Calithera Biosciences, Inc. [CALA] Filings

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2022

OR

Commission File Number 001-36644

CALITHERA BIOSCIENCES, INC.

(Exact name of Registrant as specified in its Charter)

Registrant’s telephone number, including area code: (650) 870-1000

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

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ No ☒

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:

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $11.5 million, based on the closing price of the registrant’s common stock on the Nasdaq Global Select Market of $2.46 per share.

The number of shares of Registrant’s Common Stock outstanding as of March 24, 2023, was 4,872,497.

DOCUMENTS INCORPORATED BY REFERENCE

Table of Contents

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CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K for the year ended December 31, 2022, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections, concerning our business, operations, and financial performance and condition as well as our plans, objectives, and expectations for business operations and financial performance and condition. Any statements contained herein that are not of historical facts may be deemed to be forward-looking statements. You can identify these statements by words such as “anticipate,” “assume,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “should,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about our business and the industry in which we operate and management's beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Annual Report on Form 10-K may turn out to be inaccurate. Factors that could materially affect our business operations and financial performance and condition include, but are not limited to, those risks and uncertainties described herein under “Item 1A - Risk Factors.” You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are based on information available to us as of the filing date of this Annual Report on Form 10-K. Unless required by law, we do not intend to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise.

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PART I

Item 1. Business.

Overview

Until recently, we were a fully-integrated, clinical stage precision oncology biopharmaceutical company. On January 9, 2023, we announced, after extensive consideration of potential strategic alternatives, that our Board of Directors had unanimously approved the dissolution and liquidation of Calithera pursuant to a plan of complete liquidation and dissolution, or the Plan of Dissolution, subject to stockholder approval. In connection with the Plan of Dissolution, we began discontinuing all clinical programs and commenced reducing our workforce, which includes the planned termination of most employees by the end of the first quarter, and began the wind-up of our operations. We are currently seeking to sell all of our clinical assets and programs.

In light of our planned dissolution, on January 24, 2023, we received written notice from The Nasdaq Stock Market LLC, or Nasdaq, advising us that based upon Nasdaq’s review and pursuant to Listing Rule 5101, Nasdaq believed that we were a “public shell,” and that the continued listing of our securities was no longer warranted. As a result, the trading of our common stock was suspended as of the opening of business on February 2, 2023, and on March 3, 2023, Nasdaq filed a Form 25-NSE with the Securities and Exchange Commission, or the SEC, which removed our common stock from listing and registration on Nasdaq.

Clinical Assets and Programs

Sapanisertib (CB-228) and Mivavotinib (CB-659)

In October 2021, we entered into an Asset Purchase Agreement, or APA, with Millennium Pharmaceuticals, Inc., or Millennium, a wholly-owned subsidiary of Takeda Pharmaceutical Company Limited, or Takeda, to acquire two clinical-stage compounds, both of which have demonstrated single-agent clinical activity in biomarker-defined cancer patient populations. The compounds are the TORC1/2 inhibitor sapanisertib (CB-228) and the spleen tyrosine kinase (SYK) inhibitor mivavotinib (CB-659). We were conducting phase 2 trials of sapanisertib in NRF2-mutated sqNSCLC and mivavotinib in relapsed or refractory non-GCB (ABC) DLBCL with enrichment of MYD88/CD79b mutated tumors and in January 2023 began discontinuing these two programs.

CD73 Inhibitor CB-708 (ATG037) for Oncology

A highly potent, selective, orally-bioavailable small molecule inhibitor of CD73, CB-708 (now ATG-037) was discovered by Calithera. In May 2021, we entered into a license agreement with Antengene Investment Limited, or Antengene, a wholly-owned subsidiary of Antengene Corporation, where we granted Antengene an exclusive, worldwide license to develop and commercialize CB-708 (now ATG-037). Under the terms of the license agreement, we received an upfront payment of $3.0 million in May 2021 and may receive potential development, regulatory and sales milestone of up to $252.0 million. Additionally, we were eligible to receive tiered royalties on sales of licensed product up to low double-digits. In January 2023, we entered into an Assignment Agreement with Antengene, and Antengene acquired all the outstanding rights of CB-708 (now ATG-037).

Synthetic Lethality Preclinical Pipeline and VPS4A Inhibitors

We were building a preclinical pipeline of synthetic lethality targets with a focus on paralog genes. We identified a novel series of small molecule inhibitors of VPS4A and VPS4B and were advancing multiple series through lead optimization.

Arginase Inhibitor for Cystic Fibrosis (CB-280)

We were developing CB-280, a novel oral inhibitor of arginase that was being evaluated for the treatment of cystic fibrosis, or CF. We completed a Phase 1b trial in early 2022.

Arginase Inhibitor for Oncology (INCB001158)

An additional arginase inhibitor, INCB001158, was discovered by Calithera and was being developed by Incyte Corporation for oncology and hematology indications. In January 2017, we entered into a collaboration and license agreement with Incyte, and in September 2022, Incyte notified us of its intent to terminate this agreement for convenience, which was effective on December 28, 2022. No material early termination penalties were payable by either party.

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Glutaminase Inhibitor Telaglenastat (CB-839)

In November 2021, we announced the discontinuation of the phase 2 telaglenastat KEAPSAKE clinical trial in patients with non-squamous cell lung carcinomas with genetic mutations in KEAP1/NRF2 based on a lack of clinical benefit observed in patients treated with telaglenastat in an interim analysis. In March 2023, we entered into an asset purchase agreement and sold all the assets and rights related to the telaglenastat program to an unrelated third party.

Intellectual Property

Our policy was to seek to protect our intellectual property position by, among other methods, filing U.S. and foreign patent applications related to the technology, inventions and improvements that were important to the development and implementation of our business strategy. We also relied on trade secrets, know-how and continuing technological innovation to develop and maintain our proprietary position.

We filed patent applications directed to our product candidates, preclinical compounds, and related technologies to establish intellectual property positions on these compounds and their uses in treating disease. As of December 31, 2022, we owned 26 issued U.S. patents, 165 issued foreign patents, and approximately 93 pending U.S. and foreign patent applications. We expect that these patents and patent applications, if issued, would expire between November 2025 and October 2041.

Our dual TORC 1/2 inhibitor patent portfolio includes patents and applications owned by us and patents and applications exclusively licensed from The Regents of the University of California. As of December 31, 2022, it included eight issued U.S. patents. These patents claim compositions of matter for, methods of treating cancer with, and methods of synthesizing CB-228 and related compounds. They also claim methods of treating certain cancers using CB-228 at particular dosages, and methods of combining CB-228 with other compounds to treat certain cancers. In the United States, the composition of matter patents are expected to expire between April 2027 and April 2031. We also have 59 issued foreign patents, two pending U.S. patent applications and three pending foreign patent applications directed to compositions of matter for CB-228 and related compounds, as well as methods of using these compounds. We expect that the claims to composition of matter within these patents and patent applications, if issued, would expire between November 2025 and August 2032.

Our SYK inhibitor intellectual property portfolio is wholly owned by us and as of December 31, 2022, included five issued U.S. patents and two U.S. patent applications covering the composition for and methods of using CB-659 and related compounds. The U.S. patents relating to the composition of matter for CB-659 are expected to expire between March 2031 and April 2036. We also own 60 related foreign patents and 26 related foreign pending patent applications. We expect that these foreign patents and patent applications, if issued, would expire between December 2030 and December 2035.

The intellectual property portfolio for our arginase inhibitor program, which includes INCB001158 and CB-280, includes issued patents and pending patent applications that we have exclusively licensed from Symbioscience as well as issued patents and pending patent applications that we own. This portfolio includes 20 issued U.S. patents, two pending U.S. patent applications, 62 corresponding pending foreign patent applications, and 99 issued foreign patents directed to various arginase inhibitors, therapeutic methods of using the compounds, methods of making the compounds, and intermediates useful in preparing the compounds. We expect that these patents and patent applications, if issued, would expire between April 2031 and May 2038.

Manufacturing

We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We previously obtained our supplies from manufacturers on a purchase order basis and do not have any long-term arrangements. In addition, we do not currently have arrangements in place for bulk drug substance or drug product services of any of our clinical supplies.

Research and Development

In the ordinary course of business, we entered into agreements with third parties, such as contract research organizations, medical institutions, clinical investigators and contract laboratories, to conduct our clinical trials and aspects of our research and preclinical testing. These third parties provided project management and monitoring services and regulatory consulting and investigative services. We are currently in the process of terminating these agreements, and have established reserves in connection with such termination.

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Human Capital Resources

As of March 15, 2023, we had 8 full-time employees and 2 part-time employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement.

Facilities

We occupy approximately 34,000 square feet of office and laboratory space in South San Francisco, California. Our lease term is through January 2024.

Legal Proceedings

From time to time, we may become involved in litigation relating to claims arising from the ordinary course of business. Our management believes that there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows.

Available Information

We were incorporated in the State of Delaware on March 9, 2010. Our website address is www.calithera.com. Information found on, or accessible through, our website is not a part of, and is not incorporated into, this Annual Report on Form 10-K.

We have historically filed electronically with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended. These reports are currently available on our website at www.calithera.com, free of charge.

On March 14, 2023, we filed a Form 15 with the SEC to terminate our registration under section 12(g) of the Exchange Act. Deregistration under section 12(g) will become effective 90 days after the filing of the Form 15, therefore we do not expect to file any periodic reports with the SEC following the filing of this Annual Report on Form 10-K.

Item 1A. Risk Factors.

Our business involves significant risks, some of which are described below. You should carefully consider these risks, in addition to the other information contained in this Annual Report on Form 10-K, including our consolidated financial statements and related notes and the section of this Annual Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of any of the events or developments described in the following risk factors and the risks described elsewhere in this report could harm our business, financial condition, results of operations, cash flows, the trading price of our common stock and our growth prospects. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described in the following risk factors and the risks described elsewhere in this Annual Report.

The holder of our Series A preferred stock has liquidation and other rights that are senior to the rights of the holders of shares of our common stock.

On January 9, 2023, we announced, after extensive consideration of potential strategic alternatives, that our Board of Directors had unanimously approved the dissolution and liquidation of Calithera pursuant to a Plan of Dissolution, subject to stockholder approval. In connection with the Plan of Dissolution, we began discontinuing all clinical programs and commenced reducing our workforce, which includes the planned termination of most employees by the end of the first quarter, and began the wind-up of our operations. We are currently seeking to sell all of our clinical assets and programs.

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As of December 31, 2022, we had 1,000,000 shares of Series A preferred stock outstanding and Takeda Ventures is the sole holder of our Series A preferred stock. Pursuant to the certificate of designations which defines the rights, preferences and privileges of the Series A preferred stock, upon our dissolution and wind-up the Series A preferred stock is entitled to have set apart, or to be paid, out of our assets available for distribution to stockholders after provision for payment of all of our debts and liabilities in accordance with the Delaware General Corporation Law, before any distribution or payment is made with respect to any shares of junior securities, including shares of our common stock, an amount per share equal to the greater of (i) $35.00 per share, being the issuance price per share of Series A preferred stock, for an aggregate amount of $35.0 million, and (ii) such amount as would have been payable on the number of shares of common stock into which the shares of Series A preferred stock could have been converted immediately prior to such event. As of the date of the filing of this Annual Report on Form 10-K with the SEC, we do not have sufficient assets after provision for the payment of our debts and liabilities, to satisfy in full the amount required to be set apart for the Series A preferred stock. If we are unable to satisfy in full the amount required to be set apart for the Series A preferred stock, absent a waiver or other arrangement with the holder of Series A preferred stock, no amounts will be distributed to the holders of common stock.

To the extent our liabilities, other obligations and expenses or claims against us are higher than we currently anticipate or larger contingency reserves are established, the amount available for distribution to our stockholders will be diminished.

As of December 31, 2022, we had $25.5 million in cash and cash equivalents. We expect to establish a reserve in connection with the Plan of Dissolution, which will be used to pay all expenses, including operating expenses up until the filing of the certificate of dissolution, or the Certificate of Dissolution, and other known, non-contingent liabilities, and which also includes reasonable provision for expenses of liquidation and potential, contingent and unknown liabilities as required by Delaware law. The amount of cash ultimately distributed to our stockholders in the liquidating distributions depends on the amount of our liabilities, obligations and expenses and claims against us, and contingency reserves that we establish during the liquidation process. While we will attempt to estimate reasonable reserves for such liabilities, obligations, expenses and claims against us, those estimates may be inaccurate. Factors that could impact our estimates include the following:

If any of the foregoing occurs, the amount we distribute to our stockholders may be substantially less.

We may not be successful in selling our clinical assets and programs, which would decrease the amount of cash available to distribute to our stockholders.

We have recently been focusing our efforts on the sale of our clinical assets and programs and expect to continue pursuing the Plan of Dissolution in the near term. We may have significant expenses in connection with sale of our clinical assets and programs, which expenses will decrease the remaining cash available for use in our business and may diminish or delay any distributions to our stockholders in connection with the Plan of Dissolution.

We cannot assure you of the exact amount or timing of any liquidating distributions to our stockholders under the Plan of Dissolution.

The dissolution and liquidation process is subject to numerous uncertainties, and may not result in any remaining capital for liquidating distributions to the holder of our Series A preferred stock or any other common stockholders after satisfaction of the amount required to be distributed to the holder of our Series A preferred stock. If we are unable to satisfy in full the amount required to be set apart for the Series A preferred stock, absent a waiver or other arrangement with the holder of our Series A preferred stock, no amounts will be distributed to the holders of common stock. The precise amount and timing of any liquidating distribution to our stockholders will depend on and could be delayed by, among other things, sales of our non-cash assets, any unexpected claims from third parties, including governmental authorities, and unexpected or greater than expected expenses.

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Although our Board of Directors has not established a firm timetable for liquidating distributions to the holder of our Series A preferred stock or any common stockholders, assuming our stockholders approve the Plan of Dissolution, the Board of Directors intends, subject to contingencies inherent in winding down our business, to make such liquidating distributions, if any, as promptly as practicable as creditor claims and contingent liabilities are paid or settled. However, we are currently unable to predict the precise timing of any such liquidating distributions or whether any liquidating distributions will occur at all. The timing of any such liquidating distributions will depend on and could be delayed by, among other things, the timing of sales of our non-cash assets and claim settlements with creditors. Additionally, a creditor could seek an injunction against the making of such distributions to our stockholders on the ground that the amounts to be distributed were needed to provide for the payment of our liabilities and expenses. Any action of this type could delay or substantially diminish the amount available for such distribution to our stockholders.

We will continue to incur claims, liabilities and expenses that will reduce the amount available for distribution to stockholders.

Claims, liabilities and expenses from operations, such as operating costs, salaries, insurance, payroll and local taxes, legal, accounting and consulting fees and miscellaneous expenses, will continue to be incurred as we wind-up. In connection with the Plan of Dissolution, we will also dissolve our non-U.S. subsidiaries. These non-U.S. subsidiaries may be subject to differing laws, regulations and standards in each jurisdiction where such non-U.S. subsidiary operates, which include, but are not limited to, regulations and standards applicable to liabilities and expenses arising from salaries, insurance, payroll and local taxes, legal and miscellaneous expenses. These expenses will reduce the amount of assets available for ultimate distribution to the holder of our Series A preferred stock and common stockholders.

If we fail to create an adequate contingency reserve for payment of our expenses and liabilities, any stockholder receiving liquidating distributions could be held liable for payment to our creditors of their pro rata share of amounts owed to creditors in excess of the contingency reserve, up to the amount actually distributed to such stockholder in dissolution.

If the Plan of Dissolution is approved by our stockholders, we will file the Certificate of Dissolution with the Delaware Secretary of State dissolving Calithera Biosciences, Inc. Pursuant to the Delaware General Corporation Law, or the DGCL, we will continue to exist for three years after our dissolution or for such longer period as the Delaware Court of Chancery shall direct, for the purpose of prosecuting and defending suits against us and enabling us gradually to close our business, to dispose of our property, to discharge our liabilities (and those of our non-U.S. subsidiaries) and to distribute to our stockholders any remaining assets. Under the DGCL, in the event we fail to create an adequate contingency reserve for payment of our expenses and liabilities, each stockholder of record as of the date of the filing of the Certificate of Dissolution, which is referred to hereinafter as the final record date, could be held liable for payment to our creditors of such stockholder’s pro rata share of amounts owed to creditors in excess of the contingency reserve, up to the amount actually distributed to such stockholder in dissolution.

Although the liability of any stockholder is limited to the amounts previously received by such stockholder from us (and from any liquidating trust or trusts) pursuant to the Plan of Dissolution, this means that a stockholder could be required to return all liquidating distributions previously made to such stockholder and receive nothing from us under the Plan of Dissolution. Moreover, in the event a stockholder has paid taxes on amounts previously received, a repayment of all or a portion of such amount could result in a stockholder incurring a net tax cost if the stockholder’s repayment of an amount previously distributed does not cause a commensurate reduction in taxes payable. While we will endeavor to make adequate reserves for all known, contingent, and unknown liabilities, there is no guarantee that the reserves established by us will be adequate to cover all such expenses and liabilities.

Our stock transfer books will be closed at the close of business on the date we file the Certificate of Dissolution with the Delaware Secretary of State, after which it will not be possible for stockholders to publicly trade our stock.

On the date we file the Certificate of Dissolution with the Delaware Secretary of State, we intend to close our stock transfer books and discontinue recording transfers of our common stock. Thereafter, certificates or book entries representing our common stock will not be assignable or transferable on our books except by will, intestate succession or operation of law. The proportionate interests of all of our stockholders will be fixed on the basis of their respective stock holdings at the close of business on the final record date, and, after such date, any distributions made by us will be made solely to the stockholders of record at the close of business on the final record date, except as may be necessary to reflect subsequent transfers recorded on our books as a result of any assignments by will, intestate succession or operation of law.

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Risks Related to Our Securities

We may be required to issue a significant number of additional shares of common stock for no additional consideration to the holder of our Series A preferred stock pursuant to certain price-based anti-dilution provisions.

We may be required to issue a significant number of shares of common stock for no additional consideration to the holder of our Series A preferred stock, subject to certain beneficial ownership limitations described in the certificate of designations defining the rights of the holders of the Series A preferred stock. The terms of the Series A preferred stock provide that such shares will automatically convert into common stock on the earlier of: (i) the 18-month anniversary of the date of issuance, or the Mandatory Pricing Date, into 857,843 shares of common stock, subject to adjustment into additional shares of common stock if the volume weighted-average price of our common stock for the thirty trading days prior to the Mandatory Pricing Date is lower than $40.80 per share, and (ii) a qualified financing that results in net proceeds to us of at least $40.0 million, excluding any conversion of the Series A preferred stock, subject to adjustment into additional shares of common stock if the weighted-average price per paid by investors in such qualified financing is lower than $40.80 per share. The holders of Series A preferred stock also have the option, at any time prior to the Mandatory Pricing Date or such qualified financing to convert the Series A preferred stock into shares of common stock, subject to adjustment into additional shares of common stock if the volume weighted-average sales price of certain shares of common stock are sold from the issuance date of the Series A preferred stock through the date of the written election at an effective price less than $40.80 per share. Stockholders will incur dilution of their percentage ownership interest in our common stock to the extent we issue additional shares of common stock to the holder of the Series A preferred stock.

We cannot take certain actions without the consent of the holder of Series A preferred stock.

Certain matters require the approval of the Series A preferred stock, voting as a separate class, including to:

The interests of Takeda Ventures, the sole holder of our Series A preferred stock, and those of the holders of common stock may be inconsistent, which may result in our inability to obtain the consent of the holders of Series A preferred stock to matters that may be in the best interests of the common stockholders.

Our common stock is not listed on any national exchange and the trading price of our common stock is volatile and purchasers of our common stock could incur substantial losses.

In light of our planned dissolution, on January 24, 2023, we received written notice from The Nasdaq Stock Market LLC, or Nasdaq, advising us that based upon Nasdaq’s review and pursuant to Listing Rule 5101, Nasdaq believed that we were a “public shell,” and that the continued listing of our securities was no longer warranted. As a result, the trading of our common stock was suspended as of the opening of business on February 2, 2023, and on March 3, 2023, Nasdaq filed a Form 25-NSE with the SEC, which removed our common stock from listing and registration on Nasdaq. Our common stock is not listed on any national exchange and is currently traded “over-the-counter” via broker-dealer networks. Our stock is thinly traded, and our stock price has fluctuated in the past and is likely to be volatile in the future. As a result of this volatility, investors may experience losses on their investment in our common stock. In addition, in the past, stockholders have initiated class action lawsuits against companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources.

We have filed a Form 15 with the SEC and do not intend to file any periodic reports subsequent to the filing of this Annual Report on Form 10-K, which will limit public information regarding our business and status of our dissolution and wind-up.

On March 14, 2023, we filed a Form 15 with the SEC to terminate our registration under section 12(g) of the Exchange Act. Deregistration under section 12(g) will become effective 90 days after the filing of the Form 15, therefore we do not expect to file any periodic reports with the SEC following the filing of this Annual Report on Form 10-K. Although we plan to file a proxy statement for a special meeting of stockholders to approve the Plan of Dissolution, investors will not have current public information regarding the status of our business or wind-up activities following such special meeting.

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Concentration of ownership of our capital stock may prevent new investors from influencing significant corporate decisions.

Our executive officers, directors and current beneficial owners of 5% or more of our common stock, in the aggregate, beneficially own a significant percentage of our outstanding common stock. These persons, acting together, will be able to significantly influence all matters requiring stockholder approval, including the election and removal of directors and any merger or other significant corporate transactions. The interests of this group of stockholders may not coincide with the interests of other stockholders.

Takeda Ventures beneficially owns a significant percentage of our total outstanding capital stock, which is initially convertible into 857,843 shares of our common stock, subject to price-based anti-dilution adjustments that if triggered would result in the issuance of additional shares of common stock. In no event will Takeda be entitled to cast votes in excess of, as of any date, 19.99% of our outstanding common stock. Takeda may be able to significantly influence all matters requiring stockholder approval, including the election and removal of directors and any merger or other significant corporate transactions. The interests of Takeda may not coincide with the interests of other stockholders.

Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by our stockholders to change our management or hinder efforts to acquire a controlling interest in us, and the market price of our common stock may be lower as a result.

There are provisions in our certificate of incorporation and bylaws that may make it difficult for a third party to acquire, or attempt to acquire, control of our company, even if a change in control was considered favorable by our stockholders.

Our charter documents also contain other provisions that could have an anti-takeover effect, such as:

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibit a person who owns 15% or more of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. Any provision in our certificate of incorporation or our bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware and our amended and restated bylaws designate the federal district courts of the United States of America as the exclusive forums for substantially all disputes between us and our stockholders, which will restrict our stockholders' ability to choose the judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.

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The provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims.

To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions. If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation and/or our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with litigating Securities Act claims in state court, or both state and federal court, which could seriously harm our business, financial condition, results of operations, and prospects.

These exclusive choices of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find such exclusive-forum provisions to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could harm our business.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our headquarters are located at 343 Oyster Point Blvd., Suite 200, South San Francisco, California 94080 under a lease that expires in January 2024, with an option to extend another two years to January 2026. We believe that our existing facilities are adequate for our current needs.

Item 3. Legal Proceedings.

From time to time, we may become involved in legal proceedings relating to claims arising from the ordinary course of business. Our management believes that there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock commenced trading on the Nasdaq Global Select Market under the symbol "CALA" on October 2, 2014.

On January 9, 2023, we announced, after extensive consideration of potential strategic alternatives, that our Board of Directors had unanimously approved the dissolution and liquidation of Calithera pursuant to a plan of complete liquidation and dissolution subject to stockholder approval. In connection with the Plan of Dissolution, we began discontinuing all clinical programs and commenced reducing our workforce, which includes the planned termination of most employees by the end of the first quarter, and began the wind-up of our operations.

In light of our planned dissolution, on January 24, 2023, we received written notice from The Nasdaq Stock Market LLC, or Nasdaq, advising us that based upon Nasdaq’s review and pursuant to Listing Rule 5101, Nasdaq believed that we were a “public shell,” and that the continued listing of our securities was no longer warranted. As a result, the trading of our common stock was suspended as of the opening of business on February 2, 2023, and on March 3, 2023, Nasdaq filed a Form 25-NSE with the SEC, which removed our common stock from listing and registration on Nasdaq.

On March 14, 2023, we filed a Form 15 with the SEC to terminate our registration under section 12(g) of the Exchange Act. Deregistration under section 12(g) will become effective 90 days after the filing of the Form 15, therefore we do not expect to file any periodic reports with the SEC following the filing of this Annual Report on Form 10-K.

Reverse Stock Split

On June 14, 2022, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation, or the Amendment, to effect a 1-for-20 reverse stock split of our outstanding common stock, effective as of June 14, 2022, or the Reverse Stock Split. A series of alternate amendments to effect the Reverse Stock Split was approved by our stockholders at our Annual Meeting of Stockholders held on June 1, 2022, and the specific 1-for-20 ratio was subsequently approved by our Board of Directors. Our common stock began trading on the Nasdaq Global Select Market on a split-adjusted basis on June 15, 2022.

On the effective date of the Reverse Stock Split, every 20 shares of our issued and outstanding common stock was automatically converted into one issued and outstanding share of common stock, without any change in par value per share. The Reverse Stock Split affected all shares of our common stock outstanding immediately prior to the effective time of the Reverse Stock Split, as well as the number of shares of common stock available for issuance under our equity incentive plans and employee stock purchase plan. In addition, the Reverse Stock Split effected a reduction in the number of shares of common stock issuable upon the conversion of the shares of our Series A preferred stock and upon the exercise of stock options and warrants outstanding immediately prior to the effectiveness of the Reverse Stock Split. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive a fractional share received a cash payment in lieu thereof.

Holders of Record

As of March 24, 2023, there were approximately 13 holders of record of our common stock.

Dividend Policy

We have never declared or paid cash dividends on our capital stock.

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

None.

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Item 6. [Reserved].

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes included in Part II, Item 8 of this Annual Report.

This discussion and analysis generally covers our financial condition and results of operations for the year ended December 31, 2022, including year-over-year comparisons versus the year ended December 31, 2021. Our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022, and available free of charge on the SEC’s website at www.sec.gov and at our investor relations website www.calithera.com, includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2020 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are identified by words such as “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “could,” “potentially” or the negative of these terms or similar expressions. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this report in Part I, Item 1A — “Risk Factors,” and elsewhere in this report. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. These statements, like all statements in this report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments. We caution investors that our business and financial performance are subject to substantial risks and uncertainties. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Annual Report on Form 10-K. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into or review of, all relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely on these statements.

Overview

Until recently, we were a fully-integrated, clinical stage precision oncology biopharmaceutical company. On January 9, 2023, we announced after extensive consideration of potential strategic alternatives, that our Board of Directors had unanimously approved the dissolution and liquidation of Calithera pursuant to a plan of complete liquidation and dissolution, or the Plan of Dissolution, subject to stockholder approval. In connection with the Plan of Dissolution, we began discontinuing all clinical programs and commenced reducing our workforce, which includes the planned termination of most employees by the end of the first quarter, and began the wind-up of our operations. We are currently seeking to sell all of our clinical assets and programs.

Critical Accounting Polices and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles.

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Revenue Recognition

We recognize revenue under Accounting Standards Codification, or ASC No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASC 606. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity 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 entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

We have a collaboration and license agreement with Incyte, the Incyte Collaboration Agreement, and a license agreement with Antengene, the Antengene License Agreement, that are within the scope of ASC 606, under which we license certain rights to our product candidates. The terms of these arrangements include payment to the Company of non-refundable, upfront license fees, and potential development, regulatory and sales milestones, and sales royalties. Each of these payments results in collaboration or license revenue, except for revenues from royalties on net sales of licensed products, which would be classified as royalty revenues.

In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under our agreement, we perform the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) we satisfy each performance obligation. As part of the accounting for these arrangements, we must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract.

Licenses of Intellectual Property: If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promised goods or services, we utilize judgment 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 and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

Milestone Payments: At the inception of each arrangement that includes development, regulatory or commercial milestone payments, we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price. If it is probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the licensees’ control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received or the underlying activity has been completed. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such development milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenue in the period of adjustment.

Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, we recognize 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). To date, we have not recognized any royalty revenue resulting from any of our licensing arrangements.

Contract Balances

Upfront payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until we perform our obligations under these arrangements. Amounts payable to us are recorded as accounts receivable when our right to consideration is unconditional.

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Upfront payments and fees from Incyte were recorded as deferred revenue upon receipt or when due, and may have required deferral of revenue recognition to a future period until we performed our obligations under these arrangements. Amounts were recorded as accounts receivable when our right to consideration was unconditional. We do 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 licensees and the transfer of the promised goods or services to the licensees will be one year or less.

Accrued Research and Development Costs

We record accrued liabilities for estimated costs of our research and development activities conducted by third-party service providers, which include the conduct of preclinical and clinical studies, and contract manufacturing activities. We record the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced, and include these costs in accrued liabilities in the balance sheets and within research and development expense in the statements of operations. These costs are a significant component of our research and development expenses. We accrue for these costs based on factors such as estimates of the work completed and in accordance with agreements established with our third-party service providers under the service agreements.

We have not experienced any material differences between accrued costs and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled, and the rate of patient enrollments may vary from our estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to our accruals could materially affect our results of operations.

Financial Overview

Our Ability to Continue as a Going Concern

As of December 31, 2022, we had cash and cash equivalents of $25.5 million. We have incurred losses since inception and to date have financed our operations primarily through the sale of shares of our capital stock and payments from our collaboration and licensing agreements. As of December 31, 2022, we had an accumulated deficit of $512.6 million. During the year ended December 31, 2022, we incurred a loss from continuing operations of $39.7 million and used $43.6 million of cash in operations. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future, including through the execution of the Plan of Dissolution if approved by our stockholders.

In accordance with Accounting Standards Codification, or ASC, 205-40, Going Concern, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that these consolidated financial statements are issued on March 30, 2023. We have determined that our cash and cash equivalents as of December 31, 2022 would be insufficient to fund our operations for a period of at least twelve months from the date of these financial statements which raises substantial doubt regarding our ability to continue as a going concern.

As of December 31, 2022, we, including our Board of Directors, continued to evaluate potential strategic alternatives to fund and develop our clinical programs. On January 9, 2023, we announced that our Board of Directors unanimously approved the Plan of Dissolution. As we continued to evaluate potential strategic alternatives as of December 31, 2022, and as the Plan of Dissolution was not approved by our Board of Directors as of December 31, 2022, and has not yet been brought to a vote of or approved by our stockholders, we concluded that the liquidation basis of accounting should not be applied as of the balance sheet date. Accordingly, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

License Revenue

License revenue in the year ended December 31, 2021 represents the milestone payment received in September 2021 from the Incyte Collaboration Agreement and the recognition of the upfront payment received in May 2021 from our Antengene License Agreement. There was no license revenue recognized in the year ended December 31, 2022.

Research and Development Expenses

Research and development expenses represent costs incurred to conduct research, such as the discovery and development of our product candidates. We recognize all research and development costs as they are incurred. Costs associated with co-development activities performed under our collaboration agreements and award are included in research and development expenses, with any reimbursement of costs reflected as a reduction of such expenses.

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Research and development expenses consist primarily of the following:

The largest component of our total operating expenses has historically been our investment in research and development activities including the clinical development of our product candidates. We allocate to research and development expenses the salaries, benefits, stock-based compensation expense, and indirect costs of our clinical and preclinical programs on a program-specific basis, and we include these costs in the program-specific expenses.

The following table shows our research and development expenses:

General and Administrative Expenses

General and administrative expenses consist of personnel costs, allocated expenses and other expenses for outside professional services, including legal, audit and accounting services, insurance, investor relations and other expenses associated with being a public company. Personnel costs consist of salaries, benefits and stock-based compensation. Allocated expenses consist of facilities and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation expense and other supplies.

On January 9, 2023, we announced, after extensive consideration of potential strategic alternatives, our Board of Directors unanimously approved the dissolution and liquidation of Calithera pursuant to a Plan of Dissolution, subject to stockholder approval. In connection with the Plan of Dissolution, we began discontinuing all clinical programs and commenced reducing our workforce, which includes the planned termination of most employees by the end of the first quarter, and began the wind-up of our operations.

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Results of Operations

Comparison of the Years Ended December 31, 2022 and 2021

NM: Not Meaningful

License Revenue. License revenue was $9.8 million for 2021 and is comprised of the $6.75 million milestone payment received in September 2021 under our Incyte Collaboration Agreement and the recognition of the $3.0 million upfront payment received in May 2021 from our Antengene License Agreement.

Research and Development. Research and development expenses decreased $24.9 million, or 47%, from $53.5 million for 2021 to $28.5 million for 2022. The decrease was due to a $31.5 million decrease in the telaglenastat program, a $5.1 million decrease in the CB-280 program, and a $0.5 million decrease in our early stage research, partially offset by a $6.3 million increase due to the sapanisertib program and a $5.9 million increase due to the mivavotinib program.

Research and Development Related to Asset Acquisition. The decrease of $50.9 million in research and development related to our asset acquisition of sapanisertib and mivavotinib in the fourth quarter of 2021, and comprised of an upfront payment of $10.0 million in cash and $40.9 million attributed to the value of the Series A convertible preferred stock on the date issued, estimated using the Black-Scholes option-pricing model.

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General and Administrative. General and administrative expenses decreased $7.3 million, or 35%, from $20.9 million for 2021 to $13.5 million for 2022. The decrease was due to a $5.2 million decrease in personnel-related costs, mainly as a result of reduced headcount, resulting in decreases in wages, bonuses and stock-based compensation expense, and a $2.1 million decrease in professional services, primarily in legal expenses related to our Settlement Agreement and Release with Incyte and our Asset Purchase Agreement with Takeda incurred in 2021.

Transaction Costs Allocable to Warrant Liabilities. Transaction costs allocable to the warrant liabilities of $0.5 million were recorded for 2022 in connection with the warrants issued related to the April 2022 public offering, consisting principally of underwriting discounts and commissions and offering costs.

Change in Fair Value of Warrant Liabilities. A gain of $2.4 million related to the decrease in the fair value of the warrant liabilities was recorded for 2022.

Interest and Other Income, net. Interest and other income, net, increased $0.1 million or 38%, from $345,000 for 2021 to $477,000 for 2022. The increase of $0.1 million mainly related to increased interest income generated from higher interest rates on our cash equivalents, partially offset by a $0.4 million gain related to the remeasurement of our lease liability during the 2021 period.

Deemed Contribution from Series A Preferred Stock Extinguishment. On May 23, 2022, we filed a Certificate of Amendment that limits the aggregate number of shares to be issued upon conversion of the Series A preferred stock to a maximum of 6,644,014 shares of common stock, which we accounted for as an extinguishment. As a result, we recognized a deemed contribution of $18.4 million representing the difference between the carrying value of the existing Series A preferred stock and the estimated fair value of liquidity and capital resourceswarrthe new Series A preferred stock for 2022.

Liquidity and Capital Resources

As of December 31, 2022, we had cash and cash equivalents of $25.5 million. Our operations have been financed by net proceeds from the sale of shares of our capital stock and payments from our collaboration and licensing agreements. As of December 31, 2022, we had an accumulated deficit of $512.6 million. During the year ended December 31, 2022, we incurred a loss from continuing operations of $39.7 million and used $43.6 million of cash in operations. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future, including through the execution of the Plan of Dissolution if approved by our stockholders.

We have determined that our cash and cash equivalents as of December 31, 2022 will be insufficient to fund our operations for a period of at least twelve months from the date of these financial statements which raises substantial doubt regarding our ability to continue as a going concern.

Public Offering

On April 1, 2022, we closed an underwritten public offering of 925,925 shares of our common stock and accompanying warrants at a combined offering price to the public of $10.80 per share, for $10.0 million in gross proceeds, resulting in $8.5 million of net proceeds after deducting underwriting discounts and commissions and offering costs. The common stock was accompanied by short-term warrants to purchase 925,925 shares of common stock at an exercise price of $10.80 per share, which are immediately exercisable and will expire 18 months from the date of issuance, and long-term warrants to purchase 925,925 shares of common stock at an exercise price of $10.80 per share, which are immediately exercisable and will expire 5 years from the date of issuance.

