IRulya Therapeutics Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (i) our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and (ii) our audited consolidated financial statements and related notes and the section titled "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2023 ("Annual Report on Form 10-K") filed with the Securities and Exchange Commission (the “SEC”), on April 1, 2024. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “Quince,” “we,” “us” and “our” refer to Quince Therapeutics, Inc. and "our legacy assets" refer to atuzaginstat (COR388), COR588, COR852, and COR803, collectively.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes, included in “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations, and intentions, that are based on the beliefs of our management. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “Quince,” “we,” “us,” and “our” refer to Quince Therapeutics, Inc. and its consolidated subsidiaries.

Previous wording

We are a late-stage biotechnology company dedicated to unlocking the power of a patient’s own biology for the treatment of rare diseases.

Current wording

We are a late-stage biotechnology company dedicated to unlocking the power of a patient’s own biology for the treatment of rare diseases. Our proprietary AIDE technology is an innovative drug/device combination platform that uses an automated process to encapsulate a drug into a patient’s own red blood cells. Red blood cells have several characteristics that make them an excellent vehicle for drug delivery potential including better safety and tolerability, enhanced tissue distribution, reduced immunogenicity, and prolongation of circulating half-life. Our AIDE technology is designed to harness many of these benefits to allow for new and improved therapeutic options for patients living with high unmet medical needs. eDSP is the first product in development that leverages our AIDE technology and is composed of DSP encapsulated in autologous red blood cells targeted to treat a rare pediatric neurodegenerative disease, A-T. DSP is a corticosteroid well-described for its anti-inflammatory properties, but is also coupled with serious adverse events, including adrenal suppression. eDSP is designed to maintain the well-described efficacy of DSP while reducing or eliminating the significant adverse events that accompany chronic corticosteroid treatment. The altered biodistribution, pharmacokinetics, and pharmacodynamics of eDSP enabled by autologous red blood cells may, therefore, improve the safety profile, and maintain or increase the desired therapeutic effect of DSP.

Previous wording

We also completed a patient sizing project with third-party analysis from IQVIA Medical Claims (Dx), PharmetricsPlus (P+), and IQVIA Analytics, which confirmed that there are approximately 4,600 diagnosed patients with A-T in the U.S. Currently, there are no approved treatments for A-T and the global market, based on our internal estimates and assumptions, represents a more than $1 billion peak commercial opportunity. We believe this could allow EryDex to demonstrate the clinical benefit and commercial potential of our AIDE technology.

Current wording

Currently, there are no approved treatments for A-T and the global market, based on our internal estimates and assumptions, represents a more than $1 billion peak commercial opportunity. We believe this makes eDSP an ideal lead asset to demonstrate the clinical and commercial potential of our AIDE technology.

Previous wording

With the acquisition of EryDel, we expect our research and development expenses to remain in the current levels as we continue our Phase 3 NEAT clinical trial and potentially expand into new indications.

Current wording

We expect our research and development expenses to remain in the current levels as we continue our Phase 3 NEAT clinical trial and expand into new indications, including Phase 2 study in DMD.

Previous wording

We record fair value adjustment for contingent consideration primarily due to the passage of time related to the contingent consideration earnout resulting from the EryDel Acquisition. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations.

Current wording

We record fair value adjustment for contingent consideration primarily due to the expected timing of achieving various milestones, and the passage of time related to the contingent consideration earnout resulting from the EryDel Acquisition. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations.

Previous wording

Interest and other income, net consists primarily of interest earned on our short-term and long-term investments portfolio.

Current wording

Interest income consists primarily of interest earned on our short-term and long-term investments portfolio.

Previous wording

Research and development expenses were $4.9 million for the three months ended September 30, 2024, compared to $1.4 million for the three months ended September 30, 2023, an increase of $3.5 million.

Current wording

Research and development expenses were $8.1 million for the three months ended March 31, 2025, compared to $3.7 million for the three months ended March 31, 2024, an increase of $4.4 million.

Previous wording

The costs for EryDex development increased by $8.9 million compared to the same period from the prior year due to the start-up and ramping up costs related to our Phase 3 NEAT clinical trial. This increase was primarily due to clinical trial costs of $8.1 million and $0.8 million in manufacturing costs.

Current wording

The costs for eDSP development increased by $3.4 million compared to the same period from the prior year due to the ramping up and continuation costs related to our Phase 3 NEAT clinical trial and OLE. This increase was primarily due to clinical trial costs of $6.2 million and $0.1 million in manufacturing costs.

Previous wording

Our personnel related costs decreased by $0.1 million during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, mainly as a result of a $0.6 million decrease in allocated stock-based compensation costs, offset by a $0.5 million increase in personnel related expenses.

Current wording

Our personnel related costs increased by $0.9 million during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, mainly as a result of incurring a $0.4 million severance costs and $0.3 million in allocated stock-based compensation costs.

Previous wording

Facilities and other research and development expenses increased by $31.0 thousand for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023 primarily due to an increase in rent and facilities expenses.

Current wording

Facilities and other research and development expenses decreased by $39 thousand for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 primarily due to a decrease in storage and facilities expenses.

Previous wording

General and administrative expenses decreased by $1.03 million to $3.63 million for the three months ended September 30, 2024, from $4.66 million for the three months ended September 30, 2023. The decrease in general and administrative expenses is primarily due to a decrease of $0.9 million in consulting and professional fees, $0.5 million decrease in legal fees, and $0.1 million decrease in corporate insurance. These decreases were partially offset by an increase of $0.1 million in personnel related expenses, $0.1 million increase in audit and tax fees, $0.1 million increase in commercial and new product planning expenses, and $0.1 million increase in other professional and administrative expenses year over year.

Current wording

General and administrative expenses decreased by $0.2 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The change in general and administrative expenses is primarily due to a decrease of $0.1 million in consulting and professional expenses and $0.2 million in other professional and administrative expenses. These decreases were partially offset by an increase of $0.1 million in personnel-related expenses.

Previous wording

For the three months ended September 30, 2024, we recorded a fair value adjustment for long-term debt which resulted in a $0.4 million charge primarily due to the passage of time and the interest accrued for the loan with the EIB.

Current wording

For the three months ended March 31, 2025, we recorded a fair value adjustment for long-term debt which resulted in a $0.4 million charge primarily due to the passage of time and the interest accrued and paid for the loan with the EIB.

Previous wording

Interest income decreased by $276.0 thousand for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The change was due to a decreased yields on our investment portfolio which and decreased average balances.

Current wording

Interest income decreased by $0.5 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The change was due to decreased yields on our investment portfolio and decreased average balances.

Previous wording

Other income (expense), net increased by $0.4 million for the three months ended September 30, 2024 primarily due to $0.3 million unrealized gains resulting from changes in foreign exchange rates.

Current wording

Other expense, net decreased by $0.3 million for the three months ended March 31, 2025 primarily due to the effects resulting from changes in foreign exchange rates.

Previous wording

We recorded tax expense of $0.1 million for the nine months ended September 30, 2024 and tax benefit of $0.2 million for the nine months ended September 30, 2023. The change is primarily related to foreign withholding tax, interest on uncertain tax position liability and net of tax benefit from decrease in EryDel's deferred tax liabilities.

Current wording

We recorded tax expense of $47 thousand for the three months ended March 31, 2025 and $31 thousand for the three months ended March 31, 2024. Tax expense is primarily driven by foreign withholding tax, interest on uncertain tax position liability and net of tax benefit from decrease in EryDel's deferred tax liabilities.

Previous wording

To date, we have financed our operations primarily through the issuance and sale of convertible promissory notes and redeemable convertible preferred stock and common stock. From inception through September 30, 2024, we received net proceeds of approximately $303.9 million from the issuance of redeemable convertible preferred stock, convertible promissory notes and common stock.

Current wording

We have not generated any revenue and we have never been profitable. To date, we have financed our operations primarily through the issuance and sale of convertible promissory notes and redeemable convertible preferred stock and common stock. From inception through March 31, 2025, we received net proceeds of approximately $304.2 million from the issuance of redeemable convertible preferred stock, convertible promissory notes and common stock.

Previous wording

To date, we have not generated any revenue and we have never been profitable. We have incurred net losses since the commencement of our operations. As of September 30, 2024, we had an accumulated deficit of $364.0 million. We incurred a net loss of $44.4 million in the nine months ended September 30, 2024. We do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize a drug candidate, and we cannot assure you that we will ever generate significant revenue or profits.

Current wording

We have incurred net losses since the commencement of our operations. As of March 31, 2025, we had an accumulated deficit of $391.5 million. We incurred a net loss of $15.0 million in the three months ended March 31, 2025. We do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize a drug candidate, and we cannot assure you that we will ever generate significant revenue or profits.

Previous wording

As of September 30, 2024 and December 31, 2023, we had cash, cash equivalents and short-term investments of $47.8 million and $75.1 million, respectively. Based on our current business plans, we believe that our existing capital resources will be sufficient to fund our projected operating requirements for at least the next twelve months from the date of the issuance of the accompanying condensed consolidated financial statements. Our cash, cash equivalents, and marketable debt securities are held in a variety of deposit accounts, interest-bearing accounts, U.S government securities, debt securities in government-sponsored entities, and money market funds. Cash in excess of immediate requirements is invested with a view toward liquidity and capital preservation, and we seek to minimize the potential effects of concentration and credit risk. Our cash equivalents and short-term investments are held in money market funds, certificate of deposits, and government agency obligations.

Current wording

Our cash, cash equivalents, and marketable debt securities are held in a variety of deposit accounts, interest-bearing accounts, U.S government securities, debt securities in government-sponsored entities, and money market funds. Cash in excess of immediate requirements is invested with a view toward liquidity and capital preservation, and we seek to minimize the potential effects of concentration and credit risk. Our cash equivalents and short-term investments are held in money market funds, certificate of deposits, and government agency obligations.

Previous wording

We believe that our existing cash, cash equivalents and investments will be sufficient to fund our planned operations into the first quarter of 2026, but does not include any costs or cash expenditures associated with initiating additional programs. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Current wording

While we currently believe that our existing cash, cash equivalents and investments will be sufficient to fund our planned operations through Phase 3 NEAT topline results expected in early 2026, that assumption does not include any costs or cash expenditures associated with initiating additional programs.

Previous wording

Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to EryDex, the initiation and continuation of the Phase 3 NEAT clinical trial, and general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Current wording

Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to eDSP, the initiation and continuation of the Phase 3 NEAT clinical trial and OLE, and general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Previous wording

We may continue to require additional capital to develop our drug candidates and fund operations for the foreseeable future. We may seek to raise capital through private or public equity or debt financings, collaborative or other arrangements with other companies, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. Following our acquisition of EryDel, we anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including:

Current wording

We expect that we will require additional capital to develop our drug candidates and fund operations for the foreseeable future. We may seek to raise capital through private or public equity or debt financings, collaborative or other arrangements with other companies, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including:

Previous wording

•payment of future milestones to EryDel shareholders and payments to the EIB in respect of obligations under the EIB Facility;

Current wording

•payment of future milestones to EryDel shareholders and payments to the EIB in respect of obligations under the EIB Loan;

Previous wording

If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to other rights to our drug candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.

Current wording

If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to others rights to our drug candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.

Previous wording

In connection with the acquisition of EryDel on October 20, 2023, we assumed an unsecured line of credit between EryDel and the European Investment Bank (the "EIB Loan"). The EIB Loan was amended and restated as of the acquisition date. The EIB Loan provides for maximum borrowings of 30.0 million euro through four tranches; tranche A, 3.0 million euro; tranche B, 7.0 million euro; tranche C, 10.0 million euro; and tranche D, 10.0 million euro. Each tranche is subject to conditions precedent related to our business and capitalization. As of September 30, 2024, only tranches A and B have been drawn. All amounts due under tranche A and B are payable on their maturity date of August 2026. Tranche C and D are payable in equal installments of principal together with all amounts outstanding under the tranches on the repayment dates specified in the relevant Disbursement Offer. The first Repayment Date of tranche C shall fall not earlier than twelve months from the Disbursement Date of such tranche. The last Repayment Date of tranche C and tranche D shall fall not later than 5 years from the Disbursement Date of tranche C and tranche D, respectively. The EIB Loan bears interest at fixed rates for each tranche and is payable on the maturity date for each Tranche. The fixed rates range from 7.0% to 9.0% per annum. As of September 30, 2024, principal of 10.0 million euros ($11.2 million) was outstanding on the EIB Loan and it is recorded as Long-term debt on the condensed consolidated balance sheet at fair value with imputed interest of 9.0% included.

Current wording

In connection with the acquisition of EryDel on October 20, 2023, we guaranteed the EIB Loan. The EIB Loan was amended and restated as of the acquisition date. The EIB Loan provides for maximum borrowings of 30.0 million euro through four tranches; tranche A, 3.0 million euro; tranche B, 7.0 million euro; tranche C, 10.0 million euro; and tranche D, 10.0 million euro. Each tranche is subject to conditions precedent related to our business and capitalization. As of March 31, 2025, only tranches A and B have been drawn. All amounts due under tranche A and B are payable on their maturity date of August 2026. Tranche C and D are payable in equal installments of principal together with all amounts outstanding under the tranches on the repayment dates specified in the relevant disbursement offer. The first repayment date of tranche C shall fall not earlier than twelve months from the disbursement date of such tranche. The last repayment date of tranche C and tranche D shall fall not later than 5 years from the disbursement date of tranche C and tranche D, respectively. The EIB Loan bears interest at fixed rates for each tranche and both principal and interest are payable on the maturity date for each tranche (with the exception of 2% cash interest which shall accrue and be payable quarterly during fiscal year 2025 pursuant to the terms of the Amendment, which shall correspondingly reduce the deferred interest rate accruing during such period). The fixed rates range from 7.0% to 9.0% per annum. As of March 31, 2025, principal of 10.0 million euros ($10.8 million) was outstanding on the EIB Loan and it is recorded as Long-term debt on the consolidated balance sheet at fair value with imputed interest of 9.0% included.

Previous wording

We may voluntarily prepay, in whole or in part with a prepayment premium. In the event of an occurrence of an event of default, a change in control and certain other prepayment events, as specified in the Debt Agreement, we will be required to prepay the outstanding EIB Debt together with an additional remuneration buyout fee, as specified in the Debt Agreement. The Debt Agreement includes a provision for additional remuneration to be paid in addition to interest. The amount of additional remuneration to be paid is equal to 2.5% of revenue up to 125.0 million euros, plus 1.85% of revenue between 125.0 and 250.0 million euros, plus 1.0% of revenue in excess of 250.0 million euros, multiplied by a varying percentage based on how many tranches have been drawn. The varying percentage is equal to 30.0% in the event tranche A has been drawn, 50.0% in the event tranche A and B have been drawn, 80.0% in the event tranche A, B and C have been drawn, and 100.0% in the event all four tranches have been drawn. The additional remuneration is payable for seven years, during the period January 1, 2026, through December 31, 2032. In the event of an occurrence of an event of default or prepayment, we may be required to pay an additional remuneration buyout fee.

Current wording

We may voluntarily prepay, in whole or in part with a prepayment premium. In the event of an occurrence of an event of default, a change in control and certain other prepayment events, as specified in the Debt Agreement, we will be required to prepay the outstanding EIB Loan together with an additional remuneration buyout fee, as specified in the Debt Agreement. The Debt Agreement includes a provision for additional remuneration to be paid in addition to interest. The amount of additional remuneration to be paid is equal to 2.5% of revenue up to 125.0 million euros, plus 1.85% of revenue between 125.0 and 250.0 million euros, plus 1.0% of revenue in excess of 250.0 million euros, multiplied by a varying percentage based on how many tranches have been drawn. The varying percentage is equal to 30.0% in the event tranche A has been drawn, 50.0% in the event tranche A and B have been drawn, 80.0% in the event tranche A, B and C have been drawn, and 100.0% in the event all four tranches have been drawn. The additional remuneration is payable for seven years, during the period January 1, 2026, through December 31, 2032. In the event of an occurrence of an event of default or prepayment, we may be required to pay an additional remuneration buyout fee.

Previous wording

In November 2024, the Company entered into an amendment (the “Amendment”) of the Debt Agreement with EIB which waives the Minimum Cash Covenant from January 1, 2025 and up to the earlier of December 31, 2025, or the date the Minimum Cash Covenant is restored. Under the terms of the Amendment, the Company agreed to amendments requiring monthly reporting of cash balances and additional limitations on certain permitted acquisitions. Additionally, during the waiver period, the Company agreed to convert 2% of the total 9% deferred interest on Tranches A and B to be payable quarterly, with the first payment due on March 31, 2025, and a one-time fee of 20,000 euros in connection with the Amendment.

Current wording

The Debt Agreement requires us to maintain a minimum cash balance of 14.65 million euros ($15.8 million) until the outstanding obligations under the Debt Agreement, together with accrued interest and all other amounts accrued or outstanding under the agreement, is repaid in full (the “Minimum Cash Covenant”). In November 2024, we entered into an amendment (the “Amendment”) of the Debt Agreement with EIB which waives the Minimum Cash Covenant from January 1, 2025, and up to the earlier of December 31, 2025, or the date the Minimum Cash Covenant is restored (such period, the “Waiver Period”). Under the terms of the Amendment, we agreed to amendments requiring monthly reporting of cash balances and additional limitations on certain permitted acquisitions. Additionally, solely during the waiver period, 2% cash interest on the outstanding principal amounts of tranches A and B are payable on March 31, 2025, June 30, 2025, September 30, 2025 and December 31, 2025, reducing the total deferred interest on tranches A and B to 7% for the duration of the Waiver Period, and a one-time fee of 20,000 euros in connection with the Amendment. As of March 31, 2025, we have been in compliance with all covenants under the Debt Agreement.

Previous wording

Cash used in operating activities was $12.2 million for the nine months ended September 30, 2023. Cash used in operating activities was primarily due to our net loss of $22.5 million for the period, adjusted for $8.6 million of non-cash items, including $4.1 million in stock-based compensation and $5.9 million in impairment loss due to the write down of the IPR&D asset, as well as a net increase in our current assets of $2.4 million, offset by a net decrease in accounts payable, accrued expenses and other current liabilities of $0.7 million.

Current wording

Net cash used in operating activities was $9.6 million for the three months ended March 31, 2025. Cash used in operating activities was primarily due to our net loss of $15.0 million for the period, adjusted for $3.4 million of non-cash items, including $1.9 million change in the fair value of contingent consideration liabilities, $1.4 million in stock-based compensation, $0.4 million change in the fair value of the EIB Loan and a net decrease in our operating assets of $1.1 million, offset by a net increase in our accounts payable, and accrued expenses and other current liabilities of $0.9 million.

Previous wording

Cash used in operating activities was $24.4 million for the nine months ended September 30, 2024. Cash used in operating activities was primarily due to our net loss of $44.4 million for the period, adjusted for $22.4 million of non-cash items, including $17.1 million goodwill impairment charge, $2.1 million change in the fair value of contingent consideration liabilities, $3.6 million in stock-based compensation, and a net increase in our operating assets of $2.5 million, offset by a net increase in our accounts payable, and accrued expenses and other current liabilities of $0.1 million.

Current wording

Net cash used in operating activities was $8.4 million for the three months ended March 31, 2024. Cash used in operating activities was primarily due to our net loss of $11.1 million for the period, adjusted for $3.6 million of non-cash items, including $2.5 million change in the fair value of contingent consideration liabilities, $1.3 million in stock-based compensation, and a net decrease in accounts payable, accrued expenses and other current liabilities of $0.3 million, partially offset by increases in our current assets of $0.5 million.

Previous wording

Cash provided by investing activities was $11.0 million for the nine months ended September 30, 2024, primarily related to the maturities of short-term investments of $100.7 million, and the purchase of investments of $89.6 million.

Current wording

Cash provided by investing activities was $10.9 million for the three months ended March 31, 2025, primarily related to the maturities of short-term investments of $13.0 million, and the purchase of investments of $2.0 million.

Previous wording

Cash used by investing activities was $11.1 million in the nine months ended September 30, 2023, primarily related to the purchase of investments of $95.1 million, and maturities of investments of $84.5 million.

Current wording

Cash provided by investing activities was $8.9 million in the three months ended March 31, 2024, primarily related to the maturities of short-term investments of $48.2 million, and the purchase of investments of $39.3 million.

Previous wording

Cash used in financing activities was $4.8 million for the nine months ended September 30, 2024, which consisted of a cash milestone payment of $5 million, partially offset by proceeds of $0.2 million from the exercise of stock options in the period.

Current wording

Cash used in financing activities was $0.1 million for the three months ended March 31, 2025, which consisted of net proceeds from the exercise of stock options in the period.

Previous wording

Cash provided by financing activities was $0.1 million in the nine months ended September 30, 2023, which consisted of net proceeds from the exercise of stock options in the period.

Current wording

Cash provided by financing activities was $0.2 million in the three months ended March 31, 2024, which consisted of net proceeds from the exercise of stock options in the period.

Previous wording

We enter into contracts in the normal course of business with third party contract organizations for clinical trials, non-clinical studies and testing, manufacturing, and other services and products for operating purposes. The amount and timing of the payments under these contracts varies based upon the timing of the services. We have recorded accrued expense of approximately $1.5 million in our condensed consolidated balance sheet for expenditures incurred by these vendors as of September 30, 2024. We have approximately $27.5 million in cancellable future operating expense commitments based on existing contracts as of September 30, 2024. These obligations will be satisfied in the normal course of business, but generally no longer than 12 months. As of September 30, 2024, the fair value of the EIB loan is $14.9 million and it is recorded as long-term debt on the condensed consolidated balance sheet at fair value. As of September 30, 2024, the fair value of long-term contingent consideration on our books for the earnout related to the EryDel Acquisition is $54.8 million, refer to Note 3 to the condensed consolidated financial statements for further details.

Current wording

We enter into contracts in the normal course of business with third party contract organizations for clinical trials, non-clinical studies and testing, manufacturing, and other services and products for operating purposes. The amount and timing of the payments under these contracts varies based upon the timing of the services. We have recorded accrued expense of approximately $5.3 million in our condensed consolidated balance sheet for expenditures incurred by these vendors as of March 31, 2025. We have approximately $22.8 million in cancellable future operating expense commitments based on existing contracts as of March 31, 2025. These obligations will be satisfied in the normal course of business, but generally no longer than 12 months. As of March 31, 2025, the fair value of the EIB Loan is $15.3 million and it is recorded as long-term debt on the condensed consolidated balance sheet at fair value. As of March 31, 2025, the fair value of long-term contingent consideration on our books for the earnout related to the EryDel Acquisition is $58.6 million, refer to Note 3 to the condensed consolidated financial statements for further details.