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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

​

FORM 10-Q

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(Mark One)

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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the quarterly period ended June 30, 2025

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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the transition period from to

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Commission file number: 001-37990

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LEAP THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

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​ | ​ | ​
Delaware State or other jurisdiction of incorporation or organization |  | 27-4412575 (I.R.S. Employer Identification No.)
​ | ​ | ​
47 Thorndike St, Suite B1-1, Cambridge, MA Address of Principal Executive Offices | ​ | 02141 Zip Code
​ | ​ | ​

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(617) 714-0360

Registrant’s Telephone Number, Including Area Code

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N/A

Former Name, Former Address and Former Fiscal Year, if Changed

​

Since Last Report Securities registered pursuant to Section 12(b) of the Act:

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Title of each class: |  | Trading Symbol(s) |  | Name of each exchange on which registered:
Common Stock, par value $0.001 per share | ​ | LPTX | ​ | Nasdaq Capital Market

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer ☐ |  | Accelerated filer ☐
​ | ​ | ​
Non-accelerated filer ☒ |  | Smaller reporting company ☒
​ | ​ | ​
​ | ​ | Emerging growth company ☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of August 11, 2025, there were 41,439,529 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

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TABLE OF CONTENTS

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​ | ​ | ​
​ | ​ | Page
PART I — FINANCIAL INFORMATION | ​
​ | ​ | ​
Item 1 | Financial Statements | 6
​ | ​ | ​
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23
​ | ​ | ​
Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 30
​ | ​ | ​
Item 4 | Controls and Procedures | 30
​ | ​ | ​
PART II — OTHER INFORMATION | ​
​ | ​ | ​
Item 1 | Legal Proceedings | 31
​ | ​ | ​
Item 1A | Risk Factors | 31
​ | ​ | ​
Item 2 | Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities | 31
​ | ​ | ​
Item 3 | Defaults Upon Senior Securities | 31
​ | ​ | ​
Item 4 | Mine Safety Disclosures | 31
​ | ​ | ​
Item 5 | Other Information | 31
​ | ​ | ​
Item 6 | Exhibits | 32

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements which reflect our current views with respect to, among other things, our operations and financial performance. Such statements are based upon our current plans, estimates and expectations that are subject to various risks and uncertainties that could cause actual results to differ materially from such statements. The inclusion of forward-looking statements should not be regarded as a representation that such plans, estimates and expectations will be achieved. Words such as “anticipate,” “expect,” “project,” “intend,” “believe,” “may,” “will,” “should,” “plan,” “could,” “continue,” “target,” “contemplate,” “estimate,” “forecast,” “guidance,” “predict,” “possible,” “potential,” “pursue,” “likely,” and words and terms of similar substance used in connection with any discussion of future plans, actions or events identify forward-looking statements. All statements, other than historical facts, including statements regarding estimations of projected cash runway; our future product development plans; the potential, safety, efficacy, and regulatory and clinical progress of our product candidates, including the anticipated timing for initiation of clinical trials and release of clinical trial data and the expectations surrounding potential regulatory submissions, approvals and timing thereof; and any assumptions underlying any of the foregoing, are forward-looking statements. Important factors that could cause actual results to differ materially from our plans, estimates or expectations could include, but are not limited to: (i) our ability and plan to develop and commercialize sirexatamab (DKN-01) and our other programs; (ii) status, timing and results of our preclinical studies and clinical trials; (iii) the potential benefits of sirexatamab and our other programs; (iv) the timing of our development programs and seeking regulatory approval of sirexatamab and our other programs; (v) our ability to obtain and maintain regulatory approval; (vi) our estimates of expenses and future revenues and profitability; (vii) our estimates regarding our capital requirements and our needs for additional financing; (viii) our estimates of the size of the potential markets for sirexatamab and our other programs; (ix) the benefits to be derived from any collaborations, license agreements, or other acquisition efforts; (x) sources of revenues and anticipated revenues, including contributions from any collaborations or license agreements for the development and commercialization of products; (xi) the rate and degree of market acceptance of sirexatamab or our other products; (xii) the success of other competing therapies that may become available; (xiii) the manufacturing capacity for our products; (xiv) our intellectual property position; (xv) our ability to maintain and protect our intellectual property rights; (xvi) our results of operations, financial condition, liquidity, prospects, and growth and strategies; (xvii) the industry in which we operate; (xviii) the trends that may affect the industry or us, (xix) the effect of inflation, currency rate and interest rate fluctuations, as well as fluctuations in the market price of our traded securities; (xx) our ability to regain compliance with the listing requirements of the Nasdaq capital markets; and (xxi) our ability to continue as a going concern.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in future periods. You should carefully and completely read this Quarterly Report and any documents that we have filed as exhibits to this Quarterly Report.

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You should refer to Part II, Item 1A, Risk Factors in this Quarterly Report and Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on March 26, 2025, for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard any such statement as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. Any forward-looking statement that we make in this Quarterly Report speaks only as of the date of such statement, and, except to the extent required by applicable law, we undertake no obligation to update such statements to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Sirexatamab (DKN-01) is an investigational drug undergoing clinical development and has not been approved by the U.S. Food and Drug Administration (the “FDA”), nor has it been submitted to the FDA for approval. Sirexatamab has not been, and may never be, approved by any regulatory agency or marketed anywhere in the world. Statements contained in this Quarterly Report should not be deemed to be promotional.

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INTRODUCTORY COMMENT

References to Leap

Throughout this Quarterly Report on Form 10-Q, the “Company,” “Leap,” “Leap Therapeutics,” “we,” “us,” and “our,” except where the context requires otherwise, refer to Leap Therapeutics, Inc. and its consolidated subsidiaries, and “Board of Directors” refers to the board of directors of Leap Therapeutics, Inc.

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Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

LEAP THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | December 31,
​ |  | 2025 |  | 2024
Assets |  | ​ |  |  | ​ |
Current assets: |  | ​ |  |  | ​ |
Cash and cash equivalents | ​ | $ | 18,130 | ​ | $ | 47,249
Research and development incentive receivable | ​ |  | 739 | ​ |  | 704
Prepaid expenses and other current assets | ​ |  | 292 | ​ |  | 86
Total current assets | ​ |  | 19,161 | ​ |  | 48,039
​ | ​ | ​ | ​ | ​ | ​ | ​
Right of use assets, net | ​ | ​ | 38 | ​ | ​ | 262
Research and development incentive receivable, net of current portion | ​ | ​ | 59 | ​ | ​ | —
Deposits | ​ |  | 784 | ​ |  | 823
Total assets | ​ | $ | 20,042 | ​ | $ | 49,124
​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and Stockholders’ Equity | ​ |  | ​ | ​ |  |
Current liabilities: | ​ |  | ​ | ​ |  |
Accounts payable | ​ | $ | 7,339 | ​ | $ | 4,743
Accrued expenses | ​ |  | 6,623 | ​ |  | 8,536
Income tax payable | ​ | ​ | 324 | ​ | ​ | 531
Lease liability - current portion | ​ | ​ | 39 | ​ | ​ | 266
Total current liabilities | ​ | ​ | 14,325 | ​ | ​ | 14,076
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Stockholders’ equity: | ​ | ​ | ​ | ​ | ​ | ​
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | ​ | ​ | — | ​ | ​ | —
Common stock, $0.001 par value; 240,000,000 shares authorized; 41,439,529 and 38,329,894 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | ​ | ​ | 41 | ​ | ​ | 38
Additional paid-in capital | ​ |  | 505,207 | ​ |  | 502,501
Accumulated other comprehensive loss | ​ |  | (82) | ​ |  | (120)
Accumulated deficit | ​ |  | (499,449) | ​ |  | (467,371)
Total stockholders’ equity | ​ |  | 5,717 | ​ |  | 35,048
Total liabilities and stockholders’ equity | ​ | $ | 20,042 | ​ | $ | 49,124

​

See notes to condensed consolidated financial statements.

