Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a clinical-stage biotechnology company discovering and developing tumor-activated, or masked, immuno-oncology, or 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. We are leveraging our proprietary platform to advance a pipeline of novel, tumor-activated I-O molecules that are designed to optimize the therapeutic index by localizing anti-tumor activity within the tumor microenvironment, including masked antibodies, bispecifics, cytokines and immune cell engagers. Current I-O therapies have curative potential for patients with cancer. However, their potential is significantly curtailed by systemic toxicity that results from activity of the therapeutic molecule outside the tumor microenvironment. Our molecules are engineered to localize activity within the tumor microenvironment with minimal systemic effects, resulting in the potential to achieve enhanced anti-tumor activity and increasing the population of patients who may be eligible to receive our medicines. To date, we have presented data across our clinical-stage programs showing clinical validation for our tumor-activation platform. Our most advanced clinical-stage product candidates are vilastobart, an Fc-enhanced, tumor-activated, anti-CTLA-4 monoclonal antibody, or mAb, and XTX301, a tumor-activated, engineered interleukin 12, or IL-12, therapy. We are currently advancing clinical development for vilastobart in combination with atezolizumab (Tecentriq®) in a Phase 2 clinical trial in patients with metastatic microsatellite stable colorectal cancer, or metastatic MSS CRC, under a co-funded clinical trial collaboration with F. Hoffmann-La Roche Ltd, or Roche. In May 2025, we announced updated data from the ongoing Phase 2 clinical trial at the 2025 American Society of Clinical Oncology (ASCO) Annual Meeting, demonstrating additional anti-tumor activity, further duration of responses and a generally well-tolerated safety profile and we anticipate reporting additional data from the Phase 2 trial in the first half of 2026. For XTX301, we have completed enrollment in Phase 1A monotherapy dose escalation and evaluation of those patients is ongoing, and we continue to enroll patients in Phase 1B monotherapy dose expansion of our ongoing Phase 1 clinical trial in patients with advanced solid tumors under our exclusive license agreement with Gilead Sciences, Inc., or Gilead. In addition to our clinical-stage product candidates, we are leveraging our proprietary tumor-activation platform to advance multiple preclinical programs for XTX501, a masked PD-1/IL-2 bispecific and masked T cell engager molecules, including wholly owned programs targeting the tumor-associated antigens for PSMA, CLDN18.2 and STEAP1 and an additional program under our collaboration, license and option agreement with AbbVie Group Holdings Limited, or AbbVie.

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Liquidity and Going Concern Overview

To date, we have financed our operations primarily from proceeds raised through private placements of preferred units, convertible preferred stock, common stock and prefunded warrants; sales of common stock in our initial public offering, or IPO, and through "at-the-market" offerings; the sale of prefunded warrants and common stock warrants in a follow-on public offering; and upfront payments under our collaboration and license agreements with AbbVie and Gilead. We have not generated any revenue from product sales and do not expect to generate any revenue from product sales for at least the next several years, if at all. All of our programs are in early clinical or preclinical development. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve profitability. Even if we are able to generate revenue from product sales, we may not become profitable.

In June 2025, we closed a follow-on public offering of prefunded warrants and accompanying common stock warrants and received net proceeds of $47.0 million after deducting underwriting discounts and commissions and offering expenses payable by us. In connection with the offering, we issued prefunded warrants to purchase 66,676,000 shares of common stock, accompanied by Series A warrants to purchase 66,676,000 shares of common stock (or, in certain circumstances, prefunded warrants), Series B warrants to purchase 66,676,000 shares of common stock (or, in certain circumstances, prefunded warrants) and Series C warrants to purchase 66,676,000 shares of common stock (or, in certain circumstances, prefunded warrants). If the Series B warrants and Series C warrants are exercised in cash at their initial exercise price of $0.75 per warrant, we will receive up to $100.0 million of additional gross proceeds by the second half of 2026. For more information, refer to Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Since inception, we have incurred significant operating losses, including net losses of $29.1 million and $31.1 million for the six months ended June 30, 2025 and 2024, respectively, and a net loss of $58.2 million for the year ended December 31, 2024. As of June 30, 2025, we had an accumulated deficit of $412.9 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future, particularly to the extent we:

