What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-20 compared with 2024-03-14 · 383 added, 296 removed, 885 unchanged (43% of the section changed)

11 unchanged sentences

(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 GAAP, and that receipts and expenditures are being made only in accordance with the authorizations of management and directors;

(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;

(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.

19 unchanged sentences

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.

EXECUTIVE COMPENSATION

30 unchanged sentences

333-177677) filed by the Registrant on January 13, 2012)

D escription of Securities (incorporated by reference to Exhibit 4.5 to the Form 10-K filed by the Registrant with the Securities and Exchange Commission on March 14, 2023)

D escription of Securities

Form of Pre-Funded Warrant.

(incorporated by reference to Exhibit 4.1 to the Form 8-K filed by the Registrant with the Securities and Exchange Commission on June 21, 2023).

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).

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).

Form of Incentive Stock Option Agreement under 2012 Incentive Plan (incorporated by reference to Exhibit 10.3 to Amendment No.

17 unchanged sentences

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)

Second Amendment of Lease Agreement, dated November 1, 2024, between the Registrant and 117 Kendrick DE, LLC

Employment Agreement, dated August 2, 2023, by and between Verastem, Inc.

8 unchanged sentences

(incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Registrant on May 7, 2020)

First Amendment to License Agreement for CKI27, dated April 19, 2020 between Verastem, Inc.

and Chugai Pharmaceutical, Co.

Second Amendment to License Agreement for CKI27, dated August 12, 2021, between Verastem, Inc.

and Chugai Pharmaceutical Co.

Third Amendment to License Agreement for CKI27, dated May 10, 2023, between Verastem, Inc.

and Chugai Pharmaceutical Co.

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)

12 unchanged sentences

(incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Registrant on November 9, 2020)

Exchange Agreement by and between Verastem, Inc.

and Highbridge Tactical Credit Master Fund, L.P., dated November 6, 2020 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by the Registrant on November 9, 2020)

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)

Securities Purchase Agreement, dated January 24, 2023, by and among Verastem, Inc.

and each purchaser 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 25, 2023)

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).

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)

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.

1 unchanged sentence

Amended and Restated 2018 Employee Stock Purchase Plan.

(incorporated by reference to Exhibit 10.1 to Form 10-Q by the Registrant with the Securities and Exchange Commission on August 8, 2023)

(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)

Amended and Restated 2012 Incentive Plan .

4 unchanged sentences

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)

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)

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)

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)

Collaboration and Option Agreement by and between Verastem, Inc.

and GenFleet Therapeutics (Shanghai), Inc.

dated as of August 24, 2023.

Form of Restricted Stock Unit Agreement under the Amended and Restated 2021 Equity Incentive Plan.

Insider Trading Policy

Subsidiaries of the Registrant

6 unchanged sentences

Section , as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Policy for Recoupment of Incentive Compensation

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)

Press Release issued by Verastem, Inc.

8 unchanged sentences

Filed herewith.

Certain confidential information contained in this exhibit has been omitted because it (i) is not material and (ii) would be competitively harmful if publicly disclosed.

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.

45 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Stockholders’ (Deficit) Equity

Consolidated Statements of Cash Flows

4 unchanged sentences

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

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2024 and 2023, 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, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

25 unchanged sentences

Description of the Matter

As summarized in Note 4 to the consolidated financial statements, the Company’s accrued clinical expenses were $6.5 million at December 31, 2023, which included the estimated

obligation for clinical trial expenses incurred as of December 31, 2023 but not paid as of that date.

As summarized in Note 4 to the consolidated financial statements, the Company’s accrued clinical expenses were $10.9 million at December 31, 2024, which included the estimated obligation for clinical trial expenses incurred as of December 31, 2024 but not paid as of that date.

In addition, the Company’s total prepaid expenses and other current assets were $5.9 million, which included amounts that were paid in advance of services incurred pursuant to clinical trials.

As discussed in Note 2 to the consolidated financial statements, the Company records clinical trial expenses as incurred.

The Company’s determination of costs incurred for certain devel opment 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.

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.

4 unchanged sentences

To evaluate the accrued and prepaid clinical trial expenses, our audit procedures included, among others, testing the accuracy and completeness of the underlying data used in the estimates and evaluating the significant assumptions used by management to estimate the recorded accruals and prepayments.

We obtained third party confirmation from the Company’s primary contract research organization to validate the underlying data used in management’s estimate.

We obtained third party confirmation from the Company’s most significant contract research organizations to validate the underlying data used in management’s estimate.

We corroborated the progress of research and development activities associated with clinical trials through discussion with the Company’s research and development personnel that oversee the clinical activities.

10 unchanged sentences

Short-term investments

Accounts receivable, net

Grant receivable

Prepaid expenses and other current assets

9 unchanged sentences

Lease liability, short-term

Convertible senior notes

Total current liabilities

3 unchanged sentences

Preferred stock tranche liability

Warrant liability

Total liabilities

1 unchanged sentence

Series B Convertible Preferred Stock, $ 0.0001 par value;

2,144 and 0 shares designated at December 31, 2023 and December 31, 2022, respectively;

1,200 and 0 shares issued and outstanding at December 31, 2023 and 2022, respectively

944 shares and 2,144 shares designated at December 31, 2024 and December 31, 2023, respectively;

0 shares and 1,200 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively

Stockholders’ equity:

8 unchanged sentences

Accumulated deficit

Total stockholders’ equity

Total liabilities, convertible preferred stock and stockholders’ equity

Total stockholders’ (deficit) equity

Total liabilities, convertible preferred stock and stockholders’ (deficit) equity

See accompanying notes to the consolidated financial statements.

4 unchanged sentences

Sale of COPIKTRA license and related assets

Transition services revenue

Total revenue

8 unchanged sentences

Change in fair value of preferred stock tranche liability

Change in fair value of warrant liability

Net loss before taxes

Income tax expense

Net loss per share—basic and diluted

4 unchanged sentences

Verastem, Inc.

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY

(in thousands, except share data)

5 unchanged sentences

Unrealized loss on available-for-sale marketable securities

Conversion of Notes into common stock

Issuance of common stock under Employee Stock Purchase Plan

Issuance of common stock resulting from vesting of restricted stock units

Issuance of common stock resulting from exercise of stock options

Issuance of common stock resulting from at-the-market transactions, net

Stock-based compensation expense

Balance at December 31, 2021

Unrealized loss on available-for-sale marketable securities

Issuance of Series A Convertible Preferred Stock in exchange for common stock

12 unchanged sentences

Balance at December 31, 2023

Unrealized loss on available-for-sale marketable securities

Issuance of common stock and pre-funded warrants, net of issuance costs of $ 1,179

Conversion of Series B Convertible Preferred Stock to common stock

( 1,200,000 )

Issuance of common stock upon exercise of pre-funded warrants

Issuance of common stock upon exercise of warrants

Issuance of common stock resulting from exercise of stock options

Issuance of common stock under Employee Stock Purchase Plan

Issuance of common stock resulting from vesting of restricted stock units

Stock-based compensation expense

Balance at December 31, 2024

See accompanying notes to the consolidated financial statements.

