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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 30, 2025


☐	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: 001-39801

XOMA Royalty Corporation

(Exact name of Registrant as specified in its charter)


Nevada		52-2154066
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

2200 Powell Street, Suite 310
Emeryville, California		94608
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (510) 204-7200

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


Title of each class:	Trading symbol(s):	Name of each exchange on which registered:
Common Stock, $0.0075 par value	XOMA	The Nasdaq Global Market
8.625% Series A Cumulative Perpetual Preferred Stock, par value $0.05	XOMAP	The Nasdaq Global Market
Depositary Shares (each representing 1/1000^th interest in a share of 8.375% Series B Cumulative Perpetual Preferred Stock, par value $0.05)	XOMAO	The Nasdaq Global Market

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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

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

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

As of November 7, 2025, the registrant had 12,383,103 shares of common stock, $0.0075 par value per share, outstanding.

Table of Contents

XOMA ROYALTY CORPORATION

FORM 10-Q

TABLE OF CONTENTS

9
		Page
Glossary of Terms and Abbreviations		3

PART I	FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements	8

	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 (unaudited)	8

	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)	9

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)	10

	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)	11

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited)	13

	Notes to Condensed Consolidated Financial Statements (unaudited)	15

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	59

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70

Item 4.	Controls and Procedures	70

PART II	OTHER INFORMATION	71

Item 1.	Legal Proceedings	71

Item 1A.	Risk Factors	71

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72

Item 3.	Defaults Upon Senior Securities	73

Item 4.	Mine Safety Disclosures	73

Item 5.	Other Information	73

Item 6.	Exhibits	74

Signatures		76

Table of Contents

GLOSSARY OF TERMS AND ABBREVIATIONS


Abbreviations			Definition
2010 Plan			The Company's 2010 Long Term Incentive and Stock Award Plan, as amended
2018 Common Stock ATM Agreement			At The Market Issuance Sales Agreement with HCW dated December 18, 2018
2021 Series B Preferred Stock ATM Agreement			At The Market Issuance Sales Agreement with B. Riley dated August 5, 2021
2025 Common Stock ATM Agreement			At the Market Issuance Sales Agreement with Leerink dated October 3, 2025
2025 Series B Preferred Stock ATM Agreement			At The Market Issuance Sales Agreement with HCW dated October 3, 2025
AAA			Assignment and Assumption Agreement
Affitech			Affitech Research AS
Affitech CPPA			The Company's Commercial Payment Purchase Agreement with Affitech dated October 6, 2021
Aptevo			Aptevo Therapeutics Inc.
Aptevo CPPA			The Company’s Payment Interest Purchase Agreement with Aptevo dated March 29, 2023, referred to herein as “Aptevo Commercial Payment Purchase Agreement” or “Aptevo CPPA”
Alexion			Alexion Pharmaceuticals
Alexion License Agreement			Exclusive License Agreement between the Company and Alexion (formerly Amolyt Pharma SAS, “Amolyt”) dated December 19, 2024
ASC			Accounting Standards Codification
ASC 250			ASC Topic 250, Accounting Changes and Error Corrections
ASC 310			ASC Topic 310, Receivables
ASC 450			ASC Topic 450, Contingencies
ASC 606			ASC Topic 606, Revenue from Contracts with Customers
ASC 805			ASC Topic 805, Business Combinations
ASC 815			ASC Topic 815, Derivatives and Hedging
ASC 835-30			ASC Subtopic 835-30, Interest – Imputation of Interest
ASC 842			ASC Topic 842, Leases
ASU			Accounting Standards Update
Bayer License Agreement			Out-license agreement to Bayer HealthCare LLC from Daré dated January 10, 2020, related to the development and commercialization of OVAPRENE
BioInvent			BioInvent International AB
BioInvent License Agreement			Cross-Licensing Agreement between the Company and BioInvent dated November 21, 2003, as amended on September 14, 2004, November 13, 2009, and September 6, 2018
BioInvent Agreement			Royalty Purchase Agreement between Meza Royalty 1 LLC (a wholly-owned subsidiary of the Company) and BioInvent dated May 27, 2025, related to the acquisition of BioInvent’s remaining rights to milestone payments and royalties under the BioInvent License Agreement
Black-Scholes Model			Black-Scholes Option Pricing Model
Blue Owl			Blue Owl Capital Corporation
Blue Owl Loan			Loan pursuant to the Blue Owl Loan Agreement
Blue Owl Loan Agreement			Loan agreement dated as of December 15, 2023, between XRL, the lenders from time to time party thereto and Blue Owl, as administrative agent
Board			The Company’s Board of Directors

Table of Contents

Boston Lease			The Lease Agreement between HilleVax and Harrison dated March 14, 2022
B. Riley			B. Riley Securities, Inc.
Broadridge			Broadridge Corporate Issuer Solutions, LLC
BVF			Biotechnology Value Fund, L.P.
Castle Creek			Castle Creek Biosciences, Inc. and Castle Creek Biosciences, LLC, collectively
Castle Creek PRV Interest			The Company’s right to receive 6.7% of the proceeds from a potential PRV sale
Company			XOMA Royalty Corporation, including its subsidiaries
CPPA			Commercial Payment Purchase Agreement
CVR			Contingent value right
Daré			Daré Bioscience, Inc.
Daré RPAs			The Company's Traditional RPA and Synthetic RPA with Daré dated April 29, 2024
Daré Organon License Agreement			Out-license agreement to Organon from Daré dated March 31, 2022, related to the development and commercialization of XACIATO, as amended on July 4, 2023
Day One			Day One Biopharmaceuticals
Day One License Agreement			License Agreement for RAF between Viracta and Day One dated December 16, 2019, as amended on March 4, 2024 (assumed by the Company as part of Viracta Assignment Agreements)
EIR			Effective interest rate
EMA			European Medicines Agency
ESPP			2015 Employee Stock Purchase Plan, as amended
ESSA			ESSA Pharma Inc.
ESSA Acquisition Agreement			Business Combination Agreement between Xeno and ESSA dated July, 13, 2025, related to the acquisition of the issued and outstanding securities of ESSA by XenoTherapeutics.
Exchange Act			U.S. Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board
FDA			U.S. Food and Drug Administration
FDIC			Federal Deposit Insurance Corporation
Fortis			Fortis Advisors LLC, representative of the Kinnate CVR holders under the Kinnate CVR Agreement
GAAP			Generally accepted accounting principles
G&A			General and administrative
Harrison			B9 LS Harrison & Washington LLC
HCRP			Healthcare Royalty Partners II, L.P.
HCW			H.C. Wainwright & Co., LLC
HilleVax			HilleVax, Inc.
HilleVax CVR Agreement			The Contingent Value Rights Agreement by and between the Company, Broadridge, and Dr. Robert Hershberg dated August 11, 2025
HilleVax Merger Agreement			The Agreement and Plan of Merger by and among the Company, XRA 4, and HilleVax dated August 4, 2025
ImmunityBio			ImmunityBio, Inc. (formerly NantCell, Inc.)
ImmunityBio License Agreement			Out-license agreement to ImmunityBio from LadRx dated July 27, 2017, related to the development and commercialization of Aldoxorubicin, as amended on September 27, 2018, terminated on June 3, 2024
IRA			Inflation Reduction Act
IP			Intellectual Property
IPR&D			In-Process Research and Development
IXINITY®			coagulation factor IX (recombinant)
Janssen			Janssen Biotech, Inc.

Table of Contents

Janssen License Agreement			The Company’s License Agreement with Janssen dated August 5, 2019
Kinnate			Kinnate Biopharma Inc.
Kinnate CVR Agreement			The Contingent Value Rights Agreement by and between the Company, Broadridge, and Fortis dated April 3, 2024
Kinnate Merger Agreement			The Agreement and Plan of Merger by and among the Company, XRA, and Kinnate dated February 16, 2024
Kuros			Kuros Biosciences AG, Kuros US LLC, and Kuros Royalty Fund (US) LLC, collectively
Kuros RPA			The Company's Royalty Purchase Agreement with Kuros dated July 14, 2021
LadRx			LadRx Corporation (formerly CytRx Corporation)
LadRx Agreements			LadRx AAA and LadRx RPA
LadRx AAA			The Company’s Assignment and Assumption Agreement with LadRx dated June 21, 2023
LadRx RPA			The Company’s Royalty Purchase Agreement with LadRx dated June 21, 2023 and subsequently amended on June 3, 2024
LAVA			LAVA Therapeutics N.V.
LAVA Purchase Agreement			Share Purchase Agreement between the Company and LAVA dated August 3, 2025, related to the acquisition of the issued and outstanding ordinary shares of LAVA.
Leerink			Leerink Partners LLC
Ligand			Ligand Pharmaceuticals Incorporated
MAA			Marketing Authorization Application
Medexus			Medexus Pharmaceuticals, Inc.
Mezagitamab			TAK-079, a fully human monoclonal antibody targeting CD38 being developed by Takeda for the treatment of IgA nephropathy and other indications
MIPLYFFA™			arimoclomol
Moffitt			H. Lee Moffitt Cancer Center
Moffitt APA			Asset Purchase Agreement between Turnstone and Moffitt dated June 26, 2025, related to the sale of Turnstone’s IP to Moffitt
Mural			Mural Oncology PLC
Mural Transaction Agreement			The Transaction Agreement by and among the Company, XRA 5, and Mural dated August 20, 2025
Myst			Myst Therapeutics, Inc.
OJEMDA™			tovorafenib
Organon			Organon International GmbH
OVAPRENE®			An investigational hormone-free monthly intravaginal contraceptive
Palo			Palobiofarma, S.L.
Palo RPA			The Company's Royalty Purchase Agreement with Palo dated September 26, 2019
Pfizer			Pfizer, Inc.
Pierre Fabre			Pierre Fabre Médicament, SAS
Priority Review Voucher, or PRV			A voucher that may be granted by the FDA to Castle Creek if D-Fi is approved as a treatment for a rare pediatric disease, which could be sold to a third party
PSU			Performance stock unit
Pulmokine			Pulmokine, Inc.
Pulmokine Merger Agreement			The Agreement and Plan of Merger by and among the Company, XRA 2 Corp., Pulmokine, Shareholder Representative Services LLC, Each Management Stockholder dated November 26, 2024
R&D			Research and development
Regeneron			Regeneron Pharmaceuticals, Inc.

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Rezolute			Rezolute, Inc. (formerly Antria Bio, Inc.)
Rezolute License Agreement			The Company's License Agreement with Rezolute dated December 6, 2017, as amended in March 2018, January 2019, and March 2020
RPA			Royalty Purchase Agreement
Roche			F. Hoffmann-La Roche AG
RSU			Restricted stock unit
SAB No. 99, Topic 1.M			Staff Accounting Bulletin No. 99 Topic 1.M., Materiality
SAB No. 108, Topic 1.N			Staff Accounting Bulletin No. 108, Considering the Effects of Misstatements when Quantifying Misstatements in the Current Year Financial Statements
SEC			U.S. Securities and Exchange Commission
Securities Act			U.S. Securities Act of 1933, as amended
Series A Preferred Stock			The 8.625% Series A cumulative, perpetual preferred stock issued in December 2020
Series B Preferred Stock			The 8.375% Series B cumulative, perpetual preferred stock issued in April 2021
Series A and Series B Preferred Stock			Series A Preferred Stock and Series B Preferred Stock, collectively
Series B Depositary Shares			The depositary shares, each representing 1/1000th interest in a share of Series B Preferred Stock
Series X Preferred Stock, or Convertible Preferred Stock			The Series X Convertible Preferred Stock
Sildenafil Cream			Sildenafil Cream, 3.6%
Swiss Lease			The Lease Agreement between HilleVax and Anlagestiftung der Migros-Pensionskasse dated August 17, 2021
Takeda			Takeda Pharmaceutical Company Limited
Takeda Collaboration Agreement			The Company's Collaboration Agreement with Takeda dated November 1, 2006, as amended in February 2007 and February 2009
Turnstone			Turnstone Biologics Corp.
Turnstone CVR Agreement			The Contingent Value Rights Agreement by and between the Company, Broadridge, and WT dated August 11, 2025
Turnstone Merger Agreement			The Agreement and Plan of Merger by and among the Company, XRA 3, and Turnstone dated June 26, 2025
Twist			Twist Bioscience Corporation
Twist RPA			The Company’s Royalty Purchase Agreement with Twist dated October 21, 2024
U.S.			United States
VABYSMO®			faricimab-svoa
Viracta			Viracta Therapeutics, Inc.
Viracta Assignment Agreements			Assignment and Novation Agreement by and among Viracta, the Company, and Day One dated December 3, 2024 and Intellectual Property Assignment between Viracta and the Company dated December 3, 2024
Viracta RPA			The Company's Royalty Purchase Agreement with Viracta dated March 22, 2021, as amended March 4, 2024
XACIATO™			Clindamycin phosphate vaginal gel 2%
XenoTherapeutics, or Xeno			XenoTherapeutics, Inc. and Xeno Acquisition Corp.
XenoTherapeutics Arranger Letter Agreement			The Company’s Arranger Letter Agreement with XenoTherapeutics, dated July 14, 2025
WT			WT Representative LLC, representative of the Turnstone CVR holders under the Turnstone CVR Agreement
XOMA			XOMA Royalty Corporation, including its subsidiaries
XRA			XRA 1 Corp. a wholly-owned subsidiary of the Company

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XRA 3			XRA 3 Corp. a wholly-owned subsidiary of the Company
XRA 4			XRA 4 Corp. a wholly-owned subsidiary of the Company
XRA 5			XRA 5 Corp. a wholly-owned subsidiary of the Company
XRL			XRL 1 LLC, a wholly-owned subsidiary of the Company
Zevra			Zevra Therapeutics, Inc. (formerly KemPharm Denmark A/S)
Zevra APA			Asset Purchase Agreement dated May 13, 2011 between LadRx and Orphazyme ApS, and assigned to Zevra as of June 1, 2022, related to the sale of arimoclomol from LadRx to Zevra (assumed by the Company as part of LadRx AAA)

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PART I - FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

XOMA ROYALTY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share amounts)


	September 30,		December 31,
	2025		2024
ASSETS
Current assets:
Cash and cash equivalents	$	45,189	$	101,654
Short-term restricted cash		45,288		1,330
Investment in equity securities		1,521		3,529
Trade and other receivables, net		3,573		1,839
Short-term royalty and commercial payment receivables under the EIR method		13,269		14,763
Short-term royalty and commercial payment receivables under the cost recovery method		900		413
Prepaid expenses and other current assets		967		2,076
Total current assets		110,707		125,604

Long-term restricted cash		40,076		3,432
Property and equipment, net		24		32
Operating lease right-of-use assets		272		319
Long-term royalty and commercial payment receivables under the EIR method		4,678		4,970
Long-term royalty and commercial payment receivables under the cost recovery method		57,864		55,936
Exarafenib milestone asset (Note 6)		3,500		3,214
Investment in warrants		595		—
Intangible assets, net		44,556		25,909
Other assets - long term		879		1,861
Total assets	$	263,151	$	221,277

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,654	$	1,053
Accrued and other liabilities		4,134		5,752
Contingent consideration under RPAs, AAAs, and CPPAs		—		3,000
Operating lease liabilities		2,508		446
Unearned revenue recognized under units-of-revenue method		1,320		1,361
Preferred stock dividend accrual		1,368		1,368
Current portion of long-term debt		14,345		11,394
Contingent value rights liabilities - current portion		1,976		—
Total current liabilities		28,305		24,374
Unearned revenue recognized under units-of-revenue method – long-term		3,473		4,410
Exarafenib milestone contingent consideration (Note 6)		3,500		3,214
Long-term operating lease liabilities		20,678		483
Long-term debt		94,382		106,875
Contingent value rights liabilities – long-term		4,807		—
Deferred tax liability		49		—
Total liabilities		155,194		139,356