As a result, we will need substantial additional capital to support our continuing operations and pursue our strategy. As of June 30, 2025, we had cash and cash equivalents of $121.6 million. Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of June 30, 2025 will be sufficient to enable us to fund our operating expenses and capital expenditure requirements through the end of the third quarter of 2026. However, we have based our estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we anticipate. In addition, we expect our operating losses and negative operating cash flows to continue for the foreseeable future as we continue to advance our pipeline of novel, tumor-activated I-O molecules through preclinical and clinical development, maintain the infrastructure necessary to support these activities and continue to incur costs associated with operating as a public company. These conditions raise substantial doubt about our ability to continue as a going concern. In order to fund our operations, we will need to raise additional capital, which could be obtained through the cash exercise, if any, of the Series B warrants and Series C warrants issued in connection with our June 2025 follow-on public offering, the receipt of milestone payments, option-related fees or other contingent payments under our existing agreements with Gilead and AbbVie, additional public or private equity offerings, debt financings, additional collaborations, partnerships or licensing

arrangements or other sources. However, there can be no assurance that we will receive additional proceeds from the exercise of the common stock warrants or from contingent payments under our existing agreements with Gilead or AbbVie or that we will be able to complete any such transaction on acceptable terms or otherwise. If we are not able to secure sufficient additional capital when needed, we may need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to our operations and research and development programs.

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For more information regarding our liquidity and going concern, refer to "-Liquidity and Capital Resources-Capital Requirements and Going Concern" below and Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. For more information regarding the terms of the warrants we issued in our June 2025 follow-on public offering, refer to Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

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Financial Operations Overview

Revenue

We have not generated any revenue from the sale of products since inception and do not expect to generate any revenue from the sale of products for at least the next several years, if at all. If our development efforts for our current or future product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales. For the foreseeable future, we expect substantially all of our revenue, if any, would be generated from our collaboration and license agreements with AbbVie and Gilead. For more information on our collaboration, license and option agreement with AbbVie and our license agreement with Gilead, please see Note 6 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our discovery efforts, research activities and development and testing of our programs and product candidates. These expenses include:

We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific deliverables using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our condensed consolidated balance sheets as prepaid expenses or accrued research and development expenses. We record cost-sharing payments under our clinical trial collaboration with Roche as a reduction of research and development costs upon the achievement of each study development event specified in the clinical supply agreement. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are capitalized as assets, even when there is no alternative future use for the research and development. The capitalized amounts are expensed as the related goods are delivered or the services are performed.

We use our personnel and infrastructure resources for our discovery efforts, including the advancement of our platform technology, developing programs and product candidates and managing external research efforts. A significant portion of our research and development costs have been, and will continue to be, external costs. We track these external costs, such as fees paid to CDMOs, CROs, preclinical study vendors and other third parties in connection with our manufacturing and manufacturing process development, clinical trials, preclinical studies and other research activities by program. Due to the number of ongoing programs and our ability to use resources across several projects, personnel-related expenses and indirect or shared operating costs incurred for our research and development programs are not recorded or maintained on a program-by-program basis.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will remain approximately the same or will continue to increase for the foreseeable future as we advance our programs and our current or future product candidates into and through the development phase. We expect our discovery research efforts and our related personnel costs to remain consistent with historical levels. In addition, as we progress our most advanced product candidates in clinical development, we may incur additional expenses related to milestone and royalty payments payable to third parties with whom we have entered into, or may enter into license, acquisition, option or other agreements to acquire the rights to future products and product candidates. In the event we are unable to raise sufficient additional capital to fund our operations, we may need to implement cost reduction strategies that seek to maintain our ability to continue the development of our most advanced product candidates in clinical development while otherwise reducing our overall research and development expenses.