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LEAP THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended June 30, |  | Six Months Ended June 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Operating expenses: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Research and development | ​ | $ | 10,537 | ​ | $ | 17,885 | ​ | $ | 23,448 | ​ | $ | 29,184
General and administrative | ​ |  | 1,817 | ​ |  | 3,367 | ​ |  | 4,823 | ​ |  | 6,893
Restructuring charges | ​ | ​ | 4,527 | ​ | ​ | — | ​ | ​ | 4,527 | ​ | ​ | —
Total operating expenses | ​ |  | 16,881 | ​ |  | 21,252 | ​ |  | 32,798 | ​ |  | 36,077
Loss from operations | ​ |  | (16,881) | ​ |  | (21,252) | ​ |  | (32,798) | ​ |  | (36,077)
Interest income | ​ |  | 246 | ​ |  | 865 | ​ |  | 683 | ​ |  | 1,640
Interest expense | ​ | ​ | (7) | ​ | ​ | — | ​ | ​ | (13) | ​ | ​ | —
Australian research and development incentives | ​ |  | 1 | ​ |  | 253 | ​ |  | 56 | ​ |  | 499
Foreign currency gain (loss) | ​ | ​ | (2) | ​ | ​ | 6 | ​ | ​ | (6) | ​ | ​ | (10)
Net loss | ​ | $ | (16,643) | ​ | $ | (20,128) | ​ | $ | (32,078) | ​ | $ | (33,948)
Dividend attributable to down round feature of warrants | ​ | ​ | — | ​ | ​ | (234) | ​ | ​ | — | ​ | ​ | (234)
Net loss attributable to common stockholders | ​ | $ | (16,643) | ​ | $ | (20,362) | ​ | $ | (32,078) | ​ | $ | (34,182)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net loss per share | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic and diluted | ​ | $ | (0.40) | ​ | $ | (0.52) | ​ | $ | (0.78) | ​ | $ | (1.01)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average common shares outstanding | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic and diluted | ​ | ​ | 41,444,979 | ​ | ​ | 39,122,662 | ​ | ​ | 41,357,423 | ​ | ​ | 33,830,083

​

See notes to condensed consolidated financial statements.

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LEAP THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended June 30, | ​ | Six Months Ended June 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Net loss | ​ | $ | (16,643) | ​ | $ | (20,128) | ​ | $ | (32,078) | ​ | $ | (33,948)
Other comprehensive income (loss): | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​
Foreign currency translation adjustments | ​ | ​ | 31 | ​ |  | 123 | ​ | ​ | 38 | ​ |  | (103)
Comprehensive loss | ​ | $ | (16,612) | ​ | $ | (20,005) | ​ | $ | (32,040) | ​ | $ | (34,051)

​

See notes to condensed consolidated financial statements.

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LEAP THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three and Six Months Ended June 30, 2024

(In thousands, except share amounts)

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Accumulated | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Additional | ​ | Other | ​ | ​ | ​ | ​ | Total
​ | ​ | Common Stock | ​ | Paid-in | ​ | Comprehensive | ​ | Accumulated | ​ | Stockholders’
​ |  | Shares |  | Amount |  | Capital |  | Income (loss) |  | Deficit |  | Equity
Balances at March 31, 2024 | ​ | 25,603,471 | ​ | $ | 26 | ​ | $ | 460,868 | ​ | $ | (120) | ​ | $ | (413,402) | ​ | $ | 47,372
April 2024 Private Placement (net of issuance costs of $2,948) | ​ | 12,660,993 | ​ | ​ | 12 | ​ | ​ | 37,039 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 37,051
Dividend attributable to the down round feature of 2017 Warrants | ​ | — | ​ | ​ | — | ​ | ​ | 234 | ​ | ​ | — | ​ | ​ | (234) | ​ | ​ | —
Foreign currency translation adjustment | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 123 | ​ | ​ | — | ​ | ​ | 123
Stock-based compensation | ​ | — | ​ | ​ | — | ​ | ​ | 1,370 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,370
Net loss | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (20,128) | ​ | ​ | (20,128)
Balances at June 30, 2024 | ​ | 38,264,464 | ​ | $ | 38 | ​ | $ | 499,511 | ​ | $ | 3 | ​ | $ | (433,764) | ​ | $ | 65,788

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Accumulated | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Additional | ​ | Other | ​ | ​ | ​ | ​ | Total
​ | ​ | Common Stock | ​ | Paid-in | ​ | Comprehensive | ​ | Accumulated | ​ | Stockholders’
​ |  | Shares |  | Amount |  | Capital |  | Income (loss) |  | Deficit |  | Equity
Balances at December 31, 2023 | ​ | 25,565,414 | ​ | $ | 26 | ​ | $ | 459,591 | ​ | $ | 106 | ​ | $ | (399,582) | ​ | $ | 60,141
Issuance of common stock upon vest of restricted stock units | ​ | 27,500 |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | —
Issuance of common stock upon exercise of stock options | ​ | 10,557 |  | ​ | — |  | ​ | 29 |  | ​ | — |  | ​ | — |  | ​ | 29
April 2024 Private Placement (net of issuance costs of $2,948) | ​ | 12,660,993 | ​ | ​ | 12 | ​ | ​ | 37,039 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 37,051
Dividend attributable to the down round feature of 2017 Warrants | ​ | — | ​ | ​ | — | ​ | ​ | 234 | ​ | ​ | — | ​ | ​ | (234) | ​ | ​ | —
Foreign currency translation adjustment | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (103) | ​ | ​ | — | ​ | ​ | (103)
Stock-based compensation | ​ | — | ​ | ​ | — | ​ | ​ | 2,618 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,618
Net loss | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (33,948) | ​ | ​ | (33,948)
Balances at June 30, 2024 | ​ | 38,264,464 | ​ | $ | 38 | ​ | $ | 499,511 | ​ | $ | 3 | ​ | $ | (433,764) | ​ | $ | 65,788

​

See notes to condensed consolidated financial statements.

​

​

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​

​
LEAP THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three and Six Months Ended June 30, 2025

(In thousands, except share amounts)

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Accumulated | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Additional | ​ | Other | ​ | ​ | ​ | ​ | Total
​ | ​ | Common Stock | ​ | Paid-in | ​ | Comprehensive | ​ | Accumulated | ​ | Stockholders’
​ |  | Shares |  | Amount |  | Capital |  | Loss |  | Deficit |  | Equity
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balances at March 31, 2025 |  | 41,439,529 | ​ | $ | 41 | ​ | $ | 503,718 | ​ | $ | (113) | ​ | $ | (482,806) | ​ | $ | 20,840
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign currency translation adjustment |  | — | ​ |  | — | ​ |  | — | ​ |  | 31 | ​ |  | — | ​ |  | 31
Stock-based compensation |  | — | ​ |  | — | ​ |  | 1,489 | ​ |  | — | ​ |  | — | ​ |  | 863
Net loss |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (16,643) | ​ |  | (16,643)
Balances at June 30, 2025 |  | 41,439,529 | ​ | $ | 41 | ​ | $ | 505,207 | ​ | $ | (82) | ​ | $ | (499,449) | ​ | $ | 5,717

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Accumulated | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Additional | ​ | Other | ​ | ​ | ​ | ​ | Total
​ | ​ | Common Stock | ​ | Paid-in | ​ | Comprehensive | ​ | Accumulated | ​ | Stockholders’
​ |  | Shares |  | Amount |  | Capital |  | Loss |  | Deficit |  | Equity
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balances at December 31, 2024 |  | 38,329,894 | ​ | $ | 38 | ​ | $ | 502,501 | ​ | $ | (120) | ​ | $ | (467,371) | ​ | $ | 35,048
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Issuance of common stock upon exercise of stock options | ​ | 6,667 | ​ | ​ | — | ​ | ​ | 16 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 16
Issuance of common stock upon exercise of prefunded warrants | ​ | 2,921,041 | ​ | ​ | 3 | ​ | ​ | (3) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Issuance of common stock upon vest of restricted stock units | ​ | 181,927 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Foreign currency translation adjustment | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 38 | ​ | ​ | — | ​ | ​ | 38
Stock-based compensation | ​ | — | ​ | ​ | — | ​ | ​ | 2,693 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,067
Net loss |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | (32,078) | ​ |  | (32,078)
Balances at June 30, 2025 |  | 41,439,529 | ​ | $ | 41 | ​ | $ | 505,207 | ​ | $ | (82) | ​ | $ | (499,449) | ​ | $ | 5,717

​

See notes to condensed consolidated financial statements.