5 unchanged sentences

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

Amortization of right-of-use asset and lease liability

Non-cash operating lease cost

Stock-based compensation expense

1 unchanged sentence

Change in fair value of preferred stock tranche liability

Change in fair value of warrant liability

Changes in operating assets and liabilities:

Accounts receivable, net

Grant receivable

Prepaid expenses, other current assets and other assets

9 unchanged sentences

Financing activities

Payments for loan amendment

Proceeds from issuance of Series B Convertible Preferred Stock, net

4 unchanged sentences

Proceeds from the exercise of stock options and employee stock purchase program

Settlement of restricted stock for tax withholdings

Proceeds from the issuance of common stock and pre-funded warrants, net

Proceeds from the issuance of warrants

Proceeds from exercise of warrants

Net cash provided by financing activities

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

Increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

4 unchanged sentences

Issuance of preferred stock tranche liability

Conversion of 2020 Notes into common stock

Purchases of property and equipment included in accounts payable and accrued expenses

Issuance costs included in accounts payable and accrued expenses

Conversion of Series B Convertible Preferred Stock to common stock

Conversion of warrant liability to common stock upon warrant exercise

Right of use asset obtained in exchange for operating lease liability

See accompanying notes to the consolidated financial statements.

1 unchanged sentence

Verastem, Inc.

(the “Company”) is a late-stage development biopharmaceutical company, with an ongoing registration directed trial, committed to advancing new medicines for patients battling cancer.

The Company’s 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.

The Company’s 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 low-grade serous ovarian cancer (“LGSOC”), non-small cell lung cancer (“NSCLC”), pancreatic cancer, colorectal cancer (“CRC”), and melanoma.

The Company believes 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 September 24, 2018, the Company’s first commercial product, COPIKTRA® (duvelisib), was approved by the U.S.

Food and Drug Administration (the “FDA”) for the treatment of adult patients with certain hematologic cancers including relapsed or refractory chronic lymphocytic leukemia/ small lymphocytic lymphoma after at least two prior therapies and relapsed or refractory follicular lymphoma after at least two prior systemic therapies.

On August 10, 2020, the Company and Secura Bio, Inc.

(“Secura”) entered into an asset purchase agreement (“Secura APA”).

Pursuant to the Secura APA, the Company sold to Secura its exclusive worldwide license, including certain related assets for the research, development, commercialization, and manufacture in oncology indications of products containing COPIKTRA (duvelisib).

The transaction closed on September 30, 2020.

Refer to Note 13.

License, collaboration and commercial agreements for a detailed discussion of the Secura APA.

(the “Company”) is a late-stage development biopharmaceutical company committed to the development and commercialization of new medicines to improve the lives of patients diagnosed with ras sarcoma (“RAS”)/ mitogen activated pathway kinase (“MAPK”) pathway-driven cancers.

The Company’s 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.

The Company’s 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 low grade serous ovarian cancer (“LGSOC”), non-small cell lung cancer (“NSCLC”) and pancreatic cancer.

The Company 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.

The consolidated financial statements include the accounts of Verastem Securities Company and Verastem Europe GmbH, wholly-owned subsidiaries of the Company.

6 unchanged sentences

The Company anticipates operating losses may continue for the foreseeable future since the Company does not yet have regulatory approval to sell any of its product candidates, and the Company continues to incur operating costs to execute its strategic plan, including costs related to research and development of its product candidates and commercial readiness activities.

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

The Company expects to finance its operations with its 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 Finance LLC (“Oxford”), 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, given the risk associated with these potential strategic or financing opportunities, they are not deemed probable for purposes of the going concern assessment.

If the Company fails to obtain additional future capital, it may be unable to complete its planned preclinical studies and clinical trials and obtain approval of certain

investigational product candidates from the FDA or foreign regulatory authorities.

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

(“Secura”), pursuant to the Company’s 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”), 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, given the risks associated with these potential strategic or financing opportunities, they are not deemed probable for purposes of the going concern assessment.

If the Company fails to obtain additional future capital, 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.

Therefore, there is substantial doubt about the Company’s ability to continue as a going concern.

5 unchanged sentences

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 as of December 31, 2022 and the 12 months ended December 31, 2023, 2022 and 2021, to give retroactive effect to the Reverse Stock Split.

The Company has retroactively restated the share and per share amounts in the consolidated financial statements for the 12 months ended December 31, 2023 and 2022, to give retroactive effect to the Reverse Stock Split.

Proportionate adjustments were made to the per share exercise price and number of shares of common stock issuable under all outstanding stock options, convertible notes and preferred stock.

In addition, proportionate adjustments have been made to the number of shares of common stock issuable upon vesting of the restricted stock units and the number of shares of common stock reserved for the Company’s equity incentive compensation plans.

The consolidated statements of convertible preferred stock and stockholders’ equity and balance sheets 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 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 years ended December 31, 2023, and 2022.

Significant accounting policies

1 unchanged sentence

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.

generally accepted accounting principals (“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 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 and its preferred stock tranche liability.

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.

The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable.

2 unchanged sentences

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 one operating segment, which is the business of developing and commercializing drugs for the treatment of cancer.

The Company views its operations and manages its business in 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 United States.

3 unchanged sentences

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 study is evaluating whether combining avutometinib (to target mutant KRAS 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 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, 2024 the Company has received $ 4.1 million of cash proceeds which was initially recorded as deferred liabilities on the balance sheet.

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 entity recognizes as expenses the related costs for which the grants are intended to compensate.

The Company recorded $ 2.0 million and $ 0.3 million of the proceeds as a reduction of research and development expense during the years ended December 31, 2023 and December 31, 2022, respectively.

As of December 31, 2023 and December 31, 2022, the Company recorded $ 0.3 million and $ 0.7 million, respectively, as deferred liabilities in the consolidated balance sheet related to the PanCAN Grant.

The Company recorded $ 2.0 million, $ 2.0 million and $ 0.3 million of the proceeds as a reduction of research and development expense during the years ended December 31, 2024, 2023, and 2022, respectively.

As of December 31, 2024, the company recorded $ 0.2 million as a grant receivable related to the PanCAN Grant in the consolidated balance sheet.

As of December 31, 2023, the Company recorded $ 0.3 million as deferred liabilities related to the PanCAN Grant in the consolidated balance sheet.

Cash, cash equivalents and restricted cash

9 unchanged sentences

Total cash, cash equivalents and restricted cash

Amounts included in restricted cash as of December 31, 2023 and December 31, 2022 represent (i) cash received pursuant to the PanCAN Grant restricted for future expenditures for specific research and development activities in the amounts of $ 0.9 million and $ 0.6 million, respectively, and (ii) 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.

Cash held pursuant to the PanCAN Grant is included in prepaid expenses and other current assets on the consolidated balance sheet as of December 31, 2023, and December 31, 2022.

Amounts included in restricted cash as of December 31, 2024 is 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.

Amounts included in restricted cash as of December 31, 2023 represent (i) 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 and (ii) cash received pursuant to the PanCAN Grant restricted for expenditures for specific research and development activities in the amounts of $ 0.9 million.

The letters of credit are included in non-current restricted cash on the consolidated balance sheets as of December 31, 2024 and December 31, 2023.

