Corbus Pharmaceuticals Holdings Inc

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2024

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

Corbus Pharmaceuticals Holdings, Inc. (the "Company" or "Corbus") is an oncology and obesity company with a diversified portfolio and is committed to helping people defeat serious illness by bringing innovative scientific approaches to well-understood biological pathways. Corbus’ pipeline is comprised of two experimental drugs targeting solid tumors: CRB-701, a next-generation antibody drug conjugate ("ADC") that targets the expression of Nectin-4 on cancer cells to release a cytotoxic payload and CRB-601, an anti-integrin monoclonal antibody that blocks the activation of TGFβ expressed on cancer cells. The pipeline also includes CRB-913, a highly peripherally restricted cannabinoid type-1 ("CB1") receptor inverse agonist for the treatment of obesity. Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company’s business is subject to significant risks and uncertainties and the Company will be dependent on raising substantial additional capital before it becomes profitable, and it may never achieve profitability.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP") for interim financial reporting. In the opinion of management of the Company, the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly, in all material respects, the condensed consolidated financial position of the Company as of September 30, 2024 and the results of its operations and changes in stockholders’ equity for the three and nine months ended September 30, 2024 and 2023 and its cash flows for the nine months ended September 30, 2024 and 2023. The December 31, 2023 condensed consolidated balance sheet was derived from audited financial statements. The Company prepared the condensed consolidated financial statements following the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed on March 12, 2024 (the “2023 Annual Report”). The results of operations for such interim periods are not necessarily indicative of the operating results for the full fiscal year.

Basis of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation.

The significant accounting policies used in preparation of these condensed consolidated financial statements in this Form 10-Q are consistent with those discussed in Note 3, “Significant Accounting Policies,” in our 2023 Annual Report.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning December 15, 2024, with early adoption permitted. The amendments will be applied retrospectively to all prior periods presented in the financial statements. The Company anticipates the adoption of this standard at December 31, 2024 will result in increased disclosures in the notes to its financial statements.

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2. LIQUIDITY

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred recurring losses since inception and as of September 30, 2024, had an accumulated deficit of approximately $467.4 million. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to research funding, development of its product candidates and its pre-clinical and clinical programs, strategic alliances, and the development of its administrative organization. The Company expects that its cash, cash equivalents, and investments of approximately $159.4 million at September 30, 2024 will be sufficient to meet its operating and capital requirements at least twelve months from the issuance of this Quarterly Report on Form 10-Q.

The source, timing and availability of any future financing will depend principally upon market conditions, and, more specifically, on the progress of the Company’s clinical development programs. Funding may not be available when needed, at all, or on terms acceptable to the Company. Lack of necessary funds may require the Company to, among other things, delay, scale back or eliminate some or all of the Company’s planned clinical or pre-clinical trials. Refer to Note 12 for additional information related to the Company's recent financings.

3. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

The Company considers only those investments which are highly liquid, readily convertible to cash, and that mature within 90 days from the date of purchase to be cash equivalents. At September 30, 2024 and December 31, 2023, cash equivalents were comprised of money market funds and corporate debt securities with maturities less than 90 days from the date of purchase.

Restricted cash as of September 30, 2024 included security for a stand-by letter of credit issued in favor of a landlord for $0.7 million of which $0.3 million was classified in current assets and $0.4 million was classified in noncurrent assets as of September 30, 2024.

Cash, cash equivalents, and restricted cash consist of the following (in thousands):

As of September 30, 2024, the Company’s cash and cash equivalents held in the U.S. was approximately $16.2 million and approximately $3.2 million of cash was held in its subsidiaries in the United Kingdom and Australia. As of December 31, 2023, all of the Company’s cash was held in the U.S., except for approximately $3.8 million of cash which was held in its subsidiaries in the United Kingdom and Australia.

Our foreign subsidiaries in the United Kingdom and Australia may qualify for refundable research and development tax credits in the form of cash that were earned on certain research and development expenses incurred primarily outside of the U.S. The Company received $0 and $2.5 million in refundable research and development credits from foreign tax authorities for thethree and nine months ended September 30, 2024, respectively. The Company received $0.1 million in refundable research and development credits from foreign tax authorities for thethree and nine months ended September 30, 2023. These amounts are recorded in other income (expense), net. No future conditions impact the recognition of these tax credits.

