0001558370-24-015752 | 10-Q | XBRL Viewer

Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

8. Stock-Based Compensation

In connection with the acquisition of Trawsfynydd in April 2024, the Company assumed all Trawsfynydd stock options outstanding, each becoming an option to purchase shares of the Company’s common stock. The total number of Company shares subject to such options is 365,547.

The 2018 Omnibus Incentive Compensation Plan (“2018 Plan”) was unanimously approved by the Board on May 24, 2018 and was approved by the Company’s stockholders on June 27, 2018.

The 2018 Plan was amended and restated following unanimous approval of the Board on April 24, 2019 and was approved by the Company’s stockholders on June 17, 2019. The amended 2018 Plan allowed for an additional 39,300 shares of the Company’s common stock that may be issued under the Amended Plan with respect to awards made on and after June 17, 2019. The maximum aggregate number of shares of the Company’s common stock that may be issued pursuant to outstanding stock options granted under the 2018 Plan is 26,823.

The 2021 Plan was unanimously approved by the Company’s stockholders on July 30, 2021. Upon stockholders’ approval of the 2021 Plan, no further awards have been or will be made under the amended 2018 Plan. Under the 2021 Plan, the Company may grant incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards to employees, non-employee directors, consultants, and advisors.

The 2021 Plan was amended and restated following unanimous approval of the Board on May 23, 2022 and was approved by the Company’s stockholders on August 18, 2022. The amended 2021 Plan (the “Amended 2021 Plan”) allowed for an additional 80,000 shares of the Company’s common stock that may be issued with respect to awards made on and after August 18, 2022. The Amended 2021 Plan was further amended and restated to provide for the issuance of an additional 300,000 shares of the Company’s common stock following unanimous approval of the Company’s Board of Directors on October 10, 2024 and approved by the Company’s stockholders on October 31, 2024.

In September 2024, the shares reserved for issuance under the 2021 Plan were proportionally reduced in connection with the Reverse Stock Split. At September 30, 2024, there were 51,381 shares available for future issuance with respect to new awards and outstanding awards.

Stock-based compensation expense includes stock options granted to employees and non-employees and has been reported in the Company’s statements of operations and comprehensive loss in either R&D expenses or general and administrative expenses depending on the function performed by the optionee. No net tax benefits related to the stock-based compensation costs have been recognized since the Company’s inception.

A summary of stock option activity for the nine months ended September 30, 2024 is as follows:


	Options Outstanding
				Weighted
		Weighted-		Average
		Average		Remaining	Aggregate
	Number	Exercise		Contractual	Intrinsic
	of Shares	Price		Term (in years)	Value
Balance, December 31, 2023	92,441	$	76.05	8.53	$	20,814
Trawsfynydd options exchanged in connection with acquisition	365,547	$	1.23	9.13		—
Granted	6,560	$	8.50	—		—
Forfeitures/adjustments	(10,987)	$	29.37	—		—
Expired	(23,495)	$	975.43	—		—
Balance, September 30, 2024	430,066	$	37.01	9.01	$	1,601,096
Exercisable at September 30, 2024	410,661	$	38.02	9.01	$	1,601,096

The Company accounts for all stock-based payments made to employees, non-employees and directors using an option pricing model for estimating fair value. Accordingly, stock-based compensation expense is measured based on the estimated fair value of the awards on the date of grant. Compensation expense is recognized for the portion that is ultimately expected to vest over the period during which the recipient renders the required services to the Company using the straight-line single option method.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes model requires the Company to make certain estimates and assumptions, assumptions related to the expected price volatility of the common stock, the period during which the options will be outstanding, the rate of return on risk-free investments and the expected dividend yield for the Company’s stock.

As of September 30, 2024, there was $253,000 of unrecognized compensation expense related to the unvested stock options which is expected to be recognized over a weighted-average period of approximately 1.7 years.

The weighted-average assumptions underlying the Black-Scholes calculation of grant date fair value of stock options include the following:


	Nine Months Ended September 30,
	2024			2023
Risk-free interest rate		3.46	%		3.89	%
Expected volatility		117.9	%		123.1	%
Expected term		6.00	years		5.68	years
Expected dividend yield		—	%		—	%
Weighted average grant date fair value	$	7.49		$	17.79

The weighted-average valuation assumptions were determined as follows:

●

Risk-free interest rate: The Company based the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term.

●

Expected term of options: Due to its lack of sufficient historical data, the Company estimates the expected life of its employee stock options using the “simplified” method, as prescribed in Staff Accounting Bulletin (SAB) No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option.

●

Expected stock price volatility: Expected volatility is based on the historical volatility of the Company’s common stock.

●

Expected annual dividend yield: The Company has never paid, and does not expect to pay, dividends in the foreseeable future. Accordingly, the Company assumed an expected dividend yield of 0.0%.

On August 2, 2021, the compensation committee of the Board approved restricted stock unit grants to the Company’s employees (“2021 RSUs”). An aggregate of 4,188 service-based RSUs were issued at a grant date fair value of $129.75. The 2021 RSUs will be settled in stock, vest 33% on each of the first and second anniversary of the date of grant, and vest 34% on the third anniversary of the date of grant. The 2021 RSUs were granted under the 2021 Plan.

On February 7, 2022, the compensation committee of the Board approved restricted stock unit grants to the Company’s employees (“2022 RSUs”). An aggregate of 5,934 service-based RSUs were issued at a grant date fair value of $45.50. The 2022 RSUs will be settled in stock, vest 33% on each of the first and second anniversary of the date of grant, and vest 34% on the third anniversary of the date of grant. The 2022 RSUs were granted under the 2021 Plan.

On June 10, 2022, the compensation committee of the Board approved restricted stock unit grants to certain of the Company’s employees (“2022 RSU Awards”). An aggregate of 968 service-based RSUs were issued at a grant date fair value of $33.25. The 2022 RSU Awards will be settled in stock, vest 33% on each of the first and second anniversary of the date of grant, and vest 34% on the third anniversary of the date of grant. The 2022 RSU Awards were granted under the 2021 Plan.

On March 13, 2023, the compensation committee of the Board approved restricted stock unit grants to the Company’s employees (“2023 RSUs”). An aggregate of 6,769 service-based RSUs were issued at a grant date fair value of $18.25. The 2023 RSUs will be settled in stock, vest 33% on each of the first and second anniversary of the date of grant, and vest 34% on the third anniversary of the date of grant. The 2023 RSUs were granted under the 2021 Plan.

On April 1, 2024, the compensation committee of the Board approved restricted stock unit grants as inducement awards to the Company’s employees who joined the Company on April 1, 2024 in connection with the Merger (“Inducement RSUs”). An aggregate of 21,200 service-based RSUs were issued at a grant date fair value of $25.00. The Inducement RSUs will be settled in stock, vest 25% on each of the first four anniversaries of the date of grant.

A summary of RSU activity for the nine months ended September 30, 2024 is as follows:


	2021 RSUs	2022 RSUs	2022 RSU Awards	2023 RSUs	Inducement RSUs
Outstanding and unvested January 1, 2024	1,032	2,980	440	5,436	-
Granted	-	-	-	-	21,200
Vested	(200)	(1,490)	(220)	(1,812)	-
Forfeited/Cancelled	(832)	(1,207)	-	(2,906)	-
Outstanding and unvested September 30, 2024	-	283	220	718	21,200

At September 30, 2024, the unrecognized compensation cost related to unvested service-based RSUs was $483,000 which will be recognized over the remaining service period of 3.4 years.

The Company recognized stock-based compensation expense related to stock options and restricted stock units as follows for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	17,000	$	200,000	$	164,000	$	534,000
General and administrative		326,000		160,000		892,000		435,000
Total stock-based compensation expense	$	343,000	$	360,000	$	1,056,000	$	969,000

Grants of PSUs and SARs

During 2020 and 2021, the compensation committee of the Board and the Board approved a cash bonus program of cash-settled stock appreciation right (SAR) awards to the Company’s employees and non-employee directors, and cash-settled performance stock unit (PSU) awards to the Company’s employees. These awards were granted outside of the 2018 Plan and the 2021 Plan. As the Company’s stock price has decreased since these awards were issued, their impact on the results of operations and balance sheet of the Company are not material during 2024 or 2023.