At this time, we cannot reasonably estimate or know the nature, timing and projected costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates or programs. This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of:

A change in any of these variables with respect to the development of any of our product candidates would significantly change the costs, timing and viability associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any product candidate we may develop.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits, recruiting and stock-based compensation, for personnel in our executive, finance, legal, business development, human resources and other administrative functions. General and administrative expenses also include legal fees relating to corporate matters; professional and consulting fees for accounting, auditing, tax, human resources and administrative consulting services; board of directors' fees; insurance costs; and facility-related expenses, which include depreciation costs and other allocated expenses for rent, maintenance of facilities and other general administrative costs. These costs relate to the operation of the business and are in support of but separate from the research and development function and our individual development programs. Costs to secure and defend our intellectual property are expensed as incurred and are classified as general and administrative expenses.

We anticipate that our general and administrative expenses will remain consistent with historical levels as we maintain our infrastructure to support our research and development activities. We also expect to continue to incur significant expenses associated with operating as a public company, including increased costs for accounting, audit, legal, regulatory and tax-related services attributable to maintaining compliance with exchange listing standards and U.S. Securities and Exchange Commission, or SEC, requirements, directors' and officers' liability insurance costs and investor and public relations costs. We also expect to continue to incur additional expenses related to intellectual property as we file patent applications to protect intellectual property arising from our research and development activities. In the event we are unable to obtain sufficient additional capital, we may need to implement cost reduction strategies that seek to reduce our general and administrative expenses while maintaining sufficient infrastructure to support our planned research and development activities and operations as a public company.

Restructuring

In connection with the March 2024 strategic portfolio reprioritization and restructuring, we undertook efforts to reduce our expenses and streamline our operations, including a reduction in headcount of 15 employees, representing approximately 21% of our workforce immediately prior to the workforce reduction. Restructuring expense consists of costs directly incurred as a result of restructuring initiatives, and includes employee severance payments, benefits continuation, outplacement services and related expenses.

Other Income (Expense), Net

Change in Fair Value of Common Stock Warrant Liabilities

The change in fair value of common stock warrant liabilities consists of the change in the fair value of the common stock warrant liabilities from the issuance date of June 5, 2025 to June 30, 2025.

Other Income (Expense), Net

Other income (expense), net consists primarily of the portion of the issuance costs we incurred in connection with the issuance of the prefunded warrants and common stock warrants in June 2025 in connection with a follow-on public offering which were allocated to the common stock warrant liabilities, interest income earned from our cash and cash equivalents, interest expense principally on the note payable under our former debt arrangement with Pacific Western Bank, or PacWest, and amortization of the debt discount related to debt issuance costs.

Results of Operations

Comparison of the three months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024 (in thousands):

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Collaboration and License Revenue

Collaboration and license revenue increased by $5.7 million from $2.4 million for the three months ended June 30, 2024 to $8.1 million for the three months ended June 30, 2025. The increase was due to collaboration and license revenue recognized under the collaboration, license and option agreement and stock purchase agreement that we entered into in February 2025 with AbbVie.

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended June 30, 2025 and 2024 (in thousands):

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Research and development expenses increased by $4.1 million from $11.2 million for the three months ended June 30, 2024 to $15.3 million for the three months ended June 30, 2025. The changes in research and development expenses were primarily due to the following:

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General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended June 30, 2025 and 2024 (in thousands):

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General and administrative expenses increased by $1.3 million from $5.8 million for the three months ended June 30, 2024 to $7.1 million for the three months ended June 30, 2025. The changes in general and administrative expenses were primarily due to the following:

Restructuring

We did not recognize any restructuring expenses for the three months ended June 30, 2025. We recognized $0.1 million in restructuring expenses for the three months ended June 30, 2024, consisting of employee outplacement service costs related to the workforce reduction announced in March 2024.

Change in Fair Value of Common Stock Warrant Liabilities

The change in fair value of common stock warrant liabilities for the three months ended June 30, 2025 was due to a loss of less than $0.1 million on the change in the fair value of the common stock warrant liabilities between the issuance date of June 5, 2025 and the quarter ended June 30, 2025.

