TRAW 10-K & 10-Q changes, risk factors and insider trading

We are obligated to develop and maintain proper and effective internal control over financial reporting. If we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired. In addition, the presence of material weaknesses increases the risk of material misstatement of the consolidated financial statements.

We are a public company and are required, pursuant to Section 404(a) of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of its internal control over financial reporting on our annual report on Form 10-K. Effective internal control over financial reporting is necessary for reliable financial reports and, together with adequate disclosure controls and procedures, such internal controls are designed to prevent fraud. Undetected material weaknesses in internal controls could lead to financial statement restatements and require us to incur the expense of remediation. We are required to disclose changes made in internal control and procedures on a quarterly basis.

As discussed elsewhere in this Annual Report, we completed the Merger in April 2024. Prior to the Merger, Trawsfynydd was a private company and, therefore, its controls were not required to be designed or maintained in accordance with Rules 13a-15 and 15d-15 under the Exchange Act. The design and implementation of internal control over financial reporting post-Merger has required, and will continue to require, significant time and resources from management and other personnel. Although we had internal controls in place prior to the Merger, and our management has determined in recent years that such internal controls over financial reporting were effective, during its assessment of our internal controls over financial reporting as of December 31, 2024 it was determined that our controls were not effectively updated and implemented to reflect the changes in processes and staffing during the period between completion of the Merger and December 31, 2024. Additionally, it was determined that there was an inadequate segregation of duties over the preparation, review and posting of manual journal entries, which is the result of not having a sufficient risk assessment process in place post-Merger to identify and analyze risk of misstatement due to fraud and/or error.

In connection with the audit of our financial statements for the year ended December 31, 2024, we identified material weaknesses in our internal control over financial reporting, which relate to the determinations of management discussed above. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Although we intend to update our controls and implement additional controls, no assurance can be provided that we will be able to remediate the material weaknesses identified on a timely basis, or at all. If we are unable to remedy our material weaknesses, or if we generally fail to establish and maintain effective internal controls appropriate for a public company, we may be unable to produce timely and accurate financial statements, and we may continue to conclude that our internal control over financial reporting is not effective, which could adversely impact our investors’ confidence and our stock price.

U.S. and global markets are experiencing volatility and disruption, and the global economy has been, and may continue to be, negatively impacted by Russia’s ongoing military conflict with Ukraine. As a result of Russia’s invasion of Ukraine in February 2022, the U.S., the European Union, the United Kingdom, other G7 countries, as well as various other countries, have imposed substantial financial and economic sanctions on certain industry sectors and parties in Russia. Broad restrictions on exports to Russia have also been imposed. These measures include: (i) comprehensive financial sanctions against major Russian banks; (ii) additional designations of Russian individuals with significant business interests and government connections; (iii) designations of individuals and entities involved in Russian military activities; and (iv) enhanced export controls and trade sanctions limiting Russia’s ability to import various goods. Russian military actions and the resulting sanctions could continue to adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds.

Addition, in October 2023, Hamas militants and members of certain other organizations infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Shortly thereafter, Israel’s security cabinet declared war against Hamas and launched an aerial bombardment of various targets within the Gaza Strip. It is possible that other countries and/or regional organizations will join the hostilities as well, including without limitation Hezbollah in Lebanon, and Palestinian military organizations in the West Bank, resulting in further expansion of the conflict. The conflict between Israel and Hamas is ongoing, and the length and impact of the ongoing military conflict is highly unpredictable.

Risk Factors Relating to the Merger

There is no guarantee that the Merger will increase stockholder value.

As discussed elsewhere in this Annual Report, in April 2024, we merged with Trawsfynydd. We cannot guarantee that implementing the Merger and related transactions will not impair stockholder value or otherwise adversely affect our business. The Merger continues to pose integration challenges between our businesses and management teams, which could result in management and business disruptions, any of which could harm our results of operation, business prospects, and impair the value of the Merger to our stockholders.

Stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger, including the issuance of our common stock upon conversion of all outstanding shares of our Series C Preferred issued in the Merger and Financing.

If we are unable to realize the full strategic and financial benefits currently anticipated from the Merger, stockholders will have experienced substantial dilution of their ownership interests without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent we are able to realize only part of the strategic and financial benefits currently anticipated from the Merger.

The failure to successfully integrate the businesses of Onconova and Trawsfynydd in the expected timeframe would adversely affect Traws Pharma’s future results.

Our ability to successfully integrate the operations of Onconova and Trawsfynydd will depend, in part, on our ability to realize the anticipated benefits from the Merger. If we are not able to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits of the Merger may not be realized fully, or at all, or may take longer to realize than expected, and the value of our common shares may be adversely affected. In addition, the integration of the Company’s and Trawsfynydd’s respective businesses has been, and will likely continue to be, a time-consuming and expensive process. Proper planning and effective and timely implementation will be critical to avoid any significant disruption to Traws Pharma’s operations. It is possible that the continuing integration process could result in the loss of key employees, the disruption of our ongoing business or the identification of inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with suppliers, distributors, creditors, lessors, clinical trial investigators or managers or to achieve the anticipated benefits of the Merger. Delays encountered in the integration process could have a material adverse effect on Traws Pharma’s revenues, expenses, operating results and financial condition, including the value of its common shares.

Our future results will suffer if we do not effectively manage our expanded operations.

As a result of the Merger, we have become a more diversified company and our business has become more complex. There can be no assurance that we will effectively manage the increased complexity without experiencing operating inefficiencies or control deficiencies. Significant management time and effort is required to effectively manage our increased complexity and our failure to successfully do so could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We expect to incur substantial expenses related to the integration of Trawsfynydd.

We have incurred, and expect to continue to incur, substantial expenses in connection with the Merger and the integration of Trawsfynydd. There are a large number of processes, policies, procedures, operations, technologies and systems that must be integrated, including purchasing, accounting and finance, billing, payroll, research and development, marketing and benefits. Both the Company and Trawsfynydd incurred significant transaction expenses in connection with the drafting and negotiation of the Merger Agreement, the Stock Purchase Agreement and the related ancillary agreements and significant severance expenses in connection with the reduction of employees in April 2024. While we have assumed that a certain level of expenses will be incurred, there are many factors beyond our control that could affect the total amount or the timing of the integration expenses. Moreover, many of the expenses that will be incurred are, by their nature, difficult to estimate accurately. These integration expenses likely will result in our taking significant charges against earnings following the completion of the Merger, and the amount and timing of such charges are uncertain at present.

If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may decline.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. In addition, we are required to furnish a report by management on the effectiveness of our internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act. As discussed elsewhere in this Annual Report, as of December 31, 2024, based on an analysis completed by management, our internal controls were not effective due to the existence of material weaknesses. The process of designing, implementing and testing the internal control over financial reporting required to comply with this obligation is time-consuming, costly and complicated. If we identify material weaknesses in our internal control over financial reporting (as we have for the period covered by this Annual Report), if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could decline, and we could also become subject to investigations by the stock exchange on which our common stock is listed, the Commission or other regulatory authorities, which could require additional financial and management resources.

As of December 31, 2024, the Company had $21.3 million in cash and cash equivalents. On December 29, 2024, the Company entered into the Securities Purchase Agreement described below (the “December 2024 Purchase Agreement”), for the sale of shares of Company common stock, pre-funded warrants, and Series A Warrants and raised gross proceeds of $20.0 million at closing on December 31, 2024. In addition, on April 1, 2024, in connection with the Merger, the Company entered into a Securities Purchase Agreement (the “April 2024 Securities Purchase Agreement”) for the sale of common and preferred stock to TPAV, LLC (“TPAV”), an affiliate of Torrey Pines, and OrbiMed Private Investments VIII, LP (“OrbiMed”), an affiliate of OrbiMed Advisors (together, the “Investors”) and raised gross proceeds of $14.0 million. Based on current projections, we believe that we do not have sufficient cash and cash equivalents to support our operations for more than one year following the date that these financial statements are issued.

Reverse Stock Split

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

On March 10, 2025, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with Citizens JMP Securities, LLC (“Citizens”), pursuant to which the Company may offer and sell shares of its common stock, having aggregate sales price of up to $50,000,000 (subject to certain limitations set forth in the ATM Agreement), from time to time, to or through Citizens, acting as sales agent and/or principal. Sales of shares of common stock, if any, pursuant to the ATM Agreement will be made by any method permitted that is deemed an “at the market” offering as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through the Nasdaq Capital Market or any other existing trading market in the United States for the Company’s common stock, directly to Citizens as principal, in privately negotiated transactions, in block transactions and/or in any other method permitted by law. Subject to the terms and conditions of the ATM Agreement, Citizens will use commercially reasonable efforts consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of the Nasdaq Capital Market to sell shares, from time to time, based upon the Company’s instructions, including any price, time or size limits specified by the Company.

Nasdaq Compliance

The Company received multiple notifications from The Nasdaq Stock Market LLC (“Nasdaq”) staff (the “Staff”) in 2024 regarding non-compliance with continued listing requirements. On February 25, 2025, the Company received a letter from Nasdaq confirming that the Company has regained compliance with Listing Rule 5550(b)(1) related to minimum stockholders’ equity requirements, as required by the Hearings Panel of Nasdaq’s decision dated December 13, 2024.

Pursuant to Listing Rule 5815(d)(4)(B), the Company will be subject to a mandatory panel monitor for a period of one year from the date of such letter.

December 2024 Purchase Agreement

On December 29, 2024, the Company entered into the December 2024 Purchase Agreement with several investors for the sale of (i) up to 3,630,205 Class A Units (“Class A Units”), each Class A Unit consisting of (a) one share of common stock or one pre-funded warrant to initially purchase one share of common stock, and (b) one Series A Warrant to purchase one share of common stock and (ii) 289,044 Class B Units (“Class B Units” and, together with the Class A Units, the “Units”), each Class B Unit consisting of one pre-funded warrant and one Series A Warrant. The purchase price per Class A Unit was $5.103 and the purchase price per Class B Unit was $5.093. The Units sold pursuant to the December 2024 Purchase Agreement were issued to the purchasers thereunder on December 31, 2024.

The Series A Warrants have an exercise price of $13.42 per share of common stock, and, subject to certain beneficial ownership limitations described in the Series A Warrants, will be exercisable six months after issuance and will expire on the earlier of (a) subject to the fulfilment of the Equity Conditions (as defined in the December 2024 Purchase Agreement), thirty Trading Days (as defined in the Purchase Agreement) after the last of the following data readouts to occur, as announced by the Company: (i) Ferret animal model Bird Flu data, (ii) non-human primate Bird Flu data, or (iii) Phase 2a Influenza A human clinical data and (b) the 5-year anniversary of the closing date of the December 2024 Purchase Agreement. The pre-funded warrants have an exercise price of $0.01 per share, and subject to certain beneficial ownership limitations described in the pre-funded warrants, are exercisable and do not expire. The exercise price of the Series A Warrants and pre-funded warrants will be subject to adjustment for stock splits, reverse splits, and similar capital transactions, as described in the Series A Warrants and pre-funded warrants.

The Company also entered into an agreement with Tungsten Advisors (through its Broker-Dealer, Finalis Securities LLC) (“Tungsten”), pursuant to which Tungsten agreed to serve as exclusive placement agent for the offering. The Company has agreed to pay Tungsten a cash fee equal to 8.25% of the aggregate gross proceeds raised in this offering from certain investors who are not affiliated with the Company and a cash fee equal to 4.125% of the aggregate gross proceeds raised in this offering with respect to certain investors that are affiliates of the Company.

The net proceeds to the Company from the offering were approximately $18.1 million, after deducting placement agent’s fees and other estimated offering expenses, with approximately $20 million gross proceeds at closing through the sale of shares of common stock and pre-funded warrants and up to another $52.6 million upon exercise of Series A Warrants issued with the offering if exercised in full prior to expiration thereof.

All of the securities in the offering were sold by the Company. The offering of common stock was made pursuant to the Company’s effective registration statement on Form S-3 (File No. 333-273081). The Series A Warrants, pre-funded warrants, and the shares of common stock underlying such warrants were offered in a concurrent private placement pursuant to an exemption from the registration requirements of Section 5 of the Securities Act of 1933, as amended, contained in Section 4(2) thereof and/or Regulation D thereunder. On January 14, 2025, as required by the December 2024 Purchase Agreement, the Company filed a registration statement on Form S-3 to register the shares of common stock issuable upon exercise of the Series A Warrants and the pre-funded warrants for resale by the holders thereof, which registration statement was declared effective by the SEC on January 22, 2205.

As required by the December 2024 Purchase Agreement, the Company obtained stockholder approval of the exercise of the Series A Warrants and pre-funded warrants, as required by Nasdaq rules, at that special meeting of stockholders held on February 17, 2025. Thereafter, certain investors exercised their pre-funded warrants for an aggregate of 1,382,559 shares of common stock.

Merger

On April 1, 2024, the Company acquired Trawsfynydd, in accordance with the terms of an Agreement and Plan of Merger, dated April 1, 2024 (the “Merger Agreement”), by and among the Company, Traws Merger Sub I, Inc., a Delaware corporation (“First Merger Sub”), Traws Merger Sub II, LLC, a Delaware limited liability company (“Second Merger Sub”), and Trawsfynydd. Pursuant to the Merger Agreement, First Merger Sub merged with and into Trawsfynydd, pursuant to which Trawsfynydd was the surviving corporation (the “First Merger”). Immediately following the First Merger, Trawsfynydd merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity and a wholly owned subsidiary of the Company (the “Second Merger” and together with the First Merger, the “Merger”). The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Under the terms of the Merger Agreement, upon the consummation of the Merger on April 1, 2024 (the “Closing”), in exchange for the outstanding shares of capital stock of Trawsfynydd immediately prior to the effective time of the First Merger, the Company issued to the stockholders of Trawsfynydd an aggregate of (A) 141,982 shares of Common Stock and (B) 10,359.0916 shares of Series C Preferred (as defined and described below). Each share of Series C Preferred converts into shares of common stock, subject to certain conditions and the Beneficial Ownership Limitation (defined below) as set forth in the Certificate of Designation. In addition, the Company assumed all Trawsfynydd stock options immediately outstanding prior to the First Merger, each becoming an option to purchase common stock subject to adjustment pursuant to the terms of the Merger Agreement (the “Assumed Options”). The Assumed Options are exercisable for an aggregate of 365,547 shares of common stock. Following the effective time of the Second Merger, the Company changed its name to “Traws Pharma, Inc.”

The Board approved the Merger Agreement and the related transactions, and the consummation of the Merger was not subject to approval of Company stockholders.

In accordance with the Merger Agreement, each of Werner Cautreels, Iain Dukes, and Nikolay Savchuk were appointed to the Board effective as of the Closing. In accordance with the Merger Agreement, Werner Cautreels was appointed as Chief Executive Officer of the Company, Iain Dukes was appointed as Executive Chairman of the Company, and Nikolay Savchuk was appointed as Chief Operating Officer of the Company effective as of the Closing.

Pursuant to the Merger Agreement, the Company agreed to hold a stockholders’ meeting to submit, among other proposals, the following proposals to its stockholders for their consideration: (i) the approval of the conversion of shares of Series C Preferred into shares of Common Stock in accordance with the rules of the Nasdaq Stock Market LLC, the Merger Agreement and the Certificate of Designation (the “Conversion Proposal”) and (ii) the approval of an amendment to the Company’s Certificate of Incorporation (as amended to date, the “Charter”), to increase the authorized shares of common stock from 125,000,000 to 250,000,000 (the “Share Increase Proposal” and together with the Conversion Proposal, the “Meeting Proposals”). In connection with these matters, the Company agreed to file a proxy statement on Schedule 14A with the Securities and Exchange Commission (the “SEC”). Such proxy statement was filed on August 9, 2024. At a special meeting of the stockholders held on September 16, 2024, the stockholders approved the Meeting Proposals and, subject to the Beneficial Ownership Limitation, the outstanding shares of Series C Preferred, automatically converted to shares of common stock. After the automatic conversion, there were 7,440 shares of Series C Preferred outstanding. In connection with the increase in common shares outstanding due to the December 2024 Purchase Agreement, certain investors converted an additional 42.45 Series C Preferred shares into an aggregate of 16,980 shares of the Company’s common stock to maintain the Beneficial Ownership Limitation. As of December 31, 2024, 7,398 shares of Series C remained outstanding.

Support Agreements

In connection with the execution of the Merger Agreement, the Company and Trawsfynydd entered into stockholder support agreements (the “Company Stockholder Support Agreements”) with certain of the Company’s stockholders (solely in their capacity as stockholders of the Company). Pursuant to the Support Agreements, among other things, each of the Company stockholder parties thereto agreed to vote or cause to be voted all of the shares of common stock owned by such stockholder in favor of the Meeting Proposals.

In connection with the execution of the Merger Agreement, the Company and Trawsfynydd entered into stockholder support agreements (the “Trawsfynydd Stockholder Support Agreements”) with all of Trawsfynydd’s stockholders (solely in their capacity as stockholders of the Company). Pursuant to the Trawsfynydd Stockholder Support Agreements, among other things, each of the Trawsfynydd stockholders agreed to the terms and conditions of the Merger Agreement, to waive any dissenters’ rights and to release claims such stockholder may have against the Company and Trawsfynydd.

Lock-up Agreements

Concurrently and in connection with the execution of the Merger Agreement, certain Trawsfynydd stockholders as of immediately prior to the Closing, and certain directors, officers, and stockholders of the Company as of immediately prior to the Closing entered into lock-up agreements with the Company and Trawsfynydd, pursuant to which each such stockholder agreed to be subject to a 180-day lockup on the sale or transfer of shares of the Company held by each such stockholder at the Closing, including those shares of Common Stock received by each such stockholder in the Merger and Common Stock received upon conversion of Series C Preferred upon Board approval (the “Lock-up Agreements”).

Contingent Value Rights Agreement

Concurrently with the Closing of the Merger, the Company entered into a contingent value rights agreement (the “CVR Agreement”) with a rights agent (the “Rights Agent”), pursuant to which each holder of common stock as of the applicable record date (April 15, 2024), including those holders receiving shares of common stock in connection with the Merger, is entitled to one contractual contingent value right (each, a “CVR”), subject to and in accordance with the terms and conditions of the CVR Agreement, for each share of common stock held by such holder as of the applicable record time (5:00 p.m. ET on April 15, 2024).

When issued, each contingent value right will entitle the holder (the “Holder”) thereof to distributions of the following, pro-rated on a per-CVR basis, during the CVR Term (as defined in the CVR Agreement):

The distributions in respect of the CVRs will be made on a quarterly basis, and will be subject to a number of deductions, subject to certain exceptions or limitations, including but not limited to for certain taxes and certain out-of-pocket expenses incurred by us.

Under the CVR Agreement, the Rights Agent has, and Holders of at least 30% of the CVRs then-outstanding have, certain rights to audit and enforcement on behalf of all Holders of the CVRs.

Private Placement and Securities Purchase Agreement

On April 1, 2024, the Company entered into the April 2024 Securities Purchase Agreement with TPAV and OrbiMed. Pursuant to the April 2024 Purchase Agreement, the Company issued and sold an aggregate of (i) 19,879 shares of common stock and (ii) 1,578.2120 shares of Series C Preferred (the “Private Investment in Public Equity” or “PIPE Securities”) for an aggregate purchase price of approximately $14 million (collectively, the “Financing”). The closing of the Financing occurred concurrently with the closing of the Merger on April 1, 2024 (the “Financing Closing Date”). Subject to the Beneficial Ownership Limitation (defined below), each share of Series C Preferred converts into shares of common stock, as provided in the Certificate of Designation.

Registration Rights Agreement

On April 1, 2024, in connection with the April 2024 Purchase Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the holders of common stock and Series C Preferred signatory thereto. Pursuant to the Registration Rights Agreement, we are required to prepare and file a resale registration statement with the SEC within 90 calendar days following the Financing Closing Date (the “Filing Deadline”), with respect to the shares of common stock underlying the PIPE Securities and the common stock and Series C Preferred issued to the signatories to the Registration Rights Agreement in the Merger. The Company filed such registration statement on July 1, 2024, which was declared effective on August 28, 2024.

Certificate of Designation

On April 1, 2024, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of the Series C Non-Voting Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware in connection with the Merger. The Certificate of Designation provides for the designation of shares of the Series C Preferred. Holders of Series C Preferred are entitled to receive dividends on shares of Series C Preferred equal to, on an as-if-converted-to-common-stock basis, and in the same form as dividends actually paid on shares of the common stock.

Except as otherwise required by law, the Series C Preferred does not have voting rights. However, as long as any shares of Series C Preferred are outstanding, we will not, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series C Preferred, (i) alter or change adversely the powers, preferences or rights given to the Series C Preferred or alter or amend the Certificate of Designation, amend or repeal any provision of, or add any provision to, the Charter or our bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, in each case if any such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series C Preferred, regardless of whether any of the foregoing actions shall be by means of amendment to the Charter or by merger, consolidation, recapitalization, reclassification, conversion or otherwise, (ii) issue further shares of Series C Preferred, (iii) prior to the earlier of stockholder approval of the Conversion Proposal or the six-month anniversary of the Closing, consummate either: (A) any Fundamental Transaction (as in the Certificate of Designation) or (B) any stock sale to, or any merger, consolidation or other business combination with or into, another entity in which our stockholders immediately before such transaction do not hold at least a majority of the capital stock immediately after such transaction, or (iv) enter into any agreement with respect to any of the foregoing.

