# Bolt Biotherapeutics, Inc.: Form 10-Q for the period ended Jun 30, 2024

- Company: [Bolt Biotherapeutics, Inc.](/companies/bolt.md) (CIK 1641281)
- Form: 10-Q
- Filed: 2024-08-13
- Accepted by EDGAR: Aug 13, 2024, 16:10 ET
- Period: 2024-06-30
- Accession: 0000950170-24-096200
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1641281/000095017024096200/bolt-20240630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1641281/000095017024096200/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-04-01 to 2024-06-30 | $1.3m | us-gaap:Revenues |
| Revenue | 6 months, 2024-01-01 to 2024-06-30 | $6.5m | us-gaap:Revenues |
| Research and development | 3 months, 2024-04-01 to 2024-06-30 | $15.4m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2024-01-01 to 2024-06-30 | $32.0m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | −$22.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-01-01 to 2024-06-30 | −$39.7m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | −$21.2m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | −$32.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.56 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | −$0.84 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.56 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | −$0.84 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 38,128,344 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-01-01 to 2024-06-30 | 38,098,383 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | −$32.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2024-01-01 to 2024-06-30 | $0 | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-06-30 | $6.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $76.6m | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $124.2m | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $17.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $38.3m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-06-30 | $85.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 37,076 characters.

*The following discussion and analysis of our financial condition as of June 30, 2024 and results of operations for the three and six months ended June 30, 2024 and 2023 should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and in our other SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 21, 2024. Except as otherwise indicated herein or as the context otherwise requires, references in this Quarterly Report on Form 10-Q to “Bolt Bio,” “the Company,” “we,” “us” and “our” refer to Bolt Biotherapeutics, Inc.*

### Overview

We are a clinical-stage biopharmaceutical company developing novel immunotherapies for the treatment of cancer. Our pipeline candidates are built on our deep expertise in myeloid biology and cancer drug development. Our various approaches use pattern recognition receptors expressed by the innate immune system to help the body eliminate tumor cells as part of a productive anti-cancer response. Our proprietary Boltbody™ ISAC platform technology combines tumor-targeting antibodies with immune-stimulating linker-payloads. We believe this approach has the potential to create products that work with a patient’s own immune system, resulting in anti-cancer efficacy good tolerability. Having explored more than one hundred distinct linker-payloads and multiple tumor targets, we know the importance of both the linker-payload and the antibody and have developed a library of linker-payloads for use in our own development programs and in our collaborations.

BDC-3042, our Dectin-2 agonist antibody program, is being developed to repolarize critical cells in the tumor microenvironment known as tumor-associated macrophages (TAMs). Dectin-2 agonism changes these TAMs from tumor-supportive macrophages to tumor-destructive macrophages that elicit durable anti-tumor immune responses in preclinical models. We received the Investigational New Drug Application, or IND, clearance from the FDA in July 2023. In October 2023, we dosed the first patient with BDC-3042 in the Phase 1 dose-escalation study in patients with a broad range of solid tumors. BDC-3042 has now completed the first five dose escalation cohorts without experiencing a dose-limiting toxicity.

We recently selected BDC-4182 as our next clinical candidate. BDC-4182 utilizes our next-generation Boltbody™ ISAC technology and targets the Claudin 18.2 tumor associated antigen. Claudin 18.2 is a clinically validated target in oncology with zolbetuximab, a first-in-class Claudin 18.2-targeted monoclonal antibody, receiving commercial approval in Japan in March 2024 for patients with Claudin 18.2-positive, unresectable, advanced or recurrent gastric cancer. Other programs targeting Claudin 18.2 are in development for the treatment of gastric/gastroesophageal junction cancer, pancreatic cancer, and other tumor types. BDC-4182 is currently in IND-enabling activities. Clinical candidate selection was supported by in vitro and in vivo experiments demonstrating potent anti-tumor activity in multiple preclinical models, safety and tolerability in a non-GLP non-human primate toxicology study, and enhanced preclinical efficacy compared to cytotoxic ADCs in murine tumor models. Data on our Claudin 18.2 Boltbody ISAC program was presented at the Society for Immunotherapy of Cancer’s (SITC) 2023 Annual Meeting in October. We expect to initiate our first in human clinical trial in 2025.

