Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide
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only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and our Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our Chief Executive Officer and our Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. GAAP, and includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors; and
(3) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework provided in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm, as allowed by the SEC.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting during the fiscal quarter ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information
Trading Plans of Our Directors and Officers
During the fiscal quarter ended December 31, 2025, n o n e of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) entered into, modified (as to amount, price or timing of trades) or terminated (i) contracts, instructions or written plans for the purchase or sale of our securities that are intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information or (ii) non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K) .
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Item 9B. Other Information
Trading Plans of Our Directors and Officers
During the fiscal quarter ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) entered into, modified (as to amount, price or timing of trades) or terminated (i) contracts, instructions or written plans for the purchase or sale of our securities that are intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information or (ii) non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).
Note Purchase Agreement Amendment
The information set forth below is included for the purpose of providing disclosure under “Item 1.01 — Entry into a Material Definitive Agreement,” and “Item 2.03 — Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant” of Form 8-K.
On March 2, 2026, Verastem, Inc. (the “Company”) amended its Note Purchase Agreement, dated January 13, 2025 (as amended, the “Note Purchase Agreement”) with RGCM SA LLC, as Purchaser Agent, Oberland Capital Management LLC and certain funds managed by Oberland Capital Management LLC, as purchasers.
The amendment extends the outside date for the period during which the Company may draw the Second Purchase (as defined in the Note Purchase Agreement) from December 31, 2025 to June 30, 2026.
A copy of the amendment is attached as Exhibit 10.50 to this Annual Report on Form 10-K and is incorporated herein by reference. The forgoing summary of the amendment does not purport to be complete and is qualified in its entirety by reference to the complete text of the amendment and the Note Purchase Agreement.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Information regarding our directors, including the audit committee and audit committee financial experts, and executive officers, and compliance with Section 16(a) of the Exchange Act will be included in our 2026 Proxy Statement and is incorporated herein by reference.
We have adopted a Code of Business Conduct and Ethics for all of our directors, officers, and employees as required by Nasdaq governance rules and as defined by applicable SEC rules. Stockholders may locate a copy of our Code of Business Conduct and Ethics on our website at www.verastem.com or request a copy without charge from:
Verastem, Inc.
Attention: Investor Relations
117 Kendrick St., Suite 500
Needham, MA 02494
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We will post to our website any amendments to the Code of Business Conduct and Ethics and any waivers that are required to be disclosed by the rules of either the SEC or Nasdaq.
Insider Trading Policies and Procedures
We have adopted an insider trading policy that governs the purchase, sale, and other dispositions of our securities by our directors, officers and employees, and other covered persons. The insider trading policy also applies to transactions by the Company in its securities. We believe that the insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations and the listing standards of Nasdaq. A copy of our Insider Trading Policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 of Form 10-K regarding executive compensation will be included in our 2026 Proxy Statement and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item 12 of Form 10-K regarding security ownership of certain beneficial owners and management will be included in our 2026 Proxy Statement and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item 13 of Form 10-K regarding certain relationships and related transactions and director independence will be included in our 2026 Proxy Statement and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item 14 of Form 10-K regarding principal accountant fees and services will be included in our 2026 Proxy Statement and is incorporated herein by reference.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) The following documents are filed as part of this Annual Report on Form 10-K:
(1) Consolidated Financial Statements
See Part II, Item 8 for the Financial Statements required to be included in this Annual Report on Form 10-K.
(2) Consolidated Financial Statement Schedules
All financial statement schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto.
(3) Exhibits
Those exhibits required to be filed by Item 601 of Regulation S-K are listed in the Exhibit Index immediately preceding the exhibits hereto and such listing is incorporated herein by reference.
Item 16. Form 10-K Summary
None.
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EXHIBIT INDEX
Exhibit
number
Description of exhibit
3.1
Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed by the Registrant on March 12, 2019)
3.2
Certificate of Amendment to the Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K filed by the Registrant on March 12, 2019)
3.3
Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.4 to Amendment No. 3 to the Registration Statement on Form S-1 (File No. 333-177677) filed by the Registrant on January 13, 2012)
3.4
Certificate of Amendment to the Restated Certificate of Incorporation of Verastem, Inc. (incorporated by reference to Exhibit 3.1 to the Form 8-K filed by the Registrant with the Securities and Exchange Commission on May 21, 2020)
3.5
Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Form 8-K filed by the Registrant with the Securities and Exchange Commission on November 7, 2022)
3.6
Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Form 8-K filed by the Registrant with the Securities and Exchange Commission on January 25, 2023)
3.7
Certificate of Amendment to the Restated Certificate of Incorporation of Verastem, Inc. (incorporated by reference to Exhibit 3.1 to the Form 8-K filed by the Registrant with the Securities and Exchange Commission on May 31, 2023)
4.1
Specimen certificate evidencing shares of common stock (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the Registration Statement on Form S-1 (File No. 333-177677) filed by the Registrant on January 13, 2012)
4.2*
D escription of Securities
4.3
Form of Pre-Funded Warrant to Purchase Stock (incorporated by reference to Exhibit 4.1 to the Form 8-K filed by the Registrant with the Securities and Exchange Commission on July 25, 2024).
4.4
Form of Warrant to Purchase Stock (incorporated by reference to Exhibit 4.2 to the Form 8-K filed by the Registrant with the Securities and Exchange Commission on July 25, 2024).
4.5
Registration Rights Agreement, dated April 25, 2025, by and among Verastem, Inc. and the investors party thereto (incorporated by reference to Exhibit 10.2 to Form 8-K filed by the Registrant with the Securities and Exchange Commission on April 25, 2025)
4.6
Form of Pre-Funded Warrant (incorporated by reference to Exhibit 10.3 to Form 8-K filed by the Registrant with the Securities and Exchange Commission on April 25, 2025)
4.7
Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to Form 8-K filed by the Registrant with the Securities and Exchange Commission on November 17, 2025)
10.1#
Form of Incentive Stock Option Agreement under 2012 Incentive Plan (incorporated by reference to Exhibit 10.3 to Amendment No. 3 to the Registration Statement on Form S-1 (File No. 333-177677) filed by the Registrant on January 13, 2012)
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10.2#
Form of Incentive Stock Option Agreement under Amended and Restated 2012 Incentive Plan (incorporated by reference to Exhibit 10.4 of the Registrant’s Annual Report on Form 10-K filed by the Registrant on March 13, 2018)
10.3#
Form of Nonstatutory Stock Option Agreement under 2012 Incentive Plan (incorporated by reference to Exhibit 10.4 to Amendment No. 3 to the Registration Statement on Form S-1 (File No. 333-177677) filed by the Registrant on January 13, 2012)
10.4#
Form of Nonstatutory Stock Option Agreement under Amended and Restated 2012 Incentive Plan (incorporated by reference to Exhibit 10.6 of the Registrant’s Annual Report on Form 10-K filed by the Registrant on March 13, 2018)
10.5#
Form of Restricted Stock Unit Agreement under 2012 Incentive Plan (incorporated by reference to Exhibit 10.16 to Amendment No. 3 to the Registration Statement on Form S-1 (File No. 333-177677) filed by the Registrant on January 13, 2012)
10.6#
Amendment to Form of Restricted Stock Unit Agreement under 2012 Incentive Plan (incorporated by reference to Exhibit 10.25 to the Annual Report on Form 10-K filed by the Registrant on March 26, 2013)
10.7#
Form of Restricted Stock Unit Agreement under Amended and Restated 2012 Incentive Plan (incorporated by reference to Exhibit 10.9 of the Registrant’s Annual Report on Form 10-K filed by the Registrant on March 13, 2018)
10.8#
Form of Inducement Award Nonstatutory Stock Option Agreement (incorporated by reference to Exhibit 10.11 of the Registrant’s Annual Report on Form 10-K filed by the Registrant on March 13, 2018)
10.9#
Form of Inducement Award Restricted Stock Unit Agreement (incorporated by reference to Exhibit 4.3 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, filed by the Registrant with the Securities and Exchange Commission on November 7, 2018)
10.10#
Form of Indemnification Agreement between the Registrant and each director and executive officer (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Registrant on August 8, 2017)
10.11
Lease Agreement, dated April 15, 2014, between the Registrant and Intercontinental Fund III 117 Kendrick Street LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on April 18, 2014)
10.12
First Amendment of Lease Agreement, dated February 15, 2018, between the Registrant and 117 Kendrick DE, LLC, as successor-in-interest to Intercontinental Fund III 117 Kendrick Street, LLC (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Registrant on May 3, 2018)
10.13
Second Amendment of Lease Agreement, dated November 1, 2024, between the Registrant and 117 Kendrick DE, LLC (incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K filed by the Registrant on March 20, 2025)
10.14#
Employment Agreement, dated August 2, 2023, by and between Verastem, Inc. and Daniel W. Paterson (incorporated by reference to Exhibit 10.14 on Form 10-K filed by the Registrant with the Securities and Exchange Commission on March 20, 2025).
10.15†
License Agreement, dated July 11, 2012, by and between the Registrant and Pfizer Inc. (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by the Registrant on August 13, 2012)
10.16†
Letter Agreement, dated December 7, 2012, by and between the Registrant and Pfizer Inc. (incorporated by reference to Exhibit 10.31 to the Annual Report on Form 10-K filed by the Registrant on March 6, 2014)
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10.17†
License Agreement for CKI27, dated January 7, 2020, between Verastem, Inc. and Chugai Pharmaceutical Co., Ltd. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Registrant on May 7, 2020)
10.18†
First Amendment to License Agreement for CKI27, dated April 19, 2020 between Verastem, Inc. and Chugai Pharmaceutical, Co. Ltd. (incorporated by reference to Exhibit 10.18 on Form 10-K filed by the Registrant with the Securities and Exchange Commission on March 20, 2025).
10.19†
Second Amendment to License Agreement for CKI27, dated August 12, 2021, between Verastem, Inc. and Chugai Pharmaceutical Co. Ltd. (incorporated by reference to Exhibit 10.19 on Form 10-K filed by the Registrant with the Securities and Exchange Commission on March 20, 2025).
10.20†
Third Amendment to License Agreement for CKI27, dated May 10, 2023, between Verastem, Inc. and Chugai Pharmaceutical Co. Ltd. (incorporated by reference to Exhibit 10.20 on Form 10-K filed by the Registrant with the Securities and Exchange Commission on March 20, 2025).
10.21#
Form of Restricted Stock Unit Agreement under the 2012 Incentive Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by the Registrant on May 7, 2020)
10.22#
Form of Inducement Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed by the Registrant on May 7, 2020)
10.23#
Form of Incentive Stock Option Agreement under the 2012 Incentive Plan (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed by the Registrant on May 7, 2020)
10.24#
Form of Nonstatutory Stock Option Agreement under the 2012 Incentive Plan (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q filed by the Registrant on May 7, 2020)
10.25#
Form of Inducement Nonstatutory Stock Option Agreement (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed by the Registrant on May 7, 2020)
10.26#
Form of Incentive Stock Option Agreement under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by the Registrant on August 2, 2021)
10.27#
Form of Nonstatutory Stock Option Agreement (Employees) under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed by the Registrant on August 2, 2021)
10.28#
Form of Nonstatutory Stock Option Agreement (Non-Employees) under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed by the Registrant on August 2, 2021)
10.29#
Form of Restricted Stock Unit Agreement under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q filed by the Registrant on August 2, 2021)
10.30#
Form of Inducement Nonstatutory Stock Option Agreement (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed by the Registrant on August 2, 2021)
10.31#
Form of Inducement Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q filed by the Registrant on August 2, 2021)
10.32 †
Asset Purchase Agreement by and between Secura Bio, Inc. and Verastem, Inc. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Registrant on November 9, 2020)
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10.33
Loan and Security Agreement, dated as of March 25, 2022, among Verastem, Inc., as borrower, Oxford Finance LLC, as collateral agent and a lender, and Oxford Finance Credit Fund III LP, as a lender (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed by the Registrant with the Securities and Exchange Commission on March 27, 2022)
10.34#
Employment Agreement, dated October 24, 2023 by and between Verastem, Inc. and Daniel Calkins (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Registrant with the Securities and Exchange Commission on October 27, 2023).
10.35#
Employment Agreement dated January 14, 2025 by and between Verastem, Inc. and Matthew Ros. (incorporated by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the Securities and Exchange Commission on January 21, 2025)
10.36
First Amendment to Loan and Security Agreement, dated as of January 4, 2024, among Verastem, Inc., as borrower, Oxford Finance LLC, as collateral agent and a lender, and the other lenders party thereto. (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Registrant with the Securities and Exchange Commission on January 8, 2024)
10.37#
Amended and Restated 2018 Employee Stock Purchase Plan. (incorporated by reference to Exhibit 10.1 to Form 10-Q filed by the Registrant with the Securities and Exchange Commission on August 8, 2023)
10.38#
Amended and Restated 2012 Incentive Plan . (incorporated by reference to Exhibit 10.2 to Form 10-Q by the Registrant with the Securities and Exchange Commission on August 8, 2023)
10.39#
Amended and Restated 2021 Equity Incentive Plan. (incorporated by reference to Exhibit 10.3 to Form 10-Q by the Registrant with the Securities and Exchange Commission on August 8, 2023)
10.40
Exchange Agreement, dated November 4, 2022, by and among Verastem, Inc. and B iotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS LP and MSI BVF SPV, LLC (incorporated by reference to Exhibit 10.1 to for the form 8-K filed by the Registrant with the Securities and Exchange Commission on November 7, 2022)
10.41
Amended and Restated 2021 Equity Incentive Plan. (incorporated by reference to Exhibit 10.1 to Form 10-Q by the Registrant with the Securities and Exchange Commission on August 8, 2024)
10.42
Note Purchase Agreement, dated as of January 13 2025, by and among Verastem, Inc., RGCM SA LLC, Oberland Capital Management LLC and certain funds managed by Oberland Capital Management LLC. (incorporated by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the Securities and Exchange Commission on January 13, 2025)
10.43
Stock Purchase Agreement, dated as of January 13, 2025, among Verastem, Inc. and the investors party thereto. (incorporated by reference to Exhibit 10.2 to Form 8-K filed by the Registrant with the Securities and Exchange Commission on January 13, 2025)
10.44†
Collaboration and Option Agreement by and between Verastem, Inc. and GenFleet Therapeutics (Shanghai), Inc. dated as of August 24, 2023. (incorporated by reference to Exhibit 10.44 on Form 10-K filed by the Registrant with the Securities and Exchange Commission on March 20, 2025).
10.45#
Form of Restricted Stock Unit Agreement under the Amended and Restated 2021 Equity Incentive Plan. (incorporated by reference to Exhibit 10.45 on Form 10-K filed by the Registrant with the Securities and Exchange Commission on March 20, 2025).
10.46†
First Amendment to the License Agreement, dated April 3, 2025, by and between the Registrant and Pfizer Inc. (incorporated by reference to Exhibit 10.1 to Form 10-Q filed by the Registrant with the Securities and Exchange Commission on August 7, 2025)
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10.47†
Securities Purchase Agreement, dated April 25, 2025, by and among Verastem, Inc. and the investors party thereto (incorporated by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the Securities and Exchange Commission on April 25, 2025)
10.48#
Separation Agreement dated December 19, 2025 by and between Verastem, Inc. and Matthew Ros (incorporated by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the Securities and Exchange Commission on December 19, 2025)
10.49*
Amendment Number One to Note Purchase Agreement, dated as of October 31, 2025 by and among Verastem, Inc., RGCM SA LLC, Oberland Capital Management LLC and certain funds managed by Oberland Capital Management LLC.
10.50*
Amendment Number Two to Note Purchase Agreement, dated as of March 2, 2026 by and among Verastem, Inc., RGCM SA LLC, Oberland Capital Management LLC and certain funds managed by Oberland Capital Management LLC.
19.1
Insider Trading Policy (incorporated by reference to Exhibit 19.1 on Form 10-K filed by the Registrant with the Securities and Exchange Commission on March 20, 2025).
21.1*
Subsidiaries of the Registrant
23.1*
Consent of Ernst & Young LLP
31.1*
Certification of Principal Executive Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial and Accounting Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section , as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1
Policy for Recoupment of Incentive Compensation (incorporated by reference to Exhibit 97.1 to Annual Report on Form 10-K filed by the Registrant with the Securities and Exchange Commission on March 14, 2024)
99.1*
Press Release issued by Verastem, Inc. on March 4, 2026
101.INS*
Inline XBRL Instance Document
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
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*
Filed herewith.
†
Certain confidential information contained in this exhibit has been omitted because it (i) is not material and (ii) is of the type that the Company treats as private or confidential. Confidential materials omitted will be filed separately with the SEC upon request.
#
Management contract or compensatory plan, contract or agreement.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 4th day of March 2026.
VERASTEM, INC.
By:
/s/ Daniel W. Paterson
Daniel W. Paterson
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Daniel W. Paterson
Daniel W. Paterson
President, Chief Executive Officer and Director
(Principal Executive Officer)
March 4, 2026
/s/ Daniel Calkins
Daniel Calkins
Chief Financial Officer
(Principal Financial and Accounting officer)
March 4, 2026
/s/ P AUL B UNN, M.D.
Paul Bunn, M.D.
Director
March 4, 2026
/s/ Robert Gagnon
Robert Gagnon
Director
March 4, 2026
/s/ Anil Kapur
Anil Kapur
Director
March 4, 2026
/s/ Michael Kauffman, M.D.,Ph.D.
Michael Kauffman, M.D., P h .D.
Director
March 4, 2026
/s/ J OHN J OHNSON
John Johnson
Director
March 4, 2026
/s/ M ICHELLE R OBERTSON
Michelle Robertson
Director
March 4, 2026
/s/ Eric Rowinsky, M.D.
Eric Rowinsky, M.D.
Director
March 4, 2026
/s/ B RIAN S TUGLIK
Brian Stuglik
Director
March 4, 2026
/s/ Karin Tollefson
Karin Tollefson
Director
March 4, 2026
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Verastem, Inc.
CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS
Report of Independent Registered Public Accounting Firm
F-2
Consolidated Financial Statements
Consolidated Balance Sheets
F-4
Consolidated Statements of Operations and Comprehensive Loss
F-5
Consolidated Statements of Convertible Preferred Stock and Stockholders’ (Deficit) Equity
F-6
Consolidated Statements of Cash Flows
F-7
Notes to Consolidated Financial Statements
F-8
F-1
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Verastem, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Verastem, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ (deficit) equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accrued and Prepaid Clinical Trial Expense
Description of the Matter
As summarized in Note 7 to the consolidated financial statements, accrued clinical trial expenses were $14.3 million at December 31, 2025, which included the estimated obligation for clinical trial expenses related to contract research organizations, based upon estimates of costs incurred as of December 31, 2025, but not paid as of that date. In addition, total prepaid expenses and other current assets were $7.6 million at December 31, 2025, which included amounts that were paid in advance of services incurred pursuant to the agreements with contract research organizations. As discussed in Note 2 to the consolidated financial statements, the Company
F-2
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records clinical trial expenses as incurred. The Company’s determination of costs incurred for certain development activities, such as clinical trial expenses, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, and information provided to the Company by its vendor on their actual costs incurred or level of effort expended. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the consolidated balance sheets as prepaid expenses and other current assets or accrued expenses.
How We Addressed the Matter in Our Audit
To test the accrued and prepaid clinical trial expenses related to contract research organizations, our audit procedures included, among others, reviewing agreements with contract research organizations to corroborate key financial and contractual terms, and testing the accuracy and completeness of the underlying data used in the accrued and prepaid expense computations. We also evaluated management’s estimates of the progress of the clinical trials by making direct inquiries of the Company’s research and development personnel that oversee the clinical trial activities and confirming information directly with the contract research organizations. In addition, we performed analytical procedures over accrued and prepaid clinical trial expenses by clinical trial, throughout the period subject to audit, and compared subsequent invoices received from contract research organizations to amounts accrued.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2011.
Boston, Massachusetts
March 4, 2026
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Table of Contents
Verastem, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
December 31,
2025
2024
Assets
Current assets:
Cash and cash equivalents
$
204,990
$
88,818
Accounts receivable, net
8,813
—
Inventory
1,833
—
Grant receivable
200
200
Prepaid expenses and other current assets
7,577
5,943
Total current assets
223,413
94,961
Property and equipment, net
—
32
Right-of-use asset, net
491
1,405
Restricted cash
—
241
Intangible assets, net
16,426
—
Other assets
6,112
4,899
Total assets
$
246,442
$
101,538
Liabilities, convertible preferred stock and stockholders’ (deficit) equity
Current liabilities:
Accounts payable
$
12,448
$
4,026
Accrued expenses, short-term
53,981
25,952
Vendor financing arrangement, short-term
5,304
—
Lease liability, short-term
535
995
Total current liabilities
72,268
30,973
Non-current liabilities:
Long-term debt
76,330
40,724
Vendor financing arrangement, long-term
5,000
—
Lease liability, long-term
—
535
Warrant liability
35,647
58,199
Total liabilities
189,245
130,431
Convertible preferred stock:
Series B Convertible Preferred Stock, $ 0.0001 par value; 944 shares designated at December 31, 2025 and December 31, 2024, respectively; 0 shares issued and outstanding at December 31, 2025 and December 31, 2024 , respectively
—
—
Stockholders’ equity:
Preferred stock, $ 0.0001 par value; 5,000 shares authorized:
Series A Convertible Preferred Stock, $ 0.0001 par value; 0 shares and 1,000 shares designated at December 31, 2025 and December 31, 2024, respectively, 0 shares and 1,000 shares issued and outstanding at December 31, 2025 and at December 31, 2024, respectively
—
—
Common stock, $ 0.0001 par value; 300,000 shares authorized, 77,740 and 44,784 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively
8
4
Additional paid-in capital
1,216,958
926,630
Accumulated other comprehensive income
5,229
—
Accumulated deficit
( 1,164,998 )
( 955,527 )
Total stockholders’ equity (deficit)
57,197
( 28,893 )
Total liabilities, convertible preferred stock and stockholders’ equity
$
246,442
$
101,538
See accompanying notes to the consolidated financial statements.
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Table of Contents
Verastem, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share amounts)
Year Ended December 31,
2025
2024
2023
Revenue:
Product revenue, net
$
30,914
$
—
$
—
Sale of COPIKTRA license and related assets
—
10,000
—
Total revenue
30,914
10,000
—
Operating expenses:
Cost of sales - product
4,600
—
—
Cost of sales - intangible amortization
698
—
—
Research and development
114,599
81,334
61,356
Selling, general and administrative
81,146
43,622
30,728
Total operating expenses
201,043
124,956
92,084
Loss from operations
( 170,129 )
( 114,956 )
( 92,084 )
Other expense
( 203 )
( 123 )
( 109 )
Interest income
4,068
4,149
6,214
Interest expense
( 1,138 )
( 4,562 )
( 4,139 )
Loss on debt extinguishment
( 1,826 )
—
—
Change in fair value of preferred stock tranche liability
—
4,189
2,751
Change in fair value of warrant liability
( 27,492 )
( 19,149 )
—
Change in fair value of Notes
( 12,751 )
—
—
Net loss before taxes
( 209,471 )
( 130,452 )
( 87,367 )
Income tax expense
—
( 185 )
—
Net loss
$
( 209,471 )
$
( 130,637 )
$
( 87,367 )
Net loss per share—basic and diluted
$
( 3.02 )
$
( 3.66 )
$
( 3.96 )
Weighted average common shares outstanding used in computing net loss per share—basic and diluted
69,309
35,713
22,054
Net loss
$
( 209,471 )
$
( 130,637 )
$
( 87,367 )
Unrealized gain (loss) on available-for-sale securities
—
( 13 )
13
Change in fair value of Notes attributable to instrument specific credit risk
5,229
—
—
Comprehensive loss
$
( 204,242 )
$
( 130,650 )
$
( 87,354 )
See accompanying notes to the consolidated financial statements.
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Verastem, Inc.
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY
(in thousands, except share data)
Accumulated
Total
Additional
other
stockholders'
Series B Convertible Preferred Stock
Series A Convertible Preferred Stock
Common stock
paid-in
comprehensive
Accumulated
equity
Shares
Amount
Shares
Amount
Shares
Amount
capital
income
deficit
(deficit)
Balance at December 31, 2022
—
$
—
1,000,000
$
—
16,711,761
$
2
$
784,912
$
—
$
( 737,523 )
$
47,391
Net loss
—
—
—
—
—
—
—
—
( 87,367 )
( 87,367 )
Unrealized gain on available-for-sale marketable securities
—
—
—
—
—
—
—
13
—
13
Issuance of Series B Convertible Preferred Stock, net of issuance costs of $ 1,901 and preferred stock tranche liability of $ 6,940
1,200,000
21,159
—
—
—
—
—
—
—
—
Issuance of common stock, and pre-funded warrants, net of issuance cost of $ 6,351
—
—
—
—
8,489,409
1
91,419
—
—
91,420
Issuance of common stock under Employee Stock Purchase Plan
—
—
—
—
14,270
—
57
—
—
57
Issuance of common stock resulting from vesting of restricted stock units
—
—
—
—
65,710
—
—
—
—
—
Stock-based compensation expense
—
—
—
—
5,860
—
—
5,860
Balance at December 31, 2023
1,200,000
$
21,159
1,000,000
$
—
25,281,150
$
3
$
882,248
$
13
$
( 824,890 )
$
57,374
Net loss
—
—
—
—
—
—
—
—
( 130,637 )
( 130,637 )
Unrealized loss on available-for-sale marketable securities
—
—
—
—
—
—
—
( 13 )
—
( 13 )
Issuance of common stock and pre-funded warrants, net of issuance costs of $ 1,179
—
—
—
—
13,333,334
1
14,220
—
—
14,221
Conversion of Series B Convertible Preferred Stock to common stock
( 1,200,000 )
( 21,159 )
—
—
4,236,568
—
21,159
—
—
21,159
Issuance of common stock upon exercise of pre-funded warrants
—
—
—
—
1,538,201
—
—
—
—
—
Issuance of common stock upon exercise of warrants
—
—
—
—
250,000
—
1,420
—
—
1,420
Issuance of common stock resulting from exercise of stock options
—
—
—
—
21,978
—
172
—
—
172
Issuance of common stock under Employee Stock Purchase Plan
—
—
—
—
15,231
—
69
—
—
69
Issuance of common stock resulting from vesting of restricted stock units
—
—
—
—
107,888
—
—
—
—
—
Stock-based compensation expense
—
—
—
—
—
—
7,342
—
—
7,342
Balance at December 31, 2024
—
$
—
1,000,000
$
—
44,784,350
$
4
$
926,630
$
—
$
( 955,527 )
$
( 28,893 )
Net Loss
—
—
—
—
—
—
—
—
( 209,471 )
( 209,471 )
Change in fair value of long-term debt attributable to instrument specific credit risk
—
—
—
—
—
—
—
5,229
—
5,229
Stock-based compensation expense
—
—
—
—
—
—
9,404
—
—
9,404
Issuance of common stock under Employee Stock Purchase Plan
—
—
—
—
16,341
—
51
—
—
51
Issuance of common stock resulting from vesting of restricted stock units
—
—
—
—
687,093
—
—
—
—
—
Issuance of common stock upon exercise of warrants
—
—
—
—
9,654,168
1
83,835
—
—
83,836
Issuance of common stock upon exercise of options
—
—
—
—
12,674
—
65
—
—
65
Issuance of common stock upon conversion of Series A Preferred Stock
—
—
( 1,000,000 )
—
833,332
—
—
—
—
—
Issuance of common stock upon exercise of pre-funded warrants
—
—
—
—
2,499,665
—
—
—
—
—
Issuance of common stock resulting from at-the-market transactions
—
—
—
—
4,000,000
1
22,736
—
—
22,737
Issuance of common stock, net of issuance costs of $ 74 K
—
—
—
—
1,416,939
—
7,426
—
—
7,426
2025 Private Placement issuance of common stock, and pre-funded warrants, net of issuance cost of $ 5,072
—
—
—
—
3,429,287
1
69,932
—
—
69,933
November 2025 Public Offering issuance of common stock, and pre-funded warrants, net of issuance cost of $ 6,617
—
—
—
—
10,405,863
1
96,879
—
—
96,880
Balance at December 31, 2025
—
$
—
—
$
—
77,739,712
$
8
$
1,216,958
$
5,229
$
( 1,164,998 )
$
57,197
See accompanying notes to the consolidated financial statements.
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Table of Contents
Verastem, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2025
2024
2023
Operating activities
Net loss
$
( 209,471 )
$
( 130,637 )
$
( 87,367 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation
30
26
62
Amortization of acquired intangible assets
698
—
—
Non-cash operating lease cost
( 81 )
( 175 )
( 175 )
Stock-based compensation expense
9,404
7,342
5,860
Amortization of deferred financing costs, debt discounts and premiums and discounts on available-for-sale marketable securities
29
( 5 )
( 1,132 )
Change in fair value of preferred stock tranche liability
—
( 4,189 )
( 2,751 )
Change in fair value of warrant liability
27,492
19,149
—
Non-cash change in fair value of Notes
6,560
—
—
Loss on debt extinguishment
1,826
—
—
Changes in operating assets and liabilities:
Accounts receivable, net
( 8,813 )
—
31
Grant receivable
—
( 200 )
—
Inventory
( 1,833 )
—
—
Prepaid expenses, other current assets and other assets
( 2,605 )
( 596 )
( 5,826 )
Accounts payable
8,422
( 3,158 )
2,283
Accrued expenses and other liabilities
30,833
7,999
2,938
Deferred liabilities
—
( 327 )
( 383 )
Net cash used in operating activities
( 137,509 )
( 104,771 )
( 86,460 )
Investing activities
Purchases of property and equipment
—
( 28 )
—
Purchases of intangible assets
( 9,624 )
—
—
Purchases of investments
—
—
( 96,447 )
Maturities of investments
—
60,000
52,000
Net cash (used in) provided by investing activities
( 9,624 )
59,972
( 44,447 )
Financing activities
Proceeds from the issuance of common stock and pre-funded warrants, net
196,976
14,221
91,420
Proceeds from the issuance of warrants
—
39,595
—
Proceeds from issuance of Series B Convertible Preferred Stock, net
—
—
28,099
Proceeds from exercise of warrants
33,792
875
—
Proceeds from long-term debt
75,000
—
14,918
Repayment of long-term debt
( 42,579 )
—
—
Payments for loan amendment
—
( 150 )
—
Repayment of 2018 Notes
—
—
( 300 )
Proceeds from insurance premium financing
1,180
1,298
1,430
Payments on insurance premium financing
( 1,180 )
( 1,298 )
( 1,430 )
Proceeds from the exercise of stock options and employee stock purchase program
116
241
57
Net cash provided by financing activities
263,305
54,782
134,194
Increase in cash, cash equivalents and restricted cash
116,172
9,983
3,287
Cash, cash equivalents and restricted cash at beginning of period
89,059
79,076
75,789
Cash, cash equivalents and restricted cash at end of period
$
205,231
$
89,059
$
79,076
Supplemental disclosure
Cash paid for interest
$
6,364
$
3,774
$
3,361
Cash paid for income tax expense
$
185
$
—
$
—
Supplemental disclosure of non-cash investing and financing activities
Issuance of preferred stock tranche liability
$
—
$
—
$
6,940
Purchases of property and equipment included in accounts payable and accrued expenses
$
—
$
—
$
7
Issuance costs included in accounts payable and accrued expenses
$
—
$
32
$
—
Conversion of Series B Convertible Preferred Stock to common stock
$
—
$
21,159
$
—
Conversion of warrant liability into additional paid-in capital upon warrant exercise
$
50,044
$
545
$
—
Right of use asset obtained in exchange for operating lease liability
$
—
$
988
$
—
Purchases of intangible assets in accounts payable and accrued expenses
$
7,500
$
—
$
—
See accompanying notes to the consolidated financial statements.
F-7
Table of Contents
1. Nature of business
Verastem, Inc. (the “Company”) is a biopharmaceutical company committed to the development and commercialization of new medicines to improve the lives of patients diagnosed with challenging RAS/MAPK pathway-driven cancers. The Company markets AVMAPKI FAKZYNJA CO-PACK (avutometinib capsules; defactinib tablets) in the U.S., the first treatment specifically FDA-approved for adults with KRAS-mutated recurrent LGSOC who have received prior systemic therapy. AVMAPKI FAKZYNJA CO-PACK received accelerated approval in the U.S. on May 8, 2025.
The Company’s pipeline is focused on novel small molecule drugs developed both as monotherapy and in combination, which inhibit critical signaling pathways in cancer that promote cancer cell survival and tumor growth, including targeting RAS directly with KRAS G12D inhibition, targeting the pathway downstream with RAF/MEK inhibition, and targeting the parallel pathway that drives resistance with FAK inhibition. The Company’s focus is to expeditiously develop and deliver transformative therapies that truly change outcomes for people living with RAS/MAPK pathway-driven cancers.
The consolidated financial statements include the accounts of Verastem Securities Company and Verastem Europe GmbH, wholly-owned subsidiaries of the Company. All financial information presented has been consolidated and includes the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The Company is subject to the risks associated with other life science companies, including, but not limited to, possible failure of preclinical testing or clinical trials, competitors developing new technological innovations, commercial success of the Company’s marketed product AVMAPKI FAKZYNJA CO-PACK, inability to obtain marketing approval of the Company’s product candidates, market acceptance and commercial success of the Company’s product candidates following receipt of regulatory approval, and, protection of proprietary technology and the continued ability to obtain adequate financing to fund the Company’s future operations. Until such time, if ever, that the Company can generate substantial product revenues or achieve profitability, it may need to raise additional capital.
As of December 31, 2025, the Company had cash and cash equivalents of $ 205.0 million and an additional $ 29.4 million in proceeds in January 2026 from the exercise of Warrants (see Note 20. Subsequent Events ). In accordance with applicable accounting standards, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after the date of the issuance of these consolidated financial statements. The Company expects its existing cash resources, including the proceeds from the exercise of Warrants in January 2026, along with revenue it expects to generate from sales of AVMAPKI FAKZYNJA CO-PACK and the availability to draw down $ 25.0 million under the Second Purchase (defined herein) pursuant to the Company’s Note Purchase Agreement (defined herein) (see Note 8. Long-term debt ) will be sufficient to fund its planned operations through 12 months from the date of issuance of these consolidated financial statements.
As of December 31, 2024, the Company had concluded that there was substantial doubt about its ability to continue as a going concern primarily due to anticipated operating losses for the foreseeable future since the Company did not yet have regulatory approval to sell any of its product candidates, and the Company continued to incur operating costs to execute its strategic plan, including costs related to research and development of its product candidates and commercial readiness activities. The Company’s increased cash and cash equivalents position as of December 31, 2025, forecasted net product revenue following regulatory approval of AVMAPKI FAKZYNJA CO-PACK on May 8, 2025, and ability to draw down on the Second Purchase pursuant to the Note Purchase Agreement, alleviated the substantial doubt.
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Table of Contents
The Company expects to finance its operations with its existing cash and cash equivalents, through revenue generated from sales of AVMAPKI FAKZYNJA CO-PACK, through potential future milestones and royalties received pursuant to the Company’s Asset Purchase Agreement (“Secura APA”) with Secura Bio, Inc. (“Secura”), note drawdowns pursuant to the Note Purchase Agreement, or through other strategic financing opportunities that could include, but are not limited to collaboration agreements, future offerings of its equity, or the incurrence of debt. However, there is no guarantee that any of these strategic or financing opportunities will be executed or executed on favorable terms, and some could be dilutive to existing stockholders. If the Company fails to obtain additional future capital or generate sufficient net product revenue, it may be unable to complete its planned preclinical studies and clinical trials and obtain approval of certain investigational product candidates from the U.S. Food and Drug Administration (“FDA”) or foreign regulatory authorities.
Reverse Stock Split
On May 30, 2023, the Company filed a Certificate of Amendment to the Company’s Restated Certificate of Incorporation, as amended to date, with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s issued and outstanding common stock, par value $ 0.0001 at a ratio of 1-for-12 (the “Reverse Stock Split”), as authorized at the Company’s 2023 annual meeting of stockholders held on May 15, 2023. The Company effected the Reverse Stock Split on May 31, 2023. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise were entitled to a fractional share of common stock were entitled to receive a price equal to the closing price of the common stock on the Nasdaq Capital Market on the date immediately preceding the Reverse Stock Split, as adjusted by the ratio of one share of common stock for every 12 shares of common stock, multiplied by the applicable fraction of a share. The number of shares of common stock that the Company is authorized to issue remains at 300,000,000 shares and the par value of its common stock remains unchanged at $ 0.0001 per share.
