Xilio Therapeutics, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our chief executive officer (our principal executive officer) and our chief financial and operating officer (our principal financial officer) evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024. Based upon such evaluation, our chief executive officer and chief financial and operating officer have concluded that, as of December 31, 2024, our disclosure controls and procedures were effective at the reasonable assurance level. Management’s Annual Report on Internal Control over Financial Reporting Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officer and our principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements. Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Also, projections of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of 133 Table of Contents the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting. Management has used the framework set forth in the report entitled “Internal Control—Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to evaluate the effectiveness of our internal control over financial reporting. Based on its evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2024. This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for “emerging growth companies.” Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Annual Report on Form 10-K that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Director and Officer Trading Arrangements A portion of the compensation of our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) is in the form of equity awards and, from time to time, directors and officers may engage in open-market transactions with respect to the securities acquired pursuant to such equity awards or other of our securities, including to satisfy tax withholding obligations when equity awards vest or are exercised, and for diversification or other personal reasons. Transactions in our securities by directors and officers are required to be made in accordance with our insider trading policy, which requires that the transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables directors and officers to prearrange transactions in our securities in a manner that could negate a claim of insider trading for transactions undertaken while in possession of material nonpublic information. None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined in Items 408(a) and 408(c) of Regulation S-K, respectively) during the fourth quarter of 2024. Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Not applicable. PART III Item 10. Directors, Executive Officers, and Corporate Governance Except to the extent provided below, the information required by this Item 10 will be included in our definitive proxy statement to be filed with the Securities and Exchange Commission, or the SEC, with respect to our 2025 Annual Meeting of Stockholders within 120 days of the end of the fiscal year to which this report relates, which information is incorporated herein by reference. 134 Table of Contents We post our Code of Business Conduct and Ethics, which applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, in the “Corporate Governance” sub-section of the “Investor Relations” section (ir.xiliotx.com) of our corporate website https://xiliotx.com/. We intend to disclose on our website any amendments to, or waivers from, the Code of Business Conduct and Ethics that are required to be disclosed pursuant to the disclosure requirements of Item 5.05 of Form 8-K. Our website is not incorporated by reference into this Annual Report on Form 10-K and you should not consider any information contained in or accessible from our website to be a part of this Annual Report on Form 10-K. Item 11. Executive Compensation The information required by this Item 11 will be included in the section captioned “Executive Compensation” in our definitive proxy statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates, which information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item 12 will be included in the section captioned “Security Ownership of Certain Beneficial Owners and Management” in our definitive proxy statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates, which information is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item 13 will be included in the sections captioned “Related Person Transactions,” “Policies for Related Person Transactions” and “Director Independence” in our definitive proxy statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates, which information is incorporated herein by reference. Item 14. Principal Accountant’s Fees and Services The information required by this Item 14 will be included in the section captioned “Audit Fees and Services” our definitive proxy statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates, which information is incorporated herein by reference. ​ 135 Table of Contents Part IV Item 15. Exhibits and Financial Statement Schedules (1) Financial Statements ​ The following documents are included on pages set forth in Part II, Item 8 of this Annual Report on Form 10-K and are filed as part of this Annual Report on Form 10-K. ​ Index to Consolidated Financial Statements ​ Report of Independent Registered Public Accounting Firm (PCAOB ID 42 ) F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations and Comprehensive Loss F-4 Consolidated Statements of Stockholders’ Equity F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 ​ (2) Financial Statement Schedules ​ All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto. ​ (3) Exhibits ​ The following is a list of exhibits filed as part of this Annual Report on Form 10-K. ​ EXHIBIT INDEX ​ ​ ​ ​ ​ ​ Incorporated by Reference ​ ​ Exhibit Number Description of Exhibit Form File No. Exhibit Number Filing Date ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3.1 ​ Restated Certificate of Incorporation of the Registrant ​ 8-K ​ 001-40925 ​ 3.1 ​ October 26, 2021 3.2 ​ Second Amended and Restated Bylaws of the Registrant ​ 8-K ​ 001-40925 ​ 3.1 ​ April 3, 2023 4.1 ​ Specimen Stock Certificate evidencing the shares of common stock ​ S-1 ​ 333-259973 ​ 4.1 ​ October 1, 2021 4.2 ​ Form of Prefunded Warrant ​ 8-K ​ 001-40925 ​ 4.1 ​ March 28, 2024 4.3 ​ Description of the Registrant’s securities registered pursuant to Section 12 of the Securities and Exchange Act of 1934, as amended ​ 10-K ​ 001-40925 ​ 4.3 ​ March 1, 2022 10.1 ​ 2020 Stock Incentive Plan, as amended ​ S-1 ​ 333-259973 ​ 10.2 ​ October 1, 2021 10.2 ​ Form of Stock Option Agreement under 2020 Stock Incentive Plan ​ S-1 ​ 333-259973 ​ 10.3 ​ October 1, 2021 10.3 ​ Form of Restricted Stock Agreement under 2020 Stock Incentive Plan ​ S-1 ​ 333-259973 ​ 10.4 ​ October 1, 2021 10.4 ​ 2021 Stock Incentive Plan ​ S-1 ​ 333-259973 ​ 10.5 ​ October 18, 2021 10.5 ​ Form of Stock Option Agreement under the 2021 Stock Incentive Plan ​ S-1 ​ 333-259973 ​ 10.6 ​ October 18, 2021 10.6 ​ Form of Non-Employee Director Stock Option Agreement under the 2021 Stock Incentive Plan ​ S-1 ​ 333-259973 ​ 10.7 ​ October 18, 2021 10.7 ​ Form of Restricted Unit Agreement under the 2021 Stock Incentive Plan ​ 8-K ​ 001-40925 ​ 10.1 ​ January 3, 2024 136 Table of Contents 10.8 ​ 2021 Employee Stock Purchase Plan ​ S-1 ​ 333-259973 ​ 10.8 ​ October 18, 2021 10.9 ​ Amended and Restated 2022 Inducement Stock Incentive Plan ​ ​ ​ ​ ​ ​ ​ * 10.10 ​ Form of Stock Option Agreement under the 2022 Inducement Stock Incentive Plan ​ 10-K ​ 001-40925 ​ 10.9 ​ March 2, 2023 10.11 ​ Form of Restricted Stock Unit Agreement under the 2022 Inducement Stock Incentive Plan ​ 10-K ​ 001-40925 ​ 10.10 ​ March 2, 2023 10.12# ​ Employment Agreement, dated September 30, 2021, by and between the Registrant and René Russo ​ S-1 ​ 333-259973 ​ 10.15 ​ October 1, 2021 10.13# ​ Third Amended and Restated Employment Agreement, dated August 3, 2024, by and between the Registrant and Christopher Frankenfield ​ 10-Q ​ 001-40925 ​ 10.2 ​ August 8, 2024 10.14# ​ Employment Agreement, dated September 5, 2023, by and between the Registrant and Kevin Brennan ​ 8-K ​ 001-40925 ​ 10.1 ​ September 5, 2023 10.15# ​ Employment Agreement, dated September 5, 2023, by and between the Registrant and Katarina Luptakova, M.D. ​ 10-K ​ 001-40925 ​ 10.18 ​ April 1, 2024 10.16 ​ Form of Indemnification Agreement between the Registrant and each of its Executive Officers and Directors ​ S-1 ​ 333-259973 ​ 10.20 ​ October 1, 2021 10.17 ​ Amended and Restated Non-Employee Director Compensation Policy ​ 10-Q ​ 001-40925 ​ 10.6 ​ May 14, 2024 10.18† ​ Amended and Restated Exclusive License Agreement, dated as of August 16, 2016, by and between the Registrant and City of Hope ​ S-1 ​ 333-259973 ​ 10.12 ​ October 1, 2021 10.19† ​ License Agreement, dated as of September 26, 2016, as amended, by and between the Registrant and WuXi Biologics (Hong Kong) Limited ​ S-1 ​ 333-259973 ​ 10.13 ​ October 1, 2021 10.20 ​ Lease, dated as of August 26, 2019, by and between the Registrant and PPF OFF 828-830 Winter Street, LLC ​ S-1 ​ 333-259973 ​ 10.14 ​ October 1, 2021 10.21 ​ Securities Purchase Agreement, dated March 28, 2024, among the Registrant and the persons party thereto ​ 8-K ​ 001-40925 ​ 10.1 ​ March 28, 2024 10.22 ​ Registration Rights Agreement, dated March 28, 2024, among the Registrant and the persons party thereto ​ 8-K ​ 001-40925 ​ 10.2 ​ March 28, 2024 10.23† ​ License Agreement, dated March 27, 2024, between Xilio Development, Inc. and Gilead Sciences, Inc. ​ 10-Q ​ 001-40925 ​ 10.1 ​ May 14, 2024 10.24† ​ Investor Rights Agreement, dated March 27, 2024, between the Registrant and Gilead Sciences, Inc. ​ 10-Q ​ 001-40925 ​ 10.3 ​ May 14, 2024 19 ​ Xilio Therapeutics Insider Trading Policy ​ ​ ​ ​ ​ ​ ​ * 21.1 ​ Subsidiaries of the Registrant ​ 10-K ​ 001-40925 ​ 21.1 ​ April 1, 2024 23.1 ​ Consent of Ernst & Young LLP, independent registered public accounting firm ​ ​ ​ ​ ​ ​ ​ * 31.1 ​ Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ​ ​ ​ ​ ​ ​ ​ * 31.2 ​ Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ​ ​ ​ ​ ​ ​ ​ * 32.1+ ​ Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ​ ​ ​ ​ ​ ​ ​ * 97# ​ Executive Compensation Clawback Policy ​ 10-K ​ 001-40925 ​ 97 ​ April 1, 2024 137 Table of Contents 101.INS ​ XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document ​ ​ ​ ​ ​ ​ ​ * 101.SCH ​ Inline XBRL Taxonomy Extension Calculation Linkbase Document ​ ​ ​ ​ ​ ​ ​ * 101.CAL ​ Inline XBRL Taxonomy Extension Definition Linkbase Document ​ ​ ​ ​ ​ ​ ​ * 101.DEF ​ Inline XBRL Taxonomy Extension Label Linkbase Document ​ ​ ​ ​ ​ ​ ​ * 101.LAB ​ Inline XBRL Taxonomy Extension Presentation Linkbase Document ​ ​ ​ ​ ​ ​ ​ * 104 ​ Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) ​ ​ ​ ​ ​ ​ ​ ​ * Filed herewith. # Indicates management contract or compensatory plan or arrangement. † Portions of this exhibit have been omitted pursuant to Item 601 of Regulation S-K promulgated under the Securities Act because the information is not material and is a type of information that the registrant treats as private or confidential. + The certifications attached as Exhibit 32.1 are being furnished solely to accompany this Annual Report on Form 10-K and will not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference into such filing. Item 16. Form 10-K Summary None. 138 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ ​ ​ ​ XILIO THERAPEUTICS, INC. ​ ​ ​ Date: March 11, 2025 ​ By: /s/ René Russo ​ ​ ​ René Russo ​ ​ ​ President and Chief Executive Officer ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ​ ​ ​ ​ ​ ​ ​ Signature ​ Title ​ ​ Date ​ ​ ​ ​ ​ ​ /s/ René Russo ​ President, Chief Executive Officer and Director ​ ​ March 11, 2025 René Russo ​ (Principal Executive Officer) ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Christopher Frankenfield ​ Chief Financial Officer and Chief Operating Officer ​ ​ March 11, 2025 Christopher Frankenfield ​ (Principal Financial Officer) ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Kevin Brennan ​ Senior Vice President, Finance and Accounting ​ ​ March 11, 2025 Kevin Brennan ​ (Principal Accounting Officer) ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Paul J. Clancy ​ Chair of the Board ​ ​ March 11, 2025 Paul J. Clancy ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Sara M. Bonstein ​ Director ​ ​ March 11, 2025 Sara M. Bonstein ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Aoife Brennan ​ Director ​ ​ March 11, 2025 Aoife Brennan ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Daniel Curran ​ Director ​ ​ March 11, 2025 Daniel Curran ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Robert Ross ​ Director ​ ​ March 11, 2025 Robert Ross ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Christina Rossi ​ Director ​ ​ March 11, 2025 Christina Rossi ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ James Shannon ​ Director ​ ​ March 11, 2025 James Shannon ​ /s/ Yuan Xu ​ ​ Director ​ ​ ​ March 11, 2025 Yuan Xu ​ ​ ​ ​ ​ ​ ​ ​ 139 Table of Contents ​ Xilio Therapeutics, Inc. Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID 42) F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations and Comprehensive Loss F-4 Consolidated Statements of Stockholders’ Equity F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 ​ ​ ​ ​ F-1 Table of Contents ​ ​ REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Xilio Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Xilio Therapeutics, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the two 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 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 two years in the period ended December 31, 2024 in conformity with U.S. generally accepted accounting principles. The Company's Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2020. Boston, Massachusetts March 11, 2025 ​ F-2 Table of Contents XILIO THERAPEUTICS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2024 ​ 2023 ASSETS ​ ​ Current assets ​ ​ Cash and cash equivalents ​ $ 55,291 ​ $ 44,704 Prepaid expenses and other current assets ​ 4,943 ​ 3,423 Total current assets ​ 60,234 ​ 48,127 Restricted cash ​ 1,782 ​ 1,587 Property and equipment, net ​ 4,472 ​ 5,942 Operating lease right-of-use asset ​ 4,587 ​ 5,125 Other non-current assets ​ — ​ 145 Total assets ​ $ 71,075 ​ $ 60,926 LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ Current liabilities ​ ​ Accounts payable ​ $ 2,574 ​ $ 1,050 Accrued expenses ​ 9,981 ​ 10,497 Deferred revenue, current portion ​ ​ 13,518 ​ ​ — Operating lease liability, current portion ​ 1,188 ​ 1,047 Note payable, current portion ​ — ​ 3,315 Other current liabilities ​ — ​ 48 Total current liabilities ​ 27,261 ​ 15,957 Deferred revenue, net of current portion ​ ​ 19,262 ​ ​ — Operating lease liability, net of current portion ​ 6,954 ​ 8,142 Total liabilities ​ 53,477 ​ 24,099 Commitments and contingencies (Note 8) ​ ​ Stockholders’ equity ​ ​ Preferred stock, $ 0.0001 par value; 5,000,000 shares authorized, no shares issued or outstanding ​ ​ — ​ ​ — Common stock, $ 0.0001 par value; 200,000,000 shares authorized at December 31, 2024 and December 31, 2023; 45,756,773 shares issued and outstanding at December 31, 2024; 27,613,263 shares issued and 27,607,646 shares outstanding at December 31, 2023 ​ 5 ​ 3 Additional paid-in capital ​ 401,346 ​ 362,336 Accumulated deficit ​ ( 383,753 ) ​ ( 325,512 ) Total stockholders’ equity ​ 17,598 ​ 36,827 Total liabilities and stockholders’ equity ​ $ 71,075 ​ $ 60,926 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ F-3 Table of Contents XILIO THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 Revenue ​ ​ License revenue ​ $ 6,344 ​ $ — Total revenue ​ 6,344 ​ — Operating expenses ​ ​ ​ Research and development ​ $ 41,211 ​ $ 52,136 General and administrative ​ 24,778 ​ 26,997 Restructuring ​ ​ 937 ​ ​ — Total operating expenses ​ 66,926 ​ 79,133 Loss from operations ​ ( 60,582 ) ​ ( 79,133 ) Other income, net ​ ​ Other income, net ​ 2,341 ​ 2,729 Total other income, net ​ 2,341 ​ 2,729 Net loss and comprehensive loss ​ $ ( 58,241 ) ​ $ ( 76,404 ) Net loss per share, basic and diluted ​ $ ( 1.09 ) ​ $ ( 2.78 ) Weighted average common shares outstanding, basic and diluted ​ 53,511,424 ​ 27,496,107 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ F-4 Table of Contents ​ XILIO THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-In ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital Deficit Equity Balance at December 31, 2022 ​ 27,425,447 ​ $ 3 ​ $ 354,752 ​ $ ( 249,108 ) ​ $ 105,647 Issuance of common stock under employee stock purchase plan ​ 140,192 ​ ​ — ​ ​ 194 ​ ​ — ​ 194 Vesting of restricted common stock 39,250 ​ — ​ — ​ — ​ ​ — Exercise of stock options 2,757 ​ — ​ 8 ​ — ​ 8 Stock-based compensation expense — ​ — ​ 7,382 ​ — ​ 7,382 Net loss — ​ — ​ — ​ ( 76,404 ) ​ ( 76,404 ) Balance at December 31, 2023 27,607,646 ​ $ 3 ​ $ 362,336 ​ $ ( 325,512 ) ​ $ 36,827 Issuance of common stock and prefunded warrants in connection with the Gilead stock purchase agreement, net of issuance costs ​ 9,105,451 ​ ​ 1 ​ ​ 15,771 ​ ​ — ​ ​ 15,772 Issuance of common stock and prefunded warrants in connection with a private placement, net of issuance costs ​ 1,953,125 ​ ​ — ​ ​ 9,908 ​ ​ — ​ ​ 9,908 Issuance of common stock in connection with at-the-market offerings, net of issuance costs ​ 7,000,000 ​ ​ 1 ​ ​ 6,824 ​ ​ — ​ ​ 6,825 Issuance of common stock under employee stock purchase plan ​ 76,168 ​ ​ — ​ ​ 68 ​ ​ — ​ ​ 68 Vesting of restricted common stock 5,617 ​ — ​ — ​ — ​ — Exercise of stock options 8,766 ​ — ​ 5 ​ — ​ 5 Stock-based compensation expense — ​ — ​ 6,434 ​ — ​ 6,434 Net loss — ​ — ​ — ​ ( 58,241 ) ​ ( 58,241 ) Balance at December 31, 2024 45,756,773 ​ $ 5 ​ $ 401,346 ​ $ ( 383,753 ) ​ $ 17,598 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ F-5 Table of Contents XILIO THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss $ ( 58,241 ) $ ( 76,404 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Depreciation and amortization ​ 1,644 ​ 1,900 Non-cash interest (income) expense ​ — ​ 157 Stock-based compensation expense ​ 6,434 ​ 7,382 Loss on disposal of property and equipment ​ ​ 3 ​ ​ 3 Changes in operating assets and liabilities: ​ ​ ​ ​ Prepaid and other assets ​ ( 1,520 ) ​ 688 Operating lease right-of-use asset ​ 539 ​ 460 Accounts payable ​ 1,526 ​ ( 2,063 ) Accrued expenses and other liabilities ​ ( 496 ) ​ 175 Deferred revenue ​ ​ 32,780 ​ ​ — Operating lease liability ​ ( 1,047 ) ​ ( 918 ) Net cash used in operating activities ​ ( 18,378 ) ​ ( 68,620 ) Cash flows from investing activities: ​ ​ Purchases of property and equipment ​ ( 36 ) ​ ( 486 ) Net cash used in investing activities ​ ( 36 ) ​ ( 486 ) Cash flows from financing activities: ​ ​ Repayments of debt principal ​ ​ ( 3,333 ) ​ ​ ( 6,667 ) Payments of finance lease ​ ( 49 ) ​ ( 85 ) Proceeds from issuance of common stock under employee stock purchase plan ​ 68 ​ 194 Proceeds from exercise of stock options ​ 5 ​ 8 Proceeds from issuance of common stock and prefunded warrants in connection with the Gilead stock purchase agreement, net of issuance costs ​ ​ 15,772 ​ — Proceeds from issuance of common stock and prefunded warrants in connection with a private placement, net of issuance costs ​ ​ 9,908 ​ — Proceeds from issuance of common stock in connection with at-the-market offerings, net of issuance costs ​ ​ 6,825 ​ — Net cash provided by (used in) financing activities ​ 29,196 ​ ( 6,550 ) Increase (decrease) in cash, cash equivalents and restricted cash ​ 10,782 ​ ( 75,656 ) Cash, cash equivalents and restricted cash, beginning of period ​ 46,291 ​ 121,947 Cash, cash equivalents and restricted cash, end of period $ 57,073 $ 46,291 Supplemental cash flow disclosure: ​ ​ Cash paid for interest $ 62 $ 573 Supplemental disclosure of non-cash activities: ​ ​ ​ Transfer of finance lease asset to property and equipment ​ $ 85 ​ $ — Reconciliation to amounts within the consolidated balance sheets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 55,291 ​ $ 44,704 Restricted cash ​ ​ 1,782 ​ ​ 1,587 Cash, cash equivalents and restricted cash, end of period ​ $ 57,073 ​ $ 46,291 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ F-6 Table of Contents XILIO THERAPEUTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, unless otherwise stated) 1. Description of Business, Liquidity and Going Concern Description of Business Xilio Therapeutics, Inc. (“Xilio” or the “Company”) is a clinical-stage biotechnology company dedicated to discovering and developing tumor-activated immuno-oncology (“I-O”) therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments. The Company was incorporated in Delaware in June 2020, and its headquarters are located in Waltham, Massachusetts. Liquidity and Going Concern Since its inception, the Company has devoted substantially all of its financial resources and efforts to research and development activities. As of December 31, 2024, the