Cash held pursuant to the PanCAN Grant is included in prepaid expenses and other current assets on the consolidated balance sheet as of December 31, 2023.

Fair value of financial instruments

13 unchanged sentences

Cash equivalents

Short-term investments

Total financial assets

Preferred stock tranche liability

Warrant liability

December 31, 2023

3 unchanged sentences

Total financial assets

Preferred stock tranche liability

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.

3 unchanged sentences

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, 2024 and 2023.

Warrant liability

A warrant liability was recorded as a result the July 2024 Offering (defined herein) (see Note 7.

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 inception 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 July 23, 2024 and December 31, 2024:

December 31, 2024

July 23, 2024

Risk-free interest rate

Dividend yield

Remaining term (years)

The following table represents a reconciliation of the warrant liability (in thousands):

July 23, 2024

Fair value of warrants exercised

Fair value adjustment

December 31, 2024

Preferred Stock tranche liability

A preferred stock tranche liability was recorded as a result of the entry into the Series B Convertible Preferred Stock Securities Purchase Agreement (defined herein) (see Note 7.

4 unchanged sentences

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 preferred stock tranche liability at December 31, 2023 and January 24, 2023:

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

Below are the inputs used to value the preferred stock tranche liability at December 31, 2023:

December 31, 2023

January 24, 2023

Risk-free interest rate

1 unchanged sentence

Remaining term (years)

The following table represents a rollforward for the year ended December 31, 2023 of the preferred stock right liability recorded in connection with the entry into the Series B Convertible Preferred Stock Securities Purchase Agreement (in thousands):

The following table represents a roll forward for the year ended December 31, 2024 of the preferred stock right liability (in thousands):

January 1, 2024

Fair value recognized upon entering into Securities Purchase Agreement

Fair value adjustment

December 31, 2024

Fair Value of Financial Instruments

The fair value of the Company’s 2018 issued 5.00 % Convertible Senior Notes due 2048 (the “2018 Notes”) was approximately $ 0.3 million as of December 31, 2022, which equals the carrying value of the 2018 Notes as of December 31, 2022.

During the year ended December 31, 2023, the Company repaid the 2018 Notes and no 2018 Notes remain outstanding.

Convertible Senior Notes for additional discussion on the 2018 Notes.

The fair value of the 2018 Notes is influenced by the Company’s stock price, stock price volatility, and current market yields and was determined using Level 3 inputs.

Long-term debt

The fair value of the Company’s long-term debt is determined using a discounted cash flow analysis with current applicable rates for similar instruments as of the consolidated balance sheet date.

4 unchanged sentences

Government money market funds, overnight repurchase agreements collateralized by government agency securities or U.S.

Treasury securities, corporate bonds and commercial paper of publicly traded companies that are classified as available-for-sale pursuant to ASC Topic 320, Investments—Debt and Equity Securities .

Treasury securities, corporate bonds and commercial paper of publicly traded companies that are classified as available-for-sale pursuant to Accounting Standards Codification (“ASC”) Topic 320, Investments—Debt and Equity Securities .

The Company classifies investments available to fund current operations as current assets on its consolidated balance sheets.

2 unchanged sentences

The Company reviews investments for impairment whenever the fair value of a investment is less than the amortized cost and evidence indicates that a investment’s carrying amount is not recoverable.

Unrealized losses are evaluated for impairment under ASC 326, Financial Instruments - Credit Losses (“ASC 326”), to determine if the impairment is credit-related or noncredit-related.

Unrealized losses are evaluated for impairment under ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”), to determine if the impairment is credit-related or noncredit-related.

Credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings, and noncredit-related impairment is recognized in other comprehensive income (loss).

Evidence considered in this assessment includes reasons for the impairment, compliance with our investment policy, the severity of the impairment, collectability of the security, and any adverse conditions specifically related to the security, an industry, or geographic area.

Realized gains and losses are

determined using the specific identification method and are included in interest income in the consolidated statements of operations and comprehensive loss.

Realized gains and losses are determined using the specific identification method and are included in interest income in the consolidated statements of operations and comprehensive loss.

There were no realized gains or losses on investments for the years ended December 31, 2024, 2023 or 2022.

Accrued interest receivable is excluded from the amortized cost and estimated fair value of the Company’s investments.

Accrued interest receivable of $0.1 million is presented within prepaid expenses and other current assets on the consolidated balance sheets as of December 31, 2023 and December 31, 2022.

There were two debt securities in an unrealized loss position at each of December 31, 2023, and December 31, 2022.

None of these investments had been in an unrealized loss position for more than 12 months as of December 31, 2023 and December 31, 2022.

There was no accrued interest receivable as of December 31, 2024.

Accrued interest receivable of $ 0.1 million is presented within prepaid expenses and other current assets on the consolidated balance sheets as of December 31, 2023.

There were zero and two debt securities in an unrealized loss position at each of December 31, 2024, and December 31, 2023, respectively.

None of these investments had been in an unrealized loss position for more than 12 months as of December 31, 2023.

The Company considered the decline in the market value for these securities to be primarily attributable to current economic conditions and not credit related.

At both December 31, 2023 and December 31, 2022, the Company had the intent and ability to hold such securities until recovery.

As a result, the Company did not record any charges for credit-related impairments for its investments as of December 31, 2023 and December 31, 2022.

At December 31, 2023, the Company had the intent and ability to hold such securities until recovery.

As a result, the Company did not record any charges for credit-related impairments for its investments as of December 31, 2023.

The following is a summary of available-for-sale securities with unrealized losses for less than 12 months as of December 31, 2024 and 2023 (in thousands):

8 unchanged sentences

Total cash, cash equivalents & restricted cash:

Corporate bonds, agency bonds and commercial paper (due within 1 year )

Total investments

Total cash, cash equivalents, restricted cash and investments

December 31, 2023

1 unchanged sentence

Cash and money market accounts

Corporate bonds, agency bonds and commercial paper (due within 90 days )

Total cash, cash equivalents & restricted cash:

7 unchanged sentences

As of December 31, 2024, the Company’s cash, cash equivalents and investments 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.

There was no accounts receivable balance as of December 31, 2023.

As of December 31, 2022, there was one customer, Secura, that made up more than 60 % of the Company’s trade accounts receivable balance.

The Company assesses the creditworthiness of all its customers and sets and reassesses customer credit limits to ensure collectability of any trade accounts receivable balances are assured.

For the year ended December 31, 2023, the Company did not record any revenue.

For the year ended December 31, 2022 one customer, Secura, individually accounted for all of the Company’s total revenue.

For the year ended December 31, 2024 and December 31, 2022 there was one customer, Secura, who individually accounted for all of the Company’s revenue.

Refer to Note 13.

17 unchanged sentences

● 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 clinical research organizations (“CROs”), clinical trial sites, manufacturing organizations and consultants, including the scientific advisory board;

● 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;

25 unchanged sentences

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.

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.

31 unchanged sentences

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.

(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.

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 .

The Company analyzes accounts that are past due for collectability and provides an allowance for receivables when collection becomes doubtful.

The Company accounts for income taxes under the asset and liability method.

8 unchanged sentences

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, 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.

1 unchanged sentence

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 Internal Revenue Code as well as similar state provisions during the year ended December 31, 2020.

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, 2020.

For more details please refer to Note 11.

2 unchanged sentences

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.

Weighted-average number of common shares outstanding includes the weighted average effect of the pre-funded warrants issued in June 2023, 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 stock options, restricted stock units, and ESPP (using the “treasury stock” method), the Notes (defined herein) , 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.

For purposes of calculating net loss per share, weighted-average number of common shares outstanding includes the weighted average effect of the pre-funded warrants issued in June 2023 and July 2024, 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), the Company’s 5.00 % Convertible Senior Notes due 2048 (the “2018 Notes”), 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.

3 unchanged sentences

Recently Adopted Accounting Standards Updates

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) No.

2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

ASU 2016-13 replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

Effective January 1, 2023, the Company adopted the provisions of ASU 2016-13.

The adoption did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures.

In August 2020, the FASB issued No.

ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40) (“ASU 2020-06”).

ASU 2020-06 simplifies the complexity associated with applying U.S.

GAAP for certain financial instruments with characteristics of liabilities and equity.

More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exception for contracts in an entity’s own equity.

The ASU also simplifies the diluted earnings per share calculation in certain areas.

The Company elected to adopt this standard on January 1, 2023 under the modified retrospective transition method.

The adoption did not have a material impact on the Company's consolidated financial statements or related financial statement disclosures.

In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”).

ASU 2022-04 requires the buyer in a supplier finance program to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented.

This guidance is effective for fiscal years beginning after December 15, 2022.

We adopted this guidance as of January 1, 2023, on a prospective basis.

The adoption of the standard only resulted in new disclosures and did not affect the Company’s recognition, measurement, or financial statement presentation of supplier finance program obligations on the consolidated financial statements.

For additional information on the new disclosures, see Note 14.

Notes Payable .

Recently issued accounting standards updates

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

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and by extending the disclosure requirements to entities with a single reportable segment.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

The Company adopted the guidance for the fiscal year ended December 31, 2024.

There was no impact to the Company’s reportable segments and additional required disclosures have been included in Note 9.

Segment Reporting .

Recently issued accounting standards updates

In December 2023, the FASB issued ASU No.

4 unchanged sentences

The Company is currently evaluating the impact that the adoption of ASU 2023-09 may have on its consolidated financial statements.

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.

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.

7 unchanged sentences

Total property and equipment, net

The Company recorded approximately $ 0.1 million, $ 0.1 million, and $ 0.2 million in depreciation expense for the years ended December 31, 2023, 2022, and 2021, respectively .

The Company recorded less than $0.1 million, $ 0.1 million, and $ 0.1 million in depreciation expense for the years ended December 31, 2024, 2023, and 2022, respectively .

Accrued expenses

13 unchanged sentences

Long-term debt

On March 25, 2022 (the “Closing Date”), the Company entered into a loan and security agreement (the “Loan Agreement”) with 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 have 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 March 25, 2022 (the “Loan Agreement Closing Date”), the Company entered into a loan and security agreement (the “Loan Agreement”) with 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 have 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 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, as amended, the Company received an initial Term Loan of $ 25.0 million on the Closing Date, and drew down the second term loan of $ 15.0 million (the “Term B Loan”) on March 22, 2023 and may borrow an additional $ 110.0 million of Term Loans at its option upon the satisfaction of certain conditions as follows:

In January 2025, the Company entered into a Note Purchase Agreement pursuant to which the Company issued an initial sale of $ 75.0 million principal amount of Notes.

The Company used a portion of the initial sale of Notes to repay in full all principal, accrued and unpaid interest, fees and expenses under the Loan Agreement with the Lenders.

Refer to Note 16.

Subsequent Events for further discussion.

Pursuant to the Loan Agreement, as amended, 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.

As of December 31, 2024 the Company was able to borrow an additional $ 110.0 million of Term Loans at its option upon the satisfaction of certain conditions as follows:

$ 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 may

draw the Term C Loan within 60 days after the occurrence the Term C Milestone, but no later than March 31, 2025.

The Company may draw the Term C Loan within 60 days after the occurrence the Term C Milestone, but no later than March 31, 2025.

$ 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”).

1 unchanged sentence

$ 50.0 million (the “Term E Loan”), at the sole discretion of the Lenders.

The Term Loans bear 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 % , which is subject to an overall floor and cap.

Interest is 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 has received FDA approval for the treatment of LGSOC or (B) COPIKTRA has received FDA approval for the treatment of PTCL, the Company shall 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 is due and payable in full on March 1, 2027.

The Term Loans bear 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 on the outstanding amounts was is 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 has received FDA approval for the treatment of LGSOC or (B) COPIKTRA has received FDA approval for the treatment of PTCL, the Company is 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 was due and payable in full on March 1, 2027.

The Company is 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”).

2 unchanged sentences

The Loan Agreement contains no financial covenants.

The Loan Agreement includes 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 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 result 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 will accrue interest at a rate per annum equal to 5.0 % above the otherwise applicable interest rate.

Pursuant to the Loan Agreement, during the existence of an event of default, the Term Loans will accrue 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.

11 unchanged sentences

Debt issuance costs, net of accretion

Long-term debt, net of discount

Total Long-term debt, net of discount

The following table sets forth total interest expense for the years ended December 31, 2024, 2023, and 2022 (in thousands):

3 unchanged sentences

Amortization of Final Payment Fee

As of December 31, 2023, future principal payments due are as follows (in thousands):

As of December 31, 2024, future principal payments due were as follows (in thousands):

Total principal payments

1 unchanged sentence

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 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.

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.

3 unchanged sentences

The Company does not have any other operating or finance leases.

In calculating the present value of future lease payments, the Company has elected to utilize its incremental borrowing rate based on the remaining lease term at the date of adoption of ASC 842.

The Company has elected to account for lease components and associated non-lease components as a single lease component and has allocated all of the contract consideration to the lease components only.

This will potentially result in the initial and subsequent measurement of the balances of the right-of-use asset and lease liability for leases being greater than if the policy election was not applied.

As of December 31, 2024, a right-of-use asset of $ 1.4 million and lease liability of $ 1.5 million are reflected on the consolidated balance sheets.

15 unchanged sentences

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, 2023 and 2022, 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, 2018 Notes, Series A Convertible Preferred Stock conversions to shares of common stock, the issuance and conversion of Series B Convertible Preferred Stock, and exercise of Pre-Funded Warrants (in thousands):

As of December 31, 2024 and 2023, 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, the issuance and conversion of Series B Convertible Preferred Stock, and exercise of warrants and pre-funded warrants (in thousands):

Shares reserved under equity compensation plans

Shares reserved for inducement grants

Shares reserved for 2018 Notes

Shares reserved for ESPP

1 unchanged sentence

Shares reserved for Series B Convertible Preferred Stock

Shares reserved for Warrants

Shares reserved for pre-funded warrants

2 unchanged sentences

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.

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 a 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.

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.

On December 23, 2024, 250,000 Warrants were exercised for shares of common stock.

The fair value of the 250,000 Warrants at the exercise date was $ 0.5 million, which was reclassified from warrant liability into additional paid-in-capital.