​

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LEAP THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six Months Ended June 30,
​ |  | 2025 |  | 2024
Cash flows from operating activities: |  | ​ |  |  | ​ |
Net loss | ​ | $ | (32,078) | ​ | $ | (33,948)
Adjustments to reconcile net loss to net cash used in operating activities: | ​ |  | ​ | ​ |  | ​
Depreciation expense | ​ |  | — | ​ |  | 5
Non-cash operating lease expense | ​ | ​ | 224 | ​ | ​ | 202
Stock-based compensation expense | ​ |  | 2,693 | ​ |  | 2,618
Foreign currency transaction loss | ​ | ​ | 6 | ​ | ​ | 10
Changes in operating assets and liabilities: | ​ |  | ​ | ​ |  | ​
Prepaid expenses and other assets | ​ |  | 67 | ​ |  | (169)
Research and development incentive receivable | ​ |  | (59) | ​ |  | (498)
Accounts payable and accrued expenses | ​ |  | 596 | ​ |  | 2,687
Income tax payable | ​ | ​ | (227) | ​ | ​ | —
Lease liability | ​ | ​ | (227) | ​ | ​ | (201)
Other assets | ​ | ​ | 39 | ​ | ​ | 107
Net cash used in operating activities | ​ |  | (28,966) | ​ |  | (29,187)
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flows from financing activities: | ​ |  | ​ | ​ |  | ​
Proceeds from April 2024 Private Placement | ​ | ​ | — | ​ | ​ | 39,999
Payment of offering costs | ​ | ​ | — | ​ | ​ | (2,882)
Proceeds from the exercise of stock options | ​ |  | 16 | ​ |  | 29
Principal payments of insurance financing | ​ | ​ | (196) | ​ | ​ | —
Net cash provided by (used in) financing activities | ​ |  | (180) | ​ |  | 37,146
​ | ​ | ​ | ​ | ​ | ​ | ​
Effect of exchange rate changes on cash and cash equivalents | ​ |  | 27 | ​ |  | (123)
Net increase (decrease) in cash and cash equivalents | ​ |  | (29,119) | ​ |  | 7,836
Cash and cash equivalents at beginning of period | ​ |  | 47,249 | ​ |  | 70,643
Cash and cash equivalents at end of period | ​ | $ | 18,130 | ​ | $ | 78,479
​ | ​ | ​ | ​ | ​ | ​ | ​
Supplemental disclosure of non-cash financing activities: | ​ | ​ | ​ | ​ | ​ | ​
Remeasurement of right-of-use asset and lease liability | ​ | $ | — | ​ | $ | 420
Dividend attributable to the down round feature of 2017 warrants | ​ | $ | — | ​ | $ | 234
Offering costs included in accounts payable | ​ | $ | — | ​ | $ | 66
Prepayment of insurance through third-party financing | ​ | $ | 440 | ​ | $ | —

​

See notes to condensed consolidated financial statements.

​

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Leap Therapeutics, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts)

(Unaudited)

1. Nature of Business, Basis of Presentation and Liquidity

Nature of Business

Leap Therapeutics, Inc. (“the Company”) was incorporated in the state of Delaware on January 3, 2011. During 2015, HealthCare Pharmaceuticals Pty Ltd. (“HCP Australia”) was formed and is a wholly owned subsidiary of the Company.

On December 10, 2015, the Company entered into a merger agreement with GITR Inc. (“GITR”), an entity under common control, whereby a wholly owned subsidiary of the Company was merged with GITR and the surviving name of the wholly owned subsidiary was GITR Inc.

On August 29, 2016, the Company entered into a merger agreement with Macrocure Ltd. (“Macrocure”), a publicly held, clinical stage biotechnology company based in Petach Tikva, Israel. In connection with the merger, Macrocure became a wholly owned subsidiary of the Company, and the Company applied to be listed on the Nasdaq Global Market. Nasdaq approved the listing, and trading in the Company’s common stock commenced on January 24, 2017, under the trading symbol “LPTX.” On February 1, 2017, Macrocure’s name was changed to Leap Therapeutics Ltd. In 2020, Leap Therapeutics Ltd. was dissolved.

On December 15, 2021, Leap Securities Corp. was formed and is a wholly owned subsidiary of the Company.

On January 17, 2023, the Company entered into a merger agreement with Flame Biosciences, Inc., a privately held, biotechnology corporation (“Flame”), whereby Flame became a wholly owned subsidiary of the Company under the name Flame Biosciences LLC.

The Company is a biopharmaceutical company developing novel biomarker-targeted antibody therapies designed to treat patients with cancer by inhibiting fundamental tumor-promoting pathways, targeting cancer-specific cell surface molecules, and harnessing the immune system to attack cancer cells. The Company’s strategy is to identify, acquire, and develop molecules that translate into therapeutics that generate durable clinical benefit and enhanced patient outcomes. The Company’s lead clinical stage program is sirexatamab (DKN-01), a monoclonal antibody that inhibits Dickkopf-related protein 1, or DKK1. The Company also has a preclinical antibody program FL-501.

Basis of Presentation

The December 31, 2024 year-end condensed consolidated balance sheet data in the accompanying interim condensed consolidated financial statements was derived from audited consolidated financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2025.

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2024. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments which are necessary for the fair presentation of the Company’s financial position as of June 30, 2025, statements of operations and statements of comprehensive loss for the three and six months ended June 30, 2025 and 2024 and statements of cash flows for the six months ended June 30, 2025 and 2024. Such adjustments are of a normal and recurring nature. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2025.

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Liquidity and Going Concern

Since inception, the Company has been engaged in organizational activities, including raising capital, and research and development activities. The Company does not yet have a product that has been approved by the FDA, has not generated any product sales revenues and has not yet achieved profitable operations, nor has it ever generated positive cash flows from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, the Company’s future operations are dependent on the success of the Company’s efforts to raise additional capital, its research and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of the Company’s products.

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. As of June 30, 2025, the Company had cash and cash equivalents of $18,130. Additionally, the Company had an accumulated deficit of $499,449 as of June 30, 2025, and during the six months ended June 30, 2025, the Company incurred a net loss attributable to common stockholders of $32,078. The Company expects to continue to generate operating losses for the foreseeable future. The foregoing matters give rise to a substantial doubt about the Company’s ability to continue as a going concern for at least the next 12 months from the issuance of this report on Form 10-Q.

The Company has engaged a leading financial advisor to explore strategic alternatives to preserve and maximize shareholder value, including any or all of the following: entering into a merger, asset sale, or license agreement with another company; selling or partnering sirexatamab or FL-501 in a transaction with a pharmaceutical company, biotechnology company, or investment fund; or seeking additional funding through public or private equity financings. There can be no assurance that the Company will successfully complete a transaction as part of the strategic alternative process, and any such transaction, if available, may not be on terms favorable to the Company. If the Company is not able to successfully complete any transaction, the Company’s business, operations and financial condition will be materially adversely affected, and the Company would be forced to discontinue its business and operations entirely, wind-up and liquidate.

​

2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation.

Use of Estimates

The presentation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Research and development incentive income and receivable

The Company recognizes other income from Australian research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The research and development incentive is one of the key elements of the Australian government’s support for Australia’s innovation system and is supported by legislative law primarily in the form of the Australian Income Tax Assessment Act 1997, as long as eligibility criteria are met.

Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the research and development incentive regime described above. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time.

Under the program, a percentage of eligible research and development expenses incurred by the Company through its subsidiary in Australia are reimbursed. The percentage was 43.5% for the year ended December 31, 2024 and for the six months ended June 30, 2025.

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The research and development incentive receivable represents an amount due in connection with the above program. The Company recorded a research and development incentive receivable of $798 and $704 as of June 30, 2025 and December 31, 2024, respectively, in the condensed consolidated balance sheets and other income from Australian research and development incentives of $253 for the three months ended June 30, 2024, and $56 and $499, respectively, for the six months ended June 30, 2025 and 2024, in the condensed consolidated statements of operations related to refundable research and development incentive program payments in Australia. The Company recorded an immaterial amount of Australian research and development incentives during the three months ended June 30, 2025.

The following table shows the change in the research and development incentive receivable from January 1, 2024 to June 30, 2025 (in thousands):

​ | ​ | ​ | ​
Balance at January 1, 2024 |  | $ | 771
Foreign currency translation | ​ |  | (67)
Balance at December 31, 2024 | ​ | $ | 704
Australian research and development incentive income | ​ | ​ | 56
Foreign currency translation | ​ | ​ | 38
Balance at June 30, 2025 | ​ | $ | 798

​

Foreign Currency Translation

The financial statements of the Company’s Australian subsidiary are measured using the local currency as the functional currency. The assets and liabilities of this subsidiary are translated into U.S. dollars at an exchange rate as of the consolidated balance sheet date. Equity is translated at historical exchange rates. Revenues and expenses are translated into U.S. dollars at average rates of exchange in effect during the period. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders’ equity. Realized and unrealized foreign currency transaction gains and losses are included in the results of operations.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents. All cash and cash equivalents are held in United States or Australian financial institutions and money market funds. At times, the Company may maintain cash balances in excess of the federally insured amount of $250 per depositor, per insured bank, for each account ownership category. Although the Company currently believes that the financial institutions with whom it does business will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so. The Company has not experienced any credit losses associated with its balances in such accounts for the year ended December 31, 2024 or for the six months ended June 30,2025.