The Company has retroactively restated the share and per share amounts in the consolidated financial statements for the year ended December 31, 2023, to give retroactive effect to the Reverse Stock Split. The consolidated statements of convertible preferred stock and stockholders’ equity reflect the impact of the Reverse Stock Split by reclassifying from “common stock” to “additional paid-in capital” in an amount equal to the par value of the decreased shares resulting from the Reverse Stock Split the year ended December 31, 2023.
2. Significant accounting policies
Basis of presentation
The accompanying financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) under the assumption that the Company will continue as a going concern for the next 12 months. Accordingly, they do not include any adjustments that might result from the uncertainty related to the Company’s ability to continue as a going concern.
Use of estimates
The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including but not limited to estimates related to revenue recognition, accrued and prepaid clinical trial expense and other general accruals, stock-based compensation expense, long-term debt, and its warrant liability. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable. Actual results could differ from such estimates.
Segment and geographic information
Operating segments are defined as components of an enterprise about which separate discrete information is available and regularly reviewed by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in
F-9
Table of Contents
one operating segment, which is the business of researching, developing and commercializing drugs for the treatment of patients with cancer. All material long-lived assets of the Company reside in the U.S.
Proceeds from grants
In May 2022, the Company was awarded the “Therapeutic Accelerator Award” grant from Pancreatic Cancer Network (“PanCAN”) for up to $ 3.8 million (the “ PanCAN Grant ”). In August 2022, PanCAN agreed to provide the Company with an additional $ 0.5 million for the collection and analysis of patient samples. The grant is supporting a Phase 1b/2 clinical trial of GEMZAR (gemcitabine) and ABRAXANE (Nab-paclitaxel) in combination with avutometinib and defactinib entitled RAMP 205. The RAMP 205 trial is evaluating whether combining avutometinib (to target KRAS mutant, which is found in more than 90% of pancreatic adenocarcinomas), and defactinib (to reduce stromal density and adaptive resistance to avutometinib) to the standard GEMZAR/ABRAXANE regimen improves outcomes for patients with such pancreatic cancers. The Company recognizes grants as contra research and development expense in the consolidated statement of operations and comprehensive loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate. Eligible expenses incurred in excess of grant payments received up to the total amount of the PanCAN Grant are recorded as a grant receivable. Through December 31, 2025, the Company has received $ 4.1 million of cash proceeds that were initially recorded as deferred liabilities on the balance sheet. The Company recorded $ 0.0 million, $ 2.0 million and $ 2.0 million of the proceeds as a reduction of research and development expense during the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025, the Company had $ 0.2 million as a grant receivable and no deferred liabilities related to the PanCAN Grant recognized on the consolidated balance sheet.
Cash, cash equivalents and restricted cash
The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist of a U.S. Government money market funds and corporate bonds and commercial paper of publicly traded companies. Cash equivalents are reported at fair value. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):
December 31, 2025
December 31, 2024
Cash and cash equivalents
$
204,990
$
88,818
Restricted cash
241
241
Total cash, cash equivalents and restricted cash
$
205,231
$
89,059
Amounts included in restricted cash as of December 31, 2025 and December 31, 2024 represent cash held to collateralize outstanding letters of credit provided as a security deposit for the Company’s office space located in Needham, Massachusetts in the amount of $ 0.2 million. The letters of credit are included in prepaid expenses and other current assets on the consolidated balance sheet as of December 31, 2025, and in non-current restricted cash as of December 31, 2024.
There were no realized gains or losses on cash equivalents for the years ended December 31, 2025, 2024 or 2023. Accrued interest receivable is excluded from the amortized cost and estimated fair value of the Company’s cash equivalents. Accrued interest receivable of $ 0.2 million is presented within prepaid expenses and other current assets on the consolidated balance sheets on December 31, 2025. There was no accrued interest receivable as of December
F-10
Table of Contents
31, 2024. There were no debt securities in an unrealized loss position as of December 31, 2025, or December 31, 2024.
Cash, cash equivalents and restricted cash consist of the following (in thousands):
December 31, 2025
Gross
Gross
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
Cash, cash equivalents & restricted cash:
Cash and money market accounts
$
205,231
$
—
$
—
$
205,231
Total cash, cash equivalents & restricted cash
$
205,231
$
—
$
—
$
205,231
December 31, 2024
Gross
Gross
Amortized
Unrealized
Unrealized
Fair
Cost
Gains
Losses
Value
Cash, cash equivalents & restricted cash:
Cash and money market accounts
$
89,059
$
—
$
—
$
89,059
Total cash, cash equivalents & restricted cash
$
89,059
$
—
$
—
$
89,059
Fair value of financial instruments
The Company determines the fair value of its financial instruments based upon the fair value hierarchy, which prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs:
Level 1 inputs
Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.
Level 2 inputs
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs
Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.
Items measured at fair value on a recurring basis
The following table presents information about the Company’s financial instruments that are measured at fair value on a recurring basis (in thousands)
December 31, 2025
Description
Total
Level 1
Level 2
Level 3
Financial assets
Cash equivalents
$
106,830
$
106,830
$
—
$
—
Total financial assets
$
106,830
$
106,830
$
—
$
—
Warrant liability
$
35,647
$
—
$
—
$
35,647
Notes
$
76,330
$
—
$
—
$
76,330
Total financial liabilities
$
111,977
$
—
$
—
$
111,977
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December 31, 2024
Description
Total
Level 1
Level 2
Level 3
Financial assets
Cash equivalents
$
63,304
$
63,304
$
—
$
—
Total financial assets
$
63,304
$
63,304
$
—
$
—
Warrant liability
$
58,199
$
—
$
—
$
58,199
Total financial liabilities
$
58,199
$
—
$
—
$
58,199
The investments and cash equivalents have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validates the prices provided by third party pricing services by reviewing their pricing methods and matrices, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of December 31, 2025 and 2024.
Warrant liability
A warrant liability was recorded in connection with the July 2024 Offering (defined herein) (see Note 10. Capital Stock ). The fair value measurement of the warrant liability is classified as Level 3 under the fair value hierarchy. The fair value of the warrant liability at December 31, 2025 and December 31, 2024, was determined using the Black-Scholes valuation model. The inputs to the Black-Scholes valuation model include the risk-free rate, stock price volatility, expected dividends and remaining term. Significant increases or decreases in any of those inputs in isolation could result in a significantly lower or higher fair value measurement.
Below are the inputs used to value the warrant liability at December 31, 2025 and December 31, 2024:
December 31, 2025
December 31, 2024
Risk-free interest rate
3.74
%
4.17
%
Volatility
53
%
137
%
Dividend yield
—
—
Remaining term (years)
0.1
1.1
The following table represents a reconciliation of the warrant liability (in thousands):
December 31, 2024
$
58,199
Fair value of warrants exercised
( 50,044 )
Fair value adjustment
27,492
December 31, 2025
$
35,647
Note Purchase Agreement
The fair value of the Notes pursuant to the Note Purchase Agreement represents the present value of estimated future payments, including interest, principal, Repayment Amount, and Revenue Participation Payments (each as defined in the Note Purchase Agreement) (see Note 8. Long-term debt ) . The fair value measurement is based on significant Level 3 unobservable inputs such as the probability and timing of Revenue Participation Payments, Repayment Amount, and the discount rate. The Company determined the fair value of the Notes utilizing a discounted cash flow model of estimated future payments including interest, principal, Repayment Amount and Revenue Participation Payments utilizing a discount rate calculated as the term matched risk-free rate plus credit spread. At January 13, 2025, the Company utilized a discount rate between 11.9 %- 12.4 % and at December 31, 2025, the Company utilized a discount rate between 12.6 %- 13.0 %. The fair value of the Notes at December 31, 2025 was determined to be $ 76.3 million which differed from the contractual principal amount of $ 75.0 million by $ 1.3
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million. Significant increases or decreases in any of these inputs in isolation could result in a significantly lower or higher fair value measurement.
Oxford Loan Agreement
The fair value of the Company’s Term Loans (as defined herein) pursuant to the Loan Agreement (as defined herein) (see Note 10. Long-term debt ) was determined using a discounted cash flow analysis with current applicable rates for similar instruments as of the consolidated balance sheet dates. The Company estimated that the fair value of its Term Loans was approximately $ 41.1 million at December 31, 2024 which differed from its carrying value of approximately $ 40.7 million. The fair value of the Company’s long-term debt was determined using Level 3 inputs.
Concentrations of credit risk and off-balance sheet risk
Cash and cash equivalents and trade accounts receivable are financial instruments that potentially subject the Company to concentrations of credit risk. The Company mitigates this risk by maintaining its cash and cash equivalents with high quality, accredited financial institutions. The management of the Company’s investments is not discretionary on the part of these financial institutions. As of December 31, 2025, the Company’s cash, cash equivalents were deposited at four financial institutions and it has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.
As of December 31, 2025 there were five customers that cumulatively made up 100 % of the Company’s trade accounts receivable balance and two customers who cumulatively made up more than 60 % of the Company’s trade accounts receivable balance.
For the year ended December 31, 2025, there were two customers who each individually accounted for greater than 10% of the Company’s total revenues, for a total of $ 27.4 million. For the year ended December 31, 2024, there was one customer, Secura, who individually accounted for all of the Company’s revenue. Refer to Note 16. License, collaboration, and commercial agreements for a detailed discussion of the Secura APA.
Property and equipment
Property and equipment consist of laboratory equipment, office furniture, computer equipment and leasehold improvements. Expenditures for repairs and maintenance are recorded to expense as incurred, whereas major betterments are capitalized as additions to property and equipment. Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives of the assets:
Laboratory equipment
5 years
Furniture
5 years
Computer equipment
3 years
Leasehold improvements
Lesser of useful life or life of lease
Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized.
The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying value of assets may not be recoverable. Recoverability is measured by comparison of the asset’s book value to future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value, which is measured based on the projected discounted future net cash flows arising from the assets. No impairment losses have been recorded through December 31, 2025.
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Cloud Computing Implementation Costs
The Company incurs costs to implement cloud computing arrangements that are hosted by third-party vendors. In accordance with Accounting Standard Codification (“ASC”) 350-40, Goodwill and Other, Internal-Use Software, for cloud computing arrangements that meet the definition of a service contract, the Company capitalizes qualifying implementation costs incurred during the application development stage as a component of prepaid expenses and other current assets and other assets. Capitalization of these costs concludes once the project is substantially complete, and the software is ready for the Company's intended use. Once available for its intended use, the capitalized costs are amortized on a straight-line basis over the term of the associated hosting arrangement, and are included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss. Costs related to data conversion, overhead, general and administrative activities, and training are expensed as incurred. Post-configuration training and maintenance costs will be expensed as incurred.
As of December 31, 2025, prepaid expenses and other current assets, and other long-term assets, included approximately $ 0.4 million each of capitalized implementation costs on the consolidated balance sheet. For the year ended December 31, 2025, the Company recorded amortization expense associated with cloud computing implementation costs of approximately $ 0.3 million recorded within selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss.
Research and development costs
The Company expenses research and development costs to operations as incurred. Research and development expenses consist of:
● employee-related expenses, including salaries, benefits, travel and stock-based compensation expense;
● external research and development expenses incurred under arrangements with third parties, such as contract research organizations, clinical trial sites, manufacturing organizations and consultants, including the scientific advisory board;
● license fees; and
● facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, and laboratory supplies.
Costs for certain development activities, such as clinical trial expenses, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, and information provided to the Company by its vendor on their actual costs incurred or level of effort expended. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the consolidated balance sheets as prepaid expenses and other current assets or accrued expenses.
Stock-based compensation
For service-based equity awards, the Company recognizes stock-based compensation expense for stock options, and restricted stock units (“RSUs”) issued to employees, directors, and consultants based on the grant date fair value of the awards on a straight-line basis over the requisite service period, which typically is the vest period. The Company recognized stock-based compensation for shares issued to employees under the Company’s employee stock purchase plan (“ESPP”) plan.
The Company has granted performance-based RSUs and stock options with terms that allow the recipients to vest in a specific number of shares based upon the achievement of performance-based milestones as specified in the grants. Stock-based compensation expense associated with these performance-based RSUs and stock options is recognized if the performance condition is considered probable of achievement using the Company’s best estimates of the time to vesting for the achievement of the performance-based milestones. Awards subject to performance-based vesting requirements are expensed utilizing an accelerated attribution model if achievement of the performance criteria is determined to be probable.
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The grant date fair value of stock options is estimated using the Black-Scholes option pricing model that takes into account the fair value of its common stock, the exercise price, the expected life of the option, the expected volatility of its common stock, expected dividends on its common stock, and the risk-free interest rate over the expected life of the option. The Company applies the simplified method described in the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) Topic 14.D.2 to calculate the expected term as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted to employees. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among its population. The Company has not paid and do not anticipate paying cash dividends on the Company’s shares of common stock; therefore, the expected dividend yield is assumed to be zero. The computation of expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The Company accounts for forfeitures as they occur.
The Company issues shares under the Company’s ESPP to employees. Stock-based compensation expense for discounted purchases under the ESPP is measured using the Black-Scholes model to compute the fair value of the lookback provision plus the purchase discount and is recognized as compensation expense over the offering period .
Leases
Leases are accounted for in accordance with ASC Topic 842, Leases (“ASC 842”). This standard requires lessees to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases.
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances within the arrangement. A lease is identified where an arrangement conveys the right to control the use of identified property, plant, and equipment for a period of time in exchange for consideration. Leases which are identified within the scope of ASC 842 and which have a term greater than one year are recognized on the Company’s consolidated balance sheets as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize leases with terms of one year or less on its consolidated balance sheets. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates to calculate the present value of lease payments. Incremental borrowing rates are the rates the Company incurs to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
In accordance with ASC 842, components of a lease are split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.). The fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components. Although separation of lease and non-lease components is required, certain practical expedients are available. Entities may elect the practical expedient to not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. The Company has elected to account for the lease and non-lease components of each of its operating leases as a single lease component and allocate all of the contract consideration to the lease component only. The lease component results in an operating right-of-use asset being recorded on the consolidated balance sheets and amortized on a straight-line basis as lease expense.
Revenue recognition
The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). To determine revenue recognition for contracts with its customers, the Company performs the following five step assessment: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the
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transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception and once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines which goods and services are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
P roduct Revenue, Net - The Company sells AVMAPKI FAKZYNJA CO-PACK to a limited number of specialty pharmacies and specialty distributors in the United States. The specialty pharmacies dispense AVMAPKI FAKZYNJA CO-PACK directly to patients while the specialty distributors resell AVMAPKI FAKZYNJA CO-PACK to healthcare entities who then resell AVMAPKI FAKZYNJA CO-PACK to patients. In addition to distribution agreements with specialty distributors, the Company also enters into arrangements with (1) certain government agencies and various private organizations (“Third-Party Purchasers”), which may provide for chargebacks or discounts with respect to the purchase of AVMAPKI FAKZYNJA CO-PACK, and (2) Medicare and Medicaid, which may provide for certain rebates with respect to their reimbursement of AVMAPKI FAKZYNJA CO-PACK.
The Company recognizes revenue on sales of AVMAPKI FAKZYNJA CO-PACK when a customer obtains control of the product, which occurs at a specific point in time (typically upon delivery). Product revenues are recorded at the wholesale acquisition costs, net of applicable reserves for variable consideration. Components of variable consideration include trade discounts and allowances, Third-Party Payer chargebacks and discounts, government rebates, product returns, other patient focused allowances, such as voluntary co-pay assistance, benefits verification, and other patient support programs that are offered within contracts between the Company and customers, payors, and other indirect customers relating to the Company’s sale of AVMAPKI FAKZYNJA CO-PACK. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales, and are classified as reductions of accounts receivable or a current liability. These estimates take into consideration a range of possible outcomes based upon relevant factors such as, customer contract terms, information received from third parties regarding the anticipated payor mix for AVMAPKI FAKZYNJA CO-PACK, known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled with respect to sales made.
The amount of variable consideration included within a transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under contracts will not occur in a future period. The Company’s analyses contemplate the application of the constraint in accordance with Financial Accounting Standards Board (the “FASB”) Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). For the twelve months ended December 31, 2025, the Company determined a material reversal of revenue would not occur in a future period for the estimates detailed below and, therefore, transaction prices would not be reduced further. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.
Trade Discounts and Allowances: The Company generally provides customers with invoice discounts on sales of AVMAPKI FAKZYNJA CO-PACK for prompt payment and other discounts, which are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, the Company compensates its specialty pharmacy and specialty distributor customers for sales order management, data, distribution, and certain other services. The Company has determined such services are not distinct from the Company’s sale of AVMAPKI FAKZYNJA CO-PACK to the specialty pharmacy and specialty distributor customers and, therefore, these payments have also been recorded as a reduction of revenue within the consolidated statements of operations and comprehensive loss.
Third-Party Payer Chargebacks, Discounts and Fees: The Company executes contracts with Third-Party Purchasers which allow for eligible purchases of AVMAPKI FAKZYNJA CO-PACK at prices lower than the wholesale acquisition cost. In some cases, customers will charge the Company for the difference between what they pay for
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AVMAPKI FAKZYNJA CO-PACK and the ultimate selling price to the Third-Party Purchasers to whom they sell the product. Reserves will generally be established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable, net. Chargeback amounts will generally be determined at the time of resale to the qualified Third-Party Purchasers by customers, and the Company generally will issue credits for such amounts within a few weeks of the customer’s notification to the Company of the resale. The reserves for chargebacks are expected to consist of credits that the Company expects to issue for units that remain in customer inventories at the end of each reporting period that the Company expects will be sold to Third-Party Purchasers, and chargebacks that customers have claimed, but for which the Company has not yet issued a credit. In addition, the Company compensated certain Third-Party Payers for administrative services, such as account management and data reporting. These administrative service fees have also been recorded as a reduction of net product revenue within the consolidated statements of operations and comprehensive loss.
Government Rebates: The Company is subject to discount and rebate payment obligations under various government programs including Federal and state Medicaid programs, Medicare, and others. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included as a component of accrued expenses on the consolidated balance sheets. The Company’s liability for these rebates consist of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but which remains in customer inventories at the end of each reporting period.
Other Patient Support Initiatives: Other patient support initiatives that the Company offers include voluntary co-pay assistance programs, which are intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payors. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive for product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included as a component of accrued expenses on the consolidated balance sheets.