On December 31, 2024, the fair value of the remaining 18,083,334 Warrants was determined to be $ 58.2 million and the Company recorded this amount as warrant liability on the consolidated balance sheets.

The Company recorded the mark-to-market adjustment of $ 19.1 million for the year ended December 31, 2024, under change in fair value of warrant liability within the consolidated statements of operations and 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.

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.

June 2023 Public Offering

On June 15, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with RBC Capital Markets, LLC and Cantor Fitzgerald & Co.

(“Cantor”), as representatives of several underwriters (the “Underwriters”) to offer 7,181,409 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 to purchase up to an aggregate of 1,538,591 shares of common stock at a price to the public of $ 9.749 (the “Pre-Funded Warrants”) per 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 Pre-Funded Warrant (the “June 2023 Offering”).

In addition, the Company granted the Underwriters an option to purchase, at the public offering price less any underwriting discounts and commissions, an additional 1,308,000 shares of common stock, exercisable for 30 days from the date of the Underwriting Agreement, which the Underwriters exercised in full on June 16, 2023.

On June 15, 2023, the Company entered into an underwriting agreement (the “June 2023 Underwriting Agreement”) with RBC Capital Markets, LLC and Cantor, as representatives of several underwriters (the “June 2023 Underwriters”) to offer 7,181,409 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 “June 2023 Offering”).

In addition, the Company granted the June 2023 Underwriters an option to purchase, at the public offering price less underwriting discounts and commissions, an additional 1,308,000 shares of common stock, exercisable for 30 days from the date of the June 2023 Underwriting Agreement, which the June 2023 Underwriters exercised in full on June 16, 2023.

The June 2023 Offering closed on June 21, 2023.

The Company may not effect the exercise of any Pre-Funded Warrant, and a holder will not be entitled to exercise any portion of any 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 9.99 % of the number of shares of 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 Pre-Funded Warrants, provided that such percentage may in no event exceed 19.99 % .

Each Pre-Funded Warrant has 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 Pre-Funded Warrant 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.

The Pre-Funded Warrants are exercisable as of June 21, 2023, do not expire and are exercisable in cash or by means of a cashless exercise.

In addition, upon the consummation of an acquisition (as described in the Pre-Funded Warrant agreements), each Pre-Funded Warrant will automatically be converted into the right of the holder of such 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 Pre-Funded Warrant immediately prior to such acquisition, without regard to any limitations on exercise contained in the Pre-Funded Warrants

The 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, 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 Pre-Funded Warrants do not provide any guarantee of value or return.

Accordingly, the Pre-Funded Warrants are 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 1,538,591 Pre-Funded Warrants.

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.

During the year ended December 31, 2024, the holders exercised the June 2023 Pre-Funded Warrants representing 1,538,591 underlying shares of common stock, 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.

Series B Convertible Preferred Stock

18 unchanged sentences

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:

any manner that adversely affects the rights, preferences, privileges or the restrictions provided for the benefit of, the Series B Convertible Preferred Stock;

(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;

3 unchanged sentences

Shares of Series B Convertible Preferred Stock are otherwise not entitled to dividends.

The Company classified the first tranche of the Series B Convertible Preferred Stock as temporary equity in the consolidated balance sheets as the Company could be required to redeem the Series B Convertible Preferred Stock if the Company cannot 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 were required to redeem the Series B Convertible Preferred Stock, it would be 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.

As of December 31, 2023, 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.

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, 2024, there are 0 shares of Series B Convertible Preferred Stock outstanding.

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.

3 unchanged sentences

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.

3 unchanged sentences

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 (as adjusted to account for the Reverse Stock Split) 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 is convertible into 0.833 shares of the Company’s common stock (as adjusted to account for the Reverse Stock Split) at the option of the holder at any time, subject to certain limitations, including that the holder will be prohibited from converting 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 Preferred Stock.

Holders of the Series A Convertible Preferred Stock are permitted to increase the Conversion Blocker to an amount not to exceed 19.99 % upon 60 days ’ notice.

6 unchanged sentences

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.

The Company evaluated the Series A Preferred Stock for liability or equity classification under ASC 480, Distinguishing Liabilities from Equity , and determined that equity treatment was appropriate because the Series A Preferred Stock did not meet the definition of the liability under ASC 480.

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 Preferred Stock did not meet the definition of the liability under ASC 480.

Additionally, the Series A Preferred Stock is 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 Preferred Stock as permanent equity.

As such, the Company recorded the Series A Convertible Preferred Stock as permanent equity.

At-the-market equity offering programs

8 unchanged sentences

All of the $ 7.3 million, $ 5.9 million, and $ 6.0 million of stock-based compensation expense recorded during the years ended December 31, 2024, 2023 and 2022, respectively, was recorded to additional paid-in capital.

The Company has awards outstanding under two equity compensation plans, the 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.

The Company has awards outstanding under two equity compensation plans, the Amended and Restated 2021 Equity Incentive Plan (the “Amended 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.

During 2021, the Company’s stockholders approved the 2021 Plan.

Upon effectiveness of the 2021 Plan, the Company ceased making awards under the 2012 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 2021 Plan was (i) 1,991,666 which is the sum of 1,104,177 shares plus the number of shares available for issuance under the 2012 Plan as of the date the Company’s Board of Directors approved the 2021 Plan ( 887,489 shares) 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.

As of December 31, 2023, under the 2021 Plan, the Company has granted stock options for 1,398,762 shares of common stock, of which 52,013 have been forfeited and 0 have been exercised, and granted RSUs for 269,349 shares of common stock, of which 18,594 have been forfeited and 80,367 have vested.

As of December 31, 2023, 693,645 shares remain available for future issuance.

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 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 which is the sum of 1,104,177 shares plus the number of shares available for issuance under the 2012 Plan as of the date the Company’s Board of Directors approved the 2021 Plan ( 887,489 shares) 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, 2024, under the Original 2021 Plan and Amended 2021 Plan, the Company has granted stock options for 2,198,923 shares of common stock, of which 323,349 have been forfeited and 21,978 have been exercised, and granted RSUs for 1,219,720 shares of common stock, of which 47,679 have been forfeited and 172,697 have vested.

As of December 31, 2024, 2,850,675 shares remain available for future issuance under the Amended 20221 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.

11 unchanged sentences

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 2021 Plan, the Company ceased issuing awards from the 2012 Plan.

Upon adoption of the Original 2021 Plan, the Company ceased issuing awards from the 2012 Plan.

Inducement Award Program

2 unchanged sentences

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 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.

5 unchanged sentences

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, 2024 there was $ 0.7 million of unrecognized compensation cost related to Exchanged Options that the Company expects to recognize over a remaining weighted-average period of 0.9 years.

A summary of the Company’s stock option activity and related information for the year ended December 31, 2024, is as follows:

3 unchanged sentences

Outstanding at December 31, 2023

Exercised/Released

Forfeited/cancelled

Cancelled under the Option Exchange Program

Granted under the Option Exchange Program

Outstanding at December 31, 2024

8 unchanged sentences

The fair value of stock options that vested during the years ended December 31, 2024, 2023, and 2022 was $ 3.5 million, $ 3.1 million, and $ 4.4 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, 2023, 2022, and 2021 was $ 0.0 million, less than $ 0.1 million, and $ 0.8 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, 2024, 2023, and 2022 was $ 0.1 million, $ 0.0 million, and less than $ 0.1 million, respectively.

