What changed in this filing

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Item 1. Financial Statements

2025-08-12 compared with 2025-05-15 · 112 added, 71 removed, 381 unchanged (32% of the section changed)

24 unchanged sentences

Preferred stock, par value $ 0.0001 per share;

25,000,000 shares authorized and no shares issued and outstanding as of March 31, 2025 and December 31, 2024

25,000,000 shares authorized and no shares issued and outstanding as of June 30, 2025 and December 31, 2024

Common stock, par value $ 0.0001 per share;

175,000,000 shares authorized;

41,821,887 and 41,793,412 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

42,088,697 and 41,793,412 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Accumulated deficit

5 unchanged sentences

(in thousands, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

License and collaboration revenue

10 unchanged sentences

Loss before income taxes

Income tax benefit

Income tax (provision) benefit

Net loss to common stockholders

9 unchanged sentences

Zenas BioPharma, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(in thousands, except share data)

Three Months Ended March 31, 2025

Additional Paid-in Capital

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

6 unchanged sentences

Balance as of March 31, 2025

Exercises of common stock options

Stock-based compensation expense

Unrealized gain on investments

Foreign currency translation adjustment

Balance as of June 30, 2025

The accompanying notes are an integral part of these condensed consolidated financial statements.

Zenas BioPharma, Inc.

Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(in thousands, except share data)

Three Months Ended March 31, 2024

Convertible Preferred Stock

9 unchanged sentences

Balance as of March 31, 2024

Issuance of Series C convertible preferred stock, net of $ 619 issuance cost

Exercises of common stock options

Stock-based compensation expense

Foreign currency translation adjustment

Balance as of June 30, 2024

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

19 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of Series C convertible preferred stock, net of issuance costs

Payment of initial public offering costs

Proceeds from exercise of stock options

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

2 unchanged sentences

Right-of-use assets obtained under operating lease arrangements

Conversion of BMS Note into Series C convertible preferred stock

Deferred offering costs in accounts payable and accrued expenses

26 unchanged sentences

Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been retroactively adjusted, where applicable, to reflect the reverse stock split and the adjustment of the preferred stock conversion ratios.

The Company has incurred operating losses and negative cash flows, since its inception, including net losses of $ 33.6 million and $ 27.8 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the

Company had an accumulated deficit of $ 421.0 million.

The Company has incurred operating losses and negative cash flows, since its inception, including net losses of $ 52.2 million and $ 38.0 million for the three months ended June 30, 2025 and 2024, respectively, and $ 85.8 million and $ 65.8 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, the Company had an

accumulated deficit of $ 473.2 million.

Management expects operating losses and negative operating cash flows to continue for the foreseeable future.

The Company expects that its existing cash, cash equivalents and investments of $ 314.2 million as of March 31, 2025 will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date this Form 10-Q is filed.

The Company expects that its existing cash, cash equivalents and investments of $ 274.9 million as of June 30, 2025, will be sufficient to fund its operating expenses and capital expenditure requirements into the fourth quarter of 2026, which is more than twelve months from the filing of these financial statements.

We have based this estimate on our current assumptions, which may prove to be wrong, and we may exhaust our available capital resources sooner than we expect.

The Company will need additional financing to support its continuing operations and to pursue its growth strategy.

14 unchanged sentences

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2025, and the results of operations and its cash flows for the three months ended March 31, 2025 and 2024.

The financial data and other information disclosed in these notes related to the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period.

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2025, and the results of operations and its cash flows for the three and six months ended June 30, 2025 and 2024.

The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period.

These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2024, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K as filed with the SEC, on March 11, 2025.

4 unchanged sentences

Actual results may differ from those estimates or assumptions.

Significant estimates in these condensed consolidated financial statements include estimates made in connection with accrued research and development expenses, stock-based compensation and pre-initial public offering (“IPO”) valuations of common stock.

Significant estimates in these condensed consolidated financial statements

include estimates made in connection with accrued research and development expenses, stock-based compensation and pre-initial public offering (“IPO”) valuations of common stock.

Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgement.