On May 14, 2024, we announced a strategic pipeline prioritization and restructuring plan pursuant to which we will discontinue developing trastuzumab imbotolimod, formerly known as BDC-1001, in order to focus on our Phase 1 asset, BDC-3042, and our next generation Boltbody™ ISAC platform including new clinical candidate BDC-4182, targeting Claudin 18.2 and reduce overall operating expenses. The restructuring plan reduced our workforce by approximately 50 employees, or approximately 50% of our workforce. We estimate the total restructuring charges amounting to $3.6 million, which consist of $2.9 million of one-time termination benefits such as severance costs and related benefits and $0.7 million of non-cash stock-based compensation expense. The severance payments commenced in July 2024 an will extend through July 2025.

Since our inception in January 2015, we have focused primarily on organizing and staffing our company, business planning, licensing, developing intellectual property, raising capital, developing our product candidates, and conducting preclinical studies and clinical trials. Prior to the completion of our initial public offering in February 2021, we funded our operations primarily through private placements of our convertible preferred stock for gross proceeds of $173.7 million. In February 2021, we completed our initial public offering of 13,225,000 shares of our common stock at a price to the public of $20.00 per share, including the exercise in full by the underwriters of their option to purchase 1,725,000 additional shares of our common stock. Including the option exercise, the aggregate net proceeds to us from the offering was approximately $242.0 million, net of underwriting discounts, commissions, and other offering expenses. In May 2021, we issued 821,045 shares of our common stock to Genmab for gross proceeds of approximately $15.0 million.

We have not recorded any revenue from product sales. To date, our only revenue has been derived from our collaborations with Toray, Genmab, and Innovent. In March 2019, we entered into the Toray Agreement to jointly develop and commercialize a Boltbody ISAC utilizing a Toray proprietary antibody. In May 2021, we entered into an oncology research and development collaboration with Genmab to evaluate Genmab antibodies and bispecific antibody engineering technologies in combination with our proprietary Boltbody ISAC technology platform, with the goal of discovering and developing next-generation bispecific ISACs for the treatment of cancer. The research collaboration will evaluate multiple bispecific ISAC product candidate concepts with the potential to identify up to three clinical candidates for development. In August 2021, we entered into an oncology research and development collaboration with Innovent to leverage Innovent’s proprietary therapeutic antibody portfolio and antibody discovery capability against undisclosed oncology targets in combination with our Boltbody ISAC technology and myeloid biology expertise to create new candidates for cancer treatments. The Innovent collaboration was amended in March 2024, when we secured exclusive worldwide rights to ISAC programs utilizing specified antibodies against two tumor antigen targets. We expect our collaborations with Toray and Genmab to add additional novel ISACs to our pipeline.

We have incurred operating losses since our inception. Our net losses were $21.2 million and $32.0 million for the three and six months ended June 30, 2024, respectively, and $18.1 million and $35.0 million for the same periods in 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $396.3 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative and restructuring costs associated with our operations. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we:

- conduct our ongoing and planned clinical trials;
- continue our research and development programs;
- continue our clinical, regulatory, quality and manufacturing capabilities;
- seek regulatory approvals for our product candidates; and
- operate as a public company.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our planned clinical trials and preclinical studies, and our expenditures on other research and development activities.

### Business Conditions and Macroeconomic Factors

Macroeconomic factors, such as increased inflation and interest rates, financial and credit market fluctuations, changes in economic policy, global supply chain constraints, and recent and potential disruptions in access to bank deposits due to bank failures, have had, and we believe will continue to have, an impact on our business and results of operations. Similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

The effects of a pandemic or major geopolitical developments, and associated economic conditions, remain difficult to predict due to numerous uncertainties. We believe that the direct and indirect impacts of these business conditions and macroeconomic factors are difficult to isolate or quantify. See Part I, Item 1A, Risk Factors below and in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 21, 2024, and the Special Note Regarding Forward-Looking Statements elsewhere in this Quarterly Report for additional details. We will continue to closely monitor and evaluate the nature and extent of these macroeconomic factors on our business, consolidated results of operations, and financial condition.

### Components of Results of Operations

### Revenue

To date our only revenue has been collaboration revenue derived from our collaborations with Toray, Genmab, and Innovent. We are collaborating with Toray to develop a Boltbody ISAC that incorporates a proprietary Toray antibody against a novel tumor antigen target. We are jointly responsible for early-stage development and for providing technical and regulatory support, and Toray will pay for the program expenses through the end of Phase 1 development. In conjunction with the collaboration, Toray purchased 717,514 shares of our Series T convertible preferred stock for $10.0 million, which were converted into shares of our common stock upon the completion of our IPO in February 2021. We evaluated the collaboration together with Toray’s purchase of Series T convertible preferred stock and allocated $1.5 million from the stock purchase proceeds to deferred revenue, which we recognize, together with payments received from Toray as compensation based on agreed-upon full-time equivalent rates and out-of-pocket costs, as collaboration revenue over time as we fulfill our performance obligation to Toray.

In May 2021, we entered into an oncology research and development collaboration with Genmab to evaluate Genmab antibodies and bispecific antibody engineering technologies in combination with our proprietary Boltbody ISAC technology platform, with the goal of discovering and developing next-generation bispecific ISACs for the treatment of cancer. The research collaboration will evaluate multiple bispecific ISAC concepts to identify up to three clinical candidates for development. Genmab will fund the research, along with the preclinical and clinical development of these candidates through initial clinical proof of concept. Under the Genmab Agreement, we received an upfront payment of $10.0 million and in conjunction with the collaboration, Genmab purchased 821,045 shares of our common stock for $15.0 million. We evaluated the collaboration together with Genmab’s purchase of our common stock and allocated $1.4 million from the stock purchase proceeds, together with the $10.0 million upfront payment, to deferred revenue. We recognize this deferred revenue, together with payments received from Genmab for compensation based on agreed-upon full-time equivalent rates and out-of-pocket costs, as collaboration revenue over time as we fulfill our performance obligation to Genmab.

In August 2021, we entered into an oncology research and development collaboration with Innovent, or the Original Innovent Agreement, to leverage Innovent’s proprietary therapeutic antibody portfolio and antibody discovery capability against undisclosed oncology targets in combination with our Boltbody ISAC technology and myeloid biology expertise to create new candidates for cancer treatments. Under the Original Innovent Agreement, the Company received an upfront payment of $5.0 million. We allocated the entire $5.0 million upfront payment to deferred revenue, which we recognized together with other payments received from Innovent as collaboration revenue over time as we fulfilled our performance obligation to Innovent. The Innovent agreement, as amended in March 2024, or the Amended Innovent Agreement, no longer meets the criteria under ASC 606. $2.5 million of deferred revenue allocated to the unsatisfied performance obligation as of the contract modification date was recognized as revenue in the three months ended March 31, 2024.

We expect that any collaboration revenue we generate from our current collaborations, and from any future collaboration partners, will fluctuate in the future as a result of the timing and outcome of development activities and the timing and amount paid, including upfront and milestone payments, and other factors.

We have not generated any revenue from product sales, and we do not expect to generate any revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our product candidates.

### Operating Expenses

#### Research and Development

Research and development expenses have related primarily to early research and discovery activities and to preclinical and clinical development of our product candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

Research and development expenses include:

- costs related to manufacturing our product candidates for clinical trials and preclinical studies, including fees paid to third-party CDMOs;
- salaries, payroll taxes, employee benefits and stock-based compensation charges for those individuals involved in research and development efforts;
- external research and development expenses, including lab materials and supplies and payments to CROs, investigative sites, and consultants to conduct our clinical trials and preclinical and non-clinical studies; and
- facilities and other allocated expenses which include direct and allocated expenses for rent, insurance, and other supplies.

Our direct research and development expenses consist principally of external costs, such as fees paid to CROs and consultants in connection with our clinical and preclinical studies and costs related to manufacturing materials for our studies. Since our inception and through June 30, 2024, the majority of our third-party expenses were related to the research and development of trastuzumab imbotolimod, BDC-3042, and other product candidates. With the exception of costs incurred to satisfy our performance obligations under our collaboration agreements, we do not allocate employee costs and costs associated with our discovery efforts, laboratory supplies, and facilities, including other indirect costs, to specific product candidates as these costs are associated with multiple programs and, as such, are not separately classified. We use internal resources primarily to conduct our research as well as for managing our preclinical development, process development, manufacturing, and clinical development activities. We deploy our personnel across all of our research and development activities and, as our employees work across multiple programs, we do not currently track our costs by product candidate.

We expect to continue to incur research and development expenses for the foreseeable future as we continue the development of our product candidates, particularly as product candidates in later stages of development generally have higher development costs. We cannot determine with certainty the timing of initiation, the duration or the completion costs of future clinical trials and preclinical studies of our product candidates due to the inherently unpredictable nature of clinical and preclinical development. Clinical and preclinical development timelines, and the probability of success and development costs can differ materially from expectations.

We anticipate that we will make determinations as to which product candidates and development programs to pursue and how much funding to direct to each product candidate or program on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments, and our ongoing assessments of each product candidate’s commercial potential. We will need to raise substantial additional capital in the future. In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Our future clinical development costs may vary significantly based on factors such as:

- the number and scope of preclinical and IND-enabling studies;
- per-patient trial costs;
- the number of trials required for approval;
- the number of sites included in the trials;
- the countries in which the trials are conducted;
- the length of time required to enroll eligible patients;
- the number of patients who participate in the trials;
- the number of doses that patients receive;
- the drop-out or discontinuation rates of patients;
- potential additional safety monitoring requested by regulatory agencies;
- the duration of patient participation in the trials and through all follow-up;
- the cost and timing of manufacturing our product candidates;
- the phase of development of our product candidates; and
- the safety and efficacy profile of our product candidates.

#### General and Administrative

General and administrative expenses consist primarily of salaries and employee-related costs, including stock-based compensation, for personnel in executive, finance, and other administrative functions. Other significant costs include legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services, and facility-related costs. We expect to continue to incur general and administrative expenses for the foreseeable future to support our ongoing research and development activities and the costs of operating as a public company. These costs will likely include expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements, director and officer insurance premiums and investor relations costs associated with operating as a public company.

#### Restructuring Charges

Restructuring charges consist of one-time termination benefits such as severance costs and related benefits and stock-based compensation charges associated with a reduction-in-force.

### Results of Operations

### Comparison of the three and six months ended June 30, 2024 and 2023

*(Unaudited, in thousands)*

*(Unaudited, in thousands)*

|  | Three Months Ended June 30, 2024 | 2023 | Change | Six Months Ended June 30, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Collaboration revenue | $1,275 | $1,433 | $(158) | $6,549 | $3,259 | $3,290 |
| Operating expenses: |  |  |  |  |  |  |
| Research and development | 15,433 | 15,644 | (211) | 31,962 | 30,269 | 1,693 |
| General and administrative | 4,874 | 5,621 | (747) | 10,711 | 11,237 | (526) |
| Restructuring charges | 3,565 | — | 3,565 | 3,565 | — | 3,565 |
| Total operating expenses | 23,872 | 21,265 | 2,607 | 46,238 | 41,506 | 4,732 |
| Loss from operations | (22,597) | (19,832) | (2,765) | (39,689) | (38,247) | (1,442) |
| Other income (expense), net: |  |  |  |  |  |  |
| Interest income, net | 1,402 | 1,775 | (373) | 3,008 | 3,210 | (202) |
| Other income (expense), net: | — | — | — | 4,675 | — | 4,675 |
| Total other income (expense), net | 1,402 | 1,775 | (373) | 7,683 | 3,210 | 4,473 |
| Net loss | $(21,195) | $(18,057) | $(3,138) | $(32,006) | $(35,037) | $3,031 |

#### Collaboration Revenue

Revenue was $1.3 million and $6.5 million for the three and six months ended June 30, 2024, respectively, and $1.4 million and $3.3 million for the same periods in 2023, respectively. The decrease in the comparative three-month periods was due to no revenue being recognized from the Innovent collaboration as we had satisfied our performance obligation to Innovent in the prior quarter, offset by revenue recognized under the Toray Agreement as we continued development in 2024. The increase in the comparable six-month periods was due to the revenue recognized under the Amended Innovent Agreement in the first quarter of 2024 and the continued progress in our other collaborations as we fulfill our performance obligations to our collaboration partners.

#### Research and Development Expenses

Research and development expenses were $15.4 million and $32.0 million for the three and six months ended June 30, 2024, respectively, and $15.6 million and $30.3 million for the same periods in 2023, respectively. Expenses in the comparative three-month periods were materially consistent. The increase of $1.7 million between the comparable six-month periods was due to a $1.7 million increase in clinical trial expenses due to continued progress in our clinical trial for BDC-3042 and costs related to existing patient and site visits prior to the decision to cease the development of trastuzumab imbotolimod. The increase in expenses was further due to a $0.8 million increase in research and development contract service expenses and a $0.4 million increase in salary and related expenses primarily due to an increase in headcount, partially offset by a $0.7 million decrease in manufacturing expenses related to timing of batch production of our product candidates and a $0.4 million decrease in consulting expenses.

#### General and Administrative Expenses

General and administrative expenses were $4.9 million and $10.7 million for the three and six months ended June 30, 2024, respectively, and $5.6 million and $11.2 million for the same periods in 2023, respectively. The decrease of $0.7 million between the comparable three-month periods was mainly due to a $0.6 million decrease in salary and related expenses primarily due to a decrease in bonus expense as result of the restructuring plan. The $0.5 million decrease in expenses between the comparable six-month periods was mainly due to decrease in salary and related expenses primarily due to decrease in bonus expense as result of the restructuring plan.

#### Restructuring Charges

Restructuring charges were $3.6 million for the three and six months ended June 30, 2024, consisting of $2.9 million of one-time termination benefits such as severance costs and related benefits and $0.7 million of non-cash stock-based compensation expense as a result of a restructuring plan. There were no restructuring charges in the three and six months ended June 30, 2023.

### Other Income, Net

#### Interest Income, Net

Interest income was $1.4 million and $3.0 million for the three and six months ended June 30, 2024, respectively, and $1.8 million and $3.2 million for the same periods in 2023, respectively. The interest income, net was primarily comprised of interest income from marketable securities.

#### Other Income

Other income was zero and $4.7 million for the three and six months ended June 30, 2024, respectively, and zero for the same periods in 2023. The other income in 2024 was due to the one-time payment received from Innovent under the Amended Innovent Agreement.

### Liquidity and Capital Resources

### Sources of Liquidity

We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of June 30, 2024, we had cash and cash equivalents and marketable securities of $97.5 million and an accumulated deficit of $396.3 million. Our net losses were $21.2 million and $32.0 million for the three and six months ended June 30, 2024, respectively, and $18.1 million and $35.0 million for the same periods in 2023, respectively, and we expect to incur additional losses in the future. We evaluated our current cash position, historical results, forecasted cash flows and plans with regard to liquidity.

We believe that our current cash, cash equivalents and marketable securities balances as of June 30, 2024 will be sufficient to meet our cash needs for at least 12 months following the issuance date of this Quarterly Report on Form 10-Q. Our investment policy prioritizes preservation of principal and availability of cash to meet cash flow requirements then maximization of total net returns after satisfying the first two conditions. Our policy only allows for investments in fixed-income instruments such as corporate bonds and government securities. We believe we will meet longer term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and equity or debt financings or other capital sources, including potential collaborations, licenses, and other similar arrangements.

### Shelf Registration and At-The-Market Equity Offering

On March 30, 2022, we filed a shelf registration statement on Form S-3, or the Registration Statement. Pursuant to the Registration Statement, we may offer and sell securities having an aggregate public offering price of up to $250.0 million. In connection with the filing of the Registration Statement, we also entered into a sales agreement with TD Cowen, or Cowen, as sales agent or principal, pursuant to which we may issue and sell shares of our common stock for an aggregate offering price of up to $75.0 million under an at-the-market offering program, or the ATM. Pursuant to the ATM, we will pay Cowen a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock. We are not obligated to make any sales of shares of our common stock under the ATM. As of June 30, 2024, no shares of our common stock have been sold under the ATM.

### Summary Cash Flows

The following table sets forth a summary of our cash flows for each of the periods indicated:

*(Unaudited, in thousands)*

| Net cash (used in) provided by | Six Months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Operating activities | $(32,893) | $(38,511) |
| Investing activities | 28,206 | 42,571 |
| Financing activities | 79 | 147 |
| Net (decrease) increase in cash, cash equivalents and restricted cash | $(4,608) | $4,207 |

25

### Operating Activities

Net cash used in operating activities was $32.9 million and $38.5 million for the six months ended June 30, 2024 and 2023, respectively. Net cash used in operating activities for the six months ended June 30, 2024 was due to our net loss of $32.0 million, adjusted down for $5.8 million of non-cash charges and up for a $6.7 million change in operating assets and liabilities. The non-cash charges were comprised of $5.1 million for stock-based compensation, $1.6 million of non-cash lease-related expense, and $0.9 million for depreciation and amortization expense, partially offset by $1.8 million for accretion of discount on marketable securities. The change in net operating assets was primarily due to a $4.8 million decrease in our deferred revenue, a $2.6 million decrease in our accounts payable and accrued expenses, and a $1.3 million decrease in operating lease liabilities, offset by a $2.0 million decrease in our prepaid expenses and other current assets. Net cash used in operating activities for the six months ended June 30, 2023 was due to our net loss of $35.0 million, adjusted down for $5.2 million of non-cash charges and up for a $8.7 million change in operating assets and liabilities. The non-cash charges were comprised of $4.8 million for stock-based compensation, $2.0 million for accretion of discount on marketable securities, $1.5 million of non-cash lease-related expense, and $0.9 million for depreciation and amortization expense. The change in net operating assets was primarily due to a $5.4 million decrease in our accounts payable and accrued expenses, and the remaining changes contributed to decreases in our deferred revenue and operating lease liabilities, and increases in our prepaid expenses and other current assets.

### Investing Activities

Net cash provided by investing activities was $28.2 million and $42.6 million for the six months ended June 30, 2024 and 2023, respectively. The net cash provided by investing activities for the six months ended June 30, 2024 was due to $83.5 million in maturities of marketable securities, offset by $55.3 million in purchases of marketable securities. The net cash provided by investing activities for the six months ended June 30, 2023 was due to a $139.1 million maturities of marketable securities, offset by a $96.5 million in purchases of marketable securities.

### Financing Activities

Net cash provided by financing activities was $0.1 million for each of the six months ended June 30, 2024 and 2023. The net cash provided by financing activities for the six months ended June 30, 2024 was due to net proceeds from the issuance of common stock from our employee stock purchase plan. The net cash provided by financing activities for the same period in 2023 was due to net proceeds from the issuance of common stock from our employee stock purchase plan and exercise of stock options.

### Funding Requirements

Based upon our current operating plans, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least the next 12 months following the issuance date of this Quarterly Report on Form 10-Q. We will need to raise additional capital to continue the advancement of our programs. In the near term, our primary uses of cash will be to fund the completion of key milestones for clinical programs and to fund our operations, including research and development activities and employee salaries. This includes significant costs relating to clinical trials and manufacturing our product candidates. Our uses of cash in the long term will be similar as we advance our research and development activities and pay employee salaries. Most pharmaceutical products require larger clinical trials as development progresses, and we expect our funding requirements to grow with the advancement of our programs. Our long-term funding requirements will depend on many factors, which are uncertain but include our portfolio prioritization decisions and the success of our collaborations. In turn, our ability to raise additional capital through equity or partnering will depend on the general economic environment in which we operate and our ability to achieve key milestones. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.

Our future capital requirements will depend on many factors, including:

- the type, number, scope, progress, expansions, results, costs, and timing of our clinical trials;
- the type, number, scope, results, costs, and timing of preclinical studies for our product candidates or other potential product candidates or indications we are pursuing or may choose to pursue in the future;
- the outcome, timing, and costs of regulatory review of our product candidates;
- the costs and timing of manufacturing for our product candidates, including commercial manufacturing;
- our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting;
- the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities increase;
- the costs and timing of establishing or securing sales and marketing capabilities if any product candidate is approved;
- our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products;
- patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors;
- the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements;
- the costs of obtaining, maintaining, defending, and enforcing our patent and other intellectual property rights; and
- costs associated with any product candidates, products, or technologies that we may in-license or acquire.

Until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through equity or debt financings or other capital sources, including potential collaborations, licenses, the sale of future royalties, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams or research programs or may have to grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

### Contractual Obligations and Commitments

Refer to Note 5 Collaborations and Note 6 Commitments and Contingencies, to our unaudited condensed financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q for information regarding our contractual obligations and commitments.

### Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements and accompanying notes. We base our estimates on historical experience, known trends and events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies and estimates as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, other than as set forth below.

### Long-lived Assets Impairment Assessment

Long-lived assets, including operating lease assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset group to our estimate of future net cash flows to be generated by such assets. If such asset group is considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.

## Market risk

As filed, 144 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

## Controls and procedures

As filed, 648 characters.

### Evaluation of Disclosure Controls and Procedures

Based on their evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) were effective at a reasonable assurance level as of June 30, 2024.

### Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the three months ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 8,517 characters.

There are no material changes from the risk factors previously disclosed in Item 1A of our Annual Report on Form 10-K, other than as set forth below.

***Our recent restructuring designed to reduce our operating expenses may not result in our intended outcomes and may yield unintended consequences and additional costs.***

In May 2024, we implemented a restructuring plan, including a reduction in force affecting 50 employees, or 50% of our workforce. The decision was based on cost reduction initiatives intended to reduce operating expenses. In connection with the restructuring, we will discontinue developing trastuzumab imbotolimod, formerly known as BDC-1001.

The restructuring may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, decreased morale among our remaining employees, and the risk that we may not achieve the anticipated benefits of the restructuring. In addition, while positions have been eliminated certain functions necessary to our operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees. The restructuring could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives. If we are unable to realize the anticipated benefits from the restructuring, if we experience significant adverse consequences from the restructuring, or if we are otherwise unable to retain our employees, our ability to compete and continue the clinical development of our product candidates may be harmed.

***Our failure to meet the continued listing requirements of The Nasdaq Stock Market LLC could result in a delisting of our common stock.***

On July 2, 2024, we received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market, LLC or Nasdaq, notifying us that on July 1, 2024, the average closing price of our common stock over the prior 30 consecutive trading days had fallen below $1.00 per share, which is the minimum average closing price required to maintain listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(a)(1), or the Minimum Bid Requirement. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have 180 calendar days to regain compliance with the Minimum Bid Requirement, or the Grace Period, subject to a potential 180 calendar day extension, as described below. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days within the Grace Period. If we do not achieve compliance with the Minimum Bid Requirement by December 30, 2024, the end of the Grace Period, we may be eligible for an additional 180 calendar day period to regain compliance. To qualify, we would be required to meet the continued listing requirement for the market value of our publicly held shares and all other Nasdaq initial listing standards, with the exception of the bid price requirement, and would need to provide written notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split if necessary. However, if it appears to Nasdaq staff that we will not be able to cure the deficiency, or if we do not meet the other listing standards, Nasdaq could provide notice that our common stock will be subject to delisting. In the event we receive notice that our common stock is being delisted, we would be entitled to appeal the determination to a Nasdaq Listing Qualifications Panel and request a hearing.

The delisting of our common stock from Nasdaq may make it more difficult for us to raise capital on favorable terms in the future, or at all. Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. Further, if our common stock were to be delisted from Nasdaq, our common stock would cease to be recognized as a covered security and we would be subject to additional regulation in each state in which we offer our securities. Moreover, there is no assurance that any actions that we take to restore our compliance with the Nasdaq minimum bid requirement would allow our securities to be listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from falling below the Nasdaq minimum share price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

There can be no assurance that we will continue to meet the minimum bid price requirement, or any other requirement in the future. If we fail to meet the minimum bid price requirement, or other applicable Nasdaq listing requirements, including maintaining minimum levels of stockholders’ equity or market values of our common stock, our common stock could be delisted. If our common stock were to be delisted, the liquidity of our common stock would be adversely affected, and the market price of our common stock could decrease. Additionally, if our securities are not listed on, or become delisted from, Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

***Unless our common stock continues to be listed on a national securities exchange it will become subject to the so-called “penny stock” rules that impose restrictive sales practice requirements.***

If we are unable to maintain the listing of our common stock on Nasdaq or another national securities exchange, our common stock could become subject to the so-called “penny stock” rules if the shares have a market value of less than $5.00 per share. The SEC has adopted regulations that define a penny stock to include any stock that has a market price of less than $5.00 per share, subject to certain exceptions, including an exception for stock traded on a national securities exchange. The SEC regulations impose restrictive sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors. An accredited investor generally is a person whose individual annual income exceeded $200,000, or whose joint annual income with a spouse exceeded $300,000 during the past two years and who expects their annual income to exceed the applicable level during the current year, or a person with net worth in excess of $1.0 million, not including the value of the investor’s principal residence and excluding mortgage debt secured by the investor’s principal residence up to the estimated fair market value of the home, except that any mortgage debt incurred by the investor within 60 days prior to the date of the transaction shall not be excluded from the determination of the investor’s net worth unless the mortgage debt was incurred to acquire the residence. For transactions covered by this rule, the broker-dealer must make a special suitability determination for the purchaser and must have received the purchaser’s written consent to the transaction prior to sale. This means that if we are unable maintain the listing of our common stock on a national securities exchange, the ability of stockholders to sell their common stock in the secondary market could be adversely affected.

If a transaction involving a penny stock is not exempt from the SEC’s rule, a broker-dealer must deliver a disclosure schedule relating to the penny stock market to each investor prior to a transaction. The broker-dealer also must disclose the commissions payable to both the broker-dealer and its registered representative, current quotations for the penny stock, and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the customer’s account and information on the limited market in penny stocks.

Filed Aug 13, 2024.
Source: SEC EDGAR, the filing index for accession 0000950170-24-096200. Last ingested by Listed: Nov 6, 2026, 18:52 ET. No prices; not investment advice.