At December 31, 2024 there was $ 6.0 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 2.1 years.

1 unchanged sentence

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 and (iii) 100 percent within two years of the vesting commencement date.

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.

6 unchanged sentences

The Company recorded stock-based compensation expense associated with employee and non-employee RSUs of $ 2.7 million, $ 1.6 million, and $ 1.8 million, for the years ended December 31, 2024, 2023, and 2022, respectively.

The total fair value of restricted stock units vested during the years ended December 31, 2023, 2022, and 2021 was approximately $ 1.7 million, $ 2.3 million, and $ 3.7 million, respectively.

The total fair value of restricted stock units that vested during the years ended December 31, 2024, 2023, and 2022 was approximately $ 1.7 million, $ 1.7 million, and $ 2.3 million, respectively.

At December 31, 2024, there was $ 4.0 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 2.3 years.

10 unchanged sentences

Expected term (years)

For the years ended December 31, 2023, 2022, and 2021, the Company has recognized less than $ 0.1 million, $ 0.1 million, and $ 0.1 million, respectively, of stock-based compensation expense under the Amended and Restated 2018 ESPP.

For the years ended December 31, 2024, 2023, and 2022, the Company has recognized less than $ 0.1 million, less than $ 0.1 million, and $ 0.1 million, respectively, of stock-based compensation expense under the Amended and Restated 2018 ESPP.

During the year ended December 31, 2024, 2023, and 2022, the Company issued 15,231 shares, 14,270 shares and 10,194 shares, respectively, of common stock for proceeds of $ 0.1 million, $ 0.1 million and $ 0.2 million, respectively under the Amended and Restated 2018 ESPP.

Convertible Senior Notes

On October 17, 2018, the Company closed a registered direct public offering of $ 150.0 million aggregate principal amount of the Company’s 2018 Notes for net proceeds of approximately $ 145.3 million.

The 2018 Notes were governed by the terms of a base indenture for senior debt securities (the “2018 Base Indenture”), as supplemented by the first supplemental indenture thereto (the “Supplemental Indenture” and together with the “2018 Base Indenture”, the “2018 Indenture”), each dated October 17, 2018, by and between the Company and Wilmington Trust, National Association, (“Wilmington”) as trustee.

The 2018 Notes were senior unsecured obligations of the Company and bore interest at a rate of 5.00 % per annum, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2019.

The 2018 Notes will mature on November 1, 2048, unless earlier repurchased, redeemed or converted in accordance with their terms.

Prior to November 1, 2022, the Company did not have the right to redeem the 2018 Notes.

On or after November 1, 2022, the Company may elect to redeem the 2018 Notes, in whole or in part, at a cash redemption price equal to the principal amount of the 2018 Notes to be redeemed, plus accrued and unpaid interest, if any.

Unless the Company has previously called all outstanding 2018 Notes for redemption, the 2018 Notes will be subject to repurchase by the Company at the holders’ option on each of November 1, 2023, November 1, 2028, November 1, 2033, November 1, 2038 and November 1, 2043 (or, if any such date is not a business day, on the next business day) at a cash repurchase price equal to the principal amount of the 2018 Notes to be repurchased, plus accrued and unpaid interest, if any.

The Company determined that the expected life of the 2018 Notes was equal to the period through November 1, 2023, as this represents the point at which the 2018 Notes were initially subject to repurchase by the Company at the option of the holders.

In the fourth quarter of 2023, the Company repaid the remaining outstanding balance of 2018 Notes of $ 0.3 million in exchange for principal amount plus accrued and unpaid interest of a total of $ 0.3 million.

As a result there are no outstanding 2018 Notes as of December 31, 2023.

The components of the carrying value of the 2018 Notes as of December 31, 2022 are detailed below (in thousands):

December 31, 2022

2018 Notes principal balance

Debt discount and issuance costs, net of accretion

2018 Notes, net

On November 14, 2019 and December 23, 2019, the Company entered into privately negotiated agreements to exchange approximately $ 114.3 million and $ 7.4 million, respectively, aggregate principal amount of the 2018 Notes for (i) approximately $ 62.9 million and $ 4.0 million, respectively, aggregate principal amount of newly issued 5.00 % Convertible Senior Second Lien Notes due 2048 (the “2019 Notes”), (ii) an aggregate of $ 11.4 million and $ 0.7 million, respectively, in 2018 Notes principal repayment and (iii) accrued interest on the 2018 Notes through November 14, 2019 and December 23, 2019, respectively.

As of March 31, 2020, all 2019 Notes had converted into shares of common stock and are no longer outstanding.

On November 6, 2020, the Company entered into a privately negotiated agreement with an investor who was a holder of the Company’s 2018 Notes to exchange approximately $ 28.0 million aggregate principal amount of 2018 Notes for approximately $ 28.0 million aggregate principal amount of newly issued 5.00 % Convertible Senior Notes due 2048 (the “2020 Notes” and together with the 2018 Notes and 2019 Notes referred to as the “Notes”).

The issuance of the 2020 Notes closed on November 13, 2020.

On July 16, 2021, the aggregate principal of $ 28.0 million of 2020 Notes was converted into 717,949 shares of common stock.

As a result, as of September 30, 2021, all 2020 Notes have converted into shares of common stock.

Upon conversion of the 2020 Notes, holders received a cash payment equal to the accrued and unpaid interest on the converted 2020 Notes.

Pursuant to ASC 815-15-40-1, upon conversion, the Company recorded the remaining discount on the 2020 Notes of $ 7.8 million as interest expense in the statements of operations and comprehensive loss during the year ended December 31, 2021.

The Company determined that the expected life of the Notes was equal to the period through November 1, 2023, as this represents the point at which the Notes were initially subject to repurchase by the Company at the option of the holders.

Accordingly, the total debt discount, inclusive of the fair value of the embedded conversion feature derivative at issuance and change in fair value of conversion options upon exchanges, was amortized using the effective interest method through November 1, 2023.

The effective interest utilized to amortize 2018 Notes and 2020 Notes was 15.65 % and 20.31 %, respectively.

For the year ended December 31, 2023, the Company recognized less than $ 0.1 million of interest expense related to the 2018 Notes.

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, 2024, 2023 and 2022 (in thousands):

Year Ended December 31,

Sale of COPIKTRA license and related assets (1)

Research and development expenses (2)

Commercial expenses (2)

Medical affairs expenses (2)

General and administrative expenses (2)

Stock-based compensation expense

Depreciation expense

Interest income

Interest expense

Change in fair value of preferred stock tranche liability

Change in fair value of warrant liability

Other segment items (3)

Income tax expense

(1) The Company’s revenue is comprised of milestones and royalties received pursuant to the Secura APA for which the Company has completed its performance obligations in 2020.

License, collaboration and commercial agreements for further discussion.

(2) This category is exclusive of non-cash stock-based compensation and severance expense.

(3) Other segment items primarily include severance expense and transactions losses and gains due to foreign currency fluctuations .

Net Loss per Share

1 unchanged sentence

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, 2023, 2022, and 2021 net loss, basic and diluted EPS are the same as the assumed exercise of stock options, RSUs, ESPP, the 2018 Notes, Series A Convertible Preferred Stock, and Series B Convertible Preferred Stock are anti-dilutive.

For the years ended December 31, 2024, 2023, and 2022 net loss, basic and diluted EPS are the same as the assumed exercise of stock options, RSUs, ESPP, the 2018 Notes, 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:

6 unchanged sentences

Total potentially dilutive securities

As of December 31, 2023, the Company had federal and state NOL carryforwards of approximately $ 473.6 million and $ 189.0 million, respectively, which are available to reduce future taxable income.

The Company also had federal and state tax credits of $ 9.5 million and $ 2.2 million, respectively, which may be used to offset future tax liabilities.

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

Income tax expense of $ 0.2 million for the year ended December 31, 2024 was comprised of interest under IRC section 453A related to the $ 10.0 million milestone payment from Secura because it was an installment sale.

Refer to Note.

License collaboration and commercial agreements for further discussion of the Secura APA.

For the years ended December 31, 2024, 2023, and 2022 income tax expense consisted of the following (in thousands):

Year ended December 31,

Current tax expense:

Current income tax expense

Deferred income tax expense

Total income tax expense

A reconciliation of income taxes computed using the U.S.

9 unchanged sentences

NOL and tax credit expiration under Section 382

Effective income tax rate

On October 4, 2023, Massachusetts enacted tax law changes which included the adoption of a single sales apportionment factor effective on January 1, 2025.

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, which has the impact of reducing its state deferred tax assets.

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.

11 unchanged sentences

Right-of-use asset

Debt discount

Other deferred tax liability

Total deferred tax liabilities

7 unchanged sentences

The Company has recorded a valuation allowance against its deferred tax assets at December 31, 2024 and 2023 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 $ 18.5 million in the year ended December 31, 2023, primarily relates to the capitalization of research and development expenses, the generation of NOLs and R&D credits.

Section 382 of the Internal Revenue Code and similar provisions under state law limit the utilization of U.S.

NOL carryforwards, state NOL carryforwards, R&D credits, and Orphan Drug (“OD”) credits following certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%.

The decrease in the valuation allowance of approximately $ 19.0 million in the year ended December 31, 2024, primarily relates to the loss of NOL carryforwards and research and development credits which the Company deemed would otherwise expire unused due to Section 382 of the IRC and similar provisions under state law discussed in the next paragraph.

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

The Company 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 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.

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, 2024.

1 unchanged sentence

The remaining unused carryforwards and credits remain available for future periods.

Due the Company’s full valuation allowance the write off of NOL carryforwards and R&D and OD credits did not have any impact to the statements of operation and comprehensive loss.

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, 2024, 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 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, 2024, the Company had no unrecognized tax benefits or related interest , and penalties accrued.

The Company has not conducted a study of R&D credit carryforwards.

This study may result in an adjustment to the Company’s R&D credit carryforwards;

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.

9 unchanged sentences

Leases for further details regarding the minimum aggregate future lease commitments as of December 31, 2024.

In conjunction with the execution of the 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, 2023, and 2022.

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, 2024, and 2023.

The amount is included in non-current restricted cash on the consolidated balance sheets as of December 31, 2024, and 2023.

Pursuant to the terms of various agreements, the Company may be required to pay various development, regulatory and commercial milestones.

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

As of December 31, 2024, approximately $ 0.7 million of this commitment is included within accrued expenses.

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.

2 unchanged sentences

GenFleet Therapeutics (Shanghai), Inc.

On August 24, 2023, the Company entered into a collaboration and option agreement (“GenFleet Agreement”) with GenFleet Therapeutics (Shanghai), Inc.

(“GenFleet”), 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”).

On August 24, 2023, the Company entered into a collaboration and option agreement (“GenFleet Agreement”) with GenFleet, 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.

The Company made an upfront payment of $ 2.0 million to GenFleet in September 2023 and will provide $ 1.5 million of research support (“GenFleet R&D Support Fee”) over the first three years of the GenFleet Agreement.

In addition, pursuant to the GenFleet Agreement, upon achievement of certain development and commercial milestones, and upon the Company exercising its GenFleet Options, GenFleet will be entitled to receive payments of up to $ 622.0 million.

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.

2 unchanged sentences

Either party may also terminate the GenFleet Agreement in its entirety upon certain insolvency events involving the other party.

During the year ended December 31, 2023, the Company expensed $ 2.0 million related to the upfront payment and $ 0.2 million related to the GenFleet R&D Support Fee within research and development expense in the consolidated statements of operations and comprehensive loss.

During the year ended December 31, 2024, the Company expensed $ 3.0 million related to the development milestone payment made within research and development expense in the consolidated statements of operations and comprehensive loss.

During the year ended December 31, 2023, the Company expensed $ 2.0 million related to the upfront payment within research and development expense in the consolidated statements of operations and comprehensive loss.

The 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 its GenFleet Options, the related payment will be recognized if and when each respective GenFleet Option is elected.

If the Company elects to exercise further GenFleet Options, the related expense will be recognized if and when each respective GenFleet Option is elected.

Secura Bio, Inc.

5 unchanged sentences

(“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.

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.

In connection with the Secura APA, the Company and Secura entered into a transition services agreement (“Secura TSA”).

Under the terms of the Secura TSA, the Company provided certain support functions at Secura’s direction for a term of less than one year from the date of execution (“Secura TSA Services”).

Services performed were paid at a mutually agreed upon rate.

The Company evaluated the Secura APA and Secura TSA in accordance with ASC 606 as the Company concluded that the counterparty, Secura, is a customer.

The Company identified the following performance obligations under the Secura APA and Secura TSA:

● 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”);

● Secura TSA Services.

Additionally, Secura assumed all royalty payment obligations due under the amended and restated license agreement with Infinity.

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.

1 unchanged sentence

Consistent with the guidance under ASC 606-10-25-16A, the Company disregarded immaterial promised goods and services when determining performance obligations.

The Company has 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.

The Company has the right to consideration for TSA services in an amount that corresponds directly with the value to Secura of the Company’s performance to date.

Consideration allocated to the Secura TSA Services will be recognized as such services are provided over the performance period using an output method based on the amount to which the Company has a right to invoice.

The Company determined less than $ 0.1 million of future potential royalties the Company expects to receive pursuant to the Secura APA were not constrained as of December 31, 2023.

When estimating the amount of royalties to be received that were not constrained, the Company used the expected value method as there are a range of possible outcomes.

When estimating royalties expected to be received, the Company used a combination of internal projections and forecasts and data from external sources.

The Company determined that all other future potential royalties were constrained under the guidance as of December 31, 2023.

As part of the Company’s evaluation of the constraint on future royalties, the Company considered a number of factors in determining whether there is significant uncertainty associated with the future events that would result in royalty payments.

Those factors include:

the likelihood and magnitude of revenue reversals related to future royalties, the amount of variable consideration is highly susceptible to factors outside of the Company’s influence, the amount of time to resolve the uncertainty, and lack of significant history of selling COPIKTRA outside of the United States.