3 unchanged sentences

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”) , which requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for the Company beginning in fiscal year 2025, with early adoption permitted.

ASU 2023-09 may be applied retrospectively or prospectively to the financial statements.

The Company is currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures.

In November 2024, the FASB issued 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”) , which requires entities to disclose additional information about specific expense categories in the notes to the financial statements.

ASU 2024-03 is effective annual periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

ASU 2024-03 may be applied retrospectively or prospectively to the financial statements.

The Company is currently evaluating the impact of ASU 2024-03 on the consolidated financial statements and related disclosures.

From time to time, new accounting pronouncements are issued by the “FASB” or other standard setting bodies that we adopt as of the specified effective date.

2 unchanged sentences

The following table presents information about the Company’s assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value (in thousands):

As of March 31, 2025

As of June 30, 2025

Total Carrying Value

19 unchanged sentences

Government securities

There have been no material impairments of our assets measured and carried at fair value as of March 31, 2025 and December 31, 2024.

In addition, there have been no changes in valuation techniques as of March 31, 2025 and December 31, 2024.

There have been no material impairments of our assets measured and carried at fair value as of June 30, 2025 and December 31, 2024.

In addition, there have been no changes in valuation techniques as of June 30, 2025 and December 31, 2024.

The fair value of Level 1 instruments classified as money market funds and government securities are valued using quoted market prices in active markets.

The fair value of Level 2 instruments classified as short-term investments was determined using other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date and fair value is determined using models or other valuation methodologies.

During the three months ended March 31, 2025 and year ended December 31, 2024, there were no transfers between levels.

During the six months ended June 30, 2025 and year ended December 31, 2024, there were no transfers between levels.

The short and long-term investments are classified as available-for-sales securities.

As of March 31, 2025, the remaining contractual maturities of the available-for-sales securities were 1 to 18 months , the balance in the Company’s accumulated other comprehensive income was comprised of activity related to the Company’s available-for-sale securities.

There were no realized gains or losses recognized on the sale or maturity of available-for-sale securities during the three months ended March 31, 2025 and 2024.

As of June 30, 2025, the remaining contractual maturities of the available-for-sales securities were 1 to 15 months , the balance in the Company’s accumulated other comprehensive income was comprised of activity related to the Company’s available-for-sale securities.

There were no realized gains or losses recognized on the sale or maturity of available-for-sale securities during the three and six months ended June 30, 2025 and 2024.

As a result, the Company did not reclassify any amounts out of accumulated other comprehensive income for the same period.

The Company had a limited number of available-for-sale securities in

insignificant loss positions as of March 31, 2025, which the Company does not intend to sell and has concluded will not be required to sell before recovery of amortized cost for the investment maturity.

insignificant loss positions as of June 30, 2025, which the Company does not intend to sell and has concluded it will not be required to sell before recovery of amortized cost for the investment maturity.

The following table summarizes the available-for-sale securities (in thousands):

As of March 31, 2025

As of June 30, 2025

Amortized Cost

1 unchanged sentence

Gross Unrealized Losses

March 31, 2025

June 30, 2025

Commercial paper

11 unchanged sentences

Other assets consisted of the following (in thousands):

March 31, 2025

June 30, 2025

December 31, 2024

3 unchanged sentences

Accrued expenses consisted of the following (in thousands):

March 31, 2025

June 30, 2025

December 31, 2024

9 unchanged sentences

The minimum lease payments under the Company’s operating leases are expected to be as follows (in thousands):

2025 (remaining nine months)

2025 (remaining six months)

Total future minimum lease payments

12 unchanged sentences

The global development activities under the agreement do not represent a transaction with a customer and reimbursement payments received by the Company for global development activities are accounted for as a reduction of the related research and development expenses.

For the three months ended March 31, 2025 and 2024, the Company recorded $ 1.7 million and $ 1.0 million, respectively, as a receivable included in prepaid expenses and other current assets.

The Company recorded $ 1.7 million and $ 1.0 million for the three months ended March 31, 2025 and 2024, respectively, as a reduction to research and development expense for global development costs to be reimbursed by BMS.