Warrants (Tables)

9 Months Ended

Sep. 30, 2024

Warrants

Schedule of warrants outstanding and warrant activity


					Balance				Balance
		Exercise		Expiration	December 31,	Warrants	Warrants	Warrants	September 30,
Description	Classification	Price		Date	2023	Issued	Exercised	Expired	2024
Non-tradable pre-funded warrants	Equity	$	56.25	none	141	—	—	—	141
Non-tradable pre-funded warrants	Equity	$	56.25	none	199	—	—	—	199
Non-tradable warrants	Equity	$	75.00	November 2024	9,780	—	—	—	9,780
Non-tradable warrants	Equity	$	163.59375	December 2024	679	—	—	—	679
Non-tradable warrants	Equity	$	168.86250	December 2024	1,851	—	—	—	1,851
					12,650	—	—	—	12,650

Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholders' (Deficit) Equity (unaudited) - USD ($)	Preferred stock	Common Stock	Additional Paid in Capital	Accumulated deficit	Accumulated other comprehensive income (loss)	Total
Balance at Dec. 31, 2022		$ 9,000	$ 492,016,000	$ (463,683,000)	$ (33,000)	$ 28,309,000
Balance (in shares) at Dec. 31, 2022		837,040
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation			969,000			969,000
Shares issued for vested restricted stock units (in shares)		3,211
Other comprehensive loss					3,000	3,000
Net loss				(14,764,000)		(14,764,000)
Balance at Sep. 30, 2023		$ 9,000	492,985,000	(478,447,000)	(30,000)	14,517,000
Balance (in shares) at Sep. 30, 2023		840,251
Balance at Jun. 30, 2023		$ 9,000	492,625,000	(473,708,000)	(28,000)	18,898,000
Balance (in shares) at Jun. 30, 2023		839,106
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation			360,000			360,000
Shares issued for vested restricted stock units (in shares)		1,145
Other comprehensive loss					(2,000)	(2,000)
Net loss				(4,739,000)		(4,739,000)
Balance at Sep. 30, 2023		$ 9,000	492,985,000	(478,447,000)	(30,000)	14,517,000
Balance (in shares) at Sep. 30, 2023		840,251
Increase (Decrease) in Redeemable Convertible Preferred Stock
Conversion of redeemable convertible preferred stock upon stockholder approval						$ (111,619,000)
Conversion of redeemable convertible preferred stock upon stockholder approval (in shares)						(12,472)
Issuance of stock in connection with the asset acquisition of Trawsfynydd						$ 93,232,000
Issuance of stock in connection with the asset acquisition of Trawsfynydd (in shares)						10,359
Transaction costs paid through the issuance of stock						$ 4,815,000
Transaction costs paid through the issuance of stock (in shares)						535
Issuance of stock in connection with the private placement, net of expenses						$ 13,572,000
Issuance of stock in connection with the private placement, net of expenses (in shares)						1,578
Balance at Dec. 31, 2023		$ 9,000	493,317,000	(482,631,000)	(23,000)	$ 10,672,000
Balance (in shares) at Dec. 31, 2023		840,251				840,251
Increase (Decrease) in Stockholders' Equity (Deficit)
Issuance of stock in connection with the asset acquisition of Trawsfynydd		$ 1,000	3,549,000			$ 3,550,000
Issuance of stock in connection with the asset acquisition of Trawsfynydd (in shares)		141,982
Transaction costs paid through the issuance of stock			169,000			169,000
Transaction costs paid through the issuance of stock (in shares)		6,747
Issuance of stock in connection with the private placement, net of expenses			427,000			427,000
Issuance of stock in connection with the private placement, net of expenses (in shares)		19,879
Exchange of Trawsfynydd stock options for options of the Company			7,085,000			7,085,000
Conversion of redeemable convertible preferred stock upon stockholder approval		$ 20,000	111,599,000			111,619,000
Conversion of redeemable convertible preferred stock upon stockholder approval (in shares)	7,440	2,012,973
Stock-based compensation			1,056,000			1,056,000
Shares issued for vested restricted stock units (in shares)		3,722
Other comprehensive loss					(10,000)	(10,000)
Net loss				(136,601,000)		(136,601,000)
Balance at Sep. 30, 2024		$ 30,000	617,202,000	(619,232,000)	(33,000)	$ (2,033,000)
Balance (in shares) at Sep. 30, 2024	7,440	3,025,554				3,025,554
Beginning balance at Jun. 30, 2024						$ 111,619,000
Beginning balance (in shares) at Jun. 30, 2024						12,472
Increase (Decrease) in Redeemable Convertible Preferred Stock
Conversion of redeemable convertible preferred stock upon stockholder approval						$ (111,619,000)
Conversion of redeemable convertible preferred stock upon stockholder approval (in shares)						(12,472)
Balance at Jun. 30, 2024		$ 10,000	505,260,000	(610,757,000)	(33,000)	$ (105,520,000)
Balance (in shares) at Jun. 30, 2024		1,012,381
Increase (Decrease) in Stockholders' Equity (Deficit)
Conversion of redeemable convertible preferred stock upon stockholder approval		$ 20,000	111,599,000			111,619,000
Conversion of redeemable convertible preferred stock upon stockholder approval (in shares)	7,440	2,012,973
Stock-based compensation			343,000			343,000
Shares issued for vested restricted stock units (in shares)		200
Net loss				(8,475,000)		(8,475,000)
Balance at Sep. 30, 2024		$ 30,000	$ 617,202,000	$ (619,232,000)	$ (33,000)	$ (2,033,000)
Balance (in shares) at Sep. 30, 2024	7,440	3,025,554				3,025,554

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies

Schedule of recognized revenue under license and collaboration agreements


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Symbio
Upfront license fee recognition over time	$	57,000	$	57,000	$	170,000	$	170,000
	$	57,000	$	57,000	$	170,000	$	170,000

Schedule of deferred revenue


	Symbio
	Upfront Payment
Deferred balance at December 31, 2023	$	3,017,000
Recognition to revenue		(170,000)
Deferred balance at September 30, 2024	$	2,847,000

Schedule of antidilutive securities which have been excluded from the computation of diluted weighted average shares outstanding


	September 30,
	2024	2023
Series C (common stock equivalents)	2,976,138	—
Warrants	12,310	13,509
Stock Options	430,066	88,642
Unvested restricted stock units	22,421	—
	3,440,935	102,151

Asset Acquisition - Consideration paid and the relative fair values (Details) - USD ($)	Apr. 01, 2024	Sep. 30, 2024	Dec. 31, 2023
Asset Acquisition [Line Items]
Assets acquired		$ 8,936,000	$ 22,683,000
Liabilities assumed		$ 10,969,000	$ 12,011,000
Trawsfynydd IPR&D
Asset Acquisition [Line Items]
Consideration paid	$ 112,543,000
Assets acquired	44,000
Liabilities assumed	4,965,000
Net Assets acquired	$ 112,543,000

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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+ Details

Pay vs Performance Disclosure - USD ($)	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (8,475,000)	$ (4,739,000)	$ (136,601,000)	$ (14,764,000)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Warrants (Details) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Warrants outstanding and warrant activity
Warrants Outstanding (in shares)	12,650	12,650
Warrant exercise price range one
Warrants
Warrant Exercise Price (in dollars per share)	$ 56.25
Warrants outstanding and warrant activity
Warrants Outstanding (in shares)	141	141
Warrant exercise price range two
Warrants
Warrant Exercise Price (in dollars per share)	$ 56.25
Warrants outstanding and warrant activity
Warrants Outstanding (in shares)	199	199
Warrant exercise price range three
Warrants
Warrant Exercise Price (in dollars per share)	$ 75.00
Warrants outstanding and warrant activity
Warrants Outstanding (in shares)	9,780	9,780
Warrant exercise price range four
Warrants
Warrant Exercise Price (in dollars per share)	$ 163.59375
Warrants outstanding and warrant activity
Warrants Outstanding (in shares)	679	679
Warrant exercise price range five
Warrants
Warrant Exercise Price (in dollars per share)	$ 168.86250
Warrants outstanding and warrant activity
Warrants Outstanding (in shares)	1,851	1,851

Warrants

9 Months Ended

Sep. 30, 2024

Warrants

Warrants

7. Warrants

Common stock warrants are accounted for in accordance with applicable accounting guidance provided in ASC Topic 815, Derivatives and Hedging - Contracts in Entity’s Own Equity (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement.