Product Returns: Consistent with industry practice, the Company generally offers customers a limited right of return for product that has been purchased from the Company either directly or through one of its distribution channels. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company estimates product return liabilities using available industry data and its own sales information, including its visibility into the inventory remaining in the distribution channel.
The Company’s return policy generally allows for eligible returns of AVMAPKI FAKZYNJA CO-PACK for credit under the following circumstances:
● Receipt of damaged product;
● Shipment errors that were a result of an error by the Company;
● Expired product that is returned during the period beginning three months prior to the product’s expiration and ending six months after the expiration date;
● Quantities of product received by a customer in excess of quantity ordered;
● Product subject to a recall; and
● Product that the Company, at its sole discretion, has specified can be returned for credit.
As of December 31, 2025, the Company has not received any returns.
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Sales of intellectual property - For sales of license and intellectual property, that include sale-based royalties, including milestone payments based on a level of sales, the Company evaluates whether the royalties and sales-based milestones are considered probable of being achieved and estimates the amount of royalties to include over the contractual term using the expected value method and estimates the sales-based milestones using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated royalty and milestone value is included in the transaction price. Royalties and sales-based milestones for territories for which there is not regulatory approval are not considered probable until such regulatory approval is achieved. The Company evaluates factors such as whether consideration is outside of the Company’s control, timeline for when the uncertainty will be resolved and historical sales of COPIKTRA if applicable. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and amount of royalty revenue to be received and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.
Accounts Receivable, Net
Accounts receivable, net consists of amounts due from customers, net of applicable revenue reserves. Accounts receivable have standard payments that generally require payment within 30 to 90 days. Management determines the allowance for credit loss by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. Based on the Company’s latest assessment of the collectability of its accounts receivable, an allowance for credit loss is not deemed necessary at December 31, 2025.
Inventory
Inventories are stated at the lower of cost or estimated net realizable value. The Company determined the cost of inventories using the standard cost method, which approximates actual cost based on a first-in, first out basis. Inventories consist primarily of third-party manufacturing costs. The Company began capitalizing inventory upon receiving FDA approval for AVMAPKI FAKZYNJA CO-PACK on May 8, 2025. Prior to the FDA approval of AVMAPKI FAKZYNJA CO-PACK, expenses associated with the manufacturing of the Company's products were recorded as research and development expense.
The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their estimated realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded within cost of sales – product within the consolidated statements of operations and net loss. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required which would be recorded as a cost of sales - product in the consolidated statements of operations and comprehensive loss.
Shipping and handling costs for product shipments are recorded as incurred in cost of sales - product along with costs associated with manufacturing the product, and any inventory write-downs.
Intangible Assets
The Company records finite-lived intangible assets related to certain capitalized milestone payments at their fair value. These assets are amortized over their remaining useful lives, which are estimated based on the shorter of the remaining underlying patent life or the estimated useful life of the underlying product. Intangible assets are amortized using the economic consumption method if anticipated future revenues can be reasonably estimated. The straight-line method is used when future revenues cannot be reasonably estimated.
The Company assesses its finite-lived intangible assets for impairment if indicators are present or changes in circumstance suggest that impairment may exist. Events that could result in an impairment, or trigger an impairment assessment, include the receipt of additional clinical or nonclinical data regarding the Company’s drug products or a potentially competitive drug candidate, significant changes in the manner of our use of the acquired assets, or new
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information regarding future projected sales for the product. If impairment indicators are present or changes in circumstance suggest that impairment may exist, the Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows of each finite-lived intangible asset to its carrying value on the consolidated balance sheets. If the undiscounted cash flows used in the recoverability test are less than the carrying value, the Company would determine the fair value of the finite-lived intangible asset and recognize an impairment loss if the carrying value of the finite-lived intangible asset exceeds its fair value.
Collaborative arrangements
Contracts are considered to be collaborative arrangements when they satisfy the following criteria defined in ASC Topic 808, Collaborative Arrangements : (i) the parties to the contract must actively participate in the joint operating activity and (ii) the joint operating activity must expose the parties to the possibility of significant risk and rewards, based on whether or not the activity is successful. Payments received from or made to a partner that are the result of a collaborative relationship with a partner, instead of a customer relationship, such as co-development activities, are recorded as a reduction or increase to research and development expense, respectively.
Income taxes
The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Tax benefits are recognized when it is more likely than not that a tax position will be sustained during an audit. Deferred tax assets are reduced by a valuation allowance if current evidence indicates that it is considered more likely than not that these benefits will not be realized.
The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not that it will be sustained based solely on its technical merits as of the reporting date and only in an amount more likely than not that it will be sustained upon review by the tax authorities. The Company evaluates uncertain tax positions on a quarterly basis and adjust the liability for changes in facts and circumstances, such as new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, significant amendment to an existing tax law, or resolution of an examination. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determination is made. The resolution of its uncertain income tax positions is dependent on uncontrollable factors such as law changes, new case law, and the willingness of the income tax authorities to settle, including the timing thereof and other factors. Although the Company does not anticipate significant changes to its uncertain income tax positions in the next 12 months, items outside of its control could cause its uncertain income tax positions to change in the future, which would be recorded in its statements of operations. Interest and/or penalties related to income tax matters are recognized as a component of income tax expense.
Net operating loss (“NOL”) and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code (“IRC”), as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.
The Company experienced a greater than 50 % change in ownership as defined under Section 382 and 383 of the IRC as well as similar state provisions during the year ended December 31, 2024. For more details, please refer to Note 14. Income Taxes.
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Net loss per share
Basic net loss per common share is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period. For purposes of calculating net loss per share, weighted-average number of common shares outstanding includes the weighted average effect of pre-funded warrants as the exercise of which requires little or no consideration for the delivery of shares of common stock. Diluted net loss per common share is calculated by increasing the denominator by the weighted-average number of additional shares that could have been outstanding from securities convertible into common stock, such as the warrants issued in July 2024, stock options, restricted stock units, and ESPP (using the “treasury stock” method), Series A Convertible Preferred Stock, and Series B Convertible Preferred Stock (using the “if-converted” method), unless their effect on net loss per share is antidilutive. Under the “if-converted” method, convertible instruments that are-in-the-money, are assumed to have been converted as of the beginning of the period or when issued, if later. Additionally, the effects of any interest expense and changes in fair value of any bifurcated derivatives shall be added back to the numerator of the diluted net loss per share calculation. Refer to Note 13. Net Loss per share for further details related to the calculation of net loss per share.
Recently Adopted Accounting Standards Updates
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The guidance in ASU 2023-09 improves the transparency of income tax disclosures by greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The Company has adopted and applied the guidance under this ASU for the year ended December 31, 2025, using the prospective transition method. See Note 14. Income Taxes in the accompanying notes to the consolidated financial statements for further detail.
Recently issued accounting standards updates
In November 2024, the FASB issued ASU No 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). The guidance in ASU 2024-03 is intended to require more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). This standard modernizes the accounting for internal-use software by removing references to prescriptive development stages and instead requiring capitalization of costs once (1) management has authorized and committed to funding the software project, and (2) it is probable the project will be completed and placed in service. Entities must evaluate whether there is “significant development uncertainty,” such as unresolved novel functionality or substantially revised performance requirements, before meeting this capitalization threshold. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim periods within such annual reporting periods, with early adoption permitted. Entities may adopt the amendments prospectively, retrospectively, or under a modified transition approach. The Company is in the process of evaluating the impact that the adoption of this ASU may have on its consolidated financial statements and related disclosures.
Other recent accounting pronouncements issued, but not yet effective, are not expected to be applicable to the Company or have a material effect on the consolidated financial statements upon future adoption.
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3. Product revenue reserves and allowances
Since 2025, the Company’s sole source of product revenue has been from sales of AVMAPKI FAKZYNJA CO-PACK in the United States. The following table summarizes activity in each of the product revenue allowance and reserve categories for the twelve months ended December 31, 2025 (in thousands):
Trade
Third Party Payer
Government
discounts
chargebacks,
rebates and
and
discounts
other
allowances
and fees
incentives
Returns
Total
Balance at December 31, 2024
$
—
$
—
$
—
$
—
$
—
Provision related to sales in the current year
888
387
4,392
376
6,043
Adjustments related to prior period sales
—
—
—
—
—
Credits and payments made
( 652 )
( 135 )
( 1,367 )
—
( 2,154 )
Ending balance at December 31, 2025
$
236
$
252
$
3,025
$
376
$
3,889
Trade discounts and Payer chargebacks and discounts are recorded as a reduction to accounts receivable, net on the consolidated balance sheets. Trade allowances and Payer fees, government rebates, other incentives and returns are recorded as a component of accrued expenses on the consolidated balance sheets.
4. Inventory
Inventory consists of the following (in thousands):
December 31, 2025
December 31, 2024
Raw materials
$
—
$
—
Work in process
1,797
—
Finished goods
36
—
Total inventory
$
1,833
$
—
At December 31, 2025, all of the Company’s inventory was related to AVMAPKI and FAKZYNJA. In May 2025, the FDA approved AVMAPKI FAKZYNJA CO-PACK, at which time the Company began to capitalize costs to manufacture AVMAPKI FAKZYNJA CO-PACK. Prior to FDA approval of AVMAPKI FAKZYNJA CO-PACK, all costs related to the manufacturing of AVMAPKI and FAKZYNJA and related material were charged to research and development expense in the period incurred. At December 31, 2025, the Company determined that a reserve related to inventory was not required.
5. Intangible Assets
The Company’s intangible assets consist of the following (in thousands):
December 31, 2025
Weighted-Average Remaining Amortization Period (Years)
Acquired and in-licensed rights
$
17,124
14.8 years
Less: accumulated amortization
( 698 )
Total intangible assets, net
$
16,426
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The Company's finite-lived intangible assets are the result of milestone payments due under the Pfizer Agreement (defined herein) and the License Agreement (defined herein). Refer to Note 16. License, collaboration and commercial agreements for further discussion of the Pfizer Agreement and License Agreement.
The Company recorded approximately $ 0.7 million in cost of sales – intangible amortization expense related to finite-lived intangible assets during the twelve months ended December 31, 2025 using straight-line methodology. Estimated future cost of sales- intangible amortization expense for finite-lived intangible assets as of December 31, 2025 is as follows (in thousands):
Year ending December 31,
Amount
2026
1,117
2027
1,117
2028
1,117
2029
1,117
2030
1,117
Thereafter
10,841
Total future amortization
$
16,426
6. Property and equipment, net
Property and equipment and related accumulated depreciation are as follows (in thousands):
December 31,
December 31,
2025
2024
Leasehold improvements
$
146
$
146
Furniture and fixtures
811
839
Computer equipment
665
665
Assets not yet placed in service
—
—
1,622
1,650
Less: accumulated depreciation
( 1,622 )
( 1,618 )
Total property and equipment, net
$
—
$
32
The Company recorded less than $0.1 million, less than $0.1 million, and $0.1 million in depreciation expense for the years ended December 31, 2025, 2024, and 2023, respectively .
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7. Accrued expenses
Accrued expenses consist of the following (in thousands):
December 31, 2025
December 31, 2024
Accrued clinical trial expenses
$
14,338
$
10,915
Accrued milestone payments & royalties
11,767
—
Accrued compensation and related benefits
10,860
6,245
Accrued commercialization costs
8,205
803
Accrued contract manufacturing expenses
3,224
3,748
Accrued other research and development expenses
3,015
1,359
Accrued consulting fees
1,287
1,613
Accrued professional fees
793
620
Accrued interest
—
316
Accrued other
492
333
Total accrued expenses
$
53,981
$
25,952
8. Long-term debt
Note Purchase Agreement
On January 13, 2025 (the “Note Purchase Agreement Closing Date”), the Company entered into the Note Purchase Agreement (the “Note Purchase Agreement”) with RGCM SA LLC, as purchaser agent, Oberland Capital Management LLC (“Oberland”) and certain funds managed by Oberland, as purchasers (together with the other purchasers party thereto referred as the “Note Purchase Agreement Purchasers”) pursuant to which the Company may sell to the Purchasers, and the Purchasers may buy from the Company, notes (the “Notes”) in an aggregate principal amount not to exceed $ 150.0 million. On the Note Purchase Agreement Closing Date, the Company issued and sold an initial Note in an aggregate principal amount $ 75.0 million. In addition, the Company may issue and sell additional Notes with aggregate principal amount of up to $ 75.0 million as follows :
iii. at the option of the Company, the a second purchase (the “Second Purchase”) of $ 25.0 million principal amount of Notes, at any time prior to December 31, 2025, upon the FDA’s approval sufficient for the promotion and sale of avutometinib and defactinib for the treatment of LGSOC and subject to certain other customary conditions precedent. In March 2026, the Company amended the Note Purchase Agreement to extend the date by which it may draw down the Second Purchase from December 31, 2025 to June 30, 2026 (see Note 20. Subsequent Events ). and
iv. at the option of the Company, the, a third purchase (the “Third Purchase”) of up to $ 50.0 million principal amount of Notes, at any time prior to December 31, 2026, provided that trailing six-month worldwide net sales of avutometinib and defactinib are at least $ 55.0 million and subject to certain other customary conditions precedent.
The outstanding principal amount of the Notes bear interest at a rate per annum equal to the sum of (i) the greater of the Term SOFR (as defined in the Note Purchase Agreement) and 4.29 % , and (ii) 3.71 % , subject to adjustment in certain circumstances set forth in the Note Purchase Agreement and an overall cap of 9.75 % , payable quarterly in arrears until the seventh anniversary of the Note Purchase Agreement Closing Date or the date on which all amounts owing to the Note Purchase Agreement Purchasers under the Note Purchase Agreement have been paid in full (the “Note Purchase Agreement Maturity Date”). For the first eight quarters following the Note Purchase Agreement Closing Date, at the Company’s option, up to 50 % of the interest due may be paid-in-kind and added to the then-outstanding principal balance of the Notes. Through December 31, 2025, the Company has not elected to defer any interest through its paid-in-kind option. Upon the occurrence and during the continuance of an Event of Default (as defined in the Note Purchase Agreement) under the Note Purchase Agreement, the then-applicable interest rate on all outstanding obligations may be increased by an additional 5.00 % .
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Beginning on January 13, 2025 and continuing until the Note Purchase Agreement Maturity Date, the Note Purchase Agreement Purchasers will receive 1.00 % (the “Revenue Participation Percentage”) of the first $ 100.0 million of net sales of each Included Product (as defined in the Note Purchase Agreement) by the Company or its affiliates or licensees in each calendar year, payable quarterly. “Included Products” is defined in the Note Purchase Agreement to include (a) avutometinib and defactinib, including any product that contains either one of the foregoing in combination with any other active ingredient(s), and (b) all other compounds, chemical entities or pharmaceutical products being designed, developed, licensed, manufactured or commercialized by the Company or its subsidiaries from time to time. The Revenue Participation Percentage will increase pro rata immediately upon the occurrence of the Second Purchase and the Third Purchase, such that the Revenue Participation Percentage shall increase to a maximum of 2.00 % in the event that $ 150 million in aggregate principal amount of Notes has been purchased pursuant to the Note Purchase Agreement following the Third Purchase. The outstanding principal amount of the Notes, interest accrued thereon and any other amounts owing to the Note Purchase Agreement Purchasers under the Note Purchase Agreement will be due in two equal instalments on (a) the sixth anniversary of the Note Purchase Agreement Closing Date, and (b) the Note Purchase Agreement Maturity Date.
All of the Notes may be redeemed prior to the Note Purchase Agreement Maturity Date at the option of the Company, subject to payment of the Repayment Amount (as defined in the Note Purchase Agreement). The Note Purchase Agreement Purchasers may demand redemption of the Notes prior to the Note Purchase Agreement Maturity Date in the event of a Change of Control (as defined in the Note Purchase Agreement) of the Company or an Event of Default (as defined in the Note Purchase Agreement) under the Note Purchase Agreement, subject to payment of the Repayment Amount. The Repayment Amount is due at the earlier of the Maturity Date and when payment of all obligations under the Note Purchase Agreement are otherwise due. The Repayment Amount is: (a) 135 % of the principal amount of the Notes if redemption occurs before the second anniversary of the Note Purchase Agreement Closing Date upon a Change of Control; (b) if the preceding clause (a) does not apply, 175 % of the principal amount of the Notes if redemption occurs prior to the third anniversary the Note Purchase Agreement Closing date; and (c) thereafter, 195 % of the principal amount of the Notes if redemption occurs after the third anniversary the Note Purchase Agreement Closing Date, minus, in each case, the sum of regularly scheduled interest paid in cash, payments of principal in cash, and payments of revenue participation in cash prior to such redemption date.
The Note Purchase Agreement contains no financial covenants . The Company’s obligations under the Note Purchase Agreement are subject to customary covenants, including limitations on the Company’s ability to dispose of assets, undergo a change of control, merge with or acquire other entities, incur debt, incur liens, pay dividends or other distributions to holders of its capital stock, repurchase stock and make investments, in each case subject to certain exceptions. The Company’s obligations under the Note Purchase Agreement are secured by a security interest on substantially all of the Company’s and its subsidiaries’ assets, including its intellectual property related to avutometinib and defactinib, and a negative pledge on intellectual property related to the Company’s collaboration and option agreement with GenFleet (the “GenFleet Agreement”), subject to certain exceptions relating to the Company’s development of its intellectual property.
A portion of the proceeds of the Note Purchase Agreement were used to repay the Company’s obligations under the Loan Agreement in full. The Loan Agreement was terminated concurrently with entry into the Note Purchase Agreement.
The Company assessed the terms and features of the Note Purchase Agreement and determined that the Company is eligible to elect the fair value option under ASC 825, Financial Instruments . The Note Purchase Agreement contains various embedded features and the election of the fair value option allows the Company to bypass analysis of potential embedded derivatives and further analysis of bifurcation of any recognized financial liabilities. Under the fair value option, the financial liability is initially measured at its fair value on the issuance date and subsequently remeasured at estimated fair value on a recurring basis at each reporting date. Changes in the fair value of the Note Purchase Agreement, which include accrued interest, if any, are recorded as a component of change in fair value of Notes in the consolidated statements of operations. The Company has not elected to present interest expense separately from changes in fair value and therefore will not separately present interest expense associated with the Note Purchase Agreement. Changes in fair value caused by instrument-specific credit risk are presented separately in other comprehensive income or loss within the consolidated statements of equity (deficit). The portion of total
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changes in fair value of Notes attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of comprehensive income (loss) in the accompanying consolidated statements of operations and comprehensive loss. Under the fair value option, debt issuance costs are expensed as incurred. The Company incurred $ 0.8 million of debt issuance costs which were recorded within selling, general and administrative expense in the consolidated statements of operations for the year ended December 31, 2025.
The Company determined the fair value of the Notes on January 13, 2025 was $ 75.0 million. The following table reconciles the change in fair value of the Notes during the years ended December 31, 2025
Beginning fair value balance at January 13, 2025
$
75,000
Change in fair value reported in statements of operations
12,751
Change in fair value reported in comprehensive loss
( 5,229 )
Interest and revenue participation payments
( 6,192 )
Ending fair value at December 31, 2025
$
76,330
As of December 31, 2025, future principal payments under the Note Purchase Agreement are due as follows (in thousands):
2026
—
2027
—
2028
—
2029
—
2030
—
2031
37,500
2032
37,500
Total principal payments
$
75,000
Loan Agreement
On March 25, 2022 (the “Loan Agreement Closing Date”), the Company entered into a loan and security agreement (the “Original Loan Agreement”) with Oxford Finance, LLC (“Oxford”), as collateral agent and a lender, and Oxford Finance Credit Fund III LP, as a lender (“OFCF III” and together with Oxford, the “Lenders”), pursuant to which the Lenders agreed to lend the Company up to an aggregate principal amount of $ 150.0 million in a series of term loans (the “Term Loans”). On January 4, 2024, the Company amended the Original Loan Agreement (as amended, the “Loan Agreement”) to extend the date by which it may draw down the Term C Loan from March 31, 2024, to March 31, 2025.
Pursuant to the Loan Agreement, the Company received an initial Term Loan of $ 25.0 million on the Loan Agreement Closing Date, and drew down the second term loan of $ 15.0 million (the “Term B Loan”) on March 22, 2023, and could have borrowed an additional $ 110.0 million of Term Loans at its option upon the satisfaction of certain conditions as follows:
i. $ 25.0 million (the “Term C Loan”), when the Company has received accelerated or full approval from the FDA of avutometinib for the treatment of LGSOC (the “Term C Milestone”). The Company could have drawn the Term C Loan within 60 days after the occurrence of the Term C Milestone, but no later than March 31, 2025.
ii. $ 35.0 million (the “Term D Loan”), when the Company has achieved at least $ 50.0 million in gross product revenue calculated on a trailing six-month basis (the “Term D Milestone”). The Company could have drawn the Term D Loan within 30 days after the occurrence of the Term D Milestone, but no later than March 31, 2025.
iii. $ 50.0 million (the “Term E Loan”), at the sole discretion of the Lenders.
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The Term Loans bore interest at a floating rate equal to (a) the greater of (i) the one-month CME Secured Overnight Financing Rate and (ii) 0.13 % plus (b) 7.37 % , subject to an overall floor and cap. Interest was payable monthly in arrears on the first calendar day of each calendar month. As a result of the Term B Loan drawdown, beginning (i) April 1, 2025, or (ii) April 1, 2026, if either (A) avutometinib h as received FDA approval for the treatment of LGSOC or (B) COPIKTRA has received FDA approval for the treatment of peripheral T-cell lymphoma, the Company would have been required to repay the Term Loans in consecutive equal monthly payments of principal, together with applicable interest, in arrears. All unpaid principal and accrued and unpaid interest with respect to each Term Loan were due and payable in full on March 1, 2027.
The Company was required to make a final payment of 5.0 % of the original principal amount of the Term Loans that are drawn, payable at maturity or upon any earlier acceleration or prepayment of the Term Loans (the “Final Payment Fee”). The Company could have prepaid all, but not less than all, of the Term Loans, subject to a prepayment fee equal to (i) 3.0% of the principal amount of the applicable Term Loan if prepaid on or before the first anniversary date of the funding date of such Term Loan, (ii) 2.0 % of the principal amount of the applicable Term Loan if prepaid after the first anniversary and on or before the second anniversary of the funding date of such Term Loan, and (iii) 1.0 % of the principal amount of the applicable Term Loan if prepaid after the second anniversary of the applicable funding date of such Term Loan. All Term Loans were subject to a facility fee of 0.5 % of the principal amount.
The Loan Agreement contained no financial covenants. The Loan Agreement included customary events of default, including, among others, payment defaults, breach of representations and warrants, covenant defaults, judgment defaults, insolvency and bankruptcy defaults, and a material adverse change. The occurrence of an event of default could have resulted in the acceleration of the obligations under the Loan Agreement, termination of the Term Loan commitments and the right to foreclose on the collateral securing the obligations. During the existence of an event of default, the Term Loans would have accrued interest at a rate per annum equal to 5.0 % above the otherwise applicable interest rate.
In connection with the Loan Agreement, the Company granted Oxford a security interest in all of the Company’s personal property now owned or hereafter acquired, excluding intellectual property (but including the right to payments and proceeds of intellectual property), and a negative pledge on intellectual property.
The Company assessed all terms and features of the Loan Agreement in order to identify any potential embedded features that would require bifurcation. As part of this analysis, the Company assessed the economic characteristics and risks of the Loan Agreement, including put and call features. The Company determined that all features of the Loan Agreement were clearly and closely associated with a debt host and did not require bifurcation as a derivative liability, or the fair value of the feature was immaterial to the Company's financial statements. The Company reassesses the features on a quarterly basis to determine if they require separate accounting. There have been no changes to the Company ’s assessment.
Concurrently with the closing of the Note Purchase Agreement, on January 13, 2025, the Company terminated its Loan Agreement and repaid in full the balance of its obligations under the Loan Agreement of approximately $ 42.7 million (the “Payoff Amount”). The Payoff Amount included the Final Payment Fee of $ 2.0 million, which was due at the earlier of prepayment or loan maturity, and certain prepayment fees as set forth in the Loan Agreement, a prepayment penalty fee of $ 0.6 million, and unpaid interest of $ 0.1 million. Upon the Lender’s receipt of the Payoff Amount, the Loan Agreement was terminated along with the Lender’s commitment to provide funding under any future term loans. All liens on the Company’s assets to secure the loans under the Loan Agreement have been terminated and released. The Payoff Amount, excluding accrued interest, exceeded the carrying amount of the Term Loan on January 13, 2025 by $ 1.8 million. As a result the Company recorded a loss on debt extinguishment of $ 1.8 million included in the consolidated statements of operations and comprehensive loss for the twelve months ended December 31, 2025.
The debt issuance costs and the Final Payment Fee were recorded as a debt discount which were accreted to interest expense through the maturity date of the Term Loan using the effective interest method. The components of the carrying value of the Term Loan as of December 31, 2024, are detailed below (in thousands):
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December 31, 2024
Principal loan balance
$
40,000
Final Payment Fee
1,172
Debt issuance costs, net of accretion
( 448 )
Total Long-term debt, net of discount
40,724
The following table sets forth total interest expense for the years ended December 31, 2025, 2024, and 2023 (in thousands):
Year ended December 31,
2025
2024
2023
Contractual Interest
$
1,109
$
3,774
$
3,472
Amortization of debt discount and issuance costs
11
277
230
Amortization of Final Payment Fee
18
511
437
Total
$
1,138
$
4,562
$
4,139
9. Leases
On April 15, 2014, the Company entered into a lease agreement for approximately 15,197 square feet of office and laboratory space in Needham, Massachusetts. The lease term commenced on April 15, 2014 and it was scheduled to expire on September 30, 2019. Effective February 15, 2018, the Company amended its lease agreement to relocate within the facility to another location consisting of 27,810 square feet of office space (the “February 2018 Amended Lease Agreement”). The February 2018 Amended Lease Agreement extended the expiration date of the lease from September 2019 through June 2025. Pursuant to the February 2018 Amended Lease Agreement, the initial annual base rent amount was approximately $ 0.7 million, which increased during the lease term to $ 1.1 million for the last 12-month period. Effective November 1, 2024, the Company amended the February 2018 Amended Lease Agreement to extend the expiration date from June 2025 to June 2026 (the “November 2024 Amended Lease Agreement”). The payment terms of the November 2024 Amended Lease Agreement are $ 1.1 million per annum through the expiration date in June 2026. As a result of the November 2024 Amended Lease Agreement, the Company recorded an incremental $ 1.0 million right-of-use asset and corresponding lease liability during the year ended December 31, 2024.
The Company has accounted for its Needham, Massachusetts office space as an operating lease. The Company’s lease contains an option to renew and extend the lease terms and an option to terminate the lease prior to the expiration date. The Company has not included the lease extension or the termination options within the right-of-use asset and lease liability on the consolidated balance sheets as neither option is reasonably certain to be exercised. The Company’s lease includes variable non-lease components (e.g., common area maintenance, maintenance, consumables, etc.) that are not included in the right-of-use asset and lease liability and are reflected as an expense in the period incurred. The Company does not have any other operating or finance leases.
As of December 31, 2025, a right-of-use asset of $ 0.5 million and lease liability of $ 0.5 million are reflected on the consolidated balance sheets. The elements of lease expense were as follows (dollar amounts in thousands):
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Year ended December 31,
2025
2024
2023
Lease Expense
Operating lease expense
$
1,011
$
906
$
885
Total Lease Expense
$
1,011
$
906
$
885
Other Information - Operating Leases
Operating cash flows paid for amounts included in measurement of lease liabilities
$
1,092
$
1,081
$
1,060
December 31, 2025
Other Balance Sheet Information - Operating Leases
Weighted average remaining lease term (in years)
0.5
Weighted average discount rate
9.8 %
Maturity Analysis
2026
546
Total
$
546
Less: Present value discount
( 11 )
Lease Liability
$
535
10. Capital Stock
Under the amended and restated certificate of incorporation, the Company’s board of directors has the authority, without further action by the stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.
As of December 31, 2025 and 2024, the Company had reserved the following shares of common stock for the issuance of common stock for vested restricted stock units, the exercise of stock options, employee stock purchase plan, Series A Convertible Preferred Stock conversions to shares of common stock, and exercise of warrants and pre-funded warrants (in thousands):
December 31,
2025
2024
Shares reserved under Equity Compensation Plans
5,232
5,925
Shares reserved for Inducement Grants
1,195
802
Shares reserved for ESPP
43
59
Shares reserved for Series A Convertible Preferred Stock
—
833
Shares reserved for Warrants
8,429
18,083
Shares reserved for pre-funded warrants
13,656
5,000
Total shares reserved
28,555
30,702
Each share of common stock is entitled to one vote. The holders of the common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors.
November 2025 Public Offering
On November 13, 2025, the Company entered into an Underwriting Agreement (the “November 2025 Public Offering”) with several Underwriters to sell in a public offering 8,543,794 shares of the Company’s common stock, at a price to the public of $ 7.25 per share, less the underwriting discounts and commissions, and, in lieu of shares of common stock to certain investors, pre-funded warrants (the “November 2025 Pre-Funded Warrants”) to purchase up to an aggregate of 3,870,000 shares of common stock at a price to the public of $ 7.2499 per share of common stock underlying a pre-funded warrant, which represents the per share public offering price for the shares of common stock
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less the $ 0.001 per share exercise price for each such share of common stock underlying a November 2025 Pre-Funded Warrant. Furthermore, as part of the Underwriting Agreement, Greenshoe Options (“November 2025 Overallotment Options”) were granted to the Underwriters to purchase up to an aggregate of 1,862,069 shares of the Company’s Common Stock, par value $ 0.0001 per share, at a price to the Underwriters of $ 7.25 per share, less the underwriting discounts and commissions. On November 14, 2025, the underwriters exercised their Overallotment Options in full and the Company issued 1,862,069 additional shares of common stock at the price of $ 7.25 per share.
The exercise price of each November 2025 Pre-Funded Warrant equals $ 0.0001 per underlying share of common stock. The exercise price and the number of shares of common stock issuable upon exercise of each November 2025 Pre-Funded Warrant is subject to appropriate adjustment in the event of certain stock dividends, stock splits, stock combinations, or similar events affecting the Company’s common stock. The November 2025 Pre-Funded Warrants are exercisable in cash or by means of a cashless exercise and will not expire until the date the November 2025 Pre-Funded Warrants are fully exercised. The November 2025 Pre-Funded Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof (together with its affiliates) immediately following such exercise would exceed a specified beneficial ownership limitation.
The November 2025 Pre-Funded Warrants cannot require cash settlement, are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its common stock shares and permit the holders to receive a fixed number of shares of common stock upon exercise. Additionally, the November 2025 Pre-Funded Warrants do not provide any guarantee of value or return. Accordingly, the November 2025 Pre-Funded Warrants are classified as a component of permanent equity. The net proceeds of the 2025 Public Offering were approximately $ 96.9 million, after deducting underwriting fees and other expenses.
April 2025 PIPE Transaction
On April 25, 2025, the Company entered into a securities purchase agreement with certain institutional accredited investors (the “PIPE Investors”), pursuant to which the Company sold to the PIPE Investors, in a private placement (the “2025 Private Placement”), an aggregate of 3,429,287 shares of the Company’s common stock at an offering price of $ 7.00 per share and, in lieu of common stock to certain PIPE Investors, pre-funded warrants to purchase an aggregate of 7,285,713 shares of common stock (the “April 2025 Pre-Funded Warrants,”) at an offering price of $ 6.9999 per April 2025 Pre-Funded Warrant. The 2025 Private Placement closed on April 28, 2025.
The exercise price of each April 2025 Pre-Funded Warrant equals $ 0.0001 per underlying share of common stock. The exercise price and the number of shares of common stock issuable upon exercise of each April 2025 Pre-Funded Warrant is subject to appropriate adjustment in the event of certain stock dividends, stock splits, stock combinations, or similar events affecting the Company’s common stock. The April 2025 Pre-Funded Warrants are exercisable in cash or by means of a cashless exercise and will not expire until the date the April 2025 Pre-Funded Warrants are fully exercised. The April 2025 Pre-Funded Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof (together with its affiliates) immediately following such exercise would exceed a specified beneficial ownership limitation; provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving 61 days ’ notice to the Company, but not to any percentage in excess of 19.99 % . I n addition, upon the occurrence of a fundamental transaction (as described in the April 2025 Pre-Funded Warrant), each April 2025 Pre-Funded Warrant will have the right to receive, upon exercise of such April 2025 Pre-Funded Warrant, the kind and amount of securities, cash or other property that such holders would have received had they exercised such April 2025 Pre-Funded Warrant immediately prior to such fundamental transaction without regard to any limitations on exercise contained in the April 2025 Pre-Funded Warrants.
The April 2025 Pre-Funded Warrants cannot require cash settlement, are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its common stock shares and permit the holders to receive a fixed number of shares of common stock upon exercise. Additionally, the April 2025 Pre-Funded Warrants do not provide any guarantee of value or return. Accordingly, the April 2025 Pre-Funded Warrants are classified as a component of permanent equity. The net proceeds of the 2025 Private Placement were approximately $ 69.9 million, after deducting placement agent fees and other expenses.
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Stock Purchase Agreement
In connection with the Note Purchase Agreement, on January 13, 2025, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the certain funds managed by Oberland and affiliates thereof (the “SPA Investors”), pursuant to which the SPA Investors purchased an aggregate of 1,416,939 shares of the Company’s common stock, at a price of $ 5.2931 per share, based on the trailing 30-trading day volume-weighted average price of the Company’s common stock, as of the date of the Stock Purchase Agreement. The Company received net proceeds of $ 7.4 million after deducting for offering costs which was recorded as component of permanent equity during the year ended December 31, 2025. In addition, pursuant to the Stock Purchase Agreement, the Company granted the SPA Investors, for a period of three years following the closing on January 13, 2025, a right to participate in any equity offerings consummated by the Company in an amount up to $ 2.5 million, subject to certain limitations and exclusions set out in the Stock Purchase Agreement.
July 2024 Public Offering
On July 23, 2024, the Company entered into an underwriting agreement with Guggenheim Securities, LLC and Cantor Fitzgerald & Co. (“Cantor”), as representatives of the several underwriters relating to the underwritten offering, issuance and sale by the Company of: (i) 13,333,334 shares of the Company’s common stock, and accompanying warrants (the “Warrants”) to purchase up to 13,333,334 shares of common stock; and (ii) to certain investors, pre-funded warrants (the “July 2024 Pre-Funded Warrants”) to purchase up to 5,000,000 shares of common stock and accompanying Warrants to purchase 5,000,000 shares of common stock (collectively, the “July 2024 Offering”). Each share of common stock was sold with an accompanying Warrant at a combined price of $ 3.00 , and each July 2024 Pre-Funded Warrant was sold together with an accompanying Warrant at a combined price of $ 2.999 , which is equal to the combined offering price per share of common stock and accompanying Warrant less the $ 0.001 exercise price of each July 2024 Pre-Funded Warrant. The July 2024 Offering closed on July 25, 2024. The Company received approximately $ 50.8 million in net proceeds, after deducting underwriting discounts and commissions and offering expenses.
Each July 2024 Pre-Funded Warrant has an exercise price equal to $ 0.001 per underlying share of common stock. The July 2024 Pre-Funded Warrants are exercisable as of July 25, 2024, do not expire and are exercisable in cash or by means of cashless exercise.
Each Warrant has an exercise price equal to $ 3.50 . Each Warrant is exercisable for one share of the Company’s common stock (or, in certain limited circumstances in lieu of a share of common stock, a pre-funded warrant for one share of the Company’s common stock at the warrant exercise price less the exercise price of the pre-funded warrant purchased). The Warrants are exercisable as of July 25, 2024 until their expiration on January 25, 2026. The Warrants are exercisable in cash or, in certain limited circumstances only, by means of a cashless exercise. The exercise price and the number of shares of common stock issuable upon exercise of each Warrant or July 2024 Pre-Funded Warrant, as applicable, is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock as well as upon any distribution of assets, including cash, stock or other property, to the Company’s stockholders.
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The Company may not effect the exercise of any Warrant or July 2024 Pre-Funded Warrant, and a holder will not be entitled to exercise any portion of any Warrant or July 2024 Pre-Funded Warrant if, upon giving effect to such exercise, the aggregate number of shares of common stock beneficially owned by the holder (together with its affiliates) would exceed 4.99 % (or such higher percentage up to 19.99 % , at the election of the holder) of the number of shares of the Company’s common stock outstanding immediately after giving effect to the exercise, which percentage may be increased or decreased at the holder’s election upon 61 days ’ notice to the Company subject to the terms of such Warrants or July 2024 Pre-Funded Warrants, as applicable, provided that such percentage may in no event exceed 19.99 % . In the event that the exercise of a Warrant would cause the holder to beneficially own in excess of 4.99 % (or such higher percentage up to 19.99 % , at the election of the holder) of the total number shares of the Company’s common stock outstanding immediately after giving effect to such exercise, the holder of a Warrant may elect to purchase a pre-funded warrant for one share of the Company’s common Stock, rather than a share of common stock, at the Warrant exercise price less the exercise price of the pre-funded warrant purchased.
In addition, upon the consummation of an acquisition (as described in the Warrants agreements and July 2024 Pre-Funded Warrants agreements, as applicable), each Warrant and July 2024 Pre-Funded Warrant will automatically be converted into the right of the holder of such Warrant or July 2024 Pre-Funded Warrant, as applicable, to receive the kind and amount of securities, cash or other property that such holders would have received had they exercised such Warrant or July 2024 Pre-Funded Warrant, as applicable, immediately prior to such acquisition, without regard to any limitations on exercise contained in the Warrant agreements or July 2024 Pre-Funded Warrant agreements.
The Warrants meet the definition of a derivative pursuant to FASB Accounting Standard Codification 815, Derivatives and Hedging , and do not meet the derivative scope exception given the Warrants do not qualify under the indexation guidance. As a result, the Warrants were initially recognized as liabilities and measured at fair value using the Black-Scholes valuation model with subsequent changes in fair value recorded in earnings. The warrants were recorded at a fair value of $ 39.6 million upon issuance and the Company allocated $ 39.6 million of the proceeds to this liability and recorded this amount as warrant liability. During the year ended December 31, 2025 and 2024, 9,654,168 Warrants and 250 Warrants, respectively, were exercised for shares of common stock and the fair value of the Warrants on the respective exercise dates was $ 50.0 million and $ 0.5 million, respectively, which was reclassified from warrant liability to additional paid in capital. On December 31, 2025 and 2024, the fair value of the outstanding 8,429,166 Warrants and 18,083,334 Warrants, respectively, was determined to be $ 35.6 million and $ 58.2 million, respectively and the Company recorded this amount as warrant liability on the consolidated balance sheets. During the year ended December 31, 2025 and 2024, the Company recorded the mark-to-market adjustment of $ 27.5 million and $ 19.1 million, respectively, under change in fair value of warrant liability within the consolidated statements of operations and comprehensive loss.
The July 2024 Pre-Funded Warrants cannot require cash settlement, are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock and Warrants with which they were issued, are immediately exercisable, and do not embody an obligation for the Company to repurchase its common stock shares and permit the holders to receive a fixed number of shares of common stock upon exercise. Additionally, the July 2024 Pre-Funded Warrants do not provide any guarantee of value or return. Accordingly, the July 2024 Pre-Funded Warrants are classified as a component of permanent equity. The Company allocated $ 15.4 million of the proceeds to the July 2024 Pre-Funded Warrants and shares of common stock issued. During the second quarter of 2025, the holders exercised 2,500,000 July 2024 Pre-Funded Warrants, exercise price $ 0.001 per share, via cashless exercise resulting in the issuance of 2,499,665 shares of common stock. During the third quarter of 2025, no July 2024 Pre-Funded Warrants were exercised.
The Company incurred a total of $ 4.2 million in issuance costs, which the Company allocated to the Warrants, and 2024 Pre-Funded Warrants and shares of common stock consistent with the allocation of proceeds. $ 3.0 million of issuance costs were allocated to the Warrants and expensed within selling, general and administrative expenses in the statements of operations and comprehensive loss for the year ended December 31, 2024. $ 1.2 million of the issuance costs were allocated to the July 2024 Pre-Funded Warrants and shares of common stock and applied against additional paid-in capital.
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June 2023 Public Offering
In June 2023, in an underwritten offering, the Company offered 8,489,409 shares of the Company’s common stock, at a price to the public of $ 9.75 per share, less the underwriting discounts and commissions, and, in lieu of shares of common stock to certain investors, pre-funded warrants (the “June 2023 Pre-Funded Warrants”) to purchase up to an aggregate of 1,538,591 shares of common stock at a price to the public of $ 9.749 per share of common stock underlying a pre-funded warrant, which represents the per share public offering price for the shares of common stock less the $ 0.001 per share exercise price for each such share of common stock underlying a June 2023 Pre-Funded Warrant.
The Company could not have effected the exercise of any June 2023 Pre-Funded Warrant, and a holder was not entitled to exercise any portion of any June 2023 Pre-Funded Warrant if, upon giving effect to such exercise, the aggregate number of shares of common stock beneficially owned by the holder (together with its affiliates) would have exceeded 9.99 % of the number of shares of common stock outstanding immediately after giving effect to the exercise, which percentage could have been increased or decreased at the holder’s election upon 61 days ’ notice to the Company subject to the terms of such June 2023 Pre-Funded Warrant, provided that such percentage in no event exceeded 19.99 % .
Each June 2023 Pre-Funded Warrant had an exercise price equal to $ 0.001 per share of common stock. The exercise price and the number of shares of common stock issuable upon exercise of each June 2023 Pre-Funded Warrant was subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock as well as upon any distribution of assets, including cash, stock or other property, to the Company’s stockholders. The June 2023 Pre-Funded Warrants were exercisable as of June 21, 2023, did not expire and were exercisable in cash or by means of a cashless exercise. In addition, upon the consummation of an acquisition (as described in the June 2023 Pre-Funded Warrant agreements), each June 2023 Pre-Funded Warrant would have automatically been converted into the right of the holder of such June 2023 Pre-Funded Warrant to receive the kind and amount of securities, cash or other property that such holders would have received had they exercised such June 2023 Pre-Funded Warrant immediately prior to such acquisition, without regard to any limitations on exercise contained in the June 2023 Pre-Funded Warrants.
The June 2023 Pre-Funded Warrants could not have required cash settlement, were freestanding financial instruments that were legally detachable and separately exercisable from the shares of common stock with which they were issued, were immediately exercisable, and did not embody an obligation for the Company to repurchase its common stock shares and permitted the holders to receive a fixed number of shares of common stock upon exercise. Additionally, the June 2023 Pre-Funded Warrants did not provide any guarantee of value or return. Accordingly, the June 2023 Pre-Funded Warrants were classified as a component of permanent equity. After deducting for commissions and other offering expenses, the Company received net proceeds of approximately $ 91.4 million from the sale of 8,489,409 shares of common stock and June 2023 Pre-Funded Warrants to purchase up to 1,538,591 shares of common stock.
During the year ended December 31, 2024, the holders exercised all of the June 2023 Pre-Funded Warrants representing 1,538,591 underlying shares of common stock, at an exercise price $ 0.0001 per share, via cashless exercise resulting in the issuance of 1,538,201 shares of common stock. As of December 31, 2024 there were no June 2023 Pre-Funded Warrants outstanding.
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Series B Convertible Preferred Stock
On January 24, 2023, the Company entered into a Securities Purchase Agreement (the “Series B Convertible Preferred Stock Securities Purchase Agreement”) with certain purchasers pursuant to which the Company agreed to sell and issue to the purchasers in a private placement (the “Private Placement”) up to 2,144,160 shares of its Series B convertible preferred stock, par value $ 0.0001 per share (the “Series B Convertible Preferred Stock”), in two tranches. On January 24, 2023, the Company filed the Certificate of Designation of the Preferences, Rights and Limitations of the Series B Convertible Preferred Stock (the “Series B Convertible Preferred Stock Certificate of Designation”) setting forth the preferences, rights and limitations of the Series B Convertible Preferred Stock with the Secretary of State of the State of Delaware. The Series B Convertible Preferred Stock Certificate of Designation became effective upon filing.
Each share of the Series B Convertible Preferred Shares is convertible into 3.5305 shares of the Company’s common stock, such conversion rate reflects an adjustment to account for the Reverse Stock Split, at the option of the holders at any time, subject to certain limitations, including that the holder will be prohibited from converting Series B Convertible Preferred Stock into common stock if, as a result of such conversion, the holder, together with its affiliates, would beneficially own a number of shares of common stock above a conversion blocker, which is initially set at 9.99 % (the “Conversion Blocker”) of the total common stock then issued and outstanding immediately following the conversion of such shares of Series B Convertible Preferred Stock. Holders of the Series B Convertible Preferred Stock are permitted to increase the Conversion Blocker to an amount not to exceed 19.99 % upon 60 days ’ notice.
The Company agreed to sell and issue in the first tranche of the Private Placement 1,200,000 shares of Series B Convertible Preferred Stock at a purchase price of $ 25.00 per share of Series B Convertible Preferred Stock (equivalent to $ 7.0812 per share of common stock). The first tranche of the Private Placement closed on January 27, 2023. The Company received gross proceeds from the first tranche of the Private Placement of approximately $ 30.0 million, before deducting fees to the placement agent and other offering expenses payable by the Company (“Series B Convertible Preferred Stock Proceeds”).
In addition, the Company agreed to sell and issue in the second tranche of the Private Placement 944,160 shares of Series B Convertible Preferred Stock at a purchase price of $ 31.77 per share of Series B Convertible Preferred Stock (equivalent to $ 9.00 per share of common stock) if at any time within 18 months following the closing of the first tranche the 10-day volume weighted average price of the Company’s common stock (as quoted on Nasdaq and as calculated by Bloomberg) should reach at least $ 13.50 per share, such threshold reflects an adjustment to account for the Reverse Stock Split (which may be further adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as needed) with aggregate trading volume during the same 10-day period of at least $ 25 million (the “Second Tranche Right”). The second tranche of the Private Placement is expected to close within seven trading days of meeting the second tranche conditions and will be subject to additional, customary closing conditions. If the Second Tranche Right conditions are satisfied, the Company anticipates receiving gross proceeds from the second tranche of the Private Placement of approximately $ 30.0 million, before deducting fees to the placement agent and other offering expenses payable by the Company.
The Series B Convertible Preferred Stock ranks (i) senior to the common stock; (ii) senior to all other classes and series of equity securities of the Company that by their terms do not rank senior to the Series B Convertible Preferred Stock; (iii) senior to all shares of the Company’s Series A Convertible Preferred Stock the equity securities described in (i)-(iii), the “Junior Stock”); (iv) on parity with any class or series of capital stock of the Company hereafter created specifically ranking by its terms on parity with the Series B Convertible Preferred Stock (the “Parity Stock”); (v) junior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms senior to any Series B Convertible Preferred Stock (“Senior Stock”); and (vi) junior to all of the Company’s existing and future debt obligations, including convertible or exchangeable debt securities, in each case, as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily and as to the right to receive dividends.
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In the event of the liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Company, and subject to the prior and superior rights of any Senior Stock, each holder of shares of Series B Convertible Preferred Stock will be entitled to receive, in preference to any distributions of any of the assets or surplus funds of the Company to the holders of the common stock and any of the Company’s securities that are Junior Stock and pari passu with any distribution to the holders of any Parity Stock, an amount equal to $ 1.00 per share of Series B Convertible Preferred Stock, plus an additional amount equal to any dividends declared but unpaid on such shares, before any payments shall be made or any assets distributed to holders of the common stock or any of the Company’s securities that are Junior Stock.
So long as any shares of the Series B Convertible Preferred Stock remain outstanding, the Company cannot without the affirmative vote or consent of the holders of majority of the shares of the Series B Convertible Preferred Stock then-outstanding, in which the holders of the Series B Convertible Preferred Stock vote separately as a class: (a) amend, alter, modify or repeal (whether by merger, consolidation or otherwise) the Series B Convertible Preferred Stock Certificate of Designation, the Company’s certificate of incorporation, or the Company’s bylaws in any manner that adversely affects the rights, preferences, privileges or the restrictions provided for the benefit of, the Series B Convertible Preferred Stock; (b) issue further shares of Series B Convertible Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Series B Convertible Preferred Stock; (c) authorize or issue any Senior Stock; or (d) enter into any agreement to do any of the foregoing that is not expressly made conditional on obtaining the affirmative vote or written consent of the majority of then-outstanding Series B Convertible Preferred Stock. Holders of Series B Convertible Preferred Stock are entitled to receive when, as and if dividends are declared and paid on the common stock, an equivalent dividend, calculated on an as-converted basis. Shares of Series B Convertible Preferred Stock are otherwise not entitled to dividends.
The Company initially classified the first tranche of the Series B Convertible Preferred Stock as temporary equity in the consolidated balance sheets as the Company could have been required to redeem the Series B Convertible Preferred Stock if the Company could not convert the Series B Convertible Preferred Stock into shares of common stock for any reason including due to any applicable laws or by the rules or regulations of any stock exchange, interdealer quotation system, or other self-regulatory organization with jurisdiction over the Company which is not solely in the control of the Company. If the Company was required to redeem the Series B Convertible Preferred Stock, it would have been based upon the volume-weighted-average price of common stock on an as converted basis on the date the holders provided a conversion notice to the Company. On October 18, 2024, holders of the Series B Convertible Preferred Stock elected to convert 1,200,000 shares of Series B Convertible Preferred Stock for 4,236,568 shares of the Company’s common stock and consequently, the Company issued 4,236,568 shares of its common stock to holders of the Series B Convertible Preferred Stock. During the year ended December 31, 2024, the Company did not adjust the carrying value of the Series B Convertible Preferred Stock since it was not probable the holders would be unable to convert the Series B Convertible Preferred Stock into shares of common stock due to any reason including due to any applicable laws or by the rules or regulations of any stock exchange, interdealer quotation system, or other self-regulatory organization with jurisdiction over the Company. Upon conversion, the Company reclassified $ 21.2 million from Series B Convertible Preferred Stock to common stock and additional paid in capital on the consolidated balance sheet. As of December 31, 2025 and 2024, there are 0 shares of Series B Convertible Preferred Stock outstanding.
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The Company evaluated the Second Tranche Right under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and determined that it met the requirements for separate accounting from the initial issuance of Series B Convertible Preferred Stock as a freestanding financial instrument. The Company then determined the Second Tranche Right should be liability classified pursuant to ASC 480. As a result, the Company classified the Second Tranche Right as a non-current liability within the consolidated balance sheets and the Second Tranche Right was initially recorded at fair value and is subsequently re-measured at fair value at the end of each reporting period. The fair value of the Second Tranche Right on the date of issuance was determined to be $ 6.9 million based on a Monte-Carlo valuation and the Company allocated $ 6.9 million of the Series B Convertible Preferred Stock Proceeds to this liability and recorded this amount as preferred stock tranche liability. On December 31, 2023, the fair value of the Second Tranche Right was determined to be $ 4.2 million and the Company recorded this amount as preferred stock tranche liability on the consolidated balance sheets. The Second Tranche Right expired in July 2024 and is no longer outstanding. The Company recorded the mark-to-market adjustment of $ 4.2 million for the year ended December 31, 2024, under change in fair value of preferred stock tranche liability within the consolidated statements of operations and loss. The Company recorded the mark-to-market adjustment of $ 2.8 million for the year ended December 31, 2023, under change in fair value of preferred stock tranche liability within the consolidated statements of operations and loss.
The Company determined that all other features of the securities offered pursuant to the Series B Convertible Preferred Stock Securities Purchase Agreement were clearly and closely associated with the equity host and did not require bifurcation or the fair value of the feature was immaterial to the Company's consolidated financial statements. The Company reassesses the features on a quarterly basis to determine if they require separate accounting. There were no changes to the Company’s original assessment.
Series A Convertible Preferred Stock
On November 4, 2022, the Company e ntered into an exchange agreement (the “Exchange Agreement”) with Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS LP and MSI BVF SPV, LLC (collectively referred to as “BVF”), pursuant to which BVF exchanged 833,333 shares of the Company’s common stock for 1,000,000 shares of newly designated Series A convertible preferred stock, par value $ 0.0001 per share (the “Series A Convertible Preferred Stock”) (the “Exchange”).
Each share of the Series A Convertible Preferred Stock was convertible into 0.833 shares of the Company’s common stock at the option of the holder at any time, subject to certain limitations, including that the holder was prohibited from converting the Series A Convertible Preferred Stock into common stock if, as a result of such conversion, the holder, together with its affiliates, would beneficially own a number of shares of common stock above the Conversion Blocker, initially set at 9.99 % , of the total common stock then issued and outstanding immediately following the conversion of such shares of the Series A Convertible Preferred Stock. Holders of the Series A Convertible Preferred Stock were permitted to increase the Conversion Blocker to an amount not to exceed 19.99 % upon 60 days ’ notice.
Shares of Series A Convertible Preferred Stock generally had no voting rights, except as required by law and except that the consent of a majority of the holders of the outstanding Series A Convertible Preferred Stock was required to amend the terms of the Series A Convertible Preferred Stock. In the event of the Company’s liquidation, dissolution or winding up, holders of Series A Convertible Preferred Stock would have participated pari passu with any distribution of proceeds to holders of common stock. Holders of Series A Convertible Preferred Stock were entitled to receive when, as and if dividends were declared and paid on the common stock, an equivalent dividend, calculated on an as-converted basis. Shares of Series A Convertible Preferred Stock were otherwise not entitled to dividends.
The Series A Convertible Preferred Stock were (i) senior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms junior to the Series A Convertible Preferred Stock; (ii) on parity with the common stock and any class or series of capital stock of the Company created specifically ranking by its terms on parity with the Series A Convertible Preferred Stock; and (iii) junior to the Series B Convertible Preferred Stock and to any class or series of capital stock of the Company created specifically ranking by its terms senior to any Series A Convertible Preferred Stock, in each case, as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.
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The Company evaluated the Series A Convertible Preferred Stock for liability or equity classification under ASC 480 and determined that equity treatment was appropriate because the Series A Convertible Preferred Stock did not meet the definition of the liability under ASC 480. Additionally, the Series A Convertible Preferred Stock were not redeemable for cash or other assets (i) on a fixed or determinable date, (ii) at the option of the holder, or (iii) upon the occurrence of an event that is not solely within control of the Company. As such, the Company recorded the Series A Convertible Preferred Stock as permanent equity.
In June 2025, holders of the Series A Convertible Preferred Stock elected to convert all 1,000,000 shares of Series A Convertible Preferred Stock for 833,332 shares of the Company’s common stock and consequently, the Company issued 833,332 shares of its common stock to holders of the Series A Convertible Preferred Stock. As of December 31, 2025, there were no shares of Series A Convertible Preferred Stock outstanding.