The Company did not recognize revenue related to the BMS Agreement during the three months ended March 31, 2025 and 2024.

As of June 30, 2025 and 2024, the Company recorded $ 1.3 million and $ 1.2 million, respectively, as a receivable included in prepaid expenses and other current assets.

The Company recorded $ 1.3 million and $ 1.2 million for the three months ended June 30, 2025 and 2024, respectively, as a reduction to research and development expense for global development costs to be reimbursed by BMS.

The Company recorded $ 3.0 million and $ 2.2 million for the six months ended June 30, 2025 and 2024, respectively, as a reduction of research and development expense for global development costs to be

reimbursed by BMS.

The Company did no t recognize revenue related to the BMS Agreement during the three and six months ended June 30, 2025 and 2024.

Tenacia Biotechnology Co.

5 unchanged sentences

The Company is entitled to receive further development, regulatory and sales milestones from Tenacia of up to approximately $ 86.0 million if certain milestones are successfully achieved.

The Company did not recognize revenue related to the Tenacia Agreement during the three months ended March 31, 2025 and 2024.

The Company did not recognize revenue related to the Tenacia Agreement during the six months ended June 30, 2025 and 2024.

License Agreement with Zai Lab (Hong Kong) Limited

17 unchanged sentences

Sales and royalty based milestones structured 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 transaction price relates.

The Company will recognize such milestone and

royalty 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).

As of March 31, 2025, no milestones were achieved or deemed probable of achievement.

The Company will recognize such milestone and royalty 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).

As of June 30, 2025, no milestones were achieved or deemed probable of achievement.

License Agreements

5 unchanged sentences

The Company is also obligated to reimburse Xencor for third-party costs incurred for certain patent filings, prosecution and maintenance as further specified in the 2020 Xencor Agreement.

During the three months ended March 31, 2025 and 2024, the Company incurred no such reimbursable costs.

During the six months ended June 30, 2025 and 2024, the Company incurred no such reimbursable costs.

2021 Xencor Agreement

2 unchanged sentences

In addition, the Company is required to pay Xencor tiered royalties on annual net sales of successfully commercialized products utilizing obexelimab, with the royalty percentages varying based on regions and ranging from the mid-single digits to the mid-teens.

For the three months ended March 31, 2025 and 2024, the Company recorded no reimbursable patent-related costs, respectively.

For the six months ended June 30, 2025 and 2024, the Company recorded no reimbursable patent-related costs.

License Agreement with Viridian Therapeutics, Inc.

10 unchanged sentences

For additional information on the Zai Agreement, please see License Agreement with Zai Lab (Hong Kong) Limited in Note 7 – License and Collaboration Revenue to these condensed consolidated financial statements.

During the three months ended March 31, 2025 and 2024, the Company recognized no expense related to Viridian contract manufacturing organization (“CMO”) costs.

During the three and six months ended June 30, 2025, the Company recognized no expense related to Viridian contract manufacturing organization (“CMO”) costs.

During the three and six months ended June 30, 2024, the Company recognized $ 0.1 million in expense related to Viridian CMO costs.

Viridian has agreed to reimburse the Company for certain services the Company performs on Viridian’s behalf, with reimbursements being recorded as a reduction in research and development expenses.

During the three months ended March 31, 2025, the Company recorded $ 0.1 million in reimbursable expenses.

During the three months ended March 31, 2024, the Company had no reimbursable expenses.

Additionally, during the three months ended March 31, 2025 and 2024, no milestones were achieved.

During the three and six months ended June 30, 2025, the Company recorded an immaterial amount and $ 0.2 million in reimbursable expenses, respectively.

During the three and six months ended June 30, 2024, the Company recorded $ 1.0 million in reimbursable expenses.

Additionally, during the six months ended June 30, 2025 and 2024, no milestones were achieved.

In September 2024, upon the completion of the IPO, the Company restated its certificate of incorporation, pursuant to which the Company is authorized to issue 175,000,000 shares of $ 0.0001 par value common stock.