Other Income (Expense), Net

Other income (expense), net, of $1.4 million for the three months ended June 30, 2025 included $2.3 million of the issuance costs we incurred in connection with the sale and issuance of the prefunded warrants and common stock warrants in June 2025 in connection with our follow-on public offering, which were allocated to the common stock warrant liabilities and were partially offset by $0.9 million of interest income. Other income (expense), net of $0.8 million for the three months ended June 30, 2024 consisted of interest income.

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Comparison of the six months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024 (in thousands):

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Collaboration and License Revenue

Collaboration and license revenue increased by $8.7 million from $2.4 million for the six months ended June 30, 2024 to $11.0 million for the six months ended June 30, 2025. The increase was due to an increase in collaboration and license revenue recognized under the license agreement and stock purchase agreement with Gilead and collaboration and license revenue recognized under the collaboration, license and option agreement and stock purchase agreement that we entered into in February 2025 with AbbVie.

Research and Development Expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2025 and 2024 (in thousands):

Research and development expenses increased by $2.0 million from $21.6 million for the six months ended June 30, 2024 to $23.6 million for the six months ended June 30, 2025. The changes in research and development expenses were primarily due to the following:

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the six months ended June 30, 2025 and 2024 (in thousands):

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General and administrative expenses increased by $3.7 million from $12.0 million for the six months ended June 30, 2024 to $15.6 million for the six months ended June 30, 2025. The changes in general and administrative expenses were primarily due to the following:

Restructuring

We did not recognize any restructuring expenses for the six months ended June 30, 2025. We recognized $1.0 million in restructuring expenses for the six months ended June 30, 2024. The restructuring expenses were associated with the

workforce reduction announced in March 2024 and consisted of employee severance, benefits continuation and outplacement service costs.

Change in Fair Value of Common Stock Warrant Liabilities

The change in fair value of common stock warrant liabilities for the six months ended June 30, 2025 was due to a loss of less than $0.1 million on the change in the fair value of the common stock warrant liabilities between the issuance date of June 5, 2025 and the quarter ended June 30, 2025.

Other Income (Expense), Net

Other income (expense), net of $0.8 million for the six months ended June 30, 2025 included $2.3 million of the issuance costs we incurred in connection with the sale and issuance of the prefunded warrants and common stock warrants in June 2025 in connection with our follow-on public offering, which were allocated to the common stock warrant liabilities and were partially offset by $1.4 million of interest income. Other income (expense), net of $1.1 million for the six months ended June 30, 2024 consisted of interest income.

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Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant operating losses and negative cash flows from operations. We have not yet commercialized any of our product candidates, which are in preclinical or early clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all. To date, we have financed our operations primarily from proceeds raised through private placements of preferred units, convertible preferred stock, common stock and prefunded warrants; sales of common stock in our IPO and through at-the-market offerings; the sale of prefunded warrants and common stock warrants in a follow-on public offering; and upfront payments under our collaboration and license agreements with AbbVie and Gilead. Through June 30, 2025, we have received an aggregate of $531.8 million in gross proceeds from such transactions, including $224.5 million in gross proceeds from the sale and issuance of preferred units and convertible preferred stock, $129.9 million in gross proceeds from our IPO, $72.0 million in upfront cash payments under our collaboration and license agreements with AbbVie and Gilead, $46.3 million in gross proceeds from the sale and issuance of common stock and prefunded warrants in private placements with certain existing accredited investors, Gilead and AbbVie, $9.1 million in gross proceeds from the sale and issuance of common stock through at-the-market offerings and $50.0 million in gross proceeds from the sale of prefunded warrants and common stock warrants through a follow-on public offering. As of June 30, 2025, we had cash and cash equivalents of $121.6 million.