Restructuring Charges

On June 23, 2025, the Company’s Board of Directors approved a series of measures to conserve cash and reduce operating costs, including (i) the completion of the DeFianCe clinical trial and the wind-down of the Company’s research and development activities, including the Company’s sirexatamab and FL-501 development programs, and (ii) a reduction in force that impacted approximately 75% of the Company’s workforce. The reduction in force was conducted in two phases (i) first, on June 30, 2025, that impacted the Company’s Chief Operating Officer, Chief Scientific Officer and Chief Manufacturing Officer and (ii) second, on July 31, 2025 that impacted the Chief Medical Officer of the Company. As a result of this workforce reduction, during the three months ended June 30, 2025, the Company incurred $4,527 of charges recorded within restructuring charges in the condensed consolidated statements of operations. The Company does not expect to incur any further material charges related to this workforce reduction. The charges consist primarily of one-time employee severance and benefit costs and stock-based compensation expense related to acceleration of vesting. As of June 30, 2025, $3,540 is accrued within accrued expenses for employee severance benefits, the majority of which are expected to be paid in the third and fourth quarters of 2025.

Deposits

As of June 30, 2025 and December 31, 2024, there were $784 and $823, respectively, of deposits made by the Company with certain service providers that are to be applied to future payments due under the service agreements or returned to the Company if not utilized, which were recorded in the condensed consolidated balance sheets.

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Warrants

The Company will recognize on a prospective basis the value of the effect of the down round feature in the warrants to purchase shares of common stock that were issued in a private placement in November 2017 (the “2017 Warrants”) and in the warrants that were issued in a private placement in March 2020 (the “March 2020 Coverage Warrants”) when it is triggered (i.e., when the exercise price is adjusted downward). This value is measured as the difference between (1) the financial instrument’s fair value (without the down round feature) using the pre-trigger exercise price and (2) the financial instrument’s fair value (with the down round feature) using the reduced exercise price. The value of the effect of the down round feature will be treated as a dividend and a reduction to income available to common stockholders in the basic earnings per share (“EPS”) calculation. In connection with the private placement of common stock and prefunded warrants completed in April 2024 (the “April 2024 Private Placement”), when the 2017 Warrants were repriced from $10.55 to $2.82 as a result of a down round, the Company recorded a dividend of $234 during the three months ended June 30, 2024. The 2017 Warrants expired in November 2024.

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. 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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

| ● | Level 1—Quoted prices in active markets for identical assets or liabilities.

| ● | Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

| ● | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

A summary of the assets carried at fair value in accordance with the hierarchy defined above is as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Total |  | Level 1 |  | Level 2 |  | Level 3
June 30, 2025 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash equivalents | ​ | $ | 5,151 | ​ | $ | 5,151 | ​ | $ | — | ​ | $ | —
Total assets | ​ | $ | 5,151 | ​ | $ | 5,151 | ​ | $ | — | ​ | $ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
December 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash equivalents | ​ | $ | 23,299 | ​ | $ | 23,299 | ​ | $ | — | ​ | $ | —
Total assets | ​ | $ | 23,299 | ​ | $ | 23,299 | ​ | $ | — | ​ | $ | —

​

Cash equivalents of $5,151 and $23,299 as of June 30, 2025 and December 31, 2024, respectively, consisted of overnight investments and money market funds which are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

The carrying values of the research and development incentive receivable, accounts payable and accrued liabilities approximate their fair value due to the short-term nature of these assets and liabilities.

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Leases

The Company accounts for leases in accordance with Accounting Standards Codification, or ASC, Topic 842, Leases.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Most leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. The Company has determined that the rate implicit in the lease is not determinable and the Company does not have borrowings with similar terms and collateral. Therefore, the Company considered a variety of factors, including observable debt yields from comparable companies and the volatility in the debt market for securities with similar terms, in determining that 8% was reasonable to use as the incremental borrowing rate for purposes of the calculation of lease liabilities.

In accordance with the guidance in Topic 842, components of a lease should be split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components.

Although separation of lease and non-lease components is required, certain practical expedients are available. Entities may elect the practical expedient to not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. The Company has elected to account for the lease and non-lease components of each of its operating leases as a single lease component and allocate all of the contract consideration to the lease component only. The lease component results in an operating right-of-use asset being recorded on the consolidated balance sheets and amortized such that lease expense is recorded on a straight line basis over the term of the lease.

Segment Information

The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, manages the Company’s business activities as a single operating and reportable segment at the consolidated level. Accordingly, the Company’s CODM uses consolidated net loss to measure segment loss, allocate resources and assess performance. Further, the CODM reviews and utilizes functional expenses (research and development and general and administrative) at the consolidated level to manage the Company’s operations. Other segment items included in consolidated net loss are interest income and foreign currency gain (loss), which are reflected in the consolidated statements of operations and comprehensive loss.

Income taxes

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, introducing significant changes to the U.S. federal income tax code. The OBBA includes provisions affecting corporate tax incentives, international tax provisions, and various business credits and deductions. Pursuant to ASC 740, Income Taxes, the Company will recognize the effects of the OBBBA in the third fiscal quarter of 2025, the period in which the legislation was enacted. The Company is currently evaluating the potential impact of the OBBBA on its financial statements.

Net Loss per Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares outstanding during the period and, if dilutive, the weighted average number of potential shares of common stock, including the assumed exercise of stock options and warrants.

Subsequent Events

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required.

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Recently issued accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance in ASU 2023-09 improves the transparency of income tax disclosures by greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The standard is effective for public companies for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 effective January 1, 2025 and it did not have a material impact on the Company’s consolidated financial statements at adoption date.

​

3. Accrued Expenses

Accrued expenses consist of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | December 31,
​ |  | 2025 |  | 2024
Clinical trials | ​ | $ | 2,600 | ​ | $ | 4,798
Professional fees | ​ |  | 369 | ​ |  | 274
Payroll and related expenses | ​ |  | 114 | ​ |  | 3,464
Severance | ​ | ​ | 3,540 | ​ | ​ | —
Accrued expenses | ​ | $ | 6,623 | ​ | $ | 8,536

​

​

4. Leases

The Company has an operating lease for real estate in the United States and does not have any finance leases. The Company’s leases may contain options to renew and extend lease terms and options to terminate leases early. Reflected in the right-of-use asset and lease liability on the Company’s consolidated balance sheets are the periods provided by renewal and extension options that the Company is reasonably certain to exercise, as well as the periods provided by termination options that the Company is reasonably certain to not exercise.

The Company’s existing lease agreement for the premises located at 47 Thorndike Street (the “47 Thorndike Street Lease”) was set to expire on July 31, 2025. On July 1, 2025 the Company entered into a Fifth Amendment to Lease (“Fifth Amendment”) with Landlord, extending the 47 Thorndike Street Lease as a tenancy-at will (as amended, the “Lease”). The term of the Lease will expire on the later of August 31, 2025 or the last day of any month identified by notice by the Company or Landlord to the other, not less than sixty (60) days in advance (see Note 10). The Lease includes variable lease and non-lease components that are not included in the right-of-use asset and lease liability and are reflected as an expense in the period incurred. Such payments primarily include common area maintenance charges.

In calculating the present value of future lease payments, the Company utilized its incremental borrowing rate based on the lease term. The Company has an existing net lease in which the non-lease components (e.g. common area maintenance, maintenance, consumables, etc.) are paid separately from rent based on actual costs incurred and therefore are not included in the right-of-use asset and lease liability and are reflected as an expense in the period incurred. During the three months ended March 31, 2024, the Company extended the term of its operating lease to July 31, 2025 and recorded an additional right-of-use asset and lease liability of $420. As of June 30, 2025, a right-of-use asset of $38 and lease liability of $39 are reflected on the condensed consolidated balance sheet. The Company recorded rent expense of $117 and $115, respectively, during the three months ended June 30, 2025 and 2024 and $235 and $225, respectively, during the six months ended June 30, 2025 and 2024. Cash paid for amounts included in the measurement of lease liabilities was $117 and $115, respectively, during the three months ended June 30, 2025 and 2024 and $234 and $229, respectively, during the six months ended June 30, 2025 and 2024.

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Future lease payments under non-cancelable operating leases as of June 30, 2025 are detailed as follows:

​

​ | ​ | ​ | ​
Future Operating Lease Payments
2025 | ​ | ​ | 39
Total Lease Payments | ​ |  | 39
Less: imputed interest | ​ |  | —
Total operating lease liabilities | ​ | $ | 39

​

​

5. Warrants

As of June 30, 2025, the number of shares of common stock issuable upon the exercise of outstanding warrants consisted of the following:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
June 30, 2025 | ​ | ​
​ | ​ | Number of Common Shares | ​ | ​ | ​ | ​ | ​
Description |  | Issuable |  | Exercise Price |  | Expiration Date
January 23 2017 Warrants | ​ | 5,450 | ​ | $ | 0.10 | ​ | Upon M&A Event
2019 Warrants | ​ | 690,813 | ​ | $ | 19.50 | ​ | February 2026
March 2020 Coverage Warrants | ​ | 2,594,503 | ​ | $ | 21.10 | ​ | Jan - March 2027
​ | ​ | 3,290,766 | ​ | ​ | ​ | ​ | ​

​

2017 Warrants

The 2017 Warrants contained full ratchet anti-dilution protection provisions. The Company recognized on a prospective basis the value of the effect of the down round feature in the warrant when it was triggered (i.e., when the exercise price was adjusted downward). This value was measured as the difference between (1) the financial instrument’s fair value (without the down round feature) using the pre-trigger exercise price and (2) the financial instrument’s fair value (with the down round feature) using the reduced exercise price. The value of the effect of the down round feature was treated as a dividend and a reduction to income available to common stockholders in the basic EPS calculation. In connection with the April 2024 Private Placement, when the 2017 Warrants were repriced from $10.55 to $2.82, the Company recorded a dividend of $234 during the three months ended June 30, 2024. The 2017 Warrants expired in November 2024.

March 2020 Pre-funded Warrants

During the six months ended June 30, 2025, 824,718 March 2020 Pre-funded Warrants were cashless exercised, resulting in the issuance of 809,558 common shares of the Company’s common stock.

September 2021 Pre-funded Warrants

During the six months ended June 30, 2025, 591,603 September 2021 Pre-funded warrants were cashless exercised, resulting in the issuance of 590,424 common shares of the Company’s common stock.

April 2024 Pre-funded Warrants

During the six months ended June 30, 2025, 1,523,404 April 2024 Pre-funded Warrants were cashless exercised, resulting in the issuance of 1,521,059 common shares of the Company’s common stock.

January 2023 Common Stock Warrants

In January 2023, pursuant to the Merger, the warrants held by the Flame Warrant Holders became exercisable for 6,530 shares of Leap’s common stock (the “January 2023 Common Stock Warrants”). The January 2023 Common Stock Warrants had an exercise price of $6.78 per share and expired in February 2025.

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January 2023 Series X Preferred Stock Warrants

In January 2023, pursuant to the Merger, the warrants held by the Flame Warrant Holders also became exercisable for 443 shares of Series X Preferred Stock (the “January 2023 Series X Preferred Stock Warrants”). Following Stockholder Approval, each share of Series X Preferred Stock converted into 100 shares of common stock during the three months ended June 30, 2023. The January 2023 Series X Preferred Stock Warrants had an exercise price of $6.78 per share and expired in February 2025.

​

6. Common Stock

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Board of Directors, if any, subject to the preferential dividend rights of the preferred stockholders. Through June 30, 2025, no dividends have been declared for shares of common stock.

Private Placement - April 2024

On April 15, 2024, the Company completed a private placement whereby the Company issued 12,660,993 shares of its common stock at a purchase price of $2.82 per share, and 1,523,404 prefunded warrants at a purchase price of $2.819 per share (which is equal to the price per share less the $0.001 exercise price per warrant share). The aggregate net proceeds received by the Company from the offering was $37,051, net of $2,948 of underwriting discounts and commissions and offering expenses payable by the Company.

7. Equity Incentive Plans

Equity Incentive Plans

On January 20, 2017, the Company’s stockholders approved the 2016 Equity Incentive Plan (the “2016 Plan”). Beginning on January 1, 2018, the number of shares of common stock authorized for issuance pursuant to the 2016 Plan was increased each January 1 by an amount equal to 4% of the Company’s outstanding common stock as of the end of the immediately preceding calendar year or such lesser amount as determined by the compensation committee of the Company’s Board of Directors.

On June 16, 2022, the Company’s stockholders approved the 2022 Equity Incentive Plan (the “2022 Plan”), which provides for a total of 750,000 new shares of the Company’s common stock to be granted. In addition, on June 16, 2023, and July 2, 2024, stockholders approved new shares of the Company’s common stock to be added to the 2022 Plan for future issuance of 2,250,000 and 2,000,000, respectively.

As of June 30, 2025, there were 3,922,812 shares available for grant under the Company’s equity incentive plans.

A summary of stock option activity under the Equity Plans is as follows:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Weighted |  | ​ | ​ |  | ​
​ | ​ | ​ | ​ |  | Average |  | Weighted | ​ |  | Aggregate
​ | ​ | ​ | ​ |  | Exercise Price |  | Average Remaining | ​ |  | Intrinsic
​ |  | Options | ​ |  | Per Share |  | Life in Years | ​ |  | Value
Outstanding at December 31, 2024 |  | 6,416,744 | ​ | $ | 8.43 |  | 8.43 | ​ | $ | 1,937
Exercised | ​ | (6,667) | ​ | $ | 2.40 | ​ | ​ | ​ | ​ | ​
Forfeited |  | (1,378,104) | ​ | $ | 7.55 |  | ​ | ​ | ​ | ​
Outstanding at June 30, 2025 |  | 5,031,973 | ​ | $ | 8.68 |  | 6.00 | ​ | $ | —
Options exercisable at June 30, 2025 |  | 3,639,701 | ​ | $ | 10.98 |  | 4.94 | ​ | ​ | ​
Options vested and expected to vest at June 30, 2025 |  | 5,031,973 | ​ | $ | 8.68 |  | 6.00 | ​ | $ | —

​

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The grant date fair value of the options granted during the six months ended June 30, 2024 was estimated at the date of grant using the Black-Scholes option valuation model. The expected life was estimated using the “simplified” method as defined by the SEC’s Staff Accounting Bulletin 107, Share-Based Payment. The expected volatility was based on the historical volatility of the Company. The risk-free interest rate was based on the continuous rates provided by the U.S. Treasury with a term approximating the expected life of the option. The expected dividend yield was 0% because the Company does not expect to pay any dividends for the foreseeable future. The Company elected the straight-line attribution method in recognizing the grant date fair value of options issued over the requisite service periods of the awards, which are generally the vesting periods.

The weighted average grant date fair value for the stock options granted during the six months ended June 30, 2024 was $2.12 per share. During the six months ended June 30, 2025, there were no stock options granted.

The assumptions that the Company used to determine the grant-date fair value of stock options granted to employees and directors during the six months ended June 30, 2024 were as follows, presented on a weighted average basis:

​

​ | ​ | ​ | ​
​ | ​ | Six Months Ended June 30, | ​
​ |  | 2024 | ​
​ | ​ | ​ | ​
Expected volatility | ​ | 92.84 | %
Weighted average risk-free interest rate | ​ | 4.00 | %
Expected dividend yield | ​ | 0.00 | %
Expected term (in years) | ​ | 6.44 | ​

​

Stock options generally vest over a three or four year period, as determined by the compensation committee of the Board of Directors at the time of grant. The options expire 10 years from the grant date. As of June 30, 2025, there was approximately $2,205 of unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a remaining weighted-average period of approximately 1.54 years.

Restricted Stock Units (“RSUs”)

The Company did not grant any RSUs during the six months ended June 30, 2025 and 2024.

The following table presents RSU activity under the 2016 Plan during the six months ended June 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted
​ | ​ | ​ | ​ | Average Grant
​ |  | Number of Shares |  | Date Fair Value
Outstanding at December 31, 2024 |  | 220,000 | ​ | $ | 19.40
Vested | ​ | (220,000) | ​ | $ | 19.40
Outstanding at June 30, 2025 |  | — | ​ | $ | —

​

During the six months ended June 30, 2025, 220,000 RSUs vested. As of June 30, 2025, there were no shares outstanding covered by RSUs.

The Company recognized stock-based compensation expense related to the issuance of stock option awards and RSUs to employees and non-employees in the condensed consolidated statements of operations during the three and six months ended June 30, 2025 and 2024 as follows:

Stock Based Compensation Expense

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended June 30, | ​ | Six Months Ended June 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Research and development |  | $ | 387 | ​ | $ | 729 | ​ | $ | 1,021 | ​ | $ | 1,356
General and administrative |  | ​ | 476 | ​ |  | 641 | ​ | ​ | 1,046 | ​ |  | 1,262
Restructuring charges | ​ | ​ | 626 | ​ | ​ | — | ​ | ​ | 626 | ​ | ​ | —
Total | ​ | $ | 1,489 | ​ | $ | 1,370 | ​ | $ | 2,693 | ​ | $ | 2,618

​

​

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8. Net Loss Per Share

Basic and diluted net loss per share for the three and six months ended June 30, 2025 and 2024 was calculated as follows (in thousands except share and per share amounts).

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended June 30, | ​ | Six Months Ended June 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Numerator: |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |
Net loss | ​ | $ | (16,643) | ​ | $ | (20,128) | ​ | $ | (32,078) | ​ | $ | (33,948)
Dividend attributable to down round feature of warrants | ​ |  | — | ​ |  | (234) | ​ |  | — | ​ |  | (234)
Net loss attributable to common stockholders for basic and diluted loss per share | ​ | $ | (16,643) | ​ | $ | (20,362) | ​ | $ | (32,078) | ​ | $ | (34,182)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Denominator: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Weighted average number of common shares outstanding – basic and diluted | ​ |  | 41,444,979 | ​ |  | 39,122,662 | ​ |  | 41,357,423 | ​ |  | 33,830,083
Net loss per share attributable to common stockholders – basic and diluted | ​ | $ | (0.40) | ​ | $ | (0.52) | ​ | $ | (0.78) | ​ | $ | (1.01)

​

Included within weighted average common shares outstanding for the three and six months ended June 30, 2025 and 2024 are 5,450, and 2,945,175, respectively, common shares issuable upon the exercise of certain warrants, which are exercisable at any time for nominal consideration, and as such, the shares are considered outstanding for the purpose of calculating basic and diluted net loss per share attributable to common stockholders.

All warrants exercisable for common stock participate on a one-for-one basis and shares and warrants exercisable for Series X Preferred Stock issued participate on an as converted basis with common stock in the distribution of dividends, if and when declared by the board of directors, on the Company’s common stock. For purposes of computing EPS, these securities are considered to participate with common stock in earnings of the Company. Therefore, the Company calculates basic and diluted EPS using the two-class method. Under the two-class method, net income for the period is allocated between common stockholders and participating securities according to dividends declared and participation rights in undistributed earnings. No income was allocated to the warrants and Series X Preferred Stock for the three and six months ended June 30, 2025 and 2024, as results of operations were a loss for the period.

The Company’s potentially dilutive securities include RSUs, stock options and warrants. These securities were excluded from the computations of diluted net loss per share for the three and six months ended June 30, 2025 and 2024, as the effect would be to reduce the net loss per share. The following table includes the potential shares of common stock, presented based on amounts outstanding at each period end, that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended June 30, | ​ | Six Months Ended June 30,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
Restricted stock units to purchase common stock | ​ | — | ​ | 227,500 | ​ | — | ​ | 227,500
Options to purchase common stock |  | 5,031,973 | ​ | 4,822,221 | ​ | 5,031,973 | ​ | 4,822,221
Warrants to purchase common stock | ​ | 3,285,316 | ​ | 3,586,373 | ​ | 3,285,316 | ​ | 3,586,373
​ |  | 8,317,289 | ​ | 8,636,094 | ​ | 8,317,289 | ​ | 8,636,094

​

​

9. Commitments and Contingencies

Manufacturing Agreements—The Company is party to manufacturing agreements with vendors to manufacture DKN-01, its lead product candidate, for use in clinical trials. As of June 30, 2025, there were $12 noncancelable commitments under these agreements.

Insurance Financing Agreement—In March 2025, the Company entered into an insurance premium financing and security agreement with Aon Premium Finance, LLC. Under the agreement, the Company financed $440 of insurance premiums at a 8.74% fixed annual interest rate. Payments of approximately $42 are due monthly through February 2026. As of June 30, 2025, the outstanding principal of the loan was $245 and is included within accrued expenses in the condensed consolidated balance sheets.

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License and Service Agreement—On January 3, 2011, the Company entered into a license agreement with Eli Lilly and Company (“Lilly”), a shareholder, to grant a license to the Company for certain intellectual property rights relating to pharmaceutically active compounds that may be useful in the treatment of bone healing, cancer and, potentially, other medical conditions. As defined in the license agreement, the Company would be required to pay royalties to Lilly based upon a percentage in the low single digits of net sales of developed products, if and when achieved. However, there can be no assurance that clinical or commercialization success of developed products will occur, and no royalties have been paid or accrued through June 30, 2025.

Collaboration Agreement—On August 10, 2020, the Company entered into a collaboration agreement with Adimab, LLC (the “Adimab Agreement”), pursuant to which Adimab will conduct research programs to develop monoclonal antibodies to certain targets identified by the Company and provide it with an option to acquire exclusive rights to such antibodies. Upon payment of an option fee, on a product-by-product basis, Adimab will grant the Company a world-wide, exclusive license for, or assign ownership to the Company of, certain intellectual property rights and grant the Company a non-exclusive license with respect to the Adimab platform technology. As defined in the Adimab Agreement, after exercising an option and making the option payment, the Company would be required to pay Adimab milestones upon the completion of clinical development and regulatory milestones, along with a royalty in the low-single digits of net sales of each product, if and when achieved. However, there can be no assurance that clinical, or commercialization success will occur, and no royalties have been paid or accrued through June 30, 2025.

Legal Proceedings—At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to its legal proceedings. As of the date of this report, the Company is not currently a party to any material legal proceedings.

Indemnification Agreements—In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of June 30, 2025 or December 31, 2024.

​

10. Subsequent Events

On July 1, 2025, the Company entered into a Fifth Amendment with its 47 Thorndike Street Lease, extending the lease as a tenancy-at will and reducing the size of the premises. The original term was extended and will expire on the later of August 31, 2025 or the last day of any month identified by notice by the Company or Landlord to the other, not less than sixty (60) days in advance. The annual fixed rent for the period from and after August 1, 2025, is $230 ($19 for each month).

​

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes thereto and other disclosures included in this Quarterly Report on Form 10-Q, including the disclosures under Part II, Item IA “Risk Factors,” and our audited condensed consolidated financial statements and the accompanying notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission, or the SEC, on March 26, 2025. Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and, unless otherwise indicated, amounts are presented in U.S. dollars.

Company Overview

We are a biopharmaceutical company developing biomarker-targeted antibody therapies designed to treat patients with cancer by inhibiting fundamental tumor-promoting pathways, targeting cancer-specific cell surface molecules, and harnessing the immune system to attack cancer cells. Our strategy is to identify, acquire, and develop molecules that will rapidly translate into high impact therapeutics that generate durable clinical benefit and enhanced patient outcomes.

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

We intend to apply our extensive experience in identifying and developing transformational products to build a pipeline of programs that have the potential to change the practice of cancer medicine.

We have devoted substantially all of our resources to development efforts relating to our product candidates, including manufacturing and conducting clinical trials of our product candidates, providing general and administrative support for these operations and protecting our intellectual property. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations primarily through proceeds from our sales of common stock and preferred stock and proceeds from the issuance of notes payable.

Recent Developments

Since March 31, 2025, we provided the following development and business updates.

DKN-01 Development Update

| ● | Reported updated clinical data from Part B of the DeFianCe study of sirexatamab plus bevacizumab and chemotherapy in CRC patients. In the updated analysis as of May 22, 2025, sirexatamab demonstrated a statistically significant benefit on overall response rate (“ORR”), by investigator assessment and blinded independent central review, and progression-free survival (“PFS”) in patients with high levels of DKK1, no prior exposure to anti-VEGF therapy, or liver metastasis, along with a positive trend on ORR and PFS in the full intent-to-treat population. The final data from the study is being prepared for presentation at a future medical conference.

​

Business Updates

| ● | Exploring strategic alternatives to preserve and maximize shareholder value. Our Board of Directors initiated a process to explore strategic alternatives to preserve and maximize shareholder value, including leveraging our cash balance and exploring potential sale or partnership opportunities for sirexatamab and FL-501. Our Board of Directors approved the engagement of Raymond James & Associates, Inc. to serve as exclusive financial advisor to assist in the strategic evaluation process. There can be no assurance that we will successfully complete a transaction as part of the strategic alternative process, and any such transaction, if available, may not be on terms favorable to us. If we are not able to successfully complete any transaction, our business, operations and financial condition will be materially adversely affected, and we would be forced to discontinue our business and operations entirely, wind-up and liquidate.

​

| ● | Taking additional steps to reduce spending and preserve capital. We implemented an additional workforce reduction of approximately 75% of our workforce. The total costs related to this reduction in force, including severance payments, are estimated to be approximately $4.5 million. The majority of these costs will be recognized in the third and fourth quarters of 2025.

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Financial Overview

Research and Development Expenses

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

| ● | salaries and related overhead expenses for personnel in research and development functions, including costs related to stock-based compensation;

| ● | fees paid to consultants and CROs for our nonclinical and clinical trials, and other related clinical trial fees, including but not limited to laboratory work, clinical trial database management, clinical trial material management and statistical compilation and analysis;

| ● | costs related to acquiring and manufacturing clinical trial material; and

| ● | costs related to compliance with regulatory requirements.

Our direct research and development expenses are tracked on a program-by-program basis and consist primarily of internal and external costs, such as employee costs, including salaries and stock-based compensation, other internal costs, fees paid to consultants, central laboratories, contractors and CROs in connection with our clinical and preclinical trial development activities. We use internal resources to manage our clinical and preclinical trial development activities and perform data analysis for such activities.

We participate, through our subsidiary in Australia, in the Australian government’s research and development (“R&D”) Incentive program (“R&D Incentive Program”), such that a percentage of our eligible research and development expenses are reimbursed by the Australian government as a refundable tax offset and such incentives are reflected as other income.

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended June 30, |  | Six Months Ended June 30,
​ | ​ | 2025 |  | 2024 |  | 2025 |  | 2024
​ | ​ | (in thousands) |  | (in thousands)
Direct research and development by program: |  | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |
DKN‑01 program | ​ | $ | 9,999 | ​ | $ | 17,806 | ​ | $ | 22,786 | ​ | $ | 28,989
TRX518 program | ​ |  | — | ​ |  | 3 | ​ |  | — | ​ |  | 9
FL-301 program | ​ | ​ | — | ​ | ​ | 20 | ​ | ​ | — | ​ | ​ | 31
FL-302 program | ​ | ​ | — | ​ | ​ | 11 | ​ | ​ | — | ​ | ​ | 52
FL-501 program | ​ | ​ | 538 | ​ | ​ | 45 | ​ | ​ | 662 | ​ | ​ | 103
Total research and development expenses | ​ | $ | 10,537 | ​ | $ | 17,885 | ​ | $ | 23,448 | ​ | $ | 29,184
Australian research and development incentives | ​ | $ | 1 | ​ | $ | 253 | ​ | $ | 56 | ​ | $ | 499

​

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

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General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, accounting and audit services.

Interest income

Interest income consists primarily of interest income earned on cash and cash equivalents.

Research and development incentive income

Research and development incentive income includes payments under the R&D Incentive Program from the government of Australia. The R&D Incentive Program is one of the key elements of the Australian government’s support for Australia’s innovation system. It was developed to assist businesses in recovering some of the costs of undertaking research and development. The research and development tax incentive provides a tax offset to eligible companies that engage in research and development activities.

Companies engaged in research and development may be eligible for either:

| ● | a refundable tax offset at a rate of 18.5% above the company’s tax rate for entities with income of less than A$20 million per annum; or

| ● | a non-refundable tax offset for all other entities which is a progressive marginal tiered R&D intensity threshold. Increasing rates of benefit apply for incremental research and development expenditure by intensity:

| ● | 0 to 2% intensity: an 8.5% premium to the company’s tax rate

| ● | Greater than 2% intensity: a 16.5% premium to the company’s tax rate;

We recognize as income the amount we expect to be reimbursed for qualified expenses.

Foreign currency translation adjustment

Foreign currency translation adjustment consists of gains (losses) due to the revaluation of foreign currency transactions attributable to changes in foreign currency exchange rates associated with our Australian subsidiary.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are 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. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report on Form 10-K filed with the SEC on March 26, 2025, and the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. We believe that of our critical accounting policies, the following accounting policies involve the most judgment and complexity:

| ● | accrued research and development expenses;

| ● | research and development incentive receivable; and

| ● | stock-based compensation.

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Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended June 30, | ​ | ​ | ​
​ | ​ | 2025 |  | 2024 |  | Change
​ | ​ | (in thousands) | ​ | ​ | ​
Operating expenses: | ​ |  | ​ | ​ |  |  | ​ |  |
Research and development | ​ | $ | 10,537 | ​ | $ | 17,885 | ​ | $ | (7,348)
General and administrative | ​ |  | 1,817 | ​ |  | 3,367 | ​ |  | (1,150)
Restructuring charges | ​ | ​ | 4,527 | ​ | ​ | — | ​ | ​ | 4,527
Total operating expenses | ​ |  | 16,881 | ​ |  | 21,252 | ​ |  | (4,371)
Loss from operations | ​ |  | (16,881) | ​ |  | (21,252) | ​ |  | 4,371
Interest income | ​ |  | 246 | ​ |  | 865 | ​ |  | (619)
Interest expense | ​ |  | (7) | ​ |  | — | ​ |  | (7)
Australian research and development incentives | ​ |  | 1 | ​ |  | 253 | ​ |  | (252)
Foreign currency gain (loss) | ​ |  | (2) | ​ |  | 6 | ​ |  | (8)
Net loss | ​ | ​ | (16,643) | ​ | ​ | (20,128) | ​ | ​ | 3,485
Dividend attributable to down round feature of warrants | ​ | ​ | — | ​ | ​ | (234) | ​ | ​ | 234
Net loss attributable to common stockholders | ​ | $ | (16,643) | ​ | $ | (20,362) | ​ | $ | 3,719

​

Research and Development Expenses

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended June 30, | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Increase
​ |  | 2025 |  | 2024 |  | (Decrease)
​ |  | (in thousands) | ​ | ​ | ​
Direct research and development by program: |  | ​ |  |  | ​ |  |  | ​ |
DKN-01 program | ​ | $ | 9,999 | ​ | $ | 17,806 | ​ | $ | (7,807)
TRX518 program | ​ |  | — | ​ | ​ | 3 | ​ |  | (3)
FL-301 program | ​ | ​ | — | ​ | ​ | 20 | ​ | ​ | (20)
FL-302 program | ​ | ​ | — | ​ | ​ | 11 | ​ | ​ | (11)
FL-501 program | ​ | ​ | 538 | ​ | ​ | 45 | ​ | ​ | 493
Total research and development expenses | ​ | $ | 10,537 | ​ | $ | 17,885 | ​ | $ | (7,348)

​

Research and development expenses were $10.5 million for the three months ended June 30, 2025, compared to $17.9 million for the three months ended June 30, 2024. The decrease of $7.4 million in research and development expenses during the three months ended June 30, 2025 as compared to the same period in 2024, was primarily due to a decrease of $3.9 million in clinical trial costs. There was also a decrease of $1.7 million in payroll and other related expenses due to a decrease in headcount of our R&D full-time employees due to a reduction in force, a decrease of $1.4 million in manufacturing costs and a decrease of $0.4 million in stock based compensation expense as there were no stock options granted during the three months ended June 30, 2025.

General and Administrative Expenses

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

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Restructuring Charges

During the three months ended June 30, 2025, we announced a workforce reduction involving approximately 75% of our workforce. As a result of this workforce reduction, during the three months ended June 30, 2025, we incurred $4.5 million of charges, consisting primarily of one-time employee severance and benefit costs and stock based compensation expense related to acceleration of vesting.

Interest Income

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

Australian Research and Development Incentives

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

The R&D incentive receivable has been recorded as “Research and development incentive receivable” in the condensed consolidated balance sheets.

Foreign Currency Gain/Loss

During the three months ended June 30, 2025 and 2024, we recorded an immaterial amount of foreign currency transaction losses. Foreign currency transaction gains and losses are due to changes in the Australian dollar exchange rate related to activities of the Australian entity.

Comparison of the Six Months Ended June 30, 2025 and 2024

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Six Months Ended June 30, |  |  | ​
​ |  | 2025 |  | 2024 |  | Change
​ | ​ | (in thousands) | ​ | ​ | ​
Operating expenses: | ​ |  |  | ​ |  |  | ​ |  | ​
Research and development | ​ | $ | 23,448 | ​ | $ | 29,184 | ​ | $ | (5,736)
General and administrative | ​ |  | 4,823 | ​ |  | 6,893 | ​ |  | (2,070)
Restructuring charges | ​ | ​ | 4,527 | ​ | ​ | — | ​ | ​ | 4,527
Total operating expenses | ​ |  | 32,798 | ​ |  | 36,077 | ​ |  | (3,279)
Loss from operations | ​ |  | (32,798) | ​ |  | (36,077) | ​ |  | 3,279
Interest income | ​ |  | 683 | ​ |  | 1,640 | ​ |  | (957)
Interest expense | ​ |  | (13) | ​ |  | — | ​ |  | (13)
Australian research and development incentives | ​ |  | 56 | ​ |  | 499 | ​ |  | (443)
Foreign currency loss | ​ |  | (6) | ​ |  | (10) | ​ |  | 4
Net loss | ​ | ​ | (32,078) | ​ | ​ | (33,948) | ​ | ​ | 1,870
Dividend attributable to down round feature of warrants | ​ | ​ | — | ​ | ​ | (234) | ​ | ​ | 234
Net loss attributable to common stockholders | ​ | $ | (32,078) | ​ | $ | (33,948) | ​ | $ | 1,870

