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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________
FORM 10-Q
____________________________________________________________
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2025
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________to _________________
Commission File Number: 001-36296
Carisma Therapeutics Inc.
(Exact Name of Registrant as Specified in its Charter)
____________________________________________________________

Delaware | 26-2025616
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.)
3675 Market Street, Suite 401 Philadelphia, PA | 19104
(Address of principal executive offices) | (Zip Code)

Registrant’s telephone number, including area code: (267) 491-6422
(Former Name or Former Address, if Changed Since Last Report)
____________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of exchange on which registered
Common Stock, $0.001 par value per share |  | CARM |  | The Nasdaq Stock Market LLC

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 x No o
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 x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

Large accelerated filer | o | Accelerated filer | o
Non-accelerated filer | x | Smaller reporting company | x
|  | Emerging growth company | o

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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of May 9, 2025, the registrant had 41,788,096 shares of common stock, $0.001 par value per share, outstanding.

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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q may include, but are not limited to, statements about:
•our ability to identify, evaluate and execute a strategic transaction;
•our ability to preserve our existing cash resources so that we may pursue an orderly wind down of our operations;
•our ability to successfully execute a planned orderly wind down;
•our expectations regarding the value or recovery that may be available to our stockholders and other stakeholders in connection with a potential strategic transaction or as part of a wind down process;
•our ability to obtain additional financing;
•our ability to continue as a going concern;
•the potential benefits and advantages of our platform technology, CT-2401, our pre-clinical stage product
candidate targeting liver fibrosis and CT-1119, our product candidate targeting mesothelin-positive solid tumors;
•our potential to receive future milestones and royalty payments under our collaboration with ModernaTX, Inc., or Moderna, or to realize value from such collaboration;
•our ability to resume research and development activities if we were to execute a strategic transaction or obtain significant additional funding;
•if we were to resume research and development activities, our ability to conduct discovery and pre-clinical testing of product candidates, and initiate, enroll patients in and complete clinical trials of product candidates;
•our ability to replicate in any such later clinical trials positive results found in pre-clinical studies and early-stage clinical trials of our product candidates;
•our ability to enter into and realize the anticipated benefits of our research and development programs, strategic partnerships, research and licensing programs and academic and other collaborations;
•if we were to resume research and development activities, the timing of applying for and receiving, and our ability to maintain, marketing approvals from applicable regulatory authorities for our product candidates;
•our ability to obtain and maintain intellectual property protection and regulatory exclusivity for our product candidates;
•acceptance of product candidates, if approved, by patients, the medical community, and third-party payors;
•our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash and cash equivalents;
•our estimates regarding the potential market opportunity for our product candidates;
•the potential impact of public health epidemics or pandemics and of global economic developments on our business, operations, strategy and goals;
•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
•our competitive position;
•our ability to maintain compliance with Nasdaq listing standards;
•the impact of government laws and regulations;
•political and economic developments; and
•such other matters as discussed in our Annual Report on Form 10-K for the year ended December 31, 2024 including Part I, Item 1A, “Risk Factors”.
In some cases, forward-looking statements can be identified by terminology such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “goals,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ
i

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materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those expressed or implied by the forward-looking statements. No forward-looking statement is a promise or a guarantee of future performance.
You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. 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 on Form 10-Q.
In this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise requires, references to the “Company,” “Carisma,” “we,” “us,” and “our” refer to Carisma Therapeutics Inc. (formerly Sesen Bio, Inc.) and its consolidated subsidiaries.
References to “Legacy Carisma” refer to CTx Operations, Inc. (formerly CARISMA Therapeutics Inc.) and references to “Sesen Bio” refer to Sesen Bio, Inc. prior to completion of the business combination on March 7, 2023 in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of September 20, 2022, as amended, by and among the Company, Legacy Carisma and Seahawk Merger Sub, Inc., a wholly owned subsidiary of the Company, pursuant to which Seahawk Merger Sub, Inc. merged with and into Legacy Carisma, with Legacy Carisma continuing as a wholly owned subsidiary of the Company and the surviving corporation of the merger, or the Merger.
Pursuant to the Merger Agreement, we changed our name from “Sesen Bio, Inc.” to “Carisma Therapeutics Inc.” Following the completion of the Merger, the business conducted by us became primarily the business conducted by Legacy Carisma, which is a biotechnology company dedicated to developing a differentiated and proprietary platform focused on engineered macrophages and monocytes, cells that play a crucial role in both the innate and adaptive immune response.
ii

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CARISMA THERAPEUTICS INC.
TABLE OF CONTENTS

|  | Page
PART I. | FINANCIAL INFORMATION | 1
Item 1. | Interim Financial Statements (Unaudited). | 1
| Consolidated Balance Sheets | 1
| Consolidated Statements of Operations and Comprehensive Loss | 2
| Consolidated Statements of Stockholders’ Equity (Deficit) | 3
| Consolidated Statements of Cash Flows | 4
| Notes to the Interim Consolidated Financial Statements | 5
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 16
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 26
Item 4. | Controls and Procedures. | 26
PART II. | OTHER INFORMATION | 27
Item 1. | Legal Proceedings. | 27
Item 1A. | Risk Factors. | 27
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 27
Item 5. | Other Information. | 84
Item 6. | Exhibits. | 28
SIGNATURES | 29

iii

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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
CARISMA THERAPEUTICS INC.
Unaudited Consolidated Balance Sheets
(in thousands, except share and par value)

| March 31, 2025 |  | December 31, 2024
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 7,740 |  |  | $ | 17,909 |
Prepaid expenses and other assets | 2,901 |  |  | 5,916 |
Assets held for sale | 3,313 |  |  | — |
Total current assets | 13,954 |  |  | 23,825 |
Property and equipment, net | — |  |  | 4,385 |
Right of use assets – operating leases | 1,999 |  |  | 2,040 |
Deferred financing costs | — |  |  | 208 |
Total assets | $ | 15,953 |  |  | $ | 30,458 |
Liabilities and Stockholders' Deficit |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 3,251 |  |  | $ | 2,081 |
Accrued expenses | 4,705 |  |  | 7,448 |
Deferred revenue | — |  |  | 3,729 |
Operating lease liabilities | 998 |  |  | 832 |
Finance lease liabilities | 640 |  |  | 905 |
Other current liabilities | 853 |  |  | 1,060 |
Total current liabilities | 10,447 |  |  | 16,055 |
Deferred revenue | 41,250 |  |  | 41,250 |
Operating lease liabilities | 687 |  |  | 724 |
Finance lease liabilities | — |  |  | 20 |
Other long-term liabilities | 231 |  |  | 318 |
Total liabilities | 52,615 |  |  | 58,367 |
Commitments and contingencies (Note 6) |  |  |
Stockholders’ deficit: |  |  |
Preferred stock $0.001 par value, 5,000,000 shares authorized, none issued or outstanding | — |  |  | — |
Common stock $0.001 par value, 350,000,000 shares authorized, 41,788,096 and 41,750,109 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | 41 |  |  | 41 |
Additional paid-in capital | 278,142 |  |  | 277,629 |
Accumulated deficit | (314,845) |  |  | (305,579) |
Total stockholders’ deficit | (36,662) |  |  | (27,909) |
Total liabilities and stockholders’ deficit | $ | 15,953 |  |  | $ | 30,458 |

See accompanying notes to unaudited interim consolidated financial statements.
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CARISMA THERAPEUTICS INC.
Unaudited Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024
Collaboration revenues |  |  |  |  | $ | 3,729 |  |  | $ | 3,397 |
Operating expenses: |  |  |  |  |  |  |
Research and development |  |  |  |  | 9,156 |  |  | 17,462 |
General and administrative |  |  |  |  | 3,907 |  |  | 5,445 |
Total operating expenses |  |  |  |  | 13,063 |  |  | 22,907 |
Operating loss |  |  |  |  | (9,334) |  |  | (19,510) |
Interest income, net |  |  |  |  | 68 |  |  | 532 |
Pre-tax loss |  |  |  |  | (9,266) |  |  | (18,978) |
Income tax expense |  |  |  |  | — |  |  | — |
Net loss |  |  |  |  | $ | (9,266) |  |  | $ | (18,978) |
Share information: |  |  |  |  |  |  |
Net loss per share of common stock, basic and diluted |  |  |  |  | $ | (0.22) |  |  | $ | (0.46) |
Weighted-average shares of common stock outstanding, basic and diluted |  |  |  |  | 41,771,213 |  | 40,938,464

See accompanying notes to unaudited interim consolidated financial statements.
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CARISMA THERAPEUTICS INC.
Unaudited Consolidated Statements of Stockholders’ (Deficit) Equity
(in thousands, except share data)

| Stockholders’ (Deficit) Equity
| Common stock |  | Additional paid-in capital |  | Accumulated deficit |  | Total
| Shares |  | Amount |  |  |
Balance at December 31, 2024 | 41,750,109 |  | $ | 41 |  |  | $ | 277,629 |  |  | $ | (305,579) |  |  | $ | (27,909) |
Exercise of stock options | 37,987 |  |  | — |  |  | 5 |  |  | — |  |  | 5 |
Stock-based compensation | — |  |  | — |  |  | 508 |  |  | — |  |  | 508 |
Net loss | — |  | — |  |  | — |  |  | (9,266) |  |  | (9,266) |
Balance at March 31, 2025 | 41,788,096 |  | $ | 41 |  |  | 278,142 |  |  | (314,845) |  |  | (36,662) |
Balance at December 31, 2023 | 40,609,915 |  | $ | 40 |  |  | $ | 271,594 |  |  | $ | (245,102) |  |  | $ | 26,532 |
Exercise of stock options | 1,579 |  | — |  |  | 2 |  |  | — |  |  | 2 |
Stock-based compensation | — |  |  | — |  |  | 1,057 |  |  | — |  |  | 1,057 |
Sale of common stock under Open Market Sales Agreement, net of issuance costs | 931,250 |  | 1 |  |  | 2,281 |  |  | — |  |  | 2,282 |
Net loss | — |  | — |  |  | — |  |  | (18,978) |  |  | (18,978) |
Balance at March 31, 2024 | 41,542,744 |  | 41 |  |  | 274,934 |  |  | (264,080) |  |  | 10,895 |

See accompanying notes to unaudited interim consolidated financial statements.
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CARISMA THERAPEUTICS INC.
Unaudited Consolidated Statement of Cash Flows
(in thousands)

| Three Months Ended March 31,
| 2025 |  | 2024
Cash flows from operating activities: |  |  |
Net loss | $ | (9,266) |  |  | $ | (18,978) |
Adjustment to reconcile net loss to net cash used in operating activities: |  |  |
Depreciation and amortization expense | 661 |  |  | 1,693 |
Stock-based compensation expense | 508 |  |  | 1,057 |
Reduction in the operating right of use assets | 877 |  |  | 1,360 |
Write-off of deferred financing costs | 208 |  |  | — |
(Gain) loss on sale of property and equipment | (113) |  |  | 67 |
Non-cash interest expense | 19 |  |  | 236 |
Changes in operating assets and liabilities: |  |  |
Prepaid expenses and other assets | 3,015 |  |  | (1,572) |
Accounts payable | 1,170 |  |  | (1,826) |
Accrued expenses | (2,743) |  |  | (2,933) |
Deferred revenue | (3,729) |  |  | (224) |
Operating lease liabilities | (707) |  |  | (1,355) |
Other long term liabilities | 33 |  |  | 50 |
Net cash used in operating activities | (10,067) |  |  | (22,425) |
Cash flows from investing activities: |  |  |
Proceeds from the sale of property and equipment | 524 |  |  | — |
Purchases of property and equipment | — |  |  | (17) |
Net cash provided by (used in) investing activities | 524 |  |  | (17) |
Cash flows from financing activities: |  |  |
Payment of principal related to finance lease liabilities | (304) |  |  | (1,319) |
Proceeds from failed sale-leaseback arrangement | — |  |  | 686 |
Payment of finance liability from failed sale-leaseback arrangements | (327) |  |  | (303) |
Proceeds from the exercise of stock options | 5 |  |  | 2 |
Sale of common stock under Open Market Sales Agreement, net of issuance costs | — |  |  | 2,286 |
Net cash (used in) provided by financing activities | (626) |  |  | 1,352 |
Net decrease in cash, cash equivalents and restricted cash | (10,169) |  |  | (21,090) |
Cash, cash equivalents, and restricted cash at beginning of the year | 17,909 |  |  | 77,605 |
Cash, cash equivalents and restricted cash at end of the period | $ | 7,740 |  |  | $ | 56,515 |
Supplemental disclosures of cash flow information: |  |  |
Cash paid for interest | $ | 33 |  |  | $ | 50 |
Supplemental disclosure of non-cash financing and investing activities: |  |  |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 836 |  |  | $ | 4,337 |
Right-of-use assets obtained in exchange for new financing lease liabilities | $ | — |  |  | $ | 2,470 |
Property and equipment in accounts payable | $ | — |  |  | $ | 59 |

See accompanying notes to unaudited interim consolidated financial statements.
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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
(1) Background
Carisma Therapeutics Inc., a Delaware corporation (collectively with its subsidiaries, the Company), is a biotechnology company focused on applying its industry leading expertise in macrophage engineering to develop transformative therapies to treat serious diseases including liver fibrosis and cancer.
In March and December 2024, the Company’s board of directors approved revised operating plans to reduce monthly operating expenses, conserve cash, and refocus the Company’s efforts on strategic priorities. As part of these plans, in March 2024 the Company elected to cease further development of its first lead product candidate, CT-0508. In December 2024 as part of the plan, the Company elected to cease further development of its then lead product candidate, CT-0525, following an assessment of the competitive landscape in anti-HER2 treatments and the impact of recently approved therapies on HER2 antigen loss/downregulation, and the effects on the future development strategy of any anti-HER2 product.
As part of a further revised plan approved by the Company's board of directors on March 25, 2025 to preserve the Company's existing cash resou rces following its reduction in workforce, as further discussed below (the cash preservation plan), the Company reduced its operations to those necessary to identify and explore a range of strategic alternatives to maximize value and prepare to wind down its business. The cash preservation plan prioritizes payments necessary and appropriate for those reduced operations and those that will help to evaluate our strategic alternatives. Potential strategic alternatives to be explored and evaluated may include, among other transactions, the sale, license, monetization or divestiture of one or more of the Company's assets or technologies, a strategic collaboration or partnership with one or more parties or the merger or sale of the Company. Any future resumption of research and development activities would depend on completing a strategic transaction that would support the Company's prior operating plans or otherwise obtaining significant additional funding.
As part of the cash preservation plan, the board of directors determined to terminate all of its employees not deemed necessary to pursue strategic alternatives and execute an orderly wind down of our operations. Affected employees were informed of the reduction in workforce on March 25, 2025, which became effective on March 31, 2025. The reduction in workforce included 37 of the Company's full-time employees representing approximately 84% of the Company's total workforce, including certain employees engaged in research and development, manufacturing and corporate activities. The Company incurred approximately $3.4 million in connection with the reduction in workforce during the three months ended March 31, 2025 and expects to incur an additional $0.4 million in the second quarter of 2025 related to further potential terminations, which primarily represents one-time employee termination benefits directly associated with the workforce reduction. The Company expects to pay the majority of related reduction in workforce amounts by the end of 2025.
NASDAQ Compliance
On October 10, 2024, the Company received written notice from The Nasdaq Stock Market LLC (Nasdaq) indicating that the Company no longer satisfied Nasdaq Listing Rule 5450(b)(2)(A), which requires the Company to maintain a minimum market value of listed securities (MVLS) of $50.0 million (the MVLS Rule) for continued listing on The Nasdaq Global Market. In accordance with Nasdaq Listing Rule 5810(c)(3) (the Grace Period Rule), the Company had 180 calendar days, or until April 8, 2025 (the Compliance Date), to regain compliance with the MVLS Rule.
On April 10, 2025, Nasdaq notified the Company that, based upon the Company’s continued non-compliance with the MVLS Rule, as of the Compliance Date, the Company’s securities were subject to delisting from Nasdaq unless the Company requested a hearing before the Nasdaq Hearings Panel (the Panel). The Company has requested a hearing before the Panel, which is scheduled to be held on May 22, 2025. The request has stayed any further suspension or delisting action by Nasdaq at least until the hearing is held and any extension that the Panel may grant to the Company following the hearing has expired. There can be no assurance that the Panel will grant the Company’s request for continued listing.
Also on April 10, 2025, Nasdaq notified the Company that it no longer satisfied Nasdaq Listing Rule 5450(b)(2)(C), which requires the Company to maintain a minimum market value of publicly held shares (MVPHS) of $15.0 million (the MVPHS Rule) for continued listing on The Nasdaq Global Market. In accordance with the Grace Period Rule, the Company has 180 calendar days, or until October 7, 2025, to regain compliance with the MVPHS Rule.
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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
Additionally, and as previously disclosed, on January 6, 2025, Nasdaq notified the Company that it no longer satisfied Nasdaq Listing Rule 5450(a)(1), which requires the Company to maintain a minimum bid price of $1.00 per share (the Bid Price Rule together with the MVLS Rule and the MVPHS Rule, the Price-based Rules) for continued listing on The Nasdaq Global Market. In accordance with the Grace Period Rule, the Company has 180 calendar days, or until July 7, 2025, to regain compliance with the Bid Price Rule.
To evidence compliance with the Price-based Rules, an issuer must evidence compliance with the applicable minimum threshold for at least ten, but generally not more than 20, consecutive business days. Although the Company is considering all available options to regain compliance with the applicable listing criteria, there can be no assurance that the Company will be able to do so.
(2) Development-Stage Risks and Liquidity
The Company has incurred losses and negative cash flows from operations since inception and has an accumulated deficit of $314.8 million as of March 31, 2025. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales from its product candidates currently in development. As of March 31, 2025, the Company had cash and cash equivalents of $7.7 million. Based on current projections, the Company believes that it does not have sufficient cash and cash equivalents to support its operations for more than one year following the date that these financial statements are issued. As a result of these conditions, substantial doubt exists about the Company’s ability to continue as a going concern. In addition, changing circumstances could cause the Company to consume capital significantly faster than currently anticipated, and the Company may need to spend more than currently expected because of circumstances beyond its control. The Company's cash forecast contains estimates and assumptions, and management cannot predict the timing of all cash receipts and expenditures with certainty. The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liability that might result from the outcome of this uncertainty.
Management is currently evaluating different strategies to maximize value and prepare to wind down the Company's business. Potential strategic alternatives to be explored and evaluated may include, among other transactions, the sale, license, monetization or divestiture of one or more of the Company's assets or technologies, a strategic collaboration or partnership with one or more parties or the merger or sale of the Company. There is no assurance regarding when or if this strategic review process will result in any type of transaction.
The Company is subject to those risks associated with any specialty biotechnology company that has substantial expenditures for research and development. There can be no assurance that the Company’s research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants.
(3) Summary of Significant Accounting Policies
Interim Financial Statements
The summary of significant accounting policies is included in the Company’s audited consolidated financial statements and related notes as of and for the year ended December 31, 2024 found in the Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 31, 2025.
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). Any references in these notes to applicable guidance are meant to refer to GAAP as found in Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) promulgated by the Financial Accounting Standards Board (FASB).
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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
The accompanying unaudited interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. In the opinion of management, the accompanying unaudited interim consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the unaudited interim consolidated financial statements) considered necessary to present fairly the Company’s financial position as of March 31, 2025 and its results of operations for the three months ended March 31, 2025 and 2024. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. The unaudited interim consolidated financial statements, presented herein, do not contain all of the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes as of and for the year ended December 31, 2024 found in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2025.
Use of Estimates
The preparation of unaudited interim 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 unaudited interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Estimates and assumptions are periodically reviewed, and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary.
Significant areas that require management’s estimates include stock-based compensation assumptions and accrued research and development.
Assets Held for Sale
In March 2025, the Company committed to a plan to sell its remaining equipment and therefore has classified the amount as assets held for sale on the consolidated balance sheet as of March 31, 2025. The assets held for sale were reported at the lower of the carrying amount or fair value, less costs to sell.
Fair Value of Financial Instruments
Management believes that the carrying amounts of the Company’s financial instruments, including cash equivalents and accounts payable, approximate fair value due to the short-term nature of those instruments.
Fair Value Measurements
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
•Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
•Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
•Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:

(in thousands) | Fair value measurement at reporting date using
(Level 1) |  | (Level 2) |  | (Level 3)
March 31, 2025 |  |  |  |  |
Assets: |  |  |  |  |
Cash equivalents – money markets accounts | $ | 6,965 |  |  | $ | — |  |  | $ | — |
December 31, 2024 |  |  |  |  |
Assets: |  |  |  |  |
Cash equivalents – money markets accounts | $ | 14,887 |  |  | $ | — |  |  | $ | — |

During the three months ended March 31, 2025 and 2024, there were no transfers between Level 1, Level 2 and Level 3.
Concentration of credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash and cash equivalents.
Segment information
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker (CODM), or decision-making group, in deciding how to allocate resources in assessing performance. The Company has one operating segment. The Company's CODM is the chief executive officer. The Company's CODM manages the Company's operations on a consolidated basis for the purpose of allocating resources.
The accounting policies of its segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for its segment based on net loss, which is reported on the consolidated statements of operations and comprehensive loss. The measure of segment assets is reported on the balance sheet as total assets. The CODM uses cash forecast models in deciding how to invest into the segment. The CODM analyzes the Company’s net loss and monitors budget versus actual results to assess the performance of the Company.
The table below summarizes the significant expense categories regularly reviewed by the CODM for the three months ended March 31, 2025 and 2024:

| Three Months Ended March 31,
| 2025 |  | 2024
Collaboration revenues | $ | 3,729 |  |  | $ | 3,397 |
Less: |  |  |
Research and development, excluding facilities, personnel, depreciation and amortization expenses | 1,528 |  |  | 10,191 |
General and administrative, excluding facilities and personnel expenses, depreciation and amortization expenses | 2,421 |  |  | 3,656 |
Facilities expense | 1,099 |  |  | 1,632 |
Personnel expense | 7,354 |  |  | 6,529 |
Depreciation, amortization and interest on finance and sale-leaseback lease liabilities | 712 |  |  | 1,185 |
Other segment items(a) | (119) |  |  | (818) |
Net loss | $ | (9,266) |  |  | $ | (18,978) |

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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
(a) "Other segment items" includes interest income.
Net loss per share
Basic net loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock and stock options, which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, potentially dilutive securities are not included in the calculation as their impact is anti-dilutive.
The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

| March 31,
| 2025 |  | 2024
Stock options | 6,895,824 |  | 8,210,547

Recently issued accounting pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures.
(4) Prepaid Expenses and other assets
Prepaid expenses and other assets consisted of the following (in thousands):

| March 31, 2025 |  | December 31, 2024
Research and development | $ | — |  |  | $ | 1,715 |
Collaboration receivable (Note 10) | — |  |  | 2,864 |
Other receivables (a) | 1,209 |  |  | — |
Deposits | 845 |  |  | 925 |
Insurance | 717 |  |  | 340 |
Other | 130 |  |  | 72 |
| $ | 2,901 |  |  | $ | 5,916 |

(a) "Other receivables" primarily consisted of equipment sales, sales and use tax refunds, and research and development tax refunds.
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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
(5) Accrued Expenses
Accrued expenses consisted of the following (in thousands):

| March 31, 2025 |  | December 31, 2024
Research and development | $ | 525 |  |  | $ | 1,845 |
Professional fees | 465 |  |  | 537 |
Compensation and related expenses | 3,554 |  |  | 4,879 |
Other | 161 |  |  | 187 |
| $ | 4,705 |  |  | $ | 7,448 |

(6) Commitments and Contingencies
Leases
The Company has operating leases for its laboratory and office space in Philadelphia, Pennsylvania. The Company’s operating leases have term end dates ranging from 2025 to 2029. The Company also has obligations under an arrangement for the use of certain laboratory equipment that are classified as finance leases that commenced in 2022 and have end dates ranging from 2025 to 2026.
The Company’s operating and finance lease ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. The Company is responsible for payment of certain real estate taxes, insurance and other expenses on certain of its leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU assets and lease liability. The Company accounts for non-lease components, such as maintenance, separately from lease components.
The Company carries laboratory equipment from failed sale-leasebacks, as assets held for sale on the accompanying unaudited interim consolidated balance sheets. The ongoing lease payments are recorded as reductions to the finance liability and interest expense. As of March 31, 2025, the Company had a $1.7 million financing liability recorded in other current liabilities and other long-term liabilities on the unaudited interim consolidated balance sheets.
The elements of the lease costs were as follows (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
Operating lease cost | $ | 929 |  |  | $ | 1,469 |
Finance lease cost: |  |  |
Amortization of lease assets | 263 |  |  | 1,298 |
Interest on lease liabilities | 19 |  |  | 236 |
Total finance lease cost | 282 |  |  | 1,534 |
Variable lease cost | 115 |  |  | 472 |
Total lease cost | $ | 1,326 |  |  | $ | 3,475 |

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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
Lease term and discount rate information related to leases was as follows:

| March 31,
| 2025 |  | 2024
Weighted-average remaining lease term (in years) |  |  |
Operating leases | 2.4 |  | 2.3
Finance leases | 0.6 |  | 1.5
Weighted-average discount rate |  |  |
Operating leases | 9.8 | % |  | 9.3 | %
Finance leases | 9.0 | % |  | 9.0 | %

Supplemental cash flow information was as follows (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash used in operating leases | $ | 707 |  |  | $ | 1,463 |
Operating cash used in finance leases | $ | 19 |  |  | $ | 236 |
Financing cash used in finance leases | $ | 304 |  |  | $ | 1,319 |

Future maturities of lease liabilities were as follows as of March 31, 2025 (in thousands):

| Operating Leases |  | Finance Leases
Fiscal year ending: |  |  |
2025 (remaining nine months) | $ | 1,042 |  |  | $ | 639 |
2026 | 226 |  |  | 20 |
2027 | 233 |  |  | — |
2028 | 240 |  |  | — |
2029 | 184 |  |  | — |
Thereafter | — |  |  | — |
Total future minimum payments | 1,925 |  |  | 659 |
Less imputed interest | (240) |  |  | (19) |
Present value of lease liabilities | $ | 1,685 |  |  | $ | 640 |

Licensing and Sponsored Research Agreements
Under a license agreement with The Trustees of the University of Pennsylvania (Penn), entered into in November 2017, the Company is required to make annual payments of $25,000. Penn is eligible to receive up to $10.9 million per product in development upon the achievement of certain clinical, regulatory and commercial milestone events. There are additional milestone payments required to be paid of up to $30.0 million per product in commercial milestones and up to an additional $1.7 million in development and regulatory milestone payments for the first CAR-M product directed to mesothelin. Additionally, the Company is obligated to pay Penn single-digit royalties based on its net sales.
Contingencies
Liabilities for loss contingencies, arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be
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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
reasonably estimated. As of March 31, 2025, the Company was in negotiations with a vendor to determine the total costs owed for research and development services provided. While the negotiations are ongoing, the Company believes a liability is probable. The Company has estimated the amount to be owed to be $1.5 million, of which $1.0 million and $0.5 million are included within accounts payable and accrued expenses, respectively, on the accompanying consolidated balance sheets. The final amount owed may differ from the estimate as negotiations progress. The Company will continue to evaluate the matter and will adjust the liability as necessary based on any new information or agreements reached with the vendor.
(7) Stockholders’ Equity
Open Market Sales Agreement
On April 17, 2023, the Company filed a universal shelf registration statement on Form S-3, which was declared effective on May 2, 2023 (Registration Statement). Under the Registration Statement, the Company may offer and sell up to $300.0 million of a variety of securities, including debt securities, common stock, preferred stock, depositary shares, subscription rights, warrants and units from time to time in one or more offerings at prices and on terms to be determined at the time of the offering. On May 12, 2023, the Company entered into an Amended and Restated Open Market Sale Agreement SM (Sale Agreement) with Jefferies LLC, as sales agent, pursuant to which the Company may offer and sell shares of common stock with an aggregate offering price of up to $100.0 million under an “at-the-market" offering program. During the three months ended March 31, 2024, the Company sold 931,250 shares of common stock for gross proceeds of $2.3 million. The Company did not sell any shares of common stock under the Sale Agreement during the three months ended March 31, 2025.
(8) Stock-based Compensation
2017 Stock Incentive Plan
The Company adopted the CARISMA Therapeutics Inc. 2017 Stock Incentive Plan, as amended (the Legacy Carisma Plan), that provided for the grant of incentive stock options to employees, directors, and consultants. The maximum term of options granted under the Legacy Carisma Plan was ten years, and stock options typically vested over a four-year period. The Company’s stock options vest based on the terms in the awards agreements and generally vest over four years. Upon completion of the Merger, the Company assumed the Legacy Carisma Plan and the outstanding and unexercised options issued thereunder and ceased granting awards under the Legacy Carisma Plan.
2014 Stock Incentive Plan
The Amended and Restated Stock Incentive Plan, as amended (the 2014 Plan), provides for the grant of incentive and non-qualified stock options, restricted stock awards and restricted stock units, stock appreciation rights and other stock-based awards to the Company’s employees, officers, directors, consultants, and advisors, with amounts and terms of grants determined by the Company’s board of directors at the time of grant. Stock options outstanding under the 2014 Plan generally vest over a four-year period and are exercisable for a period of ten years from the date of grant. As of March 31, 2025, approximately 5.6 million shares of common stock remained available for issuance.
2014 Employee Stock Purchase Plan
The Carisma Therapeutics Inc. 2014 Employee Stock Purchase Plan (the 2014 ESPP) provides employees with the opportunities to purchase shares of common stock at a 15% discount to the market price through payroll deductions or lump sum cash investments. The 2014 ESPP had 0.2 million shares of common stock available for issuance as of March 31, 2025.
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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
The following table summarizes stock option activity for the three months ended March 31, 2025:

| Options |  | Weighted average exercise price |  | Weighted average remaining contractual term (years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2024 | 7,746,991 |  | $ | 2.81 |  |  |  |  |
Exercised | (37,987) |  | 0.11 |  |  |  |  | $ | 14 |
Granted | 1,749,000 |  | 0.50 |  |  |  |  |
Forfeited | (2,562,180) |  | 1.99 |  |  |  |  |
Outstanding as of March 31, 2025 | 6,895,824 |  | $ | 2.54 |  |  | 7.2 |  | $ | 31 |
Exercisable as of March 31, 2025 | 4,693,361 |  | $ | 2.51 |  |  | 6.4 |  | $ | 31 |

The weighted-average grant-date per share fair values of options granted during the three months ended March 31, 2025 and 2024 were $0.42 and $1.72, respectively. The fair values in the three months ended March 31, 2025 and 2024 were estimated using the Black-Scholes option-pricing model based on the following assumptions:

| Three Months Ended March 31,
| 2025 |  | 2024
Risk-free interest rate | 4.32% - 4.35% |  | 3.77% - 3.89%
Expected term | 6 years |  | 6 years
Expected volatility | 108.30% - 110.68% |  | 103.39% - 105.96%
Expected dividend yield | — |  |  | — |

Stock-Based Compensation Expense
The Company recorded stock-based compensation expense in the following expense categories in its accompanying unaudited interim consolidated statements of operations:

|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024
Research and development |  |  |  |  | $ | 107 |  |  | $ | 436 |
General and administrative |  |  |  |  | 401 |  |  | 621 |
|  |  |  |  | $ | 508 |  |  | $ | 1,057 |

In connection with the cash preservation plan, 2.6 million options were forfeited during the three months ended March 31, 2025, resulting in a reduction in stock-based compensation expense related to research and development and, general and administrative employees. Compensation cost for awards not vested as of March 31, 2025 was $3.7 million and will be expensed over a weighted-average period of 2.3 years.
(9) Related-Party Transactions
The Company has a collaboration and license agreement with Moderna, a significant stockholder (See Note 10 – Moderna Collaboration and License Agreement).
(10) Moderna Collaboration and License Agreement
In January 2022, the Company entered into a collaboration agreement with Moderna (the Moderna License Agreement), which provides for a broad strategic collaboration to discover, develop and commercialize in vivo engineered chimeric antigen receptor macrophage and monocyte (CAR-M) therapeutics in oncology. Moderna has the right to designate up to
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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
twelve research targets as development targets under this collaboration. While the collaboration was initially limited to oncology, in September 2024, the companies agreed to expand the collaboration to discover, develop and commercialize in vivo engineered CAR-M therapeutics in specific autoimmune diseases. As of February 2025, in connection with Moderna's nomination of all 12 oncology research targets, the Company will not be conducting any additional research activities under the collaboration agreement and will not be receiving any further payments from Moderna for research and development services under the collaboration agreement.
Subsequent to the nomination of a research target, Moderna may designate the research target as a development target. Upon Moderna’s designation of a development target (and payment of a related development target designation milestone) for commencement of pre-clinical development of a product candidate, the Company will grant Moderna an exclusive worldwide, sublicensable royalty bearing license to develop, manufacture and commercialize the product candidate.
Under the terms of the Moderna License Agreement, Moderna made an upfront non-refundable payment of $45.0 million to the Company. Assuming Moderna develops and commercializes 12 products, each directed to a different development target, the Company is eligible to receive up to between $247.0 million and $253.0 million per product in development target designation, development, regulatory and commercial milestone payments. Moderna reimbursed the Company for costs incurred by the Company in connection with its research and development activities under the Moderna License Agreement plus a reasonable margin for the respective services performed into the first quarter of 2025; however, as discussed below, Moderna will no longer reimburse the Company for research and development services. The Company is eligible to receive tiered mid-to-high single digit royalties of net sales of any products that are commercialized under the agreement, which may be, subject to reductions. In addition, Moderna has agreed to cover the cost the Company incurs for certain milestone payments and royalties that the Company owes as a licensor under one of its intellectual property in-license agreements with Penn, which is sublicensed to Moderna under the Moderna License Agreement. Moderna may deduct these royalties in part from any royalties owed to the Company. The Moderna License Agreement terminates on a product-by-product basis upon the latest of expiration of the applicable product patents, expiration of regulatory exclusivity and the tenth anniversary of first commercial sale, unless terminated earlier by the Company or Moderna.
At commencement, the Company identified several potential performance obligations within the Moderna License Agreement, including research and development services on research targets, option rights held by Moderna, a non-exclusive royalty-free license to use the Company’s intellectual property to conduct research and development activities and participation on the joint steering committee. The Company determined that there were 2 performance obligations comprised of (i) research and development services and (ii) option rights.
For the research and development services, the stand-alone selling price was determined considering the expected passthrough costs and cost of the research and development services and a reasonable margin for the respective services. The material rights from the option rights were valued based on the estimated discount at which the option is priced and the Company’s estimated probability of the options’ exercise as of the time of the agreement. The transaction price allocated to research and development services is recognized as collaboration revenues as the research and development services are provided to satisfy the underlying obligation related to the research and development target. The transfer of control occurs over this period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation.
The transaction price of $45.0 million allocated to the options rights, which are considered material rights, will be recognized in the period that Moderna exercises or determines not to exercise its option right to license and commercialize the designated development target.
The Company included the $45.0 million up-front and nonrefundable payment in the transaction price as of the outset of the arrangement. During the three months ended March 31, 2025 and 2024, the Company recognized $3.7 million and $3.4 million, respectively, of collaboration revenues. As discussed below, Moderna will no longer be reimbursing the Company for research and development services.
The Company recognized $42.4 million and $3.8 million, respectively, of research and development services and option right collaboration revenues since inception of the Moderna License Agreement through March 31, 2025.
In February 2025, Moderna nominated ten additional oncology research targets, four of which replaced two oncology research targets and two autoimmune research targets, which Moderna concurrently ceased developing. As of February
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CARISMA THERAPEUTICS INC.
Notes to the Interim Consolidated Financial Statements
2025, Moderna has nominated all 12 oncology research targets under the collaboration for which the Company has the potential to receive future milestones and royalty payments. The Company will not conduct any additional research activities under the collaboration agreement and the Company will not be receiving any further research funding from Moderna under the collaboration agreement. Moderna also agreed to terminate the in vivo oncology field exclusivity, which would allow the Company to pursue in vivo CAR-M programs outside of the 12 nominated oncology targets and product polypeptides. The Company does not expect to recognize any additional unsatisfied research and development performance obligations.

| Transaction price unsatisfied
Performance obligations: |
Option rights | $ | 41,250 |

Amounts due to the Company for satisfying the revenue recognition criteria or that are contractually due based upon the terms of the collaboration agreements are recorded as accounts receivable in the Company’s unaudited interim consolidated balance sheets. Contract liabilities consist of amounts received prior to satisfying the revenue recognition criteria, which are recorded as deferred revenue in the Company’s unaudited interim consolidated balance sheets.
The following table summarizes the changes in deferred revenue (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
Balance at the beginning of the period | $ | 44,979 |  |  | $ | 46,413 |
Deferral of revenue | — |  |  | 3,173 |
Recognition of unearned revenue | (3,729) |  |  | (3,397) |
Balance at the end of the period | $ | 41,250 |  |  | $ | 46,189 |

The deferred revenue represents the unearned portion of the upfront, non-refundable and non-creditable payment allocated to Moderna's option rights of $41.3 million, which is not expected to be recognized within the next 12 months.
(11) Subsequent Events
The Company has evaluated subsequent events from the balance sheet date through May 13, 2025, the issuance date of these unaudited interim consolidated financial statements, and has not identified any additional items that have not previously been mentioned elsewhere requiring disclosure.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited interim consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated by these forward-looking statements.
Overview
We are a biotechnology company focused on applying our industry leading expertise in macrophage engineering to develop transformative therapies to treat serious diseases including liver fibrosis and cancer.
Recent Developments
In March and December 2024, our board of directors approved revised operating plans to reduce monthly operating expenses, conserve cash, and refocus its efforts on strategic priorities, or the 2024 revised operating plans. As part of these plans, in March 2024 we elected to cease further development of our first lead product candidate, CT-0508. In December 2024 as part of the plan, we elected to cease further development of our then lead product candidate, CT-0525, following an assessment of the competitive landscape in anti-HER2 treatments and the impact of recently approved therapies on HER2 antigen loss/downregulation, and the effects on the future development strategy of any anti-HER2 product.
As part of the cash preservation plan approved by our board of directors on March 25, 2025 w e have reduced our operations to those necessary to identify and explore, a range of strategic alternatives to maximize value and prepare to wind down our business. Potential strategic alternatives to be explored and evaluated may include, among other transactions, the sale, license, monetization or divestiture of one or more of our assets or technologies, a strategic collaboration or partnership with one or more parties or the merger or sale of our company. We cannot provide any commitment regarding when or if this strategic review process will result in any type of transaction. We currently have no intention of resuming research and development activities. Any future resumption of research and development activities would depend on completing a strategic transaction that would support our prior operating plans or otherwise obtaining significant additional funding. As part of our cash preservation plan, our board of directors determined to terminate all of our employees not deemed necessary to pursue strategic alternatives and execute an orderly wind down of our operations. Our cash preservation plan prioritizes payments necessary and appropriate for those reduced operatio ns and those that will help us to evaluate our strategic alternatives.
We may retain a financial advisor to advise on our exploration of a range of strategic alternatives. We plan to work with a financial advisor on identifying and evaluating potential strategic alternatives with the goal of maximizing the value of our assets, including CT-2401, CT-1119, our macrophage and monocyte engineering platform and our CAR-M platform and realizing value for the potential milestone and royalty payments under the Moderna collaboration. However, our exploration of strategic alternatives may not result in the consummation of any transaction or the realization of any value for our company or our stockholders.
Our Product Candidates and Pipeline
Our liver fibrosis program is based upon the discovery of a key efferocytosis defect in the macrophages that reside within the livers of patients with fibrosis. Using a novel mRNA/lipid nanoparticle, or -LNP, approach, our product candidate aims to reverse fibrotic disease and improve the outcomes of patients with advanced liver fibrosis. In the second quarter of 2024, we achieved pre-clinical proof of concept in our liver fibrosis program, demonstrating the anti-fibrotic potential of engineered macrophages in two liver fibrosis models. Prior to pausing our research and development activities, we planned to continue to conduct pre-clinical development of our product candidate, CT-2401, sufficient to enable a regulatory submission to initiate a clinical trial.
Our oncology program leverages our considerable expertise and experience in ex vivo cell therapy. CT-1119 is designed to treat patients with advanced mesothelin-positive solid tumors, including pancreatic cancer, ovarian cancer, lung cancer, mesothelioma, and others. Prior to pausing our research and development activities, we planned to initiate a Phase 1 clinical trial of CT-1119, a mesothelin-targeted CAR-Monocyte, in combination with tislelizumab, an anti-PD-1 antibody, in adult patients with mesothelin-positive solid tumors, in China.
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Our collaboration with Moderna utilizes Moderna's mRNA/LNP technology, together with our CAR-M platform technology, to create novel in vivo oncology off-the-shelf gene therapy product candidates. In June 2024, we announced that Moderna nominated the first development candidate under the collaboration and paid us a $2.0 million milestone. This development candidate targets Glypican-3, or GPC3, and is designed to treat solid tumors, including hepatocellular carcinoma. In November 2024, we announced new pre-clinical data on our anti-GPC3 in vivo CAR-M therapy for treating hepatocellular carcinoma. These pre-clinical data demonstrated robust anti-tumor activity. In February 2025, Moderna nominated ten additional oncology research targets, four of which replaced two oncology research targets and two autoimmune research targets, which Moderna concurrently ceased developing. As of February 2025, Moderna has nominated all 12 oncology research targets under the collaboration for which we have the potential to receive future milestones and royalty payments. As such, we will not be conducting any additional research activities under the collaboration agreement and we will not be receiving any further research funding from Moderna under the collaboration agreement. Moderna also agreed to terminate the in-vivo oncology field exclusivity, which would allow us to pursue in vivo CAR-M programs outside of the 12 nominated targets and product polypeptides.
To date, we have not yet commercialized any products or generated any revenue from product sales and have financed our operations primarily with proceeds from sales of our preferred stock, proceeds from our collaboration with Moderna, research tax credits, convertible debt financing, and completion of the Merger and related financing. Our operations have historically been limited to organizing and staffing the Company, business planning, capital raising, establishing and maintaining our intellectual property portfolio, building our pipeline of product candidates, conducting drug discovery activities, undertaking pre-clinical studies, manufacturing process development studies, conducting early-stage clinical trials, and providing general and administrative support for these operations. We have historically devoted substantially all of our financial resources and efforts to pursuing discovery, research and development of our product candidates.
Financial Operations
Our net losses were $9.3 million and $19.0 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had $7.7 million in cash and cash equivalents and an accumulated deficit of $314.8 million. We expect to continue to incur significant expenses and operating losses while we explore strategic alternatives and carry out the orderly wind down of our operations. Although we believe our current cash and cash equivalents are sufficient to sustain our operating expenses and capital expenditure requirements into the second half of 2025, we do not expect that our cash and cash equivalents will support our operations for more than one year following the date of this Quarterly Report on Form 10-Q. As a result of these conditions, substantial doubt exists about our ability to continue as a going concern. We have based this estimate on assumptions that may prove to be wrong. In addition, changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. As a result, we could deplete our capital resources sooner than we currently expect. Our exploration of strategic alternatives may not result in the consummation of any transaction that provides additional funding to our company.
Any future resumption of research and development activities would depend on completing a strategic transaction that would support our prior operating plans or otherwise obtaining significant additional funding. However, our exploration of strategic alternatives may not result in the consummation of any transaction or the realization of any value for our company or our stockholders and there can be no assurance that we would be able to generate funds on terms acceptable to us, on a timely basis, or at all.
Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand business, maintain discovery and product development efforts, diversify our pipeline of product candidates or even continue operations.
Nasdaq Compliance
On October 10, 2024, we received written notice from The Nasdaq Stock Market LLC, or Nasdaq, indicating that we no longer satisfied Nasdaq Listing Rule 5450(b)(2)(A), which requires us to maintain a minimum market value of listed securities, or MVLS, of $50.0 million, or the MVLS Rule, for continued listing on The Nasdaq Global Market. In
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accordance with Nasdaq Listing Rule 5810(c)(3), or the Grace Period Rule, we had 180 calendar days, or until April 8, 2025, or the Compliance Date, to regain compliance with the MVLS Rule
On April 10, 2025, The Nasdaq Stock Market LLC, or Nasdaq, notified us that, based upon our continued non-compliance with the MVLS Rule, which requires us to maintain a minimum market value of listed securities of $50,000,000, as of the Compliance Date, our securities were subject to delisting from Nasdaq unless we requested a hearing before the Nasdaq Hearings Panel, or the Panel. We requested a hearing before the Panel, which is scheduled to be held on May 22, 2025. The request has stayed any further suspension or delisting action by Nasdaq at least until a hearing is held and any extension that the Panel may grant to us following the hearing has expired. There can be no assurance that the Panel will grant our request for continued listing.
Also on April 10, 2025, Nasdaq notified us that it no longer satisfied Nasdaq Listing Rule 5450(b)(2)(C), which requires us to maintain a minimum market value of publicly held shares, or MVPHS, of $15.0 million, or the MVPHS Rule, for continued listing on The Nasdaq Global Market. In accordance with the Grace Period Rule, we have 180 calendar days, or until October 7, 2025, to regain compliance with the MVPHS Rule.
Additionally, and as previously disclosed, on January 6, 2025, Nasdaq notified us that we no longer satisfied Nasdaq Listing Rule 5450(a)(1), which requires us to maintain a minimum bid price of $1.00 per share, or the Bid Price Rule together with the MVLS Rule and the MVPHS Rule, the Price-based Rules, for continued listing on The Nasdaq Global Market. Nasdaq granted us 180 calendar days, or until July 7, 2025, to regain compliance with the Bid Price Rule.
To evidence compliance with the Price-based Rules, an issuer must evidence compliance with the applicable minimum threshold for at least ten, but generally not more than 20, consecutive business days. Although we are considering all available options to regain compliance with the applicable listing criteria, there can be no assurance that we will be able to do so.
Financial Operations Overview
Collaboration Revenues
To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future. Our revenues to date have been generated from the Moderna collaboration agreement. Moderna reimbursed us for all costs incurred by it in connection with its research and development activities under the Moderna collaboration agreement plus a reasonable margin for the respective services performed. As of February 2025, Moderna has nominated all 12 oncology research targets under collaboration agreement with Moderna, or the Moderna License Agreement. As such, we will not be conducting any additional research activities under the collaboration agreement and we will not be receiving any further research funding from Moderna under the collaboration agreement. We are eligible to receive potential milestone and royalty payments from Moderna in the future. To date, we have received $2.0 million in milestone payments and we have not received any royalties under the Moderna collaboration agreement.
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including discovery efforts and the development of product candidates, and include:
•expenses incurred to conduct the necessary pre-clinical studies and clinical trials required to obtain regulatory approval;
•salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;
•costs of funding research performed by third parties, including pursuant to agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our pre-clinical studies and clinical trials;
•expenses incurred under agreements with contract manufacturing organizations, or CMOs, including manufacturing scale-up expenses and the cost of acquiring and manufacturing pre-clinical study and clinical trial materials;
•costs of outside consultants, including their fees, stock-based compensation and related travel expenses;
•the costs of laboratory supplies and acquiring materials for pre-clinical studies;
•facility-related expenses, which include direct depreciation costs of equipment and expenses for rent and maintenance of facilities and other operating costs; and
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•third-party licensing fees.
Research and development activities are central to our business model. Product candidates in later stages of clinical development will generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to continue to significantly decrease in 2025 as a result of our decision to pause our research and development activities as part of our cash preservation plan. If we were to resume research and development activities, our research and development expenses would increase; however, any future resumption of research and development activities would depend on completing a strategic transaction that would support our prior operating plans or otherwise obtaining significant additional funding.
The successful development of our current or future product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that would be necessary to complete the development of any product candidates. If we were to resume research and development activities, the success of any of our product candidates will depend on several factors, including the following:
•successfully completing pre-clinical studies;
•timely filing and receiving clearance of investigational new drug applications to commence clinical trials;
•successfully initiating, enrolling patients in and completing clinical trials;
•scaling up manufacturing processes and capabilities to support clinical trials of any of our product candidates;
•applying for and receiving marketing approvals from applicable regulatory authorities;
•obtaining and maintaining intellectual property protection and regulatory exclusivity for any product candidates;
•making arrangements with third-party manufacturers, or establishing commercial manufacturing capabilities, for both clinical and commercial supplies of our product candidates;
•establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others;
•acceptance of any of our product candidates, if and when approved, by patients, the medical community and third-party payors;
•effectively competing with other therapies;
•obtaining and maintaining coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors;
•maintaining, enforcing, defending and protecting our rights in our intellectual property portfolio;
•not infringing, misappropriating or otherwise violating others’ intellectual property or proprietary rights; and
•maintaining a continued acceptable safety profile of our products following receipt of any marketing approvals.
A change in the outcome of any of these variables with respect to the development, manufacture or commercialization activities of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive, if there are safety concerns or if we determine that the observed safety or efficacy profile would not be competitive in the marketplace, we could be required to expend significant additional financial resources and time on the completion of clinical development. Product commercialization will take several years, and we expect to spend a significant amount in development costs.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel expenses, including salaries, benefits and stock-based compensation expense for employees in executive, finance, accounting, business development and human resource functions. General and administrative expense also includes corporate facility costs, including rent, utilities, depreciation and maintenance, and costs not otherwise included in research and development expenses, legal fees related to intellectual property and corporate matters as well as fees for accounting and consulting services.
We expect that our general and administrative expenses will continue to decrease in 2025, as we have terminated all of our employees not deemed necessary to pursue strategic alternatives and execute an orderly wind down of our operations. If we were to identify and pursue a strategic alternative, we expect our general and administrative expenses to increase.
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Interest Income, Net
Interest income, net consists of interest earned on our excess cash, net of interest expense. Interest expense consists of interest on our finance leases.
Income Taxes
Since inception, we have incurred significant net losses. We have provided a valuation allowance against the full amount of our deferred tax assets since, in our opinion, based upon our historical and anticipated future losses, it is more likely than not that the benefits will not be realized. As of March 31, 2025, we remained in a full valuation allowance position.
The utilization of our net operating losses, or NOLs, may be subject to a substantial annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, or the Code, respectively, as well as similar state provisions. We have recorded a valuation allowance on all of our deferred tax assets, including deferred tax assets related to NOLs.
Results of Operations
Comparison of the Three Months Ended March 31, 2025 and 2024 (in thousands)

| Three Months Ended March 31,
| 2025 |  | 2024
Collaboration revenues | $ | 3,729 |  |  | $ | 3,397 |
Operating expenses: |  |  |
Research and development | 9,156 |  |  | 17,462 |
General and administrative | 3,907 |  |  | 5,445 |
Total operating expenses | 13,063 |  |  | 22,907 |
Operating loss | (9,334) |  |  | (19,510) |
Interest income, net | 68 |  |  | 532 |
Pre-tax loss | (9,266) |  |  | (18,978) |

Collaboration Revenues
Collaboration revenues were $3.7 million and $3.4 million for the three months ended March 31, 2025 and 2024, respectively, related to the research and development activities completed under the Moderna License Agreement.
Research and Development Expenses
We track outsourced development, outsourced personnel costs and other external research and development costs of our CT-0508, CT-0525, and CT-1119 programs. We do not track internal research and development costs on a program-by-program basis. The following table summarizes our research and development expenses for the three months ended March
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31, 2025 and 2024 (in thousands). Certain amounts related to prior period results were reclassified to conform to current period presentation. These reclassifications have not changed total research and development expenses.

| Three Months Ended March 31, |  |
| 2025 |  | 2024 |  | Change
CT-0508 (1) | $ | — |  |  | $ | 1,150 |  |  | $ | (1,150) |
CT-0525 (1) | 770 |  |  | 2,416 |  |  | (1,646) |
CT-1119 (1) | — |  |  | 406 |  |  | (406) |
Personnel costs, including stock-based compensation (2) | 6,051 |  |  | 5,305 |  |  | 746 |
Other clinical and pre-clinical development expenses | 1,291 |  |  | 3,444 |  |  | (2,153) |
Facilities and other expenses | 1,044 |  |  | 4,741 |  |  | (3,697) |
Total research and development expenses | $ | 9,156 |  |  | $ | 17,462 |  |  | $ | (8,306) |

(1) Our 2024 revised operating plans adjusted our research and development focus. For the Phase 1 clinical trial of CT-0525, the last patient was dosed in November 2024 and all clinical activity ended in January 2025. All clinical activities related to CT-0508 also ceased in 2024. In connection with our 2024 revised operating plans, we had also elected to pause further development of CT-1119, a mesothelin-targeted CAR-Monocyte, pending additional financing.
(2) Our cash preservation plan and the 2024 revised operating plans included reductions in workforce which resulted in severance costs during the three months ended March 31, 2025 and 2024.
The decrease in research and development expenses was primarily attributable to a decrease in our program expenses, personnel costs and other clinical and pre-clinical development expenses in connection with the 2024 revised operating plans.
General and Administrative Expenses
The following table summarizes our general and administrative expenses for the three months ended March 31, 2025 and 2024 (in thousands). Certain amounts related to prior period results were reclassified to conform to current period presentation. These reclassifications have not changed total general and administrative expenses.

| Three Months Ended March 31, |  |
| 2025 |  | 2024 |  | Change
Personnel costs, including stock-based compensation (1) | $ | 1,828 |  |  | $ | 2,420 |  |  | $ | (592) |
Professional fees | 1,593 |  |  | 2,307 |  |  | (714) |
Facilities and supplies | 142 |  |  | 212 |  |  | (70) |
Insurance, taxes, and fees | 167 |  |  | 203 |  |  | (36) |
Other expenses | 177 |  |  | 303 |  |  | (126) |
Total general and administrative expenses | $ | 3,907 |  |  | $ | 5,445 |  |  | $ | (1,538) |

(1) Our cash preservation plan and 2024 revised operating plans included reductions in workforce which resulted in severance costs during the three months ended March 31, 2025 and 2024.
The decrease in general and administrative expenses was primarily attributable to a decrease in our professional fees and personnel costs in connection with the cash preservation plan and continuation of the 2024 revised operating plans.
Interest Income, Net
We recognized $0.1 million and $0.5 million in interest income, net for the three months ended March 31, 2025 and 2024, which was attributable to interest earned on excess cash.
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Liquidity and Capital Resources
Sources of Liquidity
As of March 31, 2025, we had $7.7 million in cash and cash equivalents and an accumulated deficit of $314.8 million. To date, we have not yet commercialized any products or generated any revenue from product sales and have financed operations primarily with proceeds from sales of preferred stock, proceeds from our collaboration with Moderna, research tax credits, convertible debt financing, and completion of the Merger and related financing. Through March 31, 2025, we have generated $46.2 million of collaboration revenues related to research and development services, option rights, and milestones.
As of February 2025, Moderna has nominated all 12 oncology research targets under the collaboration. As such, we will not be conducting any additional research activities under the collaboration agreement and we will not be receiving any further research funding from Moderna under the collaboration agreement. We received the final research and development payment of $2.9 million from Moderna in January 2025. Under the terms of the Moderna collaboration agreement, assuming Moderna develops and commercializes 12 products, each directed to a different development target, we are eligible to receive up to between $247.0 million and $253.0 million per product in development target designation, development, regulatory and commercial milestone payments. We are also eligible to receive tiered mid-to-high single digit royalties of net sales of any products that are commercialized under the agreement, which may be, subject to reductions.
On April 17, 2023, we filed a universal shelf registration statement on Form S-3, which was declared effective on May 2, 2023, or the Registration Statement. Under the Registration Statement, we may offer and sell up to $300.0 million of a variety of securities, including debt securities, common stock, preferred stock, depository shares, subscription rights, warrants and units from time to time in one or more offerings at prices and on terms to be determined at the time of the offering. On May 12, 2023, we entered into an Amended and Restated Open Market Sale Agreement SM, or the Sale Agreement, with Jefferies LLC, as sales agent, pursuant to which we may offer and sell shares of our common stock with an aggregate offering price of up to $100.0 million under an “at-the-market" offering program. As of March 31, 2025, we have sold 1,362,917 shares of our common stock for net proceeds of $3.0 million.
Cash Flows
The following table shows a summary of our cash flows for the three months ended March 31, 2025 and 2024 (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
Cash (used in) provided by |  |  |
Operating activities | $ | (10,067) |  |  | $ | (22,425) |
Investing activities | 524 |  |  | (17) |
Financing activities | (626) |  |  | 1,352 |
Net change in cash, cash equivalents and restricted cash | $ | (10,169) |  |  | $ | (21,090) |

Cash Flows from Operating Activities
During the three months ended March 31, 2025, we used $10.1 million of net cash in operating activities. Cash used in operating activities reflected our net loss of $9.3 million and a $3.0 million net change in our operating assets and liabilities attributable to the timing in which we pay our vendors for research and development activities, partially offset by $2.2 million of non-cash charges related to depreciation and amortization expense, stock-based compensation, reductions in the operating right of use, or ROU assets, the write-off of deferred financing costs and gains on the sale of property and equipment.
During the three months ended March 31, 2024, we used $22.4 million of net cash in operating activities. Cash used in operating activities reflected our net loss of $19.0 million and $4.4 million of non-cash charges related to depreciation and amortization expense, stock-based compensation, reductions in the ROU assets, and non-cash interest on the finance lease
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liability and a $7.9 million net change in our operating assets and liabilities attributable to the timing in which we pay our vendors for research and development activities.
Cash Flows from Investing Activities
During the three months ended March 31, 2025, we received $0.5 million of cash from investing activities related to the sale of property and equipment.
During the three months ended March 31, 2024, we used a nominal amount of cash from investing activities which reflected purchases of property and equipment.
Cash Flows from Financing Activities
During the three months ended March 31, 2025, we used $0.6 million of net cash from financing activities, attributable to $0.3 million in payments of finance liability for failed-sale leaseback arrangements and $0.3 million in payments of principal related to finance lease liabilities.
During the three months ended March 31, 2024, we received $1.4 million of net cash from financing activities, primarily attributable to $2.3 million from the sale of common stock in connection with the Sale Agreement and $0.7 million in proceeds from failed-sale leaseback arrangements, partially offset by $0.3 million in payments of finance liability from failed-sale leaseback arrangements, and $1.3 million in payments of principal related to finance lease liabilities.
Funding Requirements
As of March 31, 2025, we had cash and cash equivalents of $7.7 million. We expect to continue to incur significant expenses and operating losses while we explore strategic alternatives and carry out the orderly wind down of our operations. Although we believe our current cash and cash equivalents are sufficient to sustain our operating expenses and capital expenditure requirements into the second half of 2025, we do not expect that our cash and cash equivalents will support our operations for more than one year following the date of this Quarterly Report on Form 10-Q. As a result of these conditions, substantial doubt exists about our ability to continue as a going concern. We hav e based this estimate on assumptions that may prove to be wrong. In addition, changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. As a result, we could deplete our capital resources sooner than we currently expect. Our exploration of strategic alternatives may not result in the consummation of any transaction that provides additional funding to our company.
As part of our cash preservation plan, we have reduced our operations to those necessary to identify and explore a range of strategic alternatives to maximize value and prepare to wind down our business. Potential strategic alternatives to be explored and evaluated may include, among other transactions, the sale, license, monetization or divestiture of one or more of our assets or technologies, a strategic collaboration or partnership with one or more parties or the merger or sale of our company. We cannot provide any commitment regarding when or if this strategic review process will result in any type of transaction. As part of our cash preservation plan, our board of directors determined to terminate all of our employees not deemed necessary to pursue strategic alternatives and execute an orderly wind down of our operations. Our cash preservation plan prioritizes payments necessary and appropriate for those reduced operations and those that will help us to evaluate our strategic alternatives.
We may retain a financial advisor to advise on our exploration of a range of strategic alternatives. We plan to work with the advisor on identifying and evaluating potential strategic alternatives with the goal of maximizing the value of our assets, including CT-2401, CT-1119, our macrophage and monocyte engineering platform and our CAR-M platform and realizing value for the potential milestone and royalty payments under the Moderna collaboration. However, our exploration of strategic alternatives may not result in the consummation of any transaction or the realization of any value for our company or our stockholders.
Any strategic alternatives may involve or may be pursued through legal proceedings including bankruptcy or liquidation
and dissolution proceedings, and such proceedings may also be necessary or appropriate in the absence of any strategic alternatives. In the event that our board of directors determines that a liquidation and dissolution of our business approved
by stockholders is desirable or the best method to maximize value, we would prepare proxy materials and schedule a
special meeting of our stockholders to seek approval of such a plan.
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We currently have no intention of resuming research and development activities. Any future resumption of research and development activities would depend on completing a strategic transaction that would support our prior operating plans or otherwise obtaining significant additional funding. Significant additional financing may not be available to us on acceptable terms, or at all, and may be impacted by the economic climate and market conditions.
To the extent that we are able to raise additional capital through the public or private sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. Debt financing and preferred equity financing, if available, would increase our fixed payment obligations and may involve agreements that include covenants limiting or restricting our operations and ability to take specific actions, such as incurring additional debt, making acquisitions, engaging in acquisition, merger or collaboration transactions, selling or licensing our assets, making capital expenditures, redeeming our stock, making certain investments, declaring dividends or other operating restrictions that could adversely impact our ability to conduct business.
If we are able to raise funds through a strategic collaboration or partnership with one or more parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, discovery programs or product candidates, grant licenses on terms that may not be favorable to us or grant rights to develop and market product candidates that we would otherwise prefer to develop and market on our own, any of which may have a material adverse effect on our business, operating results and prospects.
If we were to resume research and development activities, our expenses would increase and our future capital requirements would depend on many factors, including:
•the progress, costs and results of pre-clinical testing of our product candidates;
•the progress, costs and results of clinical trials of our product candidates;
•the number of and development requirements for additional indications for our product candidates;
•the success of our collaborations with Moderna or others;
•our ability to scale up our manufacturing processes and capabilities to support clinical trials of the product candidates we are developing and may develop in the future;
•the costs, timing and outcome of regulatory review of our product candidates;
•potential changes in the regulatory environment and enforcement rules;
•our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such arrangements;
•the payment of license fees and other costs of our technology license arrangements;
•the costs and timing of future commercialization activities, including product manufacturing, sales, marketing and distribution, for the product candidates we are developing and may develop in the future for which we may receive marketing approval;
•our ability to obtain and maintain acceptance of any approved products by patients, the medical community and third-party payors;
•the amount and timing of revenue, if any, received from commercial sales of the product candidates we are developing or develop in the future for which we receive marketing approval;
•potential changes in pharmaceutical pricing and reimbursement infrastructure;
•the availability of raw materials for use in production of our product candidates;
•the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property-related claims; and
•the extent to which we in-license or acquire additional technologies or product candidates.
Identifying potential product candidates and conducting pre-clinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. We will not generate commercial revenues unless and until we can achieve sales of products, which we do not anticipate for a number of years, if at all.
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Contractual Obligations and Commitments
The following table summarizes our contractual obligations and commitments at March 31, 2025 (in thousands):

| Total |  | Less than 1 Year |  | 1 to 3 Years |  | 4 to 5 Years |  | More than 5 Years
Contractual obligations: |  |  |  |  |  |  |  |  |
Operating lease commitments(1) | $ | 1,925 |  |  | 1,098 |  |  | 462 |  |  | 365 |  |  | — |
Finance lease commitments | 659 |  |  | 659 |  |  | — |  |  | — |  |  | — |
Total contractual obligations | $ | 2,584 |  |  | $ | 1,757 |  |  | $ | 462 |  |  | $ | 365 |  |  | $ | — |

(1)Reflects obligations pursuant to our office and laboratory leases in Philadelphia, Pennsylvania.
The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. Our contracts with CMOs, CROs and other third parties for the manufacture of our product candidates and to support pre-clinical research studies and clinical testing are generally cancelable by us upon prior notice and do not contain any minimum purchase commitments. Payments due upon cancellation consisting only of payments for services provided or expenses incurred, including noncancelable obligations of our service providers, up to the date of cancellation are not included in the table above as the amount and timing of such payments are not known.
The table above does not include any potential milestone or royalty payments that we may be required to make under our license agreement with Penn and under licensing agreements with other third parties not considered material. We excluded these milestone and royalty payments given that the timing and likelihood of any such payments cannot be reasonably estimated at this time.
In connection with the cash preservation plan, we incurred $3.4 million during the three months ended March 31, 2025 and expect to incur an additional $0.4 million in the second quarter of 2025 related to further potential terminations, which primarily represents one-time employee termination benefits directly associated with the workforce reduction. We expect to pay the majority of related reduction in workforce amounts by the end of 2025.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of financial condition and results of operations is based on our unaudited interim consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of our unaudited interim consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our unaudited interim consolidated financial statements. We base our estimates on our limited 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.
During the three months ended March 31, 2025, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025.
Recent Accounting Pronouncements
See Note 3 - Recently issued accounting pronouncements to our unaudited interim consolidated financial statements found in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our financial statements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. Our interest-earning assets consist of cash, cash equivalents and marketable securities. Interest income earned on these assets was $0.1 million and $0.8 million for the three months ended March 31, 2025 and 2024, respectively. Our interest income is sensitive to changes in the general level of interest rates, primarily U.S. interest rates.
Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three months ended March 31, 2025 and 2024.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of March 31, 2025. The term “disclosure controls and procedures,” as defined in the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. 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.
Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. As of the date of this Quarterly Report on Form 10-Q, we were not a party to any material legal matters or claims.
Item 1A. Risk Factors.
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, operating results or financial condition. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2024 may not be the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, operating results or financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Recent Sales of Unregistered Securities
During the period covered by this Quarterly Report on Form 10-Q, we did not issue any unregistered equity securities.
Purchase of Equity Securities
We did not purchase any of our registered equity securities during the period covered by this Quarterly Report on Form 10-Q.
Item 5. Other Information.
Director and Officer Trading Arrangements
None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined in Items 408(a) and 408(c) of Regulation S-K, respectively) during the quarterly period covered by this report.
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Item 6. Exhibits.

Exhibit Number |  | Description
3.1 |  | Restated Certificate of Incorporation of Carisma Therapeutics Inc., dated March 7, 2023, as amended (incorporated by reference to Exhibit 3.1 to the registrant’s Annual Report on Form 10-K/A (File No. 001-36296) filed on April 29, 2025).
3.2 |  | Amended and Restated By-Laws of Carisma Therapeutics Inc., dated March 7, 2023 (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K (File No. 001-36296) filed on March 8, 2023).
31.1* |  | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2* |  | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+ |  | Certifications of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2+ |  | Certifications of Principal 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 financial information from Carisma Therapeutics Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Loss, (iii) the Consolidated Statements of Stockholders' Equity (Deficit), (v) the Consolidated Statements of Cash Flows, and (vi) Notes to the Interim Consolidated Financial Statements.
104 |  | Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

_________________________________________
* Filed herewith.
+ Furnished herewith.
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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.

| CARISMA THERAPEUTICS INC.
Date: May 13, 2025 | By: | /s/ Steven Kelly
|  | Steven Kelly
|  | President, Chief Executive Officer and Director
|  | (Principal Executive Officer)
Date: May 13, 2025 | By: | /s/ Natalie McAndrew
|  | Natalie McAndrew
|  | Vice President of Finance
|  | (Principal Financial Officer and Principal Accounting Officer)

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