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4. INVESTMENTS

The following table summarizes the Company’s investments as of September 30, 2024 (in thousands):

The following table summarizes the amortized cost and fair value of the Company’s available-for-sale marketable debt securities by contractual maturity as of September 30, 2024 (in thousands):

The following table summarizes the Company’s investments as of December 31, 2023 (in thousands):

The following table summarizes the amortized cost and fair value of the Company’s available-for-sale marketable debt securities by contractual maturity as of December 31, 2023 (in thousands):

5. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values as of September 30, 2024 (in thousands):

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The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values as of December 31, 2023 (in thousands):

6. LICENSE AGREEMENTS

The Company entered into a license agreement (the “Jenrin License Agreement”) with Jenrin Discovery, LLC ("Jenrin"), a privately-held Delaware limited liability company, effective September 20, 2018. Pursuant to the Jenrin License Agreement, Jenrin granted the Company exclusive worldwide rights to develop and commercialize the Licensed Products (as defined in the Jenrin License Agreement) which includes the Jenrin library of over 600 compounds and multiple issued and pending patent filings. The compounds are designed to treat inflammatory and fibrotic diseases by targeting the endocannabinoid system.

In consideration of the license and other rights granted by Jenrin, the Company paid Jenrin a $0.3 million upfront cash payment and is obligated to pay potential milestone payments to Jenrin totaling up to $18.4 million for each compound it elects to develop based upon the achievement of specified development and regulatory milestones. In addition, the Company is obligated to pay Jenrin royalties in the mid, single digits based on net sales of any Licensed Products, subject to specified reductions.

The Company entered into a license agreement (the “Milky Way License Agreement”) with Milky Way BioPharma, LLC (“Milky Way”), a subsidiary of Panorama Research Inc., effective May 25, 2021. Pursuant to the Milky Way License Agreement, the Company received an exclusive license, under certain patent rights and know-how owned or controlled by Milky Way, to develop, commercialize, and otherwise exploit products containing antibodies against integrin αvβ6 and/or integrin αvβ8 (“Licensed Products”), one of which the Company is referring to as CRB-602. Under the terms of the Milky Way License Agreement, the Company had sole responsibility for research, development, and commercialization of any Licensed Products, and the Company had agreed to use commercially reasonable efforts to perform these activities. The Milky Way Agreement may be terminated earlier in specified situations, including termination for material breach or termination by the Company with advance notice. A notice of termination without reason was executed by the Company and sent to Milky Way on January 25, 2024, terminating the Milky Way Agreement effective as of July 23, 2024.

The Company entered into a license agreement (the “UCSF License Agreement”) with the Regents of the University of California (“The Regents”) effective May 26, 2021. Pursuant to the UCSF License Agreement, the Company received an exclusive license to certain patents relating to humanized antibodies against integrin αvβ8, one of which the Company is referring to as CRB-601, along with non-exclusive licenses to certain related know-how and materials. The Company amended the UCSF License Agreement with The Regents effective November 17, 2022 adding additional antibody patents to the agreement.

Inconsideration for the license and other rights granted to the Company under the UCSF License Agreement, the Company paid The Regents a license issue fee of $1.5 million. In consideration for the additional antibody patents granted to the Company, the Company paid The Regents a license issue fee of $0.8 million, paid in two equal installments of $0.4 million.

The Company further amended the UCSF License Agreement with The Regents effective August 14, 2023 to incorporate certain new technology rights and amend the payment schedule for the development milestone for the filing of patent rights and the development milestone for the filing of an Investigational New Drug ("IND").