In November 2022, we filed a universal shelf registration statement on Form S-3 with the SEC to register for sale up to $250.0 million of our common stock, preferred stock, debt securities, units and warrants, which we could issue and sell from time to time in one or more offerings, which became effective on November 18, 2022 (333-268264), or the Prior S-3 Shelf. In November 2022, we entered into a sales agreement, or the Cowen Sales Agreement, with Cowen and Company LLC under which we could issue and sell shares of our 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 Prior S-3 Shelf. During the year ended December 31, 2024, we issued and sold 7,000,000 shares of our common stock pursuant to the Cowen Sales Agreement at a price of $1.00 per share for aggregate gross proceeds of $7.0 million. During the three months ended March 31, 2025, we issued and sold an additional 1,550,000 shares of our 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, we filed a universal shelf registration statement on Form S-3 with the SEC to register for sale up to $250.0 million of our common stock, preferred stock, debt securities, units and warrants, which we may issue and sell from time to time in one or more offerings, which became effective on May 8, 2025 (333-285703), or the New S-3 Shelf. In March 2025, we terminated the Cowen Sales Agreement and we entered into a new sales agreement with Leerink Partners, LLC, or the Leerink Sales Agreement, under which we may issue and sell shares of our common stock from time to time at an aggregate offering price of up to $50.0 million. Prior to the effectiveness of the New S-3 Shelf, the offering of shares under the Leerink Sales Agreement was registered under the Prior S-3 Shelf. In connection with the effectiveness of the New S-3

Shelf, the registration of such offering under the Prior S-3 Shelf was terminated and such offering was registered under the New S-3 Shelf.

Cash Flows

The following table provides information regarding our cash flows for each period presented (in thousands):

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Operating Activities

Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support our business. We have historically experienced negative cash flows from operating activities as we invested in research and development of our product candidates, including preclinical studies, clinical trials, manufacturing and manufacturing process development. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges, which are generally due to stock-based compensation, depreciation and amortization, as well as changes in components of operating assets and liabilities, which are generally due to increased expenses and timing of vendor payments.

During the six months ended June 30, 2025, net cash provided by operating activities of $14.5 million was primarily driven by net changes in operating assets and liabilities of $37.5 million, which includes the $49.1 million recorded as deferred revenue in connection with our collaboration, license and option agreement and stock purchase agreement with AbbVie, and net non-cash expenses of $6.1 million, partially offset by our net loss of $29.1 million.

During the six months ended June 30, 2024, net cash provided by operating activities of $9.5 million was primarily driven by the $39.1 million received from Gilead for the upfront payment under the license agreement and equity investments under the stock purchase agreement, which were recorded as deferred revenue at the outset of the arrangement and net non-cash expenses of $4.2 million, partially offset by our net loss of $31.1 million and remaining changes in operating assets and liabilities of $2.8 million.

Investing Activities

During the six months ended June 30, 2025 and 2024, net cash used in investing activities consisted of purchases of property and equipment.

Financing Activities

During the six months ended June 30, 2025, net cash provided by financing activities of $52.1 million consisted of proceeds from the sale of prefunded warrants and common stock warrants through a follow-on public offering, proceeds from the sale and issuance of common stock to AbbVie in a private placement and proceeds from the sale and issuance of common stock through ATM offerings.

During the six months ended June 30, 2024, net cash provided by financing activities of $21.0 million consisted of proceeds from the sale and issuance of common stock and prefunded warrants in private placements with certain existing accredited investors and Gilead and proceeds from the sale and issuance of common stock under our at-the-market offering program, partially offset by repayments of debt principal under our loan agreement with PacWest and payments on our finance lease for certain lab equipment.

Capital Requirements and Going Concern

We expect our future capital requirements to increase substantially over time in connection with our ongoing research and development activities, particularly as we advance our current and planned clinical development of our product candidates and maintain the research efforts and preclinical activities associated with our other existing programs and discovery platform. In addition, we expect to continue to incur additional costs associated with operating as a public company. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.

Inflation generally affects us by increasing our cost of labor and certain services. We do not believe that inflation had a material effect on our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. However, the United States has recently experienced historically high levels of inflation. If the inflation rate continues to increase it may affect our expenses, such as employee compensation and research and development charges due to, for example, increases in the costs of labor and supplies. Additionally, the biotechnology industry is subject to a competitive wage environment that may also increase our operating costs in the future.