At-the-market equity offering programs
In August 2021, the Company entered into a sales agreement with Cantor pursuant to which the Company can offer and sell up to $ 100.0 million of its common stock at the current market prices from time to time through Cantor as sales agent (the “August 2021 ATM”). In August 2025, the Company entered into a separate sales agreement with Cantor pursuant to which the Company can offer and sell up to $ 100.0 million of its common stock at the current market prices from time to time through Cantor as sales agent (the “August 2025 ATM” and together with the August 2021 ATM, the “ATM Programs”). During the years ended December 31, 2025, 2024, and 2023, the Company sold 4,000,000 shares, 0 shares, and 0 shares, respectively, under the ATM Programs for net proceeds of approximately $ 22.7 million, $ 0.0 million, and $ 0.0 million, respectively, (after deducting commissions and other offering expenses) .
11. Stock-based compensation
Stock-based compensation expense as reflected in the Company’s consolidated statements of operations and comprehensive loss was as follows (in thousands):
Year ended December 31,
2025
2024
2023
Research and development
$
2,527
$
2,134
$
1,987
Selling, general and administrative
6,878
5,208
3,873
Total stock-based compensation expense
$
9,405
$
7,342
$
5,860
All of the $ 9.4 million, $ 7.3 million, and $ 5.9 million of stock-based compensation expense recorded during the years ended December 31, 2025, 2024 and 2023, respectively, was recorded to additional paid-in capital.
The Company has awards outstanding under two equity compensation plans, the Amended and Restated 2021 Equity Incentive Plan (the “2021 Plan”), and the Amended and Restated 2012 Incentive Plan (the “2012 Plan”), as well as the inducement award program. Terms of stock award agreements, including vesting requirements, are determined by the board of directors, subject to the provisions of the individual plans.
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2021 Plan
During 2021, the Company’s stockholders approved the 2021 Equity Incentive Plan (the “Original 2021 Plan”). Upon effectiveness of the Original 2021 Plan, the Company ceased making awards under the 2012 Plan. At the Company’s 2024 Annual General Meeting of Shareholders in May 2024, the Company’s shareholders approved the Amended 2021 Plan. The Amended 2021 Plan together with the Original 2021 Plan is referred to as the 2021 Plan. The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, RSUs and other stock-based awards. The number of shares of common stock initially reserved for issuance under the Original 2021 Plan was (i) 1,991,666 plus (ii) the number of shares of the Company’s common stock underlying awards under the 2012 Plan and the 2010 Equity Incentive Plan (the “ 2010 Plan”) that expire, terminate or are surrendered without delivery of shares, are forfeited to or repurchased by the Company, or otherwise become available again for grant under the terms of the 2012 Plan or the 2010 Plan, as applicable. The Amended 2021 Plan increased the maximum number of shares available for issuance by 3,200,000 shares.
As of December 31, 2025, under the 2021 Plan, the Company has granted stock options for 2,590,423 shares of common stock, of which 418,541 have been forfeited and 34,402 have been exercised, and granted RSUs for 2,268,761 shares of common stock, of which 105,361 have been forfeited and 852,679 have vested. As of December 31, 2025, 1,567,799 shares remain available for future issuance under the 2021 Plan. The exercise price of each option has been equal to the closing price of a share of the Company’s common stock on the grant date.
2012 Plan
The 2012 Plan became effective immediately upon the closing of the Company’s initial public offering in February 2012. Upon effectiveness of the 2012 Plan, the Company ceased making awards under the 2010 Plan. The 2012 Plan initially allowed the Company to grant awards for up to 285,714 shares of common stock, plus the number of shares of common stock available for grant under the 2010 Plan as of the effectiveness of the 2012 Plan (which was an additional 2,508 shares), plus that number of shares of common stock related to awards outstanding under the 2010 Plan which terminate by expiration, forfeiture, cancellation or otherwise. The 2012 Plan included an “evergreen provision” that allowed for an annual increase in the number of shares of common stock available for issuance under the 2012 Plan. The annual increase was added on the first day of each year from 2013 through 2018 and was equal to the lesser of 107,412 shares of common stock and 4.0 % of the number of shares of common stock outstanding, or a lesser amount as determined by the board of directors. On each of January 1, 2018, January 1, 2017 and January 1, 2016, the number of shares available for issuance under the 2012 Plan increased by 107,412 under this provision. On December 18, 2018, the shareholders of the Company approved the Amended and Restated 2012 Incentive Plan which increased the maximum number of shares available for issuance under the 2012 Plan to 1,385,702 and eliminated the evergreen provision. On May 19, 2020, the shareholders of the Company approved the Amended and Restated 2012 Incentive Plan which increased the maximum number of shares available for issuance by 1,083,333 shares.
Awards under the 2012 Plan may include the following award types: incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSUs, other stock-based or cash-based awards and any combination of the foregoing. As of December 31, 2025, under the 2012 Plan, the Company has granted stock options for 1,841,188 shares of common stock, of which 1,201,898 have been forfeited, 238,203 have expired, and 191,342 have been exercised, and granted RSUs for 556,432 shares of common stock, of which 87,547 have been forfeited and 468,885 have vested. The exercise price of each stock option has been equal to the closing price of a share of the Company’s common stock on the grant date. Upon adoption of the Original 2021 Plan, the Company ceased issuing awards from the 2012 Plan.
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Inducement Award Program
In December 2014, the Company established an inducement award program (in accordance with Nasdaq Listing Rule 5635(c)(4)) under which it may grant non-statutory stock options to purchase, and RSUs in respect of up to an aggregate of 62,500 shares of common stock to new or prospective employees as inducement to enter into employment with the Company. In December 2016, the Board of Directors authorized and reserved 48,333 additional shares of common stock under this program. In December 2017, the Board of Directors authorized and reserved 208,333 additional shares of common stock under this program. In June and December 2018, the Board of Directors authorized and reserved 141,666 and 104,166 additional shares of common stock under this program, respectively. In February 2020, the Board of Directors authorized the reduction of 169,447 shares available for issuance under this program. In September 2023, the Board of Directors authorized and reserved 500,000 additional shares of common stock under this program. In September 2025, the Board of Directors authorized and reserved 400,000 additional shares of common stock under this program. The program is governed by the terms of the 2021 Plan, but shares issued pursuant to the program are not issued under the 2021 Plan. As of December 31, 2025, the Company had granted options for 1,459,605 shares of common stock under the program, of which 725,488 have been forfeited, 1,997 have expired and 48,913 have been exercised, and granted RSUs for 164,137 shares, of which 45,658 have been forfeited and 115,302 have vested. As of December 31, 2025, 508,330 shares remain available for future issuance.
Stock Options
Most options granted by the Company vest twenty-five percent ( 25 %) one year from vesting start date and six and a quarter percent ( 6.25 %) for each successive three-month period, thereafter (subject to acceleration of vesting in the event of certain change of control transactions) subject to the employee’s continued employment with, or service to, the Company on such vesting date and are exercisable for a period of ten years from the date of grant.
Option Exchange Program
On January 17, 2024, the Company’s stockholders, upon recommendation of the board of directors, approved a one-time stock option exchange program (the “Option Exchange Program”) for certain employees, executive officers and non-employee directors of the Company who held certain underwater options and remained employed or otherwise engaged by the Company through the completion of the Exchange Offer. The Company’s offer to participate in the Option Exchange Program commenced on February 8, 2024, and expired on March 8, 2024 (the “Exchange Offer”). Pursuant to the Exchange Offer, 42 eligible holders elected to exchange, and the Company accepted for cancellation, eligible options to purchase an aggregate of 603,330 shares of the Company’s common stock (the “Exchanged Options”). On March 11, 2024, promptly following the expiration of the Exchange Offer, the Company granted new options to purchase 603,330 shares of common stock (the “New Options”), pursuant to the terms of the Exchange Offer and the Amended 2021 Plan. The exercise price of the New Options granted was $ 11.44 per share, which was the closing price of the Company’s common stock on the Nasdaq Capital Market on the grant date of the New Options.
The exchange of stock options was treated as a modification for accounting purposes. As a result of the Option Exchange Program, the Company will recognize incremental stock-based compensation expense of $ 1.7 million over the requisite service period of the New Options, which is two or four years depending on whether the Exchanged Options were vested at the time of exchange. Since the Exchanged Options were not at-the-money on the modification date, the Company was precluded from utilizing the simplified method as described in SEC Staff Accounting Bulletin Topic 14.D.2 to calculate the expected term as a key assumption in the Black-Scholes pricing model. Therefore, the Company utilized the binomial lattice model to calculate the fair value of the Exchanged Options immediately prior to the exchange. The Company utilized the Black-Scholes option-pricing model to calculate the fair value of the New Options on the modification date. The Company is recognizing the remaining unamortized stock compensation expense for the Exchanged Options on the modification date over the original requisite service period of the Exchanged Options. At December 31, 2025, there was no unrecognized compensation cost related to Exchanged Options.
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A summary of the Company’s stock option activity and related information for the year ended December 31, 2025, is as follows:
Shares
Weighted-average exercise price per share
Weighted-average remaining contractual term (years)
Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2024
2,479,037
$
11.43
8.3
$
843
Granted
754,000
6.63
Exercised/Released
( 12,674 )
5.13
Forfeited/cancelled
( 189,306 )
6.83
Expired
( 625 )
95.88
Outstanding at December 31, 2025
3,030,432
$
10.53
7.7
$
2,731
Vested at December 31, 2025
1,568,702
$
12.78
7.1
$
1,248
The fair value of each stock option was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions:
Year ended December 31,
2025
2024
2023
Risk-free interest rate
3.93
%
4.07
%
3.77
%
Volatility
107
%
99
%
92
%
Dividend yield
—
—
—
Expected term (years)
5.9
5.8
6.1
The Company recorded stock-based compensation expense associated with employee and non-employee stock options of $ 4.5 million, $ 4.6 million, and $ 4.2 million, for the years ended December 31, 2025, 2024, and 2023, respectively. The weighted-average grant date fair value of stock options granted in the years ended December 31, 2025, 2024, and 2023 was $ 5.48 , $ 3.35 and $ 6.16 per stock option, respectively. The fair value of stock options that vested during the years ended December 31, 2025, 2024, and 2023 was $ 3.7 million, $ 3.5 million, and $ 3.1 million, respectively. The aggregate intrinsic value of options exercised (i.e., the difference between the market price at exercise and the price paid by employees to exercise the option) during the years ended December 31, 2025, 2024, and 2023 was $ 0.1 million, $ 0.1 million, and $ 0.0 million, respectively.
At December 31, 2025 there was $ 5.4 million of total unrecognized compensation cost related to unvested stock options and the Company expects to recognize this cost over a remaining weighted-average period of 2.2 years.
Restricted Stock Units (“RSUs”)
Each RSU entitles the holder to receive one share of the Company’s common stock when the RSU vests. The RSUs generally vest (i) twenty-five percent ( 25 %) one year from vesting start date and six and a quarter percent ( 6.25 %) for each successive three-month period, thereafter, (ii) two tranches for 50 % of the award with the second and final vesting date on the one year anniversary of the vesting commencement date, (iii) 100 percent within two years of the vesting commencement date and (iv) 33.3 % of the RSUs on the first three anniversaries of the grant date. The RSUs are subject to acceleration of vesting in the event of certain change of control transactions and subject to the employee’s continued employment with, or service to, the Company on such vesting date. Compensation expense is recognized on a straight-line basis.
A summary of RSU activity during the year ended December 31, 2025, is as follows:
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Shares
Weighted-average grant date fair value per share
Outstanding at December 31, 2024
1,010,233
$
6.29
Granted
1,132,374
$
5.73
Vested
( 687,067 )
$
6.37
Forfeited/cancelled
( 141,642 )
$
6.61
Outstanding at December 31, 2025
1,313,898
$
5.73
The Company recorded stock-based compensation expense associated with employee and non-employee RSUs of $ 4.9 million, $ 2.7 million, and $ 1.6 million, for the years ended December 31, 2025, 2024, and 2023, respectively. The total fair value of restricted stock units that vested during the years ended December 31, 2025, 2024, and 2023 was approximately $ 4.4 million, $ 1.7 million, and $ 1.7 million, respectively.
At December 31, 2025, there was $ 4.6 million of total unrecognized compensation cost related to unvested RSUs and the Company expects to recognize this cost over a remaining weighted-average period of 1.9 years.
Employee stock purchase plan
At the special meeting of stockholders, held on December 18, 2018, the stockholders approved the 2018 Employee Stock Purchase Plan (“2018 ESPP”). On June 21, 2019, the board of directors of the Company amended and restated the 2018 ESPP, to account for certain non-material changes to the plan’s administration (the “Amended and Restated 2018 ESPP”). The Amended and Restated 2018 ESPP provides eligible employees with the opportunity, through regular payroll deductions, to purchase shares of the Company’s common stock at 85 % of the lesser of the fair market value of the common stock (a) on the date the option is granted, which is the first day of the purchase period, and (b) on the exercise date, which is the last business day of the purchase period. The Amended and Restated 2018 ESPP generally allows for two six-month purchase periods per year beginning in January and July, or such other periods as determined by the compensation committee of the Company’s board of directors. The Company has reserved 166,666 shares of common stock for the administration of the Amended and Restated 2018 ESPP. The fair value of shares expected to be purchased under the Amended and Restated 2018 ESPP was calculated using the Black-Scholes model with the following weighted-average assumptions:
Year ended December 31,
2025
2024
2023
Risk-free interest rate
4.27
%
5.31
%
5.16
%
Volatility
96
%
115
%
126
%
Dividend yield
—
—
—
Expected term (years)
0.5
0.5
0.5
For the years ended December 31, 2025, 2024, and 2023, the Company has recognized less than $ 0.1 million of stock-based compensation expense each year under the Amended and Restated 2018 ESPP. During the years ended December 31, 2025, 2024, and 2023, the Company issued 16,341 shares, 15,231 shares and 14,270 shares, respectively, of common stock for proceeds of $ 0.1 million in each year under the Amended and Restated 2018 ESPP.
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12. Segment Reporting
The Company has one operating segment which is the business of researching, developing and commercializing drugs for the treatment of patients with cancer. While the Company group consists of entities incorporated in both the U.S. and Germany, the Company manages all business activities on a consolidated basis for the purposes of assessing performance, making operating decisions, and allocating Company resources. The Company’s Chief Operating Decision Maker (the “CODM”) is its President and Chief Executive Officer. The measure of segment assets is the same as reported on the consolidated balance sheets as total assets. The CODM assesses performance based on consolidated net loss that is also reported on the statements of operations and comprehensive loss. The CODM uses net loss to monitor budget versus actual results and to determine how to allocate resources and capital in line with the Company’s overall strategy and goals. The accounting policies of the Company's segment are the same as those described in Note 2. Significant accounting policies .
The table below is a summary of segment net loss including significant segment expenses for the years ended December 31, 2025, 2024 and 2023 (in thousands):
Year ended December 31,
2025
2024
2023
Revenue:
Product revenue, net
$
30,914
$
—
—
Sale of COPIKTRA license and related assets
—
10,000
$
—
Expenses:
Cost of sales - product
4,600
—
—
Cost of sales - intangible amortization
698
—
—
Research and development expenses (1)
112,065
78,648
59,137
Commercial expenses (1)
34,316
10,934
4,164
Medical affairs expenses (1)
11,046
5,231
2,907
General and administrative expenses (1)
28,512
21,785
19,755
Stock-based compensation expense
9,405
7,342
5,860
Depreciation expense
32
26
62
Interest income
( 4,068 )
( 4,149 )
( 6,214 )
Interest expense
1,138
4,562
4,139
Loss on debt extinguishment
1,826
—
—
Change in fair value of preferred stock tranche liability
—
( 4,189 )
( 2,751 )
Change in fair value of warrant liability
27,492
19,149
—
Change in fair value of Notes
12,751
—
—
Other segment items (2)
572
1,113
308
Income tax expense
—
185
—
Net loss
$
( 209,471 )
$
( 130,637 )
$
( 87,367 )
(1) This category is exclusive of non-cash stock-based compensation and severance expense.
(2) Other segment items primarily include severance expense and transactions losses and gains due to foreign currency fluctuations.
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13. Net Loss per Share
ASC Topic 260, Earnings Per Share, requires the Company to calculate its net loss per share based on basic and diluted net loss per share, as defined. Basic EPS excludes dilution and is computed by dividing net loss by the weighted average number of shares outstanding for the period. For the years ended December 31, 2025, 2024, and 2023 net loss, basic and diluted EPS are the same as the assumed exercise of stock options, RSUs, ESPP, Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Warrants are anti-dilutive.
The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect:
Year Ended December 31,
2025
2024
2023
Outstanding stock options
3,030,432
2,479,037
2,270,359
Outstanding restricted stock units
1,313,898
1,010,233
209,289
Warrants
8,429,166
18,083,334
—
Employee stock purchase plan
10,240
8,033
7,475
Series A Convertible Preferred Stock
—
833,333
833,333
Series B Convertible Preferred Stock
—
—
4,236,570
Total potentially dilutive securities
12,783,736
22,413,970
7,557,026
14. Income Taxes
There was no income tax expense for the years ended December 31, 2025 and 2023. The Company recorded income tax expense of $ 0.2 million for the year ended December 31, 2024 comprised of a federal income tax payment due to interest under IRC section 453A related to the $ 10.0 million milestone payment from Secura because it was an installment sale. This payment was made in 2025. Refer to Note. 16. License collaboration and commercial agreements for further discussion of the Secura APA
For the years ended December 31, 2025, 2024, and 2023 income tax expense consisted of the following (in thousands):
Year ended December 31,
2025
2024
2023
Current income tax expense:
Federal
$
—
$
185
$
—
State
—
—
—
Total current income tax expense
—
185
—
Deferred
Federal
—
—
—
State
—
—
—
Total deferred income tax expense
—
—
—
Total income tax expense
$
—
$
185
$
—
As further described in Note 2, Summary of Significant Accounting Policies , the Company elected to prospectively adopt the guidance in ASU 2023-09. The following table is a reconciliation of our effective income tax rate to the statutory federal income tax rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09:
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Year ended December 31, 2025
Amount
Percent
Pretax loss
$
( 209,471 )
US federal statutory rate
( 43,989 )
21.0
%
State and local income tax benefit, net of federal benefit
—
—
%
Tax credits
Research and development tax credits
( 9,710 )
4.6
%
Change in the valuation allowance
45,400
( 21.7 )
%
Nontaxable or nondeductible items
Change in fair value of warrant liability
5,773
( 2.8 )
%
Stock-based compensation
698
( 0.3 )
%
Other
1,828
( 0.9 )
%
Effective income tax rate
$
—
—
%
The following table is a reconciliation of the Company’s effective income tax rate to the statutory federal income tax rate for the year ended December 31, 2024 in accordance with the guidance prior to the adoption of ASU 2023-09:
Year ended December 31, 2024
Income tax benefit using U.S. federal statutory rate
21.00
%
State tax benefit, net of federal benefit
2.92
%
Research and development tax credits
4.56
%
Stock-based compensation
( 1.91 )
%
Permanent items
( 2.88 )
%
Change in the valuation allowance
14.59
%
Tax law change
6.20
%
NOL and tax credit expiration under Section 382
( 44.44 )
%
Other
( 0.18 )
%
Effective income tax rate
( 0.14 )
%
The principal components of the Company’s deferred tax assets and liabilities are as follows (in thousands):
December 31,
2025
2024
Deferred tax assets:
Net operating loss carryforwards
$
101,083
$
81,151
Capitalized research and development
52,887
38,478
Research and development credits
12,850
2,786
Stock-based compensation
2,902
2,762
Installment sale
7,187
7,652
Lease liability
130
395
Other deferred tax assets
2,408
462
Total deferred tax assets
179,447
133,686
Deferred tax liabilities:
Right-of-use asset
( 119 )
( 362 )
Total deferred tax liabilities
( 119 )
( 362 )
Net deferred tax asset prior to valuation allowance
179,328
133,324
Valuation allowance
( 179,328 )
( 133,324 )
Net deferred tax asset
$
—
$
—
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The Company has recorded a valuation allowance against its deferred tax assets at December 31, 2025 and 2024 because the Company’s management believes that it is more likely than not that these assets will not be fully realized. The increase in the valuation allowance of approximately $ 46.0 million in the year ended December 31, 2025, primarily relates to federal and state NOLs and credits.
As of December 31, 2025, the Company had federal and state NOL carryforwards of approximately $ 460.5 million and $ 99.5 million, respectively, which are available to reduce future taxable income. The Company also had federal and state tax credits of $ 12.3 million and $ 0.7 million, respectively, which may be used to offset future tax liabilities. The NOL and tax credit carryforwards will expire at various dates through 2045, except for $ 423.3 million of federal NOL carryforwards which may be carried forward indefinitely. Section 382 and 383 of the IRC and similar provisions under state law limit the utilization of U.S. NOL carryforwards, state NOL carryforwards, R&D credits, and OD credits following certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%. During 2024, the Company believes it triggered ownership changes under Section 382 of the IRC and similar provisions under state law. Based on the Company’s analysis under Section 382, the Company believes that its federal NOL carryforwards, its state NOL carryforwards, R&D credits, and OD credits are limited by Section 382 and similar provisions under state law as of December 31, 2025. The portion of federal NOL carryforwards, state NOL carryforwards, R&D credits, and OD credits that were determined to be limited have been written off as of December 31, 2025. The remaining unused carryforwards and credits remain available for future periods. The Company has approximately $ 346.4 million of federal NOLs generated prior to such ownership changes inclusive of $ 309.3 million of federal NOLs which may be carried forward indefinitely. Since the $ 309.3 million of federal NOLs may be carried forward indefinitely, these have not been written off as of December 31, 2025, but due to the limitations under Section 382 generally the Company can only use $ 1.6 million per year against taxable income in the future. Due to the Company’s full valuation allowance the write off of certain NOL carryforwards and R&D and OD credits did not have any impact to the statements of operation and comprehensive loss.
The Tax Cuts and Jobs Act (“TCJA”) requires taxpayers to capitalize and amortize research and development (“R&D”) expenditures under section 174 for tax years beginning after December 31, 2021. This rule became effective for the Company during 2022. The Company is amortizing these costs for tax purposes over 5 years for R&D performed in the U.S. and over 15 years for R&D performed outside the U.S.
The One Big Beautiful Bill Act ("OBBBA") was passed and became effective for the Company during 2025. The legislation includes, among other provisions, permanent full expensing for certain business assets, changes to the interest deduction limitation under Section 163(j), amendments to international tax provisions including the global intangible low-taxed income (“GILTI”) and foreign-derived intangible income (“FDII”) regimes, the permanent extension of the controlled foreign corporation (“CFC”) look-through rule, as well as modifications to the treatment of research and development expenditures mentioned above.
Congress modified the treatment for research and development expenditures by adding new Section 174A, which applies for tax years beginning after December 31, 2024. Section 174A permits the immediate deduction of domestic R&D expenditures or, at the taxpayer’s election, capitalization and amortization over a period of at least five years beginning when the related benefits are first realized. Foreign R&D expenditures continue to be capitalized and amortized over 15 years. Transition provisions allow taxpayers either to continue amortizing amounts capitalized under the TCJA rules or to deduct remaining unamortized domestic R&D expenditures in the first tax year beginning after December 31, 2024. The Company has elected to continue amortizing previously capitalized domestic R&D expenditures over the remaining amortization period permitted under OBBBA.
On October 4, 2023, Massachusetts enacted tax law changes which included the adoption of a single sales apportionment factor effective on January 1, 2025. On December 4, 2024, Massachusetts subsequently enacted supplemental legislation modifying Massachusetts' single sales apportionment factor in certain circumstances. As required under ASC 740, the Company has accounted for the deferred tax impacts of this tax law change in the period the tax law was enacted. The impact of the tax law change is offset by a change in valuation allowance.
The Company’s reserves related to taxes are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. From inception and through December 31, 2025, the
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Company had no unrecognized tax benefits or related interest , and penalties accrued. The Company has not conducted a study of R&D credit and OD credit carryforwards. A future study may result in an adjustment to the Company’s R&D credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s R&D credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the consolidated balance sheet or statement of operations if an adjustment were required. The Company would recognize both accrued interest and penalties related to unrecognized benefits in income tax expense. The Company’s uncertain tax positions are related to years that remain subject to examination by relevant tax authorities. Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S. federal, state and local income tax authorities for all tax years in which a loss carryforward is available.
15. Commitments and contingencies
The Company entered into a lease agreement for approximately 27,810 square feet of office space in Needham, Massachusetts. Please refer to Note 9. Leases for further details regarding the minimum aggregate future lease commitments as of December 31, 2025. In conjunction with the execution of the February 2018 Amended Lease Agreement and November 2024 Amended Lease Agreement, the Company has provided a security deposit in the form of a letter of credit in the amount of $ 0.2 million as of December 31, 2025, and 2024. The amount is included in non-current restricted cash on the consolidated balance sheets as of December 31, 2025, and 2024.
As of December 31, 2025, the Company has committed to spend approximately $ 48.1 million under the IQVIA Master Services Agreement which the Company expects to spend in the next two to three years. As of December 31, 2025, approximately $ 13.7 million of this commitment is included within vendor financing arrangements, accrued expenses, and accounts payable on the consolidated balance sheets. Pursuant to the terms of various other agreements, the Company may be required to pay various development, regulatory and commercial milestones. In addition, if any products related to these agreements are approved for sale, the Company may be required to pay significant royalties on future sales. The payment of these amounts, however, is contingent upon the occurrence of various future events, which have a high degree of uncertainty of occurring.
16. License, collaboration and commercial agreements
Pfizer, Inc.
On July 11, 2012, the Company entered into a license agreement (the “Pfizer Agreement”) with Pfizer (“Pfizer”) under which Pfizer granted the Company worldwide, exclusive rights to research, develop, manufacture and commercialize products containing certain of Pfizer’s inhibitors of FAK, including defactinib, for all therapeutic, diagnostic and prophylactic uses in humans. The Company has the right to grant sublicenses under the foregoing licensed rights, subject to certain restrictions.
Upon entering into the Pfizer Agreement, the Company made a one-time cash payment to Pfizer in the amount of $ 1.5 million and issued 16,001 shares of its common stock. In April 2025, the Company entered into an amendment to the Pfizer Agreement such that a $ 7.5 million milestone became payable upon FDA approval of AVMAPKI FAKZYNJA CO-PACK on May 8, 2025 (the “First Pfizer Milestone”), and $ 8.0 million milestone (the “Second Pfizer Milestone”) is payable upon the one-year anniversary of the FDA approval of AVMAPKI FAKZYNJA CO-PACK. The Company recorded a $ 15.0 million intangible asset related to these payments on the consolidated balance sheets and will record $ 0.5 million of interest expense related to the Second Pfizer Milestone. Pfizer is also eligible to receive up to $ 2.0 million in developmental milestones and up to an additional $ 110.0 million based on the successful attainment of regulatory and commercial sales milestones. The future milestone payments are contingent in nature and will be recognized if and when the respective contingencies are resolved. Pfizer is also eligible to receive high single to mid-double-digit royalties on future net sales of the products. The Company’s
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royalty obligations with respect to each product in each country begin on the date of first commercial sale of the product in that country, and end on the later of 10 years after the date of first commercial sale of the product in that country or the date of expiration or abandonment of the last claim contained in any issued patent or patent application licensed by Pfizer to the Company that covers the product in that country.
License Agreement
In the second quarter of 2025, the Company entered into an agreement with a third party to obtain an exclusive license for certain patents and intellectual property related to avutometinib and defactinib (the “License Agreement”). This agreement covers one of the four patent families that the Company has exclusively licensed and are owned by either Chugai or the third party. Pursuant to the License Agreement, the Company became obligated to pay $ 2.1 million in the year ended December 31, 2025 and is further obligated to pay up to $ 2.3 million upon achievement of certain milestones. The Company recorded $ 2.1 million within intangible assets related to these payments on the consolidated balance sheets. The future milestone payments are contingent in nature and will be recognized if and when the respective contingencies are resolved.
GenFleet Therapeutics (Shanghai), Inc.
On August 24, 2023, the Company entered into the GenFleet Agreement, pursuant to which GenFleet granted the Company the option to obtain exclusive development and commercialization rights worldwide outside of mainland China, Hong Kong, Macau, and Taiwan (the “Territory”) for up to three oncology programs targeting RAS pathway driven cancers (the “GenFleet Options”). The Company may exercise its GenFleet Options on a program-by-program basis. In January 2025, the Company exercised its GenFleet Option with respect to VS-7375 and made a $ 6.0 million payment to GenFleet.
The Company made an upfront payment of $ 2.0 million to GenFleet in September 2023 and will provide $ 1.5 million of research support over the first three years of the GenFleet Agreement. In addition, pursuant to the GenFleet Agreement, upon achievement of certain milestones, and upon the Company exercising its GenFleet Options, GenFleet will be entitled to receive payments of up to $ 622.0 million, inclusive of (i) up to $ 154.0 million upon achievement of certain development and commercialization milestones, (ii) up to $ 450.0 million upon achievement of certain sales milestones, and (iii) up to $ 18.0 million upon exercise of all three GenFleet Options. The Company paid GenFleet a $ 3.0 million milestone in the year ended December 31, 2024, upon GenFleet achieving a development milestone. The Company has also agreed to pay GenFleet royalties on net sales of licensed products in the Territory ranging from the mid to high single digits.
The Company may terminate the GenFleet Agreement in its entirety or on a program-by-program basis by providing 90 days written notice to GenFleet. Either party may terminate the GenFleet Agreement in its entirety or on a program-by-program and country-by-country basis, with 60 days ’ written notice for the other party’s material breach if such party fails to cure the breach. Either party may also terminate the GenFleet Agreement in its entirety upon certain insolvency events involving the other party.
The Company expensed $ 6.0 million in January 2025, related to the GenFleet Option payment within
research and development expense in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2025. The other future milestone payments are contingent in nature and will be recognized if and when the respective contingencies are resolved. If the Company elects to exercise further GenFleet Options, the related payment will be recognized if and when each respective GenFleet Option is elected.
Secura Bio, Inc.
On August 10, 2020, the Company and Secura signed the Secura APA and on September 30, 2020, the transaction closed.
Pursuant to the Secura APA, the Company sold to Secura its exclusive worldwide license, including related assets, for the research, development, commercialization, and manufacture in oncology indications of products containing duvelisib. The sale included certain intellectual property related to duvelisib in oncology indications, certain existing duvelisib inventory, claims and rights under certain contracts pertaining to duvelisib. Pursuant to the Secura APA,
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Secura assumed all operational and financial responsibility for activities that were part of the Company’s duvelisib oncology program, including all commercialization efforts related to duvelisib in the United States and Europe, as well as the Company’s ongoing duvelisib clinical trials. Further, Secura assumed all obligations with existing collaboration partners developing and commercializing duvelisib, which include Yakult, Honsha Co., Ltd. (“Yakult”), CSPC Pharmaceutical Group Limited (“CSPC”) and Sanofi. Additionally, Secura assumed all royalty payment obligations due under the amended and restated license agreement with Infinity Pharmaceuticals, Inc.
Pursuant to the terms of the Secura APA, Secura has paid the Company an up-front payment of $ 70.0 million in September 2020 and has agreed to pay the Company (i) regulatory milestone payments up to $ 45.0 million, consisting of a payment of $ 35.0 million upon receipt of regulatory approval of COPIKTRA in the United States for the treatment of peripheral T-cell lymphoma and a payment of $ 10.0 million upon receipt of the first regulatory approval for the commercial sale of COPIKTRA in the European Union for the treatment of peripheral T-cell lymphoma, (ii) sales milestone payments of up to $ 50.0 million, consisting of $ 10.0 million when total worldwide net sales of COPIKTRA exceed $ 100.0 million, $ 15.0 million when total worldwide net sales of COPIKTRA exceed $ 200.0 million and $ 25.0 million when total worldwide net sales of COPIKTRA exceed $ 300.0 million, (iii) low double-digit royalties on the annual aggregate net sales above $ 100.0 million in the United States, European Union, and the United Kingdom of Great Britain and Northern Ireland and (iv) 50 % of all royalty, milestone and sublicense revenue payments payable to Secura under the Company’s existing license agreements with Sanofi, Yakult, and CSPC, and 50 % of all royalty and milestone payments payable to Secura under any license or sublicense agreement entered into by Secura in certain jurisdictions.
The Company evaluated the Secura APA in accordance with ASC 606 as the Company concluded that the counterparty, Secura, is a customer. The Company identified a bundled performance obligation consisting of delivery of the duvelisib global license and intellectual property, certain existing duvelisib inventory, certain duvelisib contracts and clinical trials, certain regulatory approvals, and certain regulatory documentation and books and records (the “Bundled Secura Performance Obligation”).
The Company concluded that the duvelisib global license and intellectual property were not distinct within the context of the contract (i.e. separately identifiable) because the other assets including certain existing duvelisib inventory, certain duvelisib contracts and clinical trials, certain regulatory approval, and certain regulatory documentation and books and records do not have stand-alone value from other duvelisib global license and intellectual property and Secura could not benefit from them without the duvelisib global license and intellectual property. Consistent with the guidance under ASC 606-10-25-16A, the Company disregarded immaterial promised goods and services when determining performance obligations.
The Company determined that the upfront payment of $ 70.0 million, future potential milestone payments and royalties including from Secura’s sublicensees should be allocated to the delivery of the Bundled Secura Performance Obligation.
During the years ended December 31, 2025 and 2023, the Company has no t recognized any revenue associated with the Secura APA. During the year end ended December 31, 2024, Secura achieved $ 100.0 million of total worldwide net sales of COPIKTRA which triggered a $ 10.0 million sales milestone payment to the Company under the Secura APA. The Company received the $ 10.0 million milestone payment in July 2024. The Company determined all future potential milestones and royalties were excluded from the transaction price, as all other milestone amounts were fully constrained under the guidance as of December 31, 2025. As part of the Company’s evaluation of the constraint, the Company considered several factors in determining whether there is significant uncertainty associated with the future events that would result in the milestone payments. Those factors included: the likelihood and magnitude of revenue reversals related to future milestones, the amount of variable consideration that is highly susceptible to factors outside of the Company’s influence and the uncertainty about the consideration is not expected to be resolved for an extended period of time. All future potential milestone payments were fully constrained as the risk of significant revenue reversal related to these amounts has not yet been resolved.
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17. Notes Payable
In January 2025, the Company entered into a finance agreement with FIRST Insurance Funding (“First Insurance”). Pursuant to the terms of the agreement, First Insurance loaned the Company the principal amount of $ 1.2 million, which accrued interest at 6.9 % per annum, to fund a portion of the Company’s insurance policies. Pursuant to the agreement with First Insurance, the Company made an initial payment of $ 0.3 million and made monthly payments of $ 0.1 million through November 2025 including principal and interest. The agreement assigned First Insurance a first priority lien and security interest in the financed insurance policies. The outstanding balance at December 31, 2025 was $ 0.0 million.
18. Employee benefit Plan
In June 2011, the Company adopted a 401(k) retirement and savings plan (the 401(k) Plan) covering all employees. The 401(k) Plan allows employees to make pre-tax or post-tax contributions up to the maximum allowable amount set by the Internal Revenue Service. Under the 401(k) Plan, the Company may make discretionary contributions as approved by the board of directors. The Company made contributions to the 401(k) Plan of approximately $ 1.3 million, $ 1.0 million and $ 0.8 million in each of the years ended December 31, 2025, 2024, and 2023.
19. Vendor Financing Arrangement
Pursuant to the IQVIA Master Services Agreement, the Company has extended payment terms with respect to a portion of the services provided and has recorded a vendor financing arrangement liability of $ 10.3 million as of December 31, 2025. The Company expects to pay the amounts recorded as vendor financing arrangement liabilities during 2026 and 2027.
20. Subsequent events
The Company reviews all activity subsequent to year end but prior to the issuance of the consolidated financial statements for events that could require disclosure or that could impact the carrying value of assets or liabilities as of the consolidated balance sheet date. The Company is not aware of any material subsequent events other than the following:
Warrants exercise
In January 2026, 8,391,666 Warrants were exercised. As a result, the Company issued 8,391,666 shares of common stock and received net proceeds of $ 29.4 million.
Note Purchase Agreement amendment
In March 2026, the Company amended the Note Purchase Agreement to extend the date the Company may draw the Second Purchase from December 31, 2025 to June 30, 2026. Refer to Note 8. Long-term debt for additional details on the Note Purchase Agreement.
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