Company had an accumulated deficit of $ 383.8 million and has incurred significant operating losses, including net losses of $ 58.2 million and $ 76.4 million for the years ended December 31, 2024 and 2023, respectively. The Company expects its operating losses and negative operating cash flows to continue for the foreseeable future as it continues to advance its product candidates through clinical trials, maintains the infrastructure necessary to support these activities and continues to incur costs associated with operating as a public company. As of December 31, 2024, the Company had cash and cash equivalents of $ 55.3 million. Based on its current operating plans, the Company anticipates that its cash and cash equivalents as of December 31, 2024, together with the $ 52.0 million in upfront payments received in connection with the collaboration, license and option agreement with AbbVie Group Holdings Limited (“AbbVie Group Holdings”), will be sufficient to fund the Company’s operating expenses and capital expenditure requirements into the first quarter of 2026. However, the Company has based this estimate on assumptions that may prove to be wrong, and the Company could exhaust its available capital resources sooner than it anticipates. In addition, since these amounts are not expected to be sufficient to fund its operations for at least twelve months from the date of issuance of the consolidated financial statements, there is substantial doubt about the Company’s ability to continue as a going concern. To continue to fund the operations of the Company, management has developed plans, which in the near term primarily consist of raising additional capital through one or more of the following: additional equity or debt financings; additional collaborations, partnerships or licensing transactions; or other sources. However, there can be no assurance that the Company will be able to complete any such transaction on acceptable terms or otherwise, and the Company may be unable to obtain sufficient additional capital. If the Company is not able to secure sufficient additional capital in the near term, the Company will need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to its operations and research and development programs. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. 2. Summary of Significant Accounting Policies Basis of Presentation These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”). F-7 Table of Contents In April 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was enacted. Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that the Company either (1) irrevocably elects to “opt out” of such extended transition period or (2) no longer qualifies as an emerging growth company. The Company may take advantage of these exemptions up until December 31, 2026, or such earlier time that it is no longer an emerging growth company. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Xilio Development, Inc. (“Xilio Development”), a Delaware corporation, and Xilio Securities Corporation, a Massachusetts corporation. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenue and expenses during the reporting period. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these consolidated financial statements. Factors that may affect estimates include expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to revenue, accrued expenses, the valuation of stock-based compensation, including stock options and restricted common stock, useful life of long-lived assets and income taxes. Actual results could differ from those estimates. Segment Information The Company has one operating and reportable segment, the consolidated Company operations, reflecting the integrated nature of its business focused on discovering and developing tumor-activated I-O therapies. The Company’s chief operating decision maker (“CODM”) is its chief executive officer. The CODM allocates resources and assesses performance on a consolidated basis, focused on the Company’s cash resources and an assessment of the probability of success of its ongoing research and development activities. Resource allocation decisions are informed by forecasted cash expenditures and actual expenses incurred to date. The CODM is not regularly provided with disaggregated actual expense information, other than the actual expense information included in the consolidated statements of operations and comprehensive loss, as the Company’s integrated operating model emphasizes shared resources and centralized decision-making. All of the Company’s license revenue is generated in the United States and all of the Company’s long-lived assets are held in the United States. Cash Equivalents and Restricted Cash The Company considers all short-term, highly liquid investments with original maturities of 90 days or less at acquisition date to be cash equivalents. Restricted cash represents a letter of credit issued to the landlord of the Company’s facility lease and is reflected in non-current assets on the accompanying consolidated balance sheets. F-8 Table of Contents Concentrations of Credit Risk and Significant Suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company holds all cash and cash equivalents at accredited financial institutions. Bank accounts in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Substantially all of the Company’s cash and cash equivalents are FDIC insured, including funds held through an insured cash sweep program. The Company has not experienced any losses in its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company is dependent on a third-party manufacturer to supply material and manufacturing process development services for its product candidates and related research and development activities. These research and development programs and activities could be adversely affected by a significant interruption in the supply of such products and services which could have a material adverse effect on the Company’s business, financial position and results of operations. Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1— Quoted prices in active markets for identical assets or liabilities. ● Level 2— Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. ● Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying values of the Company’s cash, prepaid expenses, accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying value of the Company’s outstanding debt as of December 31, 2023 approximates fair value based on the variable interest rate for the borrowings as well as the short duration of the term of the note. F-9 Table of Contents Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, which are as follows: ​ ​ ​ ​ ​ Estimated Useful Life Computers and software ​ 3 years Laboratory equipment ​ 5 years Furniture and fixtures ​ 5 years Leasehold improvements ​ Shorter of the useful life or the remaining term of the lease ​ Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in loss from operations. Expenditures for repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred, while costs of major additions and betterments are capitalized. Impairment of Long-Lived Assets The Company periodically evaluates its long-lived assets, which consist of property and equipment, and any leased assets, for impairment whenever events or changes in circumstances indicate that a potential impairment may have occurred. If such events or changes in circumstances arise, the Company compares the carrying amount of the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the long-lived assets. If the estimated aggregate undiscounted cash flows are less than the carrying amount of the long-lived assets, an impairment charge, calculated as the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets, is recorded. The estimated fair value of the long-lived assets is determined based on the estimated discounted cash flows expected to be generated from the long-lived assets. The Company did not recognize impairment charges during years ended December 31, 2024 and 2023, respectively. Leases The Company determines if an arrangement is or contains a lease at inception. Operating leases are included in right-of-use lease assets (“ROU assets”) and in both the current portion of lease liabilities and long-term lease liabilities on the Company’s consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense in the consolidated statements of operations and comprehensive loss. Assets subject to finance leases are included in other non-current assets and the related lease obligation is included in other current liabilities and other long-term liabilities on the Company’s consolidated balance sheets. Lease expense for finance leases is recognized as depreciation expense and interest expense in the consolidated statements of operations and comprehensive loss using the effective interest method. The Company has elected the short-term lease recognition exemption for short-term leases, which allows the Company not to recognize lease liabilities and ROU assets on the consolidated balance sheets for leases with an original term of twelve months or less. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities and their corresponding ROU assets are initially recorded based on the present value of lease payments over the expected remaining lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Certain adjustments to the ROU asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the fixed rate at which the Company could borrow, on a collateralized basis, the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Prospectively, the Company will adjust the ROU assets for straight-line rent F-10 Table of Contents expense or any incentives received and remeasure the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date. The Company has lease agreements with lease and non-lease components, which are accounted for as a combined element. Research and Development Costs, Accruals and Prepaid Expenses Research and development expenses are expensed as incurred and consist of costs incurred in performing research and development activities, including compensation related expenses for research and development personnel, preclinical and clinical activities including cost of supply and manufacturing process development activities, overhead expenses including facilities expenses, materials and supplies, amounts paid to consultants and outside service providers, and depreciation of equipment. Upfront payments made for the licensing of technology are expensed as research and development expenses in the period in which they are incurred. In general, contingent payments are recognized when it becomes probable the payment will be required. Any contingent payments that qualify as a derivative liability are recognized at fair value on the Company’s consolidated balance sheets. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. The Company records accruals for estimated ongoing research and development costs, including costs associated with contracts with third-party contract research organizations and contract manufacturing organizations. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the preclinical studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company has entered into, and may in the future enter into, collaboration and licensing agreements that are within the scope of ASC 606, under which the Company has granted licenses to certain of the Company’s product candidates and performs research, development and other services in connection with such arrangements. The terms of these arrangements may include payment of one or more of the following: non-refundable upfront fees; reimbursement of research and development costs; development, regulatory and sales-based milestone payments; and royalties on annual net sales of licensed products. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identification of the contract with the customer; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. ● Performance Obligations . The promised goods or services in the Company’s arrangements typically consist of a license, or option to license, rights to the Company’s intellectual property or research and development services. The Company may provide options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on its own or whether the required expertise is F-11 Table of Contents readily available and whether the goods or services are integral or dependent to other goods or services in the contract. ● Customer Options. If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options that are not determined to be material rights are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights, or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or the option expires. ● Transaction Price . The Company estimates the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration may include fixed consideration or variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which method best predicts the amount expected to be received. The amount of variable consideration that is included in the transaction price may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all variable consideration subject to constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues in the period of adjustment. The Company allocates the transaction price to the identified performance obligations based on the estimated standalone selling price. The Company must develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the standalone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated are consistent with the amounts the Company would expect to receive for the satisfaction of each performance obligation. ● Milestone Payments. At the inception of each arrangement that includes development or regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. ● Royalties. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of the Company’s collaboration or licensing arrangements. F-12 Table of Contents ● Recognition. The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services. For performance obligations that consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company receives payments from its customers based on billing schedules established in each contract. Non-refundable upfront payments are included in the estimation of the transaction price, allocated to the performance obligation(s) based upon relative standalone selling price and recognized for each performance obligation based upon the measure of progress (point in time or over time) for each performance obligation. Payments received for goods and services not yet provided are recorded as deferred revenue. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. Collaboration Agreements The Company analyzes its collaboration agreements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC 808, Collaborative Arrangements (“ASC 808”). For arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and which elements of the collaboration are more reflective of a vendor-customer relationship and therefore within the scope of ASC 606, Revenue from Contracts with Customers (“ASC 606”). For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, either by analogy to authoritative accounting literature or by applying a reasonable and rational policy election. For collaboration agreements where the Company is reimbursed for a portion of its research and development expenses or participates in the cost-sharing of such research and development expenses, such reimbursements and cost-sharing arrangements are reflected as a reduction of research and development expenses in the Company’s consolidated statements of operations and comprehensive loss, as the Company does not consider performing research and development services for reimbursement to be a part of its ongoing major or central operations. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. Stock-Based Compensation The Company issues stock-based awards to employees, directors and non-employees, generally in the form of stock options or restricted stock units. The Company measures employee stock-based compensation based on the grant date fair value of the stock-based awards and recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the awards, which is generally the vesting period of the respective award, in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, which includes grants of employee stock awards, to be recognized in the consolidated statements of operations and comprehensive loss based on their grant date fair values. There are significant judgments and estimates inherent in the determination of the fair value of stock-based awards. The Company considers the fair value of common stock to be equal to its current share price. The grant date fair value of restricted stock units is estimated to be equal to the closing price of the Company’s common stock on the date of grant. The Company estimates the fair value of stock options using the Black-Scholes option pricing model, which uses as inputs the estimated fair value of common stock, and certain management estimates, including the expected stock price volatility, the expected term of the award, the risk-free rate, and expected dividends. Expected volatility is calculated based on reported volatility data for a representative group of publicly traded companies for which historical information is F-13 Table of Contents available. The Company selects companies with comparable characteristics with historical share price information that approximates the expected term of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period that approximates the calculated expected term of the stock options. The Company will continue to apply this method until a sufficient amount of historical information regarding the volatility of its stock price becomes available or until circumstances change, such that the identified entities are no longer representative companies. In the latter case, more suitable, similar entities whose share prices are publicly available would be utilized in the calculation. The Company weighs the historical volatility of its own stock price and the historical volatility of a representative group of public companies for the computation of expected volatility used for estimating the fair value of option grants. Annually, the Company will increase the weighting on the historical volatility of its own stock price over the historical volatility of a representative group of public companies until such time as the Company has a sufficient amount of historical information regarding the volatility of its own stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment , under which the expected term is presumed to be the midpoint between the vesting date and the end of the contractual term. The Company utilizes this method due to lack of historical exercise data and the plain nature of its stock-based awards. The expected dividend yield is assumed to be zero as the Company has no current plans to pay any dividends on common stock. The Company recognizes forfeitures as they occur. The Company classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss consistent with the classification of the award recipient’s salary and related costs or the award recipient’s service payments, as applicable. Comprehensive Loss Comprehensive loss is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss includes net loss and the change in accumulated other comprehensive loss for the period. The Company did not have any items of comprehensive income or loss other than net loss for years ended December 31, 2024 and 2023. Net Loss Per Share The Company calculates basic net loss per share attributable to common stockholders by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, which includes prefunded warrants to purchase common stock and excludes shares of restricted common stock that were not vested during the year ended December 31, 2023 and through the final vesting period that occurred during the year ended December 31, 2024. Diluted net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding, as applicable, after giving consideration to the dilutive effect of stock options, restricted common stock and warrants that are outstanding during the period. The Company has generated a net loss in all periods presented, so the basic and diluted net loss per share are the same, as the inclusion of the potentially dilutive securities would be anti-dilutive. Income Taxes Income taxes are recorded in accordance with ASC 740, Income Taxes , which provides for deferred taxes using an asset and liability approach. Under this method, deferred income tax assets and liabilities are recognized based on future income tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities, and their respective income tax basis. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in income tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment date and subject to a valuation allowance which is established for any income tax benefits of which future realization is not more likely than not. F-14 Table of Contents The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions. The tax benefits recorded 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 uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. At December 31, 2024 and 2023, the Company had not identified any significant uncertain tax positions. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update No. 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 that are regularly provided to the chief operating decision maker. The Company adopted ASU 2023-07 during the year ended December 31, 2024, and the implementation of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures. In November 2024 the FASB issued Accounting Standards Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures. ​ 3. Property and Equipment, Net Property and equipment, net consists of the following as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2024 ​ 2023 Laboratory equipment ​ $ 5,911 ​ $ 5,815 Computers and software ​ 183 ​ 183 Furniture and fixtures ​ 681 ​ 681 Leasehold improvements ​ 5,124 ​ 5,124 Total property and equipment ​ ​ 11,899 ​ ​ 11,803 Less: accumulated depreciation ​ ( 7,427 ) ​ ( 5,861 ) Property and equipment, net ​ $ 4,472 ​ $ 5,942 ​ The Company incurred depreciation and amortization expense related to property and equipment of $ 1.6 million and $ 1.8 million for years ended December 31, 2024 and 2023, respectively. ​ ​ ​ F-15 Table of Contents 4. Accrued Expenses Accrued expenses consist of the following as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2024 ​ 2023 External research and development ​ $ 4,899 ​ $ 4,867 Personnel-related ​ 4,208 ​ 4,690 Professional and consulting fees ​ 743 ​ 845 Other ​ ​ 131 ​ ​ 95 Total accrued expenses ​ $ 9,981 ​ $ 10,497 ​ ​ 5. Loan and Security Agreement In November 2019, the Company’s wholly owned subsidiary, Xilio Development, entered into a loan and security agreement (as amended and restated in May 2023, the “Loan Agreement”) with Pacific Western Bank (“PacWest”), with the Company as a guarantor, and borrowed $ 10.0 million under a term loan. Interest on amounts outstanding under the Loan Agreement accrued at a variable annual rate equal to the greater of (i) the prime rate plus 0.25 % or (ii) 4.75 %. In the first quarter of 2024, Xilio Development repaid all amounts outstanding under the Loan Agreement, and PacWest released all security interests in Xilio Development’s and its affiliates’ assets. The Company recognized $ 0.1 million and $ 0.7 million of interest expense related to the Loan Agreement for years ended December 31, 2024 and 2023, respectively, which is reflected in other income, net on the consolidated statements of operations and comprehensive loss. 6. Collaboration and License Agreements License Agreement with Gilead Sciences, Inc. In March 2024, Xilio Development entered into a license agreement with Gilead Sciences, Inc. (“Gilead”), pursuant to which it granted Gilead an exclusive global license to develop and commercialize XTX301, the Company’s tumor-activated IL-12 product candidate, and specified other molecules directed to IL-12. Xilio Development is responsible for conducting clinical development for XTX301 in the ongoing Phase 1 clinical trial through an initial planned Phase 2 dose expansion clinical trial. Following the delivery by Xilio Development of a specified clinical data package for XTX301 related to the Phase 1 clinical trial and planned Phase 2 clinical trial, Gilead can elect to transition responsibilities for the development and commercialization of XTX301 to Gilead, subject to the terms of the license agreement and payment by Gilead of a $ 75.0 million transition fee. In connection with the execution of the license agreement, in March 2024, the Company also entered into a stock purchase agreement with Gilead. Under the stock purchase agreement, Gilead purchased an aggregate of $ 25.0 million of the Company’s common stock and prefunded warrants in three private placements. In March 2024, the Company initially issued and sold 6,860,223 shares of common stock to Gilead at a purchase price of $ 1.97 per share, and the Company received approximately $ 13.5 million in aggregate gross proceeds. In April 2024, the Company issued and sold an additional 485,250 shares of its common stock at a purchase price of $ 0.76 per share and prefunded warrants to purchase up to an aggregate of 3,882,450 shares of its common stock at a purchase price of $ 0.7599 per prefunded warrant, and the Company received approximately $ 3.3 million in aggregate gross proceeds. In December 2024, the Company issued and sold an additional 1,759,978 shares of its common stock at a purchase price of $ 1.04 per share and prefunded warrants to purchase up to an aggregate of 6,092,816 shares of its common stock at a purchase price of $ 1.0399 per prefunded warrant, and the Company received approximately $ 8.2 million in aggregate gross proceeds. The prefunded warrants are exercisable any time at an exercise price of $ 0.0001 per share, subject to Gilead not being deemed a beneficial owner of greater than 19.9 % of the Company’s common stock upon the exercise of the prefunded warrants. F-16 Table of Contents As of December 31, 2024, the Company has received $ 55.0 million in payments under the Gilead agreements, consisting of the $ 30.0 million upfront cash payment under the license agreement and $ 25.0 million in gross proceeds from private placements under the stock purchase agreement. As of December 31, 2024, the Company is eligible to receive up to $ 592.5 million in additional contingent payments, which consist of the $ 75.0 million transition fee and up to $ 517.5 million in specified development, regulatory and sales-based milestones. Prior to the potential transition fee, $ 17.5 million of the total additional contingent payments are related to a near-term development milestone. In addition, the Company is eligible to receive tiered royalties ranging from high single digits to mid-teens on annual global net product sales. The Company considered the ASC 606 criteria for combining contracts and determined the license agreement and the stock purchase agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The Company concluded the initial private placement and the additional private placements do not represent freestanding financial instruments as such instruments are not legally detachable due to contractual transfer restrictions. The Company accounted for the common stock issued to Gilead in the initial private placement based on the fair market value of the common stock on the date of issuance. The fair market value of the common stock issued to Gilead in the initial private placement was $ 4.4 million, based on the closing price of the Company’s common stock on the date of issuance, resulting in a $ 9.1 million premium. The Company determined that the premium paid by Gilead for the common stock purchased in the initial private placement should be attributed to the transaction price of the license agreement. The Company determined that the license agreement represents a contract with a customer within the scope of ASC 606 and identified two promises under the license agreement: (i) the exclusive licenses granted to Gilead related to the Company’s IL-12 program and (ii) the provision by Xilio Development and its affiliates of development services related to ongoing and planned clinical trials for XTX301 through an initial planned Phase 2 clinical trial. The Company determined that the exclusive license and development services were not capable of being distinct on the basis that the development services to be provided by Xilio Development are specialized in nature, specifically with respect to its specialized expertise related to XTX301, the IL-12 program and the Company’s proprietary platform for tumor-activated biologics. Accordingly, the Company concluded that there is a single identified combined performance obligation consisting of the exclusive license and the development services. For purposes of ASC 606, the transaction price of the license agreement at the outset of the arrangement was determined to be $ 39.1 million, which consisted of the upfront cash payment of $ 30.0 million under the license agreement and the $ 9.1 million premium on the sale of common stock to Gilead in the initial private placement, which was allocated to the single combined performance obligation. The Company used the most likely amount method to estimate variable consideration. All contingent payments are fully constrained as of December 31, 2024, as the achievement of the milestones underlying such contingent payments is uncertain and highly susceptible to factors outside of the Company’s control. Accordingly, all such contingent payments are excluded from the transaction price. The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and may adjust the transaction price as necessary. Sales-based royalties, including milestone payments based on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the royalties relate. The Company plans to recognize such revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Revenue associated with the combined performance obligation is recognized as services are provided as control is transferred over time. The Company measures progress based on the amount of costs incurred relative to the total costs expected to fulfill the combined performance obligation. In management’s judgment, this input method is the best measure of progress towards satisfying the combined performance obligation and reflects a faithful depiction of the transfer of goods and services. During the year ended December 31, 2024, the Company recognized license revenue of $ 6.3 million under the license agreement and the stock purchase agreement. As of December 31, 2024, the Company recorded deferred revenue of $ 32.8 million, of which $ 13.5 million was recorded as a current liability on the Company’s consolidated balance sheet. The deferred revenue is expected to be recognized as license revenue through at least 2027 depending on the timing of certain clinical development activities. F-17 Table of Contents ​ Summary of Contract Assets and Liabilities ​ The following table presents changes in the balances of the Company’s contract liabilities: ​ ​ ​ ​ ​ ​ Deferred ​ ​ Revenue Deferred revenue as of December 31, 2023 ​ $ — Additions ​ 39,124 License revenue recognized ​ ​ ( 6,344 ) Deferred revenue as of December 31, 2024 ​ $ 32,780 ​ Clinical Trial Collaboration with F. Hoffmann-La Roche In July 2023, the Company and F. Hoffmann-La Roche Ltd. (“Roche”) entered into a clinical trial collaboration (the “Roche Clinical Collaboration”) pursuant to a clinical supply agreement to evaluate vilastobart (XTX101) in combination with atezolizumab (Tecentriq®) in a Phase 1/2 clinical trial consisting of a Phase 1 dose escalation cohort assessing the combination in patients with advanced solid tumors and a Phase 2 clinical trial assessing the combination in patients with microsatellite stable colorectal cancer. Under the clinical supply agreement, the Company is eligible to receive specified cost-sharing payments from Roche, and each company will supply its respective anti-cancer agent to support the Phase 1/2 clinical trial. The Company is responsible for conducting the Phase 1/2 clinical trial and retains global development and commercialization rights to vilastobart. The Company concluded that the cost-sharing payments from the Roche Clinical Collaboration are not in the scope of ASC 606 because the Company does not consider performing research and development services for reimbursement to be part of its ongoing major or central operations. Therefore, the Company applied a reasonable, rational, and consistently applied accounting policy election to record the cost-sharing payments from the Roche Clinical Collaboration as a reduction of research and development expenses in the consolidated statements of operations and comprehensive loss for the period in which a study development event is achieved. The Company recognized a reduction of research and development expenses of $ 4.0 million and $ 2.0 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, $ 2.0 million of earned but unpaid cost-sharing payments were recorded in prepaid expenses and other current assets on the Company’s consolidated balance sheet. Amended and Restated Exclusive License Agreement with City of Hope In August 2016, Xilio Development entered into an amended and restated exclusive license agreement with City of Hope pursuant to which City of Hope granted Xilio Development an exclusive worldwide license to specified patent rights related to the Company’s anti-CTLA-4 monoclonal antibody program. Under the agreement, the Company issued 24,019 shares of common stock to City of Hope. For the first three licensed products or licensed services to achieve specified development and regulatory milestones, Xilio Development is obligated to pay City of Hope up to $ 10.3 million in the aggregate per licensed product or licensed service. To date, the Company has made an aggregate of $ 0.8 million in specified development and regulatory milestone payments to City of Hope related to its anti-CTLA-4 monoclonal antibody program. In addition, subject to specified conditions, Xilio Development is obligated to pay City of Hope tiered royalties in the low single digits on aggregate annual net sales of licensed products or licensed services on a country-by-country basis until the expiration of the last-to-expire patent or patent application licensed from City of Hope covering the applicable licensed product or licensed service in such country. Xilio Development is also obligated to pay City of Hope a portion of any consideration Xilio Development receives for the grant of sublicenses under the agreement in an amount equal to a low double digit percentage of such consideration, subject to specified conditions under that agreement at the time that Xilio Development grants any such sublicense. F-18 Table of Contents The Company incurred costs of $ 0.5 million related to the payment of specified development milestones under the agreement during the year ended December 31, 2024. The Company incurred no costs related to the payment of specified development milestones under the agreement during the year ended December 31, 2023. Any additional payments that are contingent upon achievement of development and regulatory milestones or upon sales of licensed products will not be recognized until it becomes probable that the Company will be required to make such payments. CTLA-4 Monoclonal Antibody License Agreement with WuXi Biologics In September 2016, the Company entered into a license agreement with WuXi Biologics (Hong Kong) Limited (“WuXi Biologics”), as amended in December 2017, pursuant to which WuXi Biologics granted the Company an exclusive worldwide license to specified monoclonal antibodies and patent rights and know-how controlled by WuXi Biologics, including certain patent rights related to the Company’s anti-CTLA-4 monoclonal antibody program. For each product that exploits the rights licensed under the agreement, the Company is obligated to pay WuXi Biologics up to approximately $ 25.8 million in the aggregate for specified development and regulatory milestones. To date, the Company has made an aggregate of $ 5.8 million in specified development and regulatory milestone payments to WuXi Biologics related to its anti-CTLA-4 monoclonal antibody program. In addition, subject to specified conditions, the Company is obligated to pay WuXi Biologics tiered royalties in the low to mid-single digits on aggregate annual worldwide net sales of licensed products during the applicable royalty term. The Company incurred costs of $ 4.0 million related to specified development milestones under the agreement during the year ended December 31, 2024, of which $ 3.0 million was recorded in accrued expenses on the Company’s consolidated balance sheet as of December 31, 2024. The Company incurred no costs related to the payment of specified development milestones under the agreement during the year ended December 31, 2023. Any additional payments that are contingent upon the achievement of development and regulatory milestones or sales of licensed products will not be recognized until it becomes probable that the Company will be required to make such payments. 7. Leases The Company has an operating lease for its headquarters and a finance lease for certain lab equipment. In August 2019, the Company entered into a facility lease agreement with a landlord providing funding for tenant improvements and occupancy of approximately 27,830 square feet of office and laboratory space (the “premises”) at 828 Winter Street, Waltham, Massachusetts. The initial term of the lease expires in March 2030, unless terminated earlier in accordance with the terms of the lease. The Company has a right to a five-year option to extend at then-market rates. The Company is obligated to pay its portion of real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, replacement, and management of the leased premises, which it began paying simultaneous with the rent commencement date in March 2020. As of December 31, 2024 and 2023, the Company has a letter of credit for the benefit of its landlord in the amount of $ 1.8 million and $ 1.6 million, respectively, collateralized by a money market account, which is recorded as restricted cash on the consolidated balance sheets. The components of lease expense were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2024 ​ 2023 Operating lease cost ​ $ 1,225 ​ $ 1,225 Variable lease cost ​ ​ 1,060 ​ ​ 982 Total lease costs ​ $ 2,285 ​ $ 2,207 Finance lease cost: ​ ​ Amortization of right-of-use asset ​ $ 49 ​ $ 85 Interest on lease liability ​ 1 ​ 6 ​ F-19 Table of Contents Supplemental balance sheet information related to the leases was as follows (in thousands, except for remaining lease term and discount rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, ​ ​ 2024 ​ 2023 ​ Operating Lease: ​ ​ ​ ​ ​ ​ ​ Operating lease right-of-use asset $ 4,587 ​ $ 5,125 ​ Operating lease liability, current portion $ 1,188 ​ ​ $ 1,047 ​ Operating lease liability, net of current portion $ 6,954 ​ ​ $ 8,142 ​ Finance Lease: ​ ​ ​ Other non-current assets $ — ​ ​ $ 134 ​ Other current liabilities — ​ ​ 48 ​ Other liabilities, long-term — ​ ​ — ​ Weighted-average remaining lease term (in years): ​ ​ ​ Operating lease 5.2 ​ ​ 6.2 ​ Finance lease — ​ ​ 0.7 ​ Weighted-average discount rate: ​ ​ ​ Operating lease 8.0 % ​ 8.0 % Finance lease 6.9 % ​ 6.9 % ​ Supplemental cash flow information related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2024 ​ 2023 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ Operating cash flows from operating leases $ 1,733 $ 1,683 Financing cash flows from finance leases 49 85 ​ Future minimum lease payments under non-cancellable leases as of December 31, 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ Operating Lease 2025 ​ $ 1,785 ​ 2026 ​ 1,839 ​ 2027 ​ 1,894 ​ 2028 ​ 1,951 ​ 2029 ​ 2,010 ​ Thereafter ​ 506 ​ Total future minimum lease payments ​ ​ 9,985 ​ Present value adjustment ​ ( 1,843 ) ​ Present value of lease liabilities ​ $ 8,142 ​ ​ ​ 8. Commitments and Contingencies Indemnification Agreements In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors that may require the Company to F-20 Table of Contents indemnify its directors against liabilities that may arise by reason of their status or service as directors to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ liability insurance. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2024 or 2023. Legal Proceedings The Company is not currently a party to any material legal proceedings. 9. Preferred Stock and Common Stock Undesignated Preferred Stock As December 31, 2024 and 2023, the Company’s certificate of incorporation, as amended, authorized the Company to issue up to 5,000,000 shares of undesignated preferred stock at $ 0.0001 par value per share. As of December 31, 2024 and 2023, there were no shares of preferred stock issued or outstanding. Common Stock As of December 31, 2024 and 2023, the Company is authorized to issue up to 200,000,000 shares of common stock, $ 0.0001 par value per share under its certificate of incorporation, as amended. The voting, dividend and liquidation rights of the holders of shares of common stock are subject to and qualified by the rights, powers and preferences of the holders of shares of the Company’s undesignated preferred stock, if and when such shares are issued. The rights, preferences and privileges of the Company’s common stock are as follows: Voting The holders of shares of common stock are entitled to one vote for each share of common stock held at any meeting of stockholders and at the time of any written action in lieu of a meeting of stockholders. Dividends The holders of shares of common stock are entitled to receive dividends, if and when declared by the Company’s board of directors. No dividends have been declared by the Company’s board of directors or paid by the Company to the holders of common stock since the issuance of the common stock. Liquidation Upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, holders of the common stock will be entitled to receive, pro rata based on the number of shares held by each such holder, all assets of the Company available for distribution to its stockholders, subject to any preferential or other rights of any then outstanding preferred stock. Private Placement In March 2024, the Company entered into a securities purchase agreement with certain existing accredited investors pursuant to which the Company issued and sold an aggregate of 1,953,125 shares of its common stock at a purchase price of $ 0.64 per share and, in lieu of shares of the Company’s common stock, prefunded warrants to purchase up to an aggregate of 15,627,441 shares of its common stock at a purchase price of $ 0.6399 per prefunded warrant, through a private placement. The prefunded warrants are exercisable any time at an exercise price of $ 0.0001 per share. The private placement closed in April 2024. The Company received aggregate gross proceeds of $ 11.3 million from the private F-21 Table of Contents placement, before deducting placement agent fees and expenses payable by the Company. The shares of common stock issued and sold in the private placement were registered for resale pursuant to the Company’s registration statement on Form S-3 filed with the SEC on April 30, 2024, which became effective on May 6, 2024. “At-the-Market” Offering Program In November 2022, the Company filed a universal shelf registration statement on Form S-3 with the SEC to register for sale up to $ 250,000,000 of its common stock, preferred stock, debt securities, units and warrants, which the Company may issue and sell from time to time in one or more offerings, which became effective on November 18, 2022 (333-268264). In November 2022, the Company entered into a sales agreement (the “Cowen Sales Agreement”) with Cowen and Company LLC under which the Company could issue and sell shares of its common stock, from time to time, having an aggregate offering price of up to $ 75.0 million under a sales agreement prospectus filed as part of the Form S-3. During the year ended December 31, 2024, the Company issued and sold 7,000,000 shares of its common stock pursuant to the Cowen Sales Agreement at a price of $ 1.00 per share for aggregate gross proceeds of $ 7.0 million. In the first quarter of 2025, the Company issued and sold an additional 1,550,000 shares of its common stock pursuant to the Cowen Sales Agreement at a weighted average price of $ 1.3348 per share for aggregate gross proceeds of approximately $ 2.1 million. In March 2025, the Company terminated the Cowen Sales Agreement, and the Company entered into a new sales agreement with Leerink Partners, LLC under which the Company may issue and sell shares of its common stock from time to time at an aggregate offering price of up to $ 50.0 million under a sales agreement prospectus filed as part of the Form S-3. Shares Reserved for Future Issuance The Company has reserved for future issuances the following shares of common stock as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 Stock options and unvested restricted stock units 11,328,134 9,456,237 Employee stock purchase plan 901,208 701,244 Prefunded warrants ​ 25,602,707 ​ — Warrants 2,631 2,631 Total shares reserved for future issuance 37,834,680 10,160,112 ​ ​ ​ 10. Stock-Based Compensation Equity Incentive Plans 2020 Stock Incentive Plan Under the 2020 Stock Incentive Plan (as amended, the “2020 Plan”), the Company was authorized to issue shares of common stock to the Company’s employees, officers, directors, consultants and advisors in the form of options, restricted stock awards or other stock-based awards. 2021 Stock Incentive Plan In September 2021, the Company’s board of directors and stockholders adopted the 2021 Stock Incentive Plan (the “2021 Plan”), which became effective immediately prior to the initial public offering in October 2021. Upon effectiveness of the 2021 Plan, the Company ceased granting awards under the 2020 Plan. The 2021 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The Company initially reserved 6,579,016 shares of common stock under the 2021 Plan. The 2021 Plan provides that the number of shares reserved and available for issuance under the 2021 Plan will be cumulatively increased on January 1 of each calendar year by 5 % of the number of shares of common stock outstanding on such date or such lesser amount determined by the Company’s board of directors. As of December 31, 2024, there were 1,938,102 F-22 Table of Contents shares of common stock available for future issuance under the 2021 Plan. On January 1, 2025, the number of shares reserved for issuance under the 2021 Plan automatically increased by 2,293,405 shares. 2022 Inducement Plan In 2022, the Company’s board of directors adopted the 2022 Inducement Stock Incentive Plan pursuant to Nasdaq Rule 5635(c)(4) (the “2022 Inducement Plan”). In accordance with Rule 5635(c)(4), stock-based incentive awards under the 2022 Inducement Plan may only be made to a newly hired employee who has not previously been a member of the Company’s board of directors, or an employee who is being rehired following a bona fide period of non-employment by the Company as a material inducement to the employee’s entering into employment with the Company. The Company initially reserved 275,000 shares of common stock under the 2022 Inducement Plan. In November 2024, the number of shares reserved for issuance under the 2022 Inducement Plan was increased by 500,000 shares. As of December 31, 2024, there were 610,600 shares of common stock available for future issuance under the 2022 Inducement Plan. 2021 Employee Stock Purchase Plan In 2021, the Company’s board of directors and stockholders adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective immediately prior to the IPO in October 2021. The Company initially reserved 292,031 shares of common stock for issuance under the 2021 ESPP. The 2021 ESPP provides that the number of shares of common stock reserved for issuance under the 2021 ESPP will be cumulatively increased on January 1 of each calendar year by 1 % of the number of shares of the Company’s common stock outstanding on such date or such lesser amount determined by the Company’s board of directors (up to a maximum increase of 584,062 shares of common stock per year). During the years ended December 31, 2024 and 2023, the Company issued 76,168 shares and 140,192 shares, respectively, under the 2021 ESPP. As of December 31, 2024, there were 901,208 shares available for future issuance under the 2021 ESPP. On January 1, 2025, the number of shares reserved for issuance under the 2021 ESPP was increased by 458,681 shares. Stock-Based Compensation Expense During the years ended December 31, 2024 and 2023, the Company recorded compensation expense related to stock options, restricted stock units and restricted common stock for employees and non-employees, and share purchases under the 2021 ESPP for employees, which was allocated as follows in the consolidated statements of operations and comprehensive loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Research and development expense ​ $ 1,652 ​ $ 2,189 General and administrative expense ​ 4,782 ​ 5,193 Total stock-based compensation expense ​ $ 6,434 ​ $ 7,382 ​ F-23 Table of Contents Stock Options A summary of stock option activity under the Company’s Stock Incentive Plans is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Remaining ​ Aggregate ​ ​ ​ ​ Weighted ​ Contractual ​ Intrinsic ​ ​ Number of ​ Average ​ Term ​ Value (1) ​ Stock Options Exercise Price (In years) (In thousands) Outstanding as of December 31, 2023 7,455,795 ​ $ 5.52 8.0 ​ $ — Granted 2,581,453 ​ $ 0.86 ​ Exercised ( 8,766 ) ​ $ 0.55 ​ Cancelled/forfeited ( 1,694,550 ) ​ $ 5.18 ​ ​ Outstanding as of December 31, 2024 8,333,932 ​ $ 4.15 8.0 ​ $ 282 Exercisable as of December 31, 2024 4,132,222 ​ $ 5.90 7.1 ​ $ 39 ​ (1) The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock as of the end of the period. Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the years ended December 31, 2024 and 2023 was $ 0.66 per share and $ 2.02 per share, respectively. The Company satisfies stock option exercises with newly issued shares of common stock. The aggregate intrinsic value of stock options exercised during each of the years ended December 31, 2024 and 2023 was less than $ 0.1 million. The following assumptions were used in determining the fair value of options granted to employees during the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2024 ​ 2023 ​ Risk-free interest rate ​ ​ 3.5 - 4.6 % ​ 3.6 - 4.4 % Expected dividend yield ​ ​ 0 % ​ 0 % Expected term (in years) ​ ​ 5.5 - 6.1 ​ ​ 5.5 - 6.1 ​ Expected volatility ​ ​ 87.7 - 91.5 % ​ 81.7 - 87.3 % ​ As of December 31, 2024, the Company had unrecognized stock-based compensation expense of $ 7.3 million related to stock options issued to employees and directors, which is expected to be recognized over a weighted average period of 1.8 years. Restricted Stock Units In January 2024, the Company awarded 481,500 restricted stock units to certain employees of the Company. The restricted stock units vest in four equal annual installments beginning on the first anniversary of the grant date. The restricted stock units are generally forfeited if the individual’s service relationship with the Company or any subsidiary terminates prior to vesting. F-24 Table of Contents A summary of the Company’s restricted stock unit activity and related information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ Number Weighted ​ ​ of Shares ​ Average ​ ​ of Restricted ​ Grant Date ​ Stock Units Fair Value Unvested as of December 31, 2023 ​ — $ — Granted ​ 481,500 ​ $ 0.55 Forfeited ​ ( 36,000 ) ​ $ 0.55 Unvested as of December 31, 2024 445,500 $ 0.55 ​ Restricted Common Stock A summary of the Company’s restricted stock activity and related information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ Number Weighted ​ ​ of Shares ​ Average ​ ​ of Restricted ​ Grant Date ​ Common Stock Fair Value Unvested as of December 31, 2023 ​ 5,617 $ 5.51 Vested ​ ( 5,617 ) ​ $ 5.51 Unvested as of December 31, 2024 — $ — ​ In June 2020, the Company granted 552,546 shares of common stock underlying restricted stock awards, and the Company has not subsequently granted any additional restricted stock awards. The aggregate fair value of the restricted stock awards that vested during the years ended December 31, 2024 and 2023 was less than $ 0.1 million. 