What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-27 compared with 2024-03-19 · 89 added, 111 removed, 426 unchanged (32% of the section changed)

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In certain circumstances, the determination of the nature and level of services that have been received during the reporting period requires judgment because the timing and pattern of vendor invoicing did not correspond to the level of services provided and invoicing from clinical study sites and other vendors may not yet be available to management.

How We Addressed the Matter

How We Addressed the Matter in Our Audit

To test the accrued research and development expenses, our audit procedures included, among others, testing the completeness and accuracy of the underlying data used in the estimate, including, but not limited to, estimated project duration, research and manufacturing services incurred to date and terms of contractual arrangements.

To assess the reasonableness of the data, we corroborated the progress of the clinical trials with Company research and development personnel and obtained third-party evidence supporting the activities performed to date.

We recalculated the accrual based on executed contracts with the clinical research organizations, contract manufacturing organizations, clinical study sites and collaboration partners.

We recalculated the accrual based on executed contracts with the clinical research organizations, contract manufacturing organizations, and clinical study sites.

We also tested subsequent invoicing received from third parties to assess the impact to the accrual at the balance sheet date and compared that to the Company’s estimates.

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Cash and cash equivalents

Insurance recovery of legal settlement

Prepaid expenses and other current assets

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Accounts payable

Accrued legal settlement

Accrued expenses

Current loan payable (net of discount and issuance costs of $ 112 and nil , respectively)

Current loan payable (net of discount and issuance costs of $ 74 and $ 112 , respectively)

Current operating lease liabilities

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Total current liabilities

Loan payable (net of discount and issuance costs of $ 164 and $ 454 , respectively)

Loan payable (net of discount and issuance costs of nil and $ 164 , respectively)

Operating lease liabilities, less current portion

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Equity (Deficit)

BALANCE — January 1, 2022

Issuance of common stock for cash, net of issuance cost of $ 489

Share-based compensation

Issuance of pre-funded warrants, net of issuance cost $ 283

BALANCE — December 31, 2022

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BALANCE — December 31, 2023

Issuance of common stock for cash, net of issuance cost of $ 1,056

Share-based compensation

Issuance of common stock under equity plan awards

BALANCE — December 31, 2024

See accompanying Notes to Consolidated Financial Statements

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Purchase of property and equipment

Repayment of related party note receivable

Cash used in investing activities

Financing activities:

Proceeds from the issuance of common stock, net of issuance costs

Proceeds from issuance of pre-funded warrants, net of issuance costs

Proceeds from the issuance of common stock in connection with at the market offering, net of issuance costs

Repayment of loan

Proceeds from the issuance of common stock under equity plan awards

Cash provided by financing activities

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Cash paid for business taxes

Operating lease right-of-use assets recognized in exchange for lease liabilities

Non-cash operating activities:

Lease modification

Non-cash investing activities:

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Tempest Therapeutics, Inc.

(“Tempest” or the “Company”) is a clinical-stage oncology company advancing small molecules that combine both tumor-targeted and immune-mediated mechanisms with the potential to treat a wide range of tumors.

The Company’s two novel clinical programs are TPST-1120 and TPST-1495, antagonists of PPARα and EP2/EP4, respectively.

Both programs are advancing through clinical trials designed to study the agents as monotherapies and in combination with other approved agents.

Tempest is also developing other product candidates currently in our Discovery Research portfolio.

Tempest is headquartered in Brisbane, California.

(“Tempest” or the “Company”) is a clinical-stage biotechnology company moving into late-stage development with a diverse portfolio of targeted and immune-mediated product candidates with the potential to be first-in-class treatments for a wide range of cancers.

Tempest’s novel programs range from early research to the lead program, amezalpat (previously known as TPST-1120), that is poised to begin a pivotal study in first-line liver cancer.

Tempest is also developing other potential product candidates in its Discovery Research group.

The Company is headquartered in Brisbane, California.

Liquidity and Management Plans

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As of December 31, 2024 , the Company had cash and cash equivalents of $ 30.3 million, which is sufficient to fund operations beyond 12 months from the issuance of the financial statements.

The Company’s ability to fund continued development will require additional capital, and Tempest intends to raise such capital through the issuance of additional debt or equity including in connection with potential merger opportunities, or through business development activities.

The Company’s ability to continue as a going concern is dependent upon its ability to successfully accomplish these plans and secure sources of financing and ultimately attain profitable operations.

If the Company are unable to obtain adequate capital, it could be forced to cease operations.

On July 23, 2021, the Company entered into a sales agreement with Jefferies LLC, pursuant to which the Company may sell, from time to time at its sole discretion through Jefferies, as its sales agent, shares of its common stock having, up to an aggregate sales price of $ 100.0 million of its common stock through Jefferies (the “ATM Program”).

Any shares of its common stock sold will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No.

The Company’s ability to fund continued development, including its Phase 3 clinical trial for amezalpat, will require significant additional capital.

The Company intends to focus its short-term efforts on raising such capital through the issuance of additional equity or debt.

Adequate additional financing may not be available to us on acceptable terms, or at all.

If additional capital is not available to us on a timely basis, or at all, the Company will be required to take additional actions, including exploring potential merger opportunities and other strategic options, such as partnerships or collaborations for our programs, or may need to reduce operating expenses or delay, reduce the scope of, discontinue or alter the Company’s research and development activities, or may be forced to wind down its operations.

The Company’s ability to continue as a going concern in the absence of additional capital is dependent upon its ability to control its expenses over the next 12 months, which include de-prioritizing R&D programs, a reduction in its workforce, and controlling variable spend, while management secures sources of capital or another strategic opportunity.

On July 23, 2021, the Company entered into a sales agreement with Jefferies LLC (“Jefferies”), pursuant to which the Company may sell, from time to time at its sole discretion through Jefferies, as its sales agent, shares of its common stock having, up to an aggregate sales price of $ 100.0 million of its common stock through Jefferies (the “Prior ATM Program”).

As of June 20, 2024, the Company had sold an aggregate 9,017,110 shares of its common stock for gross proceeds of approximately $ 42.7 million ($ 41.5 million net of commissions and estimated expenses) under the Prior ATM Program.

On June 20, 2024, the Company and Jefferies terminated the Prior ATM Program and entered a new Open Market Sale Agreement (the “Sales Agreement”) to sell shares of common stock from time to time through Jefferies acting as sales agent (the “ATM Program”).

The Company will pay Jefferies a commission up to 3.0 % of the gross sales proceeds of any shares of its common stock sold through Jefferies under the ATM Program and also has provided Jefferies with indemnification and contribution rights.

As of December 31, 2023 , the Company has sold an aggregate of 8,960,822 shares of its common stock for net proceeds of approximately $ 41.2 million, after deducting commissions and expenses pursuant to the ATM Program.

During the year ended December 31, 2023 , the Company has sold an aggregate of 8,260,479 shares of its common stock for net proceeds of approximately $ 35.6 million, after deducting commissions and expenses.

As of December 31, 2023 , approximately $ 57.6 million remained available under the ATM Program.

Pursuant to the prospectus supplement dated June 20, 2024 filed by the Company with the U.S.

Securities and Exchange Commission (“SEC”), the Company was able to offer and sell up to $ 205,000,000 of its shares of common stock pursuant to the Sales Agreement.

As of December 31, 2024, the Company has sold an aggregate of 21,626,191 shares of its common stock for gross proceeds of approximately $ 29.6 million, or $ 28.8 million after deducting commissions

and offering expenses, pursuant to the ATM Program.

As of December 31, 2024, approximately $ 175.4 million remained available for sale under the ATM Program.

Under current SEC regulations, if at any time the Company's public float is less than $ 75.0 million, and for so long as the Company’s public float remains less than $ 75.0 million, the amount the Company can raise through primary public offerings of securities in any 12-month period using shelf registration statements is limited to an aggregate of one-third of the Company's public float, which is referred to as the baby shelf rules.

On February 6, 2025, the Company filed a prospectus supplement with the SEC limiting the availability under the ATM Program to $ 14.5 million.

Between January 1, 2025 and March 21, 2025, we sold 1,464,321 shares of our common stock for gross and net proceeds of $ 1.3 million, pursuant to the ATM Program.

As of March 21, 2025, we have approximately $ 13.4 million available for sale under the ATM Program.

PIPE Financing

On April 29, 2022, the Company completed a private investment in public equity (“PIPE”) financing from the sale of 3,149,912 shares of its common stock at a price per share of $ 2.36 and, and in lieu of shares of common stock, pre-funded warrants to purchase up to 3,206,020 shares of its common stock at a price per pre-funded warrant of $ 2.359 to EcoR1 Capital, LLC and Versant Venture Capital (the “PIPE Investors”).

On April 29, 2022, the Company completed a private investment in public equity (“PIPE”) financing from the sale of 3,149,912 shares of its common stock at a price per share of $ 2.36 and, in lieu of shares of common stock, pre-funded warrants to purchase up to 3,206,020 shares of its common stock at a price per pre-funded warrant of $ 2.359 to EcoR1 Capital, LLC and Versant Venture Capital (the “PIPE Investors”).

Net proceeds from the PIPE financings totaled approximately $ 14.5 million, after deducting offering expenses.

The Company entered into a registration rights agreement

with the PIPE Investors pursuant to which the Company filed a registration statement with the SEC registering the resale of the 3,149,912 shares common stock and the 3,206,020 shares of common stock underlying the pre-funded warrants issued in the PIPE financing.

The Company entered into a registration rights agreement with the PIPE Investors pursuant to which the Company filed a registration statement with the SEC registering the resale of the 3,149,912 shares common stock and the 3,206,020 shares of common stock underlying the pre-funded warrants issued in the PIPE financing.

As of December 31, 2024 , all pre-funded warrants had been exercised.

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All assets and operations are in the U.S.

The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.

The Company’s Chief Executive Officer , who is the chief operating decision maker (“CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.

For additional segment information, see Note 12, Segment Reporting.

Risks and Uncertainties —The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on single-source vendors, availability of raw materials, patentability of the Company’s products and processes and clinical efficacy and safety of the Company’s products under development, compliance with government regulations and the need to obtain additional financing to fund operations.

Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials and regulatory approval, prior to commercialization.

candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials and regulatory approval, prior to commercialization.

These efforts will require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting.

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In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period.

These estimates are based on communications with the third-party service

providers, the Company’s estimates of accrued expenses and on information available at each balance sheet date.

These estimates are based on communications with the third-party service providers, the Company’s estimates of accrued expenses and on information available at each balance sheet date.

If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly.

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Interest and penalties related to unrecognized tax benefits are included within the provision for income tax.

Recently Adopted Accounting Standards —In November 2023, the FASB issued ASU 2023-07, Segment Reporting:

Improvements to Reportable Segment Disclosures, which amends guidance in ASC 280, Segment Reporting.

The amendments in this ASU expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment, among other disclosure requirements.

The ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2023.

The Company adopted ASU 2023-07 for the year ended December 31, 2024 and the application of ASU 2023-07 did no t have a material impact on the Company’s Consolidated Financial Statements.

The adoption did result in enhanced disclosures as included in Note 12, Segment Reporting.

FAIR VALUE MEASUREMENTS

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Property and equipment—net

Depreciation expense for the years ended December 31, 2023 and 2022 were $ 381 and $ 638 , respectively.

Depreciation expense for the years ended December 31, 2024 and 2023 was $ 389 and $ 381 , respectively.

Accrued liabilities as of December 31, 2024 and 2023 consist of the following (in thousands):

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COMMITMENTS AND CONTINGENCIES

Facilities Lease Agreements —In February 2019, the Company entered into a 5-year office lease agreement for a 9,780 square feet facility in South San Francisco, California.

The original lease term expires on February 29, 2024 .

In June 2022, the lease was amended to terminate early on January 31, 2023 .

The amendment was not accounted for as a separate contract and the lease liability and the right-of-use asset were remeasured on the lease modification date.

In January 2022, the Company entered into a new 8-year office lease agreement for a 20,116 square feet facility in Brisbane, California ("Brisbane Lease").

Facilities Lease Agreements —In January 2022, the Company entered into an 8-year office lease agreement for a 20,116 square feet facility in Brisbane, California (“Brisbane Lease”).

The lease commenced in December 2022.

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This amount is included in other noncurrent assets in the accompanying Consolidated Balance Sheets as of December 31, 2024 .

Guarantees and Indemnifications —In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification.

The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future.

To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations.

As of December 31, 2023 and 2022, the Company does not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities.

Legal Proceedings —Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

As a result of the merger with Millendo, the Company is party to various litigation matters given Millendo’s role as successor to OvaScience, Inc.

(“OvaScience”).

OvaScience merged with Millendo in 2018.

Prior to the merger with Millendo, OvaScience was sued in three matters that are disclosed below.

On November 9, 2016, a purported shareholder derivative action was filed in Massachusetts State court (Cima v.

Dipp) against OvaScience and certain former officers and directors of OvaScience and OvaScience alleging breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets for purported actions related to OvaScience’s January 2015 follow-on public offering.

As of September 12, 2022, the parties have reached an agreement in principle and have executed a term sheet in connection with a settlement.

On September 13, 2022, the parties filed a joint motion to stay the case pending settlement.

On September 15, 2022, the court issued a 90-day nisi order.

On December 14, 2022, the court extended that order for 60 days to February 20, 2023.

On February 17, 2023, the court extended the order until March 22, 2023 and set a court appearance for March 23, 2023.

On March 23, 2023, the court granted preliminary approval of the settlement and set a final fairness hearing for June 12, 2023.

By order dated June 12, 2023, the court granted final approval of the settlement.

On July 27, 2017, a purported shareholder derivative complaint was filed in Massachusetts Federal court (Chiu v.

Dipp) against OvaScience and certain former officers and directors of OvaScience alleging breach of fiduciary duties, unjust enrichment and violations of Section 14(a) of the Exchange Act.

related to OvaScience’s January 2015 follow-on public offering and other public statements concerning OvaScience’s AUGMENT treatment.

Following the court’s dismissal of an amended complaint, the parties agreed that plaintiffs could file a second amended complaint and that the case would be stayed pending the resolution of the Dahhan Action.

In May 2018, the court entered an order staying this case pending the resolution of the Dahhan Action.

As of September 12, 2022, the parties have reached an agreement in principle and have executed a term sheet in connection with the settlement.

On February 14, 2023, the parties informed the court that, subject to court approval, they had reached an agreement to settle Chiu v.

Dipp as well as Cima v.

The parties requested a 90-day stay in order to present the settlement to the state court in Cima v.

On February 16, 2023, the court granted the 90-day stay.

On May 2, 2023, the court extended the stay through July 12, 2023.

After final approval of the Cima settlement, the parties filed a stipulation and proposed order to dismiss the Chiu Action with prejudice on June 27, 2023.

By order dated July 5, 2023, the court dismissed the Chiu Action with prejudice.

On January 15, 2021, the Company entered into a loan agreement with Oxford Finance LLC (the “Lender”) to borrow a term loan amount of $ 35,000 to be funded in three tranches.

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(ii) the interest-only repayment period was extended through December 31, 2023 (which interest-only period may be further extended through June 30, 2024 under certain circumstances);

and (iii) a security interest in all of the assets of the Company, TempestTx

and Millendo, including any intellectual property, was granted to the Lender.

and (iii) a security interest in all of the assets of the Company, TempestTx and Millendo, including any intellectual property, was granted to the Lender.

In addition, the Lender permitted a one-time prepayment in the amount of $ 5.0 million, which the Company paid on December 23, 2022.

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In the fourth quarter of 2023, the Company achieved the circumstances necessary to extend the interest-only repayment period through June 30, 2024.

Monthly principal payments of $ 733 are required to begin on July 1, 2024.

Monthly principal payments of $ 733 began on July 1, 2024 and the Company paid the first principal payment to the Lender in July 2024.

Related to this borrowing, the Company recorded loan discounts totaling $ 898 and paid $ 95 of debt issuance costs.

These amounts would be amortized as additional interest expense over the life of the loan.

As of December 31, 2023 , the balance of the loan payable (net of debt issuance costs) was $ 10.5 million.

As of December 31,

2024 , the balance of the loan payable (net of debt issuance costs) was $ 6.4 million.

The carrying value of the loan approximates fair value (Level 2).

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STOCKHOLDERS' EQUITY

On March 29, 2021, TempestTx, Inc.

(“Private Tempest”) entered into an Agreement and Plan of Merger (with Millendo Therapeutics, Inc.

upon completion of the merger on June 25, 2021, the Company issued an aggregate of approximately 5,365,899 shares of its common stock to Private Tempest stockholders, based on an exchange ratio of 0.0322 shares of the Company’s common stock for each share of Private Tempest common stock outstanding immediately prior to the merger, including those shares of common stock issued upon conversion of the Private Tempest preferred stock ( 3,692,912 common shares) and those shares of common stock issued with its pre-merger financing of $ 30.0 million ( 1,136,849 common shares).

As of December 31, 2023 and December 31, 2022, the Company was authorized to issue 100,000,000 shares of common stock and 5,000,000 shares of preferred stock, each with a par value of $ 0.001 per share.

Of the common stock shares authorized, 22,045,255 and 10,518,539 were issued and outstanding at December 31, 2023 and December 31, 2022, respectively.

There were no shares subject to repurchase due to remaining vesting requirements.

There was no preferred stock issued nor outstanding as of December 31, 2023 and December 31, 2022.

Common stockholders are entitled to dividends as declared by the Board of Directors, subject to rights of holders of all classes of stock outstanding having priority rights as to dividends.

Authorized Stock

The Company is authorized to issue 100,000,000 shares of common stock, par value of $ 0.001 per share, and 5,000,000 shares of preferred stock, 100,000 of which have been designated as Series A Participating Preferred Stock (the “Series A Preferred Stock”), par value of $ 0.001 per share.

No shares of the Company’s Series A Participating Preferred Stock were outstanding as of December 31, 2024 and 2023.

Stockholders are entitled to dividends as declared by the Board of Directors, subject to rights of holders of all classes of stock outstanding having priority rights as to dividends.

There have been no dividends declared to date.

The holders of each share of common stock are entitled to one vote.

Except for effecting or validating certain specific actions intended to protect the preferred stockholders, the holders of common stock vote together with preferred stockholders and have the right to elect one member of the Company’s Board of Directors.

On October 10, 2023, the Company’s Board of Directors adopted a limited duration stockholder rights plan (the “Rights Plan”), effective immediately, and declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of the common stock, par value $ 0.001 per share (the “Common Shares”), of the Company.

The holders of each share of common stock are entitled to one vote and the holders of each share of Series A Preferred Stock, if issued, are entitled to 1,000 votes.

Except for effecting or validating certain specific actions intended to protect the preferred stockholders, the holders of common stock vote together with preferred stockholders.

The dividend was effective as of October 23, 2023 (the “Record Date”) with respect to stockholders of record on that date.

The Rights will also attach to new Common Shares issued after the Record Date.

Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $ 0.001 per share, (the “Preferred Shares”), of the Company at a price of $ 25.00 per one one-thousandth of a Preferred Share, subject to adjustment.

The Rights will also attach to new common stock issued after the Record Date.

Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of the Series A Preferred Stock at a price of $ 25.00 per one one-thousandth of a preferred share, subject to adjustment.

The descriptions and terms of the Rights are set forth in a Rights Agreement, dated as of October 10, 2023 (the “Rights Agreement"), between the Company and Computershare Trust Company, NA.

The Rights will expire on October 10, 2024 , or, if the Company’s stockholders approve the Rights plan, on October 10, 2026 , unless the Rights are earlier redeemed or exchanged by the Company.