As the consideration for future royalties is conditional, the Company 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.

As of December 31, 2023, and 2022, the contract asset has been recorded within prepaid and other current assets on the consolidated balance sheets.

The following table presents changes in the Company’s contract asset for the year ended December 31, 2023 (in thousands):

Contract Asset:

December 31, 2022

Reclassification to receivable

December 31, 2023

Contract asset - Secura

During the year ended December 31, 2023, the Company determined all future potential milestones were excluded from the transaction price, as all other milestone amounts were fully constrained under the guidance as of December 31, 2023.

As part of the Company’s evaluation of the constraint, the Company considered a number of factors in determining whether there is significant uncertainty associated with the future events that would result in the milestone payments.

During the year 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.

During the year ended December 31, 2024, the Company recognized $ 10.0 million of sale of COPIKTRA license and related assets revenue within the consolidated statements of operations and comprehensive loss.

The Company determined that all other 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, 2024.

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.

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, the uncertainty about the consideration is not expected to be resolved for an extended period of time, and lack of significant history of selling COPIKTRA outside of the United States.

All future potential milestone and royalty payments were fully constrained as the risk of significant revenue reversal related to these amounts has not yet been resolved.

During the year ended December 31, 2022, the Company recognized $ 2.6 million of sale of COPIKTRA license and related assets revenue within the statements of operations and comprehensive loss.

1 unchanged sentence

The Company determined all other future potential milestones were excluded from the transaction price, as all other milestone amounts were fully constrained under the guidance as of December 31, 2022.

During the year ended December 31, 2021, the Company recognized $ 1.4 million of sale of COPIKTRA license and related assets revenue within the statements of operations and comprehensive loss.

The sale of COPIKTRA license and related assets revenue for the year ended December 31, 2021 primarily related to two regulatory milestone for $ 1.3 million achieved by Secura’s sublicensee and $ 0.2 million related to royalties received and expected to be received pursuant to the Secura APA.

During the year ended December 31, 2021, the Company also recognized $ 0.6 million in transition services revenue within the statements of operations and comprehensive loss.

Notes Payable

In February 2023, the Company entered into a finance agreement with AFCO Premium Credit LLC (“AFCO”).

Pursuant to the terms of the agreement, AFCO loaned the Company the principal amount of $ 1.4 million, which accrues interest at 7.4 % per annum, to fund a portion of the Company’s insurance policies.

The Company is required to make monthly payments of $ 0.1 million through October 2023 including principal and interest.

The agreement assigns AFCO a security interest in (i) all unearned premiums and dividends which may become payable under the insurance policies financed pursuant to this agreement, (ii) loss payments which reduce the unearned premiums, and (iii) the Company’s interest in any state insurance guarantee fund related to any of the insurance policies financed pursuant to this agreement.

In February 2024, the Company entered into a finance agreement with AFCO.

Pursuant to the terms of the agreement, AFCO loaned the Company the principal amount of $ 1.3 million, which accrued interest at 8.3 % per annum, to fund a portion of the Company’s insurance policies.

The Company was required to make monthly payments of $ 0.1 million through October 2024 including principal and interest.

The agreement assigned AFCO a security interest in (i) all unearned premiums and dividends which may have become payable under the insurance policies financed pursuant to this agreement, (ii) loss payments which reduce the unearned premiums, and (iii) the Company’s interest in any state insurance guarantee fund related to any of the insurance policies financed pursuant to this agreement.

The outstanding balance at December 31, 2024 was $ 0.0 million.

2 unchanged sentences

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 $ 0.8 million in each of the years ended December 31, 2023, 2022, and 2021.

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 $ 1.0 million, $ 0.8 million and $ 0.8 million in each of the years ended December 31, 2024, 2023, and 2022.

Subsequent events

1 unchanged sentence

The Company is not aware of any material subsequent events other than the following:

Oxford Loan Agreement

On January 4, 2024, the Company amended its Loan Agreement to extend the outside date for the period during which the Company may draw the Term C Loan from March 31, 2024, to March 31, 2025.

Refer to Note 5.

Long-term debt for additional details on the Loan Agreement.

Option Exchange

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”).

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, pursuant to the terms of the Exchange Offer and the 2021 Plan.

The exercise price of the new options granted pursuant to the Option Exchange Offer was $ 11.44 per share, which was the closing price of the common stock on the Nasdaq Capital Market on the grant date of the new options.

The stock option exchange is considered a modification of those options exchanged.

The incremental compensation expense will be measured as the excess, if any, of the fair value of each new option granted measured as of the date the new options are granted, over the fair value of the eligible options surrendered, measured immediately prior to the grant of the new options.

This incremental compensation expense will be recognized ratably over the remaining requisite service period of the new options subject to continued employment or service with the Company.

Unrecognized compensation cost associated with stock options surrendered will be recognized in future periods subject to continued employment or service with the Company.

The Company is continuing to evaluate the incremental compensation cost associated with the Option Exchange Program.

Note Purchase Agreement

On January 13, 2025, (the “Note Purchase Agreement Closing Date”), the Company entered into the Note Purchase Agreement, pursuant to which the Company may sell to the Note Purchase Agreement Purchasers, and the Note Purchase Agreement Purchasers may buy from the Company, notes (“Notes”) in an aggregate principal amount not to exceed $ 150.0 million.

On January 13, 2025, the Company issued an initial sale of $ 75.0 million principal amount of Notes and may issue an additional $ 75.0 million consisting of the following:

● at the option of the Company, the Second Sale 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;

● at the option of the Company, the Third Sale 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.

Pursuant to the Note Purchase Agreement, on the Note Purchase Agreement Closing Date the Company sold Notes in an aggregate principal amount of $ 75.0 million and received net proceeds of approximately $ 32.3 million after repaying the balance of its obligations under its Loan Agreement, but before payment of certain expenses payable by the Company.

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.

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 % .

Beginning on January 13, 2025 and continuing until the Note Purchase Agreement Maturity Date, the Note Purchase Agreement Purchasers will receive 1.00 % 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 Sale and the Third Sale, 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 Sale.

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.

If redeemed prior to the Note Purchase Agreement Maturity Date, the Repayment Amount will be:

(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 GenFleet Agreement, subject to certain exceptions relating to the Company’s development of its intellectual property.

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, $ 0.0001 par value per share, at a price of $ 5.2931 per share, based on the trailing 30-trading day volume-weighted average price of the Company’s stock.

The Company received gross proceeds of $ 7.5 million.

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.

Repayment of Loan Agreement

Substantially 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, which was due at the earlier of prepayment or loan maturity, and certain prepayment fees as set forth in the Loan Agreement.

Effective upon the Lender’s receipt of the Payoff Amount, the Loan Agreement has been terminated along with the Lender’s commitment to provide funding under any future term loans.

Exercise of GenFleet Option

In January 2025, the Company exercised early its GenFleet Option with respect to VS-7375 and consequently made a payment of $ 6.0 million to GenFleet.

At-the-market equity offering program issuance

In January 2025, the Company sold 4,000,000 shares under the August 2021 ATM for net proceeds of approximately $ 22.7 million (after deducting commissions and other offering expenses).

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 9A. Controls and Procedures