As of June 30, 2025, we had cash and cash equivalents of $121.6 million. Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of June 30, 2025 will be sufficient to enable us to fund our operating expenses and capital expenditure requirements through the end of the third quarter of 2026. However, we have based our estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we anticipate. In addition, we expect our operating losses and negative operating cash flows to continue for the foreseeable future as we continue to advance our pipeline of novel, tumor-activated I-O molecules through preclinical and clinical development, maintain the infrastructure necessary to support these activities and continue to incur costs associated with operating as a public company. These conditions raise substantial doubt about our ability to continue as a going concern. In order to fund our operations, we will need to raise additional capital, which could be obtained through the cash exercise, if any, of the Series B warrants and Series C warrants issued in connection with our June 2025 follow-on public offering, the receipt of milestone payments, option-related fees or other contingent payments under our existing agreements with Gilead and AbbVie, additional public or private equity offerings, debt financings, additional collaborations, partnerships or licensing arrangements or other sources. However, there can be no assurance that we will receive additional proceeds from the exercise of the common stock warrants or from contingent payments under our existing agreements with Gilead or AbbVie or that the we will be able to complete any such transaction on acceptable terms or otherwise. If we are not able to secure sufficient additional capital when needed, we may need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to our operations and research and development programs. For more information regarding our liquidity and going concern, refer to Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. For more information regarding the terms of the warrants we issued in our June 2025 follow-on public offering, refer to Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

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The accompanying condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business for the foreseeable future. The condensed 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.

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Because of the numerous risks and uncertainties associated with product development, and because the extent to which we may enter into additional collaborations with third parties for the development of our product candidates is unknown, we may incorrectly estimate the timing and amounts of increased capital outlays and operating expenses associated with advancing the research and development of our product candidates.

Our future capital requirements, both short-term and long-term, will depend on many factors, including, but not limited to:

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for several years, if ever. Accordingly, we will need to obtain substantial additional capital to achieve our business objectives.

Our expectation with respect to our ability to fund our currently planned operations is based on estimates that are subject to various risks and uncertainties. Our operating plan may change as a result of many factors currently unknown to

management and there can be no assurance that our current operating plan will be achieved in the time frame anticipated by us, and we may exhaust our available capital resources sooner than we expect.

Adequate additional capital may not be available to us on acceptable terms, or at all. Market volatility resulting from adverse changes in domestic and international fiscal, monetary and other policies and political relations, regional or global conflicts, uncertainty around global economic conditions, instability in the financial markets, current or future pandemics or other factors could also adversely impact our ability to access capital as and when needed. To the extent that we raise additional capital through the sale of equity or securities convertible into or exchangeable for equity, the ownership interest of our existing stockholders may be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. Additional debt and preferred equity, if available, may also involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may require that we issue additional warrants, which could potentially dilute the ownership interest of our existing stockholders.

Contractual Obligations

During the six months ended June 30, 2025, there have been no material changes to our contractual obligations as reported in our Annual Report on Form 10-K for the year ended December 31, 2024.

Critical Accounting Policies and Use of Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported revenue and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. Except as described in Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no changes to our critical accounting policies appearing in our Annual Report on Form 10-K for the year ended December 31, 2024, other than the estimates required in determining the fair value of the common stock warrant liabilities that are described in Note 3 to the condensed consolidated financial statements appearing elsewhere in our Quarterly Report on Form 10-Q.

Emerging Growth Company and Smaller Reporting Company Status

As an emerging growth company, or EGC, under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for EGCs include presentation of only two years of audited financial statements in a registration statement for an IPO, an exemption from the requirement to provide an auditor's report on internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements.

In addition, the JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an EGC to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have 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, we 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 we either (1) irrevocably elect to "opt out" of such extended transition period or (2) no longer qualify as an emerging growth company. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We are also a "smaller reporting company," as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an EGC, in which case we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.