2 unchanged sentences

The Company had reserved the following shares of common stock for the potential conversion of outstanding stock options:

March 31, 2025

June 30, 2025

December 31, 2024

7 unchanged sentences

In January 2025, the number of shares of common stock available for issuance under the Company’s 2024 Plan, was increased by 2,089,670 shares of common stock due to the automatic annual provision to increase shares of common stock available under the 2024 Plan.

As of March 31, 2025, 2,456,222 shares of common stock were available for issuance under the 2024 Plan.

As of June 30, 2025, 495,412 shares of common stock were available for issuance under the 2024 Plan.

Stock Options

2 unchanged sentences

Compensation expense related to awards to employees with performance based vesting conditions is recognized based on the grant date fair value once the achievement of the performance condition is probable.

From time to time, the Company grants equity awards to newly hired employees as an inducement to enter into employment with the Company.

The grants constitute "employment inducement grants" in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules and are issued outside of the 2024 Plan.

The inducement grants include non-statutory stock options to purchase shares of the Company's common stock.

The inducement grants have terms and conditions consistent with those set forth under the 2024 Plan and vest under the same respective vesting schedules as stock option awards granted under the 2024 Plan.

The inducement grants are included in the stock option award tables below.

As of June 30, 2025, the Company granted 762,000 non-statutory stock options as inducement grants.

No inducement grants were awarded during 2024.

The following table presents a summary of the Company’s stock option activity and related information:

6 unchanged sentences

Forfeited or cancelled

Outstanding - March 31, 2025

Options vested and exercisable as of March 31, 2025

Options vested and expected to vest as of March 31, 2025

The aggregate intrinsic value of the stock options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those stock options that had an exercise price lower than the fair value of the Company’s common stock as of the measurement date of March 31, 2025.

As of March 31, 2025, there was $ 68.4 million of unrecognized stock-based compensation related to stock options, which is expected to be recognized over a weighted-average period of 3.15 years.

Outstanding - June 30, 2025

Options vested and exercisable as of June 30, 2025

Options vested and expected to vest as of June 30, 2025

Restricted Stock Units

The Company granted to certain employees restricted stock units (“RSUs”) that are subject to time-based vesting conditions, that vest equally over four years , assuming continued employment.

RSUs with time-based vesting conditions are valued on the grant date using the grant date market value price of the underlying shares of the Company’s common stock.

The Company did not grant any RSU’s in 2024.

The following table summarizes the Company’s RSU activity:

Number of Shares

Weighted - Average Grant Date Fair Value

Unvested as of December 31, 2024

Unvested as of June 30, 2025

No RSUs vested during the current or prior year periods.

As of June 30, 2025, there was $ 88.1 million of unrecognized stock-based compensation related to unvested stock options, granted RSU’s and ESPP, which is expected to be recognized over a weighted-average period of 3.19 years.

The Company recognized stock-based compensation expense related to the issuance of equity awards to employees and directors in the condensed consolidated statement of operations as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

4 unchanged sentences

The number of shares of common stock available under the ESPP will automatically increase on January 1st of each year, beginning on January 1, 2025 through January 1, 2034, by the number of shares equal to the lesser of (i) one percent of the aggregate number of shares of common stock outstanding as of such date, and (ii) a number of shares as may be determined by the Board on or prior to such date, up to a maximum of 1,000,000 shares in the aggregate per year.

On January 1, 2025, the number of shares of common stock authorized for issuance under the ESPP increased automatically by 417,934 shares and as of March 31, 2025, a total of 815,890 shares were available for future issuance under the ESPP.

There were no shares issued under the ESPP during the three months ended March 31, 2025.

On January 1, 2025, the number of shares of common stock authorized for issuance under the ESPP increased automatically by 417,934 shares and as of June 30, 2025, a total of 815,890 shares were available for future issuance under the ESPP.

There were no shares issued under the ESPP during the six months ended June 30, 2025.