On July 23, 2021, the Company entered into a sales agreement with Jefferies LLC, pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $ 100,000,000 of its common stock through Jefferies LLC (the "ATM

Our ability to sell securities under the ATM program will be limited until we are no longer subject to the SEC’s “baby shelf” limitations.

Pre-Funded Warrants

In April 2022, the Company completed a PIPE financing, which included the issuance of pre-funded warrants to purchase up to 3,206,020 shares of its common stock at a price per pre-funded warrant of $ 2.359 to the PIPE Investors.

As of December 31, 2023, all pre-funded warrants had been exercised.

On October 9, 2024, the Company entered into Amendment No.

1 (the “Amendment”) to the Rights Agreement.

The Amendment extends the Final Expiration Date of the Rights Agreement until immediately following the Company’s 2025 Annual Meeting of Stockholders or, if the Company’s stockholders approve the Rights Plan at or prior to such meeting, to October 10, 2026, unless the Rights are earlier redeemed or exchanged by the Company.

The Company does not have any obligation under the Rights Agreement to seek stockholder approval for the Rights Agreement.

On December 5, 2024, the Company entered into Amendment No.

2 (the “Second Amendment”) to the Rights Agreement.

The Second Amendment makes certain technical amendments to the rights and obligations of the Company’s Board of Directors to administer and make determinations with respect to the Rights Agreement and the rights issued thereunder.

The Rights Agreement otherwise remains unmodified and in full force and effect in accordance with its terms.

STOCK-BASED COMPENSATION

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On April 29, 2019, the Board of Millendo adopted the 2019 Equity Incentive Plan (the “2019 Plan”), subject to approval by the Company’s stockholders, and became effective with such stockholder approval on June 11, 2019.

On June 17, 2022, the Company’s stockholders approved the Amended and Restated 2019 Equity Incentive Plan (the “A&R 2019 Plan”), which amended and restated the 2019 Plan and will be a successor to, and replacement of, the 2019 Plan.

On June 17, 2022, the Company’s stockholders approved the Amended and Restated 2019 Equity Incentive Plan (the “A&R 2019 Plan”), which amended and restated the 2019 Plan and was the successor to, and replacement of, the 2019 Plan.

The Board of Tempest adopted the Amended and Restated 2023 Equity Incentive Plan (the “2023 Plan”) on April 30, 2023, subject to approval by the Company’s stockholders.

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The Board of Millendo adopted the 2019 Employee Stock Purchase Plan on April 29, 2019, which became effective upon stockholder approval on June 11, 2019.

On June 17, 2022, the Company’s stockholders approved the Amended and Restated

2019 Employee Stock Purchase Plan (the “2019 ESPP”).

On June 17, 2022, the Company’s stockholders approved the Amended and Restated 2019 Employee Stock Purchase Plan (the “2019 ESPP”).

The 2019 ESPP enables employees to purchase shares of the Company's common stock through offerings of rights to purchase the Company's common stock to all eligible employees.

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Options to purchase the Company’s common stock may be granted at a price not less than the fair market value in the case of both NSOs and ISOs, except for an options holder who owns more than 10% of the voting power of all classes of stock of the Company, in which case the exercise price shall be no less than 110 % of the fair market value per share on the grant date.

Stock options granted under the Plans generally vest over four years and expire no later than ten ( 10 ) years from the date of grant.

options granted under the Plans generally vest over four years and expire no later than ten ( 10 ) years from the date of grant.

Vested options can be exercised at any time.

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Consequently, an expected dividend yield of zero was used.

Restricted Stock Units

The Company granted 125,000 restricted stock units ("RSUs") with a fair value of $ 0.60 per share during the year ended December 31, 2023 .

The RSUs vest on February 25, 2024 .

Stock-Based Compensation Expense

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The valuation allowance increased by $ 12.2 million from December 31, 2023 to December 31, 2024 due primarily to the generation of net operating losses and research and development credits.

As of December 31, 2023, the Company has net operating loss carryforwards for federal and state income tax purposes of approximately $ 482.1 million and $ 457.8 million, respectively.

As of December 31, 2022 , the Company has net operating loss carryforwards for federal and state income tax purposes of approximately $ 466.0 million and $ 434.4 million, respectively.

As of December 31, 2024 , the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $ 502.2 million and $ 487.8 million, respectively.

As of December 31, 2023 , the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $ 482.1 million and $ 457.8 million, respectively.

The federal and state net operating loss carryforwards begin to expire in 2031 and 2024, respectively, if not utilized.

Federal net operating losses of $ 281.1 million are not subject to expiration.

As of December 31, 2023 , the Company has federal and state research and development carryforwards of approximately $ 12.7 million and $ 4.0 million, respectively.

The Company also has $ 7.4 million of Orphan Drug Credit.

As of December 31, 2022 , the Company has federal and state research and development carryforwards of approximately $ 11.7 million and $ 3.6 million, respectively.

As of December 31, 2024 , the Company had federal and state research and development carryforwards of approximately $ 14.1 million and $ 4.1 million, respectively.

The Company also had $ 7.4 million of Orphan Drug Credit.

As of December 31, 2023 , the Company had federal and state research and development carryforwards of approximately $ 12.7 million and $ 4.0 million, respectively.

The federal and state credits begin to expire in 2031 and 2029, respectively, if not utilized;

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The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

The Company had no accrual for interest and penalties on the accompanying consolidated balance sheets as of December 31, 2023 and 2022, respectively, and has not recognized penalties and/or interest in the accompanying statements of operations for the years ended December 31, 2023 and 2022, respectively.

The Company had no accrual for interest and penalties on the accompanying balance sheet as of December 31, 2024 and 2023,

respectively, and has not recognized penalties and/or interest in the accompanying statements of operations for the years ended December 31, 2024 and 2023, respectively.

The Company is subject to taxation in the United States, California, Massachusetts, and Michigan.

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Weighted-average common shares outstanding

Weighted-average unvested restricted shares and shares subject to repurchase

Weighted-average shares used in computing basic and diluted net loss per share

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As of December 31, 2024 and 2023 , the Company’s potentially dilutive securities included unvested stock warrants and stock options, which have been excluded from the computation of diluted net loss per share attributable to common stockholders as the effect would be anti-dilutive.

The issuance of pre-funded warrants have been included in the computation of basic and diluted net loss per share attributable to common stockholders.

The issuance of pre-funded warrants and vested RSUs have been included in the computation of basic and diluted net loss per share attributable to common stockholders.

Based on the amounts outstanding as of December 31, 2024 and 2023, the Company excluded the following potential common shares from the computation of diluted net loss per share attributable to common stockholders because including them would have had an anti-dilutive effect:

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Common stock warrants

SEGMENT REPORTING

The Company operates and manages its business as one reportable and operating segment, which is the business of discovery and development of small molecule drugs to treat cancers.

The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer .

The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the CODM for purposes of assessing performance, allocating resources and planning and forecasting future periods.

As the Company has not generated revenue, the CODM assesses Company performance through the achievement of research goals towards advancing the Company’s product candidates through stages of development.

As such, the CODM is regularly

provided with budgeted and forecasted expense information as well as the Company’s Consolidated Financial Statements which is used to determine the Company’s liquidity needs and pipeline resource allocation.

The CODM regularly reviews and evaluates research and development expenses and uses consolidated net loss, as reported on the Company’s Consolidated Statements of Operations, to assess the performance of the segment and to allocate resources.

The consolidated net loss and significant segment expenses reviewed by the CODM are reported on the Company’s Consolidated Statements of Operations for the years ended December 31, 2024 and 2023.

The measure of segment assets is reported on the Consolidated Balance Sheet as total assets.

The CODM monitors the Company's cash and cash equivalents as reported on the Consolidated Balance Sheets.

All financial information required for segment reporting that is provided to the chief operating decision maker is contained within the financial statements and notes to financial statements.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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