​

​

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Research and Development Expenses

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six Months Ended June 30, | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Increase
​ |  | 2025 |  | 2024 |  | (Decrease)
​ | ​ | (in thousands) | ​ | ​ | ​
Direct research and development by program: |  | ​ |  |  | ​ |  |  | ​ |
DKN-01 program | ​ | $ | 22,786 | ​ | $ | 28,989 | ​ | $ | (6,203)
TRX518 program | ​ |  | — | ​ |  | 9 | ​ |  | (9)
FL-301 program | ​ | ​ | — | ​ | ​ | 31 | ​ | ​ | (31)
FL-302 program | ​ | ​ | — | ​ | ​ | 52 | ​ | ​ | (52)
FL-501 program | ​ | ​ | 662 | ​ | ​ | 103 | ​ | ​ | 559
Total research and development expenses | ​ | $ | 23,448 | ​ | $ | 29,184 | ​ | $ | (5,736)

​

Research and development expenses were $23.5 million for the six months ended June 30, 2025, compared to $29.2 million for the six months ended June 30, 2024. The decrease of $5.7 million in research and development expenses during the six months ended June 30, 2025 as compared to the same period in 2024, was primarily due to a decrease of $2.5 million in manufacturing costs and a decrease of $1.3 million in clinical trial costs. There was also a decrease of $1.7 million in payroll and other related expenses due to a decrease in headcount of our R&D full-time employees due to a reduction in force and a decrease of $0.2 million in stock based compensation expense as there were no stock options granted during the six months ended June 30, 2025.

General and Administrative Expenses

General and administrative expenses were $4.8 million for the six months ended June 30, 2025, compared to $6.9 million for the six months ended June 30, 2024. The decrease of $2.1 million in general and administrative expenses during the six months ended June 30, 2025 as compared to the same period in 2024, was primarily due to a $1.3 million decrease in payroll and other related expenses due to a decrease in incentive based compensation expense for our general and administrative full-time employees. There was also a decrease of $0.3 million in professional fees, a decrease of $0.3 million in taxes and insurance and a decrease of $0.2 million in general and administrative related stock based compensation expense.

Restructuring Charges

During the six months ended June 30, 2025, we announced a workforce reduction involving approximately 75% of our workforce. As a result of this workforce reduction, during the six months ended June 30, 2025, we incurred $4.5 million of charges, consisting primarily of one-time employee severance and benefit costs and stock based compensation expense related to acceleration of vesting.

Interest Income

During the six months ended June 30, 2025, we recorded interest income of $0.7 million. During the six months ended June 30, 2024, we recorded interest income of $1.6 million. The decrease was due to a higher average cash and cash equivalent balance during the six months ended June 30, 2024.

Australian Research and Development Incentives

We recorded R&D incentive income of $0.1 million and $0.5 million, respectively, during the six months ended June 30, 2025 and 2024, based upon the applicable percentage of eligible research and development activities under the R&D Incentive Program, which expenses included the cost of manufacturing clinical trial material.

The R&D incentive receivable has been recorded as “Research and development incentive receivable” in the condensed consolidated balance sheets.

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Foreign Currency Gain/Loss

During the six months ended June 30, 2025 and 2024, we recorded an immaterial amount of foreign currency transaction losses. Foreign currency transaction gains and losses are due to changes in the Australian dollar exchange rate related to activities of the Australian entity.

Financial Position, Liquidity and Capital Resources

Since our inception, we have been engaged in organizational activities, including raising capital, and research and development activities. We do not yet have a product that has been approved by the Food and Drug Administration (the “FDA”), have not yet achieved profitable operations, nor have we ever generated positive cash flows from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, our future operations are dependent on the success of efforts to raise additional capital, our research and commercialization efforts, regulatory approval, and, ultimately, the market acceptance of our products.

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

We have engaged a leading financial advisor to explore strategic alternatives to preserve and maximize shareholder value, including any or all of the following: entering into a merger, asset sale, or license agreement with another company; selling or partnering sirexatamab or FL-501 in a transaction with a pharmaceutical company, biotechnology company, or investment fund; or seeking additional funding through public or private equity financings. There can be no assurance that we will successfully complete a transaction as part of the strategic alternative process, and any such transaction, if available, may not be on terms favorable to us. If we are not able to successfully complete any transaction, our business, operations and financial condition will be materially adversely affected, and we would be forced to discontinue our business and operations entirely, wind-up and liquidate.

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Six Months Ended June 30,
​ | ​ | 2025 |  | 2024
​ | ​ | (in thousands)
Cash used in operating activities | ​ | $ | (28,966) | ​ | $ | (29,187)
Cash provided by (used in) financing activities | ​ |  | (180) | ​ |  | 37,146
Effect of exchange rate changes on cash and cash equivalents | ​ |  | 27 | ​ |  | (123)
Net increase (decrease) in cash and cash equivalents | ​ | $ | (29,119) | ​ | $ | 7,836

​

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

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

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

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

​

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not Applicable.

​

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our President and Chief Executive Officer, who is also serving as Chief Financial Officer and therefore currently serves as both our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As of June 30, 2025, our management, with the participation of our Chief Executive Officer, who is also serving as Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 Framework). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our principal executive officer and principal financial officer has concluded, based upon the evaluation described above, that, as of June 30, 2025, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such material information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the three months ended June 30, 2025, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that materially affected, or are reasonably likely to affect, internal control over financial reporting.

​

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Part II — OTHER INFORMATION

Item 1. Legal Proceedings

None.

​

Item 1A. Risk Factors

An investment in our ordinary shares involves a high degree of risk. You should carefully consider the risk factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 26, 2025, which could materially affect our business, financial condition, operating results or cash flows. In addition to those risk factors, you should consider the following:

Our management as of June 30, 2025 has concluded that due to our need for additional capital, and the uncertainties surrounding our ability to raise such funding, substantial doubt exists as to our ability to continue as a going concern.

Our financial statements for the quarter ended June 30, 2025 were prepared assuming that we will continue as a going concern. The going concern basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from our inability to continue as a going concern. Our management concluded as of June 30, 2025 that due to our need for additional capital and the uncertainties surrounding our ability to raise such funding, substantial doubt exists as to our ability to continue as a going concern for a period from one year after our financial statements have been issued. We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available financial resources sooner than we currently anticipate.

We have engaged a leading financial advisor to explore strategic alternatives to preserve and maximize shareholder value, including any or all of the following: entering into a merger, asset sale, or license agreement with another company; selling or partnering sirexatamab or FL-501 in a transaction with a pharmaceutical company, biotechnology company, or investment fund; or seeking additional funding through public or private equity financings. There can be no assurance that the Company will successfully complete a transaction as part of the strategic alternative process, and any such transaction, if available, may not be on terms favorable to the Company. To the extent that we raise additional capital through the sale or issuance of equity or convertible debt securities, the ownership interests of existing stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of existing stockholders. If the Company is not able to successfully complete any transaction, the Company’s business, operations and financial condition will be materially adversely affected, and the Company would be forced to discontinue its business and operations entirely, wind-up and liquidate.

​

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

None.

​

Item 3. Defaults Upon Senior Securities

None.

​

Item 4. Mine Safety Disclosures

None.

​

Item 5. Other Information

(c) Rule 10b5-1 Trading Plan

During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits

See the Exhibit Index immediately prior to the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

​

EXHIBIT INDEX

​

​ | ​ | ​
10.1* | ​ | Fifth Amendment to Lease by and between Bulfinch Square Limited Partnership and Leap Therapeutics, Inc. dated as of July 1, 2025.
​ | ​ | ​
31.1** |  | Certification of Chief Executive Officer and Chief Financial Officer Required Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
​ | ​ | ​
32.1** | ​ | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
​ | ​ | ​
101* | ​ | The following materials from Leap Therapeutics, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024, (iii) Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2025 and 2024, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024, (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024, and (vi) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text.
​ | ​ | ​
104 | ​ | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

**Furnished with this report.

​

​

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

​

LEAP THERAPEUTICS, INC.
​ |  | ​ | ​
Date: August 13, 2025 | ​ | By: | /s/ Douglas E. Onsi
​ | ​ | ​ | Douglas E. Onsi
​ | ​ | ​ | President, Chief Executive Officer and Chief Financial Officer
​ | ​ | ​ | (Principal Executive Officer, Principal Financial Officer and Duly
​ | ​ | ​ | Authorized Signatory)

​

​

​

33