such prepaid interest, divided by $0.7913 (the

consolidated closing bid price immediately preceding the time the Company entered into the Note Purchase Agreement, plus $.01), which was 9,720,291 shares.

For all applicable periods following February 15, 2023, interest shall accrue on the outstanding principal balance of the Notes at the US prime interest rate, as reported in the Wall Street Journal, plus 50 basis points, as adjusted monthly, for three months immediately following February 15, 2023, and thereafter at the US prime rate plus 300 basis points, as adjusted monthly.

The Notes accrued interest at an initial rate of 7.5%.

All interest on the Notes was paid on the date of signing for the

period through February 15, 2023.

Such prepaid interest was paid in a number of shares of our common stock, par value $0.01 (“Common Stock”) equal to the dollar amount of such prepaid interest, divided by $0.7913 (the consolidated closing bid price immediately preceding the time we entered into the Note Purchase Agreement, plus $.01), which was 9,720,291 shares.

For all applicable periods following February 15, 2023, interest accrued on the outstanding principal balance of the Notes at the US prime interest rate, as reported in the Wall Street Journal, plus 50 basis points, as adjusted monthly, for three months immediately following February 15, 2023, and thereafter at the US prime rate plus 300 basis points, as adjusted monthly.

Accrued interest was paid in cash, quarterly in arrears, on each of March 31, June 30, September 30 and December 31.

On February 15, 2023, the $20 million Zanganeh Note matured and we repaid the outstanding principal balance.

In connection with the closing of the Rights Offering, the $400 million Duggan Promissory Note matured and became due, and we repaid all principal and accrued interest thereunder using a portion of the proceeds from the Rights Offering.

In connection with the closing of the Rights Offering, the $400 million Duggan Promissory Note matured and became due, and we satisfied all principal and accrued interest thereunder using a combination of a portion of the cash proceeds from the 2023 Rights Offering and the extinguishment of a portion of the amount due equal to the subscription price of shares subscribed by Mr.

Duggan in the 2023 Rights Offering.

On February 17, 2024 the Duggan February Note was amended to extend the maturity date from September 6, 2024 to April 1, 2025.

For all applicable periods commencing February 17, 2024, interest shall accrue on the outstanding principal balance at the greater of 12% or the US prime interest rate, as reported in the Wall Street Journal plus 350 basis points, as adjusted monthly, compounded quarterly.

Interest shall be paid upon maturity of the loan.

The estimated future principal payments are $0 and $100,000,000 for 2024 and 2025, respectively, as the note matures on April 1, 2025.

For all applicable periods commencing February 17, 2024, interest accrued on the outstanding principal balance at the greater of 12% or the US prime interest rate, as reported in the Wall Street Journal plus 350 basis points, as adjusted monthly, compounded quarterly.

Interest was paid upon maturity of the loan.

As of October 1, 2024, the Company repaid the Duggan September Note in full, resulting in principal payments in the aggregate amount of $100.0 million and accrued cash interest of $7.3 million.

Other commitments

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Most contracts provide for termination upon notice, and therefore are cancellable contracts.

As of December 31, 2023, total contractual commitments, excluding leases commitments and debt commitments, are estimated to be approximately $37.7 million and the majority of these commitments are due within one year.

Subsequent to December 31, 2023 through February 9, 2024, the Company entered into additional contractual commitments of approximately $23.0 million with various third parties related to our clinical trials.

We have certain commitments under our agreements with Akeso, Wellcome Trust, the University College London and certain employees, former employees and former directors of Discuva, pursuant to which we will be required to pay royalties or make milestone payments.

As of December 31, 2024, total unconditional purchase obligations, excluding lease commitments, are estimated to be approximately $13.9 million.

We have certain commitments under our agreements with Akeso.

The License Agreement with Akeso also contains certain manufacturing and purchase commitments.

As of December 31, 2024, we are unable to estimate the amount, timing or likelihood of achieving the milestones, making future product sales or assessing estimated forecasts for manufacturing and supplied materials which these contingent payment obligations relate to.

For additional information about the License Agreement with Akeso, refer to Note 5, “Akeso License and Collaboration Agreement” to the Consolidated Financial Statements included under Item 15, “Exhibits, Financial Statement Schedules.”

Indemnifications

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Legal Proceedings

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business.

We are not currently subject to any material legal proceedings.

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On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued research and development expenses, stock-based compensation and income taxes.

We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

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These agreements are generally cancellable, and related payments are recorded as research and development expenses as incurred.

The Company records accruals for estimated ongoing research and development costs or prepaid expenses where the payments made exceeds the estimated costs.

When evaluating the adequacy of these balances, the Company analyzes progress of the studies, including the estimated costs to complete each study or activity, the estimation of the current stage of completion and the invoices received, as well as predetermined milestones which are not reflective of the current stage of development for prepaid expenses.

The Company records accruals for estimated ongoing research and development costs or prepaid expenses where the payments made exceed the estimated costs.

These amounts are determined based on the estimated costs to complete each study or activity, the estimation of the current stage of completion and the invoices received, as well as predetermined milestones which are not reflective of the current stage of development for prepaid expenses.

Actual results could differ from the Company’s estimates.

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Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met.

Use of the Black-Scholes option-pricing model requires management to apply judgment under highly subjective assumptions.

Use of the Black-Scholes option-pricing model requires management to apply judgment under subjective assumptions.

These assumptions include:

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The Company has not paid and does not intend to pay dividends.

The Company uses a Monte Carlo simulation model to estimate the fair value of Performance and Market-based Stock Options at the date of grant.

Key assumptions used in the model include the risk-free interest rate, which reflects the US Treasury Constant Maturity Yield with a term commensurate with the contractual term of the award, and stock price volatility, which is derived based on the historical volatility of the Company’s stock.

The Company estimates expected forfeitures at the time of grant instead of accounting for forfeitures as they occur.

Stock option and restricted stock unit awards have been granted at fair value to non-employees, in connection with research and consulting services provided to the Company, to non-employees in connection with corporate activities, and to employees, in connection with Stock Purchase and Restriction Agreements.

Stock option awards have been granted at fair value to non-employees, in connection with research and consulting services provided to the Company, to non-employees in connection with corporate activities, and to employees, in connection with Stock Purchase and Restriction Agreements.

Equity awards generally vest over terms of 3 or 4 years.

The Company classifies stock-based compensation expense in the consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified.

The Company classifies stock-based compensation expense in the consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified.

The provision for income taxes is determined using the asset and liability approach.

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The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties.

At December 31, 2023 and 2022, the Company had unrecognized tax positions of $1.1 million and nil, respectively.

At December 31, 2024 and 2023, the Company had unrecognized tax positions of $2.1 million and $1.1 million, respectively.

Due to the Company’s full valuation allowance, the unrecognized tax benefits would not materially impact the Company’s effective tax rate when recognized.

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The Company’s policy is to recognize interest and penalties related to uncertain tax positions as part of its income tax provision.

For the years ended December 31, 2023 and 2022, the Company had no interest or penalties related to unrecognized tax benefits.

Recent Accounting Pronouncements

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

What changed 10-K

Item 7. Management’s Discussion and Analysis