Jasper Therapeutics, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes includedinPart I, Item 1 of this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on March 5, 2024. Certain of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to plans and strategy for our business, 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 I - Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 5, 2024, as updated by the factors described under the heading “Risk Factors” in Part II - Item 1A of this Quarterly Report, 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. You should carefully read the section entitled “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see “Cautionary Note Regarding Forward-Looking Statements” below. The events and circumstances reflected in our forward-looking statements may not be achieved or may not occur, and actual results could differ materially from those described in or implied by the forward-looking statements contained in the following discussion and analysis. As a result of these risks, you should not place undue reliance on these forward-looking statements. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes includedinPart I, Item 1 of this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2025. Certain of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to plans and strategy for our business, 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 I - Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025, as updated by the factors described under the heading “Risk Factors” in Part II - Item 1A of this Quarterly Report, 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. You should carefully read the section entitled “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see “Cautionary Note Regarding Forward-Looking Statements” below. The events and circumstances reflected in our forward-looking statements may not be achieved or may not occur, and actual results could differ materially from those described in or implied by the forward-looking statements contained in the following discussion and analysis. As a result of these risks, you should not place undue reliance on these forward-looking statements. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Previous wording

We are a clinical-stage biotechnology company focused on developing therapeutics targeting mast cell driven diseases such as Chronic Spontaneous Urticaria (“CSU”), Chronic Inducible Urticaria (“CIndU”) and Asthma. We also have ongoing programs in diseases where targeting diseased hemopoietic stem cells can provide benefits, such as stem cell transplant conditioning regimens.

Current wording

We are a clinical-stage biotechnology company focused on developing therapeutics targeting mast cell driven diseases, including Chronic Spontaneous Urticaria (“CSU”), Chronic Inducible Urticaria (“CIndU”) and Asthma. We are evaluating additional indications in mast cell driven diseases for potential future development as well. We have also historically supported development programs in diseases where targeting diseased hemopoietic stem cells can provide benefits, such as stem cell transplant conditioning regimens.

Previous wording

Our lead product candidate, briquilimab, is a monoclonal antibody designed to block stem cell factor (“SCF”) from binding to and signaling through the CD117 (“c-Kit”) receptor on mast and stem cells. The SCF/c-Kit pathway is a survival signal for mast cells and we believe that blocking this pathway may lead to depletion of these cells from skin, which could lead to significant clinical benefit for patients with mast-cell driven diseases such as chronic urticarias. To that end, we are focusing on advancing a portfolio of clinical programs in mast cell driven diseases. Development highlights include:

Current wording

Our lead product candidate, briquilimab, is a monoclonal antibody designed to block stem cell factor (“SCF”) from binding to and signaling through the CD117 (“c-Kit”) receptor on mast and stem cells. The SCF/c-Kit pathway is a survival signal for mast cells and we believe that blocking this pathway may lead to depletion of these cells throughout the body, including in the lungs and in the skin, which could lead to significant clinical benefit for patients with mast-cell driven diseases such as chronic urticarias. To that end, we are focusing on advancing a portfolio of clinical programs in mast cell driven diseases. Development highlights include:

Previous wording

We also believe that utilizing briquilimab to block SCF binding and signaling can selectively result in the depletion of diseased hematopoietic stem cells (“HSCs”) from the bone marrow in certain hematologic malignancies such as myelodysplastic syndrome (“MDS”). We evaluated briquilimab in a Phase 1 trial as a second-line therapy in patients with Lower to Intermediate Risk Myelodysplastic Syndrome (“LR-MDS”) and briquilimab demonstrated an ability to deplete diseased HSCs and was well-tolerated by patients without exacerbating pre-existing anemia, neutropenia or thrombocytopenia. However, the reduction in diseased HSCs did not ultimately translate into an improvement in hematopoiesis for patients, and as a result we have discontinued development of briquilimab in LR-MDS. We are also developing briquilimab as a one-time conditioning therapy in severe combined immunodeficiency (“SCID”) patients undergoing a second stem cell transplant for which we are currently conducting a Phase 1/2 clinical trial. Briquilimab is also being studied by our academic and institutional partners, Stanford University and the National Institutes of Health, in other transplant settings, including Fanconi Anemia (“FA”), sickle cell disease (“SCD”), chronic granulomatous disease and GATA-2 Type MDS.

Current wording

We have also evaluated briquilimab as a one-time conditioning therapy for severe combined immunodeficiency (“SCID”) patients undergoing a second stem cell transplant for which we conducted a Phase 1/2 clinical trial.

Previous wording

We have an exclusive license agreement with Amgen Inc. (“Amgen”) for the development and commercialization of the briquilimab monoclonal antibody in all indications and territories worldwide. We also have an exclusive license agreement with Stanford University for the right to use briquilimab in the clearance of diseased stem cells prior to the transplantation of HSCs.

Current wording

We have an exclusive license agreement with Amgen Inc. (“Amgen”) for the development and commercialization of the briquilimab monoclonal antibody in all indications and territories worldwide. We also have an exclusive license agreement with Stanford University for the right to use briquilimab in the clearance of diseased stem cells prior to the transplantation of hematopoietic stem cells.

Previous wording

Since our inception, we have devoted substantially all of our resources to performing research and development, enabling manufacturing activities in support of our product development efforts, hiring personnel, acquiring and developing our technology and product candidates, performing business planning, establishing our intellectual property portfolio, raising capital and providing general and administrative support for these activities. We do not have any products approved for sale and have not generated any revenue from product sales. We expect to continue to incur significant and increasing expenses and substantial losses for the foreseeable future as we continue our development of and seek regulatory approvals for our product candidates and commercialize any approved products, seek to expand our product pipeline and invest in our organization. We expect to incur increased expenses associated with operating as a public company, including significant legal, audit, accounting, regulatory, tax-related, director and officer insurance, investor relations and other expenses.

Current wording

Since our inception, we have devoted substantially all of our resources to performing research and development, enabling manufacturing activities in support of our product development efforts, hiring personnel, acquiring and developing our technology and product candidates, performing business planning, establishing our intellectual property portfolio, raising capital and providing general and administrative support for these activities. We do not have any products approved for sale and have not generated any revenue from product sales. We expect to continue to incur significant and increasing expenses and substantial losses for the foreseeable future as we continue our development of and seek regulatory approvals for our product candidates and commercialize any approved products, seek to expand our product pipeline and invest in our organization. We expect to continue to incur increased expenses associated with operating as a public company, including significant legal, audit, accounting, regulatory, tax-related, director and officer insurance, investor relations and other expenses.

Previous wording

We have incurred significant losses and negative cash flows from operations since our inception. During the three and nine months ended September 30, 2024, we incurred net losses of $18.6 million and $46.9 million, respectively. During the three and nine months ended September 30, 2023, we incurred net losses of $17.5 million and $47.9 million, respectively. During the nine months ended September 30, 2024 and 2023, we had negative cash flows from operations of $41.5 million and $35.6 million, respectively. As of September 30, 2024, we had an accumulated deficit of $216.5 million.

Current wording

We have incurred significant losses and negative cash flows from operations since our inception. During the three months ended March 31, 2025 and 2024, we incurred net losses of $21.2 million and $13.7 million, respectively. We generated negative operating cash flows of $22.8 million and $15.7 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $262.1 million.

Previous wording

We had cash and cash equivalents of $92.5 million as of September 30, 2024. We expect to continue to incur substantial losses for the foreseeable future, and our transition to profitability will depend upon successful development, approval and commercialization of our product candidates and upon achievement of sufficient revenues to support our cost structure. We do not expect to generate any revenue from commercial product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates. We may never achieve profitability, and unless we do and until then, we will need to continue to raise additional capital.

Current wording

We had cash and cash equivalents of $48.8 million as of March 31, 2025. We expect to continue to incur substantial losses for the foreseeable future, and our transition to profitability will depend upon successful development, approval and commercialization of our product candidates and upon achievement of sufficient revenues to support our cost structure. We do not expect to generate any revenue from commercial product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates. We may never achieve profitability, and unless we do and until then, we will need to continue to raise additional capital.

Previous wording

We do not currently own or operate any manufacturing facility. We rely on contract manufacturing organizations (“CMOs”) to produce our drug candidates in accordance with the FDA’s current good manufacturing practices (“cGMP”) regulations for use in our clinical studies. The manufacture of pharmaceuticals is subject to extensive cGMP regulations, which impose various procedural and documentation requirements and govern all areas of record keeping, production processes and controls, personnel and quality control. Under our license agreement with Amgen, we have received a substantial amount of drug product to support initiation of our planned clinical trials of briquilimab. In November 2019, we entered into development and manufacturing agreements with Lonza Sales AG (“Lonza”) relating to the manufacturing of briquilimab and product quality testing. The facility of Lonza in Slough, United Kingdom is responsible for production and testing of drug substance. The facility of Lonza in Stein, Switzerland is responsible for production and testing of drug product. Labelling, packaging and storage of finished drug product is provided by PCI Pharma Services, in San Diego, California. Our agreement with Lonza includes certain limitations on our ability to enter into supply arrangements with any other supplier without Lonza’s consent. In addition, Lonza has the right to increase the prices it charges us for certain supplies depending on a number of factors, some of which are outside of our control.

Current wording

We do not currently own or operate any manufacturing facility. We rely on contract manufacturing organizations (“CMOs”) to produce our drug candidates in accordance with the FDA’s current good manufacturing practices (“cGMP”) regulations for use in our clinical studies. The manufacture of pharmaceuticals is subject to extensive cGMP regulations, which impose various procedural and documentation requirements and govern all areas of record keeping, production processes and controls, personnel and quality control. Under our license agreement with Amgen, we have received a substantial amount of drug product to support initiation of our planned clinical trials of briquilimab. In November 2019, we entered into development and manufacturing agreements with Lonza Sales AG (“Lonza”) relating to the manufacturing of briquilimab and product quality testing. The facility of Lonza in Slough, United Kingdom is responsible for production and testing of drug substance. The facility of Lonza in Stein, Switzerland is responsible for production and testing of drug product. Labelling, packaging and storage of finished drug product is provided by PCI Pharma Services, in San Diego, California. Our agreement with Lonza includes certain limitations on our ability to enter into supply arrangements with any other supplier without Lonza’s consent. In addition, Lonza has the right to increase the prices it charges us for certain supplies depending on a number of factors, some of which are outside of our control. In addition, given drug substance and drug product manufacturing and testing with Lonza currently occurs outside the United States, drug product imported into the United States for clinical or commercial use could be subject to significant tariffs in the current political environment.

Previous wording

General and administrative expenses consist primarily of personnel costs and expenses, including salaries, employee benefits, stock-based compensation for our executive and other administrative personnel; legal services, including relating to intellectual property and corporate matters; accounting, auditing, consulting and tax services; insurance; and facility and other allocated costs not otherwise included in research and development expenses. We expect our general and administrative expenses to increase substantially for the foreseeable future as we anticipate an increase in our personnel headcount to support expansion of research and development activities, as well as to support our operations generally. We also expect to continue to incur significant expenses associated with being a public company, including costs related to accounting, audit, legal, regulatory, and tax-related services associated with maintaining compliance with applicable Nasdaq and SEC requirements; additional director and officer insurance costs; and investor and public relations costs.

Current wording

General and administrative expenses consist primarily of personnel costs and expenses, including salaries, employee benefits, and stock-based compensation for our executive and other administrative personnel; legal services, including relating to intellectual property and corporate matters; accounting, auditing, consulting and tax services; insurance; and facility and other allocated costs not otherwise included in research and development expenses. We expect our general and administrative expenses to increase substantially for the foreseeable future as we anticipate an increase in our personnel headcount to support expansion of research and development activities, as well as to support our operations generally. We also expect to continue to incur significant expenses associated with being a public company, including costs related to accounting, audit, legal, regulatory, and tax-related services associated with maintaining compliance with applicable Nasdaq and SEC requirements; additional director and officer insurance costs; and investor and public relations costs.

Previous wording

Other income (expense), net includes foreign currency transactions gains and losses, interest income, changes in the fair value of common stock warrant liability and earnout liability. These financial instruments were classified as liabilities in our condensed consolidated balance sheets and re-measured at each reporting period end until they are exercised, settled or have expired. In January 2023, all outstanding common stock warrants met equity classification and are no longer remeasured. The estimated fair value of the earnout liability was minimal as of December 31, 2023, due to the price of our common stock relative to the price that would trigger a release of the earnout shares. The earnout liability expired in September 2024 as the common stock price targets were not achieved prior to the expiration of the earnout period.

Current wording

Other income, net includes foreign currency transactions gains and losses, interest income and change in the fair value of earnout liability. This financial instrument was classified as a liability in our condensed consolidated financial statements and was re-measured at each reporting period end. The earnout liability expired in September 2024 as the common stock price targets were not achieved prior to the expiration of the earnout period.

Previous wording

Personnel-related costs, including employee payroll and related expenses, increased by $1.5 million, from $2.5 million for the three months ended September 30, 2023 to $4.0 million for the three months ended September 30, 2024, as a result of hiring additional employees in our research and development organization. Facilities and overheads include common facilities, human resources and information technology related expenses allocated to research and development, which increased by $0.7 million, from $1.3 million for the three months ended September 30, 2023 to $2.0 million for the three months ended September 30, 2024.

Current wording

Personnel-related costs, including employee payroll and related expenses, increased by $1.7 million, from $3.1 million for the three months ended March 31, 2024 to $4.8 million for the three months ended March 31, 2025, as a result of hiring additional employees in our research and development organization. Stock-based compensation expenses, included in personnel-related costs, increased by $0.2 million, from $0.4 million for the three months ended March 31, 2024 to $0.6 million for the three months ended March 31, 2025.

Previous wording

Our external costs by program for the three months ended September 30, 2024 and 2023 were as follows (in thousands):

Current wording

Our program costs for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Previous wording

General and administrative expenses increased by $0.9 million, from $4.5 million for the three months ended September 30, 2023 to $5.4 million for the three months ended September 30, 2024. Employee payroll and related expenses increased by $0.8 million, from $2.2 million for the three months ended September 30, 2023 to $3.0 million for the three months ended September 30, 2024, as a result of continued hiring of executives and administrative employees. Stock-based compensation expenses were $1.4 million and $1.0 million for the three months ended September 30, 2024 and 2023, respectively. Expenses related to professional consulting services increased by $0.1 million, from $1.9 million for the three months ended September 30, 2023 to $2.0 million for the three months ended September 30, 2024. Rent expenses increased by $0.1 million, from $0.2 million for the three months ended September 30, 2023 to $0.3 million for the three months ended September 30, 2024, primarily related to a new short-term lease.

Current wording

General and administrative expenses increased by $0.8 million, from $4.8 million for the three months ended March 31, 2024 to $5.6 million for the three months ended March 31, 2025. Employee payroll and related expenses increased by $0.7 million, from $2.6 million for the three months ended March 31, 2024 to $3.3 million for the three months ended March 31, 2025, as a result of continued hiring of administrative employees. Stock-based compensation expenses, included in employee payroll and related expenses, were $1.2 million and $0.8 million for the three months ended March 31, 2025 and 2024, respectively. Expenses related to professional consulting services increased by $0.2 million, from $1.8 million for the three months ended March 31, 2024 to $2.0 million for the three months ended March 31, 2025. Rent expenses increased by $0.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Other expenses decreased by $0.2 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily related to a decrease in allocation of overhead costs of $0.5 million, partially offset by an increase in office licenses and subscriptions expenses of $0.1 million, utilities expenses of $0.1 million and other general administrative expenses of $0.1 million.

Previous wording

Interest income decreased by $0.1 million, from $1.4 million for the three months ended September 30, 2023 to $1.3 million for the three months ended September 30, 2024, primarily due to lower cash balances invested in money market funds.

Current wording

Total other income, net decreased by $0.8 million, from $1.3 million net income for the three months ended March 31, 2024 to $0.6 million net income for the three months ended March 31, 2025. Interest income decreased by $0.8 million, from $1.4 million for the three months ended March 31, 2024 to $0.6 million for the three months ended March 31, 2025, primarily due to lower cash balances invested in money market funds. Changes in the earnout liability and foreign currency transactions gains and losses were insignificant.

Previous wording

As of September 30, 2024, we had $92.5 million of cash and cash equivalents.

Current wording

As of March 31, 2025, we had $48.8 million of cash and cash equivalents.

Previous wording

In order to assist in funding our future operations, including our planned clinical trials, on April 28, 2023, we filed a universal shelf registration statement on Form S-3 with the SEC, which was declared effective on May 5, 2023 and will expire on May 5, 2026 (the “S-3”), which allows us to, from time to time, offer up to $250.0 million of securities, including any combination of common stock, preferred stock, debt securities, warrants, rights, units and depositary shares. We believe that the S-3 will provide us with the flexibility to raise additional capital to finance our operations as needed. From time to time, we may offer securities under the S-3 in response to market conditions or other circumstances if we believe such a plan of financing is in the best interests of our stockholders. The terms of any offering under the S-3 will be established at the time of such offering and will be described in a prospectus supplement to the S-3 filed with the SEC prior to the completion of any such offering.

Current wording

In order to assist in funding our future operations, including our planned clinical trials, on March 19, 2025, we filed a new universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”) with the SEC, which was declared effective on March 26, 2025 and superseded our prior universal shelf registration statement. As of March 31, 2025, we can sell from time to time up to $300.0 million of common stock, preferred stock, debt securities, warrants, rights, units and depositary shares comprised of any combination of these securities, for our own account in one or more offerings under the Shelf Registration Statement. The terms of any offering under the Shelf Registration Statement will be established at the time of such offering and will be described in a prospectus supplement to the Shelf Registration Statement filed with the SEC prior to the completion of any such offering.

Previous wording

In February 2024, we closed an underwritten offering that was conducted off the S-3 and issued 3,900,000 shares of common stock for net proceeds of $47.2 million. As of September 30, 2024, $75.0 million remained allocated and available under the ATM Prospectus and $124.5 million remained available and unallocated under the S-3.

Current wording

In February 2024, we closed an underwritten offering that was conducted off our prior universal shelf registration statement and issued 3,900,000 shares of common stock for net proceeds of $47.2 million.

Previous wording

We have incurred significant losses and negative cash flows from operations since our inception. As of September 30, 2024, we had an accumulated deficit of $216.5 million. Given our recurring losses from operations and negative cash flows, and based on our current operating plan, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year from the date of filing of this Quarterly Report. We expect to finance our future cash needs through equity or debt financings, collaborations or a combination of these approaches. The sale of equity or convertible debt securities may result in dilution to our stockholders, and, in the case of preferred equity securities or convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock. Debt financings may subject us to covenant limitations or restrictions on our ability to take specific actions, such as incurring additional debt or making capital expenditures. Our ability to raise additional funds may be adversely impacted by negative global economic conditions and any disruptions to and volatility in the credit and financial markets in the United States and worldwide or other factors. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable or acceptable to us. If we are unable to obtain adequate financing when needed or on terms favorable or acceptable to us, we may be forced to delay, reduce the scope of or eliminate one or more of our research and development programs.

Current wording

We have incurred significant losses and negative cash flows from operations since our inception. As of March 31, 2025, we had an accumulated deficit of $262.1 million. Given our recurring losses from operations and negative cash flows, and based on our current operating plan, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year from the date of filing of this Quarterly Report. We expect to finance our future cash needs through equity or debt financings, collaborations or a combination of these approaches. The sale of equity or convertible debt securities may result in dilution to our stockholders, and, in the case of preferred equity securities or convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock. Debt financings may subject us to covenant limitations or restrictions on our ability to take specific actions, such as incurring additional debt or making capital expenditures. Our ability to raise additional funds may be adversely impacted by negative global economic conditions and any disruptions to and volatility in the credit and financial markets in the United States and worldwide or other factors. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable or acceptable to us. If we are unable to obtain adequate financing when needed or on terms favorable or acceptable to us, we may be forced to delay, reduce the scope of or eliminate one or more of our research and development programs.

Previous wording

In August 2020 and January 2022, we leased approximately 13,400 square feet of space for our headquarters in Redwood City, California. The lease expires in August 2026. We have an option to extend the term for an additional five years to August 2031. In addition to base rent, we pay our share of operating expenses and taxes. As of September 30, 2024, our rent commitments under the lease agreement were $1.2 million within the next 12 months from September 30, 2024, and $1.0 million for the remainder of the lease term.

Current wording

As of March 31, 2025, we leased approximately 25,900 square feet of space for our headquarters in Redwood City, California. The lease expires in August 2026. We have an option to extend the term for an additional five years to August 2031. In addition to base rent, we pay our share of operating expenses and taxes. As of March 31, 2025, our rent commitments under the lease agreement were $1.9 million within the next 12 months from March 31, 2025, and $0.8 million for the remainder of the lease term.

Previous wording

In March 2021, we entered into the Stanford License Agreement. In July 2023, we entered into an amendment to the Stanford License Agreement to modify certain milestones set forth thereunder. Pursuant to the Stanford License Agreement we are required to pay annual license maintenance fees, beginning on the first anniversary of the effective date of the agreement and ending upon the first commercial sale of a product, method, or service in the licensed field of use, as follows: $25,000 for each first and second year, $35,000 for each third and fourth year, and $50,000 at each anniversary thereafter ending upon the first commercial sale. We are also obligated to pay late-stage clinical development milestone payments and first commercial sales milestone payments of up to $9.0 million in total. We will also pay low single-digit royalties on net sales of licensed products. All products were in development as of September 30, 2024, and no such royalties were due as of such date and no milestones were achieved.

Current wording

In March 2021, we entered into an exclusive license agreement with Stanford (the “2021 Stanford License Agreement ”). In July 2023, we entered into an amendment to the 2021 Stanford License Agreement to modify certain milestones set forth thereunder. Pursuant to the 2021 Stanford License Agreement we are required to pay annual license maintenance fees, beginning on the first anniversary of the effective date of the agreement and ending upon the first commercial sale of a product, method, or service in the licensed field of use, as follows: $25,000 for each first and second year, $35,000 for each third and fourth year, and $50,000 at each anniversary thereafter ending upon the first commercial sale. We are also obligated to pay late-stage clinical development milestone payments and first commercial sales milestone payments of up to $9.0 million in total. We will also pay low single-digit royalties on net sales of licensed products. All products were in development as of March 31, 2025, and no such royalties were due as of such date and no milestones were achieved.

Previous wording

Net cash used in operating activities was $41.5 million and $35.6 million for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

Net cash used in operating activities was $22.8 million and $15.7 million for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Cash used in operating activities in the nine months ended September 30, 2023 was primarily due to our net loss for the period of $47.9 million, adjusted by non-cash net loss of $5.8 million and a net change of $6.5 million in our net operating assets and liabilities. The non-cash amounts consisted of $4.1 million related to stock-based compensation expense, $0.6 million net loss related to the changes in fair value of common stock warrant liability and the earnout liability, $0.8 million related to depreciation and amortization expense and $0.3 million non-cash lease expense. The changes in our net operating assets and liabilities were primarily due to an increase of $3.2 million in accrued expenses and other current liabilities, an increase of $1.5 million in accounts payable, a decrease of $0.7 million in other receivables, a decrease of $1.5 million in prepaid expenses and other current assets and a decrease of $0.3 million in other non-current assets, partially offset by a decrease of $0.6 million in operating lease liability and a decrease of less than $0.1 million in other non-current liabilities.

Current wording

Cash used in operating activities in the three months ended March 31, 2025 was primarily due to our net loss for the period of $21.2 million, adjusted by non-cash net loss of $2.3 million and a net change of $3.9 million in our net operating assets and liabilities. The non-cash amounts consisted of $1.8 million related to stock-based compensation expense, $0.3 million related to depreciation and amortization expense and $0.2 million of non-cash lease expense. The changes in our net operating assets and liabilities were primarily due to a decrease of $2.6 million in accrued expenses and other current liabilities, a decrease of $1.0 million in accounts payable, a decrease of $0.3 million in operating lease liability, and an increase of $0.2 million in prepaid expenses and other current assets, offset by a decrease of $0.3 million in other non-current assets.

Previous wording

Cash used in operating activities in the nine months ended September 30, 2024 was primarily due to our net loss for the period of $46.9 million, adjusted by non-cash net loss of $6.1 million and a net change of $0.7 million in our net operating assets and liabilities. The non-cash amounts consisted of $4.6 million related to stock-based compensation expense, $1.1 million related to depreciation and amortization expense and $0.4 million of non-cash lease expense. The changes in our net operating assets and liabilities were primarily due to a decrease of $1.1 million in accounts payable, a decrease of $0.7 million in operating lease liability and an increase of $0.3 million in prepaid expenses and other current assets, offset by an increase of $1.1 million in accrued expenses and other current liabilities and a decrease of $0.3 million in other non-current assets.

Current wording

Cash used in operating activities in the three months ended March 31, 2024 was primarily due to our net loss for the period of $13.7 million, adjusted by non-cash net loss of $1.6 million and a net change of $3.6 million in our net operating assets and liabilities. The non-cash amounts consisted of $1.2 million related to stock-based compensation expense, $0.3 million related to depreciation and amortization expense, and $0.1 million non-cash lease expense. The changes in our net operating assets and liabilities were primarily due to a decrease of $1.8 million in accounts payable, a decrease of $1.7 million in accrued expenses and other current liabilities, a decrease of $0.2 million in operating lease liability and an increase of $0.1 million in other non-current assets, offset by an increase of $0.2 million in prepaid expenses and other current assets.

Previous wording

Cash Flows Used in Investing Activities

Current wording

Cash used in investing activities was less than $0.1 million for the three months ended March 31, 2025, consisting of sales of property and equipment.

Previous wording

Cash used in investing activities was $0.5 million and less than $0.1 million for the nine months ended September 30, 2024 and 2023, respectively, which primarily consisted of leasehold improvements, purchases of the computer and lab equipment.

Current wording

Cash used in investing activities was less than $0.1 million for the three months ended March 31, 2024, which consisted of purchases of the computer and lab equipment.

Previous wording

Cash provided by financing activities for the nine months ended September 30, 2024 was $47.5 million, which consisted primarily of net proceeds from the issuance and sale of shares of common stock in an underwritten public offering of $47.2 million, cash received from the exercise of stock options of $0.3 million and cash received from the issuance of common stock in connection with purchases under our employee stock purchase plan of less than $0.1 million.

Current wording

Cash provided by financing activities for the three months ended March 31, 2024 was $47.3 million, which consisted primarily of net proceeds from the issuance and sale of shares of common stock in an underwritten public offering of $47.2 million and cash received from the exercise of stock options of $0.2 million.

Previous wording

The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a U.S. Securities Act of 1933, as amended, registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have opted to take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our condensed consolidated financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Current wording

Previously, we were an “emerging growth company,” as defined by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a U.S. Securities Act of 1933, as amended, registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. As of December 31, 2024, we ceased to be an emerging growth company.