VSTM US Equity☆

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 together with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those discussed below and as set forth under “Risk Factors.” Please also refer to the section under the heading “Forward-Looking Statements.”

OVERVIEW

We are a late-stage development biopharmaceutical company committed to the development and commercialization of new medicines to improve the lives of patients diagnosed with RAS/ MAPK pathway-driven cancers. Our pipeline is focused on novel small molecule drugs that inhibit critical signaling pathways in cancer that promote cancer cell survival and tumor growth, including RAF/MEK inhibition, FAK inhibition and KRAS G12D inhibition.

Our most advanced product candidates, avutometinib and defactinib, are being investigated in both preclinical and clinical studies for the treatment of various solid tumors, including, but not limited to LGSOC, NSCLC and pancreatic cancer. We believe that avutometinib may be beneficial as a therapeutic, as a single agent or when used together in combination with defactinib, other agents, other pathway inhibitors, or other current and emerging standard of care treatments in cancers that do not adequately respond to currently available therapies.

Our operations to date have been organizing and staffing our company, business planning, raising capital, identifying and acquiring potential product candidates, undertaking preclinical studies and clinical trials for our product candidates and initiating U.S. commercial operations following the approval of COPIKTRA through our ownership period ending in September 2020. We have financed our operations to date primarily through public and private offerings of our common stock, warrants and pre-funded warrants, offerings of convertible notes, sales of common stock under our at-the-market equity offering programs, our loan and security agreement executed with Hercules in March 2017, as amended, the Loan Agreement, the Note Purchase Agreement, the upfront payments and milestone payments under our license and collaboration agreements with Sanofi, CSPC, and Yakult, the upfront payment and milestone payments received under the Secura APA, and sales of Series B Convertible Preferred Stock. Additionally, from our U.S. commercial launch of COPIKTRA on September 24, 2018, through our ownership period ending in September 2020, we financed a portion of our operations through product revenue.

As of December 31, 2024, we had an accumulated deficit of $955.5 million. Our net loss was $130.6 million, $87.4 million, and $73.8 million, for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, we had cash, cash equivalents, and investments of $88.8 million. In accordance with applicable accounting standards, 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 12 months after the date of the issuance of the consolidated financial statements. We anticipate operating losses may continue for the foreseeable future since we do not yet have regulatory approval to sell any of our product candidates, and we continue to incur operating costs to execute our strategic plan, including costs related to research and development of our product candidates and commercial readiness activities. As a result of the assessment in accordance with the applicable accounting standards, these conditions raise substantial doubt about our ability to continue as a going concern for 12 months after the date the consolidated financial statements are issued.

We expect to finance our operations with our existing cash, cash equivalents and investments, through potential future milestones and royalties received pursuant to the Secura APA, through the Note Purchase Agreement or through other strategic financing opportunities that could include, but are not limited to collaboration agreements, future offerings of our equity, or the incurrence of debt. However, given the risks associated with these potential strategic or financing opportunities, they are not deemed probable for purposes of the going concern assessment. If we fail to obtain additional future capital, we may be unable to complete our planned preclinical studies and clinical trials and obtain approval of certain investigational product candidates from the FDA or foreign regulatory authorities. Therefore, there is substantial doubt about our ability to continue as a going concern.

84

Table of Contents

FINANCIAL OPERATIONS OVERVIEW

Revenue

Sale of licenses and related assets revenue to date have been generated through our sale of our duvelisib license and related assets to Secura. The sale included intellectual property related to duvelisib in oncology indications, certain existing duvelisib inventory, certain manufacturing equipment and, claims and rights under certain contracts pertaining to duvelisib including net contract prepaid balances.

Research and development expenses

Research and development expenses consist of costs associated with our research activities, including the development of our product candidates. Research and development expenses include product/ product candidate and/or project-specific costs, as well as unallocated costs. We allocate the expenses related to external research and development services, such as CROs, clinical sites, manufacturing organizations and consultants, by project and/or product candidate. We use our employee and infrastructure resources in a cross-functional manner across multiple research and development projects. Our project costing methodology does not allocate personnel, infrastructure and other indirect costs to specific clinical programs or projects.

Product/ product candidate/ project specific costs include:

● license fees.

Unallocated costs include:

​

85

Table of Contents

The table below summarizes our direct research and development expenses for our product/ product candidates/ projects and our unallocated research and development costs for the years ended December 31, 2024, 2023, and 2022:

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year ended December 31,

​ ​ (in thousands) ​ (in thousands) ​ (in thousands)

Product/ product candidate / project specific costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Avutometinib + defactinib - NSCLC ​ ​ 7,271 ​ ​ 8,487 ​ ​ 7,666 ​

Avutometinib + defactinib - pancreatic cancer ​ ​ 2,966 ​ ​ — ​ ​ — ​

Avutometinib + defactinib - other indications ​ ​ 1,282 ​ ​ 1,225 ​ ​ 70 ​

Unallocated costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Stock-based compensation expense ​ ​ 2,134 ​ ​ 1,987 ​ ​ 1,766 ​

Costs for certain development activities, such as clinical trial expenses, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, and information provided us by our vendors on their actual costs incurred or level of effort expended. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the consolidated balance sheets as prepaid expenses and other current assets or accrued expenses.

Our research and development expenses may increase significantly in future periods as we undertake costlier development activities for our existing and future product candidates, including larger and later-stage clinical trials.

The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete development of our product candidates or the period, if any, in which material net cash inflows from our product candidates may commence. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

● clinical trial results;

● the potential benefits of our product candidates over other therapies;

● the terms and timing of regulatory approvals; and

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or other regulatory authority were to require us to conduct clinical trials beyond those which we currently anticipate will be required for the completion of clinical development of a product candidate or if we experience significant delays in enrollment in any clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.

86

Table of Contents

Selling, general, and administrative expenses

Selling, general, and administrative expenses consist primarily of salaries and related costs for personnel, including stock-based compensation expense, in our executive, finance, legal, information technology, commercial, communication, human resources, and business development functions. Other selling, general, and administrative expenses include allocated facility costs, commercial costs, professional fees for legal, patent, investor and public relations, consulting, insurance premiums, audit, tax, and other public company costs.

Other income, other expense, interest income and interest expense

Other expense for each of the years ended December 31, 2024 and 2023 was comprised of transaction losses due to changes in foreign currency exchange rates. Other income for the year ended December 31, 2022 was comprised of a gain on the sale of fixed assets and transaction gains due to changes in foreign currency exchange rates.

Interest income reflects interest earned on our cash, cash equivalents and available-for-sale securities.

Interest expense reflects interest expense due on our Loan Agreement with Oxford and our convertible notes, as well as non-cash interest related to the amortization of debt discount and issuance costs.

