Compass Therapeutics Inc

Previous wording

Since our inception, we have devoted substantially all of our efforts to organizing and staffing our Company, business planning, raising capital, research and development activities, building our intellectual property portfolio and providing general and administrative support for these operations. We have funded our operations primarily with proceeds from the sale of equity securities of $412 million through December 31, 2023.

Current wording

Since our inception, we have devoted substantially all of our efforts to organizing and staffing our Company, business planning, raising capital, research and development activities, building our intellectual property portfolio and providing general and administrative support for these operations. We have funded our operations primarily with proceeds from the sale of equity securities of $430 million through December 31, 2024.

Previous wording

We have incurred significant operating losses since inception. We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our therapies and any future product candidates. Our net losses were $42.5 million and $39.2 million for the years ended December 31, 2023 and 2022, respectively, and as of December 31, 2023, we had an accumulated deficit of $315.3 million. We expect to continue to incur significant expenses for at least the next several years as we advance through clinical development, develop additional product candidates and seek regulatory approval of any product candidates that complete clinical development. In addition, if we obtain marketing approval for any product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates.

Current wording

We have incurred significant operating losses since inception. We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our therapies and any future product candidates. Our net losses were $49.4 million and $42.5 million for the years ended December 31, 2024 and 2023, respectively, and as of December 31, 2024, we had an accumulated deficit of $365 million. We expect to continue to incur significant expenses for at least the next several years as we advance through clinical development, develop additional product candidates and seek regulatory approval of any product candidates that complete clinical development. In addition, if we obtain marketing approval for any product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates.

Previous wording

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity and debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions. As of December 31, 2023, we had $152.5 million in cash, cash equivalents and marketable securities. Based on our research and development plans, we expect that these cash resources will enable us to fund our operating expenses and capital expenditures requirements into mid-2026. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Current wording

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity and debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions. As of December 31, 2024, we had $126.7 million in cash, cash equivalents and marketable securities. Based on our research and development plans, we expect that these cash resources will enable us to fund our operating expenses and capital expenditures requirements into the first quarter of 2027. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Previous wording

In June 2023, we sold, through our Open Market Sale Agreement SM with Jefferies LLC, 951,873 shares of common stock at an average price of $3.28 for total proceeds of $3.1 million and net proceeds of $3.0 million.

Current wording

In the second quarter of 2023, we sold, through our Open Market Sale Agreement SM with Jefferies LLC, 951,873 shares of common stock at an average price of $3.28 for total proceeds of $3.1 million and net proceeds of $3.0 million.

Previous wording

Research and development expenses consist primarily of costs incurred in connection with the development of our product candidates, CTX-009, CTX-471 and CTX-8371, as well as unrelated preclinical and discovery program expenses. We expense research and development costs as incurred. These expenses include:

Current wording

Research and development expenses consist primarily of costs incurred in connection with the development of our clinical product candidates, tovecimig, CTX-471 and CTX-8371, as well as unrelated preclinical and discovery program expenses. We expense research and development costs as incurred. These expenses include:

Previous wording

In 2023 and 2022, the main component of other income was interest income from marketable securities.

Current wording

In 2024 and 2023, the only component of other income was interest income from marketable securities.

Previous wording

We are organized as a Delaware corporation and treated as a c-corporation for federal and state income taxes. Our wholly-owned subsidiaries are included in the consolidated corporate tax return. Prior to the Merger in 2020, we were established as a Delaware limited liability company, and the business that was acquired in the Merger was treated as a partnership for income tax reporting purposes; therefore, federal and state income taxes were the responsibility of its individual members. As such, no federal or state income taxes related to the limited liability company were recorded in our consolidated financial statements. All such taxes have been recorded in our financial statements. As of December 31, 2023 we recorded a deferred tax asset of $44.3 million primarily related to a net operating loss carryforward, section 174 capitalization, research and development tax credit carryforward, and capitalized licensing fees. The asset has a corresponding full deferred tax valuation allowance. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an ownership change (generally defined as a greater than 50% change (by value) in the ownership of its equity over a three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and certain other pre-change tax attributes to offset its post-change income may be limited. We may have experienced such ownership changes in the past, and we may experience ownership changes in the future as a result of shifts in our stock ownership, some of which are outside our control. See Note 13 to our consolidated financial statements appearing in this Form 10-K.

Current wording

We are organized as a Delaware corporation and treated as a c-corporation for federal and state income taxes. Our wholly-owned subsidiaries are included in the consolidated corporate tax return. Prior to the Merger in 2020, we were established as a Delaware limited liability company, and the business that was acquired in the Merger was treated as a partnership for income tax reporting purposes; therefore, federal and state income taxes were the responsibility of its individual members. As such, no federal or state income taxes related to the limited liability company were recorded in our consolidated financial statements. All such taxes have been recorded in our financial statements. As of December 31, 2024 we recorded a deferred tax asset of $59.5 million primarily related to a net operating loss carryforward, section 174 capitalization, research and development tax credit carryforward, and capitalized licensing fees. The asset has a corresponding full deferred tax valuation allowance. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an ownership change (generally defined as a greater than 50% change (by value) in the ownership of its equity over a three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and certain other pre-change tax attributes to offset its post-change income may be limited. We may have experienced such ownership changes in the past, and we may experience ownership changes in the future as a result of shifts in our stock ownership, some of which are outside our control. See Note 13 to our consolidated financial statements appearing in this Form 10-K.

Previous wording

Research and development expenses increased by $8.1 million from $30.0 million in 2022 to $38.1 million in 2023. This increase was primarily attributable to a $10.7 million increase in clinical and manufacturing costs related to our lead program, CTX-009 described below.

Current wording

Research and development expenses increased by $4.2 million from $38.1 million in 2023 to $42.3 million in 2024. This increase was primarily attributable to a $2.4 million increase in clinical and manufacturing costs related to our lead program, tovecimig, and $1.3 million from our second program, CTX-471, as described below.

Previous wording

General and administrative expenses increased by $0.6 million from $11.7 million in 2022 to $12.2 million in 2023. The increase was primarily attributable to higher stock compensation expense of $1.0 million offset by lower insurance costs of $0.3 million. We anticipate that our general and administrative expenses will increase in the future as we expand our operations to support our growing research and development efforts.

Current wording

General and administrative expenses increased by $2.9 million from $12.2 million in 2023 to $15.1 million in 2024. The increase was primarily attributable to higher personnel expense, including stock compensation of $2.3 million, driven by the CEO transition during the year. We anticipate that our general and administrative expenses will increase in the future as we expand our operations to support our growing research and development efforts, as well as potential commercial operations.

Previous wording

Since our inception, we have not generated any revenue from any product sales or any other sources, and we have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of products for several years, if at all. We have funded our operations primarily with proceeds from private placements of preferred and common equity and an underwritten public offering in the fourth quarter of 2021. Through December 31, 2023, we received gross proceeds of $412 million from the sale of equity securities, including $136.5 million in gross proceeds from our Follow-On Public Offering, $60.5 million in gross proceeds from the sale of our common stock in the Private Placement, $80.3 million in gross proceeds from a PIPE financing and $3.1 million in gross proceeds from sales through our ATM facility. As of December 31, 2023, we had cash, cash equivalents and marketable securities of $152.5 million. Additionally, we received an additional $17.6 million in net proceeds in the first quarter of 2024 from sales through our ATM facility.

Current wording

Since our inception, we have not generated any revenue from any product sales or any other sources, and we have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of products for several years, if at all. We have funded our operations primarily with proceeds from private placements of preferred and common equity and an underwritten public offering in the fourth quarter of 2021. Through December 31, 2024, we received gross proceeds of $430.5 million from the sale of equity securities, including $136.5 million in gross proceeds from our Follow-On Public Offering, $60.5 million in gross proceeds from the sale of our common stock in the Private Placement, $80.3 million in gross proceeds from a PIPE financing and $21.2 million in gross proceeds from sales through our ATM facility. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $126.7 million.

Previous wording

On August 1, 2022, we entered into an Open Market Sale Agreement SM with Jefferies LLC, pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $75 million.

Current wording

On August 1, 2022, we entered into an Open Market Sale Agreement SM with Jefferies LLC, pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock.

Previous wording

During the year ended December 31, 2023, we used $40.6 million of cash in operating activities, resulting from our net loss of $42.5 million and the change in operating assets and liabilities of $2.9 million, offset by non-cash charges of $4.8 million. Our non-cash charges primarily consisted of stock-based compensation expense of $6.1 million and amortization of ROU asset of $1.2 million offset by the amortization of premiums and discounts on marketable securities of $3.2 million. The change in our operating assets and liabilities of $2.9 million was related to the decrease in accrued expenses of $9.2 million offset by an increase in prepaid expenses of $6.8 million, primarily related to the decrease in minimum obligations related to CTX-009 manufacturing contracts.

Current wording

During the year ended December 31, 2023, we used $40.6 million of cash in operating activities, resulting from our net loss of $42.5 million and the change in operating assets and liabilities of $2.9 million, offset by non-cash charges of $4.8 million. Our non-cash charges primarily consisted of stock-based compensation expense of $6.1 million.

Previous wording

During the year ended December 31, 2023 cash provided by investing activities was $27.0 million, which was primarily attributed to the net proceeds of marketable securities of $27.0 million. During the year ended December 31, 2022, cash used in investing activities was $151.2 million, which was primarily attributed to the net purchase of marketable securities of $151.1 million.

Current wording

During the year ended December 31, 2024, cash provided by investing activities was $46.8 million, which was primarily attributed to the net proceeds from the sale of marketable securities of $46.8 million. During the year ended December 31, 2023 cash provided by investing activities was $27.0 million, which was primarily attributed to the net proceeds from the sale of marketable securities of $27.0 million.

Previous wording

During the year ended December 31, 2023, cash provided by financing activities was $2.9 million. This was primarily from the issuance of stock utilizing our ATM program for net proceeds of $3.0 million. During the year ended December 31, 2022, we had $75.8 million of net cash provided by financing activities. This was primarily due to the closing of the PIPE Offering in the fourth quarter of 2022, which resulted in net proceeds of $75.7 million.

Current wording

During the year ended December 31, 2024, cash provided by financing activities was $17.3 million. This was primarily from the issuance of stock pursuant to our ATM program for net proceeds of $17.6 million. During the year ended December 31, 2023, cash provided by financing activities was $2.9 million. This was primarily from the issuance of stock pursuant to our ATM program for net proceeds of $3.0 million.

Previous wording

We believe that our existing cash, cash equivalents and marketable securities as of December 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements into mid-2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. We expect that we will require additional funding to complete the clinical development of our product candidates, commercialize our product candidates, if we receive regulatory approval, and pursue in-licenses or acquisitions of other product candidates. If we receive regulatory approval for our any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize our product candidates.

Current wording

We believe that our existing cash, cash equivalents and marketable securities as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. We expect that we will require additional funding to complete the clinical development of our product candidates, commercialize our product candidates, if we receive regulatory approval, and pursue in-licenses or acquisitions of other product candidates. If we receive regulatory approval for our any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize our product candidates.