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Item 7. Management’s Discussion and Analysis

2025-03-20 compared with 2024-03-14 · 88 added, 70 removed, 210 unchanged (43% of the section changed)

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Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those discussed below and as set forth under “Risk Factors.” Please also refer to the section under the heading “Forward-Looking Statements.”

We are a late-stage development biopharmaceutical company, with an ongoing registration directed trial, committed to advancing new medicines for patients battling cancer.

Our pipeline is focused on novel anticancer agents that inhibit critical signaling pathways in cancer that promote cancer cell survival and tumor growth, particularly RAF/MEK inhibition and FAK inhibition.

Our most advanced product candidates, avutometinib and defactinib, are being investigated in both preclinical and clinical studies for the treatment of various solid tumors, including, but not limited to LGSOC, NSCLC, pancreatic cancer, CRC, and melanoma.

We are a late-stage development biopharmaceutical company committed to the development and commercialization of new medicines to improve the lives of patients diagnosed with RAS/ MAPK pathway-driven cancers.

Our pipeline is focused on novel small molecule drugs that inhibit critical signaling pathways in cancer that promote cancer cell survival and tumor growth, including RAF/MEK inhibition, FAK inhibition and KRAS G12D inhibition.

We believe that avutometinib may be beneficial as a therapeutic, as a single agent or when used together in combination with defactinib, other agents, other pathway inhibitors, or other current and emerging standard of care treatments in cancers that do not adequately respond to currently available therapies.

On August 10, 2020, we and Secura signed the Secura APA and on September 30, 2020, the transaction closed.

Pursuant to the Secura APA, we sold to Secura our exclusive worldwide license for the research, development, commercialization, and manufacture in oncology indications of products containing duvelisib.

Refer to Note 13.

License, collaboration and commercial agreements in our consolidated financial statements located in this Annual Report on Form 10-K for a detailed description of the terms and conditions of the Secura APA.

With the transition of the duvelisib program to Secura, we are focusing our efforts on our lead product candidates, avutometinib and defactinib.

Our operations to date have been organizing and staffing our company, business planning, raising capital, identifying and acquiring potential product candidates, undertaking preclinical studies and clinical trials for our product candidates and initiating U.S.

commercial operations following the approval of COPIKTRA through our ownership period ending in September 2020.

We have financed our operations to date primarily through public offerings of our common stock and pre-funded warrants, offerings of convertible notes, sales of common stock under our at-the-market equity offering programs, our loan and security agreement executed with Hercules in March 2017, as amended, the upfront payments and milestone payments under our license and collaboration agreements with Sanofi, CSPC, and Yakult, the upfront payment and milestone payments received under the Secura APA, the proceeds in connection with the private investment in public equity (the “PIPE”), and our loan and security agreement executed with Oxford in March 2022, sales of Series B Convertible Preferred Stock.

We have financed our operations to date primarily through public and private offerings of our common stock, warrants and pre-funded warrants, offerings of convertible notes, sales of common stock under our at-the-market equity offering programs, our loan and security agreement executed with Hercules in March 2017, as amended, the Loan Agreement, the Note Purchase Agreement, the upfront payments and milestone payments under our license and collaboration agreements with Sanofi, CSPC, and Yakult, the upfront payment and milestone payments received under the Secura APA, and sales of Series B Convertible Preferred Stock.

Additionally, from our U.S.

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We anticipate operating losses may continue for the foreseeable future since we do not yet have regulatory approval to sell any of our product candidates, and we continue to incur operating costs to execute our strategic plan, including costs related to research and development of our product candidates and commercial readiness activities.

These conditions raise substantial doubt about our ability to continue as a going concern for 12 months after the date the consolidated financial statements are issued.

We expect to finance our operations with our existing cash, cash equivalents and investments, through potential future milestones and royalties received pursuant to the Secura APA, through the loan and security agreement with Oxford, or through other strategic financing opportunities that could include, but are not limited to collaboration agreements, future offerings of our equity, or the incurrence of debt.

However, given the risk associated with these potential strategic or financing opportunities, they are not deemed probable for purposes of the going concern assessment.

As a result of the assessment in accordance with the applicable accounting standards, these conditions raise substantial doubt about our ability to continue as a going concern for 12 months after the date the consolidated financial statements are issued.