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Takeda Asset Purchase Agreement

On October 18, 2021, we entered into an Asset Purchase Agreement, or APA, with Millennium, a wholly-owned subsidiary of Takeda, as amended. In accordance with the APA, we entered into a Preferred Stock Purchase Agreement pursuant to which we agreed to issue to Millennium 1,000,000 shares of our Series A convertible preferred stock, or the Series A preferred stock. The Series A preferred stock is initially convertible at the option of the holder into 857,843 shares of common stock, based on our $40.80 per share closing stock price from October 15, 2021. The conversion rate of the Series A preferred stock is subject to anti-dilution adjustments that if triggered would result in the issuance of additional shares of common stock upon conversion. On May 23, 2022, we filed a Certificate of Amendment to the Certificate of Designations, which limits the aggregate number of shares to be issued upon conversion to a maximum of 6,644,014 shares of common stock. The Series A preferred stock has the preferences, rights and limitations set forth in the Certificate of Designations, as filed with the Secretary of State of the State of Delaware, as amended. If Millennium is unable to convert as a result of the Accounting Cap (defined as 19.99% of the outstanding common stock of the Company on any date) any portion of the Series A preferred stock to common stock by the five year anniversary of the issue date, then on each yearly anniversary thereafter, any shares of Series A preferred stock that remain outstanding shall automatically be converted into common stock at the applicable conversion ratio, in each case subject to the Accounting Cap, until such point in time as all shares of Series A preferred stock have been converted. On July 1, 2022, Millennium transferred their ownership interest in the Series A preferred stock to Takeda Ventures, Inc., a wholly-owned subsidiary of Takeda Pharmaceuticals Company Limited.

Shelf Registration Statement

In August 2020, we filed a shelf registration statement on Form S-3 with the SEC which permits the offering, issuance and sale by us of up to a maximum aggregate offering price of $250 million of our common stock. As of December 31, 2022, $227.9 million of our common stock remained available for sale. On March 14, 2023, we filed a post-effective amendment to the Form S-3 to terminate its effectiveness.

Contractual Obligations

We have entered into arrangements that contractually obligate us to make payments that will affect our liquidity and cash flows in future periods. Our contractual obligations primarily consist of our obligation under our non-cancellable operating lease. The aggregate amount of future operating lease payments over the term of our lease is $1.7 million as of December 31, 2022. For additional information on our lease and timing of future payments, see Note 5 on Operating Leases in Notes to Financial Statements of this Annual Report on Form 10‑K.

In the normal course of business, we previously entered into agreements with clinical research organizations for clinical trials and clinical manufacturing organizations for clinical supply manufacturing and with other vendors for preclinical research studies, investigator-led trials and other services and products for operating purposes. We have not considered these payments to be contractual obligations since the contracts are generally cancelable at any time by us upon less than 180 days’ prior written notice. We also have certain in-license agreements that require us to pay milestones to such third parties upon achievement of certain development, regulatory or commercial milestones. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory approval and commercial milestones, which may not be achieved.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

Cash used in operations was $43.6 million for 2022, compared to $66.3 million for 2021. The decrease of $22.7 million in cash used in operating activities was primarily associated with a decrease in research and development costs, primarily related to our telaglenastat and CB-280 programs, and a decrease of $10 million in cash paid as an upfront for our asset acquisition of sapanisertib and mivavotinib in October 2021. For 2022, net loss of $39.7 million was affected by noncash charges related to the decrease in the fair value of the warrant liabilities of $2.4 million.

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Cash used in investing activities was $0.1 million for 2022 and related to the purchase of property and equipment. Cash provided by investing activities was $7.9 million for 2021 and related to proceeds from the sale and maturity of investments of $8.0 million, partially offset by the purchase of property and equipment of $0.1 million.

Cash provided by financing activities was $9.7 million and $10.7 million in 2022 and 2021, respectively. For 2022, we received $8.5 million in net proceeds from the sale and issuance of common stock and accompanying warrants from a public offering, net of issuance costs, $1.1 million in net proceeds from the sale and issuance of common stock related to our at-the-market offering program, and $16,000 in proceeds from the issuance of common stock from employee stock plan purchases. For 2021, we received $10.7 million in net proceeds from the sale and issuance of common stock related to our at-the-market offering program and $0.2 million in proceeds from the issuance of common stock upon the exercise of stock options and employee stock purchase plan purchases, partially offset by preferred stock issuance costs of $0.2 million.

Recent Accounting Pronouncements

Please refer to Note 2 to our audited consolidated financial statements appearing under Part II, Item 8 for a discussion of recent accounting pronouncements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not required.

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Item 8. Consolidated Financial Statements and Supplementary Data.

CALITHERA BIOSCIENCES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Calithera Biosciences, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Calithera Biosciences, Inc. (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2014.

San Mateo, California

March 30, 2023

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Calithera Biosciences, Inc.

Consolidated Balance Sheets

(in thousands, except per share amounts)

See accompanying notes.

23

Calithera Biosciences, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

See accompanying notes.

24

Calithera Biosciences, Inc.

Consolidated Statements of Comprehensive Loss

(in thousands)

See accompanying notes.

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Calithera Biosciences, Inc.

Consolidated Statements of Stockholders’ Equity

(in thousands)