Change in fair value of preferred stock tranche liability

The change in fair value of preferred stock tranche liability for the years ended December 31, 2024 and December 31, 2023, was comprised of the mark-to-market adjustment related to the second tranche right issued as part of the Securities Purchase Agreement (the “Series B Convertible Preferred Stock Securities Purchase Agreement”), dated January 24, 2023 with certain purchasers pursuant to which the Company agreed to sell and issue to the purchasers in a private placement up to 2,144,160 shares of its Series B Convertible Preferred Stock in two tranches. The preferred stock tranche liability expired in July 2024 and is no longer outstanding. There was no preferred stock tranche liability outstanding during the year ended December 31, 2022.

Change in fair value of common stock warrant liability

The change in fair value of warrant liability for the year ended December 31, 2024 was comprised of the mark-to-market adjustment related to liability classified warrants issued as part of the July 2024 Offering (defined herein). There were no warrants outstanding during the years ended December 31, 2023, or December 31, 2022.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued and prepaid research and development expenses, stock-based compensation, revenue recognition, and collaborative agreements, described in greater detail below. We base our estimates on our limited historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. However, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our financial condition and results of operations.

87

Table of Contents

Revenue recognition

We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 Revenue from Contracts with Customers (“ASC 606”).

Sales of intellectual property

For sales of license and intellectual property, that include sale-based royalties, including milestone payments based on a level of sales, we evaluate whether the royalties and sales-based milestones are considered probable of being achieved and estimate the amount of royalties to include over the contractual term using the expected value method and estimate the sales-based milestones using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated royalty and milestone value is included in the transaction price. Royalties and sales-based milestones for territories for which there is not regulatory approval are not considered probable until such regulatory approval is achieved. We evaluate factors such as whether consideration is outside of our control, timeline for when the uncertainty will be resolved and historical sales of COPIKTRA if applicable. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, we reevaluate the probability of achievement of all milestones subject to constraint and amount of royalty revenue to be received 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 revenues and earnings in the period of adjustment. At December 31, 2024, we determined no future potential royalties pursuant to the Secura APA were not constrained.

Refer to Note 2. Significant Accounting Policies and Note 13. License, collaboration and commercial agreements to our consolidated financial statements located in this Annual Report on Form 10-K for further discussion of revenue.

Collaborative Arrangements

Collaborative Arrangements: Contracts are considered to be collaborative arrangements pursuant to U.S. GAAP when they satisfy the following criteria defined in ASC Topic 808, Collaborative Arrangements: (i) the parties to the contract must actively participate in the joint operating activity and (ii) the joint operating activity must expose the parties to the possibility of significant risk and rewards, based on whether or not the activity is successful. Payments received from or made to a partner that are the result of a collaborative relationship with a partner, instead of a customer relationship, such as co-development activities, are recorded as a reduction or increase to research and development expense, respectively.

Accrued and prepaid research and development expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued expenses. This process involves reviewing contracts, identifying services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development expenses include fees paid to CROs in connection with research and development activities for which we have not yet been invoiced.

88

Table of Contents

We base our expenses related to CROs on our estimates of the services received and efforts expended pursuant to quotes and contracts with CROs that conduct research and development on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period. To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.

Refer to Note 2. Significant Accounting Policies, and Note 4. Accrued expenses to our consolidated financial statements located in this Annual Report on Form 10-K for further discussion of accrued research and development expenses.

Stock-based compensation

For service-based awards, we recognize stock-based compensation expense for stock options, and restricted stock units (“RSUs”) issued to employees, directors and consultants based on the grant date fair value of the awards on a straight-line basis over the requisite service period. In addition, we issue shares under our employee stock purchase plan (“ESPP”) to employees. The fair value of our stock options and ESPP grants is estimated at the date of grant using the Black-Scholes option pricing model. For determining fair value of stock options when the stock options are not at the money because of a modification, we are precluded from utilizing the simplified method as described in SEC SAB Topic 14.D.2 to calculate the expected term as a key assumption in the Black-Scholes pricing model. Therefore, when valuing stock options that are not at the money, we utilize a binomial lattice model to calculate the fair value of the stock option.

We have also granted performance-based RSUs and stock options with terms that allow the recipients to vest in a specific number of shares based upon the achievement of performance-based milestones as specified in the grants. Stock-based compensation expense associated with these performance-based RSUs and stock options is recognized if the performance condition is considered probable of achievement using management’s best estimates of the achievement of the performance-based milestones. If the actual achievement of the performance-based milestones varies from our estimates, stock-based compensation expense could be materially different than what is recorded in the period. The cumulative effect on current and prior periods of a change in estimate for performance-based RSUs and stock options will be recognized as compensation cost in the period of the revision, and recorded as a change in estimate.

While the assumptions used to calculate and account for stock-based compensation awards represent management’s best estimates, these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if revisions are made to our underlying assumptions and estimates, our stock-based compensation expense could vary significantly from period to period.

During the year ended December 31, 2024, we recorded $7.3 million of stock-based compensation expense. As of December 31, 2024, there was approximately $6.0 million of unrecognized stock-based compensation related to stock options, which are expected to be recognized over a weighted-average period of 2.1 years. As of December 31, 2024, there was approximately $4.0 million of unrecognized stock-based compensation related to RSUs, which are expected to be recognized over a weighted-average period of 2.3 years. See Note 2. Significant accounting policies and Note 8. Stock-based compensation to our consolidated financial statements located in this Annual Report on Form 10-K for further discussion of stock-based compensation.

89

Table of Contents

RESULTS OF OPERATIONS

All financial information presented has been consolidated and includes the accounts of our wholly-owned subsidiaries, Verastem Securities Company and Verastem Europe GmbH. All intercompany balances and transactions have been eliminated in consolidation.

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended December 31,

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​

Sale of COPIKTRA license and related assets ​ ​ 10,000 ​ ​ — ​ ​ 2,596

Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​

Change in fair value of warrant liability ​ ​ (19,149) ​ ​ — ​ ​ —

Income tax expense ​ ​ (185) ​ ​ — ​ ​ —

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

Sale of COPIKTRA license and related assets revenue. Sale of COPIKTRA license and related assets revenue for the year ended December 31, 2024 (the “2024 Period”) was $10.0 million compared to $0.0 million for the year ended December 31, 2023 (the “2023 Period”). Sale of COPIKTRA license and related assets revenue for the 2024 Period was comprised of one sales milestone of $10.0 million due upon Secura achieving cumulative worldwide net sales of COPIKTRA exceeding $100.0 million during the 2024 Period. The $10.0 million milestone payment was received by us in July 2024.

Research and development expense. Research and development expense for the 2024 Period was $81.3 million compared to $61.4 million for the 2023 Period. The $19.9 million increase from the 2023 Period to the 2024 Period was primarily related to an increase of $6.4 million in CRO costs, an increase of $4.7 million in investigator fees, an increase of $4.5 million in consulting costs, an increase of $2.5 million in personnel related costs, including non-cash stock-based compensation, and an increase of $1.8 million in clinically supply costs. The increase in CRO costs and investigator fees was primarily driven by increased costs related to the RAMP 301 study which we commenced in the last quarter of 2023. The increase in consulting costs was primarily driven by additional consultants in 2024 to support RAMP 301 startup and enrollment and additional consulting costs related to completing the NDA submission for avutometinib and defactinib for treatment of patients with recurrent LGSOC.

Selling, general and administrative expense.Selling, general and administrative expense for the 2024 Period was $43.6 million compared to $30.7 million for the 2023 Period. The increase of $12.9 million from the 2023 Period to the 2024 Period primarily resulted from an increase of $4.8 million in personnel related costs, including non-cash stock-based compensation, an increase of $4.7 million of costs in anticipation of the potential launch of avutometinib and defactinib in LGSOC, an increase of $3.0 million in July 2024 Offering financing fees in the 2024 Period, and an increase of $1.0 million in consulting and professional fee, partially offset by $0.6 million in financing fees for the offering of our Series B Convertible Preferred Stock in the 2023 Period.

Other expense. Other expense of $0.1 million for the 2024 Period and the 2023 Period was comprised of transaction losses due to changes in foreign currency exchange rates.

90

Table of Contents

Interest income. Interest income for the 2024 Period was $4.1 million compared to $6.2 million for the 2023 Period. The decrease of $2.1 million in interest income was primarily driven by a decrease in interest rates and investment balances on short-term investments and cash equivalents.

Interest expense. Interest expense for the 2024 Period was $4.6 million compared to $4.1 million for the 2023 Period. The increase of $0.5 million from the 2023 Period to the 2024 Period was primarily driven by additional interest expense in the 2024 Period on the Loan Agreement as a result of the additional $15.0 million debt drawdown on March 22, 2023.

Change in fair value of preferred stock tranche liability.The change in fair value of the preferred stock tranche liability was $4.2 million income for the 2024 Period compared to $2.8 million income for the 2023 Period. The change in fair value of preferred stock tranche liability was comprised of the mark-to-market adjustment related to the second tranche right issued as part of the Series B Convertible Preferred Stock Securities Purchase Agreement. The fair value of the preferred stock tranche liability decreased from $4.2 million at the beginning of the 2024 Period and expired in July 2024 resulting in $4.2 million income in the 2024 Period. The fair value of the preferred stock tranche liability decreased from $6.9 million upon issuance on January 24, 2023, to $4.1 million at the end of the 2023 Period resulting in $2.8 million income in the 2023 Period.

Change in fair value of warrant liability. The change in fair value of the warrant liability of $19.1 million expense for the 2024 Period was comprised of the mark-to-market adjustment for the liability classified warrants issued as part of the July 2024 Offering. The liability classified warrants increased in value from July 23, 2024, to December 31, 2024 primarily driven by an increase in our stock price. There was no warrant liability outstanding during the 2023 Period.

Income tax expense. Income tax expense of $0.2 million for the 2024 Period was comprised of interest under IRC section 453A related to the $10.0 million milestone payment from Secura because it was an installment sale for tax purposes. There was no income tax expense in the 2023 Period.

LIQUIDITY AND CAPITAL RESOURCES

Sources of liquidity

We have financed our operations to date primarily through public and private offerings of our common stock, warrants and pre-funded warrants, offerings of convertible notes, convertible preferred stock sales of common stock under our at-the-market equity offering programs, our loan and security agreement executed with Hercules in March 2017, as amended, the Loan Agreement, the Note Purchase Agreement, the upfront payments and milestone payments under our license and collaboration agreements with Sanofi, CSPC, and Yakult, and the upfront payment and milestone payments received under the Secura APA. Additionally, from our commercial launch of COPIKTRA in the United States on September 24, 2018, through our ownership period ending in September 2020, we financed a portion of our operations through product revenue. As of September 30, 2020, we have sold our COPIKTRA license and no longer sell COPIKTRA in the United States. We expect to finance a portion of our business through future potential milestones and royalties received pursuant to the Secura APA.

As of December 31, 2024, we had $88.8 million in cash, cash equivalents, and investments. We primarily invest our cash, cash equivalents and investments in U.S. Government money market funds, government bonds, corporate bonds and commercial paper of publicly traded companies.

Risks and uncertainties include those identified under Item 1A. Risk Factors, in this Annual Report on Form 10-K.

91

Table of Contents

Cash flows

The following table sets forth the primary sources and uses of cash for each of the periods set forth below (in thousands):

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year ended December 31,

Net cash (used in) provided by: ​ ​ ​ ​ ​ ​

Operating activities. The use of cash in operating activities in the 2024 Period and 2023 Period resulted primarily from our net losses adjusted for non-cash adjustments and changes in the components of working capital. Our cash outflow from net losses adjusted for non-cash adjustments was $108.5 million and $85.5 million for the 2024 Period and 2023 Period, respectively. Non-cash adjustments for the 2024 Period were primarily related to stock-based compensation expense, change in the fair value of warrant liability and change in the fair value of preferred stock tranche liability. Non-cash adjustments for the 2023 Period were primarily related to stock-based compensation expense, non-cash interest, net and change in the fair value of preferred stock tranche liability. Our cash inflow for the 2024 Period from operating activities due to changes in operating assets and liabilities was $3.7 million primarily driven by an increase of $8.0 million in accrued expenses and other liabilities, partially offset by a decrease of $3.2 million in accounts payable, an increase of $0.6 million in prepaid expenses, other current assets and other assets, a decrease of $0.3 million in deferred liabilities and an increase of $0.2 million in grant receivable. Our cash outflow for the 2023 Period from operating activities due to changes in operating assets and liabilities was $1.0 million for the 2023 Period primarily driven by an increase of $5.8 million in prepaid expenses, other current assets and other assets, and a decrease of $0.4 million in deferred liabilities, partially offset by an increase of $2.9 million in accrued expenses and other liabilities, and an increase of $2.3 million in accounts payable. The increases in both periods in prepaid expenses, other current assets, and other asserts is exclusive of cash received from PanCAN and used on the RAMP 205 study. Cash used in operating activities was $104.8 million and $86.5 million for the 2024 Period and the 2023 Period, respectively.

Investing activities. The cash provided by investing activities for the 2024 Period primarily relates to the net maturities of investments of $60.0 million. The cash used in investing activities for the 2023 Period primarily relates to the net purchases of investments of $44.4 million.

Financing activities.The cash provided by financing activities for the 2024 Period represents $53.8 million of net proceeds received from the issuance of shares of common stock, pre-funded warrants, and warrants as part of the July 2024 Offering, $1.3 million of proceeds received from insurance premium financing, $0.9 million of proceeds received from exercise of warrants and $0.2 million of proceeds received from exercise of stock options and our employee stock purchase plan, partially offset by $1.3 million of payments on insurance premium financing, and $0.2 million of fees paid to the Lenders to amend our Loan Agreement with Oxford. The cash provided by financing activities for the 2023 Period primarily represents $91.4 million of proceeds from our public offering in June 2023 of common stock and pre-funded warrants to purchase shares of our common stock, net of issuance costs, $28.1 million of proceeds received from issuance of Series B Convertible Preferred Stock, net of issuance costs, $14.9 million of proceeds received pursuant to the Loan Agreement, $1.4 million of proceeds received from insurance premium financing and $0.1 million of proceeds received related to our employee stock purchase plan, partially offset by $1.4 million of payments on insurance premium financing, and $0.3 million of repayment of our 5.00% Convertible Senior Notes due 2048.