Warrants outstanding and warrant activity (reflects the number of common shares as if the warrants were converted to common stock) for the nine months ended September 30, 2024 is as follows:


					Balance				Balance
		Exercise		Expiration	December 31,	Warrants	Warrants	Warrants	September 30,
Description	Classification	Price		Date	2023	Issued	Exercised	Expired	2024
Non-tradable pre-funded warrants	Equity	$	56.25	none	141	—	—	—	141
Non-tradable pre-funded warrants	Equity	$	56.25	none	199	—	—	—	199
Non-tradable warrants	Equity	$	75.00	November 2024	9,780	—	—	—	9,780
Non-tradable warrants	Equity	$	163.59375	December 2024	679	—	—	—	679
Non-tradable warrants	Equity	$	168.86250	December 2024	1,851	—	—	—	1,851
					12,650	—	—	—	12,650

Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Level 1
Liabilities measured at fair value
Fair value of cash and cash equivalents	$ 4,799,000	$ 20,559,000
Recurring basis
Liabilities measured at fair value
Financial assets	0	0
Financial liabilities	$ 0	$ 0

Summary of Significant Accounting Policies - Segment Information (Details)	9 Months Ended
	Sep. 30, 2024 segment
Summary of Significant Accounting Policies
Number of operating segments	1

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and footnotes normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The financial statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, Trawsfynydd Therapeutics LLC, Trawsfynydd Therapeutics AU Ltd, Throxavir Therapeutics AU Pty Ltd and Onconova Europe GmbH, as of September 30, 2024. All significant intercompany transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities, and equity and the amount of revenues and expenses. Actual results could differ significantly from those estimates. The most significant estimates and assumptions that management considers in the preparation of the Company's financial statements relate to accrued research and development costs; the valuation of consideration transferred in acquiring the assts of Trawsfynydd; inputs used in the Black-Scholes model for stock-based compensation expense; and estimated cost to complete performance obligations related to revenue recognition.

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of September 30, 2024, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2024 and 2023, the consolidated statements of redeemable convertible preferred stock and stockholders’ (deficit) equity for the three and nine months ended September 30, 2024 and 2023 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023 are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2024, the results of its operations for the three and nine months ended September 30, 2024 and 2023, and its cash flows for the nine months ended September 30, 2024 and 2023. The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2024 and 2023 are unaudited. The results for the three and nine months ended September 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment, which is the identification and development of therapeutic drug candidates.

Concentrations of Credit Risk and Off-Balance Sheet Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of money market accounts with financial institutions that management believes are creditworthy. The Company has no financial instruments with off-balance sheet risk of loss.

At September 30, 2024 the Company had $4,799,000 of its cash and cash equivalents in money market funds that invest in a portfolio of liquid, high-quality debt securities issued by the U.S. government.

Significant Accounting Policies

These interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and SEC instructions for interim financial information, and should be read in conjunction with the Company's Annual Report. Significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed in the Company's Annual Report. The Company uses the same accounting policies in preparing quarterly and annual financial statements.

Asset Acquisitions

Acquisitions of assets or a group of assets that do not meet the definition of a business are accounted for as asset acquisitions, with a cost accumulation model used to determine the cost of the acquisition. Common stock issued as consideration in an acquisition of assets is generally measured based on the acquisition date fair value of the equity interests issued. Direct transaction costs are recognized as part of the cost of an acquisition of assets. Intangible assets that are acquired in an asset acquisition for use in research and development activities that have an alternative future use are capitalized as in-process research and development, or IPR&D. Acquired IPR&D that has no alternative future use is expensed immediately in the consolidated statements of operations and comprehensive loss.

Tax Incentive Receivable

The Company is eligible to receive a cash refund from the Australian Taxation Office for eligible research and development (“R&D”) expenditures under the Australian Research and Development Tax Incentive Program (the “Australian Tax Incentive”). The Australian Tax Incentive is recognized as a reduction to R&D expense when there is reasonable assurance that the relevant expenditure has been incurred, the amount can be reliably measured and that the Australian Tax Incentive will be received. The Company’s Australian subsidiaries began operations in the second quarter of 2024, and the Company has recognized reductions to R&D expenses of $1,804,000 for each of the three and nine months ended September 30, 2024.

Redeemable Convertible Preferred Stock

The Company records shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company has historically applied the guidance in ASC 480-10-S99-3A, SEC Staff Announcement: Classification and Measurement of Redeemable Securities, and classified the redeemable convertible preferred stock outside of stockholders’ (deficit) equity because, if conversion to common stock is not approved by the stockholders, the redeemable convertible preferred stock would have been redeemable at the option of the holders for cash equal to the closing price of the common stock on the last trading day prior to the holder’s redemption request. The Company determined that at the time, the conversion and redemption are outside of the Company’s control. Additionally, the Company determined the conversion and redemption features did not require bifurcation as derivatives. In September 2024, and in connection with the Company’s stockholder approval to allow for the conversion of outstanding preferred stock into common stock, the preferred stockholders right to request redemption expired. Immediately following the stockholder approval and related conversions to common stock, the Company reclassified the remaining preferred stock and related carrying value to permanent equity within the accompanying consolidated balance sheet as of September 30, 2024, and the preferred stock is no longer subject to temporary equity guidance within ASC 480-10-S99-3A.

Fair Value Measurements

At both September 30, 2024 and December 31, 2023, the Company had no financial assets and liabilities measured at fair value on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company utilizes a valuation hierarchy for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, accounts payable, and accrued liabilities approximate their respective fair values because of the short-term nature of these accounts.

In accordance with the fair value hierarchy described above, the Company’s cash and cash equivalents residing in money market funds are measured at fair value using level 1 inputs. As of September 30, 2024 and December 31, 2023, the fair value and carrying value of the Company’s cash and cash equivalents residing in money market funds was $4,799,000 and $20,559,000, respectively.

Revenues and Deferred Revenues

The Company’s revenue during the three and nine months ended September 30, 2024 and 2023 was from its license and collaboration agreement with SymBio.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Symbio
Upfront license fee recognition over time	$	57,000	$	57,000	$	170,000	$	170,000
	$	57,000	$	57,000	$	170,000	$	170,000

Deferred revenue is as follows:


	Symbio
	Upfront Payment
Deferred balance at December 31, 2023	$	3,017,000
Recognition to revenue		(170,000)
Deferred balance at September 30, 2024	$	2,847,000

Research and Development Expenses

R&D costs are charged to expense as incurred. These costs include, but are not limited to, license fees related to the acquisition of in-licensed products; employee-related expenses, including salaries, benefits and travel; expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies; and costs associated with preclinical activities and regulatory operations. As discussed above, the Company’s Australian Tax Incentive is recognized as a reduction to R&D expense when there is reasonable assurance that the relevant expenditure has been incurred, the amount can be reliably measured and that the Australian Tax Incentive will be received.

Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued R&D expense, as the case may be.

Net loss per share

Basic loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during each period and inclusive of prefunded warrants outstanding. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as preferred stock, stock options and unvested restricted stock units, which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive.