11. Net Loss Per Share The weighted average number of shares of common stock used in the basic and diluted net loss per share calculation includes the prefunded warrants issued in connection with the Company’s private placements with certain existing investors and Gilead, as the prefunded warrants are exercisable at any time for nominal cash consideration. As of December 31, 2024, no prefunded warrants have been exercised and 25,602,707 prefunded warrants are outstanding. The following table sets forth the outstanding common stock equivalents, presented based on amounts outstanding at each period end, that were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have been anti-dilutive. ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2024 ​ 2023 Unvested restricted common stock — 5,617 Unvested restricted stock units 445,500 — Outstanding stock options 8,333,932 7,455,795 Warrants 2,631 2,631 Unvested employee stock purchase plan shares ​ 46,735 ​ 68,642 Total common stock equivalents 8,828,798 7,532,685 ​ ​ F-25 Table of Contents 12. Income Taxes The Company has no t recorded a current or deferred tax provision for years ended December 31, 2024 and 2023. The effective income tax rate differed from the amount computed by applying the federal statutory rate to the Company’s loss before income taxes as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 Tax effected at statutory rate 21.0 % 21.0 % State taxes 7.4 ​ 6.5 ​ Stock-based compensation ( 1.0 ) ( 1.4 ) ​ Non-deductible expenses ( 1.2 ) ( 0.8 ) ​ Federal research and development credits 4.0 3.5 ​ Change in valuation allowance ( 30.2 ) ( 28.8 ) ​ Effective income tax rate 0.0 % 0.0 % ​ Deferred tax assets consist of the following as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 Deferred tax assets: ​ ​ Federal net operating loss carryforwards ​ $ 51,548 ​ $ 43,953 State net operating loss carryforwards ​ ​ 13,745 ​ ​ 11,433 Capitalized research and development expenditures ​ ​ 28,934 ​ ​ 24,485 Research and development credit carryforwards ​ 13,149 ​ 10,359 Lease liability ​ 2,224 ​ 2,510 Deferred revenue ​ 2,089 ​ — Accruals and reserves ​ 151 ​ 210 Intangible assets ​ 1,777 ​ 1,793 Stock-based compensation ​ 1,362 ​ 1,213 Total deferred tax assets: ​ 114,979 ​ 95,956 Valuation allowance ​ ( 112,522 ) ​ ( 92,978 ) Subtotal ​ 2,457 ​ 2,978 Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Property and equipment ​ ( 1,204 ) ​ ( 1,578 ) Right of use asset ​ ( 1,253 ) ​ ( 1,400 ) Total deferred tax liabilities ​ ​ ( 2,457 ) ​ ​ ( 2,978 ) Net deferred tax assets ​ $ — ​ $ — ​ The Company has had no income tax expense due to operating losses incurred since inception. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on this, the Company has provided a valuation allowance for the full amount of the net deferred tax assets as the realization of the deferred tax assets is not determined to be more likely than not. During the year ended December 31, 2024, the valuation allowance increased by $ 19.5 million primarily due to the Company’s book loss and capitalized research and development expenditures reported in the period and the generation of additional research and development credits. As of December 31, 2024, the Company had $ 245.5 million and $ 217.5 million of federal and state operating loss carryforwards, respectively. Of the federal net operating loss carryovers, $ 240.6 million are not subject to expiration and the remaining federal and state net operating loss carryovers begin to expire in 2035. These loss carryforwards are available to reduce future federal taxable income, if any. As of December 31, 2024, the Company had federal and state research and development credit carryovers of $ 10.2 million and $ 3.8 million, which may be available to offset any future income tax F-26 Table of Contents and which will begin to expire in 2033. These loss and credit carryforwards are subject to review and possible adjustment by the appropriate taxing authorities. Utilization of the Company’s net operating loss (“NOL”) carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) as well as similar state provisions. These ownership changes may limit the amount of NOL and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change as defined by Section 382 of the Code results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. In the second quarter of 2024, the Company had an ownership change as defined by Section 382 and Section 383 of the Code. As a result, if the Company earns net taxable income, its ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset such taxable income may be subject to limitations, which could result in increased future tax liability to the Company and could have an adverse effect on its future results of operations. The Company follows the provisions of ASC 740-10, Accounting for Uncertainty in Income Taxes , which specifies how tax benefits for uncertain tax positions are to be recognized, measured, and recorded in financial statements; requires certain disclosures of uncertain tax matters; specifies how reserves for uncertain tax positions should be classified on the balance sheet; and provides transition and interim period guidance, among other provisions. As of December 31, 2024, and 2023, the Company has not recorded tax reserves associated with any unrecognized tax benefits. The Company’s policy is to recognize interest and penalties accrued on any uncertain tax positions as a component of income tax expense, if any, in its statements of income. As of December 31, 2024, and 2023, the Company had no reserves for uncertain tax positions. For the years ended December 31, 2024 and 2023, no estimated interest or penalties were recognized on uncertain tax positions. The Company has not recorded any interest or penalties on any unrecognized tax benefits since its inception. The Company has not conducted a study of its research and development credit carryforwards. This study may result in an adjustment to research and development credit carryforwards; however, until a study is completed, and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the consolidated balance sheets or statements of operations and comprehensive loss if an adjustment were required. The 2017 Tax Cuts and Jobs Act (“TCJA”) included a multitude of tax provisions, including several deferred changes that became effective for tax years ending after December 31, 2021. Included in the provisions was the TCJA’s amendment to Section 174 of the Internal Revenue Code of 1986, as amended (“Section 174”), which now requires U.S.-based and non-U.S-based research and experimental expenditures to be capitalized and amortized over a period of five or 15 years, respectively, for amounts paid in tax years starting after December 31, 2021. Prior to the TCJA amendment, Section 174 allowed taxpayers to either immediately deduct research and experimental expenditures in the year paid or incurred. The Company applied this required change in accounting method beginning in 2022. The Company’s tax returns remain open to examination by the Internal Revenue Service and the Commonwealth of Massachusetts for the years ended December 31, 2021 to December 31, 2023. In addition, the Company’s tax carryover attributes such as net operating losses or credits from earlier periods are also subject to examination. The Company is currently not subject to any examinations by the Internal Revenue Service or any other tax authorities for any tax years. 13. 401(k) Plan The Company maintains a defined contribution savings plan for employees that is defined to qualify under Section 401(k) of the Internal Revenue Code, as amended, (the “401(k) Plan”) in which substantially all employees are eligible to participate. Under the 401(k) Plan, all employees who meet minimum age and service requirements may elect to defer a portion of their annual compensation on a pre-tax basis or post-tax basis, up to the maximum amount prescribed by statute. For each participating employee, the Company makes matching contributions equal to 100 % of the first 3 % of compensation contributed, plus 50 % of the next 2 % of compensation contributed, for a maximum of up to 4 % of the F-27 Table of Contents employee’s eligible compensation. Matching contributions are fully vested at the time of contribution. The Company incurred expenses related to matching contributions on behalf of employees to the 401(k) Plan of $ 0.6 million and $ 0.7 million during the years ended December 31, 2024 and 2023, respectively. 14. Subsequent Events Collaboration, License and Option Agreement and Issuance of Common Stock On February 10, 2025, Xilio Development entered into a collaboration, license and option agreement with AbbVie Group Holdings for up to four programs leveraging the Company’s proprietary tumor-activation technology and platform, consisting of (i) an exclusive option for (a) an initial program to discover, develop and commercialize masked T cell engager molecules for an agreed upon initial target and backup target, and (b) subject to the terms of the agreement, up to two additional programs to discover, develop, and commercialize masked T cell engager molecules for an initial target and backup target determined at the time of program initiation and (ii) an exclusive license for a program to develop and commercialize a masked antibody-based immunotherapy. Under the collaboration, license and option agreement, the Company received an upfront cash payment of $ 42.0 million in February 2025. In addition, the Company will be eligible to receive up to approximately $ 2.1 billion in additional contingent payments and tiered royalties ranging in the mid to high single digits on annual global net product sales. In connection with the execution of the collaboration, license and option agreement, on February 10, 2025, the Company entered into a stock purchase agreement with AbbVie Inc. pursuant to which the Company issued and sold 4,347,826 shares of its common stock to AbbVie Inc. in a private placement at a purchase price of $ 2.30 per share for an aggregate purchase price of $ 10.0 million. ​ ​ ​ F-28