Refer to Note 7. Capital Stock to our consolidated financial statements located in this Annual Report on Form 10-K for additional details on the July 2024 Offering of common stock, pre-funded warrants, and warrants, the June 2023 Offering of common stock and pre-funded warrants, and the January 2023 offering of our Series B Convertible Preferred Stock; Note 5. Debt to our consolidated financial statements located in this Annual Report on Form 10-K for additional details on the Loan Agreement; and Note 14. Notes Payable to our consolidated financial statements located in this Annual Report on Form 10-K for additional details on the finance agreement with

92

Table of Contents

AFCO Premium Credit LLC related to insurance premium financing and the monthly payments of principal and interest related thereto.

Funding requirements

We expect to continue to incur significant expenses and may continue to incur operating losses. Refer to risk factor titled We have incurred significant losses since our inception. We may incur losses for the foreseeable future and may never achieve or maintain profitability within section Item 1A. Risk Factors for detailed activities which may drive our continued operating losses and expenses in future periods.

Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, and the extent to which we may enter into collaborations with third parties for development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the development of our current product candidates. Our future capital requirements will depend on many factors, including:

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, and through future potential milestones and royalties received pursuant to the Secura APA. To the extent that we raise additional capital through the sale of equity, warrants or convertible debt securities, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Without additional funding we believe that we may not have sufficient funds to meet our obligations within the next 12 months from the date of issuance of these consolidated financial statements. While we believe that we may have sufficient funds to meet our obligations within the next 12 months from the date of the issuance of the consolidated financial statements for the year ended December 31, 2024, in performing this analysis under the applicable accounting standards management excluded certain elements of our operating plan that cannot be considered probable of occurring. Accordingly, management has concluded that substantial doubt exists about our ability to continue as a going concern for 12 months from the date the consolidated financial statements are issued.

93

Table of Contents

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

On April 15, 2014, we entered into a lease agreement for approximately 15,197 square feet of office and laboratory space in Needham, Massachusetts. The lease term commenced on April 15, 2014 and it was scheduled to expire on September 30, 2019. Effective February 15, 2018, we amended our lease agreement to relocate within the facility to another location consisting of 27,810 square feet of office space (the “February 2018 Amended Lease Agreement”). The February 2018 Amended Lease Agreement extended the expiration date of the lease from September 2019 through June 2025. Pursuant to the February 2018 Amended Lease Agreement, the initial annual base rent amount was approximately $0.7 million, which increased during the lease term to $1.1 million for the last 12-month period. Effective November 1, 2024, we amended the February 2018 Amended Lease Agreement to extend the expiration date from June 2025 to June 2026 (the “November 2024 Amended Lease Agreement”). The payment terms of the November 2024 Amended Lease Agreement are $1.1 million per annum through the expiration date in June 2026. As of December 31, 2024, the total future lease payments under the agreement are $1.6 million through June 2026.

In 2024 we entered into a master services agreement with IQVIA (“IQVIA Master Services Agreement”) for our strategic collaboration with IQVIA to leverage IQVIA’s infrastructure and established commercialization solutions to complement our launch strategy for the potential launch of avutometinib and defactinib in patients with KRAS mt LGSOC planned for middle of 2025. As of December 31, 2024, we have committed to spend approximately $60.0 million under the IQVIA Master Services Agreement which we expect to spend in the next three to four years.

As discussed in Note 13. License, collaboration and commercial agreements to the consolidated financial statements located in this Annual Report on Form 10-K, we are party to several agreements to license intellectual property. The license agreements may require us to pay upfront license fees, ongoing annual license maintenance fees, milestone payments, minimum royalty payments, as well as reimbursement of certain patent costs incurred by the licensors, as applicable. As of December 31, 2024, we do not have any minimum contractual obligations in relation to these agreements because: there were no upfront license fees payable in future periods; no annual license maintenance fees; we cannot estimate if milestone and/or royalty payments will occur in future periods; and patent cost reimbursement costs are perpetual and the agreements are cancelable by us at any time upon prior written notice to the licensor.

TAX LOSS CARRYFORWARDS

As of December 31, 2024, we had federal and state NOL carryforwards of $370.6 million and $56.7 million, respectively, which are available to reduce future taxable income. We also had federal and state tax credits of $2.6 million and $0.2 million, respectively, which may be used to offset future tax liabilities. The NOL and tax credit carryforwards will expire at various dates through 2044, except for $333.4 million of federal NOL carryforwards which may be carried forward indefinitely. NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the IRC, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of our company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. At December 31, 2024, we recorded a 100% valuation allowance against our NOL and tax credit carryforwards, as we believe it is more likely than not that the tax benefits will not be fully realized. In the future, if we determine that a portion or all of the tax benefits associated with our tax carryforwards will be realized, net income would increase in the period of determination.

Based on our analysis under Section 382 of the IRC and similar provisions under state law, we believe that our federal NOL carryforwards, our state NOL carryforwards, our research and development (“R&D”) credits and our Orphan Drug (“OD”) credits will be limited as of December 31, 2024. The portion of federal NOL, state NOL, R&D credits and OD credits that were determined to be limited by Section 382 have been written off as of December 31, 2024. The remaining unused carryforwards remain available for future periods. During 2024, we believe we triggered ownership changes under Section 382 of the IRC and similar provisions under state law. We

94

Table of Contents

have approximately $346.4 million of federal NOLs generated prior to such ownership changes inclusive of $309.3 million of federal NOLs which may be carried forward indefinitely. Since the $309.3 million of federal NOLs may be carried forward indefinitely these have not been written off as of December 31, 2024, but due to the limitations under Section 382, generally we can only use $1.6 million per year against taxable income in the future. Due to our full valuation allowance the write off of NOLs, R&D credits, and OD credits did not have any impact to the statements of operation and comprehensive loss for the 2024 Period and 2023 Period.

RECENTLY ADOPTED ACCOUNTING STANDARDS

Refer to Note 2. Significant Accounting Policies to our consolidated financial statements located in this Annual Report on Form 10-K for recently adopted accounting standards.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk related to changes in interest rates. We had cash, cash equivalents, and investments of $88.8 million and $137.1 million as of December 31, 2024 and 2023, respectively, consisting of cash, U.S. Government money market funds, government bonds, corporate bonds and commercial paper of publicly traded companies. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because most of our investments are interest bearing. Our available for sale securities are subject to interest rate risk and will fall in value if market interest rates increase. Due to the short-term duration of most of our investment portfolio and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our portfolio.

We contract with CROs and contract manufacturers globally, which may be denominated in foreign currencies. We may be subject to fluctuations in foreign currency rates in connection with these agreements. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. As of December 31, 2024, an immaterial amount of our total liabilities was denominated in currencies other than the functional currency.

As of December 31, 2024, we had borrowed $40.0 million under the Loan Agreement. The Loan Agreement bears interest at a floating rate equal to (a) the greater of (i) the one-month CME Secured Overnight Financing Rate and (ii) 0.13% plus (b) 7.37%, which is subject to an overall floor and cap. Changes in interest rates can cause interest charges to fluctuate under the Loan Agreement. A 10% increase in current interest rates would have resulted in an immaterial increase in the amount of cash interest expense for the year ended December 31, 2024 due to the overall interest rate floor and cap.

Item 8. Consolidated Financial Statements and Supplementary Data

Our consolidated financial statements, together with the report of our independent registered public accounting firm (e.g., Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)), appear on pages F-1 through F-42 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

95

Table of Contents

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and our Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as the process designed by, or under the supervision of, our Chief Executive Officer and our Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. GAAP, and includes those policies and procedures that:

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework provided in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2024.

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm, as allowed by the SEC.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the fiscal quarter ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

Trading Plans of Our Directors and Officers

During our fiscal quarter ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) entered into, modified (as to amount, price or timing of trades) or terminated (i) contracts, instructions or written plans for the purchase or sale of our securities that are intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information or (ii) non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K).

​

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

96

Table of Contents

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Information regarding our directors, including the audit committee and audit committee financial experts, and executive officers and compliance with Section 16(a) of the Exchange Act will be included in our 2025 Proxy Statement and is incorporated herein by reference.

We have adopted a Code of Business Conduct and Ethics for all of our directors, officers, and employees as required by Nasdaq governance rules and as defined by applicable SEC rules. Stockholders may locate a copy of our Code of Business Conduct and Ethics on our website at www.verastem.com or request a copy without charge from:

Verastem, Inc.

Attention: Investor Relations

117 Kendrick St., Suite 500

Needham, MA 02494

We will post to our website any amendments to the Code of Business Conduct and Ethics and any waivers that are required to be disclosed by the rules of either the SEC or Nasdaq.

Insider Trading Policies and Procedures

We have adopted an insider trading policy that governs the purchase, sale, and other dispositions of our securities by our directors, officers and employees, and other covered persons. The insider trading policy also applies to transactions by the Company in its securities. We believe that the insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations and the listing standards of Nasdaq. A copy of our Insider Trading Policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item 11 of Form 10-K regarding executive compensation will be included in our 2025 Proxy Statement and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item 12 of Form 10-K regarding security ownership of certain beneficial owners and management will be included in our 2025 Proxy Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item 13 of Form 10-K regarding certain relationships and related transactions and director independence will be included in our 2025 Proxy Statement and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item 14 of Form 10-K regarding principal accountant fees and services will be included in our 2025 Proxy Statement and is incorporated herein by reference.

​

97

Table of Contents

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report on Form 10-K:

(1) Consolidated Financial Statements

See Part II, Item 8 for the Financial Statements required to be included in this Annual Report on Form 10-K.

(2) Consolidated Financial Statement Schedules

All financial statement schedules are omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto.

(3) Exhibits

Those exhibits required to be filed by Item 601 of Regulation S-K are listed in the Exhibit Index immediately preceding the exhibits hereto and such listing is incorporated herein by reference.

Item 16. Form 10-K Summary

None.

​

98

Table of Contents

​

EXHIBIT INDEX

Exhibitnumber Description of exhibit

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

4.2* ​ Description of Securities

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​

99

Table of Contents

​ ​ ​

​ ​

​ ​

​ ​

​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​

100

Table of Contents

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

101

Table of Contents

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

19.1* ​ Insider Trading Policy

​ ​ ​

21.1* ​ Subsidiaries of the Registrant

​ ​ ​

23.1* ​ Consent of Ernst & Young LLP

​ ​ ​

​ ​ ​

​ ​

102

Table of Contents

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

101.INS* ​ Inline XBRL Instance Document

​ ​ ​

101.SCH* ​ Inline XBRL Taxonomy Extension Schema Document

​ ​ ​

101.CAL* ​ Inline XBRL Taxonomy Extension Calculation Linkbase Document

​ ​ ​

101.DEF* ​ Inline XBRL Taxonomy Extension Definition Linkbase Document

​ ​ ​

101.LAB* ​ Inline XBRL Taxonomy Extension Label Linkbase Document

​ ​ ​

101.PRE* ​ Inline XBRL Taxonomy Extension Presentation Linkbase Document

​ ​ ​

​ ​ ​

​ ​ ​

​ ​ ​

* Filed herewith.

# Management contract or compensatory plan, contract or agreement.

​

​

​

​

​

​

​

103

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 20th day of March 2025.

​​

​​ VERASTEM, INC.By: /s/ Daniel W. Paterson

​ ​ Daniel W. Paterson

​ ​ President and Chief Executive Officer

​

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Signature Title Date

​/s/ Daniel W. Paterson ​ ​ ​ ​

​ ​ ​ ​ ​

/s/ Daniel Calkins ​ ​ ​ ​

​ ​ ​ ​ ​

/s/ PAUL BUNN, M.D. ​ ​ ​ ​

Paul Bunn, M.D. ​ Director ​ March 20, 2025

​ ​ ​ ​ ​

/s/ Robert Gagnon ​ ​ ​ ​

Robert Gagnon ​ Director ​ March 20, 2025

​ ​ ​ ​ ​

/s/ Anil Kapur ​ ​ ​ ​

Anil Kapur ​ Director ​ March 20, 2025

​ ​ ​ ​ ​

/s/ Michael Kauffman, M.D.,Ph.D. ​ ​ ​ ​

Michael Kauffman, M.D., Ph.D. ​ Director ​ March 20, 2025

​ ​ ​ ​

/s/ JOHN JOHNSON ​ ​ ​ ​

John Johnson ​ Director ​ March 20, 2025

​ ​ ​ ​

/s/ MICHELLE ROBERTSON ​ ​ ​ ​

Michelle Robertson ​ Director ​ March 20, 2025

​ ​ ​ ​ ​

/s/ Eric Rowinsky, M.D. ​ ​ ​ ​

Eric Rowinsky, M.D. ​ Director ​ March 20, 2025

​ ​ ​ ​ ​

/s/ BRIAN STUGLIK ​ ​ ​ ​

Brian Stuglik ​ Director ​ March 20, 2025

​ ​ ​ ​ ​

/s/ Karin Tollefson ​ ​ ​ ​

Karin Tollefson ​ Director ​ March 20, 2025

​ ​ ​ ​

​

​

​

​

104

Table of Contents

Verastem, Inc.

CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

Report of Independent Registered Public Accounting Firm F-2

Consolidated Financial Statements ​

Consolidated Balance Sheets F-4

Consolidated Statements of Operations and Comprehensive Loss F-5

Consolidated Statements of Stockholders’ (Deficit) Equity F-6

Consolidated Statements of Cash Flows F-7

Notes to Consolidated Financial Statements F-8

​

​

​

F-1

Table of Contents

Report of Independent Registered Public Accounting Firm

​

To the Stockholders and the Board of Directors of Verastem, Inc.

Opinion on the Financial Statements

​

We have audited the accompanying consolidated balance sheets of Verastem, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders' (deficit) equity and cash flows for each of the three years in the period ended December 31, 2024, 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 consolidated financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, 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 financial statements, the Company has suffered recurring losses from operations, has a working capital deficiency, 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.

​

F-2

Table of Contents

​ ​ ​

​ ​ Accrued and Prepaid Clinical Trial Expense

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2011.

Boston, Massachusetts

March 20, 2025

​

​

​

F-3

Table of Contents

Verastem, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​

​ ​ December 31, ​

Assets ​ ​ ​ ​ ​ ​ ​

Current assets: ​ ​ ​ ​ ​ ​ ​

Short-term investments ​ — ​ 59,220 ​

Grant receivable ​ ​ 200 ​ ​ — ​

Prepaid expenses and other current assets ​ 5,943 ​ 6,553 ​

Property and equipment, net ​ 32 ​ 37 ​

Right-of-use asset, net ​ ​ 1,405 ​ ​ 1,171 ​

Restricted cash ​ ​ 241 ​ ​ 241 ​

Liabilities, convertible preferred stock and stockholders’ equity ​ ​ ​ ​ ​ ​ ​

Current liabilities: ​ ​ ​ ​ ​ ​ ​

Deferred liabilities ​ ​ — ​ ​ 327 ​

Lease liability, short-term ​ 995 ​ 941 ​

Non-current liabilities: ​ ​ ​ ​ ​

Lease liability, long-term ​ ​ 535 ​ ​ 530 ​

Preferred stock tranche liability ​ ​ — ​ ​ 4,189 ​

Warrant liability ​ ​ 58,199 ​ ​ — ​

Convertible preferred stock: ​ ​ ​ ​ ​ ​ ​

Stockholders’ equity: ​ ​ ​ ​ ​ ​ ​

Preferred Stock, $0.0001 par value; 5,000 shares authorized: ​ ​ ​ ​ ​ ​

Accumulated other comprehensive income ​ — ​ 13 ​

Total stockholders’ (deficit) equity ​ (28,893) ​ 57,374 ​

See accompanying notes to the consolidated financial statements.

​

F-4

Table of Contents

Verastem, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended December 31, ​

Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Sale of COPIKTRA license and related assets ​ $ 10,000 ​ $ — ​ $ 2,596 ​

Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other income (expense) ​ ​ (123) ​ ​ (109) ​ ​ 47 ​

Change in fair value of warrant liability ​ ​ (19,149) ​ ​ — ​ ​ — ​

Income tax expense ​ ​ (185) ​ ​ — ​ ​ — ​

Net loss per share—basic and diluted ​ ​ (3.66) ​ ​ (3.96) ​ ​ (4.57) ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Unrealized gain (loss) on available-for-sale securities ​ (13) ​ 13 ​ (34) ​

See accompanying notes to the consolidated financial statements.

​

F-5

Table of Contents

Verastem, Inc.

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY

(in thousands, except share data)

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ other ​ ​ ​ ​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ comprehensive ​ ​ ​ Total

​ Shares Amount Shares Amount Shares Amount capital income deficit equity

Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ (73,812) ​ (73,812) ​

Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (87,367) ​ (87,367) ​

Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (130,637) ​ (130,637) ​

See accompanying notes to the consolidated financial statements.

​

F-6

Table of Contents

Verastem, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Year Ended December 31,

Operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​

Non-cash operating lease cost ​ ​ (175) ​ ​ (175) ​ ​ (154)

Change in fair value of warrant liability ​ ​ 19,149 ​ ​ — ​ ​ —

Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​

Accounts receivable, net ​ ​ — ​ ​ 31 ​ ​ 485

Grant receivable ​ ​ (200) ​ ​ — ​ ​ —

Prepaid expenses, other current assets and other assets ​ (596) ​ (5,826) ​ 744

Accrued expenses and other liabilities ​ 7,999 ​ 2,938 ​ (638)

Deferred liabilities ​ ​ (327) ​ ​ (383) ​ ​ 710

Investing activities ​ ​ ​ ​ ​ ​ ​ ​ ​

Purchases of property and equipment ​ ​ (28) ​ ​ — ​ ​ —

Net cash provided by (used in) investing activities ​ 59,972 ​ (44,447) ​ 66,185

Financing activities ​ ​ ​ ​ ​ ​ ​ ​ ​

Payments for loan amendment ​ ​ (150) ​ ​ — ​ ​ —

Proceeds from long-term debt, net ​ ​ — ​ ​ 14,918 ​ ​ 24,148

Repayment of 2018 Notes ​ ​ — ​ ​ (300) ​ ​ —

Proceeds from insurance premium financing ​ ​ 1,298 ​ ​ 1,430 ​ ​ —

Payments on insurance premium financing ​ ​ (1,298) ​ ​ (1,430) ​ ​ —

Proceeds from the issuance of warrants ​ ​ 39,595 ​ ​ — ​ ​ —

Proceeds from exercise of warrants ​ ​ 875 ​ ​ — ​ ​ —

Increase in cash, cash equivalents and restricted cash ​ 9,983 ​ 3,287 ​ 54,296

Supplemental disclosure ​ ​ ​ ​ ​ ​ ​ ​ ​

Issuance of preferred stock tranche liability ​ $ — ​ $ 6,940 ​ $ —

See accompanying notes to the consolidated financial statements.

​

​

F-7

Table of Contents

1. Nature of business

Verastem, Inc. (the “Company”) is a late-stage development biopharmaceutical company committed to the development and commercialization of new medicines to improve the lives of patients diagnosed with ras sarcoma (“RAS”)/ mitogen activated pathway kinase (“MAPK”) pathway-driven cancers. The Company’s pipeline is focused on novel small molecule drugs that inhibit critical signaling pathways in cancer that promote cancer cell survival and tumor growth, including RAF/MEK inhibition, FAK inhibition and KRAS G12D inhibition.

The Company’s most advanced product candidates, avutometinib and defactinib, are being investigated in both preclinical and clinical studies for the treatment of various solid tumors, including, but not limited to low grade serous ovarian cancer (“LGSOC”), non-small cell lung cancer (“NSCLC”) and pancreatic cancer. The Company believe that avutometinib may be beneficial as a therapeutic, as a single agent or when used together in combination with defactinib, other agents, other pathway inhibitors, or other current and emerging standard of care treatments in cancers that do not adequately respond to currently available therapies.

The consolidated financial statements include the accounts of Verastem Securities Company and Verastem Europe GmbH, wholly-owned subsidiaries of the Company. All financial information presented has been consolidated and includes the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The Company is subject to the risks associated with other life science companies, including, but not limited to, possible failure of preclinical testing or clinical trials, competitors developing new technological innovations, inability to obtain marketing approval of the Company’s product candidates, avutometinib and defactinib, market acceptance and commercial success of the Company’s product candidates, avutometinib and defactinib, following receipt of regulatory approval, and, protection of proprietary technology and the continued ability to obtain adequate financing to fund the Company’s future operations. If the Company does not obtain marketing approval and successfully commercialize its product candidates, avutometinib and defactinib, following regulatory approval, it will be unable to generate product revenue or achieve profitability and may need to raise additional capital.

As of December 31, 2024, the Company had cash, cash equivalents, and investments of $88.8 million. In accordance with applicable accounting standards, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after the date of the issuance of these consolidated financial statements. The Company anticipates operating losses may continue for the foreseeable future since the Company does not yet have regulatory approval to sell any of its product candidates, and the Company continues to incur operating costs to execute its strategic plan, including costs related to research and development of its product candidates and commercial readiness activities. As a result of the assessment in accordance with the applicable accounting standards, these conditions raise substantial doubt about the Company’s ability to continue as a going concern for 12 months after the date the consolidated financial statements are issued.

The Company expects to finance its operations with its existing cash, cash equivalents and investments, through potential future milestones and royalties received pursuant to the Company’s Asset Purchase Agreement (“Secura APA”) with Secura Bio, Inc. (“Secura”), pursuant to the Company’s Note Purchase Agreement (the “Note Purchase Agreement”) with RGCM SA LLC, as purchaser agent, Oberland Capital Management LLC (“Oberland”) and certain funds managed by Oberland, as purchasers (together with the other purchasers party thereto referred as the “Note Purchase Agreement Purchasers”), or through other strategic financing opportunities that could include, but are not limited to collaboration agreements, future offerings of its equity, or the incurrence of debt. However, given the risks associated with these potential strategic or financing opportunities, they are not deemed probable for purposes of the going concern assessment. If the Company fails to obtain additional future capital, it may be unable to complete its planned preclinical studies and clinical trials and obtain approval of certain investigational product candidates from the U.S. Food and Drug Administration (“FDA”) or foreign regulatory authorities. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern.

F-8

Table of Contents

Reverse Stock Split

On May 30, 2023, the Company filed a Certificate of Amendment to the Company’s Restated Certificate of Incorporation, as amended to date, with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s issued and outstanding common stock, par value $0.0001 at a ratio of 1-for-12 (the “Reverse Stock Split”), as authorized at the Company’s 2023 annual meeting of stockholders held on May 15, 2023. The Company effected the Reverse Stock Split on May 31, 2023. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise were entitled to a fractional share of common stock were entitled to receive a price equal to the closing price of the common stock on the Nasdaq Capital Market on the date immediately preceding the Reverse Stock Split, as adjusted by the ratio of one share of common stock for every 12 shares of common stock, multiplied by the applicable fraction of a share. The number of shares of common stock that the Company is authorized to issue remains at 300,000,000 shares and the par value of its common stock remains unchanged at $0.0001 per share.

The Company has retroactively restated the share and per share amounts in the consolidated financial statements for the 12 months ended December 31, 2023 and 2022, to give retroactive effect to the Reverse Stock Split. Proportionate adjustments were made to the per share exercise price and number of shares of common stock issuable under all outstanding stock options, convertible notes and preferred stock. In addition, proportionate adjustments have been made to the number of shares of common stock issuable upon vesting of the restricted stock units and the number of shares of common stock reserved for the Company’s equity incentive compensation plans. The consolidated statements of convertible preferred stock and stockholders’ equity reflect the impact of the Reverse Stock Split by reclassifying from “common stock” to “additional paid-in capital” in an amount equal to the par value of the decreased shares resulting from the Reverse Stock Split the years ended December 31, 2023, and 2022.

2. Significant accounting policies

Basis of presentation

The accompanying financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principals (“GAAP”) under the assumption that the Company will continue as a going concern for the next 12 months. Accordingly, they do not include any adjustments that might result from the uncertainty related to the Company’s ability to continue as a going concern.

Use of estimates

The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including but not limited to estimates related to revenue recognition, accrued and prepaid clinical trial expense and other general accruals, stock-based compensation expense, its preferred stock tranche liability and its warrant liability. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable. Actual results could differ from such estimates.

Segment and geographic information

Operating segments are defined as components of an enterprise about which separate discrete information is available and regularly reviewed by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of researching, developing and commercializing drugs for the treatment of patients with cancer. All material long-lived assets of the Company reside in the United States.

F-9

Table of Contents

Proceeds from grants

In May 2022, the Company was awarded the “Therapeutic Accelerator Award” grant from Pancreatic Cancer Network (“PanCAN”) for up to $3.8 million (the “PanCAN Grant”). In August 2022, PanCAN agreed to provide the Company with an additional $0.5 million for the collection and analysis of patient samples. The grant is supporting a Phase 1b/2 clinical trial of GEMZAR (gemcitabine) and ABRAXANE (Nab-paclitaxel) in combination with avutometinib and defactinib entitled RAMP 205. The RAMP 205 trial is evaluating whether combining avutometinib (to target KRAS mutant, which is found in more than 90% of pancreatic adenocarcinomas), and defactinib (to reduce stromal density and adaptive resistance to avutometinib) to the standard GEMZAR/ABRAXANE regimen improves outcomes for patients with such pancreatic cancers. The Company recognizes grants as contra research and development expense in the consolidated statement of operations and comprehensive loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate. Eligible expenses incurred in excess of grant payments received up to the total amount of the PanCAN Grant are recorded as a grant receivable. Through December 31, 2024 the Company has received $4.1 million of cash proceeds which was initially recorded as deferred liabilities on the balance sheet. The Company recorded $2.0 million, $2.0 million and $0.3 million of the proceeds as a reduction of research and development expense during the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, the company recorded $0.2 million as a grant receivable related to the PanCAN Grant in the consolidated balance sheet. As of December 31, 2023, the Company recorded $0.3 million as deferred liabilities related to the PanCAN Grant in the consolidated balance sheet.

Cash, cash equivalents and restricted cash

The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist of a U.S. Government money market funds and corporate bonds and commercial paper of publicly traded companies. Cash equivalents are reported at fair value.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):

​ ​ ​ ​ ​ ​ ​

Total cash, cash equivalents and restricted cash ​ $ 89,059 ​ $ 79,076

​

Amounts included in restricted cash as of December 31, 2024 is cash held to collateralize outstanding letters of credit provided as a security deposit for the Company’s office space located in Needham, Massachusetts in the amount of $0.2 million. Amounts included in restricted cash as of December 31, 2023 represent (i) cash held to collateralize outstanding letters of credit provided as a security deposit for the Company’s office space located in Needham, Massachusetts in the amount of $0.2 million and (ii) cash received pursuant to the PanCAN Grant restricted for expenditures for specific research and development activities in the amounts of $0.9 million. The letters of credit are included in non-current restricted cash on the consolidated balance sheets as of December 31, 2024 and December 31, 2023. Cash held pursuant to the PanCAN Grant is included in prepaid expenses and other current assets on the consolidated balance sheet as of December 31, 2023.

​

F-10

Table of Contents

Fair value of financial instruments

The Company determines the fair value of its financial instruments based upon the fair value hierarchy, which prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs:

​ ​ ​ ​

​

Items Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s financial instruments that are measured at fair value on a recurring basis (in thousands)

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Description Total Level 1 Level 2 Level 3

Financial assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash equivalents ​ $ 63,304 ​ $ 63,304 ​ $ — ​ $ — ​

Total financial assets ​ $ 63,304 ​ $ 63,304 ​ $ — ​ $ — ​

Warrant liability ​ $ 58,199 ​ $ — ​ $ — ​ $ 58,199 ​

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Description ​ Total Level 1 Level 2 Level 3

Financial assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash equivalents ​ $ 46,093 ​ $ 46,093 ​ $ — ​ $ — ​

Preferred stock tranche liability ​ $ 4,189 ​ $ — ​ $ — ​ $ 4,189 ​

​

The investments and cash equivalents have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validates the prices provided by third party pricing services by reviewing their pricing methods and matrices, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of December 31, 2024 and 2023.

Warrant liability

A warrant liability was recorded as a result the July 2024 Offering (defined herein) (see Note 7. Capital Stock). The fair value measurement of the warrant liability is classified as Level 3 under the fair value hierarchy. The fair value of the warrant liability at inception and December 31, 2024, was determined using the Black-Scholes valuation model. The inputs to the Black-Scholes valuation model include the risk-free rate, stock price volatility, expected dividends and remaining term. Significant increases or decreases in any of those inputs in isolation could result in a significantly lower or higher fair value measurement.

F-11

Table of Contents

Below are the inputs used to value the warrant liability at July 23, 2024 and December 31, 2024:

​ ​ ​ ​ ​ ​ ​

Risk-free interest rate 4.17 % ​ 4.63 %

Dividend yield — ​ ​ — ​

Remaining term (years) 1.1 ​ ​ 1.5 ​

​

The following table represents a reconciliation of the warrant liability (in thousands):

​ ​ ​ ​ ​

Fair value of warrants exercised ​ ​ ​ (545)

Fair value adjustment ​ ​ ​ 19,149

​

Preferred Stock tranche liability

A preferred stock tranche liability was recorded as a result of the entry into the Series B Convertible Preferred Stock Securities Purchase Agreement (defined herein) (see Note 7. Capital Stock). The fair value measurement of the preferred stock tranche liability is classified as Level 3 under the fair value hierarchy. The fair value of the preferred stock tranche liability was determined using a Monte-Carlo simulation. The inputs to the Monte-Carlo include the risk-free rate, stock price volatility, expected dividends and remaining term. Significant increases or decreases in any of those inputs in isolation could result in a significantly lower or higher fair value measurement. The preferred stock tranche liability expired in July 2024 and is no longer outstanding.

Below are the inputs used to value the preferred stock tranche liability at December 31, 2023:

​ ​ ​ ​ ​ ​ ​

Risk-free interest rate ​ ​ ​ 5.13-5.52 %

Volatility ​ ​ ​ 75 %

Dividend yield ​ ​ ​ — ​

Remaining term (years) ​ ​ ​ 0.6 ​

​

The following table represents a roll forward for the year ended December 31, 2024 of the preferred stock right liability (in thousands):

​ ​ ​ ​ ​

Fair value adjustment ​ ​ ​ (4,189)

​

Long-term debt

The fair value of the Company’s long-term debt is determined using a discounted cash flow analysis with current applicable rates for similar instruments as of the consolidated balance sheet date. The carrying value of the Company’s long-term debt as of December 31, 2024 and December 31, 2023, was approximately $40.7 million and $40.1 million, respectively. The Company estimates that the fair value of its long-term debt as of December 31, 2024 and December 31, 2023, was approximately $41.1 million and $39.6 million, respectively. The fair value of the Company’s long-term debt was determined using Level 3 inputs.

F-12

Table of Contents

Investments

Investments and cash equivalents consist of investments in a U.S. Government money market funds, overnight repurchase agreements collateralized by government agency securities or U.S. Treasury securities, corporate bonds and commercial paper of publicly traded companies that are classified as available-for-sale pursuant to Accounting Standards Codification (“ASC”) Topic 320, Investments—Debt and Equity Securities. The Company classifies investments available to fund current operations as current assets on its consolidated balance sheets. Debt securities are carried at fair value with unrealized gains and losses included as a component of accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity, until such gains and losses are realized. The fair value of these securities is based on quoted prices for identical or similar assets.

The Company reviews investments for impairment whenever the fair value of a investment is less than the amortized cost and evidence indicates that a investment’s carrying amount is not recoverable. Unrealized losses are evaluated for impairment under ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”), to determine if the impairment is credit-related or noncredit-related. Credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings, and noncredit-related impairment is recognized in other comprehensive income (loss). Evidence considered in this assessment includes reasons for the impairment, compliance with our investment policy, the severity of the impairment, collectability of the security, and any adverse conditions specifically related to the security, an industry, or geographic area. Realized gains and losses are determined using the specific identification method and are included in interest income in the consolidated statements of operations and comprehensive loss.

There were no realized gains or losses on investments for the years ended December 31, 2024, 2023 or 2022. Accrued interest receivable is excluded from the amortized cost and estimated fair value of the Company’s investments. There was no accrued interest receivable as of December 31, 2024. Accrued interest receivable of $0.1 million is presented within prepaid expenses and other current assets on the consolidated balance sheets as of December 31, 2023. There were zero and two debt securities in an unrealized loss position at each of December 31, 2024, and December 31, 2023, respectively. None of these investments had been in an unrealized loss position for more than 12 months as of December 31, 2023. The Company considered the decline in the market value for these securities to be primarily attributable to current economic conditions and not credit related. At December 31, 2023, the Company had the intent and ability to hold such securities until recovery. As a result, the Company did not record any charges for credit-related impairments for its investments as of December 31, 2023.

The following is a summary of available-for-sale securities with unrealized losses for less than 12 months as of December 31, 2024 and 2023 (in thousands):

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​

​ Value Losses Value Losses ​

​

Cash, cash equivalents, restricted cash and investments consist of the following (in thousands):

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ Gross Gross ​ ​