We expect to finance our operations with our existing cash, cash equivalents and investments, through potential future milestones and royalties received pursuant to the Secura APA, through the Note Purchase Agreement or through other strategic financing opportunities that could include, but are not limited to collaboration agreements, future offerings of our equity, or the incurrence of debt.

However, given the risks associated with these potential strategic or financing opportunities, they are not deemed probable for purposes of the going concern assessment.

If we fail to obtain additional future capital, we may be unable to complete our planned preclinical studies and clinical trials and obtain approval of certain investigational product candidates from the FDA or foreign regulatory authorities.

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Research and development expenses include product/ product candidate and/or project-specific costs, as well as unallocated costs.

We allocate the expenses related to external research and development services, such as contract research organizations (“CROs”), clinical sites, manufacturing organizations and consultants, by project and/or product candidate.

We allocate the expenses related to external research and development services, such as CROs, clinical sites, manufacturing organizations and consultants, by project and/or product candidate.

We use our employee and infrastructure resources in a cross-functional manner across multiple research and development projects.

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● direct third-party costs, which include expenses incurred under agreements with CROs, the cost of consultants who assist with the development of our product candidates on a program-specific basis, clinical site costs, and any other third-party expenses directly attributable to the development of the product candidates;

● costs related to contract manufacturing operations including manufacturing costs in connection with producing product candidates for use in conducting preclinical and clinical studies.

Costs associated with manufacturing avutometinib are included in “Avutometinib manufacturing and non-clinical trial specific” category below as these costs relate to both the “Avutometinib + defactinib” and “Avutometinib + other combinations” categories and are not specifically allocated to any particular project.

Costs to produce defactinib are included in “Avutometinib + defactinib” below;

● direct costs related to avutometinib or defactinib that are not specific to a clinical trial such as the costs relating to contract manufacturing operations including manufacturing costs in connection with producing avutometinib and defactinib are included within “ Avutometinib and defactinib manufacturing and non-clinical trial specific” as the cost to manufacture avutometinib and defactinib is not allocated to specific clinical trials;

● license fees.

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Product/ product candidate / project specific costs

Avutometinib + defactinib

Avutometinib + other combinations

Avutometinib manufacturing and non-clinical trial specific

Avutometinib + defactinib - LGSOC

Avutometinib + defactinib - NSCLC

Avutometinib + defactinib - pancreatic cancer

Avutometinib + defactinib - other indications

Avutometinib and defactinib manufacturing and non-clinical trial specific

Unallocated costs

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Other income, other expense, interest income and interest expense

Other expense for the year ended December 31, 2023 was comprised of transaction losses due to changes in foreign currency exchange rates.

Other expense for each of the years ended December 31, 2024 and 2023 was comprised of transaction losses due to changes in foreign currency exchange rates.

Other income for the year ended December 31, 2022 was comprised of a gain on the sale of fixed assets and transaction gains due to changes in foreign currency exchange rates.

There was no other income or other expense for the year ended December 31, 2021.

Interest income reflects interest earned on our cash, cash equivalents and available-for-sale securities.

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Change in fair value of preferred stock tranche liability

The change in fair value of preferred stock tranche liability for the year ended December 31, 2023, was comprised of the mark-to-market adjustment related to the second tranche right issued as part of the Securities Purchase Agreement (the “Series B Preferred Stock Securities Purchase Agreement”), dated January 24, 2023 with certain purchasers pursuant to which the Company agreed to sell and issue to the purchasers in a private placement up to 2,144,160 shares of its Series B Convertible Preferred Stock in two tranches.

There was no preferred stock tranche liability outstanding during the years ended December 31, 2022 and December 31, 2021.

The change in fair value of preferred stock tranche liability for the years ended December 31, 2024 and December 31, 2023, was comprised of the mark-to-market adjustment related to the second tranche right issued as part of the Securities Purchase Agreement (the “Series B Convertible Preferred Stock Securities Purchase Agreement”), dated January 24, 2023 with certain purchasers pursuant to which the Company agreed to sell and issue to the purchasers in a private placement up to 2,144,160 shares of its Series B Convertible Preferred Stock in two tranches.

The preferred stock tranche liability expired in July 2024 and is no longer outstanding.

There was no preferred stock tranche liability outstanding during the year ended December 31, 2022.

Change in fair value of common stock warrant liability

The change in fair value of warrant liability for the year ended December 31, 2024 was comprised of the mark-to-market adjustment related to liability classified warrants issued as part of the July 2024 Offering (defined herein).

There were no warrants outstanding during the years ended December 31, 2023, or December 31, 2022.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with United States generally accepted accounting principles (“U.S.

The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements.

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Revenue recognition

We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services in accordance with Accounting Standards Codification (“ASC”) Topic 606 Revenue from Contracts with Customers.

We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 Revenue from Contracts with Customers (“ASC 606”).

Sales of intellectual property

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Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

At December 31, 2023, we determined less than $0.1 million of future potential royalties, we expect to receive pursuant to the Secura APA, were not constrained and have been recorded in the transaction price.

As the consideration for future royalties is conditional, we recorded a corresponding contract asset for the expected future royalties.

Portions of the contract asset are reclassified to accounts receivable when the right to consideration becomes unconditional.

At December 31, 2024, we determined no future potential royalties pursuant to the Secura APA were not constrained.

Refer to Note 2.

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Collaborative Arrangements:

Contracts are considered to be collaborative arrangements pursuant to GAAP when they satisfy the following criteria defined in ASC Topic 808, Collaborative Arrangements:

Contracts are considered to be collaborative arrangements pursuant to U.S.

GAAP 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.

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If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid accordingly.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular

To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.

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The fair value of our stock options and ESPP grants is estimated at the date of grant using the Black-Scholes option pricing model.

For determining fair value of stock options when the stock options are not at the money because of a modification, we are precluded from utilizing the simplified method as described in SEC SAB Topic 14.D.2 to calculate the expected term as a key assumption in the Black-Scholes pricing model.

Therefore, when valuing stock options that are not at the money, we utilize a binomial lattice model to calculate the fair value of the stock option.

We have also 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 management’s best estimates of the time to vesting for the achievement of the performance-based milestones.

If the actual achievement of the performance-based milestones varies from our estimates, stock-based compensation expense could be materially different than what is recorded in the period.

The cumulative effect on current and prior periods of a change in the estimated time to vesting for performance-based RSUs and stock options will be recognized as compensation cost in the period of the revision, and recorded as a change in estimate.

The cumulative effect on current and prior periods of a change in estimate for performance-based RSUs and stock options will be recognized as compensation cost in the period of the revision, and recorded as a change in estimate.

While the assumptions used to calculate and account for stock-based compensation awards represent management’s best estimates, these estimates involve inherent uncertainties and the application of management’s judgment.

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Sale of COPIKTRA license and related assets

Transition services revenue

Total revenue

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Loss from operations

Other income (expense)

Other expense

Interest income

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Change in fair value of preferred stock tranche liability

Change in fair value of warrant liability

Net loss before taxes

Income tax expense

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

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Sale of COPIKTRA license and related assets revenue for the year ended December 31, 2024 (the “2024 Period”) was $10.0 million compared to $0.0 million for the year ended December 31, 2023 (the “2023 Period”).

Sale of COPIKTRA license and related assets revenue for the 2022 Period was comprised of one regulatory milestone for $2.5 million achieved by Secura’s sublicensee, CSPC, and $0.1 million related to royalties on COPIKTRA sales in the 2022 Period and future royalties expected to be received pursuant to the Secura APA that are not constrained.

Sale of COPIKTRA license and related assets revenue for the 2024 Period was comprised of one sales milestone of $10.0 million due upon Secura achieving cumulative worldwide net sales of COPIKTRA exceeding $100.0 million during the 2024 Period.

The $10.0 million milestone payment was received by us in July 2024.

Research and development expense.

Research and development expense for the 2024 Period was $81.3 million compared to $61.4 million for the 2023 Period.

The $10.8 million increase from the 2022 Period to the 2023 Period was primarily related to an increase of $6.1 million in CRO costs, a $2.0 million upfront payment made in September 2023 pursuant to the GenFleet Agreement, an increase of $1.8 million in personnel related costs, including non-cash stock-based compensation, an increase of $1.5 million in IST costs, an increase of $0.9 million in consulting costs, and an increase of $0.7 million in investigator fees.

The increase is partially offset by a decrease of $2.2 million in drug substance and drug manufacturing costs.

The $19.9 million increase from the 2023 Period to the 2024 Period was primarily related to an increase of $6.4 million in CRO costs, an increase of $4.7 million in investigator fees, an increase of $4.5 million in consulting costs, an increase of $2.5 million in personnel related costs, including non-cash stock-based compensation, and an increase of $1.8 million in clinically supply costs.

The increase in CRO costs and investigator fees was primarily driven by increased costs related to the RAMP 301 study which we commenced in the last quarter of 2023.

The increase in consulting costs was primarily driven by additional consultants in 2024 to support RAMP 301 startup and enrollment and additional consulting costs related to completing the NDA submission for avutometinib and defactinib for treatment of patients with recurrent LGSOC.

Selling, general and administrative expense.

Selling, general and administrative expense for the 2024 Period was $43.6 million compared to $30.7 million for the 2023 Period.

The increase of $5.7 million from the 2022 Period to the 2023 Period primarily resulted from an increase of $1.7 million in personnel related costs, including non-cash stock-based compensation, an increase of $1.4 million of costs in anticipation of the potential launch of avutometinib and defactinib in LGSOC, an increase of $1.2 million in consulting and professional fees, an increase of $0.6 million in costs associated with financing activities, and an increase of $0.8 million in travel and other costs.

Other Income (expense).

Other expense of $0.1 million for the 2023 Period was comprised of transaction losses due to changes in foreign currency exchange rates compared to other income of less than $0.1 million for the 2022 Period comprised of a gain on the sale of fixed assets and transaction gains due to changes in foreign currency exchange rates.

The increase of $12.9 million from the 2023 Period to the 2024 Period primarily resulted from an increase of $4.8 million in personnel related costs, including non-cash stock-based compensation, an increase of $4.7 million of costs in anticipation of the potential launch of avutometinib and defactinib in LGSOC, an increase of $3.0 million in July 2024 Offering financing fees in the 2024 Period, and an increase of $1.0 million in consulting and professional fee, partially offset by $0.6 million in financing fees for the offering of our Series B Convertible Preferred Stock in the 2023 Period.

Other expense.

Other expense of $0.1 million for the 2024 Period and the 2023 Period was comprised of transaction losses due to changes in foreign currency exchange rates.

Interest income.

Interest income for the 2024 Period was $4.1 million compared to $6.2 million for the 2023 Period.

The increase of $5.0 million in interest income was primarily driven by an increase in interest rates and investment balances on short-term investments and cash equivalents.

The decrease of $2.1 million in interest income was primarily driven by a decrease in interest rates and investment balances on short-term investments and cash equivalents.

Interest expense.

Interest expense for the 2024 Period was $4.6 million compared to $4.1 million for the 2023 Period.

The increase of $2.0 million from the 2022 Period to the 2023 Period was primarily driven by increased expense on the Loan Agreement as a result of the additional $15.0 million debt drawdown on March 22, 2023.

The increase of $0.5 million from the 2023 Period to the 2024 Period was primarily driven by additional interest expense in the 2024 Period on the Loan Agreement as a result of the additional $15.0 million debt drawdown on March 22, 2023.

Change in fair value of preferred stock tranche liability.

The change in fair value of the preferred stock tranche liability of $2.8 million for the 2023 Period was comprised of the mark-to-market adjustment related to the second tranche right issued as part of the Series B Convertible Preferred Stock Securities Purchase Agreement.

There was no preferred stock tranche liability outstanding during the 2022 Period.

The change in fair value of the preferred stock tranche liability was $4.2 million income for the 2024 Period compared to $2.8 million income for the 2023 Period.

The change in fair value of preferred stock tranche liability was comprised of the mark-to-market adjustment related to the second tranche right issued as part of the Series B Convertible Preferred Stock Securities Purchase Agreement.

The fair value of the preferred stock tranche liability decreased from $4.2 million at the beginning of the 2024 Period and expired in July 2024 resulting in $4.2 million income in the 2024 Period.

The fair value of the preferred stock tranche liability decreased from $6.9 million upon issuance on January 24, 2023, to $4.1 million at the end of the 2023 Period resulting in $2.8 million income in the 2023 Period.

Change in fair value of warrant liability.

The change in fair value of the warrant liability of $19.1 million expense for the 2024 Period was comprised of the mark-to-market adjustment for the liability classified warrants issued as part of the July 2024 Offering.

The liability classified warrants increased in value from July 23, 2024, to December 31, 2024 primarily driven by an increase in our stock price.

There was no warrant liability outstanding during the 2023 Period.

Income tax expense.

Income tax expense of $0.2 million for the 2024 Period was comprised of interest under IRC section 453A related to the $10.0 million milestone payment from Secura because it was an installment sale for tax purposes.

There was no income tax expense in the 2023 Period.

LIQUIDITY AND CAPITAL RESOURCES

Sources of liquidity

We have financed our operations to date primarily through public and private offerings of our common stock and pre-funded warrants, offerings of convertible notes, sales of common stock under our at-the-market equity offering programs, our loan and security agreement executed with Hercules in March 2017, as amended, the upfront payments under our license and collaboration agreements with Sanofi, Yakult, and CSPC, the upfront payment under the Secura APA, the proceeds in connection with the PIPE, the Loan Agreement with Oxford, and the issuance of Series B Convertible Preferred Stock.

With the commercial launch of COPIKTRA in the United States in September 2018 through our ownership period ending in September 2020, we financed a portion of our operations through product revenue.

We have financed our operations to date primarily through public and private offerings of our common stock, warrants and pre-funded warrants, offerings of convertible notes, convertible preferred stock sales of common stock under our at-the-market equity offering programs, our loan and security agreement executed with Hercules in March 2017, as amended, the Loan Agreement, the Note Purchase Agreement, the upfront payments and milestone payments under our license and collaboration agreements with Sanofi, CSPC, and Yakult, and the upfront payment and milestone payments received under the Secura APA.

Additionally, from our commercial launch of COPIKTRA in the United States on September 24, 2018, through our ownership period ending in September 2020, we financed a portion of our operations through product revenue.

As of September 30, 2020, we have sold our COPIKTRA license and no longer sell COPIKTRA in the United States.

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Financing activities

Increase (decrease) in cash, cash equivalents and restricted cash

Increase in cash, cash equivalents and restricted cash

Operating activities.

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Our cash outflow from net losses adjusted for non-cash adjustments was $108.5 million and $85.5 million for the 2024 Period and 2023 Period, respectively.

Non-cash adjustments were primarily related to stock-based compensation expense, non-cash interest, net, and change in fair value on preferred stock tranche liability in the 2023 Period and stock-based compensation expense in the 2022 Period.

Non-cash adjustments for the 2024 Period were primarily related to stock-based compensation expense, change in the fair value of warrant liability and change in the fair value of preferred stock tranche liability.

Non-cash adjustments for the 2023 Period were primarily related to stock-based compensation expense, non-cash interest, net and change in the fair value of preferred stock tranche liability.

Our cash inflow for the 2024 Period from operating activities due to changes in operating assets and liabilities was $3.7 million primarily driven by an increase of $8.0 million in accrued expenses and other liabilities, partially offset by a decrease of $3.2 million in accounts payable, an increase of $0.6 million in prepaid expenses, other current assets and other assets, a decrease of $0.3 million in deferred liabilities and an increase of $0.2 million in grant receivable.

Our cash outflow for the 2023 Period from operating activities due to changes in operating assets and liabilities was $1.0 million for the 2023 Period primarily driven by an increase of $5.8 million in prepaid expenses, other current assets and other assets, and a decrease of $0.4 million in deferred liabilities, partially offset by an increase of $2.9 million in accrued expenses and other liabilities, and an increase of $2.3 million in accounts payable.

Our cash inflow for the 2022 Period from operating activities due to changes in operating assets and liabilities was $3.9 million primarily driven by an increase of $2.6

million in accounts payable, an increase of $0.7 million in deferred liabilities, a decrease of $0.7 million of prepaid expenses, other current assets and other assets, and a decrease of $0.5 million in accounts receivable, partially offset by a $0.6 million decrease in accrued expenses and other liabilities.

The changes in prepaid expenses, other current assets, and other assets in both periods are exclusive of cash received from PanCAN and used in the RAMP 205 study.

The increases in both periods in prepaid expenses, other current assets, and other asserts is exclusive of cash received from PanCAN and used on the RAMP 205 study.

Cash used in operating activities was $104.8 million and $86.5 million for the 2024 Period and the 2023 Period, respectively.

Investing activities.

The cash used in investing activities for the 2023 Period primarily relates to the net purchases of investments of $44.4 million.

The cash provided by investing activities for the 2024 Period primarily relates to the net maturities of investments of $60.0 million.

The cash used in investing activities for the 2023 Period primarily relates to the net purchases of investments of $44.4 million.

Financing activities.

The cash provided by financing activities for the 2023 Period primarily represents $91.4 million of proceeds from our previously disclosed public offering in June 2023 of common stock and pre-funded warrants to purchase shares of our common stock, net of issuance costs, $28.1 million of proceeds received from issuance of Series B Convertible Preferred Stock, net of issuance costs, $14.9 million of proceeds received pursuant to the loan and security agreement with Oxford, $1.4 million of proceeds received from insurance premium financing and $0.1 million of proceeds received related to our employee stock purchase plan, partially offset by $1.4 million of payments on insurance premium financing, and $0.3 million of repayment of our 5.00% Convertible Senior Notes due 2048 (the “2018 Notes”).

The cash provided by financing activities for the 2022 Period primarily represents $27.4 million of net proceeds received under our at-the market equity offering program, $24.1 million of net proceeds received from the loan and security agreement with Oxford, and $0.3 million of proceeds received related to exercise of stock options and our employee stock purchase plan.

The cash provided by financing activities for the 2024 Period represents $53.8 million of net proceeds received from the issuance of shares of common stock, pre-funded warrants, and warrants as part of the July 2024 Offering, $1.3 million of proceeds received from insurance premium financing, $0.9 million of proceeds received from exercise of warrants and $0.2 million of proceeds received from exercise of stock options and our employee stock purchase plan, partially offset by $1.3 million of payments on insurance premium financing, and $0.2 million of fees paid to the Lenders to amend our Loan Agreement with Oxford.

The cash provided by financing activities for the 2023 Period primarily represents $91.4 million of proceeds from our public offering in June 2023 of common stock and pre-funded warrants to purchase shares of our common stock, net of issuance costs, $28.1 million of proceeds received from issuance of Series B Convertible Preferred Stock, net of issuance costs, $14.9 million of proceeds received pursuant to the Loan Agreement, $1.4 million of proceeds received from insurance premium financing and $0.1 million of proceeds received related to our employee stock purchase plan, partially offset by $1.4 million of payments on insurance premium financing, and $0.3 million of repayment of our 5.00% Convertible Senior Notes due 2048.

Refer to Note 7.

Capital Stock to our consolidated financial statements located in this Annual Report on Form 10-K for additional details on the January 2023 offering of our Series B Convertible Preferred Stock, the June 2023 offering of our common stock and pre-funded warrants to purchase shares of our common stock, and our at-the-market equity offering program;

Capital Stock to our consolidated financial statements located in this Annual Report on Form 10-K for additional details on the July 2024 Offering of common stock, pre-funded warrants, and warrants, the June 2023 Offering of common stock and pre-funded warrants, and the January 2023 offering of our Series B Convertible Preferred Stock;

Debt to our consolidated financial statements located in this Annual Report on Form 10-K for additional details on the Loan Agreement;

Notes Payable to our consolidated financial statements located in this Annual Report on Form 10-K for additional details on the finance agreement with AFCO Premium Credit LLC related to insurance premium financing and the monthly payments of principal and interest related thereto;

Convertible Senior Notes to our consolidated financial statements located in this Annual Report on Form 10-K for details on the 2018 Notes.

Notes Payable to our consolidated financial statements located in this Annual Report on Form 10-K for additional details on the finance agreement with

AFCO Premium Credit LLC related to insurance premium financing and the monthly payments of principal and interest related thereto.

Funding requirements

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Our future capital requirements will depend on many factors, including:

● the costs and timing of commercialization activities for our product candidates for which we expect to receive marketing approval;

● the costs and timing of activities in anticipation of potential commercialization for avutometinib and defactinib and product candidates for which we expect to receive marketing approval ;

● the scope, progress, and results of our ongoing and potential future clinical trials;

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● the costs, timing, and outcome of regulatory review of our product candidates (including our efforts to seek approval and fund the preparation and filing of regulatory submissions);

● revenue received from commercial sales our product candidates, should any of our other product candidates receive marketing approval;

● revenue, if any, received from commercial sales of our product candidates, including avutometinib and defactinib, should any of our product candidates receive marketing approval;

● the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending intellectual property related claims;

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Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, and through future potential milestones and royalties received pursuant to the Secura APA.

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

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

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

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If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Without additional funding we do not believe that we have sufficient funds to meet our obligations within the next 12 months from the date of issuance of these consolidated financial statements.

Without additional funding we believe that we may not have sufficient funds to meet our obligations within the next 12 months from the date of issuance of these consolidated financial statements.

While we believe that we may have sufficient funds to meet our obligations within the next 12 months from the date of the issuance of the consolidated financial statements for the year ended December 31, 2024, in performing this analysis under the applicable accounting standards management excluded certain elements of our operating plan that cannot be considered probable of occurring.

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The lease term commenced on April 15, 2014 and it was scheduled to expire on September 30, 2019.

Effective February 15, 2018, we amended the lease agreement to relocate within the facility to another location consisting of 27,810 square feet of office space (the “Amended Lease Agreement”).

The Amended Lease Agreement extends the expiration date of the lease from September 2019 through June 2025.

Pursuant to the Amended Lease Agreement, the initial annual base rent amount is approximately $0.7 million, which increases during the lease term to $1.1 million for the last 12-month period.

As of December 31, 2023, the total future minimum lease payments under the agreement are $1.6 million through June 2025.

Effective February 15, 2018, we amended our 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, we 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 of December 31, 2024, the total future lease payments under the agreement are $1.6 million through June 2026.

In 2024 we entered into a master services agreement with IQVIA (“IQVIA Master Services Agreement”) for our strategic collaboration with IQVIA to leverage IQVIA’s infrastructure and established commercialization solutions to complement our launch strategy for the potential launch of avutometinib and defactinib in patients with KRAS mt LGSOC planned for middle of 2025.

As of December 31, 2024, we have committed to spend approximately $60.0 million under the IQVIA Master Services Agreement which we expect to spend in the next three to four years.

As discussed in Note 13.

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TAX LOSS CARRYFORWARDS

As of December 31, 2023, we had federal and state net operating loss (“NOL”) carryforwards of $473.6 million and $189.0 million, respectively, which are available to reduce future taxable income.

As of December 31, 2024, we had federal and state NOL carryforwards of $370.6 million and $56.7 million, respectively, which are available to reduce future taxable income.

We also had federal and state tax credits of $2.6 million and $0.2 million, respectively, which may be used to offset future tax liabilities.

The net operating loss and tax credit carryforwards will expire at various dates through 2043, except for $277.9 million of federal net operating loss carryforwards which may be carried forward indefinitely.

Net operating loss 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, as well as similar state provisions.

The NOL and tax credit carryforwards will expire at various dates through 2044, except for $333.4 million of federal NOL carryforwards which may be carried forward indefinitely.

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 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.

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In the future, if we determine that a portion or all of the tax benefits associated with our tax carryforwards will be realized, net income would increase in the period of determination.

Based on our analysis under Section 382 of the Internal Revenue Code and similar provisions under state law, we believe that our federal net operating loss carryforwards, our state net operating loss carryforwards, our research and development (“R&D”) credits and our Orphan Drug (“OD”) credits will be limited as of December 31, 2023.

Based on our analysis under Section 382 of the IRC and similar provisions under state law, we believe that our federal NOL carryforwards, our state NOL carryforwards, our research and development (“R&D”) credits and our Orphan Drug (“OD”) credits will be limited as of December 31, 2024.

The portion of federal NOL, state NOL, R&D credits and OD credits that were determined to be limited by Section 382 have been written off as of December 31, 2024.

The remaining unused carryforwards remain available for future periods.

During 2024, we believe we triggered ownership changes under Section 382 of the IRC and similar provisions under state law.

have 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, 2024, but due to the limitations under Section 382, generally we can only use $1.6 million per year against taxable income in the future.

Due to our full valuation allowance the write off of NOLs, R&D credits, and OD credits did not have any impact to the statements of operation and comprehensive loss for the 2024 Period and 2023 Period.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis