LEAP THERAPEUTICS, INC.

Previous wording

Our lead clinical stage program is sirexatamab (DKN-01), a monoclonal antibody that inhibits Dickkopf-related protein 1, or DKK1. We are currently studying sirexatamab in a clinical trial in patients with colorectal cancer. We also have a preclinical antibody programs FL-501.

Current wording

Our lead clinical stage program is sirexatamab (DKN-01), a monoclonal antibody that inhibits Dickkopf-related protein 1, or DKK1. We also have a preclinical antibody programs FL-501.

Previous wording

Our research and development activities have included conducting nonclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory filings for our product candidates, primarily sirexatamab. We recognize research and development expenses as they are incurred. Our research and development expenses during the three months ended March 31, 2025 consisted primarily of:

Current wording

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

Previous wording

The table below summarizes our research and development expenses incurred by development program and the R&D Incentive income for the three months ended March 31, 2025 and 2024:

Current wording

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

Previous wording

The successful development of our clinical product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the remainder of the development of any of our product candidates or the period, if any, in which material net cash inflows from these product candidates may commence. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

Current wording

The successful development of our clinical product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the remainder of the development of any of our product candidates or the period, if any, in which material net cash inflows from these product candidates may commence. We have engaged a leading financial advisor to explore strategic alternatives to preserve and maximize shareholder value, including any or all of the following: entering into a merger, asset sale, or license agreement with another company; selling or partnering sirexatamab or FL-501 in a transaction with a pharmaceutical company, biotechnology company, or investment fund; or seeking additional funding through public or private equity financings. There can be no assurance that we will successfully complete a transaction as part of the strategic alternative process, and any such transaction, if available, may not be on terms favorable to us and may not allow for the continued development of our product candidates. If we are is not able to successfully complete any transaction, our business, operations and financial condition will be materially adversely affected, and we would be forced to discontinue our business (including the further development of the products) and operations entirely, wind-up and liquidate.

Previous wording

General and administrative expenses were $3.0 million for the three months ended March 31, 2025, compared to $3.5 million for the three months ended March 31, 2024. The decrease of $0.5 million in general and administrative expenses during the three months ended March 31, 2025 as compared to the same period in 2024, was due to a $0.4 million decrease in professional fees and a $0.1 million decrease in stock based compensation expense.

Current wording

General and administrative expenses were $1.8 million for the three months ended June 30, 2025, compared to $3.4 million for the three months ended June 30, 2024. The decrease of $1.6 million in general and administrative expenses during the three months ended June 30, 2025 as compared to the same period in 2024, was due to a $1.4 million decrease in payroll and other related expenses mainly due to a decrease in incentive based compensation expense for our general and administrative full-time employees, and a $0.2 million decrease in general and administrative related stock based compensation expense.

Previous wording

During the three months ended March 31, 2025, we recorded interest income of $0.4 million. During the three months ended March 31, 2024, we recorded interest income of $0.8 million. The decrease was due to a higher average cash and cash equivalent balance during the three months ended March 31, 2024.

Current wording

During the three months ended June 30, 2025, we recorded interest income of $0.2 million. During the three months ended June 30, 2024, we recorded interest income of $0.9 million. The decrease was due to a higher average cash and cash equivalent balance during the three months ended June 30, 2024.

Previous wording

We recorded R&D incentive income of $0.1 million during the three months ended March 31, 2025, based upon the applicable percentage of eligible research and development activities under the R&D Incentive Program, which expenses included the cost of manufacturing clinical trial material. During the three months ended March 31, 2024, we did not record any R&D incentive income.

Current wording

We recorded R&D incentive income of $0.3 million during the three months ended June 30, 2024, based upon the applicable percentage of eligible research and development activities under the R&D Incentive Program, which expenses included the cost of manufacturing clinical trial material. During the three months ended June 30, 2025, we recorded an immaterial amount of R&D incentive income.

Previous wording

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. As of March 31, 2025, we had cash and cash equivalents of $32.7 million. Additionally, we had an accumulated deficit of $ 482.8 million at March 31, 2025, and during the three months ended March 31, 2025, we incurred a net loss of $15.4 million. We expect to continue to generate operating losses in the foreseeable future. The foregoing matters give rise to a substantial doubt about our ability to continue as a going concern for at least the next 12 months from the issuance of this report on Form 10-Q.

Current wording

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. As of June 30, 2025, we had cash and cash equivalents of $18.1 million. Additionally, we had an accumulated deficit of $499.4 million at June 30, 2025, and during the six months ended June 30, 2025, we incurred a net loss of $32.1 million. We expect to continue to generate operating losses in the foreseeable future. The foregoing matters give rise to a substantial doubt about our ability to continue as a going concern for at least the next 12 months from the issuance of this report on Form 10-Q.

Previous wording

Operating activities. Net cash used in operating activities for the three months ended March 31, 2025 was primarily related to our net loss from the operation of our business of $15.4 million and net changes in working capital, including a decrease in accounts payable and accrued expenses of $0.4 million, a decrease in lease liabilities of $0.1 million and an increase in research and development incentive receivable of $0.1 million. These changes were partially offset by a decrease of $0.2 million in prepaid expenses and other assets, a decrease of $0.1 million in right-of-use asset and noncash stock-based compensation expense of $1.2 million.

Current wording

Operating activities. Net cash used in operating activities for the six months ended June 30, 2025 was primarily related to our net loss from the operation of our business of $32.1 million and net changes in working capital, including a decrease of $0.2 million in income tax payable, a decrease of $0.2 million in lease liabilities and an increase in research and development incentive receivable of $0.1 million. These changes were partially offset by an increase in accounts payable and accrued expenses of $0.6 million, a decrease of $0.1 million in prepaid expenses and other assets, a decrease of $0.2 million in right-of-use asset and noncash stock-based compensation expense of $2.7 million.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 was primarily related to our net loss from the operation of our business of $13.8 million and net changes in working capital, including a decrease in accounts payable and accrued expenses of $2.4 million, an increase of $0.3 million in prepaid expenses and other assets, an increase in research and development incentive receivable of $0.2 million and a decrease in lease liabilities of $0.1 million. These changes were partially offset by noncash stock-based compensation expense of $1.2 million and a decrease in non-cash operating lease expense of $0.1 million.

Current wording

Net cash used in operating activities for the six months ended June 30, 2024 was primarily related to our net loss from the operation of our business of $33.9 million and net changes in working capital, including an increase in research and development incentive receivable of $0.5 million, an increase of $0.2 million in prepaid expenses and other assets and a decrease in lease liabilities of $0.1 million. These changes were partially offset by an increase in accounts payable and accrued expenses of $2.7 million, a decrease of $0.2 million in right-of-use asset, a decrease of $0.1 million in other assets and noncash stock-based compensation expense of $2.6 million.

Previous wording

Investing Activities. There were no investing activities during the three months ended March 31, 2025 and 2024.

Current wording

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

Previous wording

Financing Activities. Net cash provided by financing activities for the three months ended March 31, 2025 and 2024 consisted of an immaterial amount of proceeds upon the exercise of stock options.

Current wording

Financing Activities. Net cash provided by financing activities for the six months ended June 30, 2024 consisted of $40.0 million in gross proceeds from the April 2024 Private Placement and an immaterial amount of proceeds upon the exercise of stock options, partially offset by $2.9 million of offering costs paid. Net cash used in financing activities for the six months ended June 30, 2025 consisted of $0.2 million of principal payments of insurance financing and an immaterial amount of proceeds upon the exercise of stock options.