Net Loss Per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):

Three Months Ended March 31,

Net loss attributable to common stockholders

Weighted-average common stock outstanding - basic and diluted

Net loss per share attributable to common stockholders - basic and diluted

The Company’s potentially dilutive securities, which include convertible preferred stock, restricted stock and stock options, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share.

Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following shares from the computation of diluted net loss per share attributable to common stockholders as of March 31, 2025 and 2024 because including them would have had an anti-dilutive effect:

The Company excluded the following shares from the computation of diluted net loss per share attributable to common stockholders as of June 30, 2025 and 2024 because including them would have had an anti-dilutive effect:

Convertible preferred stock

Unvested restricted stock units

Unvested restricted stock

10 unchanged sentences

Under such agreements, the Company is contractually obligated to make certain minimum payments to the vendors, with the exact amounts in the event of termination to be based on the timing of the termination and the exact terms of the agreement.

As of March 31, 2025, our total non-cancellable clinical manufacturing contract payment obligations are $ 18.4 million of which the full obligation is payable within 12 months.

As of June 30, 2025, our total non-cancellable clinical manufacturing contract payment obligations are $ 20.6 million of which the full obligation is payable within 12 months.

Indemnification Agreements

3 unchanged sentences

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not currently aware of any indemnification claims and had not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of March 31, 2025.

Litigation and Other Proceedings

The Company may periodically become subject to legal proceedings and claims arising in the ordinary course of business.

As of March 31, 2025, the Company was not subject to any material legal proceedings which would reasonably be expected to have a material adverse effect on the Company’s financial results.

As of June 30, 2025, the Company was not subject to any material legal proceedings which would reasonably be expected to have a material adverse effect on the Company’s financial results.

Related Party Transactions

2 unchanged sentences

In connection with the completion of the IPO, in September 2024, all outstanding shares of preferred stock converted into shares of common stock.

As of March 31, 2025, Xencor held less than 10 % of shares of the Company’s outstanding common stock.

As of June 30, 2025, Xencor held less than 10 % of shares of the Company’s outstanding common stock.

Viridian Therapeutics, Inc.

2 unchanged sentences

As initial consideration for this license, the Company issued 38,707 shares of its common stock to Viridian during the year ended December 31, 2020.

As of March 31, 2025, Viridian held 0.1 % of shares of the Company’s outstanding common stock.

As of June 30, 2025, Viridian held 0.1 % of shares of the Company’s outstanding common stock.

Zai Lab (Hong Kong) Limited

6 unchanged sentences

When evaluating the Company’s financial performance, the Company’s chief operating decision-maker (the “CODM”), its Chief Executive Officer regularly reviews consolidated net loss, total expense and direct expenses by program and compared to budget.

allocates resources based on the Company’s available cash resources, forecasted expenditures on a consolidated basis, as well as an assessment of the probability of success of its research and development activities on a program basis.

Segment asset information regularly provided to the CODM is consistent with that reported on the consolidated balance sheets with particular emphasis on the Company’s available liquidity, including its cash, cash equivalents and marketable securities balances.

Revenue is primarily attributed to individual countries based on the entity owning the license, During the three months ended March 31, 2025, revenue was attributed to Zenas HK.

The Company did not recognize revenue during the three months ended March 31, 2024.

The following table presents certain financial data for the Company’s reportable segments for the three months ended March 31, 2025 and 2024 (in thousands):

The CODM allocates resources based on the Company’s available cash resources, forecasted expenditures on a consolidated basis, as well as an assessment of the probability of success of its research and development activities on a program basis.

Revenue is primarily attributed to individual countries based on the entity owning the license.

During the three months ended June 30, 2025, the Company did no t recognize revenue and for six months ended June 30, 2025, $ 10.0 million was recognized as revenue which was attributed to Zenas HK.

The Company did no t recognize revenue during the three or six months ended June 30, 2024.

The following table presents certain financial data for the Company’s reportable segment for the three and six months ended June 30, 2025 and 2024 (in thousands):

For the three months ended June 30,

For the six months ended June 30,

Direct research and development expenses:

12 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements