Traws Pharma Inc

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with interim unaudited condensed consolidated financial statements contained in Part I, Item 1 of this quarterly report, and the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our annual report on Form 10-K for the year ended December 31,2023, filed with the SEC on April 1, 2024 (“Annual Report”). As used in this report, unless the context suggests otherwise, the “Company” refers to Onconova Therapeutics, Inc. as of June 30, 2023 and its consolidated subsidiaries. As used in this report, unless the context suggests otherwise, “we,” “us,” “our,” “Traws” or “Traws Pharma” refer to the Company after the effective time of the Merger.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with interim unaudited condensed consolidated financial statements contained in Part I, Item 1 of this quarterly report, and the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our annual report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024 (“Annual Report”). As used in this report, unless the context suggests otherwise, the “Company” refers to Traws Pharma, Inc. as of September 30, 2024 and its consolidated subsidiaries. As used in this report, unless the context suggests otherwise, “we,” “us,” “our,” “Traws” or “Traws Pharma” refer to the Company after the effective time of the Merger.

Previous wording

The Company’s net losses were $128.1 million and $10.0 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, The Company had an accumulated deficit of $610.8 million. We expect to incur significant expenses and operating losses for the foreseeable future as we continue the development of, and seek regulatory approval for, our product candidates, even if milestones under our license and collaboration agreements may be met.

Current wording

The Company’s net losses were $136.6 million and $14.8 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, the Company had an accumulated deficit of $619.2 million. We expect to incur significant expenses and operating losses for the foreseeable future as we continue the development of, and seek regulatory approval for, our product candidates, even if milestones under our license and collaboration agreements may be met.

Previous wording

As of June 30, 2024, the Company had $16.9 million in cash and cash equivalents. On April 1, 2024, in connection with the Merger described below, the Company entered into a Securities Purchase Agreement for the sale of common and preferred stock to TPAV, LLC, an affiliate of Torrey Pines, and OrbiMed Private Investments VIII, LP, an affiliate of OrbiMed Advisors and raised gross proceeds of $14 million. Based on current projections, we do not have sufficient cash and cash equivalents as of the date of this report to support our operations for at least the 12 months following the date that these financial statements are issued. Accordingly, substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that these financial statements are issued.

Current wording

As of September 30, 2024, the Company had $5.4 million in cash and cash equivalents. On April 1, 2024, in connection with the Merger described below, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) for the sale of common and preferred stock to TPAV, LLC, an affiliate of Torrey Pines, and OrbiMed Private Investments VIII, LP, an affiliate of OrbiMed Advisors (the “Investors”) and raised gross proceeds of $14 million. Based on current projections, we do not have sufficient cash and cash equivalents as of the date of this report to support our operations for at least the 12 months following the date that these financial statements are issued. Accordingly, substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that these financial statements are issued.

Previous wording

The first-in-man clinical study of TRX100 (designated AV5124 in a previous study) was performed from May to September of 2023 in Russia. The study sponsor was Pharmasyntez, JSC. Traws Pharma has the right to use the data resulting from the study outside of Russia and the Eurasian Economic Community countries. The trial was a single ascending dose study, and, as such, each study participant only received one dose of TRX100. The study consisted of four dose cohorts that received 20, 40, 80 or 120 mg TRX100 delivered as 20 mg strength tablets, or placebo. The study enrolled 28 healthy males ages 18-45 years who received either the study drug or placebo. The primary study endpoint was measurement of the safety and tolerability of single drug doses in healthy volunteers. The secondary endpoint was the measurement of pharmacokinetic parameters of single drug doses in healthy volunteers on an empty stomach or after a meal. In the study, one subject who received a single 40 mg dose of the study drug, experienced two adverse events (AEs). This subject experienced hyperglycemia, which was deemed to be mild and we believe probably related to TRX100, and erosive gastritis with complications in the form of severe iron deficiency

Current wording

The first-in-man clinical study of TRX100 (designated AV5124 in a previous study) was performed from May to September of 2023 in Russia. The study sponsor was Pharmasyntez, JSC. Traws Pharma has the right to use the data resulting from the study outside of Russia and the Eurasian Economic Community countries. The trial was a single ascending dose study, and, as such, each study participant only received one dose of TRX100. The study consisted of four dose cohorts that received 20, 40, 80 or 120 mg TRX100 delivered as 20 mg strength tablets, or placebo. The study enrolled 28 healthy males ages 18-45 years who received either the study drug or placebo. The primary study endpoint was measurement of the safety and tolerability of single drug doses in healthy volunteers. The secondary endpoint was the measurement of pharmacokinetic parameters of single drug doses in healthy volunteers on an empty stomach or after a meal. In the study, one subject who received a single 40 mg dose of the study drug, experienced two adverse events (AEs). This subject experienced hyperglycemia, which was deemed to be mild believed probably related to TRX100, and erosive gastritis with complications in the form of severe iron deficiency anemia, which was considered to be a serious adverse event (SAE) believed unlikely to be related (doubtful per the protocol) to the study drug.

Previous wording

Traws Pharma is further advancing the development of TRX100 with a Traws Pharma sponsored Phase 1 randomized, blinded, and placebo controlled study in Australia that was approved by the Human Research Ethics Committee. This study is intended to enroll three cohorts of 8 participants, with 6 participants randomized to receive study drug and 2 participants assigned to receive placebo in each cohort. Participants are required to be healthy males or females ages 18-45 years. Participants will take either one dose of the study drug or one dose of placebo, depending on the group they are assigned to. The dose levels that will be investigated are 80, 120, and 240 mg, taken via oral capsules. The primary endpoint is the measurement of safety and tolerability and the secondary and other endpoints includes the determination of the drug pharmacokinetic profile. Traws Pharma expects that the first cohort will commence dosing in mid August 2024.

Current wording

Traws Pharma is further advancing the development of TRX100 with a Traws Pharma sponsored Phase 1 randomized, blinded, and placebo-controlled study in Australia that was approved by the Human Research Ethics Committee. To date this study enrolled three cohorts of 8 participants, with 6 participants randomized to receive study drug and 2 participants assigned to receive placebo in each cohort. Participants are required to be healthy males or females ages 18-45 years. Participants took either one dose of the study drug or one dose of placebo, depending on the group they were assigned to. The dose levels that were investigated were 80, 120, and 240 mg, taken via oral capsules; one additional dose of 480 mg will be studied. The primary endpoint is the measurement of safety and tolerability, and the secondary and other endpoints include the determination of the drug pharmacokinetic profile. Topline data for the first three doses showed good overall tolerability and a pharmacokinetic profile that appears to support the potential use of TRX100 as a one-time treatment for influenza. No treatment related adverse events were reported during the study so far. Topline data from this study showed that a single dose of TRX100 maintained plasma drug levels consistently above the EC 90 and within the predicted therapeutic window for more than 20 days. We plan tocomplete the Phase 1 trial in Australia, initiatea Phase 2 study in the first half of 2025, and to interact with BARDA (Biomedical Advanced Research and Development Authority) and CDC (Centers for Disease Control and Prevention) in the USA for potential collaboration and funding for the development of the compound in influenza and bird flu.

Previous wording

TRX-01 is currently being studied in a Phase 1 clinical trial that includes single and multiple ascending dose phases. Participants are required to be healthy males or females ages 18-45 years. The primary endpoint of the study is the measurement of safety and tolerability and the secondary endpoint includes the determination of the drug pharmacokinetic profile. The Phase 1 trial is ongoing, having been initiated in May 2024, in Australia. It is being sponsored by Traws Pharma and was approved by the Human Research Ethics Committee. The trial has enrolled and administered either the study drug or placebo to 40 participants in the single ascending dose phase, which included 5 cohorts with 8 participants in each cohort (6 receiving study drug and two receiving placebo). Subjects in the single ascending dose phase received one dose of the study drug or placebo, depending on their assigned group. The single ascending dose portion of the study assessed oral TRX01 15, 50, 150, 300 and 600 mg doses. The dosing in the single ascending dose portion of the study is complete and the results are under analysis. The Phase 1 multiple ascending dose phase of the study is ongoing. In this portion of the study, 16 participates are being enrolled into 2 cohorts of 8 participants in each cohort (6 receiving study drug and two receiving placebo). Subjects in the multiple ascending dose portion of the study receive one dose a day for ten days of either 150 or 600 mg TRX01 or placebo, depending on their group assignment. The multiple ascending dose portion of the study is ongoing.

Current wording

TRX01 was studied in a Phase 1 clinical trial that included single and multiple ascending dose phases. Participants were required to be healthy males or females ages 18-45 years. The primary endpoint of the study was the measurement of safety and tolerability, and the secondary endpoint included the determination of the drug pharmacokinetic profile. The Phase 1 trial was conducted in Australia. It was sponsored by Traws Pharma and was approved by the Human Research Ethics Committee. The trial administered either the study drug or placebo to 40 participants in the single ascending dose phase, which included 5 cohorts with 8 participants in each cohort (6 received study drug and two received placebo). Subjects in the single ascending dose phase received one oral dose of the study drug or placebo, depending on their assigned group. The single ascending dose portion of the study assessed oral TRX01 at 15, 50, 150, 300 and 600 mg doses. Subjects in the multiple ascending dose phase received a daily single oral dose of 150 mg or 600 mg (6 active and 2 placebo) for 10 consecutive days. The study was completed in September 2024. Topline data from the study showed no treatment related adverse events reported up to the highest dose. Topline data also showed that once-daily administration of TRX01 for 10 consecutive days maintained plasma drug levels within the predicted therapeutic window for 12 days. We plan to initiate a Phase 2 study in the first half of 2025.

Previous wording

Another Phase 1 study of narazaciclib as a monotherapy has also been conducted in patients with relapsed and/or refractory advanced cancer. The objectives of this study are to assess the safety and tolerability of repeated daily dosing of narazaciclib in these patients. The analysis of this study is ongoing.

Current wording

Another Phase 1 study of narazaciclib as a monotherapy has also been conducted in patients with relapsed and/or refractory advanced cancer. The objectives of this study are to assess the safety and tolerability of repeated daily dosing of narazaciclib in these patients. The analysis of both studies is ongoing.

Previous wording

Under the terms of the Merger Agreement, upon the consummation of the Merger on April 1, 2024 (the “Closing”), in exchange for the outstanding shares of capital stock of Trawsfynydd immediately prior to the effective time of the First Merger, the Company issued to the stockholders of Trawsfynydd an aggregate of (A) 3,549,538 shares of common stock of the Company, par value $0.01 per share (the “Common Stock”) and (B) 10,359.0916 shares of Series C Preferred Stock (as defined and described below). Each share of Series C Preferred Stock is convertible into 10,000 shares of Common Stock, subject to certain conditions described below. In addition, the Company assumed all Trawsfynydd stock options immediately outstanding prior to the First Merger, each becoming an option to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the “Assumed Options”). No portion of the Assumed Options will be exercisable unless and until the Meeting Proposals (as defined below) are approved by our stockholders. Once exercisable, the Assumed Options will be exercisable for an aggregate of 454,000 shares of Common Stock. Following the effective time of the Second Merger, the Company changed its name to “Traws Pharma, Inc.”

Current wording

Under the terms of the Merger Agreement, upon the consummation of the Merger on April 1, 2024 (the “Closing”), in exchange for the outstanding shares of capital stock of Trawsfynydd immediately prior to the effective time of the First Merger, the Company issued to the stockholders of Trawsfynydd an aggregate of (A) 141,982 shares of Common Stock and (B) 10,359.0916 shares of Series C (as defined and described below). Each share of Series C converts into shares of Common Stock, subject to certain conditions and the Beneficial Ownership Limitation (defined below) as set forth in the Certificate of Designation. In addition, the Company assumed all Trawsfynydd stock options immediately outstanding prior to the First Merger, each becoming an option to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the “Assumed Options”). The Assumed Options are exercisable for an aggregate of 365,547 shares of Common Stock. Following the effective time of the Second Merger, the Company changed its name to “Traws Pharma, Inc.”

Previous wording

The Board of Directors of the Company (the “Board”) approved the Merger Agreement and the related transactions, and the consummation of the Merger was not subject to approval of Company stockholders.

Current wording

The Board approved the Merger Agreement and the related transactions, and the consummation of the Merger was not subject to approval of Company stockholders.

Previous wording

In accordance with the Merger Agreement, each of Werner Cautreels, Iain Dukes, and Nikolay Savchuk were appointed to the Board of Directors of the Company effective as of the Closing. In accordance with the Merger Agreement, Werner Cautreels was appointed as Chief Executive Officer of the Company, Iain Dukes was appointed as Executive Chairman of the Company, and Nikolay Savchuk was appointed as Chief Operating Officer of the Company effective as of the Closing.

Current wording

In accordance with the Merger Agreement, each of Werner Cautreels, Iain Dukes, and Nikolay Savchuk were appointed to the Board effective as of the Closing. In accordance with the Merger Agreement, Werner Cautreels was appointed as Chief Executive Officer of the Company, Iain Dukes was appointed as Executive Chairman of the Company, and Nikolay Savchuk was appointed as Chief Operating Officer of the Company effective as of the Closing.

Previous wording

Pursuant to the Merger Agreement, the Company agreed to hold a stockholders’ meeting to submit the following matters to its stockholders for their consideration: (i) the approval of the conversion of shares of Series C Preferred Stock into shares of Common Stock in accordance with the rules of the Nasdaq Stock Market LLC (the “Conversion Proposal”) and (ii) if deemed necessary or appropriate by the Company or as otherwise required by

Current wording

Pursuant to the Merger Agreement, the Company agreed to hold a stockholders’ meeting to submit, among other proposals, the following proposals to its stockholders for their consideration: (i) the approval of the conversion of shares of Series C into shares of Common Stock in accordance with the rules of the Nasdaq Stock Market LLC, the Merger Agreement and the Certificate of Designation (the “Conversion Proposal”) and (ii) the approval of an amendment to the Charter, to increase the authorized shares of Common Stock from 125,000,000 to 250,000,000 (the “Share Increase Proposal” and together with the Conversion Proposal, the “Meeting Proposals”). In connection with these matters, the Company agreed to file a proxy statement on Schedule 14A with the Securities and Exchange Commission (the “SEC”). Such proxy statement was filed on August 9, 2024. At a special meeting of the stockholders held on September 16, 2024, the stockholders approved the Meeting Proposals and, subject to the Beneficial Ownership Limitation, the outstanding shares of Series C, automatically converted to Common Stock. After the automatic conversion, there are 7,440 shares of Series C outstanding.

Previous wording

Concurrently and in connection with the execution of the Merger Agreement, certain Trawsfynydd stockholders as of immediately prior to the Closing, and certain directors, officers, and stockholders of the Company as of immediately prior to the Closing entered into lock-up agreements with the Company and Trawsfynydd, pursuant to which each such stockholder agreed to be subject to a 180-day lockup on the sale or transfer of shares of the Company held by each such stockholder at the Closing, including those shares of Common Stock and Series C Preferred Stock (including the shares of Common Stock into which such Series C Preferred Stock is convertible) received by each such stockholder in the Merger (the “Lock-up Agreements”).

Current wording

Concurrently and in connection with the execution of the Merger Agreement, certain Trawsfynydd stockholders as of immediately prior to the Closing, and certain directors, officers, and stockholders of the Company as of immediately prior to the Closing entered into lock-up agreements with the Company and Trawsfynydd, pursuant to which each such stockholder agreed to be subject to a 180-day lockup on the sale or transfer of shares of the Company held by each such stockholder at the Closing, including those shares of Common Stock received by each such stockholder in the Merger and Common Stock received upon conversion of Series C upon Board approval (the “Lock-up Agreements”).

Previous wording

On April 1, 2024, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with TPAV, LLC, an affiliate of Torrey Pines, and OrbiMed Private Investments VIII, LP, an affiliate of OrbiMed Advisors (the “Investors”). Pursuant to the Securities Purchase Agreement, the Company issued and sold an aggregate of (i) 496,935 shares of Common Stock and (ii) 1,578.2120 shares of Series C Preferred Stock (the “PIPE Securities”) for an aggregate purchase price of approximately $14 million (collectively, the “Financing”). Each share of Series C Preferred Stock is convertible into 10,000 shares of Common Stock, as described below. The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series C Preferred Stock are set forth in the Certificate of Designation (as defined and described below). The closing of the Financing occurred concurrently with the closing of the Merger on April 1, 2024 (the “Financing Closing Date”).

Current wording

On April 1, 2024, the Company entered into the Securities Purchase Agreement. Pursuant to the Securities Purchase Agreement, the Company issued and sold an aggregate of (i) 19,879 shares of Common Stock and (ii) 1,578.2120 shares of Series C (the “PIPE Securities”) for an aggregate purchase price of approximately $14 million (collectively, the “Financing”). The closing of the Financing occurred concurrently with the closing of the Merger on April 1, 2024 (the “Financing Closing Date”). Subject to the Beneficial Ownership Limitation (defined below), each share of Series C converts into shares of Common Stock as provided in the Certificate of Designation.

Previous wording

On April 1, 2024, in connection with the Securities Purchase Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the holders of Common Stock and Series C Preferred Stock signatory thereto. Pursuant to the Registration Rights Agreement, we are required to prepare and file a resale registration statement with the SEC within 90 calendar days following the Financing Closing Date (the “Filing Deadline”), with respect to the shares of Common Stock underlying the PIPE Securities and the Common Stock and Series C Preferred Stock issued to the signatories to the Registration Rights Agreement in the Merger . The Company filed such registration statement on July 1, 2024 and will use commercially reasonable efforts to cause such registration statement to be declared effective by the SEC within 60 calendar days of the July 1, 2024 filing date.

Current wording

On April 1, 2024, in connection with the Securities Purchase Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the holders of Common Stock and Series C signatory thereto. Pursuant to the Registration Rights Agreement, we are required to prepare and file a resale registration statement with the SEC within 90 calendar days following the Financing Closing Date (the “Filing Deadline”), with respect to the shares of Common Stock underlying the PIPE Securities and the Common Stock and Series C issued to the signatories to the Registration Rights Agreement in the Merger. The Company filed such registration statement on July 1, 2024, which was declared effective on August 28, 2024.

Previous wording

On April 1, 2024, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of the Series C Non-Voting Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware in connection with the Merger. The Certificate of Designation provides for the designation of shares of the Company’s Series C Non-Voting Convertible Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”). Holders of Series C Preferred Stock are entitled to receive dividends on shares of Series C Preferred Stock equal to, on an as-if-converted-to-Common-Stock basis, and in the same form as dividends actually paid on shares of the Common Stock.

Current wording

On April 1, 2024, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of the Series C Non-Voting Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware in connection with the Merger. The Certificate of Designation provides for the designation of shares of the Series C. Holders of Series C are entitled to receive dividends on shares of Series C equal to, on an as-if-converted-to-Common-Stock basis, and in the same form as dividends actually paid on shares of the Common Stock.

Previous wording

Except as otherwise required by law, the Series C Preferred Stock does not have voting rights. However, as long as any shares of Series C Preferred Stock are outstanding, we will not, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series C Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Series C Preferred Stock or alter or amend the Certificate of Designation, amend or repeal any provision of, or add any provision to, the Charter or our bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, in each case if any such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series C Preferred Stock, regardless of whether any of the foregoing actions shall be by means of amendment to the Charter or by merger, consolidation, recapitalization, reclassification, conversion or otherwise, (ii) issue further shares of Series C Preferred Stock, (iii) prior to the earlier of stockholder approval of the Conversion or the six-month anniversary of the Closing, consummate either: (A) any Fundamental Transaction (as in the Certificate of

Current wording

Except as otherwise required by law, the Series C does not have voting rights. However, as long as any shares of Series C are outstanding, we will not, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series C, (i) alter or change adversely the powers, preferences or rights given to the Series C or alter or amend the Certificate of Designation, amend or repeal any provision of, or add any provision to, the Charter or our bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, in each case if any such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series C, regardless of whether any of the foregoing actions shall be by means of amendment to the Charter or by merger, consolidation, recapitalization, reclassification, conversion or otherwise, (ii) issue further shares of Series C, (iii) prior to the earlier of stockholder approval of the Conversion Proposal or the six-month anniversary of the Closing, consummate either: (A) any Fundamental Transaction (as in the Certificate of Designation) or (B) any stock sale to, or any merger, consolidation or other business combination with or into, another entity in which our stockholders immediately before such transaction do not hold at least a majority of the capital stock immediately after such transaction, or (iv) enter into any agreement with respect to any of the foregoing.

Previous wording

The Series C Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of Traws Pharma. Following stockholder approval of the Conversion Proposal, each share of Series C Preferred Stock will automatically convert into 10,000 shares of Common Stock, subject to certain limitations, including that a holder of Series C Preferred Stock is prohibited from converting shares of Series C Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion. The Series C Preferred Stock is redeemable for cash at the option of the holder thereof at any time following the date that is six months after the initial issuance of the Series C Preferred Stock or following any failure to deliver shares of Common Stock in accordance with the terms of the Series C Preferred Stock, at a price per share equal to the then-current fair value of the Series C Preferred Stock on an as-converted basis, as described in the Certificate of Designation.

Current wording

The Series C does not have a preference upon any liquidation, dissolution or winding-up of Traws Pharma. Following stockholder approval of the Conversion Proposal, each share of Series C automatically converted into 10,000 shares of Common Stock, subject to certain limitations, including that a holder of Series C was prohibited from converting shares of Series C into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than 19.9% of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion (the “Beneficial Ownership Limitation”). The Series C is redeemable for cash at the option of the holder thereof at any time following the date that is nine months after the initial issuance of the Series C or following any failure to deliver shares of Common Stock in accordance with the terms of the Series C, at a price per share equal to the then-current fair value of the Series C on an as-converted basis, as described in the Certificate of Designation.

Previous wording

On April 2, 2024, the Company changed its name to Traws Pharma, Inc. pursuant to a certificate of amendment to its Tenth Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware (the “Name Change”). Pursuant to the Delaware General Corporation Law, a stockholder vote was not necessary to effectuate the Name Change and it does not affect the rights of the Company’s stockholders. In addition, effective at the open of market trading on April 3, 2024, our Common Stock ceased trading under the ticker symbol “ONTX” and began trading on the Nasdaq Stock Market under the ticker symbol “TRAW”.

Current wording

On April 2, 2024, the Company changed its name to Traws Pharma, Inc. pursuant to a certificate of amendment to the Charter filed with the Secretary of State of the State of Delaware (the “Name Change”). Pursuant to the Delaware General Corporation Law, a stockholder vote was not necessary to effectuate the Name Change and it does not affect the rights of the Company’s stockholders. In addition, effective at the open of market trading on April 3, 2024, our Common Stock ceased trading under the ticker symbol “ONTX” and began trading on the Nasdaq Stock Market under the ticker symbol “TRAW”.

Previous wording

In connection with the planned Merger, the Company incurred transaction costs of approximately $8.7 million during the six months ended June 30, 2024. The transaction costs were included in the consideration paid to acquire Trawsfynydd and immediately expensed as a component of in-process research and development expense in the statement of operations for the six months ended June 30, 2024.

Current wording

In connection with the planned Merger, the Company incurred transaction costs of approximately $8.7 million during the nine months ended September 30, 2024. The transaction costs were included in the consideration paid to acquire Trawsfynydd and immediately expensed as a component of in-process research and development expense in the statement of operations for the nine months ended September 30, 2024.

Previous wording

Tungsten Partners LLC (“Tungsten”) acted as financial advisor to the Company in connection with the Merger. As compensation for services rendered by Tungsten, the Company issued to Tungsten and its affiliates and designees an aggregate of 168,601 shares of Common Stock and 535 shares of Series C Preferred Stock with an aggregated estimated fair value of $5.0 million and paid approximately $1.0 million in cash in April 2024. All of the compensation to Tungsten was contingent on the closing of the Merger and therefore was expensed in the second quarter of 2024.

Current wording

Tungsten Partners LLC (“Tungsten”) acted as financial advisor to the Company in connection with the Merger. As compensation for services rendered by Tungsten, the Company issued to Tungsten and its affiliates and designees an aggregate of 6,747 shares of Common Stock and 535 shares of Series C with an aggregated estimated fair value of $5.0 million and paid approximately $1.0 million in cash in April 2024. The 535 shares of Series C was subsequently converted into 220,932 shares of Common Stock in connection with the Board’s approval of the Series C conversion. All of the compensation to Tungsten was contingent on the closing of the Merger and therefore was expensed in the second quarter of 2024.

Previous wording

Additional costs will continue to be incurred as Traws Pharma seeks to satisfy the obligations under the Merger Agreement, Stock Purchase Agreement and related agreements.

Current wording

Additional costs will continue to be incurred as the Company seeks to satisfy the obligations under the Merger Agreement, Stock Purchase Agreement and related agreements.

Previous wording

In accordance with the Merger Agreement, three directors were appointed to the Board of Directors of the Company and there were several changes to management, each effective as of the Closing.

Current wording

In accordance with the Merger Agreement, three directors were appointed to the Board of the Company and there were several changes to management, each effective as of the Closing.

Previous wording

On April 8, 2024, the Company terminated 11 of its 17 employees, some of whom have been retained as consultants. Severance costs of $0.9 million were expensed in the second quarter of 2024 and paid according to the Company’s regular payroll schedule.

Current wording

On April 8, 2024, the Company terminated 11 of its 17 employees, some of whom have been retained as consultants. Severance costs of $0.9 million were expensed in the second quarter of 2024 and paid according to the Company’s regular payroll schedule. As of September 30, 2024, $0.1 million in severance costs remains and will be paid through the end of 2024.

Previous wording

The foregoing summaries of the Merger Agreement, Company Stockholder Support Agreements, Trawsfynydd Stockholder Support Agreements, Lock-Up Agreements, CVR Agreement, Certificate of Designation, Certificate of Amendment, Securities Purchase Agreement, Registration Rights Agreement, Employment Agreement of Werner Cautreels and Form of Offer Letter are not complete and are qualified in their entirety by reference to the full texts of the each, copies of which are incorporated by reference as Exhibits 2.1 (including the exhibits thereto), 3.1, 3.2, 10.1, 10.2,

Current wording

The foregoing summaries of the Merger Agreement, Company Stockholder Support Agreements, Trawsfynydd Stockholder Support Agreements, Lock-Up Agreements, CVR Agreement, Certificate of Designation, Certificate of Amendment, Securities Purchase Agreement, Registration Rights Agreement, Employment Agreement of Werner Cautreels and Form of Offer Letter are not complete and are qualified in their entirety by reference to the full texts of each, copies of which are incorporated by reference as Exhibits 2.1 (including the exhibits thereto), 3.1, 3.2, 10.1, 10.2, 10.3 and 10.4 to our Quarterly Report on Form 10-Q for the period ending March 31, 2024, filed with the SEC on May 15, 2024.

Previous wording

Other income, net, was income of $0.2 million for the three months ended June 30, 2024 compared to $0.4 million for the three months ended June 30, 2023. The change was caused by lower interest income in the 2024 period due to lower cash balances.

Current wording

Other income, net, was income of $0.1 million for the three months ended September 30, 2024 compared to $0.4 million for the three months ended September 30, 2023. The change was caused by lower interest income in the 2024 period due to lower cash balances.

Previous wording

Revenues for the six months ended June 30, 2024 were consistent with the six months ended June 30, 2023, and were due to the recognition of deferred revenue from our collaboration with SymBio.

Current wording

Revenues for the nine months ended September 30, 2024 were consistent with the nine months ended September 30, 2023, and were due to the recognition of deferred revenue from our collaboration with SymBio.

Previous wording

Research and development expenses increased by $1.5 million, to $4.0 million for the three months ended June 30, 2024 from $2.5 million for the three months ended June 30, 2023. This increase was caused primarily by the $0.9 million increase in personnel costs associated with our restructuring activities in April and the $1.1 million increase in consulting fees associated with the development of our virology programs acquired in April 2024. These increases were offset by decreases in preclinical and clinical development $0.5 million related to related to narazaciclib.

Current wording

Research and development expenses increased by $2.0 million, or 22%, to $11.0 million for the nine months ended September 30, 2024 from $9.0 million for the nine months ended September 30, 2023. This increase was primarily related to a $4.4 million increase in consulting fees associated with our acquired virology programs and a $1 million increase in personnel related expenses attributable the restructuring activities. In connection with the acquisition of Trawsfynydd we initiated and completed our Phase 1 study for TRX100 in Australia. These increases were offset by a $2.0 million decrease in manufacturing and a $1.0 million decrease in preclinical and clinical costs.

Previous wording

General and administrative expenses increased $1.0 million, or 23%, to $5.3 million for the six months ended June 30, 2024 from $4.3 million for the six months ended June 30, 2023. This increase was attributable to additional consulting fees in connection with seeking strategic alternatives for our investors and increases personnel related expenses attributable to our restructuring activities in April 2024. These increases were offset by lower public company costs and insurance costs.

Current wording

General and administrative expenses increased $1.8 million, or 26%, to $8.8 million for the nine months ended September 30, 2024 from $7.0 million for the nine months ended September 30, 2023. This increase was attributable to a $2.3 million increase in additional consulting fees in connection with seeking strategic alternatives for our investors and increases in personnel related expenses attributable to our restructuring activities in April 2024. These increases were offset by lower public company costs and insurance costs.

Previous wording

Other income, net, was income of $0.4 million for the six months ended June 30, 2024 compared to $0.7 million for the six months ended June 30, 2023. The change was caused by lower interest income in the 2024 period due to lower cash balances.

Current wording

Other income, net, was income of $0.5 million for the nine months ended September 30, 2024 compared to $1.1 million for the nine months ended September 30, 2023. The change was caused by lower interest income in the 2024 period due to lower cash balances.

Previous wording

Since inception, the Company has incurred net losses and experienced negative cash flows from our operations. The Company incurred net losses of $128.1 million for the six months ended June 30, 2024 of which $117.5 million was attributable to non-cash expense recognition associated with the acquired in-process research and development from Trawsfynydd in April 2024. The Company’s operating activities used $14.3 million and $9.0 million of net cash during the six months ended June 30, 2024 and 2023, respectively. At June 30, 2024, the Company had an accumulated deficit of $610.8 million, working capital of $8.8 million, and cash and cash equivalents of $16.9 million. On April 1, 2024, in connection with the Merger described above, the Company entered into a Securities Purchase Agreement for the sale of common and preferred stock to TPAV, LLC, an affiliate of Torrey Pines, and OrbiMed Private Investments VIII, LP, an affiliate of OrbiMed Advisors and raised gross proceeds of $14 million. Based on current projections, and including the proceeds received in the private placement, we do not have sufficient cash and cash equivalents as of the date of this report to support our operations for at least the 12 months following the date that these financial statements are issued. Accordingly, substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that these financial statements are issued. Due to the inherent uncertainty involved in making estimates and the risks associated with the research, development, and commercialization of biotechnology products, we may have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us.

Current wording

Since inception, the Company has incurred net losses and experienced negative cash flows from our operations. The Company incurred net losses of $136.6 million for the nine months ended September 30, 2024 of which $117.5 million was attributable to non-cash expense recognition associated with the acquired in-process research and development from Trawsfynydd in April 2024. The Company’s operating activities used $25.8 million and $13.5 million of net cash during the nine months ended September 30, 2024 and 2023, respectively. At September 30, 2024, the Company had an accumulated deficit of $619.2 million, working capital of $0.6 million, and cash and cash equivalents of $5.4 million. On April 1, 2024, in connection with the Merger described above, the Company entered into the Securities Purchase Agreement and raised gross proceeds of $14 million. Based on current projections, and including the proceeds received in the private placement, we do not have sufficient cash and cash equivalents as of the date of this report to support our operations for at least the 12 months following the date that these financial statements are issued. Accordingly, substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that these financial statements are issued. Due to the inherent uncertainty involved in making estimates and the risks associated with the research, development, and commercialization of biotechnology products, we may have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us.

Previous wording

We will require substantial additional financing to fund our ongoing clinical trials and operations, and to continue to execute our strategy. To alleviate the conditions that raise substantial doubt about our ability to continue as a going concern, we plan to explore various dilutive and non-dilutive sources of funding, including equity financings, strategic alliances, business development and other sources. The future success of the Company is dependent upon our ability to obtain additional funding. There can be no assurance, however, that we will be successful in obtaining such funding in sufficient amounts, on terms acceptable to us, or at all. The failure to obtain sufficient capital on acceptable terms when needed would have a material adverse effect on our business, results of operations and financial condition. Accordingly, we have concluded that substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that these financial statements are issued.

Current wording

We will require substantial additional financing to fund our ongoing clinical trials and operations, and to continue to execute our strategy. To alleviate the conditions that raise substantial doubt about our ability to continue as a going concern, we plan to explore various dilutive and non-dilutive sources of funding, including equity financings, strategic alliances, business development and other sources. The future success of the Company is dependent upon our ability to obtain additional funding. There can be no assurance, however, that we will be successful in obtaining such funding in sufficient amounts, on terms acceptable to us, or at all. The failure to obtain sufficient capital on acceptable terms when needed would have a material adverse effect on our business, results of operations and financial condition.

Previous wording

The following table summarizes the Company’s cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes the Company’s cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

Net cash used in operating activities was $14.3 million for the six months ended June 30, 2024 and consisted primarily of a net loss of $128.1 million and $4.3 million change in operating assets and liabilities. Significant changes in operating assets and liabilities included a net decrease increase in accounts payable and accrued expenses of $4.3 million due to timing of invoices and payments to our vendors. These operating uses of cash were offset by $118.2 million in non-cash charges primarily attributable to the immediate expensing of in-process research and development acquired in connection with the acquisition of Trawsfynydd of $117.5 million and $0.7 million related to stock-based compensation expense.

Current wording

Net cash used in operating activities was $25.8 million for the nine months ended September 30, 2024 and consisted primarily of a net loss of $136.6 million and a $7.7 million change in operating assets and liabilities. Significant changes in operating assets and liabilities included a net decrease in accounts payable and accrued expenses of $5.8 million due to timing of invoices and payments to our vendors. These operating uses of cash were offset by $118.5 million in non-cash charges primarily attributable to the immediate expensing of in-process research and development acquired in connection with the acquisition of Trawsfynydd of $117.5 million and $1.1 million related to stock-based compensation expense.

Previous wording

Net cash used in operating activities was $9.0 million for the six months ended June 30, 2023 and consisted primarily of a net loss of $10.0 million, including $0.6 million of non-cash stock-based compensation expense. Changes in operating assets and liabilities resulted in a net increase in cash of $0.4 million. Significant changes in operating assets and liabilities included an increase in accounts payable of $1.2 million and a decrease in accrued liabilities of $0.6 million due to timing of invoices and payments to our vendors, an increase in prepaid expenses and other current assets of $0.1 million, and a decrease in deferred revenue of $0.1 million due to recognition of the unamortized portion of the upfront payment under our collaboration agreement with SymBio.

Current wording

Net cash used in operating activities was $13.5 million for the nine months ended September 30, 2023 and consisted primarily of a net loss of $14.8 million, including $1.0 million of non-cash stock-based compensation expense and depreciation expense. Changes in operating assets and liabilities resulted in a net increase in cash of $0.3 million. Significant changes in operating assets and liabilities included an increase in accounts payable of $2.3 million and a decrease in accrued liabilities of $0.7 million due to timing of invoices and payments to our vendors, an increase in prepaid expenses and other current assets of $1.2 million, and a decrease in deferred revenue of $0.2 million due to recognition of the unamortized portion of the upfront payment under our collaboration agreement with SymBio.

Previous wording

Net cashed used in investing activities was $3.6 million for the six months ended June 30, 2024 and primarily related to the transaction costs paid in cash of $3.6 million in connection with the acquisition of Trawsfynydd. There were no investing activities during the six months ended June 30, 2023.

Current wording

Net cashed used in investing activities was $3.6 million for the nine months ended September 30, 2024 and primarily related to the transaction costs paid in cash of $3.6 million in connection with the acquisition of Trawsfynydd. Investing activities during the nine months ended September 30, 2023 were immaterial.

Previous wording

Net cashed provided by financing activities was $14.0 million for the six months ended June 30, 2024 and attributable to the net proceeds received from the private placement of our common stock. There were no financing activities during the six months ended June 30, 2023.

Current wording

Net cashed provided by financing activities was $14.0 million for the nine months ended September 30, 2024 and attributable to the net proceeds received from the private placement of our Common Stock. There were no financing activities during the nine months ended September 30, 2023.

Previous wording

We have not achieved profitability since our inception, and we expect to continue to incur net losses for the foreseeable future. We expect net cash expended in 2024 to be higher than 2023 due to the advancement of our clinical trials for narazaciclib and our new clinical-stage anti-viral compounds acquired in the Merger, as well as the significant transaction-related costs and acquired liabilities associated with the Merger. We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice and therefore we believe that, currently, our non-cancelable obligations under these agreements are not material. We believe that our cash and cash equivalents will be sufficient to fund our ongoing trials and operations into the fourth quarter of 2024; therefore, based on current projections, we do not have sufficient cash and cash equivalents to support our operations for at least the 12 months following the date that these financial statements are issued. These conditions raise substantial doubt about our ability to continue as a going concern through the one-year period after the date that the financial statements are issued.

Current wording

We have not achieved profitability since our inception, and we expect to continue to incur net losses for the foreseeable future. We expect net cash expended in 2024 to be higher than 2023 due to the advancement of our clinical trials for narazaciclib and our new clinical-stage anti-viral compounds acquired in the Merger, as well as the significant transaction-related costs and acquired liabilities associated with the Merger. We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice and therefore we believe that, currently, our non-cancelable obligations under these agreements are not material. We believe that our cash and cash equivalents will be sufficient to fund our ongoing trials and operations into the first quarter of 2025; therefore, based on current projections, we do not have sufficient cash and cash equivalents to support our operations for at least the 12 months following the date that these financial statements are issued. These conditions raise substantial doubt about our ability to continue as a going concern through the one-year period after the date that the financial statements are issued.

Previous wording

We are exploring various sources of funding for continued development of our product candidates, as well as our ongoing operations. We expect to incur significant expenses and operating losses for the foreseeable future as we continue the development and clinical trials of, and seek regulatory approval for, our product candidates. If we obtain regulatory approval for any of our product candidates, we expect to incur significant NDA preparation and commercialization expenses. We do not currently have an organization for the sales, marketing, and distribution of pharmaceutical products. We may rely on licensing and co-promotion agreements with strategic or collaborative partners for the commercialization of our products in the United States and other territories. If we choose to build a commercial infrastructure to support marketing in the United States for any of our product candidates that achieve regulatory approval, such commercial infrastructure could be expected to include a targeted oncology sales force supported by sales management, internal sales support, an internal marketing group and distribution support. To develop the appropriate commercial infrastructure internally, we would have to invest financial and management resources, some of which would have to be deployed prior to having any certainty about marketing approval. Furthermore, we have and expect to continue to incur additional costs associated with operating as a public company and to satisfy the obligations under the Merger Agreement, Stock Purchase Agreement and related agreements.

Current wording

We are exploring various sources of funding for continued development of our product candidates, as well as our ongoing operations. We expect to incur significant expenses and operating losses for the foreseeable future as we continue the development and clinical trials of, and seek regulatory approval for, our product candidates. If we obtain regulatory approval for any of our product candidates, we expect to incur significant non-disclosure agreement preparation and commercialization expenses. We do not currently have an organization for the sales, marketing, and distribution of pharmaceutical products. We may rely on licensing and co-promotion agreements with strategic or collaborative partners for the commercialization of our products in the United States and other territories. If we choose to build a commercial infrastructure to support marketing in the United States for any of our product candidates that achieve regulatory approval, such commercial infrastructure could be expected to include a targeted oncology sales force supported by sales management, internal sales support, an internal marketing group and distribution support. To develop the appropriate commercial infrastructure internally, we would have to invest financial and management resources, some of which would have to be deployed prior to having any certainty about marketing approval. Furthermore, we have and expect to continue to incur additional costs associated with operating as a public company and to satisfy the obligations under the Merger Agreement, Stock Purchase Agreement and related agreements.