The Series C Preferred does not have a preference upon any liquidation, dissolution or winding-up of Traws Pharma. Following stockholder approval of the Conversion Proposal, each share of Series C Preferred automatically converted into 400 shares of common stock (on a post-split basis), subject to certain limitations, including that a holder of Series C Preferred was prohibited from converting shares of Series C Preferred into shares of common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than 19.9% of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion (the “Beneficial Ownership Limitation”). The Series C Preferred is redeemable for cash at the option of the holder thereof at any time following the date that is nine months after the initial issuance of the Series C Preferred or following any failure to deliver shares of common stock in accordance with the terms of the Series C Preferred, at a price per share equal to the then-current fair value of the Series C Preferred on an as-converted basis, as described in the Certificate of Designation.

Certificate of Amendment

On April 2, 2024, the Company changed its name to “Traws Pharma, Inc.” pursuant to a certificate of amendment to the Charter filed with the Secretary of State of the State of Delaware (the “Name Change”). Pursuant to the Delaware General Corporation Law, a stockholder vote was not necessary to effectuate the Name Change and it does not affect the rights of the Company’s stockholders. In addition, effective at the open of market trading on April 3, 2024, our common stock ceased trading under the ticker symbol “ONTX” and began trading on the Nasdaq Stock Market under the ticker symbol “TRAW”.

Transaction Costs

April 2026 Financing

In April 2026, we completed a financing transaction, for aggregate gross proceeds of up to $60.0 million (the "April 2026 Financing"). The April 2026 Financing consisted of (i) $10.0 million of upfront gross proceeds at closing from the sale of 5,982,919 shares of our common stock (including pre-funded warrants in lieu thereof), (ii) the issuance of milestone-based warrants with an aggregate exercise price of $10.0 million that becomes exercisable upon receipt of approval from the Medicines and Healthcare products Regulatory Agency ("MHRA") to conduct the human challenge trial in the UK, (iii) the issuance of additional milestone-based warrant with an aggregate exercise price of $10.0 million that becomes exercisable upon shareholder approval and the announcement of data from the human challenge trial and (iv) the issuance of common warrants, subject to shareholder approval, with a three-year term to purchase shares of our common stock, providing potential additional gross proceeds of $30.0 million if fully exercised. The milestone-based warrants and the common warrants each have an exercise price equal to the per share purchase price in the April 2026 Financing. The common warrants are subject to a forced exercise provision if the trading price of our common stock equals or exceeds 200% of the applicable exercise price for 30 consecutive trading days. The milestone-based warrants become exercisable only upon achievement of the applicable milestone conditions, and there can be no assurance that we will receive any additional proceeds from the exercise of the milestone-based warrants or the common warrants, or as to the timing thereof.

At close, we paid transaction costs including a cash success fee equal to 6% of the upfront gross proceeds, and we intend to use the net proceeds for working capital and general corporate purposes, including funding our clinical and regulatory activities.

Pro Forma Impact of the April 2026 Financing

The following financial information has been developed by application of pro forma adjustments to the historical financial statements of the Company appearing elsewhere in this Quarterly Report. The unaudited pro forma information gives effect to the 2026 private placement.

The unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what the results of operations or financial position of the Company would have been had the transactions described above actually occurred on the dates indicated, nor do they purport to project the financial condition of the Company for any future period or as of any future date. The unaudited pro forma financial information should be read in conjunction with the Company’s financial statements and notes thereto included elsewhere in this Quarterly Report.

Unaudited Pro Forma Balance Sheet

The unaudited pro forma balance sheet as of March 31, 2026 gives effect to an assumed $10.0 million gross equity financing completed after March 31, 2026. Offering costs are assumed to be $0.6 million (6% of gross proceeds) and are reflected as a reduction of additional paid-in capital in accordance with U.S. GAAP. No proceeds from warrant exercises are reflected.