Commitments and Contingencies (Note 11)

Convertible preferred stock, $0.05 par value, 5,003 shares authorized, issued and outstanding as of September 30, 2025 and December 31, 2024		20,019		20,019

Stockholders’ equity:
8.625% Series A cumulative, perpetual preferred stock, $0.05 par value, 984,000 shares authorized, issued and outstanding as of September 30, 2025 and December 31, 2024		49		49
8.375% Series B cumulative, perpetual preferred stock, $0.05 par value, 3,600 shares authorized, 1,600 shares issued and outstanding as of September 30, 2025 and December 31, 2024		—		—
Common stock, $0.0075 par value, 277,333,332 shares authorized, 12,310,300 and 11,952,377 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		92		90
Additional paid-in capital		1,301,542		1,298,747
Accumulated other comprehensive income		121		73
Accumulated deficit		(1,213,866)		(1,237,057)
Total stockholders’ equity		87,938		61,902
Total liabilities, convertible preferred stock and stockholders’ equity	$	263,151	$	221,277

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The accompanying notes are an integral part of these condensed consolidated financial statements.

XOMA ROYALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share amounts)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Income and revenues:
Income from purchased receivables under the EIR method	$	6,962	$	5,423	$	19,039	$	9,985
Income from purchased receivables under the cost recovery method		1,857		1,040		9,125		1,910
Revenue from contracts with customers		225		25		9,250		6,050
Revenue recognized under units-of-revenue method		307		709		978		1,828
Total income and revenues		9,351		7,197		38,392		19,773

Operating expenses:
Research and development		69		817		1,431		2,011
General and administrative		9,734		8,020		25,682		27,485
Credit losses on purchased receivables		—		14,000		—		23,000
Amortization of intangible assets		878		—		2,077		—
Total operating expenses		10,681		22,837		29,190		52,496

Income (loss) from operations		(1,330)		(15,640)		9,202		(32,723)

Other (expense) income, net:
Gains on acquisitions		18,004		—		18,004		19,316
Change in fair value of embedded derivative related to RPA		—		—		—		8,100
Interest expense		(3,301)		(3,493)		(10,004)		(10,446)
Other income, net		727		1,890		8,456		5,900
Net income (loss) before tax		14,100		(17,243)		25,658		(9,853)
Income tax expense		(49)		—		(49)		—
Net income (loss)	$	14,051	$	(17,243)	$	25,609	$	(9,853)

Net income (loss) available to (attributable to) common stockholders (Note 3):
Basic	$	8,981	$	(18,611)	$	15,192	$	(13,957)
Diluted	$	12,683	$	(18,611)	$	21,505	$	(13,957)

Net income (loss) per share available to (attributable to) common stockholders:
Basic	$	0.74	$	(1.59)	$	1.26	$	(1.20)
Diluted	$	0.70	$	(1.59)	$	1.20	$	(1.20)

Weighted-average shares used in computing net income (loss) per share available to (attributable to) common stockholders:
Basic		12,137		11,712		12,038		11,645
Diluted		18,141		11,712		17,932		11,645

The accompanying notes are an integral part of these condensed consolidated financial statements.

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XOMA ROYALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

(in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Net income (loss)	$	14,051	$	(17,243)	$	25,609	$	(9,853)
Net unrealized gain on available-for-sale debt securities		4		104		53		104
Foreign currency translation adjustment		(5)		—		(5)		—
Comprehensive income (loss)	$	14,050	$	(17,139)	$	25,657	$	(9,749)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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XOMA ROYALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)


	Convertible			Series A			Series B						Additional		Accumulated				Total
	Preferred Stock			Preferred Stock			Preferred Stock			Common Stock			Paid-In		Other Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Income		Deficit		Equity
Balance, December 31, 2024	5	$	20,019	984	$	49	2	$	—	11,952	$	90	$	1,298,747	$	73	$	(1,237,057)	$	61,902
Exercise of stock options	—		—	—		—	—		—	21		—		85		—		—		85
Issuance of common stock related to 401(k) contribution	—		—	—		—	—		—	5		—		141		—		—		141
Stock-based compensation expense	—		—	—		—	—		—	—		—		1,983		—		—		1,983
Preferred stock dividends	—		—	—		—	—		—	—		—		(1,368)		—		—		(1,368)
Repurchase of common stock	—		—	—		—	—		—	(25)		—		—		—		(545)		(545)
Net unrealized gain on available-for-sale debt securities	—		—	—		—	—		—	—		—		—		45		—		45
Net income	—		—	—		—	—		—	—		—		—		—		2,367		2,367
Balance, March 31, 2025	5	$	20,019	984	$	49	2	$	—	11,953	$	90	$	1,299,588	$	118	$	(1,235,235)	$	64,610
Exercise of stock options	—		—	—		—	—		—	30		—		123		—		—		123
Issuance of common stock related to ESPP	—		—	—		—	—		—	10		—		119		—		—		119
Issuance of common stock related to RSUs	—		—	—		—	—		—	15		—		—		—		—		—
Issuance of common stock related to PSUs	—		—	—		—	—		—	136		1		(1)		—		—		—
Stock-based compensation expense	—		—	—		—	—		—	—		—		1,605		—		—		1,605
Preferred stock dividends	—		—	—		—	—		—	—		—		(1,368)		—		—		(1,368)
Repurchase of common stock	—		—	—		—	—		—	(82)		(1)		—		—		(1,848)		(1,849)
Net unrealized gain on available-for-sale debt securities	—		—	—		—	—		—	—		—		—		4		—		4
Net income	—		—	—		—	—		—	—		—		—		—		9,191		9,191
Balance, June 30, 2025	5	$	20,019	984	$	49	2	$	—	12,062	$	90	$	1,300,066	$	122	$	(1,227,892)	$	72,435
Exercise of stock options	—		—	—		—	—		—	127		1		1,075		—		—		1,076
Issuance of common stock related to PSUs	—		—	—		—	—		—	122		1		(1)		—		—		—
Stock-based compensation expense	—		—	—		—	—		—	—		—		1,770		—		—		1,770
Preferred stock dividends	—		—	—		—	—		—	—		—		(1,368)		—		—		(1,368)
Repurchase of common stock	—		—	—		—	—		—	(1)		—		—		—		(25)		(25)
Net unrealized gain on available-for-sale debt securities	—		—	—		—	—		—	—		—		—		4		—		4
Foreign currency translation adjustment	—		—	—		—	—		—	—		—		—		(5)		—		(5)
Net income	—		—	—		—	—		—	—		—		—		—		14,051		14,051
Balance, September 30, 2025	5	$	20,019	984	$	49	2	$	—	12,310	$	92	$	1,301,542	$	121	$	(1,213,866)	$	87,938

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	Convertible			Series A			Series B						Additional		Accumulated				Total
	Preferred Stock			Preferred Stock			Preferred Stock			Common Stock			Paid-In		Other Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Income		Deficit		Equity
Balance, December 31, 2023	5	$	20,019	984	$	49	2	$	—	11,495	$	86	$	1,291,790	$	—	$	(1,223,223)	$	68,702
Exercise of stock options	—		—	—		—	—		—	135		1		621		—		—		622
Issuance of common stock related to 401(k) contribution	—		—	—		—	—		—	7		—		118		—		—		118
Stock-based compensation expense	—		—	—		—	—		—	—		—		2,856		—		—		2,856
Preferred stock dividends	—		—	—		—	—		—	—		—		(1,368)		—		—		(1,368)
Repurchase of common stock	—		—	—		—	—		—	(1)		—		—		—		(13)		(13)
Net loss	—		—	—		—	—		—	—		—		—		—		(8,595)		(8,595)
Balance, March 31, 2024	5	$	20,019	984	$	49	2	$	—	11,636	$	87	$	1,294,017	$	—	$	(1,231,831)	$	62,322
Exercise of stock options	—		—	—		—	—		—	15		—		250		—		—		250
Issuance of common stock related to ESPP	—		—	—		—	—		—	7		—		95		—		—		95
Stock-based compensation expense	—		—	—		—	—		—	—		—		2,690		—		—		2,690
Preferred stock dividends	—		—	—		—	—		—	—		—		(1,368)		—		—		(1,368)
Net income	—		—	—		—	—		—	—		—		—		—		15,985		15,985
Balance, June 30, 2024	5	$	20,019	984	$	49	2	$	—	11,658	$	87	$	1,295,684	$	—	$	(1,215,846)	$	79,974
Exercise of stock options	—		—	—		—	—		—	97		1		732		—		—		733
Stock-based compensation expense	—		—	—		—	—		—	—		—		2,590		—		—		2,590
Preferred stock dividends	—		—	—		—	—		—	—		—		(1,368)		—		—		(1,368)
Net unrealized gain on available-for-sale debt securities	—		—	—		—	—		—	—		—		—		104		—		104
Net loss	—		—	—		—	—		—	—		—		—		—		(17,243)		(17,243)
Balance, September 30, 2024	5	$	20,019	984	$	49	2	$	—	11,755	$	88	$	1,297,638	$	104	$	(1,233,089)	$	64,790

The accompanying notes are an integral part of these condensed consolidated financial statements.

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XOMA ROYALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities:
Net income (loss)	$	25,609	$	(9,853)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Adjustment for income from EIR method purchased receivables		627		(9,985)
Stock-based compensation expense		5,358		8,136
Gains on acquisitions		(18,004)		(19,316)
Credit losses on purchased receivables		—		23,000
Gain on sale of equity securities		(3,663)		—
Income tax expense		49		—
Common stock contribution to 401(k)		141		118
Amortization of intangible assets		2,077		—
Depreciation		8		8
Accretion of long-term debt discount and debt issuance costs		1,136		996
Non-cash lease expense		47		45
Change in fair value of equity securities		(1,230)		(624)
Change in fair value of available-for-sale debt securities classified as cash equivalents		49		104
Change in fair value of derivatives		10		—
Changes in assets and liabilities:
Trade and other receivables, net		(1,187)		(41)
Prepaid expenses and other assets		1,839		(72)
Accounts payable and accrued liabilities		(3,248)		(1,348)
Operating lease liabilities		(268)		(185)
Unearned revenue recognized under units-of-revenue method		(978)		(1,828)
Net cash provided by (used in) operating activities		8,372		(10,845)

Cash flows from investing activities:
Net cash acquired in Kinnate acquisition		—		18,926
Net cash, cash equivalents, and restricted cash acquired in Turnstone acquisition		3,943		—
Net cash, cash equivalents, and restricted cash acquired in HilleVax acquisition		46,832		—
Payments of consideration under RPAs, AAAs, and CPPAs		(8,000)		(37,000)
Receipts under RPAs, AAAs, and CPPAs		3,139		26,263
Payment for BioInvent contract-based intangible asset		(20,725)		—
Payment of contingent consideration related to Kinnate IP asset		(550)		—
Purchase of property and equipment		—		(17)
Purchase of equity securities		(99)		—
Sale of equity securities		6,999		—
Net cash provided by investing activities		31,539		8,172

Cash flows from financing activities:
Principal payments – debt		(10,598)		(6,902)
Debt issuance costs and loan fees paid in connection with long-term debt		(80)		(740)
Payment of preferred stock dividends		(4,104)		(4,104)
Repurchases of common stock		(2,395)		(13)
Proceeds from exercise of options and other share-based compensation		3,422		4,127
Taxes paid related to net share settlement of equity awards		(2,019)		(2,429)
Net cash used in financing activities		(15,774)		(10,061)

Net increase (decrease) in cash, cash equivalents, and restricted cash		24,137		(12,734)
Cash, cash equivalents, and restricted cash as of the beginning of the period		106,416		159,550
Cash, cash equivalents, and restricted cash as of the end of the period	$	130,553	$	146,816

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Supplemental cash flow information:
Cash paid for interest	$	11,906	$	9,985
Cash paid for taxes	$	277	$	—

Non-cash investing and financing activities:
Accrual of contingent value rights liability in the Turnstone acquisition	$	1,110	$	—
Accrual of contingent value rights liability in the HilleVax acquisition	$	5,673	$	—
Right-of-use assets obtained in exchange for operating lease liabilities in the HilleVax acquisition	$	22,525	$	—
Relative fair value basis reduction of right-of-use assets in the HilleVax acquisition	$	(22,525)	$	—
Transaction costs in connection with the Turnstone acquisition included in accounts payable	$	92	$	—
Transaction costs in connection with the HilleVax acquisition included in accounts payable and accrued expenses	$	449	$	—
Excise tax accrual due to stock repurchases	$	24	$	—
Preferred stock dividend accrual	$	1,368	$	1,368
Estimated fair value of the Exarafenib milestone asset	$	—	$	2,922
Estimated fair value of the Exarafenib milestone contingent consideration	$	—	$	2,922
Right-of-use assets obtained in exchange for operating lease liabilities in the Kinnate acquisition	$	—	$	824
Relative fair value basis reduction of rights-of-use assets in the Kinnate acquisition	$	—	$	(824)
Accrual of contingent consideration under the Affitech CPPA	$	—	$	3,000
Accrual of contingent consideration under the LadRx AAA	$	—	$	1,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

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XOMA ROYALTY CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Description of Business

XOMA Royalty Corporation, a Nevada corporation, is a biotech royalty aggregator with a sizable portfolio of economic rights to future potential milestone and royalty payments associated with partnered commercial and pre-commercial therapeutic candidates. The Company was reincorporated from Delaware to Nevada in May 2025. The Company’s portfolio was built through the acquisition of rights to future milestone payments, royalties, and commercial payments, since its royalty aggregator business model was implemented in 2017. These acquisitions build upon out-licensing agreements for proprietary products and platforms held within the Company’s portfolio. The Company’s drug royalty aggregator business is primarily focused on early to mid-stage clinical assets in Phase 1 and 2 development, which the Company believes have significant commercial sales potential and that are licensed to well-funded partners with established expertise in developing and commercializing drugs. The Company also acquires milestone and royalty revenue streams on late-stage or commercial assets that are designed to address unmet markets or have a therapeutic advantage over other treatment options, and have long duration of market exclusivity. The Company expects most of its future income and revenue to be based on payments the Company may receive for milestones and royalties associated with these assets as well as the periodic recognition of income under the EIR method.

Liquidity and Financial Condition

The Company has incurred significant operating losses and negative cash flows from operations since its inception. As of September 30, 2025, the Company had cash, cash equivalents, and restricted cash of $130.6 million.

Based on the Company’s current cash balance and its planned spending, such as on royalties and other acquisitions, the Company has evaluated and concluded its financial condition is sufficient to fund its planned operations, commitments, and contractual obligations for a period of at least one year following the date that these unaudited condensed consolidated financial statements are issued.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions among consolidated entities were eliminated upon consolidation. The unaudited condensed consolidated financial statements were prepared in accordance with U.S. GAAP for financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial reporting. As permitted under those rules, certain footnotes or other financial information can be condensed or omitted. These unaudited condensed consolidated financial statements and related disclosures have been prepared with the assumption that users of the interim financial information have read or have access to the audited consolidated financial statements for the preceding fiscal year. Accordingly, these statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 17, 2025.

These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal and recurring adjustments that are necessary for a fair statement of the Company’s consolidated financial information. The interim results of operations are not necessarily indicative of the results that may be expected for the full year, or for any other future annual or interim period.

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Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income, revenue and expenses, and related disclosures. Management routinely evaluates its estimates including, but not limited to, those related to projected cash flows associated with income from purchased receivables under the EIR method, income from purchased receivables under the cost recovery method, revenue from contracts with customers, revenue recognized under the units-of-revenue method, royalty and commercial payment receivables, fair value of intangible assets acquired in asset acquisitions, contingent consideration for asset acquisitions, the Exarafenib milestone asset and contingent consideration, contingent consideration for purchased receivables, amortization of the Blue Owl Loan, accrued expenses, stock-based compensation, and warrants to purchase shares of third party stock. The Company bases its estimates on historical experience and on various other market-specific and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ significantly from these estimates, including estimates such as the Company’s income from purchased receivables under the EIR method, income from purchased receivables under the cost recovery method, and amortization of the deferred revenue from the HCRP arrangement and amortization of the Blue Owl Loan. Estimates related to income from purchased receivables under the EIR method are from commercial products that the Company has assessed to have reliably estimable cash flows based on the best information available from its partners or other third parties and from changes in expected cash flows for royalty and commercial receivables. Estimates related to income from purchased receivables under the cost recovery method may be based on the best information available to the Company from its partners or other third parties. Any changes to the estimated payments made by partners can result in a material adjustment to income reported. Under the contracts with HCRP, the amortization for the reporting period is calculated based on the payments expected to be made by the licensees to HCRP over the term of the arrangement. Any changes to the estimated payments by the licensees to HCRP can result in a material adjustment to revenue previously reported. The Company’s amortization of the Blue Owl Loan is calculated based on the commercial payments expected to be received from Roche for VABYSMO under the Affitech CPPA. Any changes to the estimated commercial payments from Roche can result in a material adjustment to the interest expense and term loan balance reported.

Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated statements of cash flows (in thousands):


	September 30,		December 31,
	2025		2024
Unrestricted cash	$	10,182	$	8,983
Unrestricted cash equivalents		35,007		92,671
Total unrestricted cash and cash equivalents	$	45,189	$	101,654
Short-term restricted cash		45,288		1,330
Long-term restricted cash		40,076		3,432
Total restricted cash	$	85,364	$	4,762
Total unrestricted and restricted cash and cash equivalents	$	130,553	$	106,416

Cash and Cash Equivalents

Cash consists of bank deposits held in business checking and interest-bearing deposit accounts. Cash equivalent balances are defined as highly liquid financial instruments with an original maturity of three months or less that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents held by the Company are in money market funds and U.S. treasury bills, and are classified as available-for-sale.

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Allowance for credit losses are recorded for available-for-sale debt securities with unrealized losses. The amount of credit losses that can be recognized for available-for-sale debt securities is limited to the amount by which carrying value exceeds fair value, and previously recognized credit losses are reversed if the fair value increases.

As of September 30, 2025, all investments in debt securities were held in U.S. treasury bills and classified as available-for-sale. There was no allowance for credit losses on investments in debt securities as of September 30, 2025. The Company redeemed upon maturity $72.4 million of available-for-sale debt securities during the nine months ended September 30, 2025. During the three and nine months ended September 30, 2025, the Company realized gains of $0.3 million and $0.7 million, respectively, from those redemptions. There were no sales or realized gains of available-for-sale debt securities during the three and nine months ended September 30, 2024.

Cash equivalents classified as available-for-sale debt securities consisted of the following (in thousands):


	September 30, 2025
	Amortized		Unrealized		Unrealized		Estimated Fair
	Cost Basis		Gains		Losses		Value
U.S. treasury bills	$	26,075	$	127	$	—	$	26,202
Total debt securities	$	26,075	$	127	$	—	$	26,202


	December 31, 2024
	Amortized		Unrealized		Unrealized		Estimated Fair
	Cost Basis		Gains		Losses		Value
U.S. treasury bills	$	20,294	$	73	$	—	$	20,367
Total debt securities	$	20,294	$	73	$	—	$	20,367

Restricted Cash

Cash accounts with any type of restriction are classified as restricted cash. If restrictions are expected to be lifted or to be used to pay a third party in the next twelve months, the restricted cash account is classified as current.

The restricted cash balance may only be used to pay lease payments pursuant to the Boston Lease, the purchase price for Mural, and interest expense, administrative fees, and other allowable expenses pursuant to the Blue Owl Loan. Payments of interest under the Blue Owl Loan Agreement are made semi-annually using commercial payments received since the immediately preceding interest payment date under the Affitech CPPA. On each interest payment date, if the commercial payments received are less than the total interest due for the respective quarter, the shortfall in interest payment would be paid from the reserve account.

Payments of administrative fees under the Blue Owl Loan Agreement are made semi-annually on January 1 and July 1 of each year from the reserve account. XOMA will be required to fund an additional $0.8 million into the administrative fee escrow account on July 1, 2027.

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Restricted cash consisted of the following (in thousands):


	September 30,		December 31,
	2025		2024
Short-term restricted cash held for Blue Owl Loan	$	160	$	1,330
Short-term restricted cash held for Boston Lease payments		5,244		—
Short-term restricted cash held for the acquisition of Mural		39,884		—
Total short-term restricted cash	$	45,288	$	1,330

Long-term restricted cash held for Blue Owl Loan		2,014		3,432
Long-term restricted cash held for Boston Lease security deposit		1,631		—
Long-term restricted cash held for Boston Lease payments		36,431		—
Total long-term restricted cash	$	40,076	$	3,432
Total restricted cash	$	85,364	$	4,762

Concentration of Risk

Cash, cash equivalents, restricted cash, and receivables are financial instruments which potentially subject the Company to concentrations of credit risk, as well as liquidity risk.

The Company maintains cash balances at commercial banks. Balances commonly exceed the amount insured by the FDIC. The Company has not experienced any losses in such accounts.

The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business but does not generally require collateral on receivables.

For the three months ended September 30, 2025, two counterparties represented 72% and 20% of total income and revenues, respectively. For the nine months ended September 30, 2025, four counterparties represented 48%, 24%, 13%, and 10% of total income and revenues, respectively. For the three months ended September 30, 2024, three counterparties represented 75%, 14% and 10% of total income and revenues, respectively. For the nine months ended September 30, 2024, three counterparties represented 50%, 25% and 10% of total income and revenues, respectively. Two counterparties represented 53% and 28% of trade and other receivables, net balance, respectively, as of September 30, 2025. Two counterparties represented 70% and 27% of the trade and other receivables, net balance, respectively, as of December 31, 2024.

Purchase of Rights to Future Milestones, Royalties, and Commercial Payments

The Company has purchased rights to receive a portion of certain future developmental, regulatory and commercial sales milestones, royalties, and option fees on sales of products currently in clinical development or recently commercialized. Agreements to purchase such rights do not have contractual terms typical of loans (such as contractual principal and interest amounts). As U.S. GAAP does not provide specific authoritative guidance covering such agreements, the Company has analogized and accounted for the amounts paid for these rights as a financial asset that is akin to a loan in accordance with ASC 310 as the Company believes they most closely resemble that of loans under royalty and commercial payment receivables (see Note 4). In addition, the Company may be obligated to make contingent payments related to certain product development milestones and sales-based milestones.

Under the EIR method, the amount and timing of contingent payments are included in the forecasted expected cash flows used to estimate royalty and commercial payment receivables and income from purchased receivables.

Under the cost recovery method, the contingent payments are evaluated to determine if they are subject to the provisions of ASC 815. Contingent payments subject to the scope of ASC 815 are measured at fair value at the inception of the arrangement, and subject to remeasurement to fair value during each reporting period. Any changes in the estimated fair value are recorded in the condensed consolidated statements of operations. Contingent consideration payments that do

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not fall within the scope of ASC 815 are recognized when the amounts are probable and reasonably estimable according to ASC 450.

Effective Interest Rate Method

The Company accounts for rights to future milestones, royalties, and commercial payments related to commercial products with future cash flows that can be reliably estimated at amortized cost under the prospective EIR method in accordance with ASC 835-30. The EIR is calculated by forecasting the expected cash flows to be received and paid over the life of the asset relative to the receivable’s carrying amount at the time when the Company determines that there are reliable cash flows. The carrying amount of a receivable is made up of the opening balance, which is increased by accrued income and expected cash payments and decreased by cash receipts in the period to arrive at the ending balance. The EIR is recalculated at each reporting period as differences between expected cash flows and actual cash flows are realized and as there are changes to the expected future cash flows. If the EIR for the current period is lower than the prior period and if the gross cash flows have declined (expected and collected), the Company may record an allowance for the change in expected cash flows. Receivables related to income from purchased receivables under the EIR method totaled $17.9 million and $19.8 million as of September 30, 2025 and December 31, 2024, respectively.

For income from purchased receivables under the EIR method, the accretable yield is recognized as income at the effective rate of return over the expected life of the royalty and commercial payment receivable. The amounts and duration of forecasted expected future cash flows used to calculate and measure income are largely impacted by research analyst coverage, commercial performance of the product, and contract or patent duration.

The prospective application of the EIR method to measure royalty and commercial payment receivables requires judgment in forecasting future expected cash flows and reliance on third-party information. The Company forecasts expected sales based on sales projections of the underlying commercial products that are published in research analyst reports over the periods that the Company is entitled to rights to cash flows from royalties or milestones. Market research is generally based on analysis of factors such as commercial product growth in global economies, industry trends, and product life cycles. The Company considers commercial performance updates on regulatory approval for new indications or geographic areas or discontinuation of certain indications or geographic areas in the forecasting of future expected cash flows. The Company also considers royalty duration of the commercial products, which may be based on factors including but not limited to regulatory and marketing approval dates, patent expiration dates, first commercial sale, and generic sales. Loss of regulatory exclusivity, patent protection, or other additional factors that may be communicated to the Company by its partners or through third-party information may impact the royalty duration that the Company uses in forecasting future expected cash flows.

Cost Recovery Method

When the purchase of rights to future milestones, royalties, and commercial payments involves future cash flows which cannot be reliably estimated, the Company accounts for such rights on a non-accrual basis using the cost recovery method. The Company’s assessment of whether cash flows can be reliably estimated depends on a number of factors. For example, the Company has generally determined that rights related to programs in preclinical or clinical stages of development or that have had a very short commercialization period during which payments have not yet been received, generally have cash flows that cannot be reliably estimated and therefore are accounted for under the cost recovery method. The related royalty and commercial payment receivable balance is classified as noncurrent or current based on whether payments are probable and reasonably expected to be received in the next twelve months. Under the cost recovery method, any milestone, royalty, or commercial payment received is recorded as a direct reduction of the recorded receivable balance. Under the cost recovery method, the Company does not recognize any income in accordance with ASC 835-30 and does not have any deferred fees or costs.

When the recorded royalty and commercial payment receivables balance have been fully collected, any additional amounts collected are recognized as income from purchased receivables under the cost recovery method. Receivables from such income from purchased receivables are included in trade and other receivables, net on the condensed consolidated balance sheet and totaled $1.9 million and $1.3 million as of September 30, 2025 and December 31, 2024, respectively.

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Income from purchased receivables under the cost recovery method includes income from milestone and royalty payments related to royalty and commercial payment transactions for which the cost has been fully recovered or impaired. The excess milestone and royalty payment received over a remaining receivable balance is recognized as income. If the information upon which such income amounts are derived is provided to the Company from partners or other third parties in arrears, the Company estimates the income earned during the period based upon the best information available such that the income recognized is not probable to be subsequently reversed in future periods.

Allowance for Current Expected Credit Losses

The Company evaluates the royalty and commercial payment receivables on a collective (i.e., pool) basis if they share similar risk characteristics. The Company evaluates a royalty and commercial payment receivable individually if its risk characteristics are not similar to other royalty and commercial payment receivables. The Company regularly reviews public information on clinical trials, press releases, and updates from its partners to identify any indicators that challenge the expected recovery of the royalty and commercial payment receivables.

Effective Interest Rate Method

At each reporting date, the Company evaluates royalty and commercial payment receivables under the EIR method by comparing the EIR at each reporting date to that of the prior period. If the EIR for the current period is lower than the prior period and if the gross cash flows have declined (expected and collected), the Company may record an allowance for the change in expected cash flows. The allowance is measured as the difference between the royalty and commercial payment receivables’ amortized cost basis and the net present value of the expected future cash flows, calculated based on the prior period’s EIR. The amount is recognized as credit losses on purchased receivables expense that increases the royalty and commercial payment receivable asset’s cumulative allowance, which reduces the net carrying value of the royalty and commercial payment receivable asset.

Cost Recovery Method

At each reporting date, for royalty and commercial payment receivables under the cost recovery method, if the Company determines expected future cash flows discounted to the current period are less than the carrying value of the asset, the Company will record a credit loss charge. The credit loss charge will be recognized as credit losses on purchased receivables expense that increases the royalty and commercial payment receivable asset’s cumulative allowance, which reduces the net carrying value of the royalty and commercial payment receivable asset. In a subsequent period, if there is an increase in expected future cash flows, or if the actual cash flows are greater than previously expected, the Company will reduce the previously established cumulative allowance. Amounts not expected to be collected are written off against the allowance at the time that such a determination is made.

Revenue from Contracts with Customers

The Company recognizes revenue from all contracts with customers according to ASC 606, except for contracts that are within the scope of other standards, such as leases and financial instruments. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract on whether each promised good or service is distinct to determine those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation based on relative fair values, when (or as) the performance obligation is satisfied.

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The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.

The Company recognizes revenue from its license arrangements. The terms of the arrangements generally include payment to the Company of one or more of the following: non-refundable, upfront license fees, development, regulatory and commercial milestone payments, and royalties on net sales of licensed products.

License of Intellectual Property

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, such as transfer of related materials, process, and know-how, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. Under the Company’s license agreements, the nature of the combined performance obligation is the granting of licenses to the customers as the other promises are not separately identifiable in the context of the arrangement. Since the Company grants the license to a customer as it exists at the point of transfer and is not involved in any future development or commercialization of the products related to the license, the nature of the license is a right to use the Company’s intellectual property as transferred. As such, the Company recognizes revenue related to the combined performance obligation upon completion of the delivery of the related materials, process, and know-how (i.e., at a point in time).

Deferred revenue is recorded when upfront payments and fees are received prior to the satisfaction of performance obligations. Trade and other receivables, net is recorded when the Company has an unconditional right to consideration.

Milestone Payments

At the inception of each arrangement that includes development and regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. The Company uses the most likely amount method for development and regulatory milestone payments.

If it is probable that a significant cumulative revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and earnings in the period of adjustment.

Royalties

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

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Revenue Recognized under Units-of-Revenue Method

The Company has sold its rights to receive certain milestones and royalties on product sales. In the circumstance where the Company has sold its rights to future milestones and royalties under a license agreement and also maintains limited continuing involvement in the arrangement (but not significant continuing involvement in the generation of the cash flows that are due to the purchaser), the Company defers recognition of the proceeds it receives for the sale of milestone or royalty streams and recognizes such unearned revenue as revenue under the units-of-revenue method over the life of the underlying license agreement. Under the units-of-revenue method, amortization for a reporting period is calculated by computing a ratio of the proceeds received from the purchaser to the total payments expected to be made to the purchaser over the term of the agreement, and then applying that ratio to the period’s cash payment.

Estimating the total payments expected to be received by the purchaser over the term of such arrangements requires management to use subjective estimates and assumptions. Changes to the Company’s estimate of the payments expected to be made to the purchaser over the term of such arrangements could have a material effect on the amount of revenues recognized in any particular period.

Stock-Based Compensation

The Company recognizes compensation expense for all stock-based payment awards made to the Company’s employees, consultants, and directors that are expected to vest based on estimated fair values. The valuation of stock option awards without performance conditions is determined at the date of grant using the Black-Scholes Model. The Black-Scholes Model requires inputs such as the expected term of the option, expected volatility, and risk-free interest rate. To establish an estimate of the expected term, the Company considers the vesting period and contractual period of the award and its historical experience of stock option exercises, post-vesting cancellations, and volatility. The estimate of expected volatility is based on the Company’s historical volatility. The risk-free rate is based on the yield available on U.S. Treasury zero-coupon issues corresponding to the expected term of the award. The Company records forfeitures when they occur.

The valuation of RSUs is determined at the date of grant using the Company’s closing stock price.

The Company records compensation expense for service-based awards on a straight-line basis over the requisite service period, which is generally the vesting period of the award, or to the date on which retirement eligibility is achieved, if shorter.

The grant date fair value of PSUs with market conditions is determined using the Monte Carlo valuation model. The Company records compensation expenses for PSUs based on graded expense attribution over the requisite service periods.

Equity Securities

The Company holds equity securities in publicly traded companies. Equity investments in publicly traded companies are classified in the condensed consolidated balance sheets as investment in equity securities. Equity securities are measured at fair value, with changes in fair value recorded in the other income, net line item of the condensed consolidated statement of operations at each reporting period. The Company remeasures its equity investments at each reporting period until such time that the investment is sold or disposed of. If the Company sells an investment, any realized gains and losses on the sale of the securities will be recognized in the condensed consolidated statement of operations in the period of sale.

Investments – Warrant Assets

The Company may obtain warrants pursuant to which it has the right to acquire stock in companies. The warrants are accounted for as derivatives when they contain net settlement terms and other qualifying criteria under ASC 815. In general, the warrants entitle the Company to buy a specific number of shares of stock at a specific price within a specific time period.

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Investment warrants are recorded at fair value and are revalued at each reporting period. The Company values warrants using the Black-Scholes Model. Any changes in fair value from the grant date fair value of warrants will be recognized as increases or decreases to investments on the condensed consolidated balance sheets and as a component of other income, net on the condensed consolidated statements of operations.

Asset Acquisitions

As a first step, for each acquisition, the Company determines if it is an acquisition of a business or an asset acquisition under ASC 805. The guidance requires an initial screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If the screen test is not met, the Company then further evaluates whether the assets or group of assets includes, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Acquisitions of assets or a group of assets that do not meet the definition of a business are accounted for as asset acquisitions under ASC 805-50, using the cost accumulation method whereby the cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values. If the fair value of net assets acquired, after allocating the excess of the fair value of net assets acquired to certain qualifying assets, exceeds the total cost of the acquisition, a bargain purchase gain is recognized in other income, net in the condensed consolidated statements of operations.

Contingent payments in asset acquisitions are evaluated whether they are freestanding instruments or embedded derivatives. If the contingent payments fall within the scope of ASC 815, the contingent payments are measured at fair value at the acquisition date and are subject to remeasurement to fair value each reporting period. The estimated fair value at the acquisition date is included in the cost of the acquired assets. Any subsequent changes in the estimated fair value are recorded in the condensed consolidated statements of operations. Contingent consideration payments that are related to IPR&D assets are expensed as incurred until the underlying licensed products receive FDA approval. Contingent consideration payments that do not fall within the scope of ASC 815 are recognized when the amount is probable and estimable according to ASC 450.

Cash payments related to acquired assets are reflected as investing cash flow in the Company’s condensed consolidated statements of cash flows.

Intangible Assets

Intangible assets are amortized based on the Company’s best estimate of the distribution of the economic value of the respective intangible assets. Intangible assets are carried at cost less accumulated amortization. Amortization is included in amortization of intangible assets in the condensed consolidated statements of operations.

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized. Any impairment charge should not reduce the carrying amount of an individual intangible asset below its fair value.

Leases

The Company determines the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter if modified. The lease term includes any renewal options and termination options that the Company is reasonably certain to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate. The incremental borrowing rate is determined by using the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment. The Company estimated its incremental borrowing rate by adjusting the interest rate on its fully collateralized debt for the lease term length.

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Rent expense for the operating lease is recognized on a straight-line basis over the reasonably assured lease term based on total lease payments and is included in G&A expenses in the condensed consolidated statements of operations. After an impairment or adjustment to the right-of-use assets, the remaining right-of-use assets will be amortized on a straight-line basis over the remaining lease term. The operating lease would no longer qualify for the straight-line treatment of total lease expense, but the right-of-use assets reduction and interest accretion related to the operating lease liability will continue to be combined as a single lease expense.

The Company has elected the practical expedient to not separate lease and non-lease components. The Company’s non-lease components are primarily related to property maintenance. Variable non-lease components are recognized in rent expense when incurred.

The Company has also elected not to record on the condensed consolidated balance sheets a lease for which the term is 12 months or less and does not include a purchase option that the Company is reasonably certain to exercise.

Long-Term Debt

Long-term debt represents the Company’s term loan under the Blue Owl Loan Agreement, which the Company has accounted for as a debt financing arrangement. Interest expense is accrued using the EIR method over the estimated period the loan will be repaid. The allocated debt discount and debt issuance costs have been recorded as a direct deduction from the carrying amount of the related debt in the condensed consolidated balance sheets and are being amortized and recorded as interest expense throughout the expected life of the Blue Owl Loan using the EIR method. The Company considered whether there were any embedded features in the Blue Owl Loan Agreement that require bifurcation and separate accounting as derivative financial instruments pursuant to ASC 815. See Note 9.

Warrants Issued

The Company has issued warrants to purchase shares of its common stock in connection with its financing activities. The Company classified these warrants as equity and recorded the warrants at fair value as of the date of issuance on the Company’s condensed consolidated balance sheet with no subsequent remeasurement. The issuance date fair value of the outstanding warrants was estimated using the Black-Scholes Model. The Black-Scholes Model required inputs such as the expected term of the warrants, expected volatility, and risk-free interest rate. These inputs were subjective and required significant analysis and judgment. For the estimate of the expected term, the Company used the full remaining contractual term of the warrant. The estimate of expected volatility assumption is based on the historical price volatility observed on the Company’s common stock. The risk-free rate is based on the yield available on U.S. Treasury zero-coupon issues corresponding to the expected term of the warrants.

Income Taxes

The Company accounts for income taxes using the liability method under which deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount which is more likely than not to be realizable.

The recognition, derecognition, and measurement of a tax position is based on management’s best judgment given the facts, circumstances, and information available at each reporting date. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits.

Net Income (Loss) per Share Available to (Attributable to) Common Stockholders

The Company calculates basic and diluted net income (loss) per share available to (attributable to) common stockholders using the two-class method. The Company’s convertible Series X Preferred Stock participate in any dividends declared by the Company on its common stock and are therefore considered to be participating securities. The Company’s

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Series A and Series B Preferred Stock do not participate in any dividends or distribution by the Company on its common stock and are therefore not considered to be participating securities.

Under the two-class method, net income, as adjusted for any accumulated dividends on Series A and Series B Preferred Stock for the period, is allocated to each class of common stock and participating security as if all of the net income for the period had been distributed. Undistributed earnings allocated to participating securities are subtracted from net income in determining net income available to common stockholders. During periods of loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. Basic net income (loss) per share available to (attributable to) common stockholders is then calculated by dividing the net income (loss) available to (attributable to) common stockholders by the weighted-average number of shares of common stock outstanding during the period. All participating securities are excluded from the basic weighted-average number of shares of common stock outstanding.

Diluted net income (loss) per share available to (attributable to) common stockholders is based on the weighted-average number of shares outstanding during the period, adjusted to include the assumed vesting of RSUs and PSUs, as well as the assumed exercise of certain stock options and warrants for common stock using the treasury method, if dilutive. The calculation assumes that any proceeds that could be obtained upon exercise of options and warrants would be used to purchase common stock at the average market price during the period. Adjustments to the denominator are required to reflect the related dilutive shares. The Company’s Series A and Series B Preferred Stock become convertible upon the occurrence of specific events other than a change in the Company’s share price and, therefore, are not included in the diluted shares until the contingency is resolved.

Share Repurchases

The Company has a stock repurchase program that is executed through purchases made from time to time, including in the open market. The Company retires repurchased shares of common stock, reducing common stock with any excess of cost over par value recorded to accumulated deficit. Issued and outstanding shares of common stock are reduced by the number of shares repurchased. No treasury stock is recognized in the condensed consolidated financial statements. In August 2022, the IRA enacted a 1% excise tax on net share repurchases after December 31, 2022. The tax applies if the aggregate fair market value of repurchased stock during the taxable year exceeds $1.0 million. Any excise tax incurred on share repurchases is recognized as part of the cost basis of the shares acquired.

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of two components: net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that are recorded as an element of stockholders’ equity but are excluded from net income (loss) under U.S. GAAP.

Convertible Preferred Stock

The Company records Series X Convertible Preferred Stock at its relative fair value, net of issuance costs on the date of issuance, which represents the carrying value. Convertible preferred stock is classified outside of stockholders’ equity on the accompanying condensed consolidated balance sheets as the shares are redeemable for cash or other assets upon the occurrence of certain event that is not solely within control of the Company.

Reclassifications

Certain “Income from purchased receivables” and “Royalty purchase agreement asset impairment” amounts in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 have been reclassified to conform to the current period presentation. The reclassifications had no effect on the Company's financial position, net income (loss), cash flows or stockholders' equity as of and for the periods ended September 30, 2024.

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Immaterial Restatement of Previously Issued Consolidated Financial Statements

During the second quarter of 2025, the Company determined that its Series X Convertible Preferred Stock, originally issued in 2017 and valued at $20.0 million, should be presented as temporary equity, or mezzanine equity, rather than as permanent equity.

In accordance with SAB No. 99, Topic 1.M, SAB No. 108, Topic 1.N, and ASC 250, the Company assessed the materiality of this misstatement to its previously issued consolidated financial statements. Based upon the Company’s evaluation of both quantitative and qualitative factors, the Company concluded this misstatement was immaterial to the Company’s previously issued consolidated financial statements.

As a result, the accompanying unaudited condensed consolidated balance sheet as of December 31, 2024 as well as the statement of stockholders’ equity for the three and nine months ended September 30, 2024 and for the three months ended March 31, 2025 have been restated to reflect this mezzanine equity presentation of the Series X Convertible Preferred Stock. The change has resulted in a reduction to additional paid-in-capital and total stockholder’s equity and an increase to convertible preferred stock of $20.0 million compared to amounts previously reported. The Company will restate the comparative prior periods included in consolidated financial statements in future filings.

Accounting Pronouncements Recently Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company adopted annual requirements under ASU 2023-07 during the annual period ended December 31, 2024 and adopted the interim requirements under ASU 2023-07 during the interim period ended March 31, 2025 (Note 15).

Recent Accounting Pronouncements Not Yet Adopted

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the Securities and Exchange Commission’s Disclosure Update and Simplification Initiative. ASU 2023-06 incorporates 14 of the 27 disclosure requirements published in SEC Release No. 33-10532: Disclosure Update and Simplification into various topics within the ASC. ASU 2023-06's amendments represent clarifications to, or technical corrections of, current requirements. For SEC registrants, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. Early adoption is prohibited. The Company does not expect the standard to have a material impact on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for all public entities for fiscal years beginning after December 15, 2024. Early adoption is permitted and should be applied either prospectively or retrospectively. The Company expects to adopt annual requirements under ASU 2023-09 within the annual report for the year ending December 31, 2025. The Company does not expect the standard to have a material impact on its consolidated financial statements and 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. ASU 2024-03 requires public companies to disclose in the notes to the financial statements specific information about certain costs and expenses at each interim and annual reporting period. This includes disclosing amounts related to employee compensation, depreciation, and intangible asset amortization. In addition, public companies will need to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Implementation of ASU 2024-03 may be applied prospectively or

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retrospectively. The Company is currently evaluating the impact that the standard will have on its financial statement disclosures.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. ASU 2025-03 changes how companies determine the accounting acquirer in certain business combinations involving variable interest entities. The new guidance requires companies to consider the factors used for other acquisition transactions to assess which party is the accounting acquirer. ASU 2025-03 is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting guidance on its financial statements and related disclosures.

In May 2025, the FASB issued ASU 2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts With Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. ASU 2025-04 revises the definition of a performance condition, eliminates the forfeiture policy election for service conditions, and clarifies that the variable consideration constraint in ASC 606 does not apply to share-based consideration payable to customers. The new guidance requires entities to consistently account for share-based awards granted to customers by clarifying the treatment of vesting conditions and ensuring alignment with ASC 606 and ASC 718. ASU 2025-04 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting guidance on its financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient that allows entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted, including periods for which financial statements have not been issued or made available for issuance. The Company is currently evaluating the impact of adopting this new accounting guidance on its financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606), which refines the scope of derivative accounting to exclude certain non-exchange-traded contracts with underlyings based on the operations or activities specific to one of the parties to the contract and clarifies the accounting for share-based noncash consideration in revenue contracts under ASC 606. ASU 2025-07 is effective for annual periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted. Transition can be applied prospectively to new contracts or on a modified retrospective basis. The Company is currently evaluating the impact of adopting this new accounting guidance on its financial statements and related disclosures.

3. Condensed Consolidated Financial Statements Details

Investment in Equity Securities

As of September 30, 2025 and December 31, 2024, investment in equity securities was $1.5 million and $3.5 million, respectively. For the three and nine months ended September 30, 2025, the Company recognized an unrealized loss of $3.9 million and an unrealized gain of $1.2 million, respectively, due to the change in fair value of its investment in equity securities in the other income, net line item of the condensed consolidated statements of operations. The Company sold certain equity securities in the third quarter of 2025 for $7.0 million, resulting in a realized gain of $3.7 million. For the three and nine months ended September 30, 2024, the Company recognized unrealized gains of $0.1 million and $0.6 million, respectively, due to the change in fair value of its investment in Rezolute.

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Intangible Assets, Net

The following table summarizes the cost, accumulated amortization, and net carrying value of the Company’s intangible assets as of September 30, 2025 (in thousands):


			Accumulated		Net Carrying
	Cost		Amortization		Value
As of September 30, 2025
Pulmokine - Seralutinib IP (Note 6)	$	26,115	$	1,838	$	24,277
BioInvent - Contract-based Intangible Asset (Note 5)		20,724		445		20,279
Total intangible assets	$	46,839	$	2,283	$	44,556

The following table summarizes the cost, accumulated amortization, impairment charge, and net carrying value of the Company’s intangible assets as of December 31, 2024 (in thousands):


			Accumulated		Net Carrying
	Cost		Amortization		Value
As of December 31, 2024
Pulmokine - Seralutinib IP (Note 6)	$	26,115	$	206	$	25,909
Total intangible assets	$	26,115	$	206	$	25,909

The estimated remaining life of the intangible assets ranges from 11.2 years to 15.2 years. The following table presents the projected future amortization expense (in thousands):


	Intangible Asset
	Amortization
2025 (excluding the nine months ended September 30, 2025)	$	879
2026		3,513
2027		3,513
2028		3,513
2029		3,513
Thereafter		29,625
Total	$	44,556

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Net Income (Loss) Per Share Available to (Attributable to) Common Stockholders

The following table includes the computation of basic and diluted net income (loss) per share available to (attributable to) common stockholders (in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Numerator
Net income (loss)	$	14,051	$	(17,243)	$	25,609	$	(9,853)
Less: Series A accumulated dividends		(530)		(530)		(1,591)		(1,591)
Less: Series B accumulated dividends

XOMA Royalty Corp 10-Q