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In addition to the license issuance fees, the Company is obligated to pay an annual license maintenance fee, as well as up to $153.2 million in potential milestone payments, excluding indication milestones for antibodies used for diagnostic products and services that will be an additional $50.0 thousand for each new indication, for the achievement of certain development, regulatory, and sales milestones. In addition, the Company is also obligated to pay royalties in the lower, single digits on sales of products falling within the scope of the licensed patents, which is subject to a minimum annual royalty obligation, and a percentage share of certain payments received by the Company from sublicensees or in connection with the sale of the licensed program.

The Company entered into a license agreement (the “CSPC License Agreement”) with CSPC Megalith Biopharmaceutical Co., Ltd. ("CSPC"), a subsidiary of CSPC Pharmaceutical Group Limited, effective February 12, 2023. Pursuant to the CSPC License Agreement, the Company received an exclusive license to develop and commercialize a novel clinical stage antibody drug conjugate targeting Nectin-4, which the Company is referring to as CRB-701, in the U.S., Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia.

In consideration for the license granted to the Company under the CSPC License Agreement, the Company paid CSPC an upfront payment of $7.5 million ($5.0 million paid at signing in the first quarter of 2023 followed by $2.5 million paid in August 2024). The Company is obligated to pay potential milestone payments to CSPC totaling up to $130.0 million based upon the achievement of specified development and regulatory milestones and $555.0 million in potential commercial milestone payments. In addition, we are obligated to pay royalties in the low double digits based on net sales of any Licensed Products, as defined in the CSPC License Agreement.

The Company determined that substantially all of the fair value of the Jenrin License Agreement and CSPC License Agreement was attributable to a single in-process research and development asset which did not constitute a business. The Company determined that substantially all of the fair value of the Milky Way License Agreement and the UCSF License Agreement was attributable to separate groups of in-process research and development assets which did not constitute a business. The Company concluded that it did not have any alternative future use for the acquired in-process research and development assets. Thus, the Company recorded the various upfront payments to research and development expenses in the quarter the license deals became effective. The Company will account for the development, regulatory, and sales milestone payments in the period that the relevant milestones are achieved as either research and development expense or as an intangible asset as applicable. As of September 30, 2024, the Company has accrued license costs of $1.6 million included within accrued expenses on the condensed consolidated balance sheet due to The Regents under the UCSF License Agreement for achieved milestone payments (due on December 30, 2024 based upon the amended payment schedule). For the three and nine months ended September 30, 2024, no research and development expense associated with upfront payments or clinical milestones were incurred under any of the above agreements. Research and development expenses associated with upfront payments and clinical milestones were $0 and $9.1 million, respectively, for the three and nine months ended September 30, 2023.

7. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following (in thousands):

Depreciation expense was $0.2 million and $0.2 million for the three months ended September 30, 2024 and 2023, respectively and $0.5 million and $0.5 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company notesno impairment charges were taken in thethree and nine months ended September 30, 2024 and 2023.

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8. COMMITMENTS AND CONTINGENCIES

Operating Lease Commitment

Pursuant to the terms of the Company’s non-cancelable lease agreements in effect at September 30, 2024, the following table summarizes the Company’s maturities of operating lease liabilities as of September 30, 2024 (in thousands):

Sublease Commitment

Effective August 26, 2021, the Company entered into a sublease agreement with a third party to sublease 12,112 square feet of the 30,023 square feet currently being leased under one of its two existing lease agreements. The sublease commenced on October 1, 2021 and was scheduled to end on October 31, 2026, however, it was terminated on June 24, 2024. The Company notes sublease income of $0 and $0.1 million for thethree months ended September 30, 2024 and 2023, respectively and $0.2 million and $0.2 million for thenine months ended September 30, 2024 and 2023, respectively was recognized and offset against rent expense.

9. NOTES PAYABLE

D&O Financing

In November 2023, the Company entered into a loan agreement with a financing company for $0.4 million to finance one of the Company’s insurance policies. The terms of the loan stipulate equal monthly payments of principal and interest payments of $39.0 thousand over a 10-month period. Interest accrues on this loan at an annual rate of 8.15%. Prepaid expenses as of September 30, 2024 and December 31, 2023, included approximately $34.6 thousand and$0.3 million, respectively, related to the underlying insurance policy being financed. The loan was repaid in full during the three months ended September 30, 2024.

Loan and Security Agreement with K2 HealthVentures LLC

On July 28, 2020, the Company, with its subsidiary, Corbus Pharmaceuticals, Inc., as borrower, entered into a secured Loan and Security Agreement with K2 HealthVentures LLC (“K2HV”), an unrelated third party (the “Loan and Security Agreement”) and received $20.0 million upon signing. On August 1, 2024, the loan matured and the Company made a final payment in the amount of $11.8 million, which represents $10.1 million principal outstanding on the maturity date, $1.6 million final payment and accrued interest. The$1.6 million final payment was amortized over the life of the loan through interest expense, net within thecondensed consolidated statements of operations and comprehensive loss. Interest payments were made monthly and accrued at a variable annual rate equal to the greater of (i) 8.5% and (ii) the rate of interest noted in The Wall Street Journal, Money Rates section, as the “Prime Rate” plus 5.25%.

The Company entered into an Amendment to the Loan and Security Agreement (the "Amended Loan and Security Agreement") on October 25, 2022. Pursuantto the Amended Loan and Security Agreement, K2HV could elect to convert up to $5.0 million of the outstanding loan balance into shares of the Company’s common stock at conversion prices as follows: $0.9 millionof the loan at $4.50 per share, $1.1 million at $7.875 per share, and $3.0 million at $282.00 per share. On June 1, 2023, K2HV converted $0.9 million of the outstanding loan balance into 194,444 shares of the Company's stock at a conversion price of $4.50 per share. On March 6, 2024, K2HV converted $1.1 million of the outstanding loan balance into 142,857 shares of the Company's stock at a conversion price of $7.875 per share.

Inconnection with the Loan and Security Agreement, on July 28, 2020, the Company issued K2HV a warrant to purchase up to 2,873 common shares (the “K2 Warrant”) at an exercise price of $208.80. The K2 Warrant may be exercised either for cash or on a cashless “net exercise” basis and expires on July 28, 2030.

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The total debt discount related to the Amended Loan and Security Agreement of approximately $3.0 million was charged to interest expense using the effective interest method over the term of the debt. At December 31, 2023, the fair value of our outstanding debt, which is considered level 3 in the fair value hierarchy, approximates carrying value. Interest expense for the three and nine months ended September 30, 2024 was approximately $0.4 million and $1.8 million, respectively. Interest expense for the three and nine months ended September 30, 2023 was $1.0 million and $2.9 million, respectively.

The net carrying amounts of the liability components consists of the following (in thousands):

10. ACCRUED EXPENSES

Accrued expenses consisted of the following (in thousands):

11. NET LOSS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per share for thethree and nine months ended September 30, 2024 and 2023 (in thousands except share and per share amounts):

Stock options and warrants that have not been exercised and unvested restricted stock units (see Notes 13 and 14) have been excluded from the diluted calculation as all periods presented have a net loss and the impact of these securities would be anti-dilutive.

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12. STOCKHOLDERS' EQUITY

Preferred Stock

The Company has authorized 10,000,000 shares of preferred stock, $0.0001 par value per share, of which 0 shares were issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.

Common Stock

The Company has authorized 300,000,000 shares of common stock, $0.0001 par value per share, of which 12,179,482 and 4,423,683 shares were issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.

Public Offering

On January 31, 2024, the Company entered into an underwriting agreement with Jefferies LLC (“Jefferies”), as representative of the several underwriters, relating to an underwritten public offering of 4,325,000 shares of the Company’s common stock, par value $0.0001, at a price to the public of $19.00 per share. The underwriters were also granted a 30-day option to purchase up to an additional 648,750 shares of common stock at the public offering price. On January 31, 2024, Jefferies gave notice to the Company of the underwriters’ election to exercise the option to purchase additional shares, in full. On February 2, 2024, the Company completed the public offering raising gross proceeds of approximately $94.5 million and net proceeds of $88.6 million after deducting underwriting discounts and commissions and other offering expenses payable by the Company.

Open Market Sale Agreement

On May 31, 2023, the Company entered into Amendment No. 1 to the Open Market Sale Agreement originally dated August 6, 2020 (as amended, the “Open Market Sale Agreement”) with Jefferies, as sales agent. Under the Open Market Sale Agreement, the Company may issue and sell, from time to time through Jefferies, shares of its common stock having an aggregate offering price of up to $150.0 million (the “2024 Open Market Offering”).

Under the Open Market Sale Agreement, Jefferies may sell the common stock by any method permitted by law deemed to be an “at-the-market offering” as defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Company may sell common stock in amounts and at times to be determined by the Company subject to the terms and conditions of the Open Market Sale Agreement, but the Company has no obligation to sell any of the common stock in the 2024 Open Market Offering.

The Company has agreed to pay Jefferies a commission of 3.0% of the aggregate gross proceeds from each sale of common stock and have agreed to provide Jefferies with customary indemnification and contribution rights. The Company has also agreed to reimburse Jefferies for certain specified expenses.

During the three and nine months ended September 30, 2024, the Company sold an aggregate of 663,730 and 2,484,517 shares of common stock, respectively, under the Open Market Sale Agreement, for net proceeds of approximately $35.6 million and $91.4 million, respectively. As of September 30, 2024, approximately $76.4 million was available for issuance and sale under the 2024 Open Market Offering.

During the three and nine months ended September 30, 2023, the Company sold an aggregate of 942 and 14,106 shares of common stock under the Open Market Sale Agreement, for net proceeds of approximately $7.0 thousand and $0.1 million, respectively.

Other Common Stock Transactions

During the three and nine months ended September 30, 2024, the Company issued 0 and 142,857 shares of common stock in a conversion pursuant to the K2HV Amended Loan and Security Agreement, respectively.

During the three and nine months ended September 30, 2023, the Company issued 0 and 194,444 shares of common stock in a conversion pursuant to the K2HV Amended Loan and Security Agreement, respectively.

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During the three and nine months ended September 30, 2024, the Company issued 2,588 and 136,664 shares of common stock upon the exercise of stock options to purchase common stock and the Company received proceeds of$0.1 million and $2.0 million from those exercises, respectively.

During the three and nine months ended September 30, 2023, the Company issued 0 and 43,836 shares of common stock upon the exercise of stock options to purchase common stockand the Company received proceeds of $0 and $0.1 million from those exercises, respectively.

During the three and nine months ended September 30, 2024, the Company issued 3,511 and 7,275 shares ofcommon stock from the vesting of shares from restricted stock, respectively, of which 2,783 were issued under the 2024 Plan and the remaining were issued under the 2014 Plan. No shares ofcommon stock were issued during the three and nine months ended September 30, 2023 from the vesting of shares from restricted stock under the 2014 Plan or 2024 Plan.

During the three and nine months ended September 30, 2024, the Company issued 4,649 shares of common stock pursuant to a professional services agreement with an investor relations service provider. No shares ofcommon stock were issued pursuant to a professional services agreement during the three and nine months ended September 30, 2023.

During the three and nine months ended September 30, 2024, the Company issued 6,087 shares of common stock upon the exercise of warrants. No warrants were exercised during thethree and nine months ended September 30, 2023.

13. STOCK-BASED COMPENSATION AWARDS

On May 16, 2024, the Company's stockholders approved the 2024 Equity Compensation Plan (the“2024 Plan”) authorizing the issuance of up to 2,000,000 shares, succeeding the 2014 Equity Incentive Plan (the “2014 Plan”), under which no further grants may be made pursuant to the terms of the 2014 Plan. Pursuant to the 2024 Plan, the board of directors may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares, performance units, incentive bonus awards, other cash-based awards and other stock-based awards to employees, officers, non-employee directors, and other individual service providers.

Under the terms of the 2024 Plan and 2014 Plan, the Company granted stock options and RSUs to employees, officers, non-employee directors, consultants and advisors. Stock options have a ten-year term and an exercise price equal to the fair market value of a share of our common stock on the grant date. Stock options generally vest over four years with 25% vesting on the one-year anniversary of the grant date and the remainder vesting in equal monthly installments thereafter, except for grants to non-employee directors that vest annually. RSUs generally vest over a period of one to four years in annual installments beginning on the first anniversary of the grant date.

As of September 30, 2024, an aggregate of 910,009 shares of common stock were reserved for issuance upon the exercise or vesting of outstanding awards under the 2014 Plan. No additional grants can be made under the 2014 Plan.

As of September 30, 2024, an aggregate of 88,561 shares of common stock were reserved for issuance upon the exercise or vesting of outstanding awards and up to 1,908,656 shares of common stock may be issued pursuant to awards granted under the 2024 Plan.

Stock-based Compensation Expense

Inconnection with all stock-based compensation awards, total non-cash, stock-based compensation expense recognized in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):

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The total stock-based compensation expense recognized by award type was as follows (in thousands):

Stock Options

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes stock option pricing model that uses the assumptions noted in the following table, except for the expected term for non-employees as noted in the following paragraph. The expected term of employee and non-employee director stock options granted under the 2014 Plan and 2024 Plan, all of which qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, is determined based on the simplified method due to the Company’s limited operating history. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among our employee population. For non-employee stock options, excluding directors, the Company has elected to utilize the contractual term as the expected term. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with that used to value the stock option. The Company accounts for forfeitures as they occur.

The weighted average assumptions used principally in determining the fair value of stock options granted to employees and non-employee directors were as follows:

A summary of stock option activity for thenine months ended September 30, 2024 is presented below:

The weighted average grant date fair value of stock options granted during the nine months ended September 30, 2024 and 2023 was $25.17 and $4.20 per share, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2024 and 2023 was approximately $1.1 million and$0.1 million, respectively. As of September 30, 2024, there was approximately $6.1 million of total unrecognized compensation expense, related to non-vested share-based stock option compensation arrangements. The unrecognized compensation expense is estimated to be recognized over a weighted average period of 1.45 years as of September 30, 2024.

Restricted Stock Units

A RSU represents the right to receive one share of our common stock upon vesting of the RSU. The fair value of each RSU is based on the closing price of our common stock on the date of grant. The Company accounts for forfeitures as they occur.

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Asummary of RSU activity for the nine months ended September 30, 2024 is presented below:

As of September 30, 2024, there was $5.7 million of unrecognized compensation expense related to unvested RSUs, which are expected to be recognized over a weighted average period of 1.98 years.

14. WARRANTS

During the three and nine months ended September 30, 2024, the Company issued 6,087 shares of common stock upon the exercise of warrants.

No warrants were exercised during thethree and nine months ended September 30, 2023.

At September 30, 2024, there were warrants outstanding to purchase 36,207 shares of common stock with a weighted average exercise price of $381.14 and a weighted average remaining life of 0.76 years.

On January 26, 2018, the Company entered into an Investment Agreement with the Cystic Fibrosis Foundation ("CFF") that included issuance of a warrant to purchase an aggregate of 33,334 shares of the Company’s common stock (the “CFF Warrant”) at an exercise price of $396.00 per share. The CFF Warrant is currently exercisable for 33,334 shares of the Company’s common stock and expires on January 26, 2025.

On July 28, 2020, the Company entered into the Loan and Security Agreement with K2HV and in connection with the funding of $20.0 million, the Company issued a warrant exercisable for 2,873 shares of the Company’s common stock (the “K2 Warrant”) at an exercise price of $208.80 per share. The K2 Warrant is immediately exercisable for 2,873 shares and expires on July 28, 2030.

On October 16, 2020, the Company entered into a professional services agreement with an investor relations service provider. Pursuant to the agreement, the Company issued warrants exercisable for a total of 14,000 shares of the Company’s common stock (the “Warrants”) at an exercise price of $32.10 per share. The Warrants became fully vested on October 19, 2021 and expire on November 3, 2025. The Warrants were exercised in full on a cashless basis, resulting in the issuance of 6,087 shares of common stock during thethree and nine months ended September 30, 2024. No cash proceeds were received and the exercise price settled by reducing the total shares issued in lieu of cash payment.

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