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

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

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes thereto and other disclosures included in this Quarterly Report on Form 10-Q, including the disclosures under Part II, Item IA "Risk Factors," and our audited condensed consolidated financial statements and the accompanying notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission, or the SEC, on March 26, 2025. Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and, unless otherwise indicated, amounts are presented in U.S. dollars.

Company Overview

We are a biopharmaceutical company developing biomarker-targeted antibody therapies designed to treat patients with cancer. Our clinical stage program is sirexatamab (DKN-01), a monoclonal antibody that inhibits Dickkopf-related protein 1, or DKK1. We also have a preclinical antibody program, FL-501, that is designed to treat cachexia-related indications.

We have historically devoted substantially all of our resources to development efforts relating to our product candidates, including manufacturing and conducting clinical trials of our product candidates, providing general and administrative support for these operations and protecting our intellectual property. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations primarily through proceeds from our sales of common stock and preferred stock and proceeds from the issuance of notes payable.

In October 2025, we initiated a strategy to deploy a portion of our capital raised that is not required to provide working capital for our ongoing operations to accumulate digital assets. Zcash is a protocol and blockchain network of connected devices all over the world, working together to validate transactions and maintain the Zcash ledger. ZEC is the monetary unit, or coin, of Zcash. Zcash allows for greater privacy, providing users with options for fully shielded transactions in which the sender, recipient, and amount are encrypted.

We renamed our company "Cypherpunk Technologies Inc." to reflect the strategic focus on acquiring ZEC, participating in the development of Zcash, and the values of privacy and liberty. Our ongoing research and development operations will be conducted under a wholly-owned subsidiary named "Leap Therapeutics, Inc."

Recent Developments

Since June 30, 2025, we provided the following development and business updates.

Cypherpunk Highlights:

In October 2025, we raised gross proceeds of $58.88 million in cash led by Winklevoss Capital to initiate a digital asset treasury strategy. In the transaction, we issued: (i) 15,212,311 shares of common stock, (ii) pre-funded warrants to purchase up to an aggregate of 80,768,504 shares of common stock, and (ii) warrants to purchase an additional 71,985,605 shares of common stock at an exercise price of $0.5335 per share. Parcrest International ("Parcrest") served as our placement agent in connection with the October 2025 Private Placement. On the Closing Date, we paid Parcrest $1.5 million, of which $1.0 million was paid in cash and the remainder in the form of warrants (the "Placement Agent Warrants"), which are of the same series and have the same terms as the Common Warrants, to purchase up to 4,000,000 shares of Common Stock.

In November 2025, we appointed Khing Oei as Chairman of the Boad of Directors, and Will McEvoy as Chief Investment Officer and a Board member. In conjunction with these appointments, Christopher Mirabelli will step down from his role as Chairman of the Board of Directors, while remaining a Board member.

Khing Oei is a seasoned investor with a strong track record of investing in public, private and digital markets. He is the Founder and CEO of Treasury, an emerging euro-denominated Bitcoin treasury firm. Before Treasury, Mr. Oei was the Founder and CEO of Captur (formerly AlphaSwap), a decentralized asset management platform. He was previously the Founder and Chief Investment Officer of Eyck Capital, a London-based event-driven hedge fund focused on distressed and special situations across credit and equities, managing over $200 million in assets. Prior to that role, Mr. Oei was a Managing Principal and Portfolio Manager at Bardin Hill (formerly Halcyon), a $10 billion multi-strategy hedge fund where, as CEO of its European operations, he led European distressed investments and managed the firm's $2.5 billion CLO platform. Mr. Oei began his career at Goldman Sachs in the Special Situations Group and later worked at Fortress Investment Group's Drawbridge Special Opportunities Fund.

Will McEvoy is a Principal at Winklevoss Capital, where he leads investing and identifies opportunities on the frontier, from crypto and space to energy, bio, and defense. He focuses on companies and technologies that slow entropy and create order in critical domains. Before joining Winklevoss Capital, Will authored Bitcoin and crypto research and Fundstrat and helped build one of Dynasty Financial Partners' highest performing client platforms. He also serves on the board of Real Bedford FC and holds a degree from the George Washington University.

We believe that privacy-protecting assets and related technologies will be critical in an increasingly digital world. We intend to acquire and hold ZEC as our primary digital asset and to be an active participant in the Zcash community. As of November 11, 2025, we have acquired 203,775.27 ZEC at an aggregate purchase price of approximately $50.0 million, or $245.37 per ZEC.

Zcash functions much like Bitcoin, and it was created from the original Bitcoin code base. Like Bitcoin, Zcash is a digital currency that can be transmitted over a peer-to-peer payment system, except that Zcash uses a protocol called "zero-knowledge proofs" that allows users to engage in blockchain transactions while maintaining greater privacy. This cryptographic technology allows parties to decide whether or not to reveal sensitive information and enables private, public, shielding, and deshielding transactions on the Zcash blockchain. For example, the owner of a specific address is able to choose to disclose an address and transaction details to a trusted third party, potentially for compliance or audit reasons. Alternatively, transacting can work in a similar manner to the Bitcoin blockchain, where the sender and receiver addresses and value of the transfer are all publicly visible.

Leap Therapeutics Highlights:

In a Mini Oral session at the ESMO Congress in October 2025, we presented the final results from Part B of the DeFianCe study, a Phase 2 study of sirexatamab, an anti-DKK1 monoclonal antibody, in combination with bevacizumab and chemotherapy (Sirexatamab Arm) compared to bevacizumab and chemotherapy (Control Arm) in patients with microsatellite stable CRC who have received one prior systemic therapy for advanced disease. Sirexatamab demonstrated a statistically significant benefit on overall response rate (ORR) and progression-free survival (PFS) in patients with high levels of DKK1, along with a positive trend on ORR and PFS in the full intent-to-treat population.

We are now in the process of engaging with regulatory agencies in the United States and Europe over the registrational pathway for sirexatamab in CRC. We are also working with a leading diagnostics research laboratory to optimize the DKK1 biomarker diagnostic test that could be used to identify CRC patients with poor prognosis and to select patients for treatment with sirexatamab. We expect to provide an update on the next steps in development and on the registrational pathway in the first quarter of 2026.

Financial Overview

Research and Development Expenses

Our research and development activities have included conducting nonclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory filings for our product candidates, primarily sirexatamab. We recognize research and development expenses as they are incurred. Our research and development expenses during the nine months ended September 30, 2025 consisted primarily of:

Our direct research and development expenses are tracked on a program-by-program basis and consist primarily of internal and external costs, such as employee costs, including salaries and stock-based compensation, other internal costs, fees paid to consultants, central laboratories, contractors and CROs in connection with our clinical and preclinical trial development activities. We use internal resources to manage our clinical and preclinical trial development activities and perform data analysis for such activities.

We participate, through our subsidiary in Australia, in the Australian government's research and development ("R&D") Incentive program ("R&D Incentive Program"), such that a percentage of our eligible research and development expenses are reimbursed by the Australian government as a refundable tax offset and such incentives are reflected as other income.

The table below summarizes our research and development expenses incurred by development program and the R&D Incentive income for the three and nine months ended September 30, 2025 and 2024:

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The successful development of our clinical product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the remainder of the development of any of our product candidates or the period, if any, in which material net cash inflows from these product candidates may commence.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, accounting and audit services.

Interest income

Interest income consists primarily of interest income earned on cash and cash equivalents.

Research and development incentive income

Research and development incentive income includes payments under the R&D Incentive Program from the government of Australia. The R&D Incentive Program is one of the key elements of the Australian government's support for Australia's innovation system. It was developed to assist businesses in recovering some of the costs of undertaking research and development. The research and development tax incentive provides a tax offset to eligible companies that engage in research and development activities.

Companies engaged in research and development may be eligible for either:

We recognize as income the amount we expect to be reimbursed for qualified expenses.

Foreign currency translation adjustment

Foreign currency translation adjustment consists of gains (losses) due to the revaluation of foreign currency transactions attributable to changes in foreign currency exchange rates associated with our Australian subsidiary.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting policies are described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations- Critical Accounting Policies and Significant Judgments and Estimates" in our Annual Report on Form 10-K filed with the SEC on March 26, 2025, and the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. We believe that of our critical accounting policies, the following accounting policies involve the most judgment and complexity:

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:

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Research and Development Expenses

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Research and development expenses were $1.2 million for the three months ended September 30, 2025, compared to $14.9 million for the three months ended September 30, 2024. The decrease of $13.7 million in research and development expenses during the three months ended September 30, 2025 as compared to the same period in 2024, was primarily due to a decrease of $5.3 million in clinical trial costs and a decrease of $3.7 million in manufacturing costs due to the shut down of our clinical trials. There was also a decrease of $3.3 million in payroll and other related expenses due to a decrease in headcount of our R&D full-time employees due to a reduction in force, a decrease of $0.7 million in stock based compensation expense as there were no stock options granted during the three months ended September 30, 2025 and a decrease of $0.7 million in consulting fees related to research and development activities.

General and Administrative Expenses

General and administrative expenses were $1.9 million for the three months ended September 30, 2025, compared to $2.9 million for the three months ended September 30, 2024. The decrease of $1.0 million in general and administrative expenses during the three months ended September 30, 2025 as compared to the same period in 2024, was due to a $0.5 million decrease in payroll and other related expenses due to a decrease in incentive based compensation expense for our general and administrative employees and a decrease in headcount of our general and administrative employees due to a reduction in force. There was also a decrease of $0.3 million in stock based compensation expense as there were no stock options granted during the three months ended September 30, 2025 and a $0.2 million decrease in professional fees.

Interest Income

During the three months ended September 30, 2025, we recorded interest income of $0.1 million. During the three months ended September 30, 2024, we recorded interest income of $0.9 million. The decrease was due to a higher average cash and cash equivalent balance during the three months ended September 30, 2024.

Australian Research and Development Incentives

We record R&D incentive income based upon the applicable percentage of eligible research and development activities under the R&D Incentive Program, which expenses included the cost of manufacturing clinical trial material. During the three months ended September 30, 2024, we expensed $0.5 million of R&D incentive income recognized during the six months ended June 30, 2024, in connection with our estimated 2024 Australian tax liability. During the three months ended September 30, 2025, we expensed $0.1 million of R&D incentive income recognized during the six months ended June 30, 2025, in connection with our estimated 2025 Australian tax liability.

The R&D incentive receivable has been recorded as "Research and development incentive receivable" in the condensed consolidated balance sheets.

Foreign Currency Gain/Loss

During the three months ended September 30, 2025 and 2024, we recorded an immaterial amount of foreign currency transaction gains (losses). Foreign currency transaction gains and losses are due to changes in the Australian dollar exchange rate related to activities of the Australian entity.

Comparison of the Nine Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024:

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Research and Development Expenses

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Research and development expenses were $24.7 million for the nine months ended September 30, 2025, compared to $44.1 million for the nine months ended September 30, 2024. The decrease of $19.4 million in research and development expenses during the nine months ended September 30, 2025 as compared to the same period in 2024, was primarily due to a decrease of $7.8 million in clinical trial costs and a decrease of $5.1 million in manufacturing costs due to the shut down of our clinical trials. There was also a decrease of $5.0 million in payroll and other related expenses due to a decrease in headcount of our R&D full-time employees due to a reduction in force, a decrease of $1.0 million in stock based compensation expense as there were no stock options granted during the three months ended September 30, 2025 and a decrease of $0.5 million in consulting fees related to research and development activities.

General and Administrative Expenses

General and administrative expenses were $6.7 million for the nine months ended September 30, 2025, compared to $9.8 million for the nine months ended September 30, 2024. The decrease of $3.1 million in general and administrative expenses during the nine months ended September 30, 2025 as compared to the same period in 2024, was primarily due to a $1.8 million decrease in payroll and other related expenses due to a decrease in incentive based compensation expense for our general and administrative employees and a decrease in headcount of our general and administrative employees due to a reduction in force. There was also a decrease of $0.7 million in professional fees and a decrease of $0.6 million in stock based compensation expense as there were no stock options granted during the three months ended September 30, 2025.

Restructuring Charges

During the nine months ended September 30, 2025, we announced a workforce reduction involving approximately 75% of our workforce. As a result of this workforce reduction, during the nine months ended September 30, 2025, we incurred $4.5 million of charges, consisting primarily of one-time employee severance and benefit costs and stock based compensation expense related to acceleration of vesting.

Interest Income

During the nine months ended September 30, 2025, we recorded interest income of $0.8 million. During the nine months ended September 30, 2024, we recorded interest income of $2.5 million. The decrease was due to a higher average cash and cash equivalent balance during the nine months ended September 30, 2024.

Foreign Currency Gain/Loss

During the nine months ended September 30, 2025 and 2024, we recorded an immaterial amount of foreign currency transaction gains (losses). Foreign currency transaction gains and losses are due to changes in the Australian dollar exchange rate related to activities of the Australian entity.

Financial Position, Liquidity and Capital Resources

Since our inception, we have been engaged in organizational activities, including raising capital, and research and development activities. We do not yet have a product that has been approved by the Food and Drug Administration (the "FDA"), have not yet achieved profitable operations, nor have we ever generated positive cash flows from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, our future operations are dependent on the success of efforts to raise additional capital, our research and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of our products.

In accordance with Accounting Standards Codification ("ASC") 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. As of September 30, 2025, we had an accumulated deficit of $502.8 million at September 30, 2025, and during the nine months ended September 30, 2025, we incurred a net loss of $35.4 million. We expect to continue to generate operating losses for the foreseeable future. In addition, we had cash and cash equivalents of $9.7 million as of September 30, 2025. In October 2025, we completed the October 2025 Private Placement, resulting in net proceeds of approximately $57.0 million, net of fees and offering expenses payable by us. We believe that our cash and cash equivalents of $9.7 million as of September 30, 2025, together with the $7.0 million of net proceeds from the October 2025 Private Placement that will be used to support operating the business, will be sufficient to fund our operating expenses for at least the next 12 months from issuance of these financial statements.

In addition, to support our future operations and recently announced digital asset treasury strategy, we will likely seek additional funding through public or private equity financings or government programs and will seek funding or development program cost-sharing through collaboration agreements or licenses with larger pharmaceutical or biotechnology companies. The inability to obtain funding, as and when needed, could have a negative impact on our financial condition and ability to pursue our business strategies.

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented:

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Operating activities. Net cash used in operating activities for the nine months ended September 30, 2025 was primarily related to our net loss from the operation of our business of $35.4 million and net changes in working capital, including a decrease in accounts payable and accrued expenses of $5.7 million and a decrease in lease liabilities of $0.2 million. These changes were partially offset by a decrease of $0.8 million in prepaid expenses and other assets, a decrease of $0.2 million in right-of-use asset and noncash stock-based compensation expense of $3.0 million.

Net cash used in operating activities for the nine months ended September 30, 2024 was primarily related to our net loss from the operation of our business of $52.1 million and net changes in working capital, including a decrease in lease liabilities of $0.3 million. These changes were partially offset by an increase in accounts payable and accrued expenses of $2.6 million, an increase in taxes payable of $0.7 million, a decrease of $0.3 million in right-of-use asset, a decrease of $0.1 million in other assets and noncash stock-based compensation expense of $4.0 million.

Investing Activities. There were no investing activities during the nine months ended September 30, 2025 and 2024.

Financing Activities.Net cash provided by financing activities for the nine months ended September 30, 2024 consisted of $40.0 million in gross proceeds from the April 2024 Private Placement and an immaterial amount of proceeds upon the exercise of stock options, partially offset by $2.9 million of offering costs paid. Net cash used in financing activities for the nine months ended September 30, 2025 consisted of $0.3 million of principal payments of insurance financing and an immaterial amount of proceeds upon the exercise of stock options.

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