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:


	September 30,
	2024	2023
Series C (common stock equivalents)	2,976,138	—
Warrants	12,310	13,509
Stock Options	430,066	88,642
Unvested restricted stock units	22,421	—
	3,440,935	102,151

Recently Issued Accounting Pronouncements

We adopted the Financial Accounting Standards Board’s Accounting Standards Update 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), effective as of January 1, 2024 using the modified retrospective method. Among other amendments, ASU 2020-06 eliminates the cash conversion and beneficial conversion feature models in ASC 470-20 that require an issuer of certain convertible debt and preferred stock to separately account for embedded conversion features as a component of equity, as well as changed the accounting for diluted earnings-per-share for convertible instruments and contracts that may be settled in cash or stock. Additionally, ASU 2020-06 requires that the if-converted method, which is more dilutive than the treasury stock method, be used for all convertible instruments. We applied ASU 2020-06 to all redeemable convertible preferred stock during 2024, accordingly the Company did not apply the cash conversion or beneficial conversion feature models in its analysis of the redeemable convertible preferred stock.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public companies to disclose for each reportable segment the significant expense categories and amounts for such expenses. ASU 2023-07 is effective for annual periods beginning December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. This ASU will be effective for our annual period ended December 31, 2024. The Company is currently evaluating the impacts of ASU 2023-07 on its disclosures.

Stock-Based Compensation - Options Unrecognized Compensation Expense (Details) - Employee Stock Option	9 Months Ended
	Sep. 30, 2024 USD ($)
Stock-Based Compensation
Unrecognized compensation expense related to unvested stock options	$ 253,000
Weighted-average period for recognizing unrecognized compensation expense (in years)	1 year 8 months 12 days

Balance Sheet Detail - Prepaid Expenses and Other Current Assets (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Prepaid expenses and other current assets:
Research and development	$ 882,000	$ 1,060,000
Manufacturing		186,000
Insurance	163,000	174,000
Other	347,000	401,000
Prepaid expenses and other current assets	$ 1,392,000	$ 1,821,000

Stock-Based Compensation - Narratives (Details) - shares	Oct. 31, 2024	Aug. 18, 2022	Jul. 30, 2021	Jun. 17, 2019	Sep. 30, 2024	Apr. 30, 2024	Apr. 01, 2024	Jun. 27, 2018
Stock-Based Compensation
Reserved for issuance (in shares)							19,879
Trawsfynydd IPR&D
Stock-Based Compensation
Reserved for issuance (in shares)						365,547
2018 Plan
Stock-Based Compensation
Additional shares authorized (in shares)			0
2018 Plan \| Common Stock
Stock-Based Compensation
Shares authorized (in shares)								26,823
Additional shares authorized (in shares)				39,300
2021 Incentive Plan \| Common Stock
Stock-Based Compensation
Additional shares authorized (in shares)		80,000
Shares available for future issuance (in shares)					51,381
2021 Incentive Plan \| Common Stock \| Subsequent event
Stock-Based Compensation
Additional shares authorized (in shares)	300,000

Summary of Significant Accounting Policies - Concentrations of Credit Risk and Off-Balance Sheet Risk (Details)	Sep. 30, 2024 USD ($)
Risks and Uncertainties [Abstract]
Off-balance sheet risk, asset	$ 0
Off-balance sheet risk, liability	0
Morgan Stanley Institutional Liquidity Fund
Risks and Uncertainties [Abstract]
Cash and cash equivalents	$ 4,799,000

Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies

Commitments and Contingencies

5. Commitments and Contingencies

Litigation

In the normal course of business, the Company from time to time is named as a party to legal claims and actions. The Company records a loss contingency reserve for a legal proceeding when the potential loss is considered probable and can be reasonably estimated. The Company has not recorded any amounts for loss contingencies as of September 30, 2024.

On June 17, 2024, Steven M. Fruchtman informed the Board of his intent to resign from his positions of President and Chief Scientific Officer, Oncology and indicated to the Company that Dr. Fruchtman believes his resignation to be for "good reason" under the terms of his employment agreement and his expectation of compensation commensurate therewith and in connection with a change in control. The Board accepted Dr. Fruchtman’s resignation effective immediately but disagrees with the characterization of the events set forth in the letter. The Company believes that no severance payments are due to Dr. Fruchtman under the terms of his employment agreement as it pertains to termination for good reason events. At September 30, 2024, the Company determined a range of possible loss associated with Dr. Fruchtman’s claim to be zero to $1.5 million. While the Company intends to defend itself against these claims, and believes it has strong arguments to prevail in the litigation, there can be no assurance that the Company will prevail on its claims.

Contingent Value Rights

The Company issued CVRs to common stockholders as of April 15, 2024 and may be obligated to make future distributions to such CVR holders in connection with entering into strategic arrangements related to its oncology programs and/or future royalty payments related to the successful commercialization of such programs. Refer to discussion of Contingent Value Rights within Note 3.

Summary of Significant Accounting Policies - Revenues and Deferred Revenues (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue
Upfront license fee recognition over time	$ 57,000	$ 57,000	$ 170,000	$ 170,000
Revenue	57,000	$ 57,000	170,000	$ 170,000
Activity in deferred revenue
Balance at the beginning of the period			226,000
Balance at the end of the period	226,000		226,000
SymBio
Activity in deferred revenue
Balance at the beginning of the period			3,017,000
Recognition to revenue			(170,000)
Balance at the end of the period	$ 2,847,000		$ 2,847,000

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

+ Details

Stock-Based Compensation - Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
Stock-Based Compensation - Expense (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Stock-Based Compensation
Net tax benefits related to the stock-based compensation costs			$ 0
Stock-based compensation expense	$ 343,000	$ 360,000	1,056,000	$ 969,000
Research and development
Stock-Based Compensation
Stock-based compensation expense	17,000	200,000	164,000	534,000
General and administrative
Stock-Based Compensation
Stock-based compensation expense	$ 326,000	$ 160,000	$ 892,000	$ 435,000

Asset Acquisition (Tables)

9 Months Ended

Sep. 30, 2024

Asset Acquisition

Schedule of consideration paid and the relative fair values of the assets acquired and liabilities assumed

The consideration paid and the relative fair values of the assets acquired and liabilities assumed were as follows:


Consideration transferred:
Common stock	$	3,550,000
Series C		93,232,000
Assumed options		7,085,000
Company transaction costs settled in equity		4,984,000
Company transaction costs paid in cash		3,692,000
Total consideration transferred	$	112,543,000

Assets acquired:
Cash and cash equivalents	$	44,000
Total assets acquired		44,000

Liabilities assumed:
Accrued expenses and other current liabilities		4,965,000
Total liabilities assumed		4,965,000
Net assets acquired		(4,921,000)
In-process research and development		117,464,000
Net assets acquired	$	112,543,000

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000
Preferred stock, shares issued	7,440
Preferred stock, shares outstanding	7,440
Common stock, par value (in dollars per share)	$ 0.01
Common stock, shares authorized	250,000,000
Common stock, shares issued	3,025,554	840,251
Common stock, shares outstanding	3,025,554	840,251

Condensed Consolidated Statements of Operations (unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Condensed Consolidated Statements of Operations (unaudited)
Revenue	$ 57,000	$ 57,000	$ 170,000	$ 170,000
Operating expenses:
Acquired in-process research and development			117,464,000
Research and development	5,113,000	2,460,000	10,989,000	8,996,000
General and administrative	3,480,000	2,686,000	8,813,000	7,010,000
Total operating expenses	8,593,000	5,146,000	137,266,000	16,006,000
Loss from operations	(8,536,000)	(5,089,000)	(137,096,000)	(15,836,000)
Other income, net	61,000	350,000	495,000	1,072,000
Net loss	$ (8,475,000)	$ (4,739,000)	$ (136,601,000)	$ (14,764,000)
Net loss per share, basic (in dollars per share)	$ (8.81)	$ (5.64)	$ (130.87)	$ (17.59)
Net loss per share, diluted (in dollars per share)	$ (8.81)	$ (5.64)	$ (130.87)	$ (17.59)
Basic weighted average shares outstanding (in shares)	961,530	840,117	1,043,781	839,243
Diluted weighted average shares outstanding (in shares)	961,530	840,117	1,043,781	839,243

Stock-Based Compensation - RSUs, PSUs and SARs (Details) - USD ($)						9 Months Ended
	Apr. 01, 2024	Mar. 13, 2023	Jun. 10, 2022	Feb. 07, 2022	Aug. 02, 2021	Sep. 30, 2024
Inducement RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units granted	21,200					21,200
Grant date fair value (in $ per unit)	$ 25.00
Vesting (Percentage)	25.00%
Service based RSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to awards other than options						$ 483,000
Weighted-average period for recognizing unrecognized compensation expense (in years)						3 years 4 months 24 days
Employee \| 2021 service-based RSUs \| 2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units granted					4,188
Grant date fair value (in $ per unit)					$ 129.75
Employee \| 2022 service-based RSUs \| 2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units granted			968	5,934
Grant date fair value (in $ per unit)			$ 33.25	$ 45.50
Employee \| 2023 service-based RSUs \| 2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units granted		6,769
Grant date fair value (in $ per unit)		$ 18.25
Employee \| Vesting on each of the first and second anniversary \| 2021 service-based RSUs \| 2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting (Percentage)					33.00%
Employee \| Vesting on each of the first and second anniversary \| 2022 service-based RSUs \| 2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting (Percentage)			33.00%	33.00%
Employee \| Vesting on each of the first and second anniversary \| 2023 service-based RSUs \| 2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting (Percentage)		33.00%
Employee \| Vesting on third anniversary \| 2021 service-based RSUs \| 2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting (Percentage)					34.00%
Employee \| Vesting on third anniversary \| 2022 service-based RSUs \| 2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting (Percentage)			34.00%	34.00%
Employee \| Vesting on third anniversary \| 2023 service-based RSUs \| 2021 Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting (Percentage)		34.00%

Summary of Significant Accounting Policies - Net loss per share (Details) - shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares as they would be antidilutive
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares (in shares)	3,440,935	102,151
Series C (common stock equivalents)
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares as they would be antidilutive
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares (in shares)	2,976,138
Warrants
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares as they would be antidilutive
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares (in shares)	12,310	13,509
Employee Stock Option
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares as they would be antidilutive
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares (in shares)	430,066	88,642
Unvested restricted stock units
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares as they would be antidilutive
Potentially dilutive securities outstanding excluded from the computation of diluted weighted average shares (in shares)	22,421

Balance Sheet Detail - Accrued Expenses and Other Current Liabilities (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Balance Sheet Detail
Research and development	$ 1,817,000	$ 2,196,000
Employee compensation	578,000	1,002,000
Professional fees	128,000	177,000
Accrued Severance	127,000
Accrued expenses and other current liabilities	$ 2,650,000	$ 3,375,000

Research and Development Arrangements and Related Party Transactions (Details) - USD ($)	2 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Related Party Transaction [Line Items]
Research and development		$ 5,113,000	$ 2,460,000	$ 10,989,000	$ 8,996,000
License
Related Party Transaction [Line Items]
Revenue				$ 0
Related party
Related Party Transaction [Line Items]
Research and development		$ 450,000
ChemDiv
Related Party Transaction [Line Items]
Amount payable	$ 5,024,000

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

+ Details

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 11, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-36020
Entity Registrant Name	Traws Pharma, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	22-3627252
Entity Address, Address Line One	12 Penns Trail
Entity Address, City or Town	Newtown
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	18940
City Area Code	267
Local Phone Number	759-3680
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		3,025,554
Title of 12(b) Security	Common Stock, par value $.01 per share
Trading Symbol	TRAW
Security Exchange Name	NASDAQ
Entity Central Index Key	0001130598
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Unaudited Interim Financial Information

Unaudited Interim Financial Information

Segment Information

Segment Information

Concentrations of Credit Risk and Off-Balance Sheet Risk

Concentrations of Credit Risk and Off-Balance Sheet Risk

Significant Accounting Policies

Significant Accounting Policies

Asset Acquisitions

Asset Acquisitions

Tax Incentive Receivable

Tax Incentive Receivable

Redeemable Convertible Preferred Stock

Redeemable Convertible Preferred Stock

Fair Value Measurements

Fair Value Measurements

Revenues and Deferred Revenues

Revenues and Deferred Revenues

The Company’s revenue during the three and nine months ended September 30, 2024 and 2023 was from its license and collaboration agreement with SymBio.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Symbio
Upfront license fee recognition over time	$	57,000	$	57,000	$	170,000	$	170,000
	$	57,000	$	57,000	$	170,000	$	170,000

Deferred revenue is as follows:


	Symbio
	Upfront Payment
Deferred balance at December 31, 2023	$	3,017,000
Recognition to revenue		(170,000)
Deferred balance at September 30, 2024	$	2,847,000

Research and Development Expenses

Research and Development Expenses

Net loss per share

Net loss per share

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:


	September 30,
	2024	2023
Series C (common stock equivalents)	2,976,138	—
Warrants	12,310	13,509
Stock Options	430,066	88,642
Unvested restricted stock units	22,421	—
	3,440,935	102,151

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Restructuring

9 Months Ended

Sep. 30, 2024

Restructuring

Restructuring

9. Restructuring

On April 8, 2024, Traws Pharma terminated 11 of its 17 employees, some of whom have been retained as consultants. The associated severance costs of $884,000 were expensed in the second quarter of 2024 and are being paid according to Traws Pharma’s regular payroll schedule. The Company recorded these restructuring charges based on each employee’s role to the respective R&D and general and administrative operating expense categories on its condensed consolidated statements of operations and comprehensive loss. At September 30, 2024, accrued severance of $127,000 is included in accrued expenses and other current liabilities in the condensed consolidated balance sheet.

Balance Sheet Detail (Tables)

9 Months Ended

Sep. 30, 2024

Balance Sheet Detail

Schedule of prepaid expenses and other current assets


	September 30,		December 31,
	2024		2023
Research and development	$	882,000	$	1,060,000
Manufacturing		—		186,000
Insurance		163,000		174,000
Other		347,000		401,000
	$	1,392,000	$	1,821,000

Schedule of property and equipment


	September 30,		December 31,
	2024		2023
Property and equipment	$	84,000	$	84,000
Accumulated depreciation		(72,000)		(62,000)
	$	12,000	$	22,000

Schedule of accrued expenses and other current liabilities


	September 30,		December 31,
	2024		2023
Research and development	$	1,817,000	$	2,196,000
Employee compensation		578,000		1,002,000
Professional fees		128,000		177,000
Accrued severance		127,000		—
	$	2,650,000	$	3,375,000

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating activities:
Net loss	$ (136,601,000)	$ (14,764,000)
Adjustment to reconcile net loss to net cash used in operating activities:
Acquired in-process research and development	117,464,000
Depreciation and amortization	10,000	12,000
Stock compensation	1,056,000	969,000
Changes in assets and liabilities:
Receivables	(2,103,000)	11,000
Prepaid expenses and other current assets	429,000	(1,188,000)
Accounts payable	(147,000)	2,288,000
Accrued expenses and other current liabilities	(5,690,000)	(660,000)
Deferred revenue	(170,000)	(170,000)
Net cash used in operating activities	(25,752,000)	(13,502,000)
Investing activities:
Cash paid for acquisition. net of cash acquired	(3,648,000)
Payments for purchase of property and equipment		(14,000)
Net cash used in investing activities	(3,648,000)	(14,000)
Financing activities:
Proceeds from sale of common and preferred stock in connection with the private placement, net of expenses	13,999,000
Net cash provided by financing activities	13,999,000
Effect of foreign currency translation on cash	(10,000)	3,000
Net decrease in cash and cash equivalents	(15,411,000)	(13,513,000)
Cash and cash equivalents at beginning of period	20,821,000	38,757,000
Cash and cash equivalents at end of period	5,410,000	$ 25,244,000
Supplemental disclosure of cash flow information:
Preferred stock issued in connection with the reclassification and conversion of redeemable convertible preferred stock	111,619,000
Common stock issued in connection with acquisition of Trawsfynydd	3,719,000
Preferred stock issued in connection with acquisition of Trawsfynydd	$ 98,047,000

Restructuring (Details)	Apr. 08, 2024 USD ($) item	Sep. 30, 2024 USD ($)
Restructuring Cost and Reserve [Line Items]
FTE positions eliminated \| item	11
Number of employees \| item	17
Accrued severance \| $		$ 127,000
Employee Severance
Restructuring Cost and Reserve [Line Items]
Severance costs \| $	$ 884,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Stock-Based Compensation - Fair Value Assumptions (Details) - $ / shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Assumptions used
Risk-free interest rate (as a percent)	3.46%	3.89%
Expected volatility (as a percent)	117.90%	123.10%
Expected term (in years)	6 years	5 years 8 months 4 days
Expected dividend yield (as a percent)	0.00%	0.00%
Weighted average grant date fair value (in dollars per share)	$ 7.49	$ 17.79

Balance Sheet Detail - Property and Equipment (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Property and Equipment
Property and equipment	$ 84,000	$ 84,000
Accumulated depreciation	(72,000)	(62,000)
Property and equipment, net	$ 12,000	$ 22,000

Asset Acquisition (Details)		9 Months Ended
Asset Acquisition (Details)	Apr. 01, 2024 USD ($) director Program $ / shares shares	Sep. 30, 2024 USD ($) shares	Dec. 31, 2023 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Assets
Cash and cash equivalents		$ 5,410,000	$ 20,821,000	$ 25,244,000	$ 38,757,000
Total assets		8,936,000	22,683,000
Liabilities assumed:
Accrued expenses and other current liabilities		2,650,000	3,375,000
Total liabilities		$ 10,969,000	$ 12,011,000
Number of shares issued \| shares		10,359
Acquired in-process research and development		$ 117,464,000
Common stock, shares authorized \| shares	125,000,000	250,000,000
Common Stock
Liabilities assumed:
Number of shares issued \| shares		141,982
Trawsfynydd IPR&D
Consideration transferred:
Assumed options	$ 7,085,000
Company transaction costs settled in equity	4,984,000
Company transaction costs paid in cash	3,692,000
Total consideration transferred	112,543,000
Assets
Cash and cash equivalents	44,000
Total assets	44,000
Liabilities assumed:
Accrued expenses and other current liabilities	4,965,000
Total liabilities	4,965,000
Net assets acquired	(4,921,000)
In-process research and development	117,464,000
Net Assets acquired	$ 112,543,000
Price per share (in dollars per share) \| $ / shares	$ 1.00
Percentage of discount on share price	10.00%
Number of programs \| Program	2
Transaction costs	$ 8,676,000
Acquired in-process research and development		$ 117,464,000
Number of directors appointed \| director	3
Trawsfynydd IPR&D \| Series C
Consideration transferred:
Consideration transferred	$ 93,232,000
Liabilities assumed:
Number of shares issued \| shares	10,359
Shares issuable upon conversion \| shares	10,000	400
Trawsfynydd IPR&D \| Series C \| Tungsten
Liabilities assumed:
Number of shares issued \| shares	535
Trawsfynydd IPR&D \| Common Stock
Consideration transferred:
Consideration transferred	$ 3,550,000
Liabilities assumed:
Number of shares issued \| shares	141,982
Trawsfynydd IPR&D \| Common Stock \| Tungsten
Liabilities assumed:
Number of shares issued \| shares	6,747

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 5,410,000	$ 20,821,000
Tax incentive and other receivables	2,121,000	18,000
Prepaid expenses and other current assets	1,392,000	1,821,000
Total current assets	8,923,000	22,660,000
Property and equipment, net	12,000	22,000
Other non-current assets	1,000	1,000
Total assets	8,936,000	22,683,000
Current liabilities:
Accounts payable	5,472,000	5,619,000
Accrued expenses and other current liabilities	2,650,000	3,375,000
Deferred revenue	226,000	226,000
Total current liabilities	8,348,000	9,220,000
Deferred revenue, non-current	2,621,000	2,791,000
Total liabilities	10,969,000	12,011,000
Commitments and contingencies
Stockholders' (deficit) equity:
Series C Preferred stock, $0.01 par value, 5,000,000 shares authorized, 7,440 shares issued and outstanding at September 30, 2024 and no shares issued and outstanding at December 31, 2023
Common stock, $0.01 par value, 250,000,000 shares authorized, 3,025,554 and 840,251 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	30,000	9,000
Additional paid in capital	617,202,000	493,317,000
Accumulated deficit	(619,232,000)	(482,631,000)
Accumulated other comprehensive loss	(33,000)	(23,000)
Total stockholders' (deficit) equity	(2,033,000)	10,672,000
Total liabilities and stockholders' (deficit) equity	$ 8,936,000	$ 22,683,000

Stock-Based Compensation - Options Activity (Details) - Employee Stock Option [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Number of Shares
Balance at the beginning of the period (in shares)	92,441
Trawsfynydd options exchanged in connection with acquisition (in shares)	365,547
Granted (in shares)	6,560
Forfeitures/adjustments (in shares)	(10,987)
Expired (in shares)	(23,495)
Balance at the end of the period (in shares)	430,066	92,441
Exercisable at the end of the period (in shares)	410,661
Weighted-Average Exercise Price
Balance at the beginning of the period (in dollars per share)	$ 76.05
Trawsfynydd options exchanged in connection with acquisition (in dollars per share)	1.23
Granted (in dollars per share)	8.50
Forfeitures/adjustments (in dollars per share)	29.37
Expired (in dollars per share)	975.43
Balance at the end of the period (in dollars per share)	37.01	$ 76.05
Exercisable at the end of the period (in dollars per share)	$ 38.02
Additional Disclosures
Weighted Average Remaining Contractual Term Of Options Outstanding (in years)	9 years 3 days	8 years 6 months 10 days
Weighted Average Remaining Contractual Term of Trawsfynydd options exchanged in connection with acquisition	9 years 1 month 17 days
Weighted Average Remaining Contractual Term Of Options Exercisable (in years)	9 years 3 days
Aggregate Intrinsic Value - Balance at the beginning of the period	$ 20,814
Aggregate Intrinsic Value - Balance at the end of the period	1,601,096	$ 20,814
Aggregate intrinsic value of options exercisable	$ 1,601,096

Commitments and Contingencies (Details) - Steven M Fruchtman [Member]	Sep. 30, 2024 USD ($)
Maximum
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss	$ 1,500,000
Minimum
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss	$ 0

Stock-Based Compensation - Summary of RSU activity (Details) - shares		9 Months Ended
	Apr. 01, 2024	Sep. 30, 2024
2021 RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding and unvested, beginning balance		1,032
Vested		(200)
Forfeited/Cancelled		(832)
2022 RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding and unvested, beginning balance		2,980
Vested		(1,490)
Forfeited/Cancelled		(1,207)
Outstanding and unvested, ending balance		283
2022 RSU Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding and unvested, beginning balance		440
Vested		(220)
Outstanding and unvested, ending balance		220
2023 RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding and unvested, beginning balance		5,436
Vested		(1,812)
Forfeited/Cancelled		(2,906)
Outstanding and unvested, ending balance		718
Inducement RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	21,200	21,200
Outstanding and unvested, ending balance		21,200

Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity

9 Months Ended

Sep. 30, 2024

Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity

Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity

6. Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity

As a result of the stockholder approval of the Meeting Proposals at the special meeting of the stockholders held on September 16, 2024, the Series C shares issued in connection with the acquisition of Trawsfynydd and the private placement of securities (see Note 3) were converted into 2,012,973 shares of the Company’s common stock. As of September 30, 2024, 7,440 shares of Series C remained outstanding.

Series C shares have no voting rights. Certain provisions of the Series C are as follows:

Dividends: Series C participates in any dividends with common stockholders on an as-converted basis

Liquidation: In the event of the liquidation, dissolution, or winding up of the affairs of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of Series C shall rank on parity with common stockholders as to the distributions of assets.

Redemption: In the event the Company is unable to obtain an affirmative stockholder vote to permit conversion within nine months after the initial issuance of the Series C, each holder of Series C may elect, at the holder’s option, to have the shares of Series C be redeemed by the Company at an amount equal to the last reported closing trading price of the common stock at such time on an as-converted to common stock basis, as further described in the Certificate of Designation relating to the Series C. The redemption right expired in connection with the Company obtaining the affirmative stockholder vote on the Conversion Proposal in September 2024. Immediately following the stockholder vote, any outstanding shares of Series C not converted were reclassified as permanent equity within the Company’s consolidated balance sheet as of September 30, 2024.

Beneficial Ownership Limitation: A holder of Series C is 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”)

Securities Purchase Agreement

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) 19,879 shares of common stock and (ii) 1,578 shares of Series C (the “PIPE Securities”) for an aggregate purchase price of approximately $13,999,000 (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, each share of Series C was converted into 10,000 shares of common stock upon Board approval in September 2024.

Registration Rights Agreement

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, Traws Pharma was 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 to be issued upon conversion of the Series C issued to the signatories to the Registration Rights Agreement in the Merger, subject to the Beneficial Ownership Limitation. The Company filed such registration statement within the Filing Deadline on July 1, 2024 which was declared effective on August 28, 2024.

Nature of Business (Details)		1 Months Ended	3 Months Ended		9 Months Ended
Nature of Business (Details)	Apr. 01, 2024 USD ($) Program	Sep. 30, 2024 USD ($) $ / shares	Sep. 30, 2024 USD ($) $ / shares	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) $ / shares	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Liquidity
Net loss			$ (8,475,000)	$ (4,739,000)	$ (136,601,000)	$ (14,764,000)
Accumulated deficit		$ (619,232,000)	(619,232,000)		(619,232,000)		$ (482,631,000)
Cash and cash equivalents		$ 5,410,000	$ 5,410,000	$ 25,244,000	$ 5,410,000	$ 25,244,000	$ 20,821,000	$ 38,757,000
Reverse stock split ratio		0.04
Common stock, par value (in dollars per share) \| $ / shares		$ 0.01	$ 0.01		$ 0.01
Trawsfynydd IPR&D
Liquidity
Number of programs \| Program	2
Cash and cash equivalents	$ 44,000

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2024 shares	Sep. 30, 2024 shares
Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity
Preferred stock, shares outstanding	7,440	7,440
Beneficial ownership percentage		19.90%
Common Stock
Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity
Number of shares issued during the period	2,012,973	2,012,973
Trawsfynydd IPR&D \| Common Stock
Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity
Number of shares issued during the period		2,012,973

Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity - Securities Purchase and Registration Rights Agreement (Details) - USD ($)	Sep. 30, 2024	Apr. 01, 2024
Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity
Reserved for issuance (in shares)		19,879
Aggregate purchase price		$ 13,999,000
Series C preferred stock
Redeemable Convertible Preferred Stock Stockholders' (Deficit) Equity
PIPE Securities agreed to be issued (in shares)		1,578
Number of common shares issuable on conversion (in shares)	10,000

Nature of Business

9 Months Ended

Sep. 30, 2024

Nature of Business

Nature of Business

1. Nature of Business

The Company

Traws Pharma, Inc. (“Traws Pharma” or the “Company”), formerly known as Onconova Therapeutics, Inc., was incorporated in the State of Delaware on December 22, 1998 and commenced operations on January 1, 1999. The Company's headquarters are located in Newtown, Pennsylvania. On April 1, 2024, the Company acquired Trawsfynydd Therapeutics, Inc., a Delaware corporation (“Trawsfynydd”), and the name change to Traws Pharma was effected. The Company accounted for the transaction as an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in two programs that were grouped as a single identifiable in-process research & development (“IPR&D”) asset. Traws Pharma is a clinical stage biopharmaceutical company aiming to address unmet medical needs in respiratory viral diseases and cancer. The viral respiratory disease program includes an oral inhibitor drug candidate of the SARS-CoV-2 Mpro (3CL protease) and an oral antiviral drug candidate for influenza. In the cancer program, Traws Pharma is developing the novel, proprietary multi-kinase CDK2/4/6 inhibitor narazaciclib for refractory endometrial cancer and potentially for other cancers.

Liquidity

The Company has incurred recurring operating losses since inception. For the nine months ended September 30, 2024, the Company incurred a net loss of $136,601,000, and as of September 30, 2024 the Company had an accumulated deficit of $619,232,000. The Company anticipates that operating losses will continue for the foreseeable future due to, among other things, costs related to research, development of its product candidates and its preclinical programs, strategic alliances and its administrative organization. At September 30, 2024, the Company had cash and cash equivalents of $5,410,000. Based on current projections, the Company believes that its cash and cash equivalents will be sufficient to fund its ongoing trials and operations into the first quarter of 2025; therefore, it does not have sufficient cash and cash equivalents to support its operations for at least the 12 months following the date that these financial statements are issued. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through the one-year period after the date that the 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, the Company may have based this estimate on assumptions that may prove to be wrong, and the Company's operating plan may change as a result of many factors currently unknown to the Company.

The Company will require substantial additional financing to fund its ongoing clinical trials and operations, and to continue to execute its strategy. To alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, management plans 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 its ability to obtain additional funding. The failure to obtain sufficient capital on acceptable terms when needed would have a material adverse effect on the Company’s business, results of operations and financial condition. There can be no assurance, however, that the Company will be successful in obtaining such funding in sufficient amounts, on terms acceptable to the Company, or at all.

On September 24, 2024, the Company received a letter from The Nasdaq Capital Market (“Nasdaq”) Staff (the “Staff”) stating that the Company had not been able to regain compliance with the minimum bid price requirement and that the Staff had determined to seek to delist the Company’s securities from Nasdaq. On October 29, 2024, the Company was notified by Nasdaq that the Company had regained compliance with the minimum bid price requirement because the Company’s common stock had a minimum closing price of at least $1.00 per share for a minimum of ten consecutive business days.

On August 23, 2024, the Company was notified by the Staff that the Company is no longer in compliance with the minimum stockholders’ equity requirement for continued listing on Nasdaq. The Company attended a hearing before the Nasdaq Hearings Panel (the “Nasdaq Panel”) on November 14, 2024 to present its plan to regain compliance with the minimum stockholders’ equity requirement.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business, and do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Reverse Stock Split

In September 2024, the Board of Directors of the Company (the “Board”) approved a one-for-25 reverse stock split of the Company’s outstanding shares of common stock (the “Reverse Stock Split”). Each 25 shares of the Company’s common stock, par value of $0.01 per share, issued and outstanding immediately prior to the Reverse Stock Split automatically reclassified, combined, converted and changed into one fully paid and nonassessable share of common stock, par value of $0.01 per share. In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding options, warrants and convertible preferred stock entitling the holders to purchase shares of the Company’s common stock, and the number of shares reserved for issuance pursuant to the Company’s 2021 Incentive Compensation Plan (the “2021 Plan”), including pursuant to outstanding restricted stock units outstanding thereunder, was reduced proportionately. No fractional shares were issued as a result of the Reverse Stock Split. Instead, the Company’s stockholders who otherwise would have been entitled to a fraction of a share received a full share of common stock. All common stock, per share and related information presented in the financial statements and accompanying notes have been retroactively adjusted to reflect the Reverse Stock Split.

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Stock-Based Compensation

Schedule of stock option activity


	Options Outstanding
				Weighted
		Weighted-		Average
		Average		Remaining	Aggregate
	Number	Exercise		Contractual	Intrinsic
	of Shares	Price		Term (in years)	Value
Balance, December 31, 2023	92,441	$	76.05	8.53	$	20,814
Trawsfynydd options exchanged in connection with acquisition	365,547	$	1.23	9.13		—
Granted	6,560	$	8.50	—		—
Forfeitures/adjustments	(10,987)	$	29.37	—		—
Expired	(23,495)	$	975.43	—		—
Balance, September 30, 2024	430,066	$	37.01	9.01	$	1,601,096
Exercisable at September 30, 2024	410,661	$	38.02	9.01	$	1,601,096

Schedule of weighted-average assumptions used for estimating the fair value of the stock compensation granted


	Nine Months Ended September 30,
	2024			2023
Risk-free interest rate		3.46	%		3.89	%
Expected volatility		117.9	%		123.1	%
Expected term		6.00	years		5.68	years
Expected dividend yield		—	%		—	%
Weighted average grant date fair value	$	7.49		$	17.79

Summary of RSU activity


	2021 RSUs	2022 RSUs	2022 RSU Awards	2023 RSUs	Inducement RSUs
Outstanding and unvested January 1, 2024	1,032	2,980	440	5,436	-
Granted	-	-	-	-	21,200
Vested	(200)	(1,490)	(220)	(1,812)	-
Forfeited/Cancelled	(832)	(1,207)	-	(2,906)	-
Outstanding and unvested September 30, 2024	-	283	220	718	21,200

Schedule of stock-based compensation expense


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	17,000	$	200,000	$	164,000	$	534,000
General and administrative		326,000		160,000		892,000		435,000
Total stock-based compensation expense	$	343,000	$	360,000	$	1,056,000	$	969,000

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Rule 10b5-1 Arrangement Modified	false
Non-Rule 10b5-1 Arrangement Modified	false

Summary of Significant Accounting Policies - Tax Incentive Receivable (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2024
Summary of Significant Accounting Policies
Research and development expense	$ 1,804,000	$ 1,804,000

Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Condensed Consolidated Statements of Comprehensive Loss (unaudited)
Net loss	$ (8,475,000)	$ (4,739,000)	$ (136,601,000)	$ (14,764,000)
Other comprehensive loss
Foreign currency translation adjustments		(2,000)	(10,000)	3,000
Other comprehensive loss		(2,000)	(10,000)	3,000
Comprehensive loss	$ (8,475,000)	$ (4,741,000)	$ (136,611,000)	$ (14,761,000)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-SubTopic 10
-Topic 505
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 830
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481674/830-30-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 830
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-Name Accounting Standards Codification
-Section 45
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481694/830-30-45-17

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
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-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1A

+ Details

Asset Acquisition

9 Months Ended

Sep. 30, 2024

Asset Acquisition

Asset Acquisition

3. Asset Acquisition

On April 1, 2024, the Company acquired Trawsfynydd, in accordance with the terms of an Agreement and Plan of Merger, dated April 1, 2024 (the “Merger Agreement”), pursuant to which the Company acquired Trawsfynydd’s TRX100 and TRX01 programs and assumed certain liabilities associated with the acquired assets. The upfront consideration included (i) the issuance of 141,982 shares of common stock of the Company at an aggregate fair value of $3,550,000, (ii) the issuance of 10,359 shares of Series C Convertible Preferred Stock (“Series C”) at an aggregate fair value of $93,232,000, and (iii) the assumption of all Trawsfynydd stock options (the “assumed options”) immediately outstanding prior to the transaction at an aggregated fair value of $7,085,000.

Each share of Series C was convertible into 10,000 shares of common stock, subject to the Beneficial Ownership Limitation (defined below). Post Reverse Stock Split, each share of Series C converts into 400 shares of common stock, and is still subject to the Beneficial Ownership Limitation (defined below). The fair value of the shares issued to Trawsfynydd and options assumed was based on the closing stock price of the Company’s common stock on April 1, 2024 of $1.00, less a discount 10.0% related to unregistered share restrictions of the preferred shares.

The Company accounted for the transaction as an asset acquisition as the Company acquired inputs and no substantive processes or outputs. The assets acquired in the transaction were measured based on the estimated fair value of the consideration paid of $112,543,000, which included direct transactions costs of $8,676,000. Tungsten Partners LLC (“Tungsten”) acted as financial advisor to the Company in connection with the Merger. As partial 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.

The consideration paid and the relative fair values of the assets acquired and liabilities assumed were as follows:


Consideration transferred:
Common stock	$	3,550,000
Series C		93,232,000
Assumed options		7,085,000
Company transaction costs settled in equity		4,984,000
Company transaction costs paid in cash		3,692,000
Total consideration transferred	$	112,543,000

Assets acquired:
Cash and cash equivalents	$	44,000
Total assets acquired		44,000

Liabilities assumed:
Accrued expenses and other current liabilities		4,965,000
Total liabilities assumed		4,965,000
Net assets acquired		(4,921,000)
In-process research and development		117,464,000
Net assets acquired	$	112,543,000

Under the asset acquisition model, an entity that acquires IPR&D assets follows the guidance in ASC 730, Research and Development, which requires that both tangible and intangible identifiable R&D assets with no alternative future use be initially allocated a portion of the consideration transferred and then charged to expense at the acquisition date. As the Trawsfynydd IPR&D assets acquired have no alternative future use to the Company, the Company charged $117,464,000 to expense within its consolidated statement of operations and comprehensive loss for the nine months ended September 30, 2024.

The Board approved the Merger Agreement and the related transactions, and the consummation of the Merger was not subject to approval of Company stockholders. In accordance with the Merger Agreement, three directors were appointed to the Board, and there were several changes to management, each effective as of the Closing.

Concurrently with the Closing of the Merger, the Company entered into a contingent value rights agreement (the “CVR Agreement”) with a rights agent (the “Rights Agent”), pursuant to which each holder of common stock as of the applicable record date (April 15, 2024), including those holders receiving shares of common stock in connection with the Merger, is entitled to one contractual contingent value right (each, a “CVR”) entitling the holder to certain distributions of net proceeds and net sales of Traws Pharma’s two leading cancer candidates, subject to, and in accordance with, the terms and conditions of the CVR Agreement, for each share of common stock held by such holder as of the applicable record time.

The distributions in respect of the CVRs will be made on a quarterly basis, and will be subject to a number of deductions, subject to certain exceptions or limitations, including but not limited to for certain taxes and certain out-of-pocket expenses incurred by Traws Pharma. At the time of Merger and again at September 30, 2024, the value ascribed to the CVR liability was de minimis given the uncertainty related to the success of the underlying oncology programs.

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 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.

Research and Development Arrangements and Related Party Transactions

9 Months Ended

Sep. 30, 2024

Research and Development Arrangements and Related Party Transactions

Research and Development Arrangements and Related Party Transactions

10. Research and Development Arrangements and Related Party Transactions

Research and development arrangements with unrelated parties

The Company has entered into various licensing and right-to-sublicense agreements with educational institutions for the exclusive use of patents and patent applications, as well as any patents that may develop from research being conducted by such educational institutions in the field of anticancer therapy, genes and proteins. Results from this research have been licensed to the Company pursuant to these agreements. Under one of these agreements with Temple University (“Temple”), the Company is required to make annual maintenance payments to Temple and royalty payments based upon a percentage of sales generated from any products covered by the licensed patents, with minimum specified royalty payments. As no sales had been generated through September 30, 2024 under the licensed patents, the Company has not incurred any royalty expenses related to this agreement. In addition, the Company is required to pay Temple a percentage of any sublicensing fees received by the Company.

Research and development arrangements with related parties

Prior to acquiring Trawsfynydd in April 2024, Trawsfynydd entered into a Master Research and Development Agreement (“Agreement”) with ChemDiv, Inc. (“ChemDiv”), pursuant to which ChemDiv provided services related to preclinical drug discovery to Trawsfynydd prior to the Merger and continues to provide services to the Company post-Merger. Dr. Nikolay Savchuk, COO of the Company, is a stockholder of ChemDiv and a member of its board of directors. Subsequent to the acquisition and through September 30, 2024, the Company made payments to ChemDiv of $5,024,000 which primarily relate to services completed prior the acquisition. During the three months ended September 30, 2024, $450,000 was expensed as R&D cost and included in accounts payable in the Company’s condensed statements of operations and condensed balance sheets, respectively, related to ChemDiv services.

Balance Sheet Detail

9 Months Ended

Sep. 30, 2024

Balance Sheet Detail

Balance Sheet Detail

4. Balance Sheet Detail

Prepaid expenses and other current assets:


	September 30,		December 31,
	2024		2023
Research and development	$	882,000	$	1,060,000
Manufacturing		—		186,000
Insurance		163,000		174,000
Other		347,000		401,000
	$	1,392,000	$	1,821,000

Property and equipment:


	September 30,		December 31,
	2024		2023
Property and equipment	$	84,000	$	84,000
Accumulated depreciation		(72,000)		(62,000)
	$	12,000	$	22,000

Accrued expenses and other current liabilities:


	September 30,		December 31,
	2024		2023
Research and development	$	1,817,000	$	2,196,000
Employee compensation		578,000		1,002,000
Professional fees		128,000		177,000
Accrued severance		127,000		—
	